ORD 1988-06 - Street Bond IssueORDINANCE AUTHORIZING THE ISSUANCE OF $2,000,000
CITY OF HUNTSVILLE, TEXAS, STREET
IMPROVEMENT BONDS, SERIES 1988
THE STATE OF TEXAS
COUNTY OF WALKER
CITY OF HUNTSVILLE
WHEREAS, the Bonds hereinafter authorized were duly and
favorably voted at an election held in the City of Huntsville,
Texas (the "City"), on the 8th day of August, 1987; and
WHEREAS, the City Council of the City has determined to
issue and deliver the Bonds at this time, reserving the
right to issue at a future time the remainder of the bonds
authorized at the aforesaid election; Now, Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE:
1. Throughout this ordinance the following terms and
expressions as used herein shall have the meanings set forth
below:
The term "Bonds" shall mean the $2,000,000 City of
Huntsville, Texas, Street Improvement Bonds, Series 1988,
authorized in this Ordinance, unless the context clearly
indicates otherwise.
The term "City" shall mean the City of Huntsville,
Texas.
The term "Construction Fund" shall mean the construc-
tion fund established by the City pursuant to Section 8 of
the Ordinance.
The term "Initial Purchaser" shall mean the purchaser
of the Bonds named in Section 12 hereof.
The term "Intesrest and Sinking Fund" shall mean the
interest and sinking fund established by the City pursuant
to Section 7 of this Ordinance.
The term "Interest Payment Date", when used in con-
nection with any Bond, shall mean October 1, 1988, and each
April 1 and October 1 thereafter until maturity of such
Bond.
The term "Ordinance" shall mean this ordinance autho-
rizing the Bonds.
The term "Owner" shall mean any person who shall be the
registered owner of any outstanding Bond.
The term "Record Date" shall mean March 15 for interest
payments due on April 1 and September 15 for interest
payments'due on October 1.
The term "Register" shall mean the books of registra-
tion kept by the Registrar in which are maintained the names
and addresses of and the principal amounts registered to
each Owner.
The term "Registrar" shall mean First National Bank of
Huntsville, Huntsville, Texas, and its successors and
assigns in the capacities of registrar and paying agent for
the Bonds.
2. The Bonds shall be issued in fully registered
form, without coupons, in the total authorized aggregate
amount of Two Million Dollars ($2,000,000) FOR THE PURPOSE
OF THE CONSTRUCTION AND IMPROVEMENT OF THE ROADS, BRIDGES
AND STREETS OF THE CITY, INCLUDING, WITHOUT LIMITATION,
RELATED DRAINAGE IMPROVEMENTS.
3. (a) The Bonds shall be designated as the "CITY OF
HUNTSVILLE, TEXAS, STREET IMPROVEMENT BONDS, SERIES 1988,"
and shall be dated April 1, 1988. The Bonds shall bear
interest from the later of April 1, 1988, or the most recent
Interest Payment Date to which interest has been paid or
duly provided for, calculated on the basis of a 360 day year
of twelve 30 day months, with interest payable on each
Interest Payment Date.
(b) The Bonds shall be initially issued bearing the
numbers, in the principal amounts, and bearing interest at
the rates set forth in the following schedule, shall be
registered in the name of the Initial Purchaser or such
other name designated by the Initial Purchaser, and may be
transferred and exchanged as set out in this Ordinance. The
Bonds shall mature on October 1 in each of the years and in
the amounts set out in such schedule. Bonds delivered on
transfer of or in exchange for other Bonds shall be numbered
in order of their authentication by the Registrar, shall be
in the denomination of $5,000 or integral multiples thereof,
and shall mature on the same date and bear interest at the
same rate as the Bond or Bonds in lieu of which they are
delivered.
-2-
Bond
Number
R-1
R-2
R-3
R-4
R-5
R-6
R-7
R-8
R-9
R-10
R-11
R-12
R-13
R-14
• •
Year
Principal Interest
Amount Rate
1990 50,000 8.70%
1991 50,000 9.00
1992 50,000 9.00
1993 100,000 9.00
1994 100,000 9.00
1995 100,000 9.00
1996 150,000 7.875
1997 150,000 6.60
1998 150,000 6.70
1999 200,000 6.80
2000 200,000 6.90
2001 200,000 7.00
2002 250,000 7.00
2003 250,000 6.00
(c) The Bonds shall be signed by the Mayor and counter-
signed by the City Secretary, by their manual, lithographed,
or facsimile signatures, and the official seal of the City
shall be manually impressed, or placed in facsimile, thereon.
Such facsimile signatures on the Bonds shall have the same
effect as if each of the Bonds had been signed manually and
in person by each of said officers, and such facsimile seal
on the Bonds shall have the same effect as if the official
seal of the City had been manually impressed upon each of
the Bonds. If any officer of the City whose manual or
facsimile signature shall appear on the Bonds shall cease to
be such officer before the authentication of such Bonds or
before the delivery of such Bonds, such manual or facsimile
signature shall nevertheless be valid and sufficient for all
purposes as if such officer had remained in such office.
(d) Only such Bonds as shall bear thereon either (i)
the manually executed registration certificate of the
Comptroller of Public Accounts of the State of Texas substan-
tially in the form provided in Section 5(b) of this Ordi-
nance, or (ii) a certificate of authentication, substantially
in the form provided in. Section 5(c) of this Ordinance,
manually executed by an authorized representative of the
Registrar, shall be entitled to the benefits of this Ordi-
nance or shall be valid or obligatory for any purpose. Such
duly executed certificate of authentication shall be conclu-
sive evidence that the Bond so authenticated was delivered
by the Registrar hereunder.
(e) The Registrar is hereby appointed as the registrar
and paying agent for the Bonds. The principal of and
premium, if any, on the Bonds shall be payable, without
7/s
exchange or collection charges, in any coin or currency of
the United States of America, which, on the date of payment,
is legal tender for the payment of debts due the United
States of America, upon their presentation and surrender as
they become due and payable at maturity, at the principal
corporate trust office of the Registrar. The interest on •
each Bond shall be payable by check or draft dated as of the
Interest Payment Date and mailed by the Registrar to the
Owner of record as of the Record Date, to the address of
such Owner as shown on the Register, or in such other
customary manner as may be agreed upon by the Registrar and
the Owner, at the risk and expense of the registered owner.
If the date for payment of the principal of or interest
on any Bond is a Saturday, Sunday, or a day on which banking
institutions in the city where the principal corporate trust
office of the Registrar is located are authorized by law or
executive order to close, or a day on which the United
States Postal Service is not open for business, then the
date for such payment shall be the next succeeding day which
is not a Saturday, Sunday, or a day on which banking insti-
tutions in the city where the principal corporate trust
office of the Registrar is located are authorized by law or
executive order to close, or a day on which the United
States Postal. Service is not open for business, and payment
on such date shall have the same force and effect as if made
on the original date payment was due.
(f) The City, the Registrar and any other person may
treat the person in whose name any Bond is registered as the
absolute owner of such Bond for the purpose of making and
receiving payment of the principal thereof and premium, if
any, thereon, and for the further purpose of making and
receiving payment of the interest thereon, and for all other
purposes, whether or not such Bond is overdue, and neither
the City nor the Registrar shall be bound by any notice or
knowledge to the contrary. All payments made to the person
deemed to be the Owner of any Bond in accordance with this
Section 3(f) shall be valid and effectual and shall dis-
charge the liability of the City and the Registrar upon such
Bond to the extent of the sums paid. Amounts held by the
Registrar which represent principal of or interest on the
Bonds remaining unclaimed by the Owner after the expiration
of three years from the date such amounts have become due
and payable shall be reported and disposed of by the Regis-
trar in accordance with the provisions of Title 6 of the
Texas Property Code, as amended, to the extent that such
provisions are applicable to such amounts.
(g) So long as any Bonds remain outstanding, the
Registrar shall keep at its principal corporate trust office
the Register, in which, subject to such reasonable regula-
tions as it may prescribe, the Registrar shall provide for
the registration and transfer of Bonds in accordance with
the terms of this Ordinance.
Each Bond shall be transferable only upon the presenta-
tion and surrender thereof at the principal corporate trust
office of the Registrar, duly endorsed for transfer, or
accompanied by an assignment duly executed by the registered.
Owner or his authorized representative in form satisfactory
to the Registrar. Upon due presentation of any Bond in
proper form for transfer, the Registrar shall authenticate
and deliver in exchange therefor, to the extent possible
within three (3) business days after such presentation, a
new Bond or Bonds, registered in the name of the transferee
or transferees, in authorized denominations and of the same
maturity and aggregate principal amount and bearing interest
at the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and
surrender thereof at the principal corporate trust office of
the Registrar for a Bond or Bonds of the same maturity and
interest rate and in any authorized denomination, in an
aggregate principal amount equal to the unpaid principal
amount of the Bond or Bonds presented for exchange. The
Registrar shall be and is hereby authorized to authenticate
and deliver exchange Bonds in accordance with the provisions
of this Section 3(g). Each Bond delivered in accordance
with this Section 3(g) shall be entitled to the benefits and
security of this Ordinance to the same extent as the Bond or
Bonds in lieu of which such Bond is delivered.
The City or the Registrar may require the Owner of any
Bond to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with
the transfer or exchange of such Bond. Any fee or charge of
the Registrar for such transfer or exchange shall be paid by
the City.
(h) All Bonds paid or redeemed in accordance with this
Ordinance, and all Bonds in lieu of which exchange Bonds or
replacement Bonds are authenticated and delivered in accor-
dance herewith, shall be cancelled and destroyed upon the
making of proper records regarding such payment, redemption,
exchange or replacement. The Registrar shall furnish the
City with appropriate certificates of destruction of such
Bonds.
(i) Upon the presentation and surrender to the Regis-
trar of a mutilated Bond, the Registrar shall authenticate
and deliver in exchange therefor a replacement Bond of like
maturity, interest rate and principal amount, bearing a
number not contemporaneously outstanding. The City or the
Registrar may require the Owner of such Bond to pay a sum
sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith and any other
expenses connected therewith, including the fees and ex-
penses of the Registrar.
If any Bond is lost, apparently destroyed, or wrongful-
ly taken, the City, pursuant to the applicable laws of the
State of Texas and in the absence of notice or knowledge
that such Bond has been acquired by a bona fide purchaser,
shall execute and the Registrar shall authenticate and
deliver a replacement Bond of like maturity, interest rate
and principal amount, bearing a number not contemporaneously
outstanding, provided that the Owner thereof shall have:
(1) furnished to the City and the Registrar
satisfactory evidence of the ownership of and the
circumstances of the loss, destruction or theft of such
Bond;
(2) furnished such security or indemnity as may
be required by the Registrar and the City to save them
harmless;
(3) paid all expenses and charges in connection
therewith, including, but not limited to, printing
costs, legal fees, fees of the Registrar and any tax or
other governmental charge that maybe imposed; and
(4) met any other reasonable requirements of the
City and the Registrar.
If, after the delivery of such replacement Bond, a bona fide
purchaser of the original Bond in lieu of which such re-
placement Bond was issued presents for payment such original
Bond, the City and the Registrar shall be entitled to
recover such replacement Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the securi-
ty or indemnity provided therefor to the extent of any loss,
damage, cost or expense incurred by the City or the Regis-
trar in connection therewith.
If any such mutilated, lost, apparently destroyed or
wrongfully taken Bond has become or is about to become due
and payable, the City in its discretion may, instead of
issuing a replacement Bond, authorize the Registrar to pay
such Bond.
Each replacement Bond delivered in accordance with this
Section 3(i) shall be entitled to the benefits and security
of this Ordinance to the same extent as the Bond or Bonds in
lieu of which such replacement Bond is delivered.
4. (a) The Bonds are not subject to redemption prior
to their stated maturities.
5. (a) The Bonds shall be in substantially the
following form, with such additions, deletions and varia-
tions as may be necessary or desirable and not prohibited by
this Ordinance.
NUMBER
R-
REGISTERED
INTEREST RATE:
REGISTERED OWNER:
PRINCIPAL AMOUNT:
(Face of Bond)
United States of America
State of Texas
County of Walker
CITY OF HUNTSVILLE, TEXAS
STREET IMPROVEMENT BOND,
SERIES 1988
MATURITY DATE:
ISSUE DATE:
AMOUNT
REGISTERED
CUSIP:
DOLLARS
The City of Huntsville, Texas (the "City") promises to
pay to the Registered Owner identified above, or registered
assigns, on the Maturity Date specified above, upon presen-
tation and surrender of this Bond at the principal corporate
trust office of First National Bank of Huntsville, Huntsville,
Texas (the "Registrar"), the principal amount identified
above, payable in any coin or currency of the United States
of America which on the date of payment of such principal is
legal tender for the payment of debts due the United States
of America, and to pay interest thereon at the rate shown
above, calculated on the basis of a 360 day year of twelve
30 day months, from the later of the Issue Date specified
above or the most recent interest payment date to which
interest has been paid or duly provided for. Interest on
this Bond is payable semiannually on April 1 and October 1
of each year until maturity, beginning October 1, 1988, by
check or draft, dated as of the interest payment date and
mailed by the Registrar to the registered owner as of the
fifteenth day of the month next preceding such interest
payment date as shown on the books of registration kept by
the Registrar, or in such other customary manner as may be
agreed upon by the Registrar and the registered owner, at
the risk and expense of the registered owner.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS
SHALL HAVE THE SAME FORCE AND EFFECT. AS IF SET FORTH AT THIS
PLACE.
IN WITNESS WHEREOF, this Bond has been signed with the
manual or facsimile signature of the Mayor and countersigned
with the manual or facsimile signature of the City Secretary,
and the official seal of the City has been duly impressed,
or placed in facsimile, on this Bond.
(AUTHENTICATION CERTIFICATE) (SEAL) CITY OF HUNTSVILLE,
TEXAS
xxxxxxxxx
Mayor
xxxxxxxxx
City Secretary
(Back Panel of Bond)
THIS BOND is one of a duly authorized issue of Bonds,
dated April 1, 1988, aggregating $2,000,000,(the "Bonds"),
issued FOR THE PURPOSE OF THE CONSTRUCTION AND IMPROVEMENT
OF THE ROADS, BRIDGES AND STREETS OF THE CITY, INCLUDING,
WITHOUT LIMITATION, RELATED DRAINAGE IMPROVEMENTS, pursuant
to an election held within the City on the 8th day of
August, 1987, and authorized pursuant to an ordinance
adopted by the City Council (the "Ordinance"), under and in
strict conformity with the Constitution and laws of the
State of Texas, particularly Chapters 1 and 7, Title 22,
Revised Civil Statutes of Texas, as amended.
THE BONDS are not subject to redemption prior to their
stated maturities.
THIS BOND IS TRANSFERABLE only upon presentation and
surrender at the principal corporate trust office of the
Registrar, duly endorsed for transfer or accompanied by an
assignment duly executed by the registered owner or his
authorized representative, subject to the terms and condi-
tions of the Ordinance.
THE BONDS ARE EXCHANGEABLE at the principal corporate
trust office of the Registrar for bonds in the principal
amount of $5,000 or any integral multiple thereof, subject
to the terms and conditions of the Ordinance.
THIS BOND SHALL NOT BE VALID OR OBLIGATORY for any
purpose or be entitled to any benefit under the Ordinance
unless this Bond either (i) is registered by the Comptroller
of Public Accounts of the State of Texas by due execution of
the registration certificate endorsed hereon, or (ii) is
authenticated by the Registrar by due execution of the
authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance
hereof, acknowledges and agrees to be bound by all of the
terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will
at all times provide a legally qualified Registrar for the
Bonds and will cause notice of any change of Registrar to be
mailed to each registered owner.
IT IS HEREBY certified, recited and covenanted that
this Bond has been duly and validly authorized, issued and
delivered; that all acts, conditions and things required or
proper to be performed, to exist and to be done precedent to
or in the issuance and delivery of this Bond have been
performed, exist and have been done in accordance with law;
and that annual ad valorem taxes sufficient to provide for
the payment of the interest on and principal of this Bond,
as such interest comes due and such principal matures, have
been levied and ordered to be levied against all taxable
property in the City, within the limits prescribed by law,
and have been pledged irrevocably for such payment.
(b) Bonds Nos. R-1 through R-14 shall be registered by
the Comptroller of Public Accounts of the State of Texas, as.
provided by law. The registration certificate of the
Comptroller of Public Accounts shall be affixed to or
printed on Bonds Nos. R-1 through R-14 and shall be in
substantially the following form:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined,
certified as to validity, and approved by the Attorney
General of Texas, and that this Bond has been registered by
the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
xxxxxxxxxxxxxxxxx
Comptroller of Public Accounts
of the State of Texas
(SEAL)
(c) The following form of authentication certificate
shall be printed on the face of each of the Bonds, except
for Bonds Nos. R-1 through Nos. R-14:
Registration Date:
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond
has been delivered pursuant to the
Ordinance described in the text of
this Bond, in exchange for or in
replacement of a bond, bonds, or a
portion of a bond or bonds of a Series
which was originally approved by the
Attorney General of the State of Texas
and registered by the Comptroller of
Public Accounts of the State of Texas.
First National Bank of Huntsville,
Huntsville, Texas
By
Authorized Signature
(d) The following form of assignment shall be printed
on the back of each of the Bonds:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns, and transfers unto (print or typewrite name,
address, and zip code of transferee):
(Social Security or other identifying
number: ) the within bond
and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney
to transfer said bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: This signature
must be guaranteed by a
member of the New York
Stock Exchange or a
commercial bank or trust
company
Registered Owner
NOTICE: The signature on this
assignment must correspond
with the name of the regis-
tered owner as it appears on
the face of the within bond
in every particular.
6. The approving opinion of Vinson & Elkins, Houston,
Texas, and CUSIP Numbers may be printed on the Bonds, but
errors or omissions in the printing of such opinion or such
numbers shall have no effect on the validity of the Bonds.
7. (a) A special fund, to be designated as "City of
Huntsville, Texas, Street Improvement Bonds, Series 1988
Interest and Sinking Fund" is hereby established. The
proceeds from all taxes levied, assessed and collected for
and on account of the Bonds authorized by this Ordinance
shall be credited to such fund. While the Bonds or any part
of the principal thereof or interest thereon remain outstand-
ing and unpaid, there is hereby levied, within the limits
prescribed by law, and there shall be annually assessed and
collected in due time, form and manner, and at the same time
other City ad valorem taxes are assessed, levied and col-
lected, in each year, beginning with the current year, a
continuing direct annual ad valorem tax upon all taxable
property within the City sufficient to pay the current
interest on the Bonds as the same becomes due, and to create
and provide a sinking fund of not less than two per cent
(2%) of the original principal amount of the Bonds or not
less than the amount required to pay each installment of the
principal of the Bonds as the same matures, whichever is
greater, full allowance being made for delinquencies and
costs of collection, and said taxes when collected shall be
applied to the payment of the interest on and principal of
the Bonds and to no other purpose. The City hereby appro-
priates from lawfully available funds on hand sufficient
funds to pay interest coming due on the Bonds on October 1,
1988.
(b) In addition to the taxes mentioned in Section
7(a), accrued interest on the Bonds from their date to the
date of their delivery and any premium is to be deposited in
the Interest and Sinking Fund. Money in the Interest and
Sinking Fund may, at the option of the City, be invested as
permitted by state law; provided that all such deposits and
investments shall be made in such a manner that money
required to be expended from the Interest and Sinking Fund
will be available at the proper time or times. All interest
and income derived from such deposits and investments of the
Interest and Sinking Fund shall be credited to the Interest
and Sinking Fund. So long as any Bonds remain outstanding,
all uninvested moneys on deposit in, or credited to, the
Interest and Sinking Fund shall be secured by the pledge of
security, as provided by law for cities in the State of
Texas.
8. There is hereby created and established a special
fund of the City, to be known as the "City of Huntsville,
Texas, Street Improvement Bonds, Series 1988 Construction
Fund". The proceeds of the Bonds, after depositing accrued
interest and any premium to the Interest and Sinking Fund,
as provided in Section 7(b), shall be credited to the
Construction Fund. Money on deposit in the Construction
Fund shall be used only for the purposes set forth in
Section 2 of this Ordinance or to pay amounts required to be
rebated to the federal government in connection with the
Bonds, except as hereafter provided in this Section 8.
Money on deposit in the Construction Fund may, at the option
of the City, be invested as permitted by Texas law; provided
that all such deposits and investments shall be made in such
manner that the money required to be expended from the
Construction Fund will be available at the proper time or
times. So long as any Bonds remain outstanding, all unin-
vested monies on deposit in, or credited to, the
Construction Fund shall be secured by the pledge of
security, as provided by law for cities in the State of
Texas. All interest and income derived from such deposits
and investments shall remain in the Construction Fund and
shall be used for the purposes above set forth, provided
that, in the discretion of the City, such interest earnings
maybe transferred to the Interest and Sinking Fund.
9. (a) The City intends that the interest on the
Bonds shall be excludible from gross income for purposes of
federal income taxation pursuant to sections 103 and 141
through 150 of the Internal Revenue Code of 1986, as amended
(the "Code"), and applicable regulations. The City cove-
nants and agrees not to take any action, or knowingly omit
to take any action within its control, that if taken or
omitted, respectively, would cause the interest on the Bonds
to be includible in gross income, as defined in section 61
of the Code, of the holders thereof for purposes of federal
income taxation. In particular, the City covenants and
agrees to comply with each requirement of this Section 9;
provided, however, that the City shall not be required to
comply with any particular requirement of this Section 9 if
the City has received an opinion of nationally recognized
bond counsel ("Counsel's Opinion") that such noncompliance
will not adversely affect the exclusion from gross income
for federal income tax purposes of interest on the Bonds or
if the City has received a Counsel's Opinion to the effect
that compliance with some other requirement set forth in
this Section 9 will satisfy the applicable requirements of
the Code, in which case compliance with such other require-
ment specified in such Counsel's Opinion shall constitute
compliance with the corresponding requirement specified in
this Section 9.
(b) The City covenants and agrees that its use of the
Net Proceeds of the Bonds (as hereinafter defined) will at
all times satisfy the following requirements:
(1) The City will limit the amount of original or
investment proceeds of the Bonds to be used (other than
use as a member of the general public) in the trade or
business of any person other than a governmental unit
to an amount aggregating no more than ten percent of
the Net Proceeds of the Bonds ("private-use proceeds").
For purposes of this Section, the term "person" includes
any individual, corporation, partnership, unincorporated
association, or any other entity capable of carrying on
a trade or business; and the term "trade or business"
means, with respect to any natural person, any activity
regularly carried on for profit and, with respect to
persons other than natural persons, any activity other
than an activity carried on by a governmental unit.
Any use of proceeds of the Bonds in any manner contrary
to the guidelines set forth in Revenue Procedures
82 -14, 1982 -1 C.B. 459, and 82 -15, 1982 -1 C.B. 460,
including any revisions or amendments thereto, shall
constitute the use of such proceeds in the trade or
business of one who is not a governmental unit;
(2) The City will not permit more than five
percent of the Net Proceeds of the Bonds to be used in
the trade or business of any person other than a
governmental unit if such use is unrelated to the
governmental purpose of the Bonds. Further, the amount
of private -use proceeds of the Bonds in excess of five
percent of the Net Proceeds of the Bonds ( "excess
private -use proceeds ") will not exceed the proceeds of
the Bonds expended for the governmental purpose of the
Bonds to which such excess private -use proceeds relate;
and
(3) The City will not permit an amount of pro-
ceeds of the Bonds exceeding the lesser of (i)
$5,000,000 or (ii) five percent of the Net Proceeds of
the Bonds to be used, directly or indirectly, to
finance loans to persons other than governmental units.
When used in this Section 9, the term Net Proceeds of the
Bonds shall mean the proceeds from the sale of the Bonds,
including investment earnings on such proceeds, less accrued
interest.
(c) The City covenants and agrees not to take any
action, or knowingly omit to take any action within its
control, that, if taken or omitted, respectively, would
cause the Bonds to be "federally guaranteed" within the
meaning of section 149(b) of the Code and applicable regula-
tions thereunder, except as permitted by section 149(b)(3)
of the Code and such regulations.
(d) The City shall certify, through an authorized
officer, employee or agent that based upon all facts and
estimates known or reasonably expected to be in existence on
the date the Bonds are delivered, the City will reasonably
expect that the proceeds of the Bonds will not be used in a
manner that would cause the Bonds to be "arbitrage bonds"
within the meaning of section 148(a) of the Code and appli-
cable regulations thereunder. Moreover, the City covenants
and agrees that it will make such use of the proceeds of the
Bonds including interest or other investment income derived
from Bond proceeds, regulate investments of proceeds of the
Bonds, and take such other and further action as may be
required so that the Bonds will not be "arbitrage bonds"
within the meaning of section 148(a) of the Code and appli-
cable regulations thereunder.
(e) The City will take all necessary steps to comply
with the requirement that certain amounts earned by the City
on the investment of the "gross proceeds" of the Bonds
(within the meaning of section 148(f)(6)(B) of the Code), be
rebated to the federal government. Specifically, the City
will (i) maintain records regarding the investment of the
gross proceeds of the Bonds as may be required to calculate
the amount earned on the investment of the gross proceeds of
the Bonds separately from records of amounts on deposit in
the funds and accounts of the City allocable to other bond
issues of the City or moneys which do not represent gross
proceeds of any bonds of the City, (ii) calculate at such
times as are required by applicable regulations, the amount
earned from the investment of the gross proceeds of the
Bonds which is required to be rebated to the federal govern-
ment, and (iii) pay, not less often than every fifth anniver-
sary date of the delivery of the Bonds, all amounts required
to be rebated to the federal government. Further, the City
will not indirectly pay any amount otherwise payable to the
federal government pursuant to the foregoing requirements to
any person other than the federal government by entering
into any investment arrangement with respect to the gross
proceeds of the Bonds that might result in a "prohibited
payment" within the meaning of Temp. Treas. Reg. §1.103-15AT.
(f) The City covenants and agrees to file or cause to
be filed with the Secretary of the Treasury, not later than
the 15th day of the second calendar month after the close of
the calendar quarter in which the Bonds are issued, an
information statement concerning the Bonds, all under and in
accordance with section 149(e) of the Code and applicable
regulations thereunder.
10. The City hereby designates the Bonds as "qualified
tax-exempt obligations" for purposes of section 265(b) of
the Code. In connection therewith, the City represents (a)
that the aggregate amount of tax-exempt obligations issued
by the City during calendar year 1988, including the Bonds,
which have been designated as "qualified tax-exempt obliga-
tions" under section 265(b)(3) of the Code does not exceed
$10,000,000, and (b) that the reasonably anticipated amount
of tax-exempt obligations, which will be issued by the City
during calendar year 1988, including the Bonds, will not
exceed $10,000,000. For purposes of this section 10, the
term "tax-exempt obligation" does not include "private
activity bonds" within the meaning of section 141 of the
• •
Code, other than "qualified 501(c)(3) bonds" within the
meaning of section 145 of the Code. In addition, for
purposes of this section 10, the City includes all govern-
mental units which are "subordinate entities" of the City,
within the meaning of section 265(b) of the Code.
11. After the Bonds to be initially issued shall have
been executed, it shall be the duty of the Mayor to deliver
the Bonds to be initially issued and all pertinent records
and proceedings to the Attorney General of Texas, for
examination and approval by the Attorney General. After the
Bonds to be initially issued shall have been approved by the
Attorney General, they shall be delivered to the Comptroller
of Public Accounts of the State of Texas for registration.
Upon registration of the Bonds to be initially issued, the
Comptroller of Public Accounts (or a deputy lawfully desig-
nated in writing to act for the Comptroller) shall manually
sign the Comptroller's Registration Certificate prescribed
herein to be affixed to or printed on the Bonds to be
initially issued, and the seal of said Comptroller shall be
impressed, or placed in facsimile, thereon.
12. The Bonds are hereby sold and shall be delivered
to Clayton Brown & Associates, Inc. (the "Initial Purchas-
er") for the principal amount thereof plus accrued interest
to the date of delivery of the Bonds to such Initial Pur-
chaser, plus a premium of $-0-, subject to the approving
opinion as to the legality of the Bonds of the Attorney
General of Texas and of Vinson & Elkins, bond attorneys for
the City. It is hereby found and determined that the sale
of the Bonds to said Initial Purchaser is on the best terms
and at the best price obtainable by the City after adver-
tisement for and receipt of competitive bids for the Bonds.
13. The form of agreement setting forth the duties of
the Registrar is hereby approved, and appropriate officials
of the City are hereby authorized to execute such agreement
for and on behalf of the City. The City reserves the right
to replace the Registrar.
14. The Mayor and City Secretary and all other appro-
priate officials, employees, and agents of the City are
hereby authorized and directed to do any and all things
necessary or convenient to carry out the terms of this
Ordinance.
15. No recourse shall be had for the payment of the
principal of or interest on any Bonds or for any claim based
thereon or on this Ordinance, against any official or
employee of the City or any person executing any Bonds.
16. (a) The Registrar, by undertaking the performance
of the duties of the Registrar and in consideration of the
payment of fees and/or deposits of money pursuant to this
Ordinance and a Paying Agent/Registrar Agreement, accepts
and agrees to abide by the terms of this Ordinance and such
Agreement.
(b) The City reserves the right to replace the Regis-
trar or its successor at any time. If the Registrar is
replaced by the City, the new Registrar shall accept the
previous Registrar's records and act in the same capacity as
the previous Registrar. Any successor Registrar shall be
either a national or state banking institution and a corpo-
ration organized and doing business under the laws of the
United States of America or any State authorized under such
laws to exercise trust powers and subject to supervision or
examination by Federal or State authority.
17. If any Section, paragraph, clause or provision of
this Ordinance shall for any reason be held to be invalid or
unenforceable, the invalidity or unenforceability of such
Section, paragraph, clause or provision shall not affect any
of the remaining provisions of this Ordinance.
18. The City hereby approves the Official Notice of
Sale and Preliminary Official Statement, dated February 1,
1988, used in connection with the sale of the Bonds.
19. This Ordinance shall be in force and effect from
and after its passage, and it is so ordered.
20. All orders, resolutions and ordinances, or parts
thereof, inconsistent herewith are hereby repealed to the
extent of such inconsistency.
21. It is hereby officially found and determined that
the meeting at which this Ordinance was adopted was open to
the public, and public notice of the time, place and purpose
of said meeting was given, all as required by and in confor-
mance with Article 6252-17, Vernon's Texas Civil Statutes,
as amended.
PASSED AND APPROVED this 15th day of March, 1988.
Ma
C TY OF HUNTSVILLE, T
ATTEST:
•
Secretary
CITY OF HUNTSVILLE, TEXAS
(SEAL)
APPROVED AS TO LEGALITY:
City Attorfiey
CITY OF HUNTSVILLE, TEXAS
HUN(a)
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT (this "Agreement "), is entered into as
of the 15th day of March, 1988, by and between the City of
Huntsville, Texas, (the "Issuer "), and First National Bank
of Huntsville, Huntsville, Texas, duly organized and
existing under the laws of the United States of America (the
"Bank ").
RECITALS OF THE ISSUER
The Issuer has duly authorized and provided for the
issuance of its bonds, entitled "City of Huntsville, Texas,
Street Improvement Bonds, Series 1988" (the "Bonds ") in an
aggregate principal amount of $2,000,000 to be issued as
fully registered Bonds;
All things necessary to make the Bonds the valid
obligations of the Issuer, in accordance with their terms,
will be done upon the issuance and delivery thereof;
The Issuer and the Bank wish to provide the terms under
which the Bank will act as Paying Agent to pay the princi-
pal, redemption premium (if any) and interest on the Bonds,
in accordance with the terms thereof, and under which the
Bank will act as Registrar for the Bonds;
The Issuer and the Bank have duly authorized the
execution and delivery of this Agreement; and all things
necessary to make this Agreement the valid agreement of the
parties, in accordance with its terms, have been done.
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 act as Paying
Agent with respect to the Bonds, to pay to the Registered
Owners of the Bonds in accordance with the terms and pro-
visions of this Agreement and the Bond Ordinance, the
principal of, redemption premium (if any), and interest, on
all or any of the Bonds.
HUN(p) -1-
The Issuer hereby appoints the Bank as Registrar with
respect to the Bonds.
The Bank hereby accepts its appointment, and agrees to
act as Paying Agent and Registrar.
Section 1.02. Compensation.
•
As compensation for the Bank's services as Paying Agent
and Registrar, the Issuer hereby agrees to pay the Bank the
fees set forth in the Bank's fee schedule attached as Annex
A hereto.
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Bank" means First National Bank of Huntsville,
Huntsville, Texas, a national bank duly organized and
existing under the laws of the United States of America.
"Bond" or "Bonds" means any one or all of the
"$2,000,000 City of Huntsville, Texas, Street Improvement
Bonds, Series 1988."
"Bond Ordinance" means the ordinance of the Issuer
approved March 15, 1988, pursuant to which the Bonds are
issued.
"Issuer" means City of Huntsville, Texas.
"Paying Agent" means the Bank when it is performing the
function of paying agent.
"Person" means any individual, corporation, partner-
ship, joint venture, associations, joint stock company,
trust, unincorporated organization or government or any
• •
agency or political subdivision of a government or any
entity whatsoever.
"Registrar" means the Bank when it is performing the
function of registrar.
All other capitalized terms shall have the meanings
assigned in the Bond Ordinance.
ARTICLE THREE
DUTIES OF THE BANK
Section 3.01. Initial Delivery of Bonds.
The Bonds will be initially registered and
delivered to the purchaser designated by the Issuer as set
forth in the Bond Ordinance. If such purchaser delivers a
written request to the Bank not later than five business
days prior to the date of initial delivery, the Bank will,
on the date of initial delivery, exchange the Bonds
initially delivered for Bonds of authorized denomin-
ations, registered in accordance with the instructions in
such request and the Bond Ordinance.
Section 3.02. Duties of Paying Agent.
As Paying Agent, the Bank shall, provided adequate
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, redemption premium, if any, and interest, on
each Bond in accordance with the provisions of the Bond
Ordinance.
Section 3.03. Duties of Registrar.
The Bank shall provide for the proper registration of
the Bonds, and the exchange, replacement and regis-
tration of transfer of the Bonds, in accordance with
the provisions of the Bond Ordinance. The Bank will
maintain the records of the books of registration in
accordance with the Bank's general practices and procedures
in effect from time to time.
Section 3.04. Unauthenticated Bonds.
The Issuer shall provide an adequate inventory of
unauthenticated Bonds to facilitate transfers. The
Bank covenants that it will maintain such unauthenticated
Bonds in safekeeping and will use reasonable care in
maintaining such Bonds in safekeeping, which shall be not
less than the care it maintains for debt securities of other
government entities or corporations for which it serves as
registrar, or which it maintains for its own bonds.
Section 3.05. Reports.
The Bank will provide the Issuer reports not less often
than once each six months, which reports will describe in
reasonable detail all transactions pertaining to the Bonds
and the books of registration. The Issuer may also inspect
and make copies of the information in the books of registra-
tion 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 content of
the books of registration 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 subpoena or court
order. Upon receipt of a subpoena or court order the Bank
will notify the Issuer immediately so that the Issuer may
contest the subpoena or court order.
Section 3.06. Cancelled Bonds.
All Bonds.surrendered for payment, redemption, trans-
fer, exchange, or replacement, if surrendered to the Bank,
shall be promptly cancelled by it and, if surrendered to the
Issuer, shall be delivered to the Bank and, if not already
cancelled, shall be promptly cancelled by the Bank. The
Issuer may at any time deliver to the Bank for cancellation
any Bonds previously authenticated and delivered which the
Issuer may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Bank.
All cancelled Bonds held by the Bank shall be destroyed and
evidence of such destruction furnished to the Issuer.
• •
Section 3.07. 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
by the Issuer.
(b) The Bank shall not be liable to the Issuer for
actions taken under this Agreement so long as it acts in
good faith and exercises due diligence, reasonableness and
care, as prescribed by law, with regard to its duties
hereunder.
(c) This Agreement is not intended to require the Bank
to expend its own funds for performance of any of its duties
hereunder.
(d) The Bank may exercise any of the powers hereunder
and perform any duties hereunder either directly or by or
through agents or attorneys.
Section 3.08. Money Held by Bank.
Money held by the Bank hereunder shall be held in trust
for the benefit of the Registered Owners of the Bonds.
The Bank shall be under no obligation to pay interest
on any money received by it hereunder.
All money deposited with the Bank hereunder shall be
secured in the manner and to the fullest extent required by
law for the security of funds of the Issuer.
Except as provided in Section 3(f) of the Bond Ordi-
nance, any money deposited with the Bank for the payment of
the principal, redemption premium (if any) or interest on
any Bond and remaining unclaimed for four years after the
maturity of the Bond will be paid by the Bank to the Issuer,
upon receipt of a written request from the Issuer, and the
Issuer and the Bank agree that the Registered Owner of such
Bond shall thereafter look only to the Issuer for payment
thereof, and that all liability of the Bank with respect to
such moneys shall thereupon cease.
• •
ARTICLE FOUR
MISCELLANEOUS PROVISIONS
Section 4.01. May Own Bonds.
The Bank, in its individual or any other capacity, may
become the owner or pledgee of Bonds with the same
rights it would have if it were not the Paying Agent and
Registrar for the Bonds.
Section 4.02. Amendment.
This Agreement may be amended only by an agreement in
writing signed by both of the parties hereof.
Section 4.03. Assignment.
This Agreement may not be assigned by either party
without the prior written consent of the other.
Section 4.04. Notices.
Any request, demand, authorization, direction, notice,
consent, waiver or other document provided or 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 herein, or such other
address as may have been given by one party to the other by
15 days written notice.
Section 4.05. Effect of Headings.
The Article and Section headings herein are for conve-
nience only and shall not affect the construction hereof.
Section 4.06. Successors and Assigns.
All covenants and agreements herein by the Issuer and
the Bank shall bind their successors and assigns, whether so
expressed or not.
Section 4.07. Severability.
If any provision of this Agreement shall be invalid or
unenforceable, the validity and enforceability of the
remaining provisions hereof shall not in any way be affected
or impaired.
• •
Section 4.08. 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 4.09. Bond Ordinance Governs Conflicts.
This Agreement and the Bond Ordinance constitute the
entire agreement between the parties hereto relative to the
Bank acting as Paying Agent and Registrar and if any con-
flict exists between this Agreement and the Bond Ordinance,
the Bond Ordinance shall govern.
Section 4.10. Term and Termination.
This Agreement shall be effective from and after its
date and may be terminated for any reason by the Issuer or
the Bank at any time upon 60 days written notice; provided,
however, that no such termination shall be effective until a
successor has been appointed and has accepted the duties of
the Bank hereunder. In the event of early termination
regardless of circumstances, the Bank shall deliver to the
Issuer or its designee all funds Bonds, and all books
and records pertaining to the Bank's role as Paying Agent
and Registrar with respect to the Bonds, including,
but not limited to, the books of registration.
Section 4.11. Governing Law.
This Agreement shall be construed in accordance with
and shall be 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.
CITY OF HUNTSVILLE, TEXAS
By
AD
Mayor
1212 Avenue M
Huntsville, 'exas 77340
(
(SEAL)
FIRST NATIONAL BANK OF
HUNTSVILLE
By
Tii 11} it. (do-Leh-du
le
Sr. VP /Cashier
ADDRESS: P.O.Box 659
Huntsville, Texas
77342 -0659