ORD 1997-08 - Issue Revenue Bonds - $14,395,000 03-11-1997ORDINANCE NO. 97 -08
AN ORDINANCE authorizing the issuance of "CITY OF
HUNTSVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS, SERIES 1997 "; specifying the terms
and features of said bonds; pledging the net
revenues derived from the operation of the City's
combined Waterworks and Sewer System for the
payment of the principal of and interest on such
revenue bonds; and resolving other matters incident
and related to the issuance, payment, security,
sale and delivery of said revenue bonds, including
the approval and execution of a Paying
Agent /Registrar Agreement; and providing an
effective date.
WHEREAS, a "Notice of Intention To Issue City of Huntsville,
Texas, Revenue Bonds" in the principal amount not to exceed
$14,395,000, maturing not later than December 31, 2017 and bearing
interest at a rate not to exceed 10% per annum, for the purpose of
making improvements and extensions to the City's combined
Waterworks and Sewer System, including wastewater collection and
treatment facilities, has been duly published in the Huntsville
Item, a newspaper hereby found and determined to be published and
of general circulation in the City of Huntsville, Texas, in its
issues dated February 16, 1997 and February 23, 1997, the date of
the first publication of such notice being at least fourteen (14)
days prior to March 11, 1997, the date stated therein for the
passage and adoption of this Ordinance; and
WHEREAS, the City Council hereby finds and determines that no
valid petition requesting that an election be held on the issuance
of such revenue bonds has been filed with the City Secretary or any
other officer of the City; and
WHEREAS, the City Council hereby further finds and determines
that all of the revenue bonds described in the aforesaid notice
should be issued and sold at this time; and
WHEREAS, the City Council further finds and determines that
the revenue bonds herein authorized can be issued on a parity with
the outstanding revenue bonds (hereinafter identified and defined
as "Previously Issued Bonds "), payable from and secured by a first
lien on and pledge of the "Net Revenues" of the City's combined
Waterworks and Sewer System (the "System "), in that the terms and
conditions precedent specified for the issuance of parity
additional obligations can be satisfied and met, to wit: (a) each
of the funds created and established for the payment and security
of the Previously Issued Bonds contains the amount of money now
required to be on deposit therein, (b) the Net Revenues of the
System for the last completed fiscal year is adopted were equal to
at least 1.50 times the average annual principal and interest
requirements on all bonds payable from the revenues of the System
which will be outstanding after the bonds herein authorized are
issued, sold and delivered, (c) the City has obtained from a
independent registered professional engineer under the laws of the
State of Texas a projection of the income of the System during the
life of the Previously Issued Bonds and the bonds herein authorized
showing that, in the engineer's opinion, the average annual Net
Revenues of the System will be equal to at least 1.50 times the
average annual principal and interest requirements of all bonds
payable from the revenues of the System which will be outstanding
after the bonds herein authorized are issued, sold and delivered;
now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE,
TEXAS:
SECTION 1: Authorization - Designation - Principal Amount
- Pur,Rosg. Revenue bonds of the City shall be and are hereby
authorized to be issued in the aggregate principal amount of
$14,395,000, to be designated and bear the title "CITY OF
HUNTSVILLE,.TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS,
SERIES 1997" (hereinafter referred to as the "Bonds "), for the
purpose of making improvements and extensions to the City's
combined Waterworks and Sewer System, including wastewater
collection and treatment facilities, pursuant to authority
conferred by and in conformity with the Constitution and laws of
the State of Texas, including Articles 1111.et seq. and 2368x,
V.A.T.C.S., as amended.
SECTION 2: Fully Registered Obligations - Authorized
Denominations - Stated Maturities - Interest Rates - Date. The
Bonds are issuable in fully registered form only; shall be dated
February 1, 1997 (the "Bond Date "), and shall be in denominations
of $5,000 or any integral multiple thereof (within a Stated
Maturity) and the Bonds shall become due and payable on August 15
in each of the years and in principal amounts (the "Stated
Maturities ") and bear interest at per annum rates in accordance
with the following schedule:
Year of
Principal
Interest
Stated Maturity
Amount
Rate
1997
$ 475,000
2.75%
1998
490,000
2.75%
1999
510,000
3.05%
2000
530,000
3.20%
2001
550,000
3.35%
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2002
570,000
3.45%
2003
595,000
3.55%
2004
620,000
3.65%
2005
645,000
3.75%
2006
670,000
3.85%
2007
700,000
3.95%
2008
735,000
4.05%
2009
770,000
4.15%
2010
805,000
4.25%
2011
845,000
4.30%
2012
885,000
4.35%
2013
930,000
4.40%
2014
975,000
4.45%
2015
1,020,000
4.50%
2016
1,075,000
4.55%
The Bonds shall bear interest on the unpaid principal amount
thereof from the date of delivery to the initial purchasers (which
date shall be the registration date noted on the Initial Bond(s) in
the "Registration Certificate of Paying Agent/ Registrar', to appear
thereon) at the rates per annum shown above in this Section
(calculated on the basis of a 360 -day year of twelve 30 -day
months). Interest on the Bonds shall be payable on February 15 and
August 15 in each year, commencing August 15, 1997.
SECTION 3: Payment of Bonds - Paying AgentLRecristrar. The
principal of, premium, if any, and the interest on the Bonds, due
and payable by reason of maturity, redemption or otherwise, shall
be payable only to the registered owners or holders of the Bonds
(hereinafter called the "Holders ") appearing on the registration
and transfer books for the Bonds maintained by the Paying
Agent /Registrar and the payment thereof shall be in any coin or
currency of the United States of America, which at the time of
payment is legal tender for the payment of public and private
debts, and shall be without exchange or collection charges to the
Holders.
Interest on each Bond issued and delivered to a Holder shall
accrue from the latest interest payment date that interest on such
Bond (or its Predecessor Bond) has been paid that precedes the
registration date appearing on such Bond in the "Registration
Certificate of Paying Agent/ Registrar" (Section 9D hereof), unless
the registration date appearing thereon is an interest payment date
for which interest is being paid, in which case interest on such
Bond shall accrue from the registration date appearing thereon and
provided further that with respect to the initial payment of
interest on a Bond, such interest shall accrue from the date of
delivery of the Bonds (or its Predecessor Bonds) to the initial
purchasers thereof.
03M2s -3-
The selection and appointment of U. S. Trust Company of Texas,
N.A., Dallas, Texas to serve as Paying Agent /Registrar for the
Bonds is hereby approved and confirmed. Books and records relating
to the registration, payment, transfer and exchange of the Bonds
(the "Security Register ") shall at all times be kept and maintained
on behalf of the City by the Paying Agent /Registrar, as provided
herein and in accordance with the terms and provisions of a "Paying
Agent/ Registrar Agreement ", substantially in the form attached
hereto as Exhibit A, and such reasonable rules and regulations as
the Paying Agent /Registrar and the City may prescribe. The Mayor
and City Secretary are authorized to execute and deliver such
Agreement in connection with the delivery of the Bonds. The City
covenants to maintain and provide a Paying Agent /Registrar at all
times until the Bonds are paid and discharged, and any successor
Paying Agent /Registrar shall be a bank, trust company, financial
institution or other entity qualified and authorized to serve in
such capacity and perform the duties and services of Paying
Agent /Registrar. Upon any change in the Paying Agent /Registrar
for the Bonds, the City agrees to promptly cause a written notice
thereof to be sent to each Holder by United States Mail, first
class postage prepaid, which notice shall also give the address of
the new Paying Agent /Registrar.
Principal of and premium, if any, on the Bonds shall be
payable at the Stated Maturities or the redemption thereof, only
upon presentation and surrender of the Bonds to the Paying
Agent /Registrar at its designated offices in New York, New York
(the "Designated Payment /Transfer Office "). Interest on the Bonds
shall be paid to the Holders whose names appear in the Security
Register at the close of business on the Record Date (the last
business day of the month next preceding each interest payment
date) and shall be paid by the Paying Agent /Registrar (i) by check
sent United States Mail, first class postage prepaid, to the
address of the Holder recorded in the Security Register or (ii) by
such other method, acceptable to the Paying Agent /Registrar,
requested by, and at the risk and expense of, the Holder.
Provided, however, while the Texas Water Development Board is the
registered owner of the Bonds, payments on the Bonds shall be made
by wire transfer without expense to the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be
a Saturday, Sunday, a legal holiday, or a day on which banking
institutions in the City where the Designated Payment/ Transfer
office is located are authorized by law or executive order to
close, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day on
which banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the
original date payment was due.
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In the event of a non - payment of interest on a scheduled
payment date (such non - payment constitutes a default), 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 Holder appearing on Security Register at the close
of business on the last business day next preceding the date of
mailing of such notice.
SECTION 4: Redemption. (a) Optional Redemption. The
Bonds having Stated Maturities on and after August 15, 2008, shall
be subject to redemption prior to maturity, at the option of the
City, in whole or in part (in inverse order of Stated Maturities if
less than all) in principal amounts of $5,000 or any integral
multiple thereof (and if within a Stated Maturity selected by lot
by the Paying Agent /Registrar), on August 15, 2007, or on any date
thereafter, at the redemption price of par plus accrued interest to
the date of redemption.
(b) Exercise of Redemption Option. At least forty -five (45)
days prior to a date set for the redemption of Bonds (unless a
shorter notification period shall be satisfactory to the Paying
Agent /Registrar), the City shall notify the Paying Agent /Registrar
of its decision to exercise the right to redeem Bonds, the
principal amount of each Stated Maturity to be redeemed, and the
date set for the redemption thereof. The decision of the City to
exercise the right to redeem Bonds shall be entered in the minutes
of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all
Outstanding Bonds of the same Stated Maturity are to be redeemed on
a redemption date, the Paying Agent /Registrar shall select by lot
the Bonds to be redeemed, provided that if less than the entire
principal amount of a Bond is to be redeemed, the Paying
Agent /Registrar shall treat such Bond then subject to redemption as
representing the number of Bonds Outstanding which is obtained by
dividing the principal amount of such Bond by $5,000.
(d) Notice of Redemption. Not less than thirty (30) days
prior to a redemption date for the Bonds, a notice of redemption
shall be sent by United States Mail, first class postage prepaid,
in the name of the City and at the City's expense, to each Holder
of a Bond to be redeemed in whole or in part at the address of the
Holder appearing on the Security Register at the close of business
on the business day next preceding the date of mailing such notice,
ON&T" -51
and any notice of redemption so mailed shall be conclusively
presumed to have been duly given irrespective of whether received
by the Holder.
All notices of redemption shall (i) specify the date of
redemption for the Bonds, (ii) identify the Bonds to be redeemed
and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state
the redemption price, (iv) state that the Bonds, or the portion of
the principal amount thereof to be redeemed, shall become due and
payable on the redemption date specified, and the interest thereon,
or on the portion of the principal amount thereof to be redeemed,
shall cease to accrue from and after the redemption date, and (v)
specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the
Designated Payment /Transfer Office of the Paying Agent /Registrar
only upon presentation and surrender thereof by the Holder. If a
Bond is subject by its terms to prior redemption and has been
called for redemption and notice of redemption thereof has been
duly given or waived as herein provided, such Bond (or the
principal amount thereof to be redeemed) shall become due and
payable, and interest thereon shall cease to accrue from and after
the redemption date therefor, provided moneys sufficient for the
payment of such Bond (or of the principal amount thereof to be
redeemed) at the then applicable redemption price are held for the
purpose of such payment by the Paying Agent /Registrar.
SECTION 5: Registration - Transfer - Exchange of Bonds -
Predecessor Bonds. The Paying Agent /Registrar shall obtain, record
and maintain in the Security Register the name and address of each
registered owner of the Bonds issued under and pursuant to the
provisions of this Ordinance. Any Bond may, in accordance with its
terms and the terms hereof, be transferred or exchanged for Bonds
of other authorized denominations upon the Security Register by the
Holder, in person or by his duly authorized agent, upon surrender
of such Bond to the Paying Agent /Registrar for cancellation,
accompanied by a written instrument of transfer or request for
exchange duly executed by the Holder or by his duly authorized
agent, in form satisfactory to the Paying Agent /Registrar.
Upon surrender for transfer of any Bond at the Designated
Payment /Transfer Office of the Paying Agent /Registrar, the Paying
Agent /Registrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Bonds,
executed on behalf of, and furnished by, the City, of authorized
denominations and having the same Stated Maturity and of a like
aggregate principal amount as the Bond or Bonds surrendered for
transfer.
0393W -6-
At the option of the Holder, Bonds may be exchanged for other
Bonds of authorized denominations and having the same Stated
Maturity, bearing the same rate of interest and of like aggregate
principal amount as the Bonds surrendered for exchange upon
surrender of the Bonds to be exchanged at the Designated
Payment /Transfer Office of the Paying Agent /Registrar. Whenever
any Bonds are so surrendered for exchange, the Paying
Agent /Registrar shall register and deliver new Bonds, executed on
behalf of, and furnished by the City, to the Holder requesting the
exchange.
All Bonds issued upon any transfer or exchange of Bonds shall
be delivered at the Designated Payment /Transfer Office of the
Paying Agent/ Registrar, or sent by United States mail, first class
postage prepaid, to the Holder and, upon the delivery thereof, the
same shall be valid obligations of the City, evidencing the same
obligation to pay, and entitled to the same benefits under this
Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section
shall be made without expense or service charge to the Holder,
except as otherwise herein provided, and except that the Paying
Agent /Registrar shall require payment by the Holder requesting such
transfer or exchange of any tax or other governmental charges
required to be paid with respect to such transfer or exchange.
Bonds canceled by reason of an exchange or transfer pursuant
to the provisions hereof are hereby defined to be "Predecessor
Bonds," evidencing all or a portion, as the case may be, of the
same obligation to pay, evidenced by the new Bond or Bonds
registered and delivered in the exchange or transfer therefor.
Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed or stolen Bond for which a replacement
Bond has been issued, registered and delivered in lieu thereof
pursuant to Section 26 hereof and such new replacement Bond shall
be deemed to evidence the same obligation as the mutilated, lost,
destroyed or stolen Bond.
Neither the City nor the Paying Agent /Registrar shall be
required to transfer or exchange any Bond called for redemption, in
whole or in part, within 45 days of the date fixed for redemption
of such Bond; provided, however, such limitation on transferability
shall not be applicable to an exchange by the Holder of an
unredeemed balance of a Bond called for redemption in part.
SECTION 6: Book -Entry Only Transfers and Transactions.
Notwithstanding the provisions contained in Sections 3, 4 and 5
hereof relating to the payment, and transfer /exchange of the Bonds,
the City hereby approves and authorizes the use of "Book -Entry
Only" securities clearance, settlement and transfer system provided
03M2e -7-
by The Depository Trust Company (DTC), a limited purpose trust
company organized under the laws of the State of New York, in
accordance with the requirements and procedures identified in the
Letter of Representation, by and between the City, the Paying
Agent/Registrar and DTC (the "Depository Agreement ") relating to
the Bonds.
Pursuant to the Depository Agreement and the rules of DTC, the
Bonds shall be deposited with DTC who shall hold said Bonds for its
participants (the "DTC Participants "). While the Bonds are held by
DTC under the Depository Agreement, the Holder of the Bonds on the
Security Register for all purposes, including payment and notices,
shall be Cede & Co., as nominee of DTC, notwithstanding the
ownership of each actual purchaser or owner of each Bond (the
"Beneficial Owners ") being recorded in the records of DTC and DTC
Participants.
In the event DTC determines to discontinue serving as
securities depository for the Bonds or otherwise ceases to provide
book -entry clearance and settlement of securities transactions in
general or the City determines that DTC is incapable of properly
discharging its duties as securities depository for the Bonds, the
City covenants and agrees with the Holders of the Bonds to cause
Bonds to be printed in definitive form and provide for the Bond
certificates to be issued and delivered to DTC Participants and
Beneficial Owners, as the case may be. Thereafter, the Bonds in
definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent /Registrar and
payment of such Bonds shall be made in accordance with the
provisions of Sections 3, 4 and 5 hereof.,
SECTION 7: Execution - Registration. The Bonds shall be
executed on behalf of the City by the Mayor under its seal
reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be
manual or facsimile. Bonds bearing the manual or facsimile
signatures of said individuals who are or were the proper officers
of the City on the Bond Date shall be deemed to be duly executed on
behalf of the City, notwithstanding that such individuals or any of
them shall cease to hold such offices prior to the delivery of the
Bonds to the initial purchaser(s), and with respect to Bonds
delivered in subsequent exchanges and transfers, all as authorized
and provided in the Bond Procedures Act of 1981, as amended.
No Bond shall be entitled to any right or benefit under this
Ordinance, or be valid or obligatory for any purpose, unless there
appears on such Bond either a certificate of registration
substantially in the form provided in Section 9C, manually executed
by the Comptroller of Public Accounts of the State of Texas or his
duly authorized agent, or a certificate of registration
03OW29 -8-
substantially in the form provided in Section 9D, manually executed
by an authorized officer, employee or representative of the Paying
Agent /Registrar, and either such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been
duly certified, registered and delivered.
Notwithstanding the above and foregoing paragraph, the Initial
Bond(s) authorized for delivery to the initial purchasers in
Section 8 hereof shall have printed thereon both Certificates of
Registration appearing in Section 9C and 9D hereof, and both such
certifications shall be required to be manually executed in
connection with the initial delivery of the Initial Bond(s) to the
initial purchasers and both such certificates appearing on the
Initial Bond(s), duly signed, shall be conclusive evidence that
such Initial Bond(s) have been duly certified, registered and
delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized
shall be initially issued either (i) as a single fully registered
bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in
Section 2 hereof and numbered T -1, or (ii) as twenty (20) fully
registered bonds, being one bond for each year of maturity in the
applicable principal amount and denomination and to be numbered
consecutively from T -1 and upward (hereinafter called the "Initial
Bonds) ") and, in either case, the Initial Bond(s) shall be
registered in the name of the initial purchaser(s) or the designee
thereof. The Initial Bond(s) shall be the Bonds submitted to the
Office of the Attorney General of the State of Texas for approval,
certified and registered by the Office of the Comptroller of Public
Accounts of the State of Texas and delivered to the initial
purchaser(s). Anytime after the delivery of the Initial Bond(s),
the Paying Agent/ Registrar, pursuant to written instructions from
the initial purchaser (rs) , or the designee thereof, shall cancel the
Initial Bond(s) delivered hereunder and exchange therefor
definitive Bonds of authorized denominations, Stated Maturities,
principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses
identified therefor; all pursuant to and in accordance with such
written instructions from the initial purchaser (s), or the designee
thereof, and such other information and documentation as the Paying
Agent /Registrar may reasonably require.
SECTION 9: Forms. A. Forms Generally. The Bonds, the
Registration Certificate of the Comptroller of Public Accounts of
the State of Texas, the Certificate of Registration, and the form
of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in this Section with such
appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may
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have such letters, numbers, or other marks of identification
(including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American
Bankers Association) and such legends and endorsements (including
insurance legends on insured Bonds and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be
established by the City or determined by the officers executing
such Bonds as evidenced by their execution thereof. Any portion of
the text of any Bonds may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bonds) shall be printed,
lithographed, or engraved, typewritten, photocopied or otherwise
reproduced in any other similar manner, all as determined by the
officers executing such Bonds as evidenced by their execution
thereof.
B. Form of Bonds.
REGISTERED
NO.
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF HUNTSVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BOND
SERIES 1997
Bond Date: Interest Rate: Stated Maturity CUSIP NO:
February 1, 1997 %
Registered Owner:
Principal Amount:
The City of Huntsville (hereinafter referred to as the
"City "), a body corporate and municipal corporation in the County
of Walker, State of Texas, for value received, hereby promises to
pay to the order of the Registered Owner named above, or the
registered assigns thereof, solely from the revenues hereinafter
identified, on the Stated Maturity date specified above the
Principal Amount stated above (or so much thereof as shall not have
been paid upon prior redemption) and to pay interest on the unpaid
principal amount hereof from the interest payment date next
preceding the "Registration Date" of this Bond appearing below
(unless this Bond bears a "Registration Date" as of an interest
payment date, in which case interest shall accrue from such date,
or unless the Registration Date of this Bond is the delivery date
of this Bond (or its Predecessor Bond] to the initial purchasers,
in which case interest shall accrue from such date of delivery to
the initial purchasers) at the per annum rate of interest specified
above computed on the basis of a 360 -day year of twelve 30 -day
months; such interest being payable on February 15 and August 15 in
each year, commencing August 15, 1997. Principal of this Bond
shall be payable to the registered owner hereof upon presentation
and surrender at the Designated Payment/ Transfer Office of the
Paying Agent /Registrar executing the registration certificate
appearing hereon, or its successor; provided, however, while this
Bond is registered to Cede & Co., the payment of principal upon a
partial redemption of the principal amount hereof may be
accomplished without presentation and surrender of this Bond.
Interest shall be payable to the registered owner of this Bond (or
one or more Predecessor Bonds, as defined in the Ordinance
hereinafter referenced) whose name appears on the "Security
Register" maintained by the Paying Agent /Registrar at the close of
business on the "Record Date ", which is the last business day of
the month next preceding each interest payment date and interest
shall be paid by the Paying Agent /Registrar by check sent United
States Mail, first class postage prepaid, to the address of the
registered owner recorded in the Security Register or by such other
method, acceptable to the Paying Agent/ Registrar, requested by, and
at the risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this Bond shall be
without exchange or collection charges to the owner or holder
hereof and in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of
public and private debts.
This Bond is one of the series specified in its title issued
in the aggregate principal amount of $14,395,000 (herein referred
to as the "Bonds ") for the purpose of making improvements and
extensions to the City's combined Waterworks and Sewer System,
including wastewater collection and treatment facilities, under and
in strict conformity with the Constitution and laws of the State of
Texas, particularly Articles 1111 et seq. and 2368a, V.A.T.C.S. and
pursuant to an ordinance adopted by the governing body of the City
(hereinafter referred to as the "Ordinance ").
The Bonds maturing on and after August 15, 2008, may be
redeemed prior to their Stated Maturities, at the option of the
City, in whole or in part (in inverse order of Stated Maturities if
less than all) in principal amounts of $5,000 or any integral
multiple thereof (and if within a Stated Maturity selected by lot
by the Paying Agent /Registrar), on August 15, 2007, or on any date
thereafter, at the redemption price of par, together with accrued
interest to the date of redemption, and upon 30 days prior written
notice being given by United states Mail, first class postage
prepaid, to registered owners of the Bonds to be redeemed, and
o3M29 -11-
subject to the terms and provisions relating thereto contained in
the Ordinance. If a Bond (or any portion of its principal sum)
shall have been duly called for redemption and notice of such
redemption duly given, then upon said redemption date such Bond (or
the portion of its principal sum to be redeemed) shall become due
and payable, and interest thereon shall cease to accrue from and
after the redemption date therefor, provided moneys for the payment
of the redemption price and the interest on the principal amount to
be redeemed to the date of redemption are held for the purpose of
such payment by the Paying Agent /Registrar.
In the event a portion of the principal amount of a Bond is to
be redeemed and the registered owner is someone other than Cede &
Co., payment of the redemption price of such principal amount shall
be made to the registered owner only upon presentation and
surrender of such Bond to the Designated Payment/ Transfer Office of
the Paying Agent /Registrar, and a new Bond or Bonds of like
maturity and interest rate in any authorized denominations provided
by the Ordinance for the then unredeemed balance of the principal
sum thereof will be issued to the registered owner, without
charge. If a Bond is selected for redemption, in whole or in part,
the City and the Paying Agent /Registrar shall not be required to
transfer such Bond to an assignee of the registered owner within 45
days of the redemption date therefor; provided, however, such
limitation on transferability shall not be applicable to an
exchange by the registered owner of the unredeemed balance of a
Bond redeemed in part.
The Bonds are special obligations of the City and, together
with the outstanding Previously Issued Bonds (identified and
defined in the Ordinance), are payable solely from and equally and
ratably secured by a first lien on and pledge of the "Net Revenues"
(as defined in the Ordinance) derived from the operation of the
City's combined Waterworks and Sewer System (the "System "). The
Bonds do not constitute a legal or equitable pledge, charge, lien,
or encumbrance upon any property of the City or the System, except
with respect to the Net Revenues. The holder hereof shall never
have the right to demand payment of this obligation out of any
funds raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed
therefor, the City has reserved the right to issue additional
revenue obligations payable from and, together with the Bonds,
equally and ratably secured by a parity lien on and pledge of the
Net Revenues of the System.
Reference is hereby made to the Ordinance, a copy of which is
on file in the Designated Payment /Transfer Office of the Paying
Agent /Registrar, and to all the provisions of which the Holder by
the acceptance hereof hereby assents, for definitions of terms; the
03 -12-
description of and the nature and extent of the security for the
Bonds; the properties constituting the System; the Net Revenues
pledged to the payment of the principal of and interest on the
Bonds; the nature and extent and manner of enforcement of the
pledge; the terms and conditions relating to the transfer or
exchange of this Bond; the conditions upon which the Ordinance may
be amended or supplemented with or without the consent of the
Holders; the rights, duties, and obligations of the City and the
Paying Agent/ Registrar; the terms and provisions upon which the
liens, pledges, charges and covenants made therein may be
discharged at or prior to the maturity of this Bond, and this Bond
deemed to be no longer Outstanding thereunder; and for the other
terms and provisions thereof. Capitalized terms used herein have
the meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the
Ordinance, may be transferred on the Security Register only upon
its presentation and surrender at the Designated Payment /Transfer
Office of the Paying Agent/ Registrar, with the Assignment hereon
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Paying Agent /Registrar duly
executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or
more new fully registered Bonds of the same Stated Maturity, of
authorized denominations, bearing the same rate of interest, and of
the same aggregate principal amount will be issued by the Paying
Agent /Registrar to the designated transferee or transferees.
The City and the Paying Agent/ Registrar, and any agent of
either, may treat the registered owner hereof whose name appears on
the Security Register (i) on the Record Date as the owner entitled
to payment of interest hereon, (ii) on the date of surrender of
this Bond as the owner entitled to payment of principal hereof at
its Stated Maturity or its redemption, in whole or in part, and
(iii) on any other date as the owner for all other purposes, and
neither the City nor the Paying Agent/ Registrar, or any agent of
either, shall be affected by notice to the contrary. In the event
of a non - payment of interest on a scheduled payment date (such
non - payment constitutes a default), 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 Holder
appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such
notice.
o" -13-
It is hereby certified, recited, represented and covenanted
that the City is a duly organized and legally existing municipal
corporation under and by virtue of the Constitution and laws of the
State of Texas; that the issuance of the Bonds is duly authorized
by law; that all acts, conditions and things required to exist and
be done precedent to and in the issuance of the Bonds to render the
same lawful and valid obligations of the City have been properly
done, have happened and have been performed in regular and due
time, form and manner as required by the Constitution and laws of
the State of Texas, and the Ordinance; that the Bonds do not exceed
any constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of and interest on
the Bonds by the pledge of and lien on the Net Revenues of the
System as aforestated. In case any provision in this Bond or any
application thereof shall be invalid, illegal, or unenforceable,
the validity, legality, and enforceability of the remaining
provisions and applications shall not in any way be affected or
impaired thereby. The terms and provisions of this Bond and the
Ordinance shall be construed in accordance with and shall be
governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused
this Bond to be duly executed under the official seal of the City
as of the Bond Date.
CITY OF HUNTSVILLE, TEXAS
COUNTERSIGNED: Mayor
City Secretary
(CITY SEAL)
0393= -24
C. *Form of Registration Certificate of Comptroller of
Public Accounts to appear on Initial Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS ( REGISTER NO.
(
THE STATE OF TEXAS
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 duly registered by the Comptroller of Public Accounts of
the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*NOTE TO PRINTER: Do not print on definitive bonds
D. Form of Certificate of Paying Agent /Registrar.
REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR
This Bond has been duly issued and registered under the
provisions of the within - mentioned Ordinance; the bond or bonds of
the above entitled and designated series originally delivered
having been approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts, as shown by
the records of the Paying Agent /Registrar.
The designated offices of the Paying Agent /Registrar in New
York, New York, is the Designated Payment /Transfer Office for this
Bond.
U. S. TRUST COMPANY OF TEXAS, N.A.,
Dallas, Texas,
as Paying Agent /Registrar
Registration Date:
By
Authorized Signature
03M29 -15-
E.
and
code
Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED
transfers unto (Prin t
of transferee:)
the undersigned hereby sells, assigns,
or typewrite name, address, and zip
(Social Security or other
identifying number: ) the within Bond
and all rights thereunder, and hereby irrevocably constitutes and
appoints attorney
to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
Signature guaranteed:
F.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NOTICE: The signature on this
assignment must correspond with
the name of the registered owner
as it appears on the face of the
within Bond in every particular.
follows:
NO immediately under the name of the bond the headings
"Interest Rate "i and "Stated Maturity
"" shall both be omitted;
(ii) Paragraph one shall read as follows:
Registered Owner:
Principal Amount: Dollars
The City of Huntsville (hereinafter referred to as the
"City "), a body corporate and municipal corporation in the County
of Walker, State of Texas, for value received, acknowledges itself
indebted to and hereby promises to pay to the order of the
Registered Owner named above, or the registered assigns thereof,
solely from the revenues hereinafter identified, on August 15 in
each of the years and in principal installments in accordance with
the following schedule:
YEAR OF
MATURITY
URITY
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from
schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to
maturity) and to pay interest on the unpaid Principal Amount hereof
from the date of the delivery to the initial purchasers at the per
annum rates of interest specified above computed on the basis of a
360 -day year of twelve 30 -day months; such interest being payable
on February 15 and August 15 in each year, commencing August 15,
1997. Principal installments of this Bond are payable in the year
of maturity or on a prepayment date to the registered owner hereof
by U. S. Trust Company of Texas, N.A., Dallas, Texas (the "Paying
Agent /Registrar "), upon presentation and surrender, at its
designated offices in New York, New York (the "Designated
Payment /Transfer Office "). Interest is payable to the registered
owner of this Bond whose name appears on the "Security Register"
maintained by the Paying Agent /Registrar at the close of business
on the "Record Date ", which is the last business day of the month
next preceding each interest payment date, and interest shall be
paid by the Paying Agent /Registrar by check sent United States
Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method,
acceptable to the Paying Agent /Registrar, requested by, and at the
risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this Bond shall be
without exchange or collection charges to the owner hereof and in
any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and
private debts.
SECTION 10: Definitions. For purposes of this Ordinance
and for clarity with respect to the issuance of the Bonds herein
authorized, and the pledge and appropriation of Net Revenues
therefor, the following words or terms, whenever the same appear
herein without qualifying language, are defined to mean as follows:
(a) The term "Additional Bonds" shall mean 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 17 hereof.
(b) The term "Bonds" shall mean the "City of
Huntsville, Texas, Waterworks and Sewer System Revenue
Bonds, Series 199701, dated February 1, 1997.
(c) The term "Bonds Similarly Secured" shall mean
the Previously Issued Bonds, the Bonds and Additional
Bonds.
_i7_
(d) The term "City" shall mean the City of
Huntsville, Texas, the City Council thereof and any
successor to the City as owner of the System.
(e) The term "Government Obligations" shall mean
direct obligations of the United States of America,
including obligations the principal of and interest on
which are fully and unconditionally guaranteed by the
United States of America, and United States Treasury
obligations such as its State and Local Government Series
in book -entry form.
(f) The term "Fiscal Year" shall mean the
twelve -month financial accounting period used for the
System ending each year on September 30th; 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.
(g) The term "Net Revenues" shall mean the gross
revenues of the System less the reasonable expense of
operation and maintenance of 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 keep the plant or utility in operation 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 the security of the Bonds Similarly Secured shall
be deducted in determining "Net Revenues ".
(h) The term "Outstanding" when used in this
Ordinance with respect to Bonds or Bonds Similarly
Secured means, as of the date of determination, all Bonds
and Bonds Similarly Secured theretofore sold, issued and
delivered by the City, except:
(1) those 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) those
Secured paid
accordance with
hereof; and
Bonds or Bonds
or deemed to be
the provisions of
Similarly
paid in
Section 27
(3) those Bonds or Bonds Similarly
Secured that have been mutilated, destroyed,
lost, or stolen and replacements therefor have
been registered and delivered in lieu thereof.
(i) The term "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:
(1) City of Huntsville, Texas Waterworks
and Sanitary Sewer System Revenue Bonds,
Series 1991, dated July 1, 1991, and
originally issued in the principal amount of
$1,700,000;
(2) City of Huntsville, Texas Waterworks
and Sanitary Sewer System Revenue Bonds,
Series 1992, dated April 1, 1992, and
originally issued in the principal amount of
$1,860,000;
(j) The term "Required Reserve" shall mean the
amount required to be accumulated and maintained in the
Reserve Fund under the provisions of Section 14 hereof.
(k) The term "System" shall mean the waterworks and
sanitary sewer system of the City, including all present
and future extensions, additions, replacements and
improvements thereto.
SECTION 11; Pledge of Revenues. 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 and maintenance 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
lien shall be valid and binding without any physical delivery
thereof or further act by the City.
SECTION 12; System Fund. The City hereby covenants and
agrees that all income and revenues of every nature derived from
the operation and ownership of the System shall be deposited day to
day as collected into the "City of Huntsville Waterworks and Sewer
0393M -19-
System Revenue 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 while Bonds Similarly Secured remain
Outstanding. All 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:
FIRST: To the payment of all necessary and
reasonable operating and maintenance expenses of the
System and other costs or expenses required by statute to
be a first charge on and claim against the revenues
thereof, including all salaries, labor and materials upon
approval of the City Council.
SECOND: To the payment of the amounts required to
be deposited in the Interest and Sinking Fund for the
payment of the principal of and interest on the Bonds
Similarly Secured as the same becomes due and payable.
THIRD: To the payment of the amounts required to
be deposited in the Reserve Fund to accumulate and
maintain the Required Reserve (hereinafter defined) in
accordance with the provisions of this Ordinance or any
other ordinance relating to issuance of Bonds Similarly
Secured.
Provided, however, the Director of Finance (or other
designated financial officer of the City) shall not make any
disbursement from the System Fund for repairs in excess $1,000.00
or for extensions, except pursuant to a resolution adopted by the
City Council declaring that it is the judgment of the City Council
that such repairs or extensions are necessary to keep the plant or
system in operation and render adequate service to the City and the
inhabitants thereof, or that such repairs or extensions are
necessary to meet some physical accident or condition which would
otherwise impair the Bonds, and such resolution, in either case,
shall recite the facts and reasons for such judgment. Certified
copies of such resolution shall be furnished without cost to any
Holders of Bonds Similarly Secured requesting the same. Such
resolution shall be binding or conclusive upon any Holder.
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 the
redemption of Bonds Similarly Secured, or for any lawful purpose.
SECTION 13: 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 bank of the City a special
Account or Fund known as the "City of Huntsville Waterworks and
0393928 -20-
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 ordinances 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 1st day
of each month beginning on or before the 1st day of the month next
following the month the Bonds are delivered to the initial
purchaser(s).
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 Additional
Bonds.
Any surplus proceeds of sale of the Bonds after satisfying the
provisions of Section 32 hereof 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 14: Reserve Fund. To accumulate and maintain a
reserve for the payment of the Bonds Similarly Secured in an amount
(the "Required Reserve ") equal to the average annual principal and
interest requirement for all Bonds Similarly Secured Outstanding,
the City agrees to maintain a Special Fund or Account known as the
"City of Huntsville Waterworks and Sewer System Revenue Bonds
Reserve Fund" (the "Reserve Fund ") , which Fund shall be maintained
at a depository bank of the City. All funds deposited in the
Reserve Fund shall be used to pay the principal of and interest on
the Bonds Similarly Secured at any time when the balance in the
Interest and Sinking Fund is insufficient for such purposes.
In accordance with the provisions of the ordinances
authorizing the issuance of the Previously Issued Bonds, the amount
currently on deposit in the Reserve Fund is $410,979.00 (the
"Current Reserve "). By reason of the issuance of the Bonds, the
039&329 -21-
total amount required to be accumulated and maintained in the
Reserve Fund shall be and is hereby increased to the sum of
$1,253,173.00 (the "Required Reserve "), which amount equals at
least the average annual principal and interest requirements for
the Bonds and the Previously Issued Bonds now Outstanding.
Immediately following the delivery of the Bonds, the difference
between the Required Reserve and the Current Reserve in the amount
of $842,194 will be deposited to the credit of the Reserve Fund
from proceeds of sale of the Bonds.
If in any month the City shall, for any reason, fail to pay
into the Reserve Fund the full amounts above stipulated, amounts
equivalent to such deficiencies shall be set apart and paid into
said Reserve Fund from the first available and unallocated 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 Reserve Fund during such month or months.
While the Reserve Fund contains the entire Required Reserve,
no monthly deposits shall be required to be made to the Reserve
Fund; provided, however, if the Reserve Fund should ever contain
less than the total Required Reserve, monthly deposits in amounts
equal to not less than one - sixtieth (1/60) of the then Required
Reserve, shall be made and continued to be made to the Reserve Fund
on or before the 1st day of each month until the Required Reserve
has been fully restored and deposited in the Reserve Fund.
SECTION 15: 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 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 16: Security of Funds. 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.
SECTION 17: Issuance of Additional Bonds. In addition to
inferior lien bonds, the City reserves the right to issue, from
o -22-
time to time as needed, Additional Bonds for any lawful purpose
and, when issued, may be secured by and payable from a first lien
on and pledge of the Net Revenues of the System in the same manner
and to the same extent as are the Previously Issued Bonds and the
Bonds, and such Additional Bonds may in all respects be of equal
dignity with the Previously Issued Bonds and the Bonds. No
Additional Bonds may be issued unless:
(a) Each of the Funds set forth above contains the
amount of money then required to be on deposit therein,
(b) The Net Revenues of the System for either of
the following periods:
the 12 -month period ending on the last day of
the month in which the bond ordinance is
adopted authorizing such Additional Bonds,
or
the then last preceding Fiscal Year (being the
last completed Fiscal Year preceding the month
in which the bond ordinance is adopted
authorizing such Additional Bonds),
were equal to at least 1 -1/2 times the average annual
principal and interest requirements on all bonds payable
from the revenues of the System which will be outstanding
after the Additional Bonds then proposed to be issued are
issued, sold, and delivered.
(c) An independent professional engineer registered
under the laws of the State of Texas makes a projection
of the income of the System during the life of all bonds
payable from the revenues of the System then Outstanding
and the Additional Bonds proposed to be issued and such
projection shows that, in the engineer's opinion, the
average annual Net Revenues of the System will equal at
least 1 -1/2 times the average annual principal and
interest requirement of all bonds payable from the
revenues of the System which will be outstanding after
the Additional Bonds then proposed to be issued are
issued, sold and delivered.
The term "Net Revenues" as used in this Section shall mean all
of the net revenues of the System (excluding income received
specifically for capital items) after deduction of the reasonable
expenses of operation and maintenance of the System (excluding
expenditures for capital items).
O3M29 -23-
SECTION 18: Rates and Charges. The City hereby covenants and
agrees that:
(a) that it will all times charge and collect for
services rendered by the System rates sufficient to pay
all operating, maintenance, depreciation, replacement and
betterment expense and other costs deductible in
determining "Net Revenues" as herein defined, and to
produce Net Revenues equal to at least one and one -half
times the average annual principal of and interest on the
Previously Issued Bonds, the Bonds and the Additional
Bonds if issued.
(b) If the Additional Bonds are issued, or if the
System should become legally liable for any other
indebtedness, the City will fix and maintain rates and
collect charges for the services of the System sufficient
to discharge such indebtedness.
SECTION 19: Maintenance and Operation - Insurance. The
City shall maintain the System in good condition and operate the
System in an efficient manner and at reasonable cost. While any
Bonds are Outstanding, the City agrees to maintain insurance, for
the benefit of the Holders of the Bonds Similarly Secured, on the
System of a kind and in an amount which usually would be carried by
private companies engaged in a similar type of business. Nothing
in this Ordinance shall be construed as requiring the City to
expend any funds derived from sources other than the operation of
the System, but nothing herein shall be construed as preventing the
City from doing so.
SECTION 20: Records and Accounts. The City hereby
covenants and agrees that while any of the Bonds remain
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 Article 1113,
V.A.T.C.S. or other applicable law. The Holder of any 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 and all properties
comprising same. Within ninety days after the close of each Fiscal
Year, the City will furnish (without cost) to any Holder of Bonds
Similarly Secured who may so request, a signed or certified copy of
a report by an independent accountant covering the next preceding
fiscal year showing the following information relating to the
System:
(a) Income and Expense Statement;
(b) Balance sheet;
03 -24-
(c) The accountants comments regarding the manner
in which the City has complied with the requirements of
this Ordinance and his recommendations for any changes or
improvements in the operation of the System.
(d) A list of insurance policies in force at the
end of the Fiscal Year covering the properties of the
System, showing as to each policy, the risk covered, the
name of the insurer, and the expiration date;
(e) The number of properties connected with the
System and the total income from the System for the year;
and
(f) The number of unmetered customers of the System
at the each of the year.
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 to the Texas Water Development
Board, Attention: Development Fund Manager.
SECTION 21: 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 the 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 the
outstanding "City of Huntsville, Texas, Combination Tax
and Revenue Certificates of Obligation, Series 199311,
dated July 1, 1993.
(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.
SECTION 22: Remedy in Event of Default. In addition to
all rights and remedies provided by the laws of the State of Texas,
0393M 25-
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 set forth in this
Ordinance, the Holder of any 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 officers 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 and 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.
SECTION 23: 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 24: Notices to Holders Waiver. Wherever this
Ordinance provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and sent by United States Mail, first class
postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the business day next
preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice to any particular Holders, nor any
defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Bonds. Where this Ordinance
provides for notice in any manner, such notice may be waived in
writing by the Holder entitled to receive such notice, either
before or after the event with respect to which such notice is
given, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Paying
Agent/ Registrar, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
SECTION 25: Cancellation. All Bonds surrendered for payment,
redemption, transfer, exchange, or replacement, if surrendered to
the Paying Agent /Registrar, shall be promptly canceled by it and,
if surrendered to the City, shall be delivered to the Paying
Agent /Registrar and, if not already canceled, shall be promptly
o3 =2 -26-
canceled by the Paying Agent/ Registrar. The City may at any time
deliver to the Paying Agent /Registrar for cancellation any Bonds
previously certified or registered and delivered which the City may
have acquired in any manner whatsoever, and all Bonds so delivered
shall be promptly canceled by the Paying Agent/ Registrar. All
canceled Bonds held by the Paying Agent /Registrar shall be returned
to the City.
SECTION 26: Mutilated- Destroyed -Lost and Stolen Bonds. In
case any Bond shall be mutilated, or destroyed, lost or stolen, the
Paying Agent /Registrar may execute and deliver a replacement Bond
of like form and tenor, and in the same denomination and bearing a
number not contemporaneously outstanding, in exchange and
substitution for such mutilated Bond or in lieu of and in
substitution for such destroyed, lost or stolen Bond only upon the
approval of the City and after (i) the filing by the Holder thereof
with the Paying Agent /Registrar of evidence satisfactory to the
Paying Agent/ Registrar of the destruction, loss or theft of such
Bond, and of the authenticity of the ownership thereof and (ii) the
furnishing to the Paying Agent /Registrar of indemnification in an
amount satisfactory to hold the City and the Paying Agent /Registrar
harmless. All expenses and charges associated with such indemnity
and with the preparation, execution and delivery of a replacement
Bond shall be borne by the Holder of the Bond mutilated, or
destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any
mutilated, destroyed, lost, or stolen Bond shall constitute a
replacement of the prior obligation of the City, whether or not the
mutilated, destroyed, lost, or stolen Bond shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and ratably with all other Outstanding
Bonds.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 27: Satisfaction of Obligations of City. If the City
shall pay or cause to be paid, or there shall otherwise be paid to
the Holders, the principal of, premium, if any, and interest on the
Bonds, at the times and in the manner stipulated in this Ordinance,
then the pledge of the Net Revenues of the System under this
Ordinance and all other obligations of the City to the Holders
shall thereupon cease, terminate, and become void and be discharged
and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to
have been paid within the .meaning and with the effect expressed
above in this Section when (i) money sufficient to pay in full such
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Bonds or the principal amount(s) thereof at maturity or to the
redemption date therefor, together with all interest due thereon,
shall have been irrevocably deposited with and held in trust by the
Paying Agent/Registrar, or an authorized escrow agent, or
(ii) non-callable Government obligations shall have been
irrevocably deposited in trust with the Paying Agent/ Registrar, or
an authorized escrow agent, which Government Obligations have been
certified by an independent accounting firm to mature as to
principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money,
together with any moneys deposited therewith, if any, to pay when
due the principal of and interest on such Bonds, or the principal
amount(s) thereof, on and prior to the Stated Maturity thereof or
(if notice of redemption has been duly given or waived or if
irrevocable arrangements therefor acceptable to the Paying
Agent/Registrar have been made) the redemption date thereof. The
City covenants that no deposit of moneys or Government obligations
will be made under this Section and no use made of any such deposit
which would cause the Bonds to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of
1986, as amended, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or
an authorized escrow agent, and all income from Government
Obligations held in trust by the Paying Agent/Registrar or an
authorized escrow agent, pursuant to this Section which is not
required for the payment of the Bonds, or any principal amount(s)
thereof, or interest thereon with respect to which such moneys have
been so deposited shall be remitted to the City or deposited as
directed by the City. Furthermore, any money held by the Paying
Agent/Registrar for the payment of the principal of and interest on
the Bonds and remaining unclaimed for a period of four (4) years
after the Stated Maturity, or applicable redemption date, of the
Bonds such moneys were deposited and are held in trust to pay
shall, upon the request of the City, be remitted to the City
against a written receipt therefor. Notwithstanding the above and
foregoing, any remittance of funds from the Paying Agent/Registrar
to the City shall be subject to any applicable unclaimed property
laws of the State of Texas.
SECTION 28: Ordinance a Contract - Amendments. This
Ordinance shall constitute a contract with the Holders from time to
time, be binding on the City, and shall not be amended or repealed
by the City while any Bond remains Outstanding except as permitted
in this Section. The City, may, without the consent of or notice
to any Holders, from time to time and at any time, amend this
Ordinance in any manner not detrimental to the interests of the
Holders, including the curing of any ambiguity, inconsistency, or
formal defect or omission herein. In addition, the City may, with
the written consent of Holders holding a majority in aggregate
principal amount of the Bonds then outstanding affected thereby,
030M -28-
amend, add to, or rescind any of the provisions of this Ordinance;
provided that, without the consent of all Holders of Outstanding
Bonds, no such amendment, addition, or rescission shall (1) extend
the time or times of payment of the principal of, premium, if any,
and interest on the Bonds, reduce the principal amount thereof, the
redemption price therefor, or the rate of interest thereon, or in
any other way modify the terms of payment of the principal of,
premium, if any, or interest on the Bonds, (2) give any preference
to any Bond over any other Bond, or (3) reduce the aggregate
principal amount of Bonds required to be held by Holders for
consent to any such amendment, addition, or rescission.
SECTION 29: Covenants to Maintain Tax - Exempt Status.
(a) Definitions. When used in this Section, the following terms
shall have the following meanings:
"Closing Date" means the date on which the Bonds are
first authenticated and delivered to the initial
purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as
amended by all legislation, if any, effective on or
before the Closing Date.
"Computation Date" has the meaning set forth in
Section 1.148 -1(b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in
Section 1.148 -1(b) of the Regulations, and any
replacement proceeds as defined in Section 1.148 -1(c) of
the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section
1.148 -1(b) of the Regulations.
"Nonpurpose Investment" means any investment
property, as defined in section 148(b) of the Code, in
which Gross Proceeds of the Bonds are invested and which
is not acquired to carry out the governmental purposes of
the Bonds.
"Rebate Amount" has the meaning set forth in Section
1.148 -1(b) of the Regulations.
"Regulations" means any proposed, temporary, or
final Income Tax Regulations issued pursuant to Sections
103 and 141 through 150 of the Code, and 103 of the
Internal Revenue Code of 1954, which are applicable to
the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary
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or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set
forth in Section 1.148 -5 of the Regulations and (2) the
Bonds has the meaning set forth in Section 1.148 -4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall
not use, permit the use of, or omit to use Gross Proceeds or any
other amounts (or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with
Gross Proceeds) in a manner which, if made or omitted,
respectively, would cause interest on (1) any Bond issued hereunder
or (2) any series of bonds or obligations issued or incurred by the
Texas Water Development Board or the Texas Water Resources Finance
Authority to become includable in the gross income, as defined in
section 61 of the Code, of the owner thereof for federal income tax
purposes. Without limiting the generality of the foregoing, unless
and until the City receives a written opinion of counsel nationally
recognized in the field of municipal bond law to the effect that
failure to comply with such covenant will not adversely affect the
exemption from federal income tax of the interest on any Bond, the
City shall comply with each of the specific covenants in this
Section.
(c) No Private Use or Private Payments. Except as permitted
by section 141 of the Code and the Regulations and rulings
thereunder, the City shall at all times prior to the last Stated
Maturity of Bonds:
(1) exclusively own, operate and possess all
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use
or permit the use of such Gross Proceeds (including all
contractual arrangements with terms different than those
applicable to the general public) or any property
acquired, constructed or improved with such Gross
Proceeds in any activity carried on by any person or
entity (including the United States or any agency,
department and instrumentality thereof) other than a
state or local government, unless such use is solely as
a member of the general public; and
(2) not directly or indirectly impose or accept any
charge or other payment by any person or entity who is
treated as using Gross Proceeds of the Bonds or any
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with such Gross Proceeds, other than taxes of
so
general application within the City or interest earned on
investments acquired with such Gross Proceeds pending
application for their intended purposes.
(d) No Private Loan. Except to the extent permitted by
section 141 of the Code and the Regulations and rulings thereunder,
the City shall not use Gross Proceeds of the Bonds to make or
finance loans to any person or entity other than a state or local
government. For purposes of the foregoing covenant, such Gross
Proceeds are considered to be "loaned" to a person or entity if:
(1) property acquired, constructed or improved with such Gross
Proceeds is sold or leased to such person or entity in a
transaction which creates a debt for federal income tax purposes;
(2) capacity in or service from such property is committed to such
person or entity under a take -or -pay, output or similar contract or
arrangement; or (3) indirect benefits, or burdens and benefits of
ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise
transferred in a transaction which is the economic equivalent of a
loan.
(e) Not to Invest at Higher Yield. Except to the extent
permitted by section 148 of the Code and the Regulations and
rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest
Gross Proceeds in any Investment (or use Gross Proceeds to replace
money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross
Proceeds (or with money replaced thereby), whether then held or
previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted
by section 149(b) of the Code and the Regulations and rulings
thereunder, the City shall not take or omit to take any action
which would cause the Bonds to be federally guaranteed within the
meaning of section 149(b) of the Code and the Regulations and
rulings thereunder.
(g) Information Report. The City shall timely file the
information required by section 149(e) of the Code with the
Secretary of the Treasury on Form 8038 -G or such other form and in
such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent
otherwise provided in section 148(f) of the Code and the
Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds
(including all receipts, expenditures and investments
thereof) on its books of account separately and apart
from all other funds (and receipts, expenditures and
o3"M -31-
investments thereof) and shall retain all records of
accounting for at least six years after the day on which
the last Outstanding Bond is discharged. However, to the
extent permitted by law, the City may commingle Gross
Proceeds of the Bonds with other money of the City,
provided that the City separately accounts for each
receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date,
the City shall calculate the Rebate Amount in accordance
with rules set forth in section 148(f) of the Code and
the Regulations and rulings thereunder. The City shall
maintain such calculations with its official transcript
of proceedings relating to the issuance of the Bonds
until six years after the final Computation Date.
(3) As additional consideration for the purchase of
the Bonds by the Purchasers and the loan of the money
represented thereby and in order to induce such purchase
by measures designed to insure the excludability of the
interest thereon from the gross income of the owners
thereof for federal income tax purposes, the City shall
pay to the United States out of the Interest and Sinking
Fund or its general fund, as permitted by applicable
Texas statute, regulation or opinion of the Attorney
General of the State of Texas, the amount that when added
to the future value of previous rebate payments made for
the Bonds equals (i) in the case of a Final Computation
Date as defined in Section 1.148- 3(e)(2) of the
Regulations, one hundred percent (100 %) of the Rebate
Amount on such date; and (ii) in the case of any other
Computation Date, ninety percent (90 %) of the Rebate
Amount on such date. In all cases, the rebate payments
shall be made at the times, in the installments, to the
place and in the manner as is or may be required by
section 148(f) of the Code and the Regulations and
rulings thereunder, and shall be accompanied by Form
8038 -T or such other forms and information as is or may
be required by Section 148(f) of the Code and the
Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to
assure that no errors are made in the calculations and
payments required by paragraphs (2) and (3) , and if an
error is made, to discover and promptly correct such
error within a reasonable amount of time thereafter (and
in all events within one hundred eighty (180) days after
discovery of the error), including payment to the United
States of any additional Rebate Amount owed to it,
o3 -32-
interest thereon, and any penalty imposed under Section
1.148 -3(h) of the Regulations.
(i ) Not to Divert Arbitrage Prof its. Except to the extent
permitted by section 148 of the Code and the Regulations and
rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, enter
into any transaction that reduces the amount required to be paid to
the United States pursuant to Subsection (h) of this Section
because such transaction results in a smaller profit or a larger
loss than would have resulted if the transaction had been at arm's
length and had the Yield of the Bonds not been relevant to either
party.
(j) Elections. The City hereby directs and authorizes the
City Manager, Director of Finance and City Secretary, individually
or jointly, to make elections permitted or required pursuant to the
provisions of the Code or the Regulations, as they deem necessary
or appropriate in connection with the Bonds, in the Certificate as
to Tax Exemption or similar or other appropriate certificate, form
or document.
SECTION 30: Confirmation of Sale. The sale of the Bonds to
the Texas Water Development Board (the "Purchasers ") at the price
of par, less an origination fee of 2.25 %, pursuant to a loan
commitment received from the Purchasers is hereby confirmed.
Delivery of said Bonds shall be made to said Purchasers as soon as
may be after the adoption of this Ordinance, upon payment therefor
in accordance with the terms of sale.
SECTION 31: Control and Custody of Bonds. The Mayor of the
City shall be and is hereby authorized to take and have charge of
all necessary orders and records pending investigation by the
Attorney General of the State of Texas, including the printing and
supply of definitive Bonds, and shall take and have charge and
control of the Initial Bond(s) pending the approval thereof by the
Attorney General, the registration thereof by the Comptroller of
Public Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, City Manager, Director of Finance and
City Secretary, any one or more of said officials, are hereby
authorized and directed to furnish and execute such documents and
certifications relating to the City and the issuance of the Bonds,
including certifications as to facts, estimates, circumstances and
reasonable expectations pertaining to the use, expenditure and
investment of the proceeds of the Bonds, as may be necessary for
the approval of the Attorney General, the registration by the
Comptroller of Public Accounts and the delivery of the Bonds to the
Purchasers, and, together with the City's financial advisor, bond
counsel and the Paying Agent /Registrar, make the necessary
o3 =29 -33-
arrangements for the delivery of the Initial Bond(s) to the
Purchasers.
SECTION 32: Compliance with Rules of Texas Water
Development Board. In compliance with the rules and regulations of
the Texas Water Development Board (the "Board ") , the City agrees
and covenants:
(1) to keep and maintain full and complete records and
accounts pertaining to the construction of the project financed
with the proceeds of sale of the Bonds, including the construction
fund account created below, in accordance with the standards set
forth by the Government Accounting Standard Board;
(2) to create and establish at an official depository of the
City a "Special City of Huntsville Loan Construction Fund (the
"Construction Fund ") for the receipt and disbursement of the
proceeds from the sale of the Bonds (less amounts to pay costs of
issuance) and all other funds acquired by the City in connection
with the planning and construction of the projects financed, in
whole or in part, by the Board pursuant to a loan evidenced by the
Bonds and all funds deposited to the credit of the Construction
Fund shall be disbursed only for the payment of costs and expenses
incurred in connection with the planning and building of such
projects as approved by the Board and as otherwise allowed by the
rules;
(3) upon completion of the construction of the projects
financed, in whole or in part, by the loan evidenced by the Bonds,
to provide (i) to the Development Fund Manager of the Board a
complete set of as -built drawings and (ii) to the Board a final
accounting of the total costs of the projects. If the projects as
finally completed were built at a total cost less than the amount
of available funds for building the projects, or if the Development
Fund Manager of the Board disapproves construction of any portion
of such projects as not being in accordance with the plans and
specifications, the City agrees to immediately, with filing of the
final accounting, return to the Board the amount of any such excess
and /or the cost determined by the Development Fund Manager of the
Board relating to the parts of such projects not built in
accordance with the plans and specifications, to the nearest
multiple of the authorized denominations for the Bonds, upon the
surrender and cancellation of a like amount of such Bonds held by
the Board in inverse order of their Stated Maturities. In
determining the amount of available funds for building the project,
the City agrees to account for all amounts deposited to the credit
of the Construction Fund, including all loan funds extended by the
Board, all other funds available from the projects as described in
the project engineer's or fiscal representative's sufficiency of
funds statement and all interest earned by the City on money in the
Construction Fund.
o3 -34
(4) in addition to the provisions of Section 19 hereof, to
maintain adequate insurance coverage on the projects financed with
the proceeds of the Bonds in amounts adequate to protect the
Board's interest;
(5) maintain current, accurate and complete records and
accounts necessary to demonstrate compliance with financial
assistance related legal and contractual provisions;
(6) to implement any water conservation program required by
the Board until all financial obligations to the State have been
discharged;
(7) to comply with any special conditions specified by the
Board's environmental determination until all financial obligations
to the State have been discharged;
(8) to abide by the Board's rules and relevant state
statutes, including the Texas Water Code, Chapters 15, 16 and 17.
SECTION 33: Proceeds of Sale. Immediately following the
delivery of the Bonds to the initial purchasers, the proceeds of
sale shall be deposited in a trust clearing account to be
maintained at Norwest Bank Texas, National Association, Dallas,
Texas and held in trust and in escrow pending written authorization
to release said moneys. A "Special Escrow Deposit Agreement" by
and between the City and Norwest Bank Texas, National Association,
Dallas, Texas providing for the deposit, safekeeping and
administration of such funds pending their release from escrow is
attached hereto as Exhibit B and incorporated herein by reference
as a part of this Ordinance for all purposes, and such Special
Escrow Deposit Agreement is hereby approved as to form and content.
The Mayor and City Secretary of the City are hereby authorized and
directed to execute such Agreement for and on behalf of the City
and as the act and deed of the City Council.
Upon the release of funds from the trust clearing account
maintained pursuant to the "Special Escrow Deposit Agreement ", the
amount released from escrow shall be deposited in a construction
fund maintained at the City's depository bank. Pending
expenditures for authorized projects and purposes, the amount
deposited to the credit of the construction fund may be invested in
authorized investments, and any investment earnings realized may be
expended for such authorized projects and purposes or deposited in
the Interest and Sinking Fund as shall be determined by the City
Council. All surplus proceeds of sale of the Bonds, including
investment earnings, remaining in the construction fund after
completion of all authorized projects or purposes and after
satisfying the requirements of Section 32 hereof shall be deposited
to the credit of the Interest and Sinking Fund.
SECTION 34: Legal Opinion. The obligation of the Purchasers
to accept delivery of the Bonds is subject to being furnished a
039U29 -35-
final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas,
Texas, approving such Bonds as to their validity, said opinion to
be dated and delivered as of the date of delivery and payment for
such Bonds. A true and correct reproduction of said opinion or an
executed counterpart thereof is hereby authorized to be deposited
with DTC along with the global certificates for the implementation
and use of the Book Entry Only System used in the settlement and
transfer of the Bonds.
SECTION 35: CUSIP Numbers. CUSIP numbers may be printed or
typed on the definitive Bonds. It is expressly provided, however,
that the presence or absence of CUSIP numbers on the definitive
Bonds shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving said Bonds as
to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the definitive Bonds.
SECTION 36: Amendments to Ordinance Upon Discharge of
Previously Issued Bonds. A such time as the Series 1991 and Series
1992 Previously Issued Bonds identified in Section 10(i) (1) and (2)
have been paid or are no longer Outstanding, the following Sections
of this Ordinance shall be amended and modified to read as follows:
(a) Section 10 shall be amended to add the following
definitions:
"Average Annual Debt Service" - That
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 from proceeds of Bonds Similarly
Secured shall be excluded in making the
aforementioned computation.
"Debt Service" - 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
03 -36-
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.
"Gross Revenues" - 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 a lien on and pledge
of the Net Revenues.
"Maintenance and Operating
Expenses" - 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 Operating and Maintenance Expenses.
Operating and Maintenance 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.
"Net Revenues" - Gross Revenues of the
System, with respect to any period, after
deducting the System's Maintenance and
Operating Expenses during such period.
-37-
"System" - 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 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."
(b) Section 12 is hereby amended and modified to read as
follows:
"SECTION 12: Water 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 an official depository of
City funds and known on the books and records of the City
as the "Water and Sewer System 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 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:
(1) 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.
(2) To the payment of the amounts
required to be deposited in the Interest and
Sinking Fund established and maintained for
Sm
the payment of Debt Service on the Bonds
Similarly Secured as the same becomes due and
payable.
(3) 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."
(c) Section 14 shall be amended and modified to read as
follows:
"SECTION 14: 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 an official
depository of the City. 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 12 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
-39-
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) of 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 1st 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 15th 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 time 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."
(d) Section 16 shall be amended and modified to read as
follows:
"SECTION 16: 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
o3s3= -40-
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
(V.T.C.A., 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 14 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."
(e) Section 17 shall be amended and modified to read as
follows:
"SECTION 17: 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
03 -41-
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 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 a lien on and
pledge of the Net Revenues of the System have
been made and that 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 15 months
immediately preceding the month the ordinance
authorizing the issuance of the Additional
Bonds is adopted, are at least equal to (i)
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
o3 -42-
by the System that became effective at least
sixty (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) of this Section
shall be satisfied and the Accountant's certificate or
opinion required 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 a lien on and
pledge of the Net Revenues of the System, junior and
subordinate in rank and dignity to the lien and pledge
securing the payment of the Bonds Similarly Secured, as
may be authorized by the laws of the State of Texas."
(f) Section 18 shall be amended and modified to read as
follows:
"SECTION 18: 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
O39W2e -43-
information and experience and with due allowance for
contingencies, to produce Gross Revenues in each Fiscal
Year sufficient:
(1) To pay Maintenance and Operating
Expenses, depreciation charges and replacement
and betterment costs,
(2) 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 a lien on and pledge of
the Net Revenues of the System, and
(3) To produce Net Revenues equal to at
least 1.10 times the annual Debt Service for
the Bonds Similarly Secured then Outstanding.
(4) 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.
(g) Section 19 shall be amended and modified to read as
follows:
"SECTION 19: Maintenance 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."
(h) Section 20 shall be amended and modified to read as
follows:
039&329 -44-
"SECTION 20: Records - Accounts - Accounting
Reports. The City hereby covenants and agrees that while
any of 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
Article 1113, V.A.T.C.S. or other applicable law. The
Holders of any 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 and all
properties comprising 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:
(1) A statement of the income and
expenses of the System for such Fiscal Year.
(2) A balance sheet for the System as of
the end of such Fiscal Year.
(3) 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 Operating
and Maintenance 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 any of
said Bonds. The audits herein required shall be made
within 120 days following the close of each Fiscal Year
insofar as is possible."
(i) Section 21 shall be amended to add a subparagraph (d) to
read as follows:
"(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
03OW29 -45-
may sell or dispose of any property, facilities and
equipment not necessary or essential to the operations 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 37: Benefits of Ordinance. Nothing in this
Ordinance, expressed or implied, is intended or shall be construed
to confer upon any person other than the City, the Paying
Agent /Registrar, and the Holders, any right, remedy, or claim,
legal or equitable, under or by reason of this Ordinance or any
provision hereof, and this Ordinance and all its provisions is
intended to be and is for the sole and exclusive benefit of the
City, the Paying Agent /Registrar and the Holders.
SECTION 38: 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 39: Governing Law. This Ordinance shall be construed
and enforced in accordance with the laws of the State of Texas and
the United States of America.
SECTION 40: Effect of Headings. The Section headings herein
are for convenience only and shall not affect the construction
hereof.
SECTION 41: Severability. If any provision of this Ordinance
or the application thereof to any circumstance shall be held to be
invalid, the remainder of this Ordinance or 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 42: Construction of Terms. If appropriate in the
context of this Ordinance, words of the singular number shall be
considered to include the plural, words of the plural number shall
be considered to include the singular, and words of the masculine,
feminine or neuter gender shall be considered to include the other
genders.
SECTION 43: Continuing Disclosure Undertaking. (a)
Definitions. As used in this Section, the following terms have the
meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has
determined to be a nationally recognized municipal securities
o39W29 -46-
information repository within the meaning of the Rule from time to
time.
time.
"Rule" means SEC Rule 15c2 -12, as amended from time to
"SEC" means the United States Securities and Exchange
Commission.
"SID" means any person designated by the State of Texas
or an authorized department, officer, or agency thereof as, and
determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each
NRMSIR and any SID, within six months after the end of each fiscal
year (beginning with the fiscal year ending September 30, 1996)
financial information and operating data with respect to the City
of the general type described in Exhibit C hereto. Financial
statements to be provided shall be (1) prepared in accordance with
the accounting principles described in Exhibit C hereto 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 audited financial statements are not available at
the time the financial information and operating data must be
provided, then the City shall provide unaudited financial
statements for the applicable fiscal year to each NRMSIR and any
SID with the financial information and operating data and will file
the annual audit report when and if the same becomes available.
If the City changes its fiscal year, it will notify each
NRMSIR and any SID 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 Section may be set forth in full in one or more
documents or may be included by specific reference to any document
(including an official statement or other offering document, if it
is available from the MSRB) that theretofore has been provided to
each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID
and either each NRMSIR or the MSRB, in a timely manner, of any of
the following events with respect to the Bonds, if such event is
material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non - payment related defaults;
3. Unscheduled draws on debt service reserves
reflecting financial difficulties;
os &M -47-
4. Unscheduled draws on credit enhancements reflecting
financial difficulties;
5. Substitution of credit
their failure to perform;
6. Adverse tax opinions or
exempt status of the Bonds;
7. Modifications to rights
8. Bond calls;
9. Defeasances;
or liquidity providers, or
events affecting the tax-
of holders of the Bonds;
10. Release, substitution, or sale of property securing
repayment of the Bonds; and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with
subsection (b) of this Section by the time required by such
Section.
(d) Limitations, Disclaimers, and Amendments. The City shall
be obligated to observe and perform the covenants specified in this
Section while, but only while, 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
subsection (c) hereof of any Bond calls and defeasance that cause
the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit
of the Holders and beneficial owners of the Bonds and the
beneficial owners of the Board's bonds if the City is an obligated
person with respect to the Board's bonds under the Rule, and
nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any
other person. The City undertakes to provide only the financial
information, operating data, financial statements, and notices
which it has expressly agreed to provide pursuant to this Section
and does not hereby undertake to provide any other information that
may be relevant or material to a complete presentation of the
City's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with
this Section or otherwise, except as expressly provided herein.
The City does not make any representation or warranty 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.
OSM29 -48-
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.
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 resulting 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.
The provisions of this Section may also be amended from time to
time or repealed by the City if the SEC amends or repeals the
applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, but only if and to the
extent that reservation of the City's right to do so would not
prevent underwriters of the initial public offering of the Bonds
from lawfully purchasing or selling Bonds in such offering. If the
City so amends the provisions of this Section, it shall include
with any amended financial information or operating data filed with
each NRMSIR and SID pursuant to subsection (b) of this Section 48
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.
SECTION 45: InsuraEnce. The Bonds have been sold with the
principal of and interest thereon being insured by AMBAC Indemnity
Corporation (hereinafter called " AMBAC") pursuant to a Municipal
Bond Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by AMBAC, the City covenants and
agrees that, in the event the principal and interest due on the
Bonds shall be paid by AMBAC pursuant to the policy referred to
this Section, the assignment and pledge of all funds and all
covenants, agreements and other obligations of the City to the
Holders shall continue to exist and AMBAC shall be subrogated to
the rights of such Holders; and furthermore, the City covenants and
agrees that:
03W29 -49-
(a) Consent of AMBAC where Holder Consent
Required. AMBAC shall be deemed to be the holder of the
Bonds insured by AMBAC at all times for the purpose of
the execution and delivery of any amendment, change or
modification of this Ordinance or the initiation by
Holders of any action to be taken under this Ordinance at
the Holder's request, which under this Ordinance (or
under such underlying documents requires the written
approval or consent of or can be initiated by the Holders
of a majority (50% percent) in aggregate principal amount
of the Bonds at the time Outstanding.
(b) Defeasapce. In the event that the principal
and redemption price, if applicable, and interest due on
the Bonds shall be paid by AMBAC pursuant to the policy
referred to in this Section, all covenants, agreements
and other obligations of the City to the Holders shall
continue to exist and AMBAC shall be subrogated to the
rights of such Holders.
(c) Notices to be Given to AMBAC. While the
Municipal Bond Insurance Policy is in effect, the City
shall furnish to AMBAC:
(1) as soon as practicable after the
filing thereof, a copy of any financial
statement of the City and a copy of any audit
and annual report of the City;
(2) a copy of any notice to be given to
the registered owners of the Bonds, including,
without limitation, notice of any redemption
or defeasance of Bonds, and any certificate
rendered pursuant to this Ordinance relating
to the security for the Bonds; and
(3) such additional information as it
may reasonably request.
The City will permit AMBAC to discuss the affairs,
finances and accounts of the City, or any information
AMBAC may reasonably request regarding the security for
the Bonds with appropriate officers of the City. The
City will permit AMBAC to have access to and make copies
of all books and records relating to the Bonds at any
reasonable time.
(d) Consent of AMBAC. Any provision of this
Ordinance expressly recognizing or granting rights in or
to AMBAC may not be amended in any manner which affects
the rights of AMBAC hereunder without the prior written
0393329 -50-
consent of AMBAC. Furthermore, anything in this
Ordinance to the contrary notwithstanding, upon the
occurrence and continuance of an event of default, AMBAC
shall be entitled to control and direct the enforcement
of all rights and remedies granted to the Holders of the
Bonds for the benefit of such Holders.
(e) Concerning the Bond Insurance Policy. As long
as insurance for the Bonds shall be in full force and
effect, the City agrees to comply with the following
provisions:
(1) if five ( 5) days prior to an
interest payment date for the Bonds the City
determines that there will be insufficient
funds in the Interest and Sinking Fund to pay
the principal of or interest on the Bonds on
such interest payment date, the City shall so
notify AMBAC. Such notice shall specify the
amount of the anticipated deficiency, the
Bonds to which such deficiency is applicable
and whether such Bonds will be deficient as to
principal or interest, or both.
(2) the City shall, after giving notice
to AMBAC as provided in (1) above, make
available to AMBAC and the United States Trust
Company of New York, as insurance trustee for
AMBAC, the registration books of the City
maintained by the Paying Agent /Registrar, and
all records relating to the funds and accounts
maintained under this Ordinance.
(3) the City shall cause the Paying
Agent /Registrar to provide AMBAC and the
United States Trust Company of New York with a
list of registered owners of Bonds entitled to
receive principal or interest payments from
AMBAC under the terms of the Municipal Bond
Insurance Policy, and shall cause the Paying
Agent /Registrar to make arrangements with
United States Trust Company of New York (i) to
mail checks or drafts to the registered owners
of Bonds entitled to receive full or partial
interest payments from AMBAC, and (ii) to pay
principal upon Bonds surrendered to United
States Trust Company of New York by the
registered owners of Bonds entitled to receive
full or partial principal payments from AMBAC.
08s -51-
(4) the City shall cause the Paying
Agent /Registrar to notify, at the time it
provides notice to AMBAC pursuant to (1)
above, the registered owners of Bonds entitled
to receive the payment of principal or
interest thereon from AMBAC (i) as to the fact
of such entitlement, (ii) that AMBAC will
remit to them all or a part of the interest
payments next coming due, (iii) that should
they be entitled to receive full payment of
principal from AMBAC they must tender their
Bonds (along with a form of transfer of title
thereto) for payment to United States Trust
Company of New York, as insurance trustee for
AMBAC, and not the Paying Agent/ Registrar,
and (iv) that should they be entitled to
receive partial payment of principal from
AMBAC they must tender their Bonds for payment
thereon first to the Paying Agent/ Registrar,
who shall note on such Bonds the portion of
the principal paid by the Paying
Agent/ Registrar, and then, along with a form
of transfer of title thereto, to AMBAC, which
will then pay the unpaid portion of principal.
(5) AMBAC shall, to the extent it makes
a payment of principal of or interest on
Bonds, become subrogated to the rights of the
recipients of such payments in accordance with
the terms of the Municipal Bond Insurance
Policy, and to evidence such subrogation (i)
in the case of subrogation as to claims for
past due interest, the City shall cause the
Paying Agent /Registrar to note AMBAC's rights
as subrogee on the registration books of the
City maintained by the Paying Agent /Registrar
upon receipt from AMBAC of proof of the
payment of interest thereon to the registered
owners of the Bonds, and ( ii) in the case of
subrogation as to claims for past due
principal, the City shall cause the Paying
Agent /Registrar to note AMBAC's rights as
subrogee on the registration books of the City
maintained by the Paying Agent/ Registrar upon
surrender of the Bonds by the registered
owners thereof together with proof of the
payment of principal thereof.
SECTION 45: Public Meeting. It is officially found,
determined, and declared that the meeting at which this Ordinance
is adopted was open to the public and public notice of the time,
0393M -52-
place, and subject matter of the public business to be considered
at such meeting, including this Ordinance, was given, all as
required by V.T.C.A., Government Code, Chapter 551, as amended.
SECTION 46: Effective Date. This Ordinance shall take
effect and be in force immediately from and after its adoption, and
it is so ordained.
PASSED AND ADOPTED, this March 11, 1997.
ATT T:
_ qtJ( te
City Secretary
(City seal)
CITY OF HUNTSVILLE, TEXAS
ayor
APPROVED:
I W dtA'41J�--
City Att rney
oWWW -53-
EXHIBIT A
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of
"Agreement"), by and between the City of
"Issuer "), and U. S. Trust Company of
association duly organized and existing
United States of America (the "Bank ").
RECITALS
March 11, 1997 (this
Huntsville, Texas (the
Texas, N.A., a banking
under the laws of the
WHEREAS, the Issuer has duly authorized and provided for the
issuance of its "City of Huntsville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 1997" (the "Securities ") in the
aggregate principal amount of $14,395,000, which Securities are
scheduled to be delivered to the initial purchasers on or about
April 15, 1997; and
WHEREAS, the Issuer has selected and the Bank has agreed to
serve as Paying Agent /Registrar in connection with the payment of
the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange
thereof by the registered owners; and
WHEREAS, the Bank represents it has full power and authority
to perform and serve as Paying Agent /Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. ARpointment. The Issuer hereby appoints the
Bank to serve as Paying Agent with respect to the Securities, and,
as Paying Agent for the Securities, the Bank shall be responsible
for paying on behalf of the Issuer the principal, premium (if
any), and interest on the Securities as the same become due and
payable to, the registered owners thereof; all in accordance with
this Agreement and the "Bond Resolution" (hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to
the Securities and, as Registrar for the Securities, the Bank
shall keep and maintain for and on behalf of the Issuer books and
records as to the ownership of said Securities and with respect to
the transfer and exchange thereof as provided herein and in the
"Bond Resolution ".
The Bank hereby accepts its appointment, and agrees to serve
as the Paying Agent and Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's
services as Paying Agent /Registrar, the Issuer hereby agrees to
pay the Bank the fees and amounts set forth in Annex A attached
hereto.
In addition, the Issuer agrees to reimburse the Bank upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Bank in accordance with any of the
provisions hereof (including the reasonable compensation and the
expenses and disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on
and after which the principal or any or all installments of
interest, or both, are due and payable on any Security which
has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in
New York, New York at the address appearing in Section 3.01
hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Bond Resolution" means the resolution, order, or
ordinance of the governing body of the Issuer pursuant to
which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer,
ending September 30th.
"Holder" and "Security Holder" each means the Person in
whose name a Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written
request or order signed in the name of the Issuer by the
Mayor, City Manager, City Secretary or Director of Finance,
any one or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is
required or authorized to be closed.
-2-
EXHIBIT A ,
"Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or
political subdivision of a government.
"Predecessor Securities" of any particular security
means every previous Security evidencing all or a portion of
the same obligation as that evidenced by such particular
Security (and, for the purposes of this definition, any
mutilated, lost, destroyed, or stolen Security for which a
replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the
Resolution).
"Redemption Date" when used with respect to any Security
to be redeemed means the date fixed for such redemption
pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank
means the Chairman or Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive
Committee of the Board of Directors, the President, any Vice
President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier.. any Trust Officer or Assistant Trust
officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the
Bank on behalf of the Issuer providing for the registration
and transfers of Securities.
"Stated Maturity" means the date specified in the Bond
Resolution the principal of a Security is scheduled to be due
and payable.
Section 2.02. Other Definitions. The terms "Bank,"
"Issuer," and "Securities (Security)" have the meanings assigned
to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the
performance of the duties and functions of this Agreement.
EXHIBIT A I
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent. As Paying Agent, the
Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on
behalf of the Issuer the principal of each Security at its Stated
Maturity, Redemption Date, or Acceleration Date, to the Holder
upon surrender of the Security to the Bank at the following
offices:
By Hand:
U. S. Trust Company
of Texas, N.A.
111 Broadway
Lower Level
New York, New York 10006 -1906
By Mail:
U. S. Trust Company
of Texas, N.A.
P. O. Box 841
Cooper Station
New York, New York 10276
As Paying Agent, the Bank shall, provided adequate collected
funds have been provided to it for such purpose by or on behalf of
the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid
each Holder and making payment thereof to the Holders of the
Securities (or their Predecessor Securities) on the Record Date.
All payments of principal and /or interest on the Securities to the
registered owners shall be accomplished (1) by the issuance of
checks, payable to the registered owners, drawn on the fiduciary
account provided in Section 5.05 hereof, sent by United States
mail, first class, postage prepaid, to the address appearing on
the Security Register or (2) by such other method, acceptable to
the Bank, requested in writing by the Holder at the Holder's risk
and expense.
Section 3.02. Payment Dates. The Issuer hereby instructs
the Bank to pay the principal of and interest on the Securities at
the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the
Issuer at the Bank Office books and records (herein sometimes
referred to as the "Security Register ") for recording the names
and addresses of the Holders of the Securities, the transfer,
exchange and replacement of the Securities and the payment of the
principal of and interest on the Securities to the Holders and
containing such other information as may be reasonably required by
-4-
EXHIBIT q
the Issuer and subject to such reasonable regulations as the
Issuer and Bank may prescribe. All transfers, exchanges and
replacement of Securities shall be noted in the Security Register.
The Bank represents and warrants its office in Dallas, Texas will
at all times have immediate access to the Security Register by
electronic or other means and will be capable at all times of
producing a hard copy of the Security Register at its Dallas
office for use by the Issuer.
Every Security surrendered for transfer or exchange shall be
duly endorsed or be accompanied by a written instrument of
transfer, the signature on which has been guaranteed by an officer
of a federal or state bank or a member of the National Association
of Securities Dealers, in form satisfactory to the Bank, duly
executed by the Holder thereof or his agent duly authorized in
writing.
The Bank may request any supporting documentation it feels
necessary to effect a re- registration, transfer or exchange of the
Securities.
To the extent possible and under reasonable circumstances,
the Bank agrees that, in relation to an exchange or transfer of
Securities, the exchange or transfer by the Holders thereof will
be completed and new Securities delivered to the Holder or the
assignee of the Holder in not more than three (3) business days
after the receipt of the Securities to be cancelled in an exchange
or transfer and the written instrument of transfer or request for
exchange duly executed by the Holder, or his duly authorized
agent, in form and manner satisfactory to the Paying
Agent /Registrar.
Section 4.02. Certificates. The Issuer shall provide an
adequate inventory of printed Securities to facilitate transfers
or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use
and reasonable care will be exercised by the Bank in maintaining
such Securities in safekeeping, which shall be not less than the
care maintained by the Bank for debt securities of other
governments or corporations for which it serves as registrar, or
that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as
Registrar, will maintain the Security Register relating to the
registration, payment, transfer and exchange of the Securities in
accordance with the Bank's general practices and procedures in
effect from time to time. The Bank shall not be obligated to
maintain such Security Register in any form other than those which
the Bank has currently available and currently utilizes at the
time.
��� EXHIBIT 4 �
The Security Register may be maintained in written form or in
any other form capable of being converted into written form within
a reasonable time.
Section 4.04. List of Security Holders. The Bank will
provide the Issuer at any time requested by the Issuer, upon
payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the
information contained in the Security Register at any time the
Bank is customarily open for business, provided that reasonable
time is allowed the Bank to provide an up-to-date listing or to
convert the information into written form.
The Bank will not release or disclose the contents of the
Security Register to any person other than to, or at the written
request of, an authorized officer or employee of the Issuer,
except upon receipt of a court order or as otherwise required by
law. Upon receipt of a court order and prior to the release or
disclosure of the contents of the Security Register, the Bank will
notify the Issuer so that the Issuer may contest the court order
or such release or disclosure of the contents of the Security
Register.
Section 4.05. Return of Cancelled Certificates. The Bank
will, at such reasonable intervals as it determines, surrender to
the Issuer, Securities in lieu of which or in exchange for which
other Securities have been issued, or which have been paid.
Section 4.06. Mutilated. Destroyed. Lost or Stolen Securi-
ties. The Issuer hereby instructs the Bank, subject to the
provisions of Section 26 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated,
destroyed, lost, or stolen Securities as long as the same does not
result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost
or stolen, the Bank may execute and deliver a replacement Security
of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in
substitution for such destroyed lost or stolen Security, only upon
the approval of the Issuer and after (i) the filing by the Holder
thereof with the Bank of evidence satisfactory to the Bank of the
destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii) the furnishing to
the Bank of indemnification in an amount satisfactory to hold the
Issuer and the Bank harmless. All expenses and charges associated
with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of
the Security mutilated, or destroyed, lost or stolen.
0405M
-6- EXH1131T A i
Section 4.07. Transaction Information to Issuer. The Bank
will, within a reasonable time after receipt of written request
from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3. 01, Securities it has
delivered upon the transfer or exchange of any Securities pursuant
to Section 4.01, and Securities it has delivered in exchange for
or in lieu of mutilated, destroyed, lost, or stolen Securities
pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to
perform the duties set forth herein and agrees to use reasonable
care in the performance thereof.
Section 5.02. Reliance on Documents. Etc. (a) The Bank
may conclusively rely, as to the truth of the statements and
correctness of the opinions expressed therein, on certificates or
opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Bank was negligent in ascertaining the pertinent
facts.
(c) No provisions of this Agreement shall require the Bank
to expend or risk its own funds or otherwise incur any financial
liability for performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, security, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine
the ownership of any Securities, but is protected in acting upon
receipt of Securities containing an endorsement or instruction of
transfer or power of transfer which appears on its face to be
signed by the Holder or an agent of the Holder. The Bank shall
not be bound to make any investigation into the facts or matters
stated in a resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
note, security, or other paper or document supplied by Issuer.
0405M "7" EXHIBIT A
(e) The Bank may consult with counsel, and the written
advice of such counsel or any opinion of counsel shall be full and
complete authorization and protection with respect to any action
taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon.
(f) The Bank may exercise any of the powers hereunder and
perform any duties hereunder either directly or by or through
agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained
herein with respect to the Issuer and in the Securities shall be
taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any
Holder or Holders of any Security, or any other Person for any
amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its
individual or any other capacity, may become the owner or pledgee
of Securities and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent /Registrar, or
any other agent.
Section 5.05. Moneys by Bank - Fiduciary Account,[
Collateralization. A fiduciary account shall at all times be kept
and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the
payment of the Securities, and money deposited to the credit of
such account until paid to the Holders of the Securities shall be
continuously collateralized by securities or obligations which
qualify and are eligible under both the laws of the State of Texas
and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation.
Payments made from such fiduciary account shall be made by check
drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other
medium of payment.
The Bank shall be under no liability for interest on any
money received by it hereunder.
Subject to the applicable unclaimed property laws of the
State of Texas, any money deposited with the Bank for the payment
of the principal, premium (if any), or interest on any Security
and remaining unclaimed for four years after final maturity of the
Security has become due and payable will be paid by the Bank to
the Issuer, and the Holder of such Security shall thereafter look
-8-
EXHIBIT A
only to the Issuer for payment thereof, and all liability of the
Bank with respect to such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by
law, the Issuer agrees to indemnify the Bank for, and hold it
harmless against, any loss, liability, or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with its acceptance or administration of its duties
hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of
its powers or duties under this Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree
that the Bank may seek adjudication of any adverse claim, demand,
or controversy over its person as well as funds on deposit, in
either a Federal or State District Court located in the State and
County where either the Bank Office or the administrative offices
of the Issuer is located, and agree that service of process by
certified or registered mail, return receipt requested, to the
address referred to in Section 6.03 of this Agreement shall
constitute adequate service. The Issuer and the Bank further
agree that the Bank has the right to file a Bill of Interpleader
in any court of competent jurisdiction to determine the rights of
any Person claiming any interest herein.
Section 5.08. DT Services. It is hereby represented and
warranted that, in the event the Securities are otherwise
qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the
Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements ", effective
December 12, 1994, which establishes requirements for securities
to be eligible for such type depository trust services, including,
but not limited to, requirements for the timeliness of payments
and funds availability, transfer turnaround time, and notification
of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement maybe amended only
by an agreement in writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be
assigned by either party without the prior written consent of the
other.
Section 6.03. Notices. Any request, demand, authorization,
direction, notice, consent, waiver, or other document provided or
in
EXHIBIT A
permitted hereby to be given or furnished to the Issuer or the
Bank shall be mailed or delivered to the Issuer or the Bank,
respectively, at the addresses shown on page 11.
Section 6.04. Effect of Headings. The Article and -Section
headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assigns. All covenants and
agreements herein by the Issuer shall bind its successors and
assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein
shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond
Resolution constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent /Registrar and
if any conflict exists between this Agreement and the Bond
Resolution, the Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same
Agreement.
Section 6.10. Termination. This Agreement will terminate
(i) on the date of final payment of the principal of and interest
on the Securities to the Holders thereof or (ii) may be earlier
terminated by either party upon sixty (60) days written notice;
provided, however, an early termination of this Agreement by
either party shall not be effective until (a) a successor Paying
Agent /Registrar has been appointed by the Issuer and such
appointment accepted and (b) notice given to the Holders of the
Securities of the appointment of a successor Paying
Agent /Registrar. Furthermore, the Bank and Issuer mutually agree
that the effective date of an early termination of this Agreement
shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees
to promptly transfer and deliver the Security Register (or a copy
thereof) , together with other pertinent books and records relating
-10-
EXHIBIT A
to the Securities, to the successor Paying Agent /Registrar
designated and appointed by the Issuer.
The provisions of Section 1.02 and of Article Five shall
survive and remain in full force and effect following the
termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State
of Texas.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
U.S. TRUST COMPANY OF TEXAS, N.A.
BY
Title:
(SEAL]
Attest:
Address: 2001 Ross Ave., Suite 2700
Dallas, Texas 75201
Title:
CITY OF HUNTSVILLE, TEXAS
BY
Mayor
(CITY SEAL)
Address: 1212 Avenue M
Attest: Huntsville, Texas 77340 -4608
City Secretary
-11- EXHIBIT A
SPECIAL ESCROW DEPOSIT AGREEMENT
THIS SPECIAL ESCROW DEPOSIT AGREEMENT,
1997, made by and between the City of
municipal corporation and political subdiv
Texas in Walker County, Texas, (the "City ")
the Mayor and City Secretary and
(the "Bank "), a
organized and existing under the laws of
America,
W I T N E S S E T H:
EXHIBIT a
dated as of March 11,
Huntsville, Texas, a
ision of the State of
acting by and through
banking association
the United States of
WHEREAS, pursuant to an ordinance finally adopted on March 11,
1997, the City Council of the City of Huntsville, Texas, authorized
the issuance of $14,395,000 "City of Huntsville, Texas, Waterworks
and Sewer System Revenue Bonds, Series 199711, dated February 1,
1997 (the "Bonds ") for the purpose of constructing improvements and
extensions to the City's combined Waterworks and Sewer System,
including wastewater collection and treatment facilities; and
WHEREAS, such ordinance also confirmed the sale of the Bonds
to the Texas Water Development Board (the "Board "); and
WHEREAS, a condition to the purchase of the Bonds by the Board
is the deposit of the proceeds of sale (less amounts to pay costs
of issuance and municipal bond insurance premium) in escrow subject
to being withdrawn only with the approval of the Development Fund
Manager of the Board or an authorized representative; provided,
however, the funds can be transferred to different investments so
long as all parties hereto consent to such transfer;
NOW, THEREFORE, the City and the Bank hereby mutually agree as
follows:
SECTION 1: Upon the delivery of the Bonds described above,
proceeds of sale (less amounts to pay costs of issuance and
municipal bond insurance premium) shall be deposited to the credit
of a special escrow account maintained at the Bank on behalf of the
City and the Board, and such amount deposited to the credit of such
account shall be held in escrow by the Bank in accordance with the
terms of this Agreement.
SECTION 2: The Bank shall not honor any disbursement from
said fund unless and until it has been supplied with written
approval and consent by the Development Fund Manager of the Board
or an authorized representative to the release from escrow such
funds, or portion thereof, as the Board shall indicate in such
release. No written approval and consent by the Development Fund
Manager shall be required if the disbursement involves
transferring funds from one investment to another. Notice
reflecting the type of investments purchased for the construction
fund shall be sent to the Development Fund Manager of the Board.
SECTION 3: Any sums remaining unexpended after completion of
the construction and after full and final payment of the facilities
and improvements to be financed with the proceeds of the Bonds and
such facilities have been accepted by the City and the Board, shall
be returned to the Board to the nearest multiple of $5,000, for the
purpose of cancellation of a like amount of Bonds in inverse order
of maturity, at par plus accrued interest to the date of
redemption. Any remaining surplus thereafter shall be transferred
to the credit of the Interest and Sinking Fund referenced in the
ordinance authorizing the issuance of the Bonds.
SECTION 4: The Bank shall be authorized to accept and rely
upon the certifications and documents furnished to the Bank by the
City and shall not be liable for the payment of any funds in
reliance in good faith upon such certificates or other evidence or
approval as herein recited.
SECTION 5: The Bank shall have no obligation except that
expressly set forth herein.
SECTION 6: All cash deposited to the credit of such escrow
account in excess of the amounts insured by the Federal Deposit
Insurance Corporation and remaining uninvested under the terms of
this Agreement shall be continuously secured by a valid pledge of
direct obligations of the United States of America having an
aggregate market value, exclusive of accrued interest, at all
times, at least equal to the sums on deposit in said Bank.
SECTION 7: While funds are held in escrow, the Bank, at the
direction of the City, is authorized to invest such funds in direct
obligations of the United States of America or other authorized
investments for political subdivisions of the State of Texas.
SECTION 8: An account statement of the escrow account will be
provided by the City to the Development Fund Manager's Office on a
monthly basis.
SECTION 9: This Agreement may be amended from time to time as
necessary with the consent of the City Council and the Board, but
no such amendments shall increase the liabilities or
responsibilities or diminish the rights of the Bank without its
consent.
0405M -2-
EXHIBIT B
SECTION 10: No provision hereof shall be construed to prevent
the investment, in any manner prescribed by law, of any of the
City's funds held in escrow under the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be executed by their duly authorized officers and
their corporate seals to be hereunto affixed and attested as of the
date first above written.
EXECUTED as of the date first written above.
ATTEST:
City Secretary
(CITY SEAL)
ATTEST:
Title:
(SEAL)
CITY OF HUNTSVILLE, TEXAS
By
Mayor
By
Title:
-3-
EXHOT a
Exhibit C
to
ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 43 of
this Ordinance.
Annual Financial Statements and operating Data
The financial information and operating data with respect
to the City to be provided annually in accordance with such Section
are as specified below:
1. The financial statements of the City for the most
recently concluded fiscal year.
2. Condensed Operating Statements for the System for
the last five fiscal years.
3. Revenue Fund Balances (System Fund, Interest and
Sinking Fund and Reserve Fund) for the current fiscal year.
4. City Revenue Debt Data for the current fiscal year.
5. Revenue Bond Debt Service Requirements.
6. Coverage Factors of the Bonds for the current fiscal
year.
7. Historical Production and Consumption Data for the
System for the last five fiscal years.
8. Customer Count for the System for the last ten
fiscal years.
9. Top Ten Principal Customers for the System for the
current fiscal year.
10. Rates and Charges for the System.
Accounting Principles
The accounting principles referred to in such Section are the
generally accepted accounting principles as applicable to
governmental units as prescribed by The Government Accounting
Standards Board.
o39W29
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTY OF WALKER §
CITY OF HUNTSVILLE §
I, the undersigned, City Secretary of the City of Huntsville,
Texas, DO HEREBY CERTIFY as follows:
1. On the 11th day of March, 1997, a regular meeting of the
City Council of the City of Huntsville, Texas was held at a meeting
place within the City; the duly constituted members of the Council
being as follows:
WILLIAM B. GREEN
RONALD L. LANGE )
DAN DAVIS )
ANN JAMES )
DAVE LUNING )
DAVID MARTINEZ )
JO ANN MATTHEWS )
MARJORIE REX )
VANCE HOWARD )
MAYOR
MAYOR PRO TEM
COUNCILMEMBERS
and all of said persons were present at said meeting, except the
following: Ann James Among other
business considered at said meeting, the attached ordinance
entitled:
"AN ORDINANCE authorizing the issuance of 'CITY OF
HUNTSVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS, SERIES 19971; specifying the terms
and features of said bonds; pledging the net
revenues derived from the operation of the City's
combined Waterworks and Sewer System for the
payment of the principal of and interest on such
revenue bonds; and resolving other matters incident
and related to the issuance, payment, security,
sale and delivery of said revenue bonds, including
the approval and execution of a Paying
Agent /Registrar Agreement; and providing an
effective date."
was introduced and submitted to the Council for passage and
adoption. After presentation and due consideration of the
ordinance and, upon a motion made by Dan Davis and
seconded by Marjorie Rex , the ordinance was duly passed
and adopted by the Council to be effective immediately by the
following vote:
8 voted "For" -0- voted "Against" -0- abstained
0405703
all as shown in the official Minutes of the Council for the meeting
held on the aforesaid date.
2. The attached ordinance is a true and correct copy of the
original on file in the official records of the City; the duly
qualified and acting members of the City Council of said City on
the date of the aforesaid meeting are those persons shown above
and, according to the records of my office, advance notice of the
time, place and purpose of the meeting was given to each member of
the Council; and that said meeting, and the deliberation of the
aforesaid public business, was open to the public and written
notice of said meeting, including the subject of the above entitled
ordinance, was posted and given in advance thereof in compliance
with the provisions of V.T.C.A., Government Code, Chapter 551, as
amended.
IN WITNESS WHEREOF, I have hereunto signed my name officially
and affixed the seal of said City, this the 11th day of March,
1997.
(City Seal;
0406705
City Secretary,
City of Huntsville, Texas
-2-
TELEPHONE: 214/855 -8000
FACSIMILE: 214/8SS -8200
WRITERS DIRECT DIAL NUMBER:
214/855 -8024
Mr. Gene Pipes
City Manager
City of Huntsville
1212 Avenue M
Huntsville, Texas
FULBRIGHT & JAWOR5K1
L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
2200 ROSS AVENUE
SUITE 2600
DALLAS, TEXAS 75201
77340 -4608
March 14, 1997
HOUSTON
WASHINGTON, D.C.
AUSTIN
SAN ANTONIO
DALLAS
NEW YORK
LOS ANGELES
LONDON
HONG KONG
Re: $14,395,000 "City of Huntsville, Texas, Waterworks and Sewer System Revenue Bonds,
Series 1997', dated February 1, 1997
Dear Mr. Pipes:
In reference to the above described bonds, enclosed herewith are the following executed
documents for your records:
1. Ordinance authorizing the certificates, together with Certificate of Secretary
relating to its adoption (one for the City and one for the City Attorney);
2. General Certificate; and
3. Instruction Letters.
Should you have any questions, please advise.
Sincerely,
Qpz�
Diane Callahan
Senior Legal Assistant
DClmdh
Enclosures
March 11, 1997
U. S. Trust Company of Texas, N.A.
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Department
Re: $14,395,000 "City of Huntsville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 199711, dated February 1, 1997
Ladies and Gentlemen:
Delivery of the above described obligations to the initial
purchasers shown below is to occur at your bank on or about
April 15, 1997. Such delivery is to be accomplished with a single
fully registered obligation (the "Initial Obligation ") which you
will be receiving from the City's bond counsel, Fulbright &
Jaworski L.L.P., 2200 Ross Avenue, Suite 2800, Dallas, Texas 75201
(214/855 - 8013).
When the City's bond counsel has forwarded the Initial
Obligation together with their approving opinion, you are
authorized to deliver the Initial Obligation to the initial
purchasers, to wit: Texas Water Development Board, or their order,
upon payment being made for the obligations in immediately
available funds in accordance with the terms of sale.
Furthermore, when funds are received in settlement for the
payment of the Bonds, please transmit all amounts received pursuant
to instructions to be received from the City's financial advisor.
In regard to the delivery of the obligations to the initial
purchasers, the following documents are enclosed herewith to be
completed, executed and dated, as the case may be, when payment has
occurred, to wit:
1. Four copies of a Signature and No- Litigation Certificate.
2. Four copies of a Receipt for Payment.
0406674
When said documents have been complet
the Signature and No- Litigation Certifici
the initial purchasers, together with F
opinion, and the remaining copies are
Counsel at the address shown above. One
Payment is to be retained by your bank
copies should be sent to Bond Counsel
documents enclosed herewith.
ad and dated, one copy of
to is to be released to
and Counsel's approving
to be returned to Bond
copy of the Receipt for
and the remaining three
with the other closing
Furthermore, should any litigation be filed or instituted
which would cause the statements appearing in the Signature and
No- Litigation Certificate to be incorrect or untrue, the
undersigned or other proper official of the City will notify you
and Bond Counsel at once by telephone or other means. You and Bond
Counsel, therefore, can be assured that, unless advised otherwise
by the City, the statements pertaining to no- litigation appearing
in the Signature and No- Litigation Certificate are accurate and
complete prior to and at the time of the delivery of the Initial
Obligation.
Mayor, City of
Huntsville, Texas
0406674
March 11, 1997
Messrs. Fulbright & Jaworski L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Re: $14,395,000 "City of Huntsville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 199711, dated February 1, 1997
Gentlemen:
Enclosed you will find four Certificates as to Tax Exemption
executed but undated.
At such time as the above described bonds are delivered to the
purchaser, you are authorized to complete and date each of these
certificates.
Very truly yours,
Director of Finance
City of Huntsville, Texas
0406674
March 11, 1997
Ms. Melissa Guzman
Economic Analysis Center
Comptroller's Department
P. 0. Box 13528, Capitol Station
Austin, Texas 78711
Re: $14,395,000 "City of Huntsville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 199711, dated February 1, 1997
Dear Ms. Guzman:
When the Initial Bond of the series described above has been
received from the Attorney General, please register the same on
behalf of the City, and when so registered, forward it by overnight
delivery to the firm of Fulbright & Jaworski L.L.P., 2200 Ross
Avenue, Suite 2800, Dallas, Texas 75201, Attention: Ed H.
Esquivel, for further handling under our instructions to them.
It is further requested that four (4) copies of the approving
opinion of the Attorney General and Comptroller's Registration
Certificate be enclosed with the Initial Bond when it is sent to
said firm.
Very truly yours,
�1
Mayor
City of Huntsville, Texas
0406674
March 11, 1997
Attorney General of Texas
P.O. Box 12548
Capitol Station
Austin, Texas 78711
Attention: Public Finance Division
RE: $14,395,000 "City of Huntsville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 199711, dated February 1, 1997
Ladies and Gentlemen:
Enclosed herewith is the Initial Bond of the above series and
a Signature and No- Litigation Certificate relating thereto,
executed and completed except as to date.
When the record of proceedings relating to the issuance of the
above referenced series and the Initial Bond have been approved by
your office, this will be your authority to date the Signature and
No- Litigation Certificate and deliver such Initial Bond to the
Comptroller of Public Accounts for registration. It is further
requested that four (4) copies of your approving opinion be
included with the Initial Bond sent to the Comptroller.
Should there be a change in circumstances which would alter or
modify the certifications or recitals contained in such
Certificate, particularly the absence of litigation or a change in
the office of Mayor or City Secretary, the undersigned or other
official of the City will notify you at once by telephone or other
means. You may thus be assured that the certifications and
statements appearing in the Signature and No- Litigation Certificate
are accurate and complete at the time the Bonds are finally
approved unless notice to the contrary has been given in the manner
aforementioned.
Very truly yours,
Mayor
City of Huntsville, Texas
0405574
GENERAL CERTIFICATE
THE STATE OF TEXAS §
§
COUNTY OF WALKER §
§
CITY OF HUNTSVILLE §
We, the undersigned, City Manager and City Secretary,
respectively, of the City of Huntsville, Texas, DO HEREBY CERTIFY
as follows:
1. Relative to Nonencumbrance.
Save and except for the pledge of the income and revenues of
the City's combined Waterworks and Sewer System (the "System ") to
the payment of the principal of and interest to become due with
respect to the outstanding
(a) "City of Huntsville, Texas, Waterworks and
Sanitary Sewer System Revenue Bonds, Series 199111, dated
July 1, 1991, now outstanding in the principal amount of
$1,410,000;
(b) "City of Huntsville, Texas, Waterworks and
Sanitary Sewer System Revenue Bonds, Series 199211, dated
April 1, 1992, now outstanding in the principal amount of
$1,300,000;
(c) "City of Huntsville, Texas, Combination Tax and
Revenue Certificates of Obligation, Series 199311, dated
July 1, 1993, now outstanding in the principal amount of
$1,160,000;
(the above described obligations being hereinafter referred to as
the "Outstanding Obligations ") and the proposed "City of
Huntsville, Texas, Waterworks and Sewer System Revenue Bonds,
Series 199711, dated February 1, 1997 (the "Bonds ") , said income and
revenues of said System have not been pledged or hypothecated in
any other manner or for any other purpose; and that the Outstanding
Obligations and the Bonds evidence the only liens, encumbrances or
indebtedness of said System or against the income and revenues of
such System.
2. Relative to No- Default.
The City of Huntsville, Texas, is not in default as to any
covenant, condition or obligation contained in the ordinances
authorizing the issuance of the Outstanding Obligations; and there
is on hand in the respective special funds created for the payment
04OW21
and security of the Outstanding Obligations the amounts now
required to be deposited therein.
3. Relative to Income and Revenues.
The following is a schedule of the gross receipts, operating
expenses and net revenues of the System for the years stated:
Fiscal Year Gross Operating Net
Ending 9/30 Receipts Expenses Revenues
1992
$6,165,555
$5,246,802
$ 918,753
1993
6,703,483
51564,121
1,139,362
1994
7,067,002
5,457,773
1,609,229
1995
7,362,305
5,611,503
1,750,802
1996
7,996,060
5,816,921
2,179,139
4. Relative
to Utility Properties.
The water and sewer utility properties owned, operated and
maintained by the City currently provides water to approximately
6,552 customers and currently provides sewer services to
approximately 5,935 customers. The City secures its water supply
from Lake Livingston. In addition, the City owns eight wells as
a secondary source of water.
As of the date hereof, no question is pending and no
proceedings of any nature have been instituted in any manner
questioning the City's right and title to its utility properties
or its authority to operate the same.
5. Relative to Rates and Charges.
The current monthly rates and charges for water and sewer
services provided by the System are as follows:
WATER RATES
First 3,000 gallons $10.65 (minimum)
Over 3,000 gallons 1.80 /M gallons
SEWER RATES
(based on water consumption)
First 3,000 gallons
Over 3,000 gallons
Maximum
$10.65 (minimum)
2.75/M gallons
29.90
04W21 -2-
SPECIAL CUSTOMERS
The City provides water and sewer services to the Texas
Department of Corrections, Sam Houston State University and Elkins
Lake Municipal Utility District at the following rates:
Water
Sewer
$ 2.70/M gallons
$ 1.80 /M gallons
6. Relative to City Officials.
Certain duly qualified and acting officials of the City are as
follows:
WILLIAM B. GREEN MAYOR
RONALD L. LANGE MAYOR PRO TEM
GENE PIPES CITY MANAGER
DANNA WELTER CITY SECRETARY
PATRICIA A. ALLEN DIRECTOR OF FINANCE
SCOTT BOUNDS CITY ATTORNEY
7. Relative to Incorporation.
The City is incorporated under the general laws of the State
of Texas, and is operating under the Home Rule Amendment to the
Texas Constitution, Section 5, Article XI, as amended in 1912.
The City Charter was adopted at an election held in the City for
that purpose on September 28, 1968, and was amended at elections
held November 17, 1970, November 28, 1972, April 7, 1979, April 3,
1982, April 5, 1986 and January 21, 1992 and has not been amended
in any respect since January 21, 1992.
8. Relative to No- Petition.
No valid petition of any kind or character, signed by at least
10%. of the qualified electors of the City, has been filed with or
presented to the Mayor, City Secretary or any other official of
the City protesting the issuance of the Bonds.
04W21 -3-
WITNESS OUR HANDS AND THE SEAL OF THE CITY OF HUNTSVILLE,
TEXAS, this the 11th day of March, 1997.
CITY OfHQUNTSVILLE�, TEXAS
C7 M ager U
City Secretary
(City Seal)
04W21 -4-
�a
i1
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of
"Agreement "), by and between the City of
"Issuer ") , and U. S. Trust Company of
association duly organized and existing
United States of America (the "Bank ").
RECITALS
March 11, 1997 (this
Huntsville, Texas (the
Texas, N.A., a banking
under the laws of the
WHEREAS, the Issuer has duly authorized and provided for the
issuance of its "City of Huntsville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 1997" (the "Securities ") in the
aggregate principal amount of $14,395,000, which Securities are
scheduled to be delivered to the initial purchasers on or about
April 15, 1997; and
WHEREAS, the Issuer has selected and the Bank has agreed to
serve as Paying Agent /Registrar in connection with the payment of
the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange
thereof by the registered owners; and
WHEREAS, the Bank represents it has full power and authority
to perform and serve as Paying Agent /Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the
Bank to serve as Paying Agent with respect to the Securities, and,
as Paying Agent for the Securities, the Bank shall be responsible
for paying on behalf of the Issuer the principal, premium (if
any), and interest on the Securities as the same become due and
payable to. the registered owners thereof; all in accordance with
this Agreement and the "Bond Resolution" (hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to
the Securities and, as Registrar for the Securities, the Bank
shall keep and maintain for and on behalf of the Issuer books and
records as to the ownership of said Securities and with respect to
the transfer and exchange thereof as provided herein and in the
"Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve
as the Paying Agent and Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's
services as Paying Agent /Registrar, the Issuer hereby agrees to
pay the Bank the fees and amounts set forth in Annex A attached
hereto.
In addition, the Issuer agrees to reimburse the Bank upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Bank in accordance with any of the
provisions hereof (including the reasonable compensation and the
expenses and disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires;
"Acceleration Date" on any Security means the date on
and after which the principal or any or all installments of
interest, or both, are due and payable on any Security which
has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in
New York, New York at the address appearing in Section 3.01
hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Bond Resolution" means the resolution, order, or
ordinance of the governing body of the Issuer pursuant to
which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer,
ending September 30th.
"Holder" and "Security Holder" each means the Person in
whose name a Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written
request or order signed in the name of the Issuer by the
Mayor, City Manager, City Secretary or Director of Finance,
any one or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is
required or authorized to be closed.
-2-
"Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or
political subdivision of a government.
"Predecessor Securities " of any particular Security
means every previous Security evidencing all or a portion of
the same obligation as that evidenced by such particular
Security (and, for the purposes of this definition, any
mutilated, lost, destroyed, or stolen Security for which a
replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the
Resolution).
"Redemption Date " when used with respect to any Security
to be redeemed means the date fixed for such redemption
pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank
means the Chairman or Vice - Chairman of the Board of
Directors, the Chairman or Vice - Chairman of the Executive
Committee of the Board of Directors, the President, any Vice
President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust
Officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the
Bank on behalf of the Issuer providing for the registration
and transfers of Securities.
"Stated Maturity" means the date specified in the Bond
Resolution the principal of a Security is scheduled to be due
and payable.
Section 2.02. Other Definitions. The terms "Bank,"
"Issuer," and "Securities (Security)" have the meanings assigned
to them in the recital paragraphs of this Agreement.
The term "Paying Agent /Registrar" refers to the Bank in the
performance of the duties and functions of this Agreement.
-3-
M
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent. As Paying Agent, the
Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on
behalf of the Issuer the principal of each Security at its Stated
Maturity, Redemption Date, or Acceleration Date, to the Holder
upon surrender of the Security to the Bank at the following
offices:
By Hand:
U. S. Trust Company
of Texas, N.A.
111 Broadway
Lower Level
New York, New York 10006 -1906
By Mail:
U. S. Trust Company
of Texas, N.A.
P. 0. Box 841
Cooper Station
New York, New York 10276
As Paying Agent, the Bank shall, provided adequate collected
funds have been provided to it for such purpose by or on behalf of
the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid
each Holder and making payment thereof to the Holders of the
Securities (or their Predecessor Securities) on the Record Date.
All payments of principal and /or interest on the Securities to the
registered owners shall be accomplished (1) by the issuance of
checks, payable to the registered owners, drawn on the fiduciary
account provided in Section 5.05 hereof, sent by United States
mail, first class, postage prepaid, to the address appearing on
the Security Register or (2) by such other method, acceptable to
the Bank, requested in writing by the Holder at the Holder's risk
and expense.
Section 3.02. Payment Dates. The Issuer hereby instructs
the Bank to pay the principal of and interest on the Securities at
the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the
Issuer at the Bank Office books and records (herein sometimes
referred to as the "Security Register ") for recording the names
and addresses of the Holders of the Securities, the transfer,
exchange and replacement of the Securities and the payment of the
principal of and interest on the Securities to the Holders and
containing such other information as may be reasonably required by
040 -4
the Issuer and subject to such reasonable regulations as the
Issuer and Bank may prescribe. All transfers, exchanges and
replacement of Securities shall be noted in the Security Register.
The Bank represents and warrants its office in Dallas, Texas will
at all times have immediate access to the Security Register by
electronic or other means and will be capable at all times of
producing a hard copy of the Security Register at its Dallas
office for use by the Issuer.
Every Security surrendered for transfer or exchange shall be
duly endorsed or be accompanied by a written instrument of
transfer, the signature on which has been guaranteed by an officer
of a federal or state bank or a member of the National Association
of Securities Dealers, in form satisfactory to the Bank, duly
executed by the Holder thereof or his agent duly authorized in
writing.
The Bank may request any supporting documentation it feels
necessary to effect a re- registration, transfer or exchange of the
Securities.
To the extent possible and under reasonable circumstances,
the Bank agrees that, in relation to an exchange or transfer of
Securities, the exchange or transfer by the Holders thereof will
be completed and new Securities delivered to the Holder or the
assignee of the Holder in not more than three (3) business days
after the receipt of the Securities to be cancelled in an exchange
or transfer and the written instrument of transfer or request for
exchange duly executed by the Holder, or his duly authorized
agent, in form and manner satisfactory to the Paying
Agent /Registrar.
Section 4.02. Certificates. The Issuer shall provide an
adequate inventory of printed Securities to facilitate transfers
or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use
and reasonable care will be exercised by the Bank in maintaining
such Securities in safekeeping, which shall be not less than the
care maintained by the Bank for debt securities of other
governments or corporations for which it serves as registrar, or
that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as
Registrar, will maintain the Security Register relating to the
registration, payment, transfer and exchange of the Securities in
accordance with the Bank's general practices and procedures in
effect from time to time. The Bank shall not be obligated to
maintain such Security Register in any form other than those which
the Bank has currently available and currently utilizes at the
time.
-5-
The Security Register may be maintained in written form or in
any other form capable of being converted into written form within
a reasonable time.
Section 4.04. List of Security Holders. The Bank will
provide the Issuer at any time requested by the Issuer, upon
payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the
information contained in the Security Register at any time the
Bank is customarily open for business, provided that reasonable
time is allowed the Bank to provide an up -to -date listing or to
convert the information into written form.
The Bank will not release or disclose the contents of the
Security Register to any person other than to, or at the written
request of, an authorized officer or employee of the Issuer,
except upon receipt of a court order or as otherwise required by
law. Upon receipt of a court order and prior to the release or
disclosure of the contents of the Security Register, the Bank will
notify the Issuer so that the Issuer may contest the court order
or such release or disclosure of the contents of the Security
Register.
Section 4.05. Return of Cancelled Certificates. The Bank
will, at such reasonable intervals as it determines, surrender to
the Issuer, Securities in lieu of which or in exchange for which
other Securities have been issued, or which have been paid.
Section 4.06. Mutilated, Destroyed. Lost or Stolen Securi-
ties. The Issuer hereby instructs the Bank, subject to the
provisions of Section 26 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated,
destroyed, lost, or stolen Securities as long as the same does not
result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost
or stolen, the Bank may execute and deliver a replacement Security
of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in
substitution for such destroyed lost or stolen Security, only upon
the approval of the Issuer and after (i) the filing by the Holder
thereof with the Bank of evidence satisfactory to the Bank of the
destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii.) the furnishing to
the Bank of indemnification in an amount satisfactory to hold the
Issuer and the Bank harmless. All expenses and charges associated
with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of
the Security mutilated, or destroyed, lost or stolen.
040 -6-
Section 4.07. Transaction Information to Issuer. The Bank
will, within a reasonable time after receipt of written request
from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3. 01, Securities it has
delivered upon the transfer or exchange of any Securities pursuant
to Section 4.01, and Securities it has delivered in exchange for
or in lieu of mutilated, destroyed, lost, or stolen Securities
pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to
perform the duties set forth herein and agrees to use reasonable
care in the performance thereof.
Section 5.02. Reliance on Documents. Etc. (a) The Bank
may conclusively rely, as to the truth of the statements and
correctness of the opinions expressed therein, on certificates or
opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Bank was negligent in ascertaining the pertinent
facts.
(c) No provisions of this Agreement shall require the Bank
to expend or risk its own funds or otherwise incur any financial
liability for performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, security, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine
the ownership of any Securities, but is protected in acting upon
receipt of Securities containing an endorsement or instruction of
transfer or power of transfer which appears on its face to be
signed by the Holder or an agent of the Holder. The Bank shall
not be bound to make any investigation into the facts or matters
stated in a resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
note, security, or other paper or document supplied by Issuer.
040 -7-
(e) The Bank may consult with counsel, and the written
advice of such counsel or any opinion of counsel shall be full and
complete authorization and protection with respect to any action
taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon.
(f) The Bank may exercise any of the powers hereunder and
perform any duties hereunder either directly or by or through
agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained
herein with respect to the Issuer and in the Securities shall be
taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any
Holder or Holders of any Security, or any other Person for any
amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its
individual or any other capacity, may become the owner or pledgee
of Securities and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent /Registrar, or
any other agent.
Section 5.05. Moneys Held by Bank - Fiduciary Accountl
Collateral ization. A fiduciary account shall at all times be kept
and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the
payment of the Securities, and money deposited to the credit of
such account until paid to the Holders of the Securities shall be
continuously collateralized by securities or obligations which
qualify and are eligible under both the laws of the State of Texas
and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation.
Payments made from such fiduciary account shall be made by check
drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other
medium of payment.
The Bank shall be under no liability for interest on any
money received by it hereunder.
Subject to the applicable unclaimed property laws of the
State of Texas, any money deposited with the Bank for the payment
of the principal, premium (if any), or interest on any Security
and remaining unclaimed for four years after final maturity of the
Security has become due and payable will be paid by the Bank to
the Issuer, and the Holder of such Security shall thereafter look
-4 .
only to the Issuer for payment thereof, and all liability of the
Bank with respect to such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by
law, the Issuer agrees to indemnify the Bank for, and hold it
harmless against, any loss, liability, or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with its acceptance or administration of its duties
hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of
its powers or duties under this Agreement.
Section 5.07. Interr)leader. The Issuer and the Bank agree
that the Bank may seek adjudication of any adverse claim, demand,
or controversy over its person as well as funds on deposit, in
either a Federal or State District Court located in the State and
County where either the Bank Office or the administrative offices
of the Issuer is located, and agree that service of process by
certified or registered mail, return receipt requested, to the
address referred to in Section 6.03 of this Agreement shall
constitute adequate service. The Issuer and the Bank further
agree that the Bank has the right to file a Bill of Interpleader
in any court of competent jurisdiction to determine the rights of
any Person claiming any interest herein.
Section 5.08. DT Services. It is hereby represented and
warranted that, in the event the Securities are otherwise
qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the
Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements", effective
December 12, 1994, which establishes requirements for securities
to be eligible for such type depository trust services, including,
but not limited to, requirements for the timeliness of payments
and funds availability, transfer turnaround time, and notification
of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement maybe amended only
by an agreement in writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be
assigned by either party without the prior written consent of the
other.
Section 6.03. Notices. Any request, demand, authorization,
direction, notice, consent, waiver, or other document provided or
0405M
".
M
permitted hereby to be given or furnished to the Issuer or the
Bank shall be mailed or delivered to the Issuer or the Bank,
respectively, at the addresses shown on page 11.
Section 6.04. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assigns. All covenants and
agreements herein by the Issuer shall bind its successors and
assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein
shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond
Resolution constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent /Registrar and
if any conflict exists between this Agreement and the Bond
Resolution, the Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same
Agreement.
Section 6.10. Termination. This Agreement will terminate
(i) on the date of final payment of the principal of and interest
on the Securities to the Holders thereof or (ii) may be earlier
terminated by either party upon sixty (60) days written notice;
provided, however, an early termination of this Agreement by
either party shall not be effective until (a) a successor Paying
Agent /Registrar has been appointed by the Issuer and such
appointment accepted and (b) notice given to the Holders of the
Securities of the appointment of a successor Paying
Agent /Registrar. Furthermore, the Bank and Issuer mutually agree
that the effective date of an early termination of this Agreement
shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees
to promptly transfer and deliver the Security Register (or a copy
thereof) , together with other pertinent books and records relating
0405M -10-
0 '
to the Securities, to the successor Paying Agent/Registrar
designated and appointed by the Issuer.
The provisions of Section 1.02 and of Article Five shall
survive and remain in full force and effect following the
termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State
of Texas.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
(SEAL]
Attes t:
Title: im
r" 7
(CITY SEAL)
Z
City Secretary
U.S. TRUST COMPANY OF TEXAS, N.A.
BY
Title; NICE
Address: 2001 Ross Ave., Suite 2700
Dallas, Texas 75201
7
CITY OF T LE, EXAS
BY
�
Mayor
Address: 1212 Avenue M
Huntsville, Texas 77340-4608
-11-
U.S.TRUST
Corporate Trust and
Agency Services
Annex A
Fee Schedule
$14,395,000
City of Huntsville, Texas
Waterworks and Sewer System Revenue
Bonds, Series 1997
dated February 1, 1997
Registrar /Paying Agent
Annual Fee $250.00
Acceptance Fee $250.00
Dated: March 17, 1997
SPECIAL ESCROW DEPOSIT AGREEMENT
THIS SPECIAL ESCROW DEPOSIT AGREEMENT, dated as of March 11,
1997, made by and between the City of Huntsville, Texas, a
municipal corporation and political subdivision of the State of
Texas in Walker County, Texas, (the "City ") acting by and through
the Mayor and City Secretary and Norwest Bank Texas, National
Association, Dallas, Texas (the "Bank "), a banking association
organized and existing under the laws of the United States of
America,
W I T N E S S E T H:
WHEREAS, pursuant to an ordinance finally adopted on March 11,
1997, the City Council of the City of Huntsville, Texas, authorized
the issuance of $14,395,000 "City of Huntsville, Texas, Waterworks
and Sewer System Revenue Bonds, Series 199711, dated February 1,
1997 (the "Bonds ") for the purpose of constructing improvements and
extensions to the City's combined Waterworks and Sewer System,
including wastewater collection and treatment facilities; and
WHEREAS, such ordinance also confirmed the sale of the Bonds
to the Texas Water Development Board (the "Board "); and
WHEREAS, a condition to the purchase of the Bonds by the Board
is the deposit of the proceeds of sale (less amounts to pay costs
of issuance and municipal bond insurance premium) in escrow subject
to being withdrawn only with the approval of the Development Fund
Manager of the Board or an authorized representative; provided,
however, the funds can be transferred to different investments so
long as all parties hereto consent to such transfer;
NOW, THEREFORE, the City and the Bank hereby mutually agree as
follows:
SECTION 1: Upon the delivery of the Bonds described above,
proceeds of sale (less amounts to pay costs of issuance and
municipal bond insurance premium) shall be deposited to the credit
of a special escrow account maintained at the Bank on behalf of the
City and the Board, and such amount deposited to the credit of such
account shall be held in escrow by the Bank in accordance with the
terms of this Agreement.
SECTION 2: The Bank shall not honor any disbursement from
said fund unless and until it has been supplied with written
approval and consent by the Development Fund Manager of the Board
or an authorized representative to the release from escrow such
funds, or portion thereof, as the Board shall indicate in such
release. No written approval and consent by the Development Fund
Manager shall be required if the disbursement involves
transferring funds from one investment to another. Notice
reflecting the type of investments purchased for the construction
fund shall be sent to the Development Fund Manager of the Board.
SECTION 3: Any sums remaining unexpended after completion of
the construction and after full and final payment of the facilities
and improvements to be financed with the proceeds of the Bonds and
such facilities have been accepted by the City and the Board, shall
be returned to the Board to the nearest multiple of $5, 000, for the
purpose of cancellation of a like amount of Bonds in inverse order
of maturity, at par plus accrued interest to the date of
redemption. Any remaining surplus thereafter shall be transferred
to the credit of the Interest and Sinking Fund referenced in the
ordinance authorizing the issuance of the Bonds.
SECTION 4: The Bank shall be authorized to accept and rely
upon the certifications and documents furnished to the Bank by the
City and shall not be liable for the payment of any funds in
reliance in good faith upon such certificates or other evidence or
approval as herein recited.
SECTION 5: The Bank shall have no obligation except that
expressly set forth herein.
SECTION 6: All cash deposited to the credit of such escrow
account in excess of the amounts insured by the Federal Deposit
Insurance Corporation and remaining uninvested under the terms of
this Agreement shall be continuously secured by a valid pledge of
direct obligations of the United States of America having an
aggregate market value, exclusive of accrued interest, at all
times, at least equal to the sums on deposit in said Bank.
SECTION 7: While funds are held in escrow, the Bank, at the
direction of the City, is authorized to invest such funds in direct
obligations of the United States of America or other authorized
investments for political subdivisions of the State of Texas.
SECTION 8: An account statement of the escrow account will be
provided by the City to the Development Fund Manager's Office on a
monthly basis.
SECTION 9: This Agreement may be amended from time to time as
necessary with the consent of the City Council and the Board, but
no such amendments shall increase the liabilities or
responsibilities or diminish the rights of the Bank without its
consent.
0405M -2-
i
SECTION 10: No provision hereof shall be construed to prevent
the investment, in any manner prescribed by law, of any of the
City's funds held in escrow under the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be executed by their duly authorized officers and
their corporate seals to be hereunto affixed and attested as of the
date first above written.
EXECUTED as of the date first written above.
ATTEST:
City Secretary
(CITY SEAL)
ATTEST:
Title
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SEAL °;
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CITY OF HUNTSVILLE, TEXAS
By
Mayor
Norwest Bank Texas, National Association
Dallas, Texas
By
Title: SS �� cZQl
-3-
$14,395,000
City of Huntsville, Texas
Waterworks & Sewer System Revenue Bonds
Series 1997
Fee Proposal for Escrow Agent Services
L Acceptance Fee $200
Our acceptance fee covers the review, acceptance and assumption of all
responsibilities and duties as Paying Agent under the agreement, participation in
document conferences, establishing records and accounts, authentication and delivery
of bonds, receipt of funds, consultation with counsel and attendance at closings. This
one time charge is payable at closing of the financing.
IL Administration Fee $500
This annual fee includes the normal day -to -day administration of the escrow performed
in accordance with the governing documents, maintenance of all administrative
records, and the duties and functions associated with the Escrow Agreement. Our
annual administration fee is billed annually in advance and first year fee is due upon
closing.
M. Out -of- Pocket Expenses At cost as incurred
All out -of- pocket expenses incurred in connection with the acceptance of the paying
agent appointment and annual administration will be billed at actual cost as incurred.
Expenses for which we are normally reimbursed include, but are not limited to
postage, express mail, mail insurance, long distance calls, fax charges, travel expenses,
and wire charges.
IV. Extraordinary Services
Fees indicated in this schedule are based upon services rendered in accordance with
established procedures and during normal business hours. Unusual or extraordinary
services such as those provided upon an Event of Default are subject to additional
charges based on the duties, responsibilities, and other factors involved.
Our proposal is subject in all respects to our review and acceptance of the governing
documents which set forth our duties and responsibilities
CERTIFICATE OF CERTIFIED PUBLIC ACCOUNTANT
THE STATE OF TEXAS §
§
COUNTY OF WALKER §
I, the undersigned, Kenneth C. Davis. P.C.
Certified Public Accountants, DO HEREBY CERTIFY AND REPRESENT:
1. According to the books and records of the Waterworks
and Sewer System (the "System ") of the City of Huntsville, Texas,
for the fiscal year ending September 30, 1996, the gross revenues,
operation and maintenance expenses and net revenues of the System
for said fiscal year are as follows:
Gross Operation and Net
Revenues Maintenance Expenses Revenues
$7,996,060 $ 5,372,791 $2,623,269
2. That, in our opinion, the Net Revenues of the System
(being the net revenues of the System (excluding income received
specifically for capital items] after deduction of the reasonable
expenses for maintenance and operation of the System (excluding
expenditures for capital items] for the fiscal year ending
September 30, 1996 according to the books and records of the City
are equal to at least 1.50 times the average annual principal and
interest requirement for the outstanding "City of Huntsville,
Texas, Waterworks and Sanitary Sewer System Revenue Bonds, Series
199111, dated July 1, 1991, "City of Huntsville, Texas, Waterworks
and Sanitary Sewer System Revenue Bonds, Series 199211, dated
April 1, 1992, and the proposed "City of Huntsville, Texas,
Waterworks and Sewer System Revenue Bonds, Series 199711, dated
February 1, 1997.
Zified Public Accoun ants
By:
SWORN TO AND SUBSCRIBED BEFORE ME, this the 13 fA day
of /t'hr�� , 1997.
Notary Public, State of Texas
(Notary Seal)
DONNA NASH
MY COMMISSION EXPIRES
February 13, 2001
0105915
SIGNATURE AND NO- LITIGATION CERTIFICATE
THE STATE OF TEXAS §
S
COUNTY OF WALKER §
WE, the undersigned, officials of the City of Huntsville,
Texas (the "Issuer ") , do hereby certify with respect to the "CITY
OF HUNTSVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS,
SERIES 1997" dated February 1, 1997 (the "Bond Date ") , in the
aggregate principal amount of $14,395,000 (the "Bonds ") as
follows:
(1) The Bonds have been duly and officially executed by
the undersigned with their manual or facsimile signature in the
same manner appearing hereon, and the undersigned hereby adopt and
ratify their respective signatures in the manner appearing on each
of the Bonds whether in manual or facsimile form, as the case may
be, as their true, genuine and official signatures.
(2 ) On the Bond Date and on the date hereof , we were and
are the duly qualified and acting officials of the Issuer
indicated below.
(3) The legally adopted proper and official corporate
seal of the Issuer is impressed, imprinted or lithographed on all
of the Bonds and impressed on this Certificate.
(4) No litigation of any nature is now pending before
any federal or state court, or administrative body, or to our
knowledge threatened, seeking to restrain or enjoin the issuance
or delivery of the Bonds or questioning the issuance or sale of
the Bonds, the authority or action of the governing body of the.
Issuer relating to the issuance or sale of the Bonds, the
collection of the revenues of the City's combined Waterworks and
Sanitary Sewer System (the "System "), or the imposition of rates
and charges with respect to the System, pledged to pay the
principal of and interest on the Bonds or that otherwise would
have a material adverse effect on the financial affairs of the
Issuer or the System to pay the Bonds; and that neither the
corporate existence or boundaries of the Issuer nor the right to
hold office of any member of the governing body of the Issuer or
any other elected or appointed official of the Issuer is being
contested or otherwise questioned.
(5) No petition or other request has been filed with or
presented to any official of the Issuer requesting that any
proceedings authorizing the issuance of the Bonds adopted by the
governing body of the Issuer be submitted to a referendum or other
04MUl
election; no authority or proceeding for the issuance, sale or
delivery of the Bonds, passed and adopted by the governing body of
the Issuer, has been amended, repealed, revoked, rescinded or
otherwise modified since the date of passage thereof, and all such
proceedings and authority relating to the issuance and sale of the
Bonds remain in full force and effect as of the date of this
Certificate.
DELIVERED this
(Issuer's Seal)
SIGNATUR OFFICIAL TITLE
-iaY or , City of Huntsville , Texas
THE STATE OF TEXAS
COUNTY OF WALKER
City Secretary, City of
Huntsville, Texas
S
S
The undersigned, a Notary Public, hereby represents and
certifies each of the signatures of William B. Green and Danna
Welter, Mayor and City Secretary, respectively, of the City of
Huntsville, Texas, appearing above is genuine.
of AMEN UNDER MY HAND AND SEAL OF OFFICE, this the 144- day
z , 1997.
(Notary Seal)
-2-
Not Public, State of Texas