ORD 2011-24 - Refunding Bonds Repealing 2011-09 [02-22-2011]0
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF HUNTSVILLE, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES
2011; REPEALING ORDINANCE NO. 2011-09; AUTHORIZING THE PLEDGE OF
CERTAIN REVENUES IN SUPPORT OF THE BONDS; APPROVING AN OFFICIAL
STATEMENT; AUTHORIZING EXECUTION OF A PAYING AGENT/REGISTRAR
AGREEMENT, A BOND PURCHASE AGREEMENT AND AN ESCROW
AGREEMENT; ESTABLISHING PROCEDURES FOR SELLING AND DELIVERING
THE BONDS; AND AUTHORIZING OTHER MATTERS RELATING TO THE BONDS
•
Adopted February 22, 2011
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RECITALS
SECTION 1.
SECTION 2.
SECTION 3.
SECTION 4.
SECTION 5.
SECTION 6.
TABLE OF CONTENTS
Page
........... ............................... ........................1
DEFINITIONS .... ............................... ................2
AMOUNT, NAME, PURPOSE, AND AUTHORIZATION ................. 2
DATE, DENOMINATION, MATURITIES, NUMBERS, AND
INTEREST......................... ..............................3
REDEMPTION ..................... ..............................4
CHARACTERISTICS OF THE BONDS ............................... 5
FORM OF BOND 9
SECTION 7.
SECTION 8.
SECTION 9.
SECTION 10.
SECTION 11.
SECTION 12.
SECTION 13.
SECTION 14.
SECTION 15.
SECTION 16.
SECTION 17.
SECTION 18.
SECTION 19.
SECTION 20.
SECTION 21.
SECTION 22.
SECTION 23.
SECTION 24.
SECTION 25.
SECTION 26.
SECTION 27.
SECTION 28.
SECTION 29.
SECTION 30.
SECTION 31.
SECTION 32.
SECTION 33.
SECTION 34.
.................. ...............................
PLEDGE OF NET REVENUES ....... ...............................
19
WATERWORKS AND SEWER SYSTEM FUND ......................
19
INTEREST AND SINKING FUND ... ...............................
20
RESERVE FUND ................. ...............................
20
TRANSFERS FROM FUNDS ........ ...............................
21
SECURITY OF FUNDS - INVESTMENTS ............................
22
ISSUANCE OF ADDITIONAL BONDS - REFUNDING BONDS -
OBLIGATIONS SECURED BY INFERIOR LIEN ......................
22
RATES AND CHARGES ........... ...............................
24
MAINTENANCE AND OPERATION - INSURANCE . ..................
24
RECORDS - ACCOUNTS - ACCOUNTING REPORTS ..................
24
COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ON THE BONDS .................... .............................25
SALE OF BONDS ................. ...............................
27
APPROVAL OF PAYING AGENT/REGISTRAR AGREEMENT AND
ESCROW AGREEMENT ........... ...............................
28
REFUNDING OF REFUNDED OBLIGATIONS .......................
28
APPROVAL OF OFFICIAL STATEMENT ............................
28
INSURANCE PROVISIONS ........ ...............................
28
CONTINUING DISCLOSURE UNDERTAKING .......................
29
SPECIAL COVENANTS ........... ...............................
32
REMEDIES IN EVENT OF DEFAULT ...............................
32
SPECIAL OBLIGATIONS .......... ...............................
33
DEFEASANCE OF THE BONDS .... ...............................
33
DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS ..
34
AMENDMENT OF ORDINANCE .... ...............................
35
CUSTODY, APPROVAL AND REGISTRATION OF THE BONDS;
BOND COUNSEL'S OPINION ...... ...............................
37
AMENDMENTS TO ORDINANCE UPON DISCHARGE OR AMENDMENT OF
PREVIOUSLY ISSUED BONDS ..... ...............................
37
NO RECOURSE AGAINST CITY OFFICIALS ........................
41
FURTHER ACTIONS .............. ...............................
41
INTERPRETATIONS ................ .............................41
0
•
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Page
SECTION 35. INCONSISTENT PROVISIONS ..... ............................... 41
SECTION 36. INTERESTED PARTIES ........... ............................... 41
SECTION 37. SEVERABILITY .................. ............................... 42
SECTION 38. FUNDS AND ACCOUNTS ......... ............................... 42
SECTION 39. REPEALER ........................ .............................42
SECTION 40. EFFECTIVE DATE ................ ............................... 42
SECTION 41. PAYMENT OF ATTORNEY GENERAL FEE ......................... 42
Exhibit "A" Definitions
Exhibit "B" Paying Agent/Registrar Agreement
Exhibit "C" Notices of Redemption/Defeasance
Exhibit "D" Escrow Agreement
Exhibit "E" Continuing Disclosure
HUNTSVU1X1W WSSREVRER11: OrdinmwRwiud ill
ORDINANCE NO. 2011-24
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF HUNTSVILLE, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES
2011; REPEALING ORDINANCE NO. 2011-09; AUTHORIZING THE PLEDGE OF
CERTAIN REVENUES IN SUPPORT OF THE BONDS; APPROVING AN OFFICIAL
STATEMENT; AUTHORIZING EXECUTION OF A PAYING AGENTIREGISTRAR
AGREEMENT, A BOND PURCHASE AGREEMENT AND AN ESCROW
AGREEMENT; ESTABLISHING PROCEDURES FOR SELLING AND DELIVERING
THE BONDS; AND AUTHORIZING OTHER MATTERS RELATING TO THE BONDS
THE STATE OF TEXAS §
COUNTY OF WALKER §
CITY OF HUNTSVILLE §
WHEREAS, the City of Huntsville, Texas (the "City") has- previously issued and there is
now outstanding the following series of obligations:
City of Huntsville, Texas Waterworks and Sewer System Revenue Bonds, Series 1997; and
WHEREAS, the City Council of the City adopted Ordinance No. 2011 -09 on December 14,
2010 providing for a net present value debt service savings of not less than 5.75% of the principal •
amount of the Refunded Obligations net of any City contribution and a not to exceed principal
amount for the Bonds of $5,825,000; and
WHEREAS, in light of current market conditions, the City desires to repeal Ordinance No.
2011 -09 and adopt a new ordinance in order to provide for a net present value debt service savings
of not less than 3.50% of the principal amount of the Refunded Obligations net of any City
contribution and a not to exceed principal amount for the Bonds of $5,950,000; and
WHEREAS, the City Council of the City deems it advisable and in the best interest of the
City to refund the Refunded Obligations, as defined in Exhibit "A" attached hereto, in order to
achieve a net present value debt service savings of not less than 3.50% of the principal amount of
the Refunded Obligations net of any City contribution with such savings, among other information
and terms to be included in a pricing certificate to be executed by the City Manager, acting as the
designated pricing officer of the City, or, in the absence of the City Manager, the City's Finance
Director, all in accordance with the provisions of Chapter 1207, including 1207.007 thereof; and
WHEREAS, Chapter 1207, Texas Government Code, as amended ( "Chapter 1207 ")
authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof
together with any other available funds or resources, directly with a place of payment (paying agent)
for the Refunded Obligations or with a trust company or commercial bank that does not act as
depository for the City, and such deposit, if made before such payment dates, shall constitute the
HUNTSVU1XJWV1SSREVRFA1I: OtdirmnccRevised 1 0
making of firm banking and financial arrangements for the discharge and final payment of the
Refunded Obligations; and
WHEREAS, Chapter 1207 further authorizes the City to enter into an escrow agreement
with a paying agent for the Refunded Obligations or with a trust company or commercial bank that
does not act as depository for the City with respect to the safekeeping, investment, reinvestment,
administration and disposition of any such deposit, upon such terms and conditions as the City and
such escrow agent may agree, provided that such deposits may be invested and reinvested in
Defeasance Securities, as defined herein; and
WHEREAS, the Escrow Agreement hereinafter authorized, constitutes an agreement of the
kind authorized and permitted by said Chapter 1207; and
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized: and
WHEREAS, the Bonds authorized by this Ordinance are being issued and delivered
pursuant to the City Charter and Chapter 1207 of the Texas Government Code, as amended, and
other applicable laws: and
WHEREAS, the City Council further finds and determines that the revenue bonds herein
authorized can be issued on parity with the Previously Issued Bonds (hereinafter defined) payable
. from and secured by a first lien on and a pledge of the Net Revenues of the City's Combined
Waterworks and Sewer System in that the terms and conditions precedent specified for the issuance
of parity additional obligations have been satisfied; and
WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice of the time, place and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code.
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS THAT:
SECTION 1. DEFINITIONS. For all purposes of this Ordinance, except as otherwise
expressly provided or unless the context otherwise requires, the terms defined in Exhibit "A" to this
Ordinance have the meanings assigned to them in Exhibit "A ".
SECTION 2. AMOUNT, NAME, PURPOSE, AND AUTHORIZATION. The Bonds,
each to be designated the "CITY OF HUNTSVILLE, TEXAS WATERWORKS AND SEWER
SYSTEM REVENUE REFUNDING BOND, SERIES 201111, is hereby authorized to be issued
and delivered in accordance with the Constitution and laws of the State of Texas, particularly
Chapter 1207, Texas Government Code, as amended, and the Charter of the City. The Bonds shall
be issued in the aggregate principal amount not to exceed $5,950,000 for the purpose of providing
fluids for (i) refunding the Refunded Obligations and (ii) paying the costs of issuing the Bonds.
HUNTSVM1E(W WSSREVRM11: OrdhmceReviN d 2
SECTION 3. DATE, DENOMINATION, MATURITIES, NUMBERS, AND •
INTEREST. (a) Initially there shall be issued, sold, and delivered hereunder fully registered
bonds, without interest coupons, which may be in the form of Current Interest Bonds or Premium
Compound Interest Bonds, numbered consecutively from R -1 upward, in the case of Current Interest
Bonds, and from PC -1 upward, in the case of Premium Compound Interest Bonds (except the Initial
Bond delivered to the Attorney General of the State of Texas which shall be numbered T -1 and TPC-
1 respectively) payable to the respective initial Registered Owners thereof, or to the registered
assignee or assignees of said Bonds or any portion or portions thereof, in Authorized
Denominations, maturing not later than August 15, 2016, serially or otherwise on the dates, in the
years and in the principal amounts, respectively, and dated, as all set forth in the Pricing Certificate
to be executed and delivered by the Pricing Officer pursuant to subsection (b) of this section. The
Pricing Certificate is hereby incorporated in and made a part of this Ordinance and shall be filed in
the minutes of the City Council as part of this Ordinance. The Bonds shall be designated by the year
in which they are awarded. The authority of the Pricing Officer to execute a Pricing Certificate shall
expire at 5:00 p.m. on August 22, 2011. Bonds priced on or before August 22, 2011 may close after
such date.
(b) As authorized by Section 1207.007, Texas Government Code, as amended, the
Pricing Officer is hereby authorized to act on behalf of the City in selling and delivering the Bonds,
determining which of the Refundable Obligations shall be refunded and constitute Refunded
Obligations under this Ordinance and carrying out the other procedures specified in this Ordinance,
including determining the date of the Bonds, any additional or different designation or title by which
the Bonds shall be known, the price at which the Bonds will be sold, the years in which the Bonds .
will mature, the principal amount to mature in each of such years, the aggregate principal amount
of Current Interest Bonds and Premium Compound Interest Bonds, the rate of interest to be borne
by each such maturity, the interest payment periods, the dates, price, and terms upon and at which
the Bonds shall be subject to redemption prior to maturity at the option of the City, as well as any
mandatory sinking fund redemption provisions, and all other matters relating to the issuance, sale,
and delivery of the Bonds and the refunding of the Refunded Obligations, all of which shall be
specified in the Pricing Certificate; provided that (i) the price to be paid for the Bonds shall not be
less than 90% of the aggregate original principal amount thereof plus accrued interest thereon from
its date to its delivery, (ii) none of the Bonds shall bear interest at a rate, or yield in the case of
Premium Compound Interest Bonds, greater than the maximum authorized by law, and (iii) the
refunding must produce a net present value debt service savings of at least 3.50% of the principal
amount of the Refunded Obligations, net of any City contribution. In establishing the aggregate
principal amount of the Bonds, the Pricing Officer shall establish an amount not to exceed the
amount authorized in Section 2, which shall be sufficient to provide for the purposes for which the
Bonds are authorized and to pay the costs of issuing the Bonds.
(c) To achieve advantageous borrowing costs for the City, the Bonds shall be sold on a
negotiated, placement or competitive basis as determined by the Pricing Officer in the Pricing
Certificate. In determining whether to sell the Bonds by negotiated, placement or competitive sale,
the Pricing Officer shall take into account any material disclosure issues which might exist at the
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• time, the market conditions expected at the time of the sale and any other matters which, in the
judgment of the Pricing Officer, might affect the net borrowing costs on the Bonds.
If the Pricing Officer determines that the Bonds should be sold at a competitive sale, the
Pricing Officer shall cause to be prepared a notice of sale and official statement in such manner as
the Pricing Officer deems appropriate, to make the notice of sale and official statement available to
those institutions and firms wishing to submit a bid for the Bonds, to receive such bids, and to award
the sale of the Bonds to the bidder submitting the best bid in accordance with the provisions of the
notice of sale.
If the Pricing Officer determines that the Bonds should be sold by a negotiated sale or
placement, the Pricing Officer shall designate the placement purchaser or the senior managing
underwriter for the Bonds and such additional investmentbanking firms as the Pricing Officer deems
appropriate to assure that the Bonds are sold on the most advantageous terms to the City. The
Pricing Officer, acting for and on behalf of the City, is authorized to enter into and carry out a Bond
Purchase Contract or other agreement for the Bonds to be sold by negotiated sale or placement, with
the underwriters or placement purchasers at such price, with and subject to such terms as determined
by the Pricing Officer pursuant to Section 3(b) above. Each Bond Purchase Contract or other
agreement shall be substantially in the form and substance previously approved by the City in
connection with the authorization of ad valorem tax or revenue debt with such changes as are
acceptable to the Pricing Officer.
. (d) The Current Interest Bonds shall bear interest calculated on the basis of a 360 -day
year composed of twelve 30 -day months from the dates specified in the FORM OF BOND set forth
in this Ordinance to their respective dates of maturity or redemption at the rates per annum set forth
in the Pricing Certificate.
The Premium Compound Interest Bonds shall bear interest from the Issuance Date,
calculated on the basis of a 360 -day year composed of twelve 30-day months (subject to rounding
to the Compounded Amounts thereof), compounded on the Compounding Dates as set forth in the
Pricing Certificate, and payable, together with the principal amount thereof, in the manner provided
in the Form of Bonds at the rates set forth in the Pricing Certificate. Attached to the Pricing
Certificate, if Premium Compound Interest Bonds are to be issued, shall be the Accretion Table.
The Accreted Value with respect to any date other than a Compounding Date is the amount set forth
on the Accretion Table with respect to the last preceding Compounding Date, plus the portion of the
difference between such amount and the amount set forth on the Accretion Table with respect to the
next succeeding Compounding Date that the number of days (based on 30 -day months) from such
last preceding Compounding Date to the date for which such determination is being calculated bears
to the total number of days (based on 30-day months) from such last preceding Compounding Date
to the next succeeding Compounding Date.
SECTION 4. REDEMPTION. (a) Right of Redemption The City reserves the right, at
its option, to redeem the Bonds as set forth in the FORM OF BOND and the Pricing Certificate: The
City, at least thirty (30) days before the date of any optional redemption, shall notify the Paying
0 HUNTSVMLE(WWSSRHVR II: OrainanwRcvised 4
Agent/Registrar of such redemption date and of the amount and maturity of the Bonds to be •
redeemed.
(b) Notice of Redemption to Bondholder. The Paying Agent/Registrar shall give notice of
any redemption of the Bonds by sending notice by first class United States mail, postage prepaid,
not less than twenty (20) days before the date fixed for redemption, to the Bondholder at the address
shown in the Register. The notice shall state among other things, the redemption date, the
redemption price, the place at which the Bonds are to be surrendered for payment, and that the
Bonds so called for redemption shall cease to bear interest after the redemption date. Any notice
given as provided in this Section shall be conclusively presumed to have been duly given, whether
or not the Bondholder receives such notice. With respect to any optional redemption of the Bonds,
unless certain prerequisites to such redemption required by or this Ordinance have been met and
moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be
redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice
of redemption, such notice shall state that said redemption may, at the option of the City, be
conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying
Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth
in such notice of redemption. If a conditional notice of redemption is given and such prerequisites
to the redemption and sufficient moneys are not received, such notice shall be of no force and effect,
the City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in the
manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
(c) Effect of Redemption. Notice of redemption having been given as provided in this •
Section, the Bonds called for redemption shall become due and payable on the date fixed for
redemption and, unless the City defaults in the payment of the principal thereof or accrued interest
thereon, such Bonds thereof shall cease to bear interest from and after the date fixed for redemption,
whether or not such Bond is presented and surrendered for payment on such date. If the Bonds
thereof called for redemption are not so paid upon presentation and surrender thereof for redemption,
such Bonds thereof shall continue to bear interest at the rate stated on the Bond until paid or until
due provision is made for the payment of same.
SECTION 5. CHARACTERISTICS OF THE BONDS. (a) Registration. Transfer,
Conversion and Exchange: Authentication The City shall keep or cause to be kept at Wells Fargo
Bank, N.A., Austin, Texas (the "Paying Agent/Registrar ") books or records for the registration of
the transfer, conversion and exchange of the Bonds (the "Register "), and the City hereby appoints
the Paying Agent/Registrar as its registrar and transfer agent to keep such Bonds or records and
make such registrations of transfers, conversions and exchanges under such reasonable regulations
as the City and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make
such registrations, transfers, conversions and exchanges as herein provided within three days of
presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in the
Register the address of the Registered Owner of each Bond to which payments with respect to the
Bond shall be mailed, as herein provided; but it shall be the duty of each Registered Owner to notify
the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such
xUN7SVU,LErWVMREVRM1I: Onditm wReOL"d 5 •
interest payments shall not be mailed unless such notice has been given. The City shall have the
right to inspect the Register during regular business hours of the Paying Agent/Registrar, but
otherwise the Paying Agent/Registrar shall keep the Register confidential and, unless otherwise
required by law, shall not permit their inspection by any other entity. The Paying Agent/Registrar
shall make a copy of the Register available in the State of Texas. The City shall pay the Paying
Agent/Registrar's standard or customary fees and charges for making such registration, transfer,
conversion, exchange and delivery of a substitute Bond. Registration of assignments, transfers,
conversions and exchanges ofBonds shall be made in the mannerprovided and with the effect stated
in the FORM OF BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or
number to distinguish it from each other Bond.
Except as provided in subsection (c) hereof, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Bond, date and manually sign the Bond, and
no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The
Paying Agent/Registrarpromptly shall cancel all paid Bonds and Bonds surrendered for conversion
and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the
City Council or any other body or person so as to accomplish the foregoing conversion and
exchange of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the
printing, execution, and delivery of the substitute Bond in the manner prescribed herein, and the
Bonds shall be typewritten, photocopied, printed, lithographed, engraved or produced in any other
similar manner, all as determined by the officers executing such bond as evidenced by their
execution thereof. Pursuant to Chapter 1201, Texas Government Code, as amended, and particularly
Subchapter D thereof, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed
upon the Paying Agent/Registrar, and, upon the execution of the Bonds, the converted and
exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the same
effect as the Bond which initially was issued and delivered pursuant to this Ordinance, approved by
the Attorney General, and registered by the Comptroller of Public Accounts.
(b) Payment of Principal and Interest. The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bond, all
as provided in this Ordinance and in the Pricing Certificate. The Paying Agent/Registrar shall keep
proper records of all payments made by the City and the Paying Agent/Registrar with respect to the
Bond, and of all conversions and exchanges of Bonds, and all replacements of Bonds, as provided
in this Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date,
and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date) shall
be sent at least five (5) Business Days prior to the Special Record Date by United States mail, first -
class postage prepaid, to the address of each Registered Owner appearing on the Register at the close
of business on the last Business Day next preceding the date of mailing of such notice.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the Registered
• HUHTSVnjXr*IVMPLEVREFU 1: OrdinmxeReviwd
Owner, (ii) may be transferred and assigned, (iii) may be converted and exchanged for another
Bond, (iv) shall have the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi)
shall be payable as to principal and interest and (vii) shall be administered and the Paying
Agent/Registrar and the City shall have certain duties and responsibilities with respect to the Bonds,
all as provided, and in the manner and to the effect as required or indicated, in the Pricing Certificate
and the FORM OF BOND set forth in this Ordinance. The Bonds initially issued and delivered
pursuant to this Ordinance are not required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Bond issued in exchange for any Bond issued under this
Ordinance the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S
AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF BOND. On the closing
date, the initial Bond representing the entire principal amount of the Bonds, payable to the
underwriter, executed by manual or facsimile signature of the Mayor and City Secretary, approved
by the Attorney General of Texas, and registered and manually signed by the Comptroller of Public
Accounts of the State of Texas, and with the date of delivery inserted thereon by the Paying
Agent/Registrar, will be delivered to the underwriter.
(d) Substitute Paying A ent/Registrar. The City covenants with the Registered Owners of
the Bonds that at all times while the Bonds are outstanding the City will provide a competent and
legally qualified bank, trust company, financial institution, or other agency to act as and perform the
services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying
Agent/Registrar will be one entity. The City reserves the right to, and may, at its option, change the
Paying Agent/Registrar upon not less than 30 days written notice to the Paying Agent/Registrar, to
be effective at such time which will not disrupt or delay payment on the next principal or interest •
payment date after such notice. In the event that the entity at any time acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise
cease to act as such, the City covenants that promptly it will appoint a competent and legally
qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar
under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying
Agent/Registrar promptly shall transfer and deliver the Register (or a copy thereof), along with all
other pertinent Bonds and records relating to the Bonds, to the new Paying Agent/Registrar
designated and appointed by the City. Upon any change in the Paying Agent/Registrar, the City
promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each
Registered Owner of the Bonds, by United States mail, first -class postage prepaid, which notice also
shall give the address of the new Paying Agent/Registrar. By accepting the position and performing
as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
(e) Book -Entzy -Only System. The Bonds issued in exchange for the Bonds initially
issued as provided in Section 6(i) shall be issued in the form of a separate single fully registered
Bond for each of the maturities thereof registered in the name of Cede & Co., as nominee of the
Depository Trust Company of New York ( "DTC ") and except as provided in subsection (f) hereof,
all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
HUN7SVRJX/WWssREVRFlU: ora;narxexcvisa 7 •
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City
P
and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers
and dealers, banks, trust companies, clearing corporations and certain other organizations on whose
behalf DTC was created to hold securities to facilitate the clearance and settlement of securities
transactions among DTC participants (the "DTC Participant ") or to any person on behalf of whom
such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding
sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect
to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person,
other than a Registered Owner, as shown on the Registration Books, of any notice with respect to
the Bonds, or (iii) the payment to any DTC Participant or any person, other than a Registered
Owner, as shown in the Registration Books of any amount with respect to principal of or interest on
the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, but to the extent
permitted by law, the City and the Paying Agent/Registrar shall be entitled to treat and consider the
person whose name each Bond is registered in the registration Books as the absolute owner of such
Bond for the purpose of payment of principal of and interest, with respect to such Bond, for the
purposes of registering transfers with respect to such Bond, and for all other purposes of registering
transfers with respect to such Bonds, and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the
respective Registered Owners, as shown in the Registration Books as provided in this Ordinance,
or their respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the City's obligations with respect to payment of principal
of and interest on the Bonds to the extent of the sum or sums so paid. No person other than. a
Registered Owner, as shown in the Registration Books, shall receive a Bond evidencing the
obligation of the City to make payments of principal, and interest pursuant to this Ordinance. Upon
delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this
Ordinance with respect to interest checks being mailed to the registered owner at the close of
business on the Record Date the word "Cede & Co." in this Ordinance shall refer to such new
nominee of DTC.
(f) Successor Securities Dmosltory; Transfer Outside Book - Entry -Only System. In the event
that the City determines to discontinue the book -entry system through DTC or a successor or DTC
determines to discontinue providing its services with respect to the Bonds, the City shall either (i)
appoint a successor securities depository, qualified to act as such under Section 17(a) of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants
having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted
to being registered in the Registration Books in the name of Cede & Co., as nominee of DTC, but
shall be registered in the name of the successor securities depository, or its nominee, or in whatever
name or names the Registered Owner transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Ordinance.
0 HUNTSV J FAMSSREVRMI I: 0rdh=n=Rvi s«t
Pa eats to Cede & Co. Notwithstanding an other provision of this Ordinance to the
ig) Ym g Y p
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, in the manner provided in the Letter ofRepresentations
of the City to DTC.
(h) DTC Blanket Letter of Representations. The City confirms execution of a Blanket Letter
of Representations with DTC establishing the Book - Entry-Only System which will be utilized with
respect to the Bonds.
(i) Cancellation of Initial Bond. On the Closing Date, one initial Bond representing the
entire principal amount of the Bonds, payable in stated installments to the order of the underwriter
of the Bonds or its designee, executed by manual or facsimile signature of the Mayor and City
Secretary, approved by the Attorney General of Texas, and registered and manually signed by the
Comptroller of Public Accounts of the State of Texas, will be delivered to such underwriter or its
designee. Upon payment for the initial Bond, the Paying Agent/Registrar shall cancel. the initial
Bond and deliver to DTC or the Paying Agent /Registrar on behalf ofsuch underwriter one registered.
definitive Bond for each year of maturity of the Bonds, in the aggregate principal amount of all the
Bonds for such maturity.
SECTioN G. FORM OF BOND. The form of the Bonds, including the form of Paying
Agent/Regisb&s Authentication Certificate, the form of Assignment, and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bonds
initially issued and delivered pursuant to this Ordinance shall be, respectively, substantially as
follows, with such appropriate variations, omissions, or insertions as are permitted or required by
this Ordinance.
00 !1M 1111
fAll blanks and my a pnILnate or necessary insertions or deletions. to be completed as
determined by the Pricing Officer in the Pricing Certificate)
R UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF HUNTSVILLE, TEXAS $
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND,
SERIES 2011
[FORM OF FIRST PARAGRAPHS OF CURRENT INTEREST BONDS]
INTEREST RATE MATURITY DATE DATE OF BOND CUSIP NO.
HUNTSVIIS.FIW W' SSREVREFII I: drdhw=cRtvbcd 9 0
• REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the CITY OF HUNTSVILLE, TEXAS
(the "Issuer "), being a political subdivision and municipal corporation of the State of Texas, hereby
promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called
the "Registered Owner "), the Principal Amount specified above, and to pay interest thereon
(calculated on the basis of a 360 -day year of twelve 30 -day months) from ` at
the Interest Rate per annum specified above, payable on , `, and semiannually on
each ` and ` thereafter to the Maturity Date specified above, or the date of
redemption prior to maturity; except that if this Bond is required to be authenticated and the date of
its authentication is later than the first Record Date (hereinafter defined), such Principal Amount
shall bear interest from the interest payment date next preceding the date of authentication, unless
such date of authentication is after any Record Date but on or before the next following interest
payment date, in which case such principal amount shall bear interest from such next following
interest payment date; provided, however, that if on the date of authentication hereof the interest on
the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then
this Bond shall bear interest from the date to which such interest has been paid in full.
Notwithstanding the foregoing, during any period in which ownership of the Bonds is determined
only by a book entry at a securities depository for the Bonds, any payment to the securities
depository, or its nominee or registered assigns, shall be made in accordance with existing
. arrangements between the Issuer and the securities depository.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this Bond
shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at
maturity or upon the date fixed for its redemption prior to maturity, at the designated office for
payment of Wells Fargo Bank N.A., Austin, Texas which is the "Paying Agent/Registrar" for this
Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the
Registered Owner hereof on each interest payment date by check, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required
by the Ordinance authorizing the issuance of this Bond (the "Bond Ordinance ") to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent
by the Paying Agent/Registrar by United States mail, first -class postage prepaid, on each such
interest payment date, to the Registered Owner hereof, at its address as it appeared on the last
business day of the month next preceding each such date (the "Record Date ") on the Registration
Books kept by the Paying Agent/Registrar, as hereinafter described. In the event of a non - payment
of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar ifand
*As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent
with any provisions in this Form of Bond or contains information to complete missing information in this Form of
Bond, the language in the Pricing Certificate shall be used in the executed Bonds.
• HUNTSVQIDWWWREVRE91I: OrdhonceRavised 10
when funds for the payment of such interest have been received from the Issuer. Notice of the
Special Record Date and of the scheduled payment date of the past due interest (the "Special
Payment Date" which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first class, postage prepaid,
to the address of each Registered Owner appearing on the Registration Books of the Paying
Agent/Registrar at the close of business on the last business day next preceding the date of mailing
of such notice. Any accrued interest due upon the redemption of this Bond prior to maturity as
provided herein shall be paid to the Registered Owner upon presentation and surrender of this Bond
for redemption and payment at the principal office for payment of the Paying Agent/Registrar
(unless the redemption date is a regularly scheduled interest payment date, in which case accrued
interest on such redeemed Bonds shall be payable in the regular manner described above). The
Issuer covenants with the Registered Owner of this Bond that on or before each principal payment
date, interest payment date, and accrued interest payment date for this Bond it will make available
to the Paying Agent/Registrar, from the "Interest and Sinking Fund" referred to in and maintained
by the Bond Ordinance, the amounts required to provide for the payment, in immediately available
funds, of all principal of and interest on the Bonds, when due. Terms used in this Bond and not
otherwise defined shall have the meaning given in the Bond Ordinance.
DURING ANY PERIOD in which ownership of the Bonds is determined only by a book
entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity and
bearing the same interest rate are to be redeemed, the particular Bonds of such maturity and bearing
such interest rate shall be selected in accordance with the arrangements between the Issuer and the
securities depository.
[FORM OF FIRST PARAGRAPHS
OF PREMIUM COMPOUND INTEREST BOND]
NO. PC-
INTEREST RATE
REGISTERED OWNER:
MATURITY AMOUNT:
MATURITY DATE ISSUANCE DATE
MATURITY
AMOUNT
S
CUSIP NO.
ON THE MATURITYDATE SPECIFIED ABOVE, CITY OF HUNTSVILLE, TEXAS
(the "City "), being a political subdivision and municipal corporation of the State of Texas, hereby
promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter called
the "Registered Owner ") the Maturity Amount set forth above, representing the principal amount
HUN7SVMLFJWWSSREVREFlI1: Ord'ftwnceRwised 11
•
•
L`
• hereof and accrued and compounded interest hereon. Interest shall accrue on the principal amount
hereof from the Issuance Date at the interest rate per annum specified above, calculated on the basis
of a 360 day year comprised of twelve 30 day months, compounded semiannually on
and * of each year commencing , *. For convenience of reference
a table of the "Accreted Value" per $5,000 Maturity Amount is printed on the reverse side of this
Bond. The term "Accreted Value" as set forth in the table on the reverse side hereof shall mean the
original principal amount plus initial premium per $5,000 Maturity Amount compounded
semiannually on * and * at the yield shown on such table.
THE MATURITY AMOUNT ofthis Bond is payable in lawful money of the United States
of America, without exchange or collection charges. The Maturity Amount of this Bond shall be
paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity, at the
designated office forpayment of Wells Fargo BankN.A., which is the "Paying Agent/Registrar" for
this Bond, and shall be drawn by the Paying Agent/Registrar on, and solely from, funds of the City
required by the ordinance authorizing the issuance of the Bonds (the 'Bond Ordinance ") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided, payable to the
Registered Owner hereof, as it appears on the Registration Books kept by the Paying Agent/
Registrar, as hereinafter described. The City covenants with the Registered Owner of this Bond that
on or before the Maturity Date for this Bond it will make available to the Paying Agent/Registrar,
from the "Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to
provide for the payment, in immediately available funds of the Maturity Amount, when due.
Notwithstanding the foregoing, during any period in which ownership of the Bonds is determined
. only by a book entry at a securities depository for the Bonds, any payment to the securities
depository, or its nominee or registered assigns, shall be made in accordance with existing
arrangements between the City and the securities depository.
[FORM OF REMAINDER OF EACH BOND]
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the principal
office for payment of the Paying Agent/Registrar is located are authorized by law or executive order
to close, or the United States Postal Service is not open for business (each a "Non- Business Day "),
then the date for such payment shall be the next succeeding day which is not a Non - Business Day,
and payment on such date shall have the same force and effect as if made on the original date
payment was due.
THIS BOND is one of a series of Bonds dated as of * and authorized
to be issued pursuant to the Bond Ordinance adopted by the City Council of the City in the principal
*As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is
inconsistent with any provisions in this Form of Bond or contains information to complete missing information in
this Form of Bond, the language in the Pricing Certificate shall be used in the executed Bonds.
*As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent
with any provisions in this Form of Bond or contains information to complete missing information in this Form of
Bond, the language in the Pricing Certificate shall be used in the executed Bonds.
• HUNS ► EAwwsstu M11: O[dinaweRevised 12
amount of $ ' [constituting $ Current Interest Bonds and $
Premium Compound Interest Bonds]."
ON . OR ON ANY DATE THEREAFTER, the Bonds maturing on and after
may be redeemed prior to their scheduled maturities, at the option of the City, with
funds derived from any available and lawful source, at a redemption price equal to the principal
amount to be redeemed plus accrued interest to the date fixed for redemption as a whole, or from
time to time in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed shall
be selected and designated by the City, and if less than all of a maturity is to be redeemed the Paying
Agent/Registrar shall determine by lot the Bonds, or portions thereof within such maturity to be
redeemed (provided that a portion of a Bond may be redeemed only in integral multiples of $5,000
of principal amount).
[THE BONDS MATURING ON are subject to mandatory sinking fund
redemption by lot prior to maturity in the following amounts on the following dates and at a price
of par plus accrued interest to the redemption date ( "Term Bonds ").
Term Bonds Maturing on . 20
Redemption Date Principal Amount
20 $
20 t $ t
Ff- •
THE PRINCIPAL AMOUNT of the Term Bonds required to be redeemed pursuant to the
operation of the mandatory sinking fund redemption provisions shall be reduced, at the option of the
City by the principal amount of any Term. Bonds of the stated maturity which, at least 50 days prior
to a mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding
the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and
delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled
by the Paying Agent/Registrar at the request of the City with monies in the Interest and Sinking
Fund at a price not exceeding the principal amount of the Term Bonds plus accrued interest to the
date of purchase thereof, or (3) shall have been redeemed pursuant to the optional redemption
provisions and not theretofore credited against a mandatory sinking fund redemption requirement.] `
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity, a written notice of such redemption shall be sent by the Paying Agent/Registrar
by United States mail, first -class postage prepaid, to the Registered Owner of each Bond to be
redeemed at its address as it appeared on the Registration Books maintained by the Paying
* *To be included only if Current Interest Bonds and Premium Compound Interest Bonds are both issued and
completed as determined in the Pricing Certificate.
** *Use of Term Bonds, if any, to be determined by the Pricing Officer.
HUNMRIDWWSSREVRUMis 0rfflr=wcRwisW 13 •
Agent/Registrar on the day such notice of redemption is mailed. By the date fixed for any such
redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the
required redemption price for the Bonds or portions thereof which are to be so redeemed. If such
written notice of redemption is mailed and if due provision for such payment is made, all as provided
above, the Bonds or portions thereof which are to be so redeemed thereby automatically shall be
treated as redeemed prior to their scheduled maturities, and they shall not bear interest after the date
fixed for redemption, and they shall not be regarded as being outstanding except for the right of the
Registered Owner to receive the redemption price from the Paying Agent/Registrar out of the funds
provided for such payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds
having the same maturity date, bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000, at the written request of the Registered Owner,
and in an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
Registered Owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as
provided in the Bond Ordinance.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in the denomination of any integral multiple of $5,000 (an "Authorized
Denomination'). As provided in the Bond Ordinance, this Bond, or any unredeemed portion hereof,
may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned,
transferred and exchanged for a like aggregate principal amount of fully registered Bonds, without
interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case
may be, having the same denomination or denominations in any integral multiple of $5,000 as
. requested in writing by the appropriate Registered Owner, assignee or assignees, as the case may
be, upon surrender . of this Bond to the Paying Agent/Registrar for cancellation, all in accordance
with the form and procedures set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or
portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or
names this Bond or any such portion or portions hereof is or are to be registered. The form of
Assignment printed or endorsed on this Bond may be executed by the Registered Owner to evidence
the assignment hereof, but such method is not exclusive, and other instruments of assignment
satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Bond or
any portion or portions hereof from time to time by the Registered Owner. The Paying
Agent/Registrar's reasonable standard or customary fees and charges for transferring and exchanging
any Bond or portion thereof shall be paid by the City, but any taxes or governmental charges
required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer
or exchange as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar
shall not be required to make any such transfer or exchange (i) during the period commencing with
the close of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date, or, (ii) with respect to any Bond or any portion thereof
called for redemption prior to maturity, within 45 days prior to its redemption date; provided,
however, such limitation of transfer shall not be applicable to an exchange by the Registered Owner
of an unredeemed balance of a Bond called for redemption in part.
0 HUNTSvur.E /VMREVxERit: OrdiranceReAsed 14
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a •
securities depository for the Bonds, the foregoing requirements of holding, delivering or transferring
this Bond shall be modified to require the appropriate person or entity to meet the requirements of
the securities depository as to registering or transferring the book entry to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns
or otherwise ceases to act as such, the City has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and cause written notice thereof
to be mailed to the Registered Owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance and delivery of this Bond
have been performed, existed and been done in accordance with law; that this Bond is a special
obligation of the City, and that the interest on and principal of this Bond, together with the
Previously Issued Bonds and all other outstanding "Bonds Similarly Secured" (as defined in the
Bond Ordinance), as such interest comes due, and as such principal matures, are payable from and
secured by a lien on and pledge of the "Net Revenues" of the "System" (which is generally described
as the City's combined waterworks and sewer system), all as provided in the Bond Ordinance.
THE CITY has reserved the right, subject to restrictions stated in the Bond Ordinance, to
issue Additional Bonds which also may be made payable from and equally and ratably secured by
a first lien on and pledge of, the Net Revenues of the System in the same manner and to the same .
extent as this Series of Bond.
THE CITY also has reserved the right, subject to restrictions stated in the Bond Ordinance
to issue obligations payable from and equally and ratably secured, in whole or in part, by alien on
and pledge of the Net Revenues (as defined in the Bond Ordinance), junior and subordinate in rank
and dignity to the lien on and pledge of such Net Revenues securing payment of the Bond or Bonds
Similarly Secured.
THE OWNER HEREOF shall never have the right to demand payment of this Bond out of
any funds raised or to be raised by taxation.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
Registered Owner hereof and the City.
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the City, and countersigned with the manual or facsimile
RUNT U1YJ%'%WREVU1N11: omnv«xeviea 15 •
• signature of the City Secretary of the City and the official seal of the City has been duly impressed,
or placed in facsimile, on this Bond,
(facsimile sipeL (facsimile signature)
City Secretary, City of Huntsville, Texas Mayor, City of Huntsville, Texas
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE
OF THE COMPTROLLER OF PUBLIC ACCOUNTS:
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
(COMPTROLLER'S SEAL)
Comptroller of Public Accounts .
of the State of Texas
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION :CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration Certificate of'the
Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond, and that this Bond has been issued in exchange for a
bond or bonds, or a portion of a bond or bonds of a series which originally was approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the
State of Texas.
Dated: WELLS FARGO BANK N.A.
Austin, Texas
Paying Agent/Registrar
By
Authorized Representative
HUN73VffAZVWSSREVREP111: OrdinaweRmbW 16
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned Registered Owner of this Bond, or duly
authorized representative or attorney thereof, hereby sells, assigns and transfers this Bond and all
rights hereunder unto
1 1
(Assignee's Social Security or
Taxpayer Identification Number)
(Please print or typewrite Assignee's name and address,
including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever.
INSERTIONS FOR THE INITIAL BONDS
(i) The initial Current Interest Bond shall be in the form set forth in this FORM OF BOND,
except that:
A. immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As shown below" and
"CUSIP NO." shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"ON THE MATURITY DATE SPECIFIED ABOVE, the City of Huntsville, Texas (the
"Issuer "), being a political subdivision, hereby promises to pay to the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner "), on ` in each of
the years, in the principal installments and bearing interest at the per annum rates set forth in the
following schedule:
HUNMH1.&WWSSREVRM1 I: 0tdkam=R&Ased 17
•
C
Principal Maturity Interest
Amount Date Rate
(Information for the Current Interest Bonds from the Pricing Certificate to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360 -day year of twelve 30 -day months) from * at the respective Interest Rate per
annum specified above. Interest is payable on * and semiannually on each
and * thereafter to the date of payment of the principal installment specified above;
except, that if this Bond is required to be authenticated and the date of its authentication is later than
the first Record Date (hereinafter defined), such principal amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after any
Record Date but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date; provided, however, that
if on the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond
is being exchanged is due but has not been paid, then this Bond shall bear interest from the date to
which such interest has been paid in full."
C. The initial Bond shall be numbered 17-1."
(ii) The Initial Compound Interest Bond shall be in the form set forth in this Section, except that:
• A. immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As shown below" and
"CUSIP NO. " shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF HUNTSVILLE, Texas (the "City "), being a political subdivision of the State
of Texas, hereby promises to pay to the Registered Owner set forth above, or registered assigns
(hereinafter called the "Registered Owner ") the Payment at Maturity on * in each of the
years and in installments of the respective Maturity Amounts set forth in the following schedule:
Maturity Maturity Interest
Amounts Date Rate
*As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent
with any provisions in this Form of Bond or contains information to complete missing information in this Form of
Bond, the language in the Pricing Certificate shall be used in the executed Bonds.
*As provided in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds is inconsistent
with any provisions in this Form of Bond or contains information to complete missing information in this Form of
Bond, the language in the Pricing Certificate shall be used in the executed Bonds.
49 auNrsvuIXAMSSREVREPNII: oidineuexevised 18
(Information for the Premium Compound Interest Bonds from the Pricing Certificate to be inserted) 0
The amount shown above as the respective Maturity Amounts represent the principal amount hereof
and accrued and compounded interest hereon. Interest shall accrue on the principal amount hereof
from the Issuance Date at the interest rate per annum specified above, compounded semiannually on
* and * of each year commencing *. For convenience of reference, a
table appears on the back of this Bond showing the "Compounded Amount" of the original principal
amount plus initial premium, if any, per $5,000 Maturity Amount compounded semiannually at the
yield shown on such table."
C. the Initial Premium Compound Interest Bond shall be numbered 11TPC-l."
SECTION 7. PLEDGE OF NET REVENUES (a) The City hereby covenants and agrees
that all Net Revenues of the System, with the exception of those in excess of the amounts required
to establish and maintain the special funds created for the payment and security of the Bonds
Similarly Secured, are hereby irrevocably pledged to the payment of the Previously Issued Bonds,
the Bonds and Additional Bonds, if issued including the establishment andmaintenance of the special
funds created and established for the payment and security thereof all as hereinafter provided. It is
hereby ordained that the Bonds Similarly Secured and the interest thereon, shall constitute a first lien
on the Net Revenues of the System in accordance with the terms and provisions of this Ordinance,
which hen shall be valid and binding without any physical delivery thereof or further act by the City.
Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of revenues
granted by the City under this Section 7, and such pledge is therefore valid, effective and perfected.
If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge
of revenues granted by the City under this Section 7 is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as
it determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said
pledge to occur.
SECTION 8. WATERWORKS AND SEWER SYSTEM FUND The City hereby
covenants and agrees that Gross Revenues of the System (excluding earnings and income derived
from investments held in the Interest and Sinking Fund and Reserve Fund) shall be deposited as
collected to the credit of a fund maintained at a Depository and known on the books and records of
the City as the "Water and Sewer Fund" (herein called the "System Fund"), and such revenues of the
System shall be kept separate and apart from all other funds of the City. All Gross Revenues
deposited in the System Fund shall be pledged and appropriated to the extent required for the
following uses and in the order of priority shown:
(a) To the payment of all necessary and reasonable Maintenance and Operating Expenses
as defined herein or required by statute to be a first charge on and claim against the Gross Revenues
thereof.
HUNMU1TVVMS9REVRM1 1: OnrtnaxeReAW
• (b) To the payment of the amounts required to be deposited in the Interest and Sinking
Fund established and maintained for the payment of Debt Service on the Bonds Similarly Secured
as the same becomes due and payable.
(c) To the payment of the amounts required to be deposited in the Reserve Fund to
accumulate and maintain therein the Required Reserve in accordance with the provisions of this
Ordinance or any other ordinance relating to issuance of Bonds Similarly Secured.
Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making
adequate and sufficient provision for the payment thereof, may be appropriated and used for any other
City purpose now or hereafter permitted by law.
SECTION 9. INTEREST AND SINKING FUND. To provide funds to pay the principal of
and interest on the Bonds Similarly Secured as the same shall become due and payable, the City
hereby agrees and covenants to maintain at a Depository a special Account or Fund known as the
"City of Huntsville Waterworks and Sewer System Revenue Bonds Interest and Sinking Fund: (the
"Interest and Sinking Fund "). In addition to the payments required to be made to the Interest and
Sinking Fund in accordance with the provisions of the ordinance authorizing the Previously Issued
Bonds, the City covenants that there shall be deposited into the Interest and Sinking Fund prior to
each principal and interest payment date for the Bonds from the Net Revenues an amount equal to
One Hundred Per Centum (100 %) of the amount required to fully pay the interest on and principal
of the Bonds then falling due and payable, such deposits to the Interest and Sinking Fund to pay
• accrued interest and maturing principal on the Bonds to be made in substantially equal monthly
installments on or before the 1' day of each month beginning on or before the V day of the month
next following the month the Bonds are delivered to the Purchaser.
If the City shall, for any reason, fail to pay into the Interest and Sinking Fund in any month
the full amounts above stipulated, amounts equivalent to such deficiencies shall be set apart and paid
into said Interest and Sinking Fund from the first available and unallocated Net Revenues of the
following month or months, and such payments shall be in addition to the amounts hereinabove
provided to be otherwise paid into the Interest and Sinking Fund during such month or months.
Money in the Interest and Sinking Fund shall be used only to pay the principal of and interest on the
Previously Issued Bonds, the Bonds and any Additional Bonds.
Any surplus proceeds of sale of the Bonds shall be deposited in the Interest and Sinking Fund,
and such deposits shall be taken into consideration and reduce the amount of the monthly installments
otherwise required to be deposited in the Interest and Sinking Fund from the Net Revenues of the
System.
SECTION 10. RESERVE FUND. For purposes of accumulating and maintaining funds as
a reserve for the payment of the Bonds Similarly Secured, the City agrees and covenants to create and
maintain on the books and records of the City a separate and special fund or account known as the
"Revenue Bond Reserve Fund" (the "Reserve Fund "), and all funds deposited to the credit of such
fund shall be kept and maintained in a special banking account or fund maintained at a Depository.
• ttU?MVU1XMVSSREVRM h 0rdkmnwRev1=d 20
All funds deposited therein (excluding earnings and income derived or received from deposits or •
investments which maybe transferred to the System Fund referred to in Section 8 hereof during such
periods as there is on deposit in the Reserve Fund the Required Reserve) shall be used solely for the
payment of the principal of and interest on the Bonds Similarly Secured when (whether at maturity,
upon a mandatory redemption date or any interest payment date) other funds available for such
purposes are insufficient, and, in addition, may be used to the extent not required to maintain the
Required Reserve, to pay, or provide for the payment of, the final principal amount of a series of
Bonds Similarly Secured so that such series of Bonds Similarly Secured is no longer deemed to be
Outstanding as such term is defined herein.
The City hereby reaffirms that it will accumulate and, when accumulated, continuously
maintain in the Reserve Fund an amount equal to the lesser of (i) the Average Annual Debt Service
(calculated on a Fiscal Year basis) for all Bonds Similarly Secured then Outstanding, as determined
on the date each series of Additional Bonds are delivered or incurred, as the case may be, or (ii) the
maximum amount in a reasonably required reserve fund that can be invested without restriction as
to yield pursuant to Subsection (d) or Section 148 of the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder — the "Required Reserve."
By reason of the issuance of the Bonds, the Required Reserve shall be an amount equal to the
Average Annual Debt Service (calculated on a Fiscal Year basis) for all Bonds Similarly Secured that
are Outstanding at the time the provisions hereof become operative and effective, and the City shall
continue to make monthly deposits in the Reserve Fund, if then required, on or before the 1 I day of
each month in substantially equal amounts so that the Required Reserve shall have been accumulated •
in the Reserve Fund within 60 months from the date of issuance of the Bonds.
When and so long as the cash and investments in the Reserve Fund total not less than the
Required Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and when the
Reserve Fund at any time contains less than the Required Reserve, the City covenants and agrees to
cure the deficiency in the Required Reserve by resuming monthly deposits to said fund from the Net
Revenues of the System; such monthly deposits to be in amounts equal to not less than 1 /60th of the
then total Required Reserve to be maintained in said fund and to be made on or before the 151 day
of each month until the total Required Reserve then to be maintained in said Fund has been fully
restored. The City fiuther covenants and agrees that, subject only to the payments to be made to the
Interest and Sinking Fund, the Net Revenues shall be applied and appropriated and used to establish
and maintain the Required Reserve and to cure any deficiency in such amounts as required by the
terms of this Ordinance and any other ordinance pertaining to the issuance of Additional Bonds.
During such times as the Reserve Fund contains the total Required Reserve, the City may, at
its option, withdraw all surplus in the Reserve Fund in excess of the Required Reserve and deposit
such surplus in the System Fund.
SECTION 11. TRANSFERS FROM FUNDS. While any of the Bonds are Outstanding, the
proper officers of the City are hereby authorized to transfer or cause to be transferred to the Paying
Agent/Registrar, from funds on deposit in the Interest and Sinking Fund and, if necessary, in the
HUNTSV01E(W WSSREVRM1l: OrdinameRevised 21 •
• Reserve Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and
principal of the Bonds as the same accrue or mature; such transfer of funds to be made in such
manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar
for the Bonds at the close of the last business day next preceding the date of a payment for the Bonds.
SECTION 12. SECURITY OF FUNDS - INVESTMENTS. (a) Moneys on deposit in the
funds referred to in this Ordinance (except any portion thereof as may be at any time properly
invested) shall be secured in the manner and to the fullest extent permitted by law for the security of
public funds, and moneys on deposit in such funds shall be used only for the purposes permitted by
this Ordinance.
(b) Money deposited to the credit of any fund referenced in this Ordinance may, at the option
of the City be invested in funds and obligations authorized and identified in the Public Funds
Investment Act, as amended (Government Code, Chapter 2256); provided, however, the investment
of moneys in the Interest and Sinking Fund and Reserve Fund shall be restricted to Government
Obligations and time deposits or certificates of deposit secured (to the extent not insured by the
Federal Deposit Insurance Corporation) by Government Obligations; provided that all such deposits
and investments shall be made in such a manner that the money required to be expended from any
fund will be available at the proper time or times. Such investments (except State and Local
Government Series investments held in book entry form, which shall at all times be valued at cost)
shall be valued in terms of current market value within 45 days of the close of each Fiscal Year and,
with respect to investments held for the account of the Reserve Fund, within 30 days of the date of
• passage of each ordinance authorizing the issuance of Additional Bonds. All interest and income
derived from deposits and investments in the Interest and Sinking Fund immediately shall be credited
to, and any losses debited to, the Interest and Sinking Fund. All interest and interest income derived
from deposits in and investments of the Reserve Fund shall, subject to the limitations provided in
Section 10 hereof, be credited to and deposited in the System Fund. All such investments shall be
sold promptly when necessary to prevent any default in connection with the Bonds.
SECTION 13. ISSUANCE OF ADDITIONAL BONDS - REFUNDING BONDS -
OBLIGATIONS SECURED BY INFERIOR LIEN. (a) Subject to the provisions hereinafter
appearing as to conditions precedent which must be satisfied, the City reserves the right to issue, from
time to time as needed, Additional Bonds for any lawful purpose. Such Additional Bonds may be
issued in such form and manner as now or hereafter authorized by the laws of the State of Texas for
the issuance of evidences of indebtedness or other instruments, and should new methods or financing
techniques be developed that differ from those now available and in normal use, the City reserves the
right to employ the same in its financing arrangements provided only that the following conditions
precedent for the authorization and issuance of the same are satisfied, to wit:
(1) The Director of Finance of the City (or other officer of the City then having the primary
responsibility for the financial affairs of the City) shall have executed a certificate stating (a)
that, to the best of his knowledge and belief, the City is not then in default as to any covenant,
obligation or agreement contained in any ordinance or other proceeding relating to any
obligations of the City payable from and secured by a lien on and pledge of the Net Revenues
0 HUNTSVH.LEf%1X0eEVRW1 I: ona��c 22
of the System that would materially affect the security or payment of such obligations and (b) •
either (i) payments into all special funds or accounts created and established for the payment
and security of all outstanding obligations payable from and secured by alien on and pledge
of the Net Revenues of the System have been made and the amounts on deposit in such
special funds or accounts are the amounts then required to be on deposit therein or (ii) the
application of the proceeds of sale of such obligations then being issued will cure any such
deficiency.
(2) The Additional Bonds shall be scheduled to mature or be payable as to principal on
February 15 or August 15 (or both) in each year the same are to be outstanding or during the
term thereof.
(3) The City has secured a certificate or opinion of an independent Certified Public
Accountant to the effect that, according to the books and records of the City, the Net
Earnings, for the preceding Fiscal Year or for 12 consecutive months out of the IS months
immediately preceding the month the ordinance authorizing the issuance of the Additional
Bonds is adopted, are at least equal to (1)1.10 times the maximum Debt Service Requirement
and (ii) 1.25 times the Average Annual Debt Service for all Bonds Similarly Secured then
Outstanding after giving effect to the issuance of the Additional Bonds then being issued. In
making a determination of the Net Earnings, the Accountant may take into consideration a
change in the rates and charges for services and facilities afforded by the System that became
effective at least 60 days prior to the last day of the period for which Net Earnings are
determined and, for purposes of satisfying the above Net Earnings test, make a pro forma. •
determination of the Net Earnings of the System for the period of time covered by his
certification or opinion based on such change in rates and charges being in effect for the
entire period covered by the Accountant's certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean the Gross Revenues of the System
after deducting the Maintenance and Operating Expenses of the System, but not depreciation charges
or expenditures which, under generally accepted accounting principles, should be charged to capital
expenditures.
(b) The City reserves the right to issue refunding bonds to refund all or any part of the Bonds
Similarly Secured (pursuant to any law then available) upon such terms and conditions as the City
Council of the City may deem to be in the best interest of the City and its inhabitants, and if less than
all such Bonds Similarly Secured then outstanding are refunded, the conditions precedent prescribed
(for the issuance of Additional Bonds) set forth in subparagraph (a) (3) shall give effect to the Debt
Service of the proposed refunding bonds (and shall not give effect to the Debt Service of the Bonds
Similarly Secured being refunded following their cancellation or provision being made for their
payment).
(c) The City hereby reserves the right to issue obligations payable from and secured by alien
on and pledge of the Net Revenues of the System, junior and subordinate in rank and dignity to the
HLTNTSVUIYJwwssasvREF\11: 07dinwiccRevised 23
• lien and P led a securing the payment of the Bonds Similarly Secured, as may be authorized by the
g
laws of the State of Texas.
SECTION 14. RATES AND CHARGES. For the benefit of the Holders of the Bonds and in
addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance, the
City hereby expressly stipulates and agrees, while any of the Bonds are Outstanding, to establish and
maintain rates and charges for facilities and services afforded by the System that are reasonably
expected, on the basis of available information and experience and with due allowance for
contingencies, to produce Gross Revenues in each Fiscal Year sufficient:
(a) To pay Maintenance and Operating Expenses, depreciation charges and replacement
and betterment costs,
(b) To produce Net Revenues sufficient to pay the current Debt Service on the Bonds
Similarly Secured then Outstanding and the amounts required to be deposited in any reserve or
contingency fund created for the payment and security of the Bonds Similarly Secured, or other
evidences of indebtedness issued or incurred that are payable only from and secured solely by alien
on and pledge of the Net Revenues of the System, and
(c) To produce Net Revenues equal to at least 1.10 times the annual Debt Service for the
Bonds Similarly Secured then Outstanding.
(d) To pay all other indebtedness payable from the Net Revenues and/or secured by a lien
on the properties or the revenues of the System.
SECTION 15. MAENTENANCE AND OPERATION - INSURANCE. The City shall
maintain the System in good condition and operate the same in an efficient manner and at reasonable
cost. In regard to the operations and properties of the System, the City also agrees to carry and
maintain liability and property damage insurance of the kind and in the amounts carried by municipal
corporations in Texas owning and operating similar facilities and providing like services; provided,
however, the City in lieu of and/or in combination with carrying such insurance may self-insure
against such perils and risks by establishing self-insurance reserves. Annually each year not later
than the end of each Fiscal Year, the City shall prepare or cause to be prepared by a person competent
and knowledgeable in such matters a written evaluation of the adequacy of such self - insurance and/or
insurance coverage and of any recommended changes in regard to the City's insurance /self- insurance
policies, practices and procedures.
SECTION 16. RECORDS - ACCOUNTS - ACCOUNTING REPORTS. The City hereby
covenants and agrees that while the Bonds are Outstanding, it will keep and maintain separate and
complete records and accounts pertaining to the operations of the System in which complete and
correct entries shall be made of all transactions relating thereto, as provided by Chapter 1 502, Texas
Government Code, as amended or other applicable law. The Holders of the Bonds or any duly
authorized agent or agents of such Holders shall have the right at all reasonable times to inspect such
records, accounts and data relating thereto, and to inspect the System an all properties comprising
0 HUNT uIZIMSSREVREA1I: Or&nmb=Rcvised 24
same. The City further agrees that following the close of each Fiscal Year, it will cause an audit of •
such books and accounts to be made by an independent firm of Certified Public Accountants. Each
such audit, in addition to whatever other matters may be thought proper by the accountant, shall
particularly include the following:
(a) A statement of the income and expenses of the System for such Fiscal Year.
(b) A balance sheet for the System as of the end of such Fiscal Year.
(c) The Accountant's comments regarding the manner in which the City has carried out
the requirements of this Ordinance and any other ordinance authorizing the issuance of Additional
Bonds and his recommendations for any changes or improvements in the operations, records and
accounts of the System.
Expenses incurred in making an annual audit of the operations of the System are to be regarded as
Maintenance and Operating Expenses. Copies of each annual audit shall be furnished to the
Executive Director of the Municipal Advisory Council of Texas at his office in Austin, Texas, and,
upon request, to the initial Purchasers of the Bonds and subsequent Holders of the said Bonds. The
audits herein required shall be made within 120 days following the close of each Fiscal Year insofar
as is possible.
SECTION 17. COVENANTSREGARDINGTAXEXEMPTIONOFINTERESTONTHE
BONDS. (a) Covenants. The City covenants to take any action necessary to assure, or refrain from
any action which would adversely affect, the treatment of the Bonds as an obligation described in 40
section 103 of the Internal Revenue Code of 1986, as amended (the "Code "), the interest on which
is not includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds or the Refunded Obligations or the projects financed or refinanced therewith (less
amounts deposited to a reserve fund, if any) are used for any "private business use," as
defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds of the
Bonds or the Refunded Obligations or the projects financed or refinanced therewith are so
used, such amounts, whether or not received by the City, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service on
the Bonds, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
Refunded Obligations or the projects financed or refinanced therewith (less amounts
deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a
"private business use" which is "related" and not "disproportionate," within the meaning of
section 141(b)(3) of the Code, to the governmental use;
HUNTSVU LEtW WSSREVREE711: OcdinanceRevised 25 •
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve
fund, if any) is directly or indirectly used to finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Bonds being
treated as a "private activity bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a materially
higher yield over the term of the Bonds, other than investment property acquired with --
(A) proceeds of the Bonds invested for a reasonable temporary period of 3
years or less or, in the case of a current refunding bonds, for a period of 90 days and
in the case of an advance refunding bonds, for a period of 30 days,
(B) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148 -1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds does not otherwise contravene
the requirements of section 148 of the Code (relating to arbitrage) and, to the extent
applicable, section 149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five -year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent
of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the
United States of America, not later than 60 days after the Bonds has been paid in full, 100
percent of the amount then required to be paid as a result of Excess Earnings under section
148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and such
fund shall not be subject to the claim of any other person, including without limitation the
bondholders. The Rebate Fund is established for the additional purpose of compliance with section
148 of the Code.
0 auxrsvnIXwwssxavxMII: or&ar=xcvIwa 26
(c) Proceeds. The City understands that the term "proceeds" includes "disposition proceeds" •
as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if
any) and proceeds of the Refunded Obligations expended prior to the date of issuance of the Bonds.
It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the
Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which
modify or expand provisions of the Code, as applicable to the Bonds, the City will not be required
to comply with any covenant contained herein to the extent that such failure to comply, in the opinion
of nationally recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or
rulings are hereafter promulgated which impose additional requirements which are applicable to the
Bonds, the City agrees to comply with the additional requirements to the extent necessary, in the
opinion of nationally recognized bond counsel, to preserve the exemption from federal income
taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the
City hereby authorizes and directs the City Manager or the Mayor or Secretary of the City Council
to execute any documents, certificates or reports required by the Code and to make such elections,
on behalf of the City, which may be permitted by the Code as are consistent with the purpose for the
issuance of the Bonds.
(d) Disposition of Project. The City covenants that the property constituting the projects
financed or refinanced with the proceeds of the Bonds will not be sold or otherwise disposed in a
transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains
an opinion of nationally- recognized bond counsel that such sale or other disposition will not .
adversely affect the tax- exempt status of the Bonds. For purposes of the foregoing, the portion of the
property comprising personal property and disposed in the ordinary course shall not be treated as a
transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City shall
not be obligated to comply with this covenant if it obtains an opinion that such failure to comply will
not adversely affect the excludability for federal income tax purposes from gross income of the
interest.
(e) Designation as Qualified Tax -Exem to Obli ag tion. The City hereby designates the Bonds
as a "qualified tax- exempt obligation" as defined in section 265(b)(3) of the Code. In furtherance of
such designation, the City represents, covenants and warrants the following: (a) that during the
calendar year in which the Bonds are issued, the City (including any subordinate entities) has not
designated nor will designate bonds, which when aggregated with the Bonds, will result in more than
$10,000,000 of "qualified tax- exempt obligations" being issued; (b) that the City reasonably
anticipates that the amount of tax- exempt obligations issued, during the calendar year in which the
Bonds are issued, by the City (or any subordinate entities) will not exceed $10,000,000; and, (c) that
the City will take such action or refrain from such action as necessary, and as more particularly set
forth in this Section, in order that the Bonds will not be considered a "private activity bond" within
the meaning of section 141 of the Code.
SECTION 18. SALE OF BONDS. The Bonds shall be sold and delivered, pursuant to a a
purchase agreement by and between the City and the purchaser at a price under the terms set forth in
HUNMU.LFJWWSSREVRM1I: ora;nceRevina 27 0
the Pricing Certificate. The Pricing Officer is authorized to execute the purchase agreement in
connection with the sale of the Bonds.
SECTION 19. APPROVAL OF PAYING AGENT
/REGISTRAR AGREEMENT AND
ESCROW AGREEMENT. (a) The Paying Agent/RegistrarAgreement ("Paying Agent Agreement' ")
by and between the City and the Paying Agent in substantially the form and substance attached hereto
as Exhibit "B" is hereby approved and the Pricing Officer is hereby authorized and directed to
complete, amend, modify and execute the Paying Agent Agreement as necessary.
(b) The Escrow Agreement ("Escrow Agreement) by and between the City and the Escrow
Agent in substantially the form and substance attached hereto as Exhibit "D" is hereby approved, and
the Pricing Officer is hereby authorized to complete, amend, modify and execute the Escrow
Agreement, as necessary. The Mayor, City Manager, Director of Finance, the Secretary or Assistant
Secretary are each hereby authorized to take such action as may be necessary to cause the purchase
and delivery of the federal securities to be acquired and deposited to the credit of the Escrow Fund
created by the Escrow Agreement.
SECTION 20. REFUNDING OFREFUNDED OBLIGATIONS. That concurrently with the
delivery of the Bonds, the City shall cause to be deposited an amount from the proceeds of the sale
of the Bonds with the Escrow Agent sufficient together with other legally available funds of the City,
to provide for the refunding and defeasance of the Refunded Obligations. The Pricing Officer is
hereby authorized and directed to issue to the Escrow Agent the Notice of Redemption with respect
to the Refunded Obligations in substantially the form set forth in Exhibit "C" hereto completed with
such information to conform with the Pricing Certificate.
SECTION 21. APPROVAL OF OFFICIAL STATEMENT. The Pricing Officer is hereby
authorized to approve the Preliminary Official Statement and the Official Statement relating to the
Bonds and any addenda, supplement or amendment thereto, and to deem such documents final in
accordance with Rule 15c2-12. The City further approves the distribution of such Official Statement
in the reoffering of the Bonds by the underwriter in final form, with such changes therein or additions
thereto as the Pricing Officer executing the same may deem advisable, such determination to be
conclusively evidenced by his execution thereof.
SECTION 22. INSURANCE, PROVISIONS. In connection with the sale of the Bonds, the
City may obtain municipal bond insurance policies from one or more recognized municipal bond
insurance organizations (the "Bond Insurer" or "Bond Insurers") to guarantee the full and complete
payment required to be made by or on behalf of the City on the Bonds. The Pricing Officer is hereby
authorized to sign a commitment letter with the Bond Insurer or Bond Insurers and to pay the premium
for the bond insurance policies at the time of the delivery of the Bonds to the underwriter out of the
proceeds of sale of the Bonds or from other available funds and to execute such other documents and
certificates as necessary in connection with the bond insurance policies as the Pricing Officer may
deem appropriate. Printing on the Bonds covered by the bond insurance policies a statement
describing such insurance, in form and substance satisfactory to the Bond Insurer and the Pricing
Officer, is hereby approved and authorized. The Pricing Certificate may contain provisions related
0 HLWMVUJXJWW5SMRM1 1: OrAunmRmiud 28
to the bond insurance policies, including payment provisions thereunder, and the rights of the Bond
Insurer or Insurers, and any such provisions shall be read and interpreted as an integral part of this
Ordinance.
SECTION 23. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports. The
City shall provide annually to the MSRB, in an electronic format as prescribed by the MSRB, within
six months after the end of any fiscal year, financial information and operating data with respect to
the City as determined by the Pricing Officer at the time the Bonds are sold. The Pricing Certificate
shall specify such financial information and operating data of the general type included in the final
Official Statement authorized by Section 16 of this Ordinance. Any financial statements to be so
provided shall be (1) prepared in accordance with the accounting principles described in Exhibit "E"
hereto, or such other accounting principles as the City may be required to employ from time to time
pursuant to state law or regulation, and (2) audited, if the City commissions an audit of such
statements and 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 within such period, and audited financial statements for the applicable
fiscal year to the MSRB, when and if the audit report on such statements become available.
If the City changes the fiscal year, the City will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this subsection may
be set forth in full in one or more documents or may be included by specific reference to any
document that is available to the public on the MSRB's intereet web site or filed with the SEC. All
documents provided to the MSRB pursuant to this subsection shall be accompanied by identifying
information as prescribed by the MSRB.
(b) Material Event Notices. The City shall notify the MSRB, in an electronic format as
prescribed by the MSRB, in a timely manner not in excess of ten business days after the occurrence
of the event, of any of the following events with respect to the Bonds:
laws;
A. Principal and interest payment delinquencies;
B. Non - payment related defaults, if material within the meaning of the federal securities
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;
•
HUNTSVII EWWSSREVRER11:OrdimnceRevind 29 •
F. Adverse tax opinions, the issuance by the Internal Revenue Service ofproposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701 —TEB) or other material
notices or determinations with respect to the tax- exempt status of the Bonds, or other events affecting
the tax- exempt status of the Bonds;
G. Modifications to rights of holders of the Bonds, if material within the meaning of the
federal securities laws;
H. Bond calls, if material within the meaning of the federal securities laws;
I. Defeasances;
J. Release, substitution, or sale of property securing repayment of the Bonds, if material
within the meaning of the federal securities laws;
K. Rating changes;
L. Bankruptcy, insolvency, receivership or similar event of the City;
M. The consummation of a merger, consolidation, or acquisition involving the City or the
sale of all or substantially all of the assets of the City, other than in the ordinary course of business,
the entry into a definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material within the meaning
of the federal securities laws; and
N. Appointment of a successor or additional trustee or the change of name of a trustee, if
material within the meaning of the federal securities laws.
The City shall notify the MSRB, in an electronic format as prescribed by the MSRB, in a
timely manner, of any failure by the City to provide financial information or operating data in
accordance with this subsection by the time required. All documents provided to the MSRB pursuant
to this subsection shall be accompanied by identifying information as prescribed by the MSRB.
(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 respect to the Bonds within the meaning of the Rule, except that the City
in any event will give the notice required by this Ordinance of any Bond calls and defeasance that
cause the Bonds to be no longer outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners of
the Bonds, 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, financial statements, and notices that it has expressly agreed
to provide pursuant to this Section and does not hereby undertake to provide any other information
• HUNTSVH1YJwwssxevREFN1 l: orainanceftviwd 30
that may be relevant or material to a complete presentation of the City's financial results, condition,
or prospects relating to the Financing System 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 concerning such information or its usefulness to a decision to
invest in or sell Bonds at any future date.
UNDER NO 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 OR IN 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.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Should the Rule be amended to obligate the City to make filings with or provide notices to
entities other than the MSRB, the City hereby agrees to undertake such obligation with respect to the
Bonds in accordance with the Rule as amended.
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, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary
offering of the Bonds 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
(2) either (A) the holders of a majority in aggregate principal amount (or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (B) a person that is unaffiliated with the City (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interests of
the holders and beneficial owners of the Bonds. If the City so amends the provisions of this Section,
it shall include with any amended financial information or operating data next provided in accordance
with this Section an explanation, in narrative form, of the reasons for the amendment and of the impact
of any change in the type of financial information or operating data so provided. The City may also
amend or repeal the provisions of this continuing disclosure requirement if the SEC amends or repeals
the applicable provisions of the Rule or a court of final jurisdiction enters judgment that such
provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence
would not prevent an underwriter from lawfully purchasing or selling the Bonds in the primary
offering of the Bonds.
HUN7Svu u�wwssREVxMu: 0rdhmn=Rcvised 31 •
SECTION 24. SPECIAL COVENANTS. The City further covenants and agrees by and
through this Ordinance as follows:
(a) It has the lawful power to pledge the Net Revenues of the System to the
payment of the Bonds to the extent provided herein and has lawfully exercised said power
under the Constitution and laws of the State of Texas, and that the Previously Issued Bonds,
the Bonds, together with any Additional Bonds, shall be ratably secured in such manner that
no one bond shall have preference over any other bond of said issues.
(b) The Net Revenues of the System have not been in any manner pledged or
encumbered to the payment of any debt or obligation of the City or the System, save and
except for the Previously Issued Bonds, the Bonds and various series of the City's outstanding
Certificates of Obligation.
(c) No free services of the System shall be allowed, and should the City or any of
its agents or instrumentalities make use of the services and facilities of the System, payment
of the reasonable value thereof shall be made by the City out of funds from sources other than
the revenues and income of the System.
(d) While the Bonds remain Outstanding, the City will not sell or otherwise dispose
of the System or, except as authorized below, any substantial portion of the System or its
component parts; provided, however, to the extent and in the manner authorized by law, the
City may sell or dispose of any property, facilities and equipment not necessary or essential
the operation of the System or which is obsolete, damaged or surplus and the proceeds of sale
of such property, facilities and equipment, if any, shall be deposited to the credit of the System
Fund.
SECTION 25. REMEDIES IN EVENT OF DEFAULT. In addition to all rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event
the City (a) defaults in payments to be made to the Interest and Sinking Fund or the Reserve Fund as
required by this Ordinance or (b) defaults in the observance or performance of any other of the
covenants, conditions or obligations sets forth in this Ordinance, the Holder of the Bonds shall be
entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring the
City and its officer to observe and perform any covenant, condition or obligation prescribed in this
Ordinance. No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right and power may be exercised from time to time as often as
may be deemed expedient.
The specific remedy herein provided shall be cumulative of all other existing remedies and the
specification of such remedy shall not be deemed to be exclusive.
0 HUNTSVILEMWSSREVRERn: ordkor eRevised 32
SECTION 26. SPECIAL OBLIGATIONS. The Bonds are special obligations of the City
payable from the pledged Net Revenues of the System and the Holders thereof shall never have the
right to demand payment thereof out of funds raised or to be raised by taxation.
SECTION 27. DEFEASANCE OF THE BONDS. (a) The Bonds and the interest thereon shall
be deemed to be paid, retired and no longer outstanding (a " Defeased Bond ") within the meaning of
this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the
principal of the Bonds, plus interest thereon to the due date (whether such due date be by reason of
maturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in
accordance with the terms thereof (including the giving of any required notice of redemption) or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or making
available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of
America sufficient to make such payment, (2) Defeasance Securities, certified by an independent
public accounting firm of national reputation to mature as to principal and interest in such amounts
and at such times as will ensure the availability, without reinvestment, of sufficient money to provide
for such payment and when proper arrangements have been made by the City with the Paying
Agent/Registrar for the payment of its services until the Defeased Bond shall have become due and
payable or (3) any combination of (1) and (2). At such time as the Bonds shall be deemed to be a
Defeased Bond hereunder, as aforesaid, the Bonds and the interest thereon shall no longer be secured
by, payable from, or entitled to the benefits of, the Net Revenues as provided in this Ordinance, and
such principal and interest shall be payable solely from such money or Defeasance Securities.
(b) The deposit under clause (ii) of subsection (a) shall be deemed a payment of the Bonds as
aforesaid when proper notice of redemption of the Bonds shall have been given, in accordance with
this Ordinance. Any money so deposited with the Paying Agent/Registrar as provided in this Section
may at the discretion of the City also be invested in Defeasance Securities, maturing in the amounts
and at the times as hereinbefore set forth, and all income from all Defeasance Securities in possession
of a paying agent pursuant to this Section which is not required for the payment of the Bonds and
premium, if any, and interest thereon with respect to which such money has been so deposited, shall
be turned over to the City, or deposited as directed in writing by the City.
(c) Notwithstanding any provision of any other Section of this Ordinance which may be
contrary to the provisions of this Section, all money or Defeasance Securities set aside and held in
trust pursuant to the provisions of this Section for the payment ofprincipal of the Bonds and premium,
if any, and interest thereon, shall be applied to and used solely for the payment of the Bonds and
premium, ifany, and interest thereon, with respect to which such money or Defeasance Securities have
been so set aside in trust.
(d) Notwithstanding anything elsewhere in this Ordinance contained, if money or Defeasance
Securities have been deposited or set aside with a paying agent pursuant to this Section for the
payment of the Bonds and such Bonds shall not have in fact been actually paid in full, no amendment
of the provisions of this Section shall be made without the consent of the registered owner of the
Bonds affected thereby.
HiiNMRIEAMSSREVRMI I: "mu=Revfwd 33 0
(e ) Notwithstanding the provisions of subsection (a ) above , to the extent that, upon the
defeasance of the Defeased Bond to be paid at its maturity, the City retains the right under Texas law
to later call that Defeased Bond for redemption in accordance with the provisions of the Ordinance
authorizing its issuance, the City may call such Defeased Bond for redemption upon complying with
the provisions of Texas law and upon the satisfaction of the provisions of subsection (a) above with
respect to such Defeased Bond as though it was being defeased at the time of the exercise of the option
to redeem the Defeased Bond and the effect of the redemption is taken into account in determining
the sufficiency of the provisions made for the payment of the Defeased Bond.
SECTION 28. DAMAGED, MUTILATED LOST STOLEN, ORDESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a new bond
of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or
destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Anlication for Rai lacement Bonds. Application for replacement of damaged, mutilated,
lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the Paying
Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered owner applying
for a replacement bond shall fiuish to the City and to the Paying Agent/Registrar such security or
indemnity as may be required by them to save each of them harmless from any loss or damage with
respect thereto. Also, in every case of loss, theft or destruction of a Bond, the registered owner shall
furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft
or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the
registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged
or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Bond shall have matured, and no default has occurred which is then continuing in the
payment of the principal of, redemption premium, if any, or interest on the Bond, the City may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is finnished
as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing and
other expenses in connection therewith. Every replacement bond issued pursuant to the provisions
of this Section by virtue of the fact that any Bond is lost, stolen or destroyed shall constitute a
contractual obligation of the City whether or not the lost, stolen or destroyed Bond shall be found at
any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance
equally and proportionately with any and all other Bonds duly issued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter D of Chapter
1201, Texas Government Code, this Section of this Ordinance shall constitute authority for the
issuance of any such replacement bond without necessity of further action by the governing body of
0 HUNUVRJ.E HVMREVXM11: 0rdh=weRcv6cd 34
the City or any other body or person, and the duty of the replacement of such bonds is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Bonds in the form and manner and with the effect, as provided in Section
5 of this Ordinance for Bonds issued in exchange for other Bonds.
SECTION 29. AMENDMENT OF ORDINANCE (a) The holders of the Bonds aggregating
a majority in principal amount of the aggregate principal amount of then Outstanding Bonds shall have
the right from time to time to approve any amendment to this Ordinance which may be deemed
necessary or desirable by the City, provided, however, that without the consent of the holders of all
of the effected Bonds at the time outstanding, nothing herein contained shall permit or be construed
to permit the amendment of the term and conditions in this Ordinance or in the Bonds so as to:
(1) Make any change in the maturity of the Outstanding Bonds;
(2) Reduce the rate of interest borne by any of the Outstanding Bonds;
(3) Reduce the amount of the principal payable on the Outstanding Bonds;.
(4) Modify the terms of payment of principal of or interest on the Outstanding Bonds or
impose any conditions with respect to such payment;
(5) Affect the rights of the holders of less than all of the Bonds then outstanding;
(6) Change the minimum percentage of the principal amount of Bonds necessary for
consent to such amendment.
(b) If at any time the City shall desire to amend this Ordinance under this Section, unless
waived by the Holder, the City shall cause notice of the proposed amendment to be delivered to the
Insurer and published in a financial newspaper or journal of general circulation in The City of New
York, New York, once during each calendar week for at least two successive calendar weeks. Such
notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof
is on file for inspection by all registered owners of the Bonds at the designated trust office of the
registrar for the Bonds. Such publication is not required, however, if notice in writing is given to each
registered owner of the Bonds.
(c) Whenever at any time not less than thirty days, and within one year, from the date of the
first publication of said notice or other service of written notice the City shall receive an instrument
or instruments executed by the holders of at least a majority in aggregate principal amount of all
Bonds then Outstanding, which instrument or instruments shall refer to the proposed amendment
described in said notice and which specifically consent to and approve such amendment in
substantially the form of the copy thereof on file with the Paying Agent/Registrar, the City Council
may pass the amendatory ordinance in substantially the same form.
•
E
HUNUVRIE"WREVRMI I: 0r&=wxRv/iwd 35 0
• (d) Upon the passage of any amendatory ordinance pursuant to the provisions of this Section,
this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and
the respective rights, duties and obligations under this Ordinance of the City and all the holders of
then outstanding Bonds shall thereafter be determined, exercised and enforced hereunder, subject in
all respects to such amendments.
(e) Any consent given by the registered owner of a Bond pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the first publication of the
notice provided for in this Section, and shall be conclusive and binding upon all future holders of the
same Bond during such period. Such consent may be revoked at any time after six months from the
date of the first publication of such notice by the holder who gave such consent, or by a successor in
title, by filing notice thereof with the Paying Agent/Registrar and the City, but such revocation shall
not be effective if the registered owners of at least a majority in aggregate principal amount of the then
outstanding Bonds as in this Section defined have, prior to the attempted revocation, consented to and
approve the amendment.
(f) For the purpose of this Section, the fact of the holding of Bonds issued in registered form
without coupons and the amounts and numbers of such Bonds and the date of their holding same shall
be proved by the Registration Books of the Paying Agent/Registrar. For purposes of this Section, the
holder of a Bond in such registered form shall be the owner thereof as shown on such Registration
Books. The City may conclusively assume that such ownership continues until written notice to the
contrary is served upon the City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or remedies
to bondholders or to surrender, restrict or limit any right or power herein reserved to or
conferred upon the City;
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or in regard
to clarifying matters or questions arising under this Ordinance, as are necessary or desirable
and not contrary to or inconsistent with this Ordinance and which shall not adversely affect
the interests of the holders of the Bonds;
(3) To modify any of the provisions of this Ordinance in any other respect
whatever, provided that (i) such modification shall be, and be expressed to be, effective only
after all Bonds outstanding at the date of the adoption of such modification shall cease to be
outstanding, and (ii) such modification shall be specifically referred to in the text of all
Additional Bonds issued after the date of the adoption of such modification.
0 HUNTSVILLEAMSSREVRMI I: OrdhmraeRevised 36
Notice of any such amendment may be published or given by the City in the manner described in •
subsection (b) of this Section; provided, however, that the publication of such notice shall not
constitute a condition precedent to the adoption of such amendatory ordinance and the failure to
publish such notice shall not adversely affect the implementation of such amendment as adopted
pursuant to such amendatory ordinance.
SECTION 30. CUSTODY. APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION. The Mayor of the City and the City Manager are hereby authorized to have
control of the initial Bond issued and delivered hereunder and all necessary records and proceedings
pertaining to the Bond pending its delivery and their investigation, examination, and approval by the
Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts
of the State of Texas. Upon registration of the Bond the Comptroller of Public Accounts (or a deputy
designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration
Certificate attached to such Bond, and the seal of the Comptroller shall be impressed, or placed in
facsimile, on such Certificate. The approving legal opinion of the City's Bond Counsel may, at the
option of the City, be printed on the Bond issued and delivered under this Ordinance, but it shall have
no legal effect, and shall be solely for the convenience and information of the Registered Owner of
the Bonds.
SECTION 31. AMENDMENTS TO ORDINANCE UPON DISCHARGE OR
AMENDMENT OF PREVIOUSLY ISSUED BONDS. At such time as the City of Huntsville,
Texas Waterworks and Sewer System Revenue Bonds, Series 1997 have been paid or are no longer
Outstanding or the bondholder has consented to the below described amendment, this Ordinance shall •
be amended and modified to read as follows:
(a) Section 10 shall be amended to read as follows:
"SECTION 10. RESERVE FUND. (a) For purposes of accumulating and
maintaining funds as a reserve for the payment of the Bonds Similarly Secured, the
City agrees and covenants to create and maintain on the books and records of the
City a separate and special fund or account known as the "Revenue Bond Reserve
Fund" (the "Reserve Fund!% and all funds deposited to the credit of such fund shall
be kept and maintained in a special banking account or fund maintained at a
Depository. All funds deposited therein (excluding earnings and income derived or
received from deposits or investments which may be transferred to the System Fund
referred to in Section S hereof during such periods as there is on deposit in the
Reserve Fund the Required Reserve) shall be used solely for the payment of the
principal of and interest on the Bonds Similarly Secured when (whether at maturity,
upon a mandatory redemption date or any interest payment date) other funds
available for such purposes are insufficient, and, in addition, -may be used to the
extent not required to maintain the Required Reserve, to pay, or provide for the
payment of, the final principal amount of a series of Bonds Similarly Secured so that
such series of Bonds Similarly Secured is no longer deemed to be Outstanding as
such term is defined herein.
HLNMU.Lrrnwss u: OrdinmodUvisW 37 is
• The City hereby reaffirms that it will accumulate and, when accumulated,
continuously maintain in the Reserve Fund an amount equal to the lesser of (i) the
Average Annual Debt Service (calculated on a Fiscal Year basis) for all Bonds
Similarly Secured then Outstanding, as determined on the date each series of
Additional Bonds are delivered or incurred, as the case may be, or (ii) the maximum
amount in a reasonably required reserve fund that can be invested without restriction
as to yield pursuant to Subsection (d) or Section 148 of the Internal Revenue Code
of 1986, as amended, and regulations promulgated thereunder — the "Required
Reserve."
By reason of the issuance of the Bonds, the Required Reserve shall be an
amount equal to the Average Annual Debt Service (calculated on a Fiscal Year basis)
for all Bonds Similarly Secured that are Outstanding at the time the provisions hereof
become operative and effective, and the City shall continue to make monthly
deposits in the Reserve Fund, if then required, on or before the V day of each month
in substantially equal amounts so that the Required Reserve shall have been
accumulated in the Reserve Fund within 60 months from the date of issuance of the
Bonds.
When and so long as the cash and investments in the Reserve Fund total not
less than the Required Reserve, no deposits need be made to the credit of the Reserve
Fund; but, if and when the Reserve Fund at any time contains less than the Required
Reserve, the City covenants and agrees to cure the deficiency in the Required
Reserve by resuming monthly deposits to said fund from the Net Revenues of the
System; such monthly deposits to be in amounts equal to not less than 1 /60th of the
then total Required Reserve to be maintained in said fund and to be made on or
before the 15' day of each month until the total Required Reserve then to be
maintained in said Fund has been fully restored. The City further covenants and
agrees that subject only to the payments to be made to the Interest and Sinking Fund,
the Net Revenues shall be applied and appropriated and used to establish and
maintain the Required Reserve and to cure any deficiency in such amounts as
required by the terms of this Ordinance and any other ordinance pertaining to the
issuance of Additional Bonds.
During such times as the Reserve Fund contains the total Required Reserve,
the City may, at its option, withdraw all surplus in the Reserve Fund in excess of the
Required Reserve and deposit such surplus in the System Fund.
(b) A Reserve Fund Obligation issued in an amount equal to all or part of the
Required Reserve Amount for the Bonds, the Previously Issued Bonds and the
Additional Bonds may be used in lieu of depositing cash into the Reserve Fund. In
addition, a Reserve Fund Obligation may be substituted for monies and investments
in the Reserve Fund if the substitution of the Reserve Fund Obligation will not, in
and of itself, cause any ratings then assigned to the Bonds, the Previously Issued
0 HUNTSVM1ErWWSsREVREFII 1: ora;nancrsevisea 38
Bonds and the Additional Bonds by any Rating Agency to be lowered and the •
ordinance authorizing the substitution of the Reserve Fund Obligation for all or part
of the Required Reserve contains a finding that such substitution is cost effective.
In the event a Reserve Fund Obligation is substituted in lieu of all or a portion of the
cash on deposit in the Reserve Fund, such cash in excess of the Required Reserve
may be withdrawn from the Reserve Fund and deposited in the System Fund.
(c) A Reserve Fund Obligation permitted under (b) above, must be in the
form of a surety bond or insurance policy meeting the requirements described below.
(1) (i) A surety bond or insurance policy issued to the Paying
Agent/Registrar, as agent of the Holders, by a company licensed to issue an
insurance policy guaranteeing the timely payment of debt service on the
Parity Obligations (a "municipal bond insurer ") if the claims paying ability
of the issuer thereof shall be rated "AAA" or "Aaa ", respectively, by S &P
and Moody's, or (ii) a surety bond or insurance policy issued to the Paying
Agent/Registrar, as agent of the Holders, by an entity other than a municipal
bond insurer, if the form and substance of such instrument and the issuer
thereof shall be approved in writing by each Bond Insurer of record.
(2) The obligation to reimburse the issuer of a Reserve Fund Obligation for
any claims or draws upon such Reserve Fund Obligation in accordance with
its terms, including expenses incurred in connection with such claims or .
draws, to the extent permitted by law, (a Reserve Fund Obligation Payment)
shall be made from the deposits made to the Reserve Fund as provided in this
Section and in Section 8. The Reserve Fund Obligation shall provide for a
revolving feature under which the amount available thereunder will be
reinstated to the extent of any reimbursement of draws or claims paid. If the
revolving feature is suspended or terminated for any reason, the right of the
issuer of the Reserve Fund Obligation to reimbursement will be subordinated
to the cash replenishment of the Reserve Fund to an amount equal to the
difference between the full original amount available under the Reserve Fund
Obligation and the amount then available for further draws or claims. In the
event (a) the issuer of a Reserve Fund Obligation becomes insolvent, or (b)
the issuer of a Reserve Fund Obligation defaults in its payment obligations
thereunder, or (c) the claims paying ability of the issuer of the insurance
policy or surety bond falls below "AAA" or "Aaa ", by S &P and Moody's,
respectively, the obligation to reimburse the issuer of the Reserve Fund
Obligation shall be subordinated to the cash replenishment of the Reserve
Fund.
(3) In the event (a) the revolving reinstatement feature described in the
preceding paragraph is suspended or terminated, or (b) the rating of the
claims paying ability of the issuer of the surety bond or insurance policy falls
HLNMVU,LE SSREVxMu: 0r&nmweReviwd 39 •
below "AAA" or "Aaa ", by S &P and Moody's, respectively, the City shall
either (i) deposit into the Reserve Fund, in accordance with this Section and
Section 8, an amount sufficient to cause the cash or investments credited to
the Reserve Fund to accumulate to the Required Reserve, or (ii) replace such
instrument with a surety bond or insurance policy meeting the requirements
of 1 and 2 above, within six months of such occurrence. In the event (a) the
rating of the claims- paying ability of the issuer of the surety bond or
insurance policy falls below "A" by S &P and Moody's, or (b) the issuer of
the Reserve Fund Obligation defaults in its payment obligations hereunder,
or (c) the issuer of the Reserve Fund Obligation becomes insolvent, the City
shall either (i) deposit into the Reserve Fund, in accordance with this Section,
amounts sufficient to cause the cash or investments on deposit in the Reserve
Fund to accumulate to the Required Reserve Amount, or (ii) replace such
instrument with a surety bond or insurance policy meeting the requirements
of 1 and 2 above within six months of such occurrence.
(4) The Paying Agent/Registrar shall ascertain the necessity for a claim or
draw upon any Reserve Fund Obligation and provide notice to the issuer of
the Reserve Fund Obligation in accordance with its terms not later than three
days (or such appropriate time period as will, when combined with the timing
of required payment under the Reserve Fund Obligation, ensure payment
under the Reserve Fund Obligation on or before the interest payment date)
. prior to each date upon which the principal of or interest on the Bonds
Similarly Secured will be due.
It is recognized that a Reserve Fund Obligation may be issued which is
payable only with respect to a part of the Bonds, the Previously Issued Bonds and the
Additional Bonds with the remainder of the Required Reserve being satisfied by
monies and investments and in that case any draws upon the Reserve Fund will have
to be made on a pro -rata basis to ensure that Bonds Similarly Secured enjoy an equal
amount of security. Therefore, (i) draws upon one or more such Reserve Fund
Obligations shall be made on a pro -rata basis with cash and investments available in
the Reserve Fund and (ii) deposits and credits to the Reserve Fund to restore it to the
Required Reserve shall be utilized on a pro -rata basis to pay Reserve Fund
Obligation Payments to reimburse the issuers of the Reserve Fund Obligations, thus
restoring that part of the Required Reserve, and to restore with cash and investments
the balance of the Required Reserve.
(b) Exhibit "A" shall be amended to add the following definitions:
"Reserve Fund Obligation" means a surety bond or insurance policy
deposited in the Reserve Fund to satisfy the Required Reserve whereby the issuer is
obligated to provide funds up to and including the maximum amount and under the
conditions specified in such agreement or instrument.
• HUNrSVffJ EMWSSREVPM1I: OrfimrxeRevised 40
".Reserve Fund Obligation Payment" means any subrogation payment the
City is obligated to make from Net Revenues deposited in the Reserve Fund with
respect to a Reserve Fund Obligation.
SECTION 32. NO RECOURSE AGAINST CITY OFFICIALS. No recourse shall be had
for the payment of principal of or interest on the Bonds or for any claim based thereon or on this
Ordinance against any official of the City or any person executing the Bonds.
SECTION 33. FURTHER ACTIONS. The Mayor, the City Manager and all other officers
and employees of the City are hereby authorized, empowered and directed from time to time and at
any time to do and perform all such acts and things and to execute, acknowledge and deliver in the
name and under the corporate seal and on behalf of the City all such instruments, whether or not
herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions.
of this Ordinance and the Bonds. In addition, prior to the initial delivery of the Bonds, the Mayor,
the City Manager, the Director of Finance and Bond Counsel are hereby authorized and directed to
approve any changes or corrections to this Ordinance or to any of the instruments authorized and
approved by this Ordinance necessary in order to (i) correct any ambiguity or mistake or properly
or more completely document the transactions contemplated and approved by this Ordinance, (ii)
obtain a rating from any of the national bond rating agencies or satisfy requirements of any bond
insurer, or (iii) obtain the approval of the Bonds by the Texas Attorney General's office.
In case any officer of the City whose signature shall appear on any Bonds shall cease to be •
such officer before the delivery of such Bonds, such signature shall nevertheless be valid and
sufficient for all purposes the same as if such officer had remained in office until such delivery.
SECTION 34. INTERPRETATIONS. All terms defined herein and all pronouns used in
this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles
and headings of the articles and sections of this Ordinance and the Table of Contents 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 terms and provisions hereof shall be liberally construed to effectuate the
purposes set forth herein and to sustain the validity of the Bonds and the validity of the lien on and
pledge of the Pledged Revenues to secure the payment of the Bonds.
SECTION 35. INCONSISTENT PROVISIONS. All ordinances, orders or resolutions, or
parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 36. INTERESTED PARTIES. 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 and the registered 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
HUNT3VUJ.FJwwssxevREF%u:O Revised 41 0
rand agreements in this Ordinance contained by and on behalf of the City shall be for the sole and
exclusive benefit of the City and the registered owners of the Bonds.
SECTION 37. SEVERAMMY. If any provision of this Ordinance or the application
thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 38. FUNDS AND ACCOUNTS. Notwithstanding anything in this Ordinance to
the contrary any funds or accounts created by this Ordinance, other than the Escrow Fund, may be
subaccounts of the City's Funds held by the City's depository, and, as such, not held in separate bank
accounts, such treatment shall not constitute commingling of the monies in such funds or of funds
and the City shall keep full and complete records indicating the monies and investment credited to
each such fund.
SECTION 39. REPEALER The adoption of this Ordinance hereby repeals and supersedes
Ordinance No. 2011 -09. Any other orders, resolutions and ordinances, or parts thereof, inconsistent
herewith are hereby repealed to the extent of such inconsistency.
SECTION 40. EFFECTIVE DATE. This Ordinance shall become effective immediately
upon its adoption in accordance with Section 1201.028, Texas Government Code, as amended.
. SECTION 41. PAYMENT OF ATTORNEY GENERAL FEE. The City hereby
authorizes the disbursement of a fee equal or lesser of (i) one -tenth of one percent of the principal
amount of the Bonds or (ii) $9,500, provided that such fee shall not be less than $750, to the
Attorney General of Texas Public Finance Division for payment of the examination fee charged by
the State of Texas for the Attorney General's review and approval of public securities and credit
agreements, as required by Section 1202.004 of the Texas Government Code. The appropriate
member of the City's staff is hereby instructed to take the necessary measures to make this payment.
The City is also authorized to reimburse the appropriate City funds for such payment from proceeds
of the Bonds.
0 HUNTSVaLEVWSSREVRER1I:04= =RvAsea 42
IN ACCORDANCE WITH SECTION 1201.028, TEXAS GOVERNMENT CODE •
passed and approved on First and Final Reading on the 22nd day of February, 2011.
J. Turner, Mayor
City of Huntsville, Texas
ATTEST:
Lee Woodward, City Secretary
City of Huntsville, Texas
APPROVED AS TO FORM:
Leonard Schneider, City Attorney
City of Huntsville, Texas 0
xUN7SVff-1FJWWSSREVKM1 is mainan=xevisea 43 •
wq 011:__
As used in this Ordinance, the following terms and expressions shall have the meanings set
forth below, unless the text hereof specifically indicates otherwise:
"Accountant" means an independent certified public accountant or accountants or a firm of
an independent certified public accountants, in either case, with demonstrated expertise and
competence in public accountancy.
"Accreted Value" means, with respect to a Premium Compound Interest Bond, as of any
particular date of calculation, the original principal amount thereof, plus all interest accrued and
compounded to the particular date of calculation, as determined in accordance with the Pricing
Certificate and the Accretion Table attached as an exhibit to the Pricing Certificate relating to the
respective Bonds that shows the Accreted Value per $5,000 maturity amount on the calculation date
of maturity to its maturity.
"Accretion Table" means the exhibit attached to the Pricing Certificate that sets forth the
rounded original principal amounts at the Issuance Date for the Premium Compound Interest Bonds
and the Accreted Values and maturity amounts thereof as of each Compounding Date until final
maturity.
"Additional Bonds" means the additional parity revenue bonds which the City reserves the
right to issue on a parity with the Previously Issued Bonds and the Bonds in accordance with the
terms and conditions stated in Section 13 hereof.
"Authorized Denominations" means the denomination of $5,000 or any integral multiple
thereof with respect to the Current Interest Bonds and in the denomination of $5,000 in maturity
amount or any integral multiple thereof with respect to the Premium Compound Interest Bonds.
"Average Annual Debt Service" means the average amount which, at the time of
computation, will be required to pay the Debt Service of obligations when due and derived by
dividing the total of such Debt Service by the number of years then remaining before final maturity.
Capitalized interest payments provided fromproceeds of Bonds Similarly Secured shall be excluded
in making the aforementioned computation.
"Bonds" means the "City of Huntsville, Texas Waterworks and Sewer System Revenue
Refunding Bonds, Series 2011."
"Bond Insurer "or "Insurer" means the provider of a municipal bond insurance policy for the
Bonds as determined by the Pricing Officer in the Pricing Certificate or any other entity that insures
or guarantees the payment of principal and interest on any Bonds.
"Bonds Similarly Secured" shall mean the Previously Issued Bonds, the Bonds and any
Additional Bonds.
0 HUMVKLE/WWSSREVKM1I:• QcdimmRcvised A -1
"Book- Entry -Only System" means the book -entry system of bond registration provided in
Section 5, or any successor system of book -entry registration.
"Business Day" means any day which is not a Saturday, Sunday or a day on which the
Paying Agent/Registrar is authorized by law or executive order to remain closed.
"Cede & Co." means the designated nominee and its successors and assigns of The
Depository Trust Company, New York.
"City" and "Issuer" mean the City of Huntsville, Texas, the City Council thereof and any
successor to the City as owner of the System.
"City Council"' means the governing body of the City.
"Closing Date" means the date of initial delivery of and payment for the Bonds.
"Compounded Amount" means, with respect to a Premium Compound Interest Bond, as of
any particular date of calculation, the original principal amount thereof plus all interest accrued and
compounded to the particular date of calculation.
"Compounding Dates" means the dates on which interest is compounded on the Premium
Compound Interest Bonds as set forth in the Accretion Table attached to the Pricing Certificate.
"Current Interest Bonds" means the Bonds paying current interest and maturing in each of •
the years and in the aggregate principal amounts set forth in the Pricing Certificate.
"Debt Service" shall mean as of any particular date of computation, with respect to any
obligations and with respect to any period, the aggregate of the amounts to be paid or set aside by
the City as of such date or in such period for the payment of the principal of, premium, if any, and
interest (to the extent not capitalized) on such obligations; assuming, in the case of Bonds Similarly
Secured without a fixed numerical rate, that such obligations bear, or would have borne, interest at
the highest rate reached, or that would have applied to such obligations (using the index or method
for computing interest applicable to such obligations) during the twenty-four (24) month period next
preceding the date of computation; and further assuming in the case of obligations required to be
redeemed or prepaid as to principal prior to maturity, the principal amounts thereof will be redeemed
prior to maturity in accordance with the mandatory redemption provisions applicable thereto.
"Defeasance Securities" means (i) Federal Securities, (ii) noncallable obligations of an
agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City
Council adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise
provide for the funding of an escrow to effect the defeasance of the Bonds are rated as to investment
quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent, (iii)
noncallable obligations of a state or an agency or a county, municipality, or other political
HL N VHJYJWWSSR RM1 I: aa; evL%a A -2 •
• subdivision of a state that have been refunded and that, on the date the City Council adopts or
approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the
funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quality by a
nationally recognized investment rating firm no less than "AAA" or its equivalent and (iv) any other
then authorized securities or obligations under applicable State law that may be used to defease
obligations such as the Bonds.
"Depository" means one or more official depository banks of the City.
"DTC" means The Depository Trust Company, New York, New York and its successors and
assigns.
"DTC Participant" means securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Escrow Agent" means Wells Fargo Bank, N.A. or any successor escrow agent under the
Escrow Agreement.
"Escrow Agreement" means the agreement by and between the City and the Escrow Agent
relating to the defeasance of the Refunded Obligations.
• "Federal Securities" as used herein shall mean direct, noncallable obligations of the United
States of America, including obligations that are unconditionally guaranteed by the United States
of America (including Interest Strips of the Resolution Funding Corporation).
"Fiscal Year" means the twelve -month financial accounting period used for the System
ending each year on September 30'; provided, however, the City may, by ordinance, change the
fiscal year to another period of not less than twelve calendar months, if found and determined to be
necessary.
"Gross Revenues" means all income and revenues of every nature derived or received from
the operation and ownership (excluding refundable meter deposits, gifts and grants in aid of
construction, impact fees charged developers and special assessments against landowners) of the
System, including earnings and income derived from the investment or deposit of moneys in any
special funds or accounts created and established for the payment and security of the Bonds
Similarly Secured and other obligations payable solely from and secured only by alien on and
pledge of the Net Revenues.
"Holder" or "Holders" means the registered owner, whose name appears in the Registration
Books, for the Bonds.
"Initial Bond' means the Bond authorized, issued, and initially delivered as provided in
Section 3 of this Ordinance.
. HUNTSVRJX W WSSREVREFV I: OrdbunceReAmd A -3
"Insurance Policy" means an insurance policy issued by any Insurer guaranteeing the •
scheduled principal of and interest on the Bonds when due.
"Interest and Sinking Fund" means the special fund maintained by the provisions of Section
9 of this Ordinance.
"Interest Payment Date" means a date on which interest on the Bonds is due and payable.
"Issuance Date" means the date of delivery of the Bonds.
"Maintenance and Operating Expenses" means all current expenses of operating and
maintaining the System, including all salaries, labor, materials, repairs and extensions necessary to
render efficient service; provided, however, that only such repairs and extensions, as in the judgment
of the City Council, reasonably and fairly exercised,.are necessary to maintain the operations and
render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet
some physical accident or condition which would otherwise impair obligations payable from Net
Revenues shall be deducted in determining "Net Revenues ". Depreciation charges shall not be
considered Maintenance and Operating Expenses. Maintenance and Operating Expenses shall
include payments under contracts for the purchase of water supply, treatment of sewage or other
materials, goods or services for the System to the extent authorized by law and the provisions of
such contract.
WSRB" means the Municipal Securities Rulemaking Board. •
"Net Revenues" means the Gross Revenues of the System, with respect to any period, after
deducting the System's Maintenance and Operating Expenses during such period.
"Ordinance" means this ordinance finally adopted by the City Council on February 22, 2011.
"Outstanding" when used in this Ordinance with respect to the Bonds or Bonds Similarly
Secured means, as of the date of determination, the Bonds and Bonds Similarly Secured theretofore
sold, issued and delivered by the City, except:
(1) the Bonds or Bonds Similarly Secured canceled or delivered to the transfer agent or
registrar for cancellation in connection with the exchange or transfer of such
obligations;
(2) the Bonds or Bonds Similarly Secured paid or deed to be paid in accordance with the
provisions of Section 7 hereof; and
(3) the Bonds or Bonds Similarly Secured that have been mutilated, destroyed, lost or
stolen and replacements therefor have been registered and delivered in lieu thereof.
"Paying AgentlRegistrar" shall have the meaning set forth in Section 5 hereof.
HUNTSVUIXwwss Iis o,a era A-4 0
• "Permitted Investments" shall mean any security or obligation or combination thereof
permitted under the Public Funds Investments Act, Chapter 2256, Texas Government Code, as
amended or other applicable law.
"Premium Compound Interest Bonds" means the Bonds on which no interest is paid prior
to maturity, maturing in various amounts and in the aggregate principal amount as set forth in the
Pricing Certificate.
"Previously Issued Bonds" shall mean the Outstanding and unpaid revenue bonds of the City
payable from and equally and ratably secured by a first lien on and pledge of the Net Revenues of
the System, identified as follows:
City of Huntsville, Texas Waterworks and Sewer System Revenue Bonds, Series 1997,
dated February 1, 1997, and originally issued in the principal amount of $14,395,000*
( *Such Series constitutes the Refundable Obligations so all or a portion of the maturities
may be redeemed)
City of Huntsville, Texas Waterworks and Sewer System Revenue Bonds, Series 2002,
dated November 15, 2002, and originally issued in the principal amount of $7,255,000
City of Huntsville, Texas Waterworks and Sewer System Revenue Bond, Series 2007, dated
October 15, 2007, and originally issued in the principal amount of $1,995,000
• "Pricing Certificate" means the Pricing Certificate of the City's Pricing Officer to be
executed and delivered pursuant to Section 3 hereof in connection with the issuance of the Bonds.
"Pricing Officer" means the City Manager, acting as the designated pricing officer of the
City to execute the Pricing Certificate. In the absence of the City Manager, the City's Finance
Director may act as the designated pricing officer of the City to execute the Pricing Certificate.
"Rating Agency" means any nationally recognized securities rating agency which has
assigned, at the request of the City, a rating to the Bonds.
"Record Date" means Record Date as defined in Section 6 the Form of Bond.
"Redemption Date" means a date fixed for redemption of any Bond pursuant to the terms of
this Ordinance.
"Refunded Obligations" means those Refundable Obligations designated by the Pricing
Officer in the Pricing Certificate to be refunded.
"Refundable Obligations" means all or a portion of the City's outstanding Waterworks and
Sewer System Revenue Bonds, Series 1997.
0 HUN' rSVU 1FIWWSSREVREFII:OcdinanoeRevised A'5
"Register" or "Registration Books" means the registry system maintained on behalf of the
City by the Registrar in which are listed the names and addresses of the Registered Owners and the
principal amount of Bonds registered in the name of each Registered Owner.
"Replacement Bonds" means the Bonds authorized by the City to be issued in substitution
for lost, apparently destroyed, or wrongfully taken Bonds as provided in Section 28 of this
Ordinance.
"Required Reserve" shall mean the amount required to be accumulated and maintained in the
Reserve Fund under the provisions of Section 10 hereof.
"Reserve Fund" shall mean the special fund created, established and maintained by the
provisions of Section 10 of this Ordinance
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
"System" shall mean all properties, facilities and plants currently owned, operated and
maintained by the City for the supply, treatment, transmission and distribution of potable water and
the collection, treatment and disposal of water - carried wastes, together with all future extensions,
improvements, replacements and additions thereto; provided, however, that notwithstanding the
foregoing, and to the extent now or hereafter authorized or permitted by law, the term "System" shall •
not mean to include facilities of any kind which are declared not to be a part of the System and
which are acquired or constructed by or on behalf of the City with the proceeds from the issuance
of "Special Facilities Bonds ", which are hereby defined as being special revenue obligations of the
City which are not the Bonds but which are payable from and secured by other liens on and pledges
of any revenues, sources or payments, not pledged to the payment of the Bonds Similarly Secured
including, but not limited to, special contract revenues or payments received from any other legal
entity in connection with such facilities.
euMl!Jvu,LE"SSREVRMI t: onahrnceRevisea A -6
•
1 4:11:
PAYING AGENT IRE-GIS AGREEMENT
0 HUNTSVMLFIWWSSPXVRE911! Ordm'nmkm'sed B-1
EXHIBIT C •
NOTICE OF REDEMPTION/DEFEASANCE
CITY OF HUNTSVILLE, TEXAS
NOTICE IS HEREBY GIVEN that the following obligations (the "Obligations ") issued
by the City of Huntsville, Texas (the "City ") have been defeased and called for redemption prior to
their scheduled maturities, at a price of par and accrued interest to the date of redemption, to -wit:
City of Huntsville, Texas Waterworks and Sewer System Revenue Bonds, Series
1997* maturing on August 15* in each of the years 2011 * through 2016 *, inclusive,
aggregating $5,730,000* in principal amount.
Maturity Principal Interest Redemption CUSIP
August 15* Amount* Rate* Date* Number **
2011
$845,000
4.300%
2012
885,000
4.350
2013
930,000
4.400
2014
975,000
4.450
2015
1,020,000
4.500
2016
1,075,000
4.550
The redemption price for the above Obligations is par plus accrued interest to the date fixed for •
redemption. Such Obligations shall be redeemed on and shall no longer bear interest after the redemption
date. Due provision for the payment of the obligations described above has been made with U.S. Trust
Company of Texas, N.A., Dallas, Texas (the 'Bank "), and said obligations shall be presented for payment
either in person or by mail, at the following address:
U.S. Trust Company of Texas, N.A.
2001 Ross Avenue, 27' Floor
Dallas, Texas 75201
In compliance with section 3406 ofthe Internal Revenue Code of 1986, as amended, payors making
certain payments due on debt securities may be obligated to deduct and withhold a portion of such payment
from the remittance to any payee who has failed to provide such payor with a valid taxpayer identification
number. To avoid the imposition of this withholding tax, such payees should submit a certified taxpayer
identification number when surrendering the Obligations for redemption.
* Preliminary, to be finalized by the Pricing Officer in accordance with the Pricing Certificate.
** The CUSIP Numbers have been assigned to this issue by the CUSIP Service Bureau and are included solely for the convenience of the owners of
the Obligations. The City shall not be responsible for the selection or the correctness of the CUSIP numbers set forth herein.
•
C -1
•
•
EXE"IT D
FORM OF ESCROW AGREEMENT
D -1
EXHIBIT E •
CONTINUING DISCLOSURE
The following information is referred to in Section 23 of this Ordinance.
Accounting Principles
The accounting and reporting policies of the City relating to the funds and account groups
will conform to generally accepted accounting principles (GAAP) as applied to governmental
entities.
is
•
E -1
IN ACCORDANCE WITH SECTION 1201.028, TEXAS GOVERNMENT CODE
passed and approved on First and Final Reading on the 22nd day of February, 2011.
(: I
J. ayor a
City of Huntsville, Texas
ATTEST:
Woodwaitl�Cityl-See
of Huntsville, Texas
APPROVED AS TO FORM:
Leonard Schneider, City Attorney
City of Huntsville, Texas
HUNTSVILLWW WSSREVREN t: OrdinanceRevisW 43
CERTIFICATE FOR ORDINANCE NO. 2011-24
THE STATE OF TEXAS §
COUNTY OF WALKER §
CITY OF HUNTSVILLE §
We, the undersigned officers and members of the City of Huntsville, Texas (the "City "),
hereby certify as follows:
1. The City Council of the City convened in a SPECIAL MEETING ON THE 22ND
DAY OF FEBRUARY, 2011, at the City Council Chambers, Huntsville City Hall (the "Meeting "),
and the roll was called of the duly constituted officers and members of the City, to -wit:
J. Turner, Mayor Tom Cole, Ward 1
James Fitch, Position 1 Mac Woodward, Ward 2
Lydia Montgomery, Position 2 Jack Wagamon, Ward 3
Don H. Johnson, Position 3 Wayne Barrett, Ward 4
Keith D. Olson, Position 4
and all of the persons were present, except the following absentees: none, thus constituting a
quorum. Whereupon, among other business, the following was transacted at the Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF HUNTSVILLE, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES
2011; REPEALING ORDINANCE NO. 2011-09; AUTHORIZING THE PLEDGE OF
CERTAIN REVENUES IN SUPPORT OF THE BONDS; APPROVING AN OFFICIAL
STATEMENT; AUTHORIZING EXECUTION OF A PAYING AGENT/REGISTRAR
AGREEMENT, A BOND PURCHASE AGREEMENT AND AN ESCROW
AGREEMENT; ESTABLISHING PROCEDURES FOR SELLING AND DELIVERING
THE BONDS; AND AUTHORIZING OTHER MATTERS RELATING TO THE BONDS
was duly introduced for the consideration of the City Council. It was then duly moved and seconded
that the Ordinance be passed; and, after due discussion, said motion carrying with it the passage of
the Ordinance, prevailed and carried by the following vote:
AYES:
NOES: 0
2. A true, full and correct copy of the Ordinance passed at the Meeting described in the
above and foregoing paragraph is attached to and follows this Certificate; that the Ordinance has
been duly recorded in the City Council's minutes of the Meeting; that the above and foregoing
paragraph is a true, full and correct excerpt from the City Council's minutes of the Meeting
HUNTSV 1LLR WWSSRefg \11: OtdinanceCertRevised
pertaining to the passage of the Ordinance; that the persons named in the above and foregoing
paragraph are the duly chosen, qualified and acting city officials as indicated therein; that each of
the elected officials and members of the City Council was duly and sufficiently notified officially
and personally, in advance, of the time, place and purpose of the Meeting, and that the Ordinance
would be introduced and considered for passage at the Meeting, and each of the elected officials and
members consented, in advance, to the holding of the Meeting for such purpose, and that the
Meeting was open to the public and public notice of the time, place and purpose of the meeting was
given, all as required by Chapter 551, Government Code, as amended.
HUNTSV Q.Lh1W WSSRefg111: OrdinanceCertRevised
SIGNED AND SEALED the 22nd day of February, 2011.
J. er, Mayor
SAL]' -,
HUNTSYR.LSW WSSRefg \I I: OrdinmecCertRwind