HomeMy WebLinkAbout1061 10-08-1991ORDINANCE NO. 1061
AN ORDINANCE authorizing the issuance of "CITY OF
EULESS, TEXAS, MUNICIPAL DRAINAGE UTILITY SYSTEM
REVENUE BONDS, SERIES 1991 "; pledging the
revenues of the Drainage Utility System to the
payment of the principal of and interest on said
Bonds; enacting provisions incident and related
to the issuance, payment, security and delivery
of said bonds, including the approval and
execution of a Purchase Contract and the
approval and distribution of an Official
Statement pertaining thereto; and providing an
effective date.
WHEREAS, pursuant to authority conferred by Subchapter C
of Chapter 402 of the Local Government Code, V.T.C.A., the City
Council of the City of Euless, Texas, held a public hearing on
October 9, 1990 on the creation of a municipal drainage utility
system and adopted Ordinance No. 1036 on second reading on
October 23, 1990 establishing and declaring the creation of the
Euless Municipal Drainage Utility System within the municipal
boundaries of the City;
WHEREAS, the City Council hereby finds and determines that
$2,100,000 in principal amount of revenue bonds to finance the
costs of drainage improvements, including the acquisition,
construction and repair of structures, equipment and facilities
for the City's Municipal Drainage Utility. System should be
issued and sold at this time; now, therefore,'
BE IT ORDAINED BY THE CITY COUNCIL OF THE, CITY OF EULESS,
TEXAS:
SECTION 1: Authorization - Designation - Principal Amount -
Purpose. Revenue bonds of the City shall be and are hereby
authorized to be issued in the aggregate principal amount of
$2,100,000 to be designated and bear the title "CITY OF EULESS,
TEXAS, MUNICIPAL DRAINAGE UTILITY SYSTEM REVENUE BONDS, SERIES
1991" (hereinafter referred to as the "Bonds "), to finance the
costs of drainage improvements, including the acquisition,
construction and repair of structures, equipment and facilities
for the City's Municipal Drainage Utility System, in conformity
with the Constitution and laws of the State of Texas, including
V.T.C.A., Local Government Code, Section 402.051, as amended.
SECTION 2: Fully xegisrerea UD11garions - tiUC1w11zeu
;r >r;nrc RratPA Maturities - Date. The Bonds shall
be issued as fully registered obligations, without coupons,
shall be dated October 1, 1991 (the "Issue Date ") and, other
than the single fully registered Initial Bond referenced in
Section 8 hereof, shall be in denominations of $5,000 or any
integral multiple thereof (within a Stated Maturity), shall be
numbered consecutively from One (1) upward and shall become due
and payable on July 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 (s)
1993
$ 25,000
4.75%
1994
25,000
5.00%
1995
25,000
5.20%
1996
25,000
5.35%
1997
30,000
5.50%
1998
100,000
5.65%
1999
105,000
5.80%
2000
110,000
5.90%
2001
120,000
6.00%
2002
130,000
6.05%
2003
140,000
6.10%
2004
145,000
6.20%
2005
155,000
6.30%
2006
170,000
6.40%
2007
180,000
6.50%
2008
190,000
6.60%
2009
205,000
6.65%
2010
220,000
6.70%
The Bonds shall bear interest on the unpaid principal
amounts from the Issue Date at the rate(s) per annum shown in
the above schedule (calculated on the basis of a 360 -day year
of twelve 30 -day months). Interest on the Bonds shall be
payable on January 15 and July 15 in each year, commencing
January 15, 1992.
SECTION 3: Terms of Payment - Paying Agent /Registrar.
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 (the "Security
Register ") maintained by the Paying Agent /Registrar and all
such payments shall be in 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.
-2-
The selection and appointment of Ameritrust Texas National
Association to serve as Paying Agent /Registrar for the Bonds is
hereby approved and confirmed. 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 of such change to be given to each
Holder by United States Mail, first class postage prepaid,
which notice shall 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 upon their earlier
redemption, only upon presentation and surrender of the Bonds
to the Paying Agent /Registrar at its principal offices in
Dallas, Texas (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. 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 of the
Paying Agent /Registrar 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.
In the event of a non - payment of interest on one or more
maturities on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment
for such maturity or maturities (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
-3-
Mail, first class postage prepaid, to the address of each
Holder of such maturity or maturities appearing on the 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 maturing on and after July 15, 2000 shall be subject to
redemption prior to maturity, at the option of the City, in
whole or in part in principal amounts of $5,000 or any integral
multiple thereof (and if within a Stated Maturity by lot by the
Paying Agent/ Registrar), on July 15, 1999 or on any date
thereafter at the redemption price of par and accrued interest
to the redemption date.
(b) Exercise of Redemption Option. At least forty -five
(45) days prior to a redemption date for the Bonds (unless a
shorter notification period shall be satisfactory to the Paying
Agent /Registrar), the City shall notify the Paying
Agent /Registrar of the decision to redeem Bonds, the principal
amount of each Stated Maturity to be redeemed, and the date of
redemption therefor. 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
treat such Bonds as representing the number of Bonds
Outstanding which is obtained by dividing the principal amount
of such Bonds by $5,000 and shall select the Bonds to be
redeemed within such Stated Maturity by lot.
(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, 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,
-4-
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
their presentation and surrender by the Holder. If a Bond is
subject by its terms to prior redemption and has been called
for redemption and a notice of redemption has been duly
given as hereinabove 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. A Security Register relating to the
registration, payment, and transfer or exchange of the Bonds
shall at all times be kept and maintained by the City at the
Designated Payment /Transfer Office of the Paying
Agent /Registrar, as provided herein and in accordance with the
provisions of an agreement with the Paying Agent /Registrar and
such rules and regulations as the Paying Agent /Registrar and
the City may prescribe. The Paying Agent /Registrar shall
obtain, record, and maintain in the Security Register the name
and address of each and every owner of the Bonds issued under
and pursuant to the provisions of this Ordinance, or if
appropriate, the nominee thereof. Any Bond may be transferred
or exchanged for Bonds of other authorized denominations by the
Holder, in person or by his duly authorized agent, upon
surrender of such Bond to the Designated Payment /Transfer
Office of 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 of any Bond for transfer at the
Designated Payment /Transfer Office of the Paying Agent/
Registrar, one or more new Bonds shall be registered and issued
to the assignee or transferee of the previous Holder; such
Bonds to be in authorized denominations, of like Stated
Maturity and of a like aggregate principal amount as the Bond
or Bonds surrendered for transfer.
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
-5-
exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment /Transfer Office of the Paying Agent/
Registrar. Whenever any Bonds are surrendered for exchange,
the Paying Agent /Registrar shall register and deliver new Bonds
to the Holder requesting the exchange.
All Bonds issued in a transfer or exchange of Bonds
shall be delivered to the Holders at the Designated
Payment /Transfer Office of the Paying Agent /Registrar or sent
by United States Mail, first class, postage prepaid to the
Holders, and, upon the registration and delivery thereof, the
same shall be the 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 cancelled 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 the provisions of
Section 30 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 issue or transfer to an assignee of a Holder any
Bond called for redemption, in whole or in part, within 45 days
of the date fixed for the redemption of such Bond; provided,
however, such limitation on transferability shall not be
applicable to an exchange by the Holder of the 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, redemption, and
transfer /exchange of the Bonds, the City hereby approves and
authorizes the use of "Book -Entry Only" securities clearance,
ff.=
settlement and transfer system provided 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 a 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 ") and, 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 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 individuals who are or were the proper officers
of the City on the Issue Date shall be deemed to be duly
executed on behalf of the City, notwithstanding that such
individuals or either of them shall cease to hold such offices
at the time of 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
this Ordinance, or be valid or obligatory
unless there appears on such Bond either
-7-
or benefit under
for any purpose,
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 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 duly signed shall be
conclusive evidence, and the only evidence, that such Bond has
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 of
$2,100,000 with principal installments to become due and
payable as provided in Section 2 hereof and numbered T -1, or
(ii) as eighteen (18) 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 Bond(s)") 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). Any time after the delivery of the
Initial Bond(s), the Paying Agent /Registrar, pursuant to
written instructions from the initial purchaser(s), 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 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
in the event the Bonds are purchased with insurance 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. 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.
B. Form of Definitive Bond.
REGISTERED
NO.
Issue Date:
October 1, 1991
Registered Owner:
Principal Amount:
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS,
MUNICIPAL DRAINAGE UTILITY SYSTEM
REVENUE BOND
SERIES 1991
Interest Rate: Stated Maturity: CUSIP NO:
DOLLARS
The City of Euless (hereinafter referred to as the
"City "), a body corporate and municipal corporation in the
County of Tarrant, 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 (computed on the basis of a 360 -day year of
twelve 30 -day months) on the unpaid Principal Amount hereof
from the Issue Date at the per annum rate of interest specified
above; such interest being payable on January 15 and July 15 of
each year, commencing January 15, 1992. Principal of this Bond
is payable at its Stated Maturity or redemption to the
registered owner hereof, upon its presentation and surrender at
the principal office of the Paying Agent /Registrar executing
the registration certificate appearing hereon, or its
successor. Interest is 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 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 $2,100,000 (herein
referred to as the "Bonds ") to finance the costs of drainage
improvements, including the acquisition, construction and
repair of structures, equipment and facilities for the City's
Municipal Drainage Utility System, under and in strict
conformity with the Constitution and laws of the State of
Texas, including V.T.C.A., Local Government Code, Section
402.051, as amended, and pursuant to an Ordinance adopted by
the governing body of the City (herein referred to as the
"Ordinance ").
The Bonds maturing on and after July 15, 2000 may be
redeemed prior to their Stated Maturities, at the option of the
City, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity by
lot by the Paying Agent /Registrar), on July 15, 1999 or on any
date thereafter at the redemption price of par plus accrued
interest to the date of redemption. At least thirty days prior
to a redemption date for the Bonds, the City shall cause a
written notice of redemption to be sent by United States Mail,
first class postage prepaid, to the registered owners of each
Bond to be redeemed at the address appearing on the Security
Register and subject to the terms and provisions relating
thereto contained in the Ordinance. If this Bond (or any
portion of the principal sum hereof) shall have been called for
redemption and notice of such redemption duly given, this Bond
(or the portion of the principal sum hereof to be redeemed)
shall become due and payable and interest shall cease to accrue
and be payable from and after the redemption date provided
sufficient funds to accomplish such redemption are held by the
Paying Agent /Registrar on the redemption date.
-10-
In the event of a partial redemption of the principal
amount of this Bond, payment of the redemption price of such
principal amount shall be made to the registered owner only
upon presentation and surrender of this Bond to the Designated
Payment /Transfer Office of the Paying Agent /Registrar, and
there shall be issued to the registered owner hereof, without
charge, a new Bond or Bonds of like maturity and interest rate
in any authorized denominations provided in the Ordinance for
the then unredeemed balance of the principal sum hereof. If
this Bond is called for redemption, in whole or in part, the
City and the Paying Agent /Registrar shall not be required to
transfer this Bond to an assignee of the Holder within 45 days
of the redemption date therefor; provided, however, such
limitation on transferability shall not be applicable to an
exchange by the Holder of the unredeemed balance hereof in the
event of its redemption in part.
The Bonds are special obligations of the City, payable
solely from and equally and ratably secured by a first lien on
and pledge of the Revenues (as defined in the Ordinance) of the
City's Municipal Drainage Utility System (as defined in the
Ordinance and hereinafter referred to as 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 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 equally and ratably
secured by a parity lien on and pledge of the Revenues of the
System, in the same manner and to the same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which
is on file in the principal office of the Paying
Agent /Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions
of terms; a description of and the nature and extent of the
security for the Bonds, including the Revenues pledged to the
payment of the Bonds and the lien and pledge securing the
payment of the Bonds; conditions for the issuance of additional
revenue obligations; rights and conditions relating to
transferability 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;
provisions relating to the defeasance and discharge of the
liens, pledges, charges and covenants contained in the
Ordinance at or prior to the maturity or redemption of this
-11-
Bond; and for other terms and provisions contained therein.
Capitalized terms used herein have the same meanings assigned
in the Ordinance.
This Bond, subject to 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 non - payment of
interest on a scheduled payment date and for thirty (30) days
thereafter, a new record date for such interest payment (a
"Special Record Date ") will be established by the Paying
Agent /Registrar, if and when funds for the payment of such
interest have been received from the City. Notice of the
Special Record Date and of the scheduled payment date of the
past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days
prior to the Special Record Date by United States Mail, first
class postage prepaid, to the address of each 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.
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
-12-
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 a pledge of the 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 Issue Date.
COUNTERSIGNED:
City Secretary
(SEAL)
CITY OF EULESS, TEXAS
Mayor
C. *Form of Registration Certificate of Comptroller of
Public Accounts to Appear on Initial Bond only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
REGISTER NO.
OF PUBLIC ACCOUNTS )
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.
this
(SEAL)
WITNESS my signature and seal of office
Comptroller of Public Accounts
of the State of Texas
*NOTE TO PRINTER: Do not print on definitive bonds
-13-
D. Form of Certificate of Paying Agent /Registrar to Appear on
Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR
This Bond has been duly issued and registered in the name
of the Registered Owner shown above 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 principal offices of the Paying Agent /Registrar in
Dallas, Texas, is the "Designated Payment /Transfer Office" for
this Bond.
Registration Date: AMERITRUST TEXAS NATIONAL
ASSOCIATION,
as Paying Agent /Registrar
By
Authorized Signature
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns, and transfers unto (Print or typewrite name,
address, and zip code of transferee:) ........... I.........
............................. ...............................
......... ...............................
(Social Security or other identifying
................) the within Bond and
and hereby irrevocably constitutes an
......... ...............................
attorney to transfer the within Bond
registration thereof, with full power
premises.
DATED:
....................
number: .............
all rights thereunder,
I appoints ...........
....................
on the books kept for
of substitution in the
NOTICE: The signature on this
Signature guaranteed: assignment must correspond with
the name of the registered owner
as it appears on the face of the
within Bond in every particular.
-14-
F.
follows:
(i) immediately under the name of the bond the headings
"Interest Rate " and "Stated Maturity "
shall both be omitted ";
(ii) Paragraph one shall read as follows:
The City of Euless (hereinafter referred to as the
"City "), a body corporate and municipal corporation in the
County of Tarrant, 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, the Principal Amount
hereinabove stated on July 15 in each of the years and in
principal installments in accordance with the following
schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS 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, computed on the basis of a
360 -day year of twelve 30 -day months, on the unpaid principal
amounts hereof from the Issue Date at the per annum rates of
interest specified above; such interest being payable on
January 15 and July 15 in each year, commencing January 15,
1992. Principal installments of this Bond are payable in the
year of maturity or on a prepayment date to the registered
owner hereof by Ameritrust Texas National Association (the
"Paying Agent /Registrar "), upon presentation and surrender, at
its principal offices in Dallas, Texas (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 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,
-15-
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 all purposes of this
Ordinance and in particular for clarity with respect to the
issuance of the Bonds herein authorized and the pledge and
appropriation of revenues to the payment of the Bonds, the
following definitions are provided:
"Act" - Subchapter C of Chapter 402 of the Local
Government Code, as amended.
"Additional Bonds" - Revenue bonds or other
evidences of indebtedness issued or entered into, as
the case may be, in the future in accordance with the
terms and conditions provided in Section 18 hereof
and, by their terms, are equally and ratably secured
by a parity lien on and pledge of the Revenues of the
System.
"Average Annual Debt Service" - An amount which,
at the time of computation, is derived by dividing
the total amount of Debt Service to be paid over a
period of years as the same is scheduled to become
due and payable by the number of years taken into
account in determining the total Debt Service.
Capitalized interest payments provided from bond
proceeds shall be excluded in making the
aforementioned computation.
"Bonds" - The "City of Euless, Texas, Municipal
Drainage Utility System Revenue Bonds, Series 1991"
authorized by this Ordinance.
"Bonds Similarly Secured" - Collectively, the
Bonds and Additional Bonds.
"City" - The incorporated municipality known as
the City of Euless located in Tarrant County, Texas.
"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 o£, premium, if any, and interest (to the
extent not capitalized) on such obligations;
-16-
assuming, in the case of obligations without a fixed
numerical rate, that such obligations bear, or would
have borne, interest at the highest rate reached, or
that would have been applied to such obligations
(using the index or measure for computing interest
applicable to such obligations) during the
twenty -four (24) month period next preceding the date
of computation, and further assuming in the case of
obligations required to be redeemed or prepaid as to
principal prior to maturity, the principal amounts
thereof will be redeemed prior to maturity in
accordance with such applicable mandatory redemption.
"Fiscal Year" - The twelve month financial
accounting period used by the City in connection with
the operation of the System which may be any twelve
consecutive month period established by the City.
"Government Obligations" - 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.
"Operating and Maintenance Expenses" - All
current expenses of operating and maintaining the
System, including all salaries, labor, materials, and
administrative costs, allocable under generally
accepted accounting principles, to the System.
Depreciation charges and other costs and
disbursements which may be capitalized under
generally accepted accounting principles shall not be
considered Operating and Maintenance Expenses.
"Outstanding" - When used in this Ordinance with
respect to Bonds or Bonds Similarly Secured, as the
case may be, means, as of the date of determination,
all Bonds and Bonds Similarly Secured theretofore
sold, issued and delivered by the City, except:
(1) Bonds or Bonds Similarly Secured
cancelled or delivered to the transfer
agent or registrar for cancellation in
.connection with the exchange or transfer of
such obligations;
-17-
(2) Bonds or Bonds Similarly Secured
paid or deemed to be paid in accordance
with the provisions of Section 28 hereof;
and
(3) Bonds or Bonds Similarly Secured
that have been mutilated, destroyed, lost,
or stolen and replacement bonds have been
registered and delivered in lieu thereof.
"Required Reserve" - The total amount required
to be accumulated and maintained in the Reserve Fund
under the provisions of Section 14 hereof.
"Revenues" - All income, receipts and revenues
of every nature derived or received from the
operation and ownership (excluding restricted gifts,
grants in aid of construction and any amounts
received from drainage charges specifically provided
by ordinance for contribution to the funding of
future drainage system construction) 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 Revenues of the System.
"Municipal Drainage Utility System" or "System"
- All land, easements and interest in land, together
with all structures, equipment and facilities used in
draining benefitted property (within the meaning of
the Act) , including, but not limited to, bridges,
catch basins, channels, conduits, creeks, culverts,
detention ponds, ditches, draws, flumes, pipes,
pumps, sloughs, treatment works, and appurtenances to
those items, whether natural or artificial, or using
force or gravity, that are used to draw off surface
water from land, carry the water away, collect,
stole, or treat the water, or divert the water into
natural or artificial watercourses.
SECTION 11: Pledge. The City hereby covenants and
agrees that the Revenues of the System, with the exception of
those in excess of the amounts required for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably
pledged, to the payment and security of the Bonds and
Additional Bonds, if issued, including the establishment and
maintenance of the special funds created and established by
this Ordinance, all as hereinafter provided, and it is hereby
-18-
ordained that such pledge of the Revenues securing the payment
of the Bonds Similarly Secured and interest thereon shall
constitute a first lien on such Revenues and be valid and
binding in accordance with the terms hereof without any filing
or recording thereof (except in the official records of the
City) or physical delivery of such Revenues or further act by
the City.
SECTION 12: System Fund. The City hereby covenants and
agrees that the Revenues of the System (excluding earnings and
income derived from investments held in the Bond 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 "Drainage
Utility System Fund" (herein called the "System Fund "). 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 the amounts required
to be deposited in the Bond Fund for the payment of
Debt Service on the Bonds Similarly Secured as the
same becomes due and payable.
Second: To the payment of the amounts required
to be deposited in the Reserve Fund to establish and
maintain the Required Reserve in accordance with the
provisions of this Ordinance or any other ordinance
relating to issuance of Bonds Similarly Secured.
Revenues remaining in the System Fund after satisfying the
foregoing payments, or making adequate and sufficient provision
for the payment thereof, may be transferred to the City's
general fund or used for any other purpose now or hereafter
permitted by law.
SECTION 13: Bond Fund. For purposes of providing funds
to pay the principal of and interest on the Bonds Similarly
Secured as the same becomes due and payable, the City agrees to
create or maintain a special account on the books and records
of the City known as the "City of Euless Drainage Utility
System Revenue Bond Interest and Sinking Fund" (the "Bond
Fund "). All monies deposited to the credit of such Fund shall
be held in a fund or account maintained at an official
depository of the City. The City covenants that there shall be
deposited into the Bond Fund prior to each principal and
interest payment date from the Revenues an amount equal to one
hundred per centum (100° %) of the the interest on and the
principal of the Bonds then falling due and payable by reason
of maturity or redemption, and such deposits to pay principal
-19-
and accrued interest on the Bonds shall be made in
substantially equal monthly installments on or before the 10th
day of each month, beginning the month next following the
delivery of the Bonds to the initial purchaser(s).
The required monthly deposits to the Bond Fund for the
payment of principal of and interest on the Bonds shall
continue to be made as hereinabove provided until (i) the total
amount on deposit in the Bond Fund and Reserve Fund is equal to
the amount required to fully pay and discharge all Outstanding
Bonds Similarly Secured (principal and interest) or (ii) the
Bonds are no longer Outstanding.
Accrued interest and premium, if any, received from the
purchaser(s) of the Bonds, as well as earnings derived from the
investment of moneys in the Bond Fund, shall be deposited to
the credit of the Bond Fund and taken into consideration and
reduce the amount of the monthly deposits hereinabove required
to be deposited in the Bond Fund from the Revenues of the
System.
SECTION 14: Reserve Fund. For purposes of accumulating
and maintaining a reserve amount for the payment of the Bonds
Similarly Secured, the City agrees and covenants to create and
maintain a special fund or account on its books and records
known as the "City of Euless Drainage Utility System Revenue
Bond Reserve Fund" (the "Reserve Fund "). All moneys deposited
to the credit of such Fund shall be held in a fund or account
maintained at an official depository of City funds. All funds
deposited to the credit of the Reserve Fund (excluding
investment or deposit earnings and income which may be
transferred to the System Fund established 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.
Initially, the total amount to be accumulated and
maintained in the Reserve Fund by reason of the issuance of the
Bonds shall be an amount equal to the Average Annual Debt
Service for the Bonds (calculated on a Fiscal Year basis), and
hereinafter referred to as the "Required Reserve ". Beginning
on or before the 10th day of the month next following the
-20-
delivery of the Bonds to the initial purchasers on or before
the 10th day of each following month until the Required Reserve
has been accumulated in said Fund, the City covenants and
agrees to cause an amount to be deposited in the Reserve Fund
equal to at least 1 /60th of the Required Reserve.
When Additional Bonds are delivered or incurred, the
Required Reserve shall be increased, if required, to an amount
equal to the lesser of (i) the Average Annual Debt Service
(calculated on a Fiscal Year basis) for all Bonds Similarly
Secured then Outstanding, as determined on the date each series
of Additional Bonds are delivered or incurred and annually
following each principal payment date or redemption date for
Bonds Similarly Secured, 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. Any
additional amount required to be maintained in the Reserve Fund
shall be so accumulated by the deposit in the Reserve Fund of
all or any part thereof in cash immediately after the delivery
of the then proposed Additional Bonds, or, at the option of the
City, by the deposit of monthly installments, made on or before
the 10th day of each month following the month of delivery of
the then proposed Additional Bonds, of not less than 1 /60th of
the additional amount to be maintained in said Fund by reason
of the issuance of the Additional Bonds then being issued (or
1 /60th of the balance of the additional amount not deposited
immediately in cash).
While 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 (other than
as the result of the initial funding of the Required Reserve or
issuance of Additional Bonds as provided in the preceding
paragraph), the City covenants and agrees to cure the
deficiency in the Required Reserve by making monthly deposits
on or before the 10th day of each month to said Fund from the
Revenues in amounts equal to not less than 1 /60th of the then
total Required Reserve to be maintained in said Fund 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 Bond Fund,
the 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.
-21-
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.
SECTION 15: Deficiencies; Excess Revenues. (a) If on
any occasion there shall not be sufficient Revenues of the
System to make the required deposits into the Bond Fund and the
Reserve Fund, then such deficiency shall be cured as soon as
possible from the next available Revenues of the System, or
from any other sources available for such purpose.
(b) Subject to making the required deposits to the Bond
Fund and the Reserve Fund in accordance with the provisions of
this Ordinance, or any ordinance authorizing the issuance of
Additional Bonds, the excess Revenues may be transferred to the
City's general operating fund or used by the City for any
lawful purpose.
SECTION 16: Payment of Bonds. While any of the
Bonds are Outstanding, the Director of Finance (or other
designated financial officer of the City) shall cause to be
transferred to the Paying Agent /Registrar, from funds on
deposit in the Bond Fund, and, if necessary, in the Reserve
Fund, amounts sufficient to fully pay and discharge promptly as
each installment of interest and principal cf the Bonds accrues
or matures or comes due by reason of redemption prior to
maturity; 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 payment for the Bonds.
SECTION 17: Investments - Security of Funds.
(a) Money in any Fund established pursuant to this Ordinance
ray, at the option of the City, be invested in funds and
obligations authorized and identified in the Public Funds
Investment Act of 1987, as amended or other applicable law;
provided, however, the investment of moneys held in the Bond
Fund and Reserve Fund shall be restricted to time deposits or
certificates of deposit secured (to the extent not insured by
the Federal Deposit Insurance Corporation) by obligations of
the type hereinafter described, or be invested, including
investments held in book -entry form, in direct obligations of
the United States of America and obligations guaranteed or
insured by the United States of America, which, in the opinion
of the Attorney General of the United States, are backed by its
full faith and credit or represent its general 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 and
-22-
provided further the maximum stated maturity for any investment
acquired with money in the Reserve Fund shall be limited to
five (5) years from the date of the investment of such money.
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 Bond Fund
immediately shall be credited to, and any losses debited to,
the Bond 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.
(b) To the extent amounts deposited to the credit of any
Funds referenced herein are not invested, such uninvested
amounts shall be secured in the manner and to the fullest
extent required by the laws of the State of Texas for the
security of public funds.
SECTION 18: Issuance of Additional Obligations. 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
authorized purpose, including the issuance of refunding bonds.
Such Additional Bonds may be issued in such form and manner as
now or hereafter authorized by the laws of the State of Texas
for the issuance of evidences of indebtedness or other
instruments, and should new methods or financing techniques be
developed that differ from those now available and in normal
use, the City reserves the right, to employ the same in its
financing arrangements provided only that the following
conditions precedent for the authorization and issuance of the
same are satisfied, to wit:
(1) The 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 her 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 Revenues of the System that would materially
affect the security or payment of such obligations
-23-
and (b) either (i) payments into all special Funds
maintained for the payment and security of all
outstanding obligations payable from and secured by a
lien on and pledge of the Revenues of the System have
been made and. that the amounts on deposit in such
special Funds equal or exceed 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 January 15 or
July 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 a Certified Public Accountant to the
effect that, according to the books and records of
the City, the Revenues for the last completed Fiscal
Year, or for 12 consecutive months out of the 18
months, immediately preceding the date of issuance of
the Additional Bonds (the date of issuance being the
date of delivery of all or a portion of the
Additional Bonds to the initial purchasers) are at
least equal to (i) 1.25 times the Average Annual Debt
Service for all Outstanding Bonds Similarly Secured
after giving effect to the issuance of the Additional
Bonds then being issued and (ii) 1.10 times the
maximum annual Debt Service payment to be paid in a
Fiscal Year for the Outstanding Bonds Similarly
Secured after giving effect to the issuance of the
Additional Bonds then being issued. In making a
determination of the Revenues, the Accountant may
take into consideration a change in the charges for
services afforded by the System that became effective
at least sixty (60) days prior to the last day of the
period for which Revenues are determined and, for
purposes of satisfying the above Revenues test, make
a pro forma determination of the Revenues of the
System for the period of time covered by his
certification or opinion based on such change in
charges being in effect for the entire period covered
by the certificate or opinion of the Accountant.
SECTION 19: Refunding Bonds. 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
-24-
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 (3) of Section 18 hereof shall be satisfied and
the certificate or opinion of the Accountant required in
subparagraph (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).
SECTION 20: Obligations of Inferior Lien and
Pledge. The City hereby reserves the right to issue
obligations payable from and secured by a lien on and pledge of
the 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.
SECTION 21: Drainage Charges. For the benefit of the
Holders of the Bonds and in accordance with the provisions of
the Act and other applicable laws of the State of Texas, the
City hereby expressly stipulates and agrees, while any of the
Bonds are Outstanding, to establish, maintain and impose
drainage charges for services afforded by the System that are
reasonably expected, on the basis of available information and
experience and with due allowance for contingencies, to produce
Revenues in each Fiscal Year:
(1) sufficient to pay the principal of and
interest on the Bonds Similarly Secured and the
amounts required to be deposited in any reserve or
contingency fund created for the payment and security
of the Bonds Similarly Secured, and other obligations
or evidences of indebtedness issued or incurred that
are payable only from and secured solely by a lien on
and pledge of the Revenues of the System,
(2) in an amount equivalent to at least 1.25
times the annual Debt Service for the Fiscal Year on
the Bonds Similarly Secured then Outstanding, and
(3) to pay all other indebtedness payable from
and /or secured in whole or in part by a lien on and
pledge of the Revenues of the System.
SECTION 22: Insurance. 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 customarily carried by municipal
corporations in Texas on such kind of properties; provided,
-25-
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
knowledgable in such matters a written evaluation of the
adequacy of such self- insurance and /or insurance coverage and
of any recommended changes in regard to the City's
insurance /self- insurance policies, practices and procedures.
SECTION 23: Sale or Lease of Properties. The City, to
the extent and in the manner authorized by law, may sell or
exchange for consideration representing the fair value thereof,
as determined by the City Council of the City, any property of
the System which is obsolete, damaged or worn out or otherwise
unsuitable. The proceeds of any sale of properties of the
System shall be deposited in the System Fund.
SECTION 24: Records and Accounts. The City hereby
covenants and agrees that while any Bonds remain Outstanding,
it will keep and maintain separate and complete records and
accounts pertaining to the receipt and disbursement of Revenues
of the System in accordance with generally accepted accounting
principles, as well as an inventory or list of System
properties. 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 the inventory of System properties. The
City further agrees that annually an audit of the books and
accounts of the System shall 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 receipts and
disbursements 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.
-26-
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 15%
or more in principal amount of said Bonds. Such required
annual audit of the financial records and accounts of the City
shall be completed, insofar as possible, within 120 days
following the close of each Fiscal Year and may be a part of
the annual audit made of all City records and accounts.
SECTION 25: Special Covenants. The City further
covenants and agrees by and through this Ordinance as follows:
(1) It has the lawful power to pledge the
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, including the Act, and that the Bonds
issued hereunder, 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.
(2) The 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 Bonds.
(3) To exercise and pursue with due diligence
available remedies provided by law for the collection
of delinquent drainage charges, including the power
under Section 402.050 of the Act to discontinue all
utility services, particularly water and sewer
services provided by the City to a user of benefitted
property who is delinquent in the payment of drainage
charges.
SECTION 26: Remedy in Event of Default. In addition
to all rights and remedies provided by the laws of the State of
Texas, the City covenants and agrees particularly that in the
event the City (a) defaults in payments to be made to the Bond
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 Holders 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
-27-
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 27: Special Obligations. The Bonds are special
obligations of the City payable from the pledged Revenues and
the Holders thereof shall never have the right to demand
payment thereof out of funds raised or to be raised by taxation.
SECTION 28: Satisfaction of Obligation 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 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 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 (9) 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 29: 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, to cure any ambiguity,
inconsistency, or formal defect or omission herein and to
provide additional security for the payment of the Bonds
Similarly Secured. In addition, the City may, with the written
consent from the the owners holding a majority in aggregate
principal amount of the Bonds Similarly Secured then
Outstanding (excluding Bonds Similarly Secured acquired by or
held for the account of the City) affected thereby, amend, add
to, or rescind any of the provisions of this Ordinance;
provided that, without the written. consent of all Holders of
Bonds then Outstanding, 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 or Bonds Similarly Secured,
as the case may be, required to be held for consent to any such
amendment, addition, or rescission.
-29-
SECTION 30: 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 31: Covenants to Maintain Tax - Exempt Status.
(a) Definitions. when used in this Section 31, the
following terms have the following meanings:
"Code" means the Internal Revenue Code of 1986,
as amended by all legislation, if any, enacted on or
before the Issue Date.
"Computation Date" has the meaning stated in
Treas. Reg. § 1.148- 8T(b)(1).
"Gross Proceeds" has
Treas. Reg. § 1.148- 8T(d).
"Investment" has the
Reg. § 1.148- BT(e).
the meaning stated in
meaning stated in Treas.
-30-
"Issue Date" means the date on which the Bonds
are first authenticated and delivered to the initial
purchasers against payment therefor.
"Nonpurpose Investment" means any Investment in
which Gross Proceeds of the Bonds are invested and
which is not acquired to carry out the governmental
purpose of the Bonds.
"Yield of"
(1) any Investment shall be computed
in accordance with Treas. Reg. §1.148 -2T,
and
(2) the Bonds has the meaning stated
in Treas. Reg. § 1.148 -3T.
(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 the interest on
any Bond 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 shall have received 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 exclusion of
interest on any Bond from gross income for federal income tax
purposes pursuant to Section 103 of the Code, 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, at all times prior to the last
Stated Maturity of Bonds,
(1) shall exclusively own, operate, and possess
all property acquired, constructed or improved
directly or indirectly with Gross Proceeds of the
Bonds and shall not use or permit the use of such
Gross Proceeds or any property acquired, constructed,
or improved with such Gross Proceeds in any activity
carried on by any person or entity other than a state
or local government, unless such use is solely as a
member of the general public, or
-31-
(2) shall not directly or indirectly impose or
accept any charge or other payment for use of Gross
Proceeds of the Bonds or for any property acquired,
constructed or improved indirectly with such Gross
Proceeds, other than taxes of 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 of the Bonds in any Investment (or use
such Gross Proceeds to replace money so invested), if as a
result of such investment the Yield of all Investments
allocated to such Gross Proceeds 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 with
the Secretary of the Treasury the information required by
section 149(e) of the Code with respect to the Bonds on such
form and in such place as such Secretary may prescribe.
-32-
(h) No Rebate Required. The City warrants and represents
that it satisfies the requirements of paragraphs (2) and (3) of
section 148(f) of the Code with respect to the Bonds without
making the payments to the United States described in such
section. Specifically, the City warrants and represents that
(1) the City is a governmental unit with
general taxing powers;
(2) at least 95% of the Gross Proceeds of the
Bonds will be used for the local governmental
activities of the City;
(3) the aggregate face amount of all tax - exempt
obligations issued or expected to be issued by the
City (and all subordinate entities thereof) in the
calendar year in which the Bonds are issued is not
reasonably expected to exceed $5,000,000;
(i) Not Hedge Bonds. The proceeds of the Bonds will not
be invested or used in a manner that would cause the Bonds to
be "hedge bonds" under Section 149(g) of the Code.
(j) Qualified Tax Exempt Obligations. In accordance with
the provisions of paragraph (3) of subsection (b) of Section
265 of the Code, the City hereby designates the Bonds to be
"qualified tax exempt obligations" in that the Bonds are not
"private activity bonds" as defined in the Code and the
reasonably anticipated amount of "qualified tax exempt
obligations" to be issued by the City (including all
subordinate entities of the City) for the calendar year in
which the Bonds are issued will not exceed $10,000,000.
SECTION 32: Sale of the Bonds. The Bonds authorized
by this Ordinance are hereby sold by the City to Smith Barney,
Harris Upham & Co., Incorporated and NCNB Capital Markets, Inc.
(herein referred to as the "Purchasers ") in accordance with the
Purchase Contract, dated October 8, 1991, attached hereto as
Exhibit A and incorporated herein by reference as a part of
this Ordinance for all purposes. The Mayor is hereby
authorized and directed to execute said Purchase Contract for
and on behalf of the City and as the act and deed of this
Council. In regard to the approval and execution of the
Purchase Contract, the Council hereby finds, determines and
declares that the representations, warranties and agreements of
the City Contained in paragraph 6 of such agreement therein are
true and correct in all material respects and shall be honored
and performed by the City.
-33-
SECTION 33: Control and Custody of Bonds. The Mayor
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
initial purchasers.
Furthermore, the Mayor, City Secretary, Director of
Finance and Human Resourses and City Manager, 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 a
certification as to facts, estimates, circumstances and
reasonable expectations pertaining to the use and expenditure
and investment of the proceeds of the Bonds as may be necessary
for the approval of the Attorney General, registration by the
Comptroller of Public Accounts and 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 arrangements for the delivery of the Initial Bonds (s)
to the initial purchasers.
SECTION 34: Official Statement. Furthermore, the
use of the Preliminary Official Statement by the Purchasers in
connection with the public offering and sale of the Bonds is
hereby ratified, confirmed and approved in all respects. The
final Official Statement, being a modification and amendment of
the Preliminary Official Statement to reflect the terms of
sale, attached as Exhibit A to the Purchase Contract (together
with such changes approved by the Mayor, City Secretary,
Director of Finance and Human Resources and City Manager, any
one or more of said officials), shall be and is hereby in all
respects approved and the Purchasers are hereby authorized to
use and distribute said final Official Statement, dated October
8, 1991, in the reoffering, sale and delivery of the Bonds to
the public. The Mayor and City Secretary are further
authorized and directed to manually execute and deliver for and
on behalf of the City copies of said Preliminary Official
Statement and Official Statement in final form as may be
required by the Purchasers, and such final Official Statement
in the form and content manually executed by said officials
shall be deemed to be approved by the City Council and
constitute the Official Statement authorized for distribution
and use by the Purchasers.
SECTION 35: Construction Fund. The proceeds of sale of
the Bonds, excluding the accrued interest and premium, if any,
received from the purchasers shall be deposited in a Series
1991 Drainage Utility System Construction Fund maintained at
-34-
the City's depository bank. Pending expenditure for authorized
projects and purposes, such proceeds of sale may be invested in
authorized investments and any investment earnings realized may
be expended for such authorized projects and purposes or
deposited in the Bond Fund as shall be determined by the City
Council. All excess proceeds of sale of the Bonds, including
investment earnings, remaining after completion of all
authorized projects or purposes and amounts, if any, required
to be rebated to the Federal government, shall be deposited to
the credit of the Bond Fund. All money deposited to the credit
of the Construction Fund, pending disbursement and expenditure
for authorized projects and purposes, shall be and is hereby
pledged to the payment of the principal of and interest on the
Bonds; provided, however, the pledge and encumbrance of the
proceeds of sale of the Bonds deposited to the credit of the
Construction Fund shall be terminated and released on amounts
withdrawn and disbursed by the City without filing any release
or further action by the City other than the act of withdrawing
or disbursing such amount from the Construction Fund.
SECTION 36: 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 as it appears in the Security Register.
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 37: Cancellation. All Bonds surrendered for
payment, redemption, transfer or exchange, if surrendered to
the Paying Agent /Registrar, shall be promptly cancelled by it
and, if surrendered to the City, shall be delivered to the
Paying Agent /Registrar and, if not already cancelled, shall be
promptly cancelled 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
-35-
whatsoever, and all Bonds so delivered shall be promptly
cancelled by the Paying Agent /Registrar. All cancelled Bonds
held by the Paying Agent /Registrar shall be destroyed as
directed by the City.
SECTION 38: Printed Opinion. The obligation of the
initial purchasers to accept delivery of the Bonds is subject
to being furnished a final opinion of Fulbright & Jaworski,
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. Printing of a true and
correct reproduction of said opinion on the reverse side of
each of the definitive Bonds is hereby approved and authorized.
SECTION 39: 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 40: 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, this Ordinance and all its provisions
being intended to be and being for the sole and exclusive
benefit of the City, the Paying Agent /Registrar and the Holders.
SECTION 41: 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 42: 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 43: 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 and the
application thereof to other circumstances shall nevertheless
be valid, and the Council hereby declares that this Ordinance
would have been enacted without such invalid provision.
-36-
SECTION 44: 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 45: Insurance. The Bonds have been offered
and sold with the principal of and interest thereon being
insured by AMBAC Indemnity Corporation (hereinafter called
"AMBAC ") pursuant to a Municipal Bond Guaranty 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:
(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) Defeasance. 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 Guaranty Insurance Policy is in
effect, the City shall furnish to AMBAC:
-37-
(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 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 Bond 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
-38-
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.
(9) the City shal.l 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)
-39-
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 46: 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, place, and subject matter of the public business
to be considered at such meeting, including this Ordinance, was
given, all as required by Article 6252 -17, Vernon's Texas Civil
Statutes, as amended.
-40-
SECTION 47: Effective Date. This Ordinance shall take
effect and be in full force from and after its second reading
and final adoption on the date shown below, and it is so
ordained.
PASSED ON FIRST READING, September 24, 1991.
PASSED ON SECOND
October 8, 1991.
ATTEST:
City Secretary
(City Seal)
5 9 1 0 3
READING AND FINALLY ADOPTED, this
CITY OF EULESSS, TEXAS:
ACS/ /YN
Mayor
-41-