98-040 ORD AUTHORIZE TEXAS TAX AND REVENUE REFUNDING BONDS, SERIES 1998ORDINANCE 98-040
AUTHORIZING THE ISSUANCE OF CITY OF PARIS, TEXAS TAX AND REVENUE
REFUNDING BONDS, SERIES 1998, APPROVING AN OFFICIAL STATEMENT,
AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT AND THE
EXECUTION OF AN ESCROW AGREEMENT, AND MAKING PROVISIONS FOR THE
SECURITY THEREOF, AND ORDAINING OTHER MATTERS RELATING TO THE
SUBJECT
THE STATE OF TEXAS
§
COUNTY OF LAMAR
§
CITY OF PARIS
§
WHEREAS, the City of Paris, Texas (the "Issuer") has duly issued and there is now
outstanding pursuant to Articles 1111 through 1118, Article 1175, and Article 717k, as amended,
V.A.T.C.S. the following series or issues of bonds being secured solely by a lien on and pledge of
the Net Revenues of the Issuer's Waterworks and Sewer System:
Waterworks and Sewer System Revenue Bonds, Series 1992, dated April 1, 1992,
maturities December 15, 1998 through December 15, 2011, now outstanding in the
principal amount of $7,980,000 (the "Series 1992 Bonds" or "Outstanding Revenue
Bonds");
Waterworks and Sewer System Revenue Bonds, Series 1997, dated February 15,
1997, maturities June 15, 1999 through June 15, 2016, now outstanding in the
principal amount of $5,000,000 (the "Series 1997 Bonds" or "Outstanding Revenue
Bonds");
and the following series or issues of Bonds and Certificates of Obligation being secured by ad
valorem taxes and a pledge of surplus revenues of the Waterworks and Sewer System:
Tax and Revenue Refunding Bonds, Series 1991, dated November l, 1991,
maturities December 15, 1998 through December 15, 2011, now outstanding in the
principal amount of $13,075,000 (the "Series 1991 Bonds");
Certificates of Obligation, Series 1993, dated December 15, 1993, maturities
December 15, 1998 through December 15, 2013, now outstanding in the principal
amount of $4,485,000 (Series 1993 Certificates of Obligation");
Certificates of obligation, Series 1994, dated August 15, 1994, maturities December
15, 1998 through December 15, 2014, now outstanding in the principal amount of
$5,005,000 (Series 1994 Certificates of Obligation"); and
WHEREAS, the Issuer now desires to refund a portion of maturities 2002 through 2011 of
the Taac and Revenue Refunding Bonds, Series 1991 Bonds in the principal amount of $5,380,000
(the "Refunded Bonds"); and
WHEREAS, the City Council of the Issuer deems it advisable to refund the Refunded Bonds
in order to achieve a gross savings of approximately $368,694.70 and a present value savings of
$326,722.68; and
WHEREAS, Article 717k, V.A.T.C.S. authorizes the Issuer to issue refunding bonds and to
deposit the proceeds from the sale thereof together with any other available funds or resources,
directly with a place of payment (paying agent) for the Refunded Bonds, and such deposit, if made
before such payment dates, shall constitute the making of firm banking and financial arrangements
for the discharge and final payment of the Refunded Bonds; and
WHEREAS, Article 717k further authorizes the Issuer to enter into an escrow agreement
with the paying agent for the Refunded Bonds with respect to the safekeeping, investment,
reinvestment, administration and disposition of any such deposit, upon such terms and conditions
as the Issuer and such paying agent may agree, provided that such deposits may be invested and
reinvested including obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, and which shall mature and bear interest payable at such
times and in such amounts as will be sufficient to provide for the scheduled payment or prepayment
of the Refunded Bonds; and
WHEREAS, The Bank of New York, New York, New York (successor to NCNB Texas,
Dallas, Texas) is the paying agent for the Refunded Bonds and the Escrow Agreement hereinafter
authorized, constitutes an agreement of the kind authorized and permitted by said Article 717k; and
WHEREAS, all the Refunded Bonds mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized.
WHEREAS, the bonds hereinafter authorized aze to be issued and delivered pursuant to
Articles 1111 through 1118, V.A.T.C.S. and Article 717k, V.A.T.C.S.; and
WHEREAS, the meeting was open to the public and public notice of the time, place and
purpose of said meeting was given pursuant to Chapter 551, Texas Government Code.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
Section 1. AMOLJNT AND PURPOSE OF THE BONDS. The bond or bonds of the City
of Paris (the "Issuer") are hereby authorized to be issued and delivered in the aggregate principal
amount of $5,810,000, for the purpose of refunding maturities 2002 through 2011 of the Refunded
Bonds.
2
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance
shall be designated: "CITY OF PARIS, TEXAS TAX AND REVENUE REFLTNDING BOND,
SERIES 1998", and initially there shall be issued, sold, and delivered hereunder a single fully
registered bond, without interest coupons, payable in annual installments of principal (the "Initial
Bond"), but the Initial Bond may be assigned and transferred and/or converted into and exchanged
for a like aggregate principal amount of fully registered bonds, without interest coupons, having
serial and annual maturities, and in the denomination or denominations of $5,000 or any integral
multiple of $5,000, all in the manner hereinafter provided. The term "Bonds" as used in this
Ordinance shall mean and include collectively the Initial Bond and all substitute bonds exchanged
therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and the
term "Bond" shall mean any of the Bonds.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND. (a) The Initial
Bond is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered
Bond, without interest coupons, dated September 1, 1998, in the denomination and aggregate
principal amount of $5,810,000, numbered R-1, payable in annual installments of principal to the
initial registered owner thereof, to-wit: FIRST SOUTHWEST COMPANY, or to the registered
assignee or assignees of said Bond or any portion or portions thereof (in each case, the "registered
owner"), with the annual installments of principal of the Initial Bond to be payable on the dates,
respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL BOND
set forth in this Ordinance.
(b) The Initial Bond (i) may be prepaid or redeemed prior to the respective scheduled due
dates of installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted
and exchanged for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed,
and the principal of and interest on the Initial Bond shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Bond shall bear interest
from the date of the Initial Bond and will be calculated on the basis of a 360-day year of twelve 30-
day months to the respective scheduled due dates, or to the respective dates of prepayment or
redemption, of the installments of principal of the Initial Bond, and said interest shall be payable,
all in the manner provided and at the rates and on the dates stated in the FORM OF INITIAL BOND
set forth in this Ordinance.
Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including the form
of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be
endorsed on the Initial Bond, shall be substantially as follows:
3
FORM OF INITIAL BOND
NO. R-1
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS, TEXAS
TAX AND REVENUE REFUNDING BOND
SERIES 1998
$5,810,000
The CITY OF PARIS, in LAMAR COLJNTY, Texas (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
FIRST SOUTHWEST COMPANY
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each case,
the "registered owner") the aggregate principal amount of
FIVE MILLION EIGHT HUNDRED TEN THOUSAND DOLLARS
in annual installments of principal due and payable on December 15 in each of the years, and in the
respective principal amounts, as set forth in the following schedule:
YEAR
AMOUNT
YEAR
AMOUNT
2002
$ 460,000
2007
$ 590,000
2003
495,000
2008
615,000
2004
515,000
2009
645,000
2005
540,000
2010
675,000
2006
560,000
2011
715,000
and to pay interest, from the date of delivery of this Bond hereinafter stated, on the balance of each
such installment of principal, respectively, from time to time remaining unpaid, at the rates as
follows:
maturity 2002, 4.05%
maturity 2003, 4.15%
maturity 2004, 4.25%
maturity 2005, 4.30%
maturity 2006, 4.40%
maturity 2007, 4.50%
maturity 2008, 4.50%
maturity 2009, 4.60%
maturity 2010, 4.85%
maturity 2011, 4.95%
4
with said interest being payable on December 15, 1998 and semiannually on each June 15 and
December 15 thereafter while this Bond or any portion hereof is outstanding and unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond aze
payable in lawful money of the United States of America, without exchange or collection charges.
The installments of principal and the interest on this Bond are payable to the registered owner hereof
through the services of The Bank of New York, New York, New York, which is the "Paying
AgentJRegistrar" for this Bond. Payment of all principal of and interest on this Bond shall be made
by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest
payment date by check or draft, dated as of such date, drawn by the Paying AgentlRegistrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this
Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as
hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, on each such principal and/or interest payment date, to the
registered owner hereof, at the address of the registered owner, as it appeazed on the last business
day of the month next preceding each such date (the "Record Date") on the Registration Books kept
by the Paying Agent/Registrar, as hereinafter described, or by such other method acceptable to the
Paying Agent/Registrar requested by, and at the risk and expense of, the registered owner. The
Issuer covenants with the registered owner of this Bond that on or before each principal and/or
interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the
"Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the
payment, in immediately available funds, of all principal of and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where 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.
THIS BOND has been authorized in accordance with the Constitution and laws of the State
of Texas in the principal amount of $5,810,000, for the purpose of refunding a portion of maturities
2002 through 2011 of the City of Paris, Texas Tax and Revenue Refunding Bonds, Series 1992.
ON DECEMBER 15, 2008, or any date thereafter, the unpaid installments of principal of
this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer,
with funds derived from any available source, as a whole, or in part, and, if in part, the Issuer shall
select and designate the maturity, or maturities, and the amount that is to be redeemed, and if less
than a whole maturity is to be called, the Issuer shall direct the Paying Agent/Registrar to call by lot
(provided that a portion of this Bond may be redeemed only in an integral multiple of $5,000), at the
redemption price of the principal amount, plus accrued interest to the date fixed for prepayment or
redemption.
5
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written
notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the
registered owner hereof. By the date fixed for any such prepayment or redemption due provision
shall be made by the Issuer with the Paying AgentlRegistrar for the payment of the required prepay-
ment or redemption price for this Bond or the portion hereof which is to be so prepaid or redeemed,
plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice
of prepayment or redemption is given, and if due provision for such payment is made, all as provided
above, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically
shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest
after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding
except for the right of the registered owner to receive the prepayment or redemption price plus
accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out
of the funds provided for such payment. The Paying Agent/Registraz shall record in the Registration
Books all such prepayments or redemptions of principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any
unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the
initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer
kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms
and conditions set forth in the Bond Ordinance. Among other requirements for such transfer, this
Bond must be presented and surrendered to the Paying AgentJRegistrar for cancellation, together
with proper instruments of assignment, in form and with guazantee of signatures satisfactory to the
Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Bond, or any
portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or aze to be transferred and
registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar
may be used to evidence the assignment of this Bond or any such portion or portions hereof by the
initial registered owner hereof. A new bond or bonds payable to such assignee or assignees (which
then will be the new registered owner or owners of such new Bond or Bonds) or to the initial
registered owner as to any portion of this Bond which is not being assigned and transferred by the
initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond or any portion or portions hereof, but solely in the form and manner as
provided in the next paragraph hereof for the conversion and exchange of this Bond or any portion
hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying
Agent/Registrar as the absolute owner hereof for all purposes, including payment and dischazge of
liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar
shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid or
unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest coupons, payable to the assignee or
assignees duly designated in writing by the initial registered owner hereof, or to the initial registered
owner as to any portion of this Bond which is not being assigned and transferred by the initial
6
registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject
to the requirement hereinafter stated that each substitute bond issued in exchange for any portion of
this Bond shall have a single stated principal maturity date), upon surrender of this Bond to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or converted each
bond issued in exchange for any portion hereof shall have a single stated principal maturity date
corresponding to the due date of the installment of principal of this Bond or portion hereof for which
the substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne by
such installment of principal or portion thereof. Such bonds, respectively, shall be subject to
redemption prior to maturity on the same dates and for the same prices as the corresponding
installment of principal of this Bond or portion hereof for which they are being exchanged. No such
bond shall be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more
assignees, but the bonds issued and delivered in exchange for this Bond or any portion hereof may
be assigned and transfened, and converted, subsequently, as provided in the Bond Ordinance. The
Issuer shall pay the Paying AgentlRegistrar's standard or customary fees and charges for transferring,
converting, and exchanging this Bond or any portion thereof, but the one requesting such transfer,
conversion, and exchange shall pay any taaces or governmental charges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing with the close of business on any Record
Date and ending with the opening of business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or portion thereof called for prepayment or redemption prior
to maturity, within 45 days prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registraz for this Bond is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law, that this Bond is a
general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due, and as such principal matures, have been pledged for such payment within the limit
prescribed by law, and that this Bond is additionally secured from surplus revenues of the Issuer's
combined Waterworks and Sewer System, remaining after payment of all operation and maintenance
expenses thereof, and all debt service and reserve required and any other payments and deposits
required in connection with the Issuer's Outstanding Revenue Bonds, additional parity revenue bonds
or other revenue bonds (now or hereafter outstanding), which are payable from all or any part of the
7
Net Revenues of the issuer's combined Waterworks and Sewer System, all as described in the Bond
Ordinance.
THE ISSUER has reserved the right, subject to the restrictions stated and adopted by
reference in the Ordinance authorizing this Series of Bonds, to issue additional pazity revenue bonds
which also may be made payable from, and secured by a lien on and pledge of the aforesaid Net
Revenues, superior to the pledge for the payment of the Bonds.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of
this Bond or the interest hereon, or from any sources whatsoever other than those described in the
Bond Ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that
the terms and provisions of this Bond and the Bond Ordinance constitute a contract between the
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
signature of the Mayor of the Issuer and countersigned with the manual signature of the City Clerk
of the Issuer, has caused the official seal of the Issuer to be duly impressed on this Bond, and has
caused this Bond to be dated September 1, 1998.
City Clerk Mayor
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. (a) Registration and
Transfer. The Issuer shall keep or cause to be kept at the principal corporate trust office of The Bank
of New York, New York, New York, (the "Paying Agent/Registrar") books or records of the regis-
tration and transfer of the Bonds (the "Registration Books"), and the Issuer hereby appoints the
Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make
such transfers and registrations under such reasonable regulations as the Issuer and Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and regis-
trations as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration
Books the address of the registered owner of each Bond to which payments with respect to the Bonds
shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify the
Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such
interest payments shall not be mailed unless such notice has been given. The Issuer shall have the
right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar,
but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless
otherwise required by law, shall not permit their inspection by any other entity. Registration of each
Bond may be transferred in the Registration Books only upon presentation and surrender of such
Bond to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper
written instruments of assignment, in form and with guarantee of signatures satisfactory to the
Paying AgentlRegistrar, (i) evidencing the assignment of the Bond, or any portion thereof in any
integral multiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such assignee
or assignees to have the Bond or any such portion thereof registered in the name of such assignee
or assignees. Upon the assignment and transfer of any Bond or any portion thereof, a new substitute
Bond or Bonds shall be issued in conversion and exchange therefor in the manner herein provided.
The Initial Bond, to the extent of the unpaid or unredeemed principal balance thereof, may be
assigned and transferred by the initial registered owner thereof once only, and to one or more
assignees designated in writing by the initial registered owner thereof. All Bonds issued and de-
livered in conversion of and exchange for the Initial Bond shall be in any denomination or
denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Bond shall have a single stated principal maturity date), shall be in the form
prescribed in the FORM OF SUBSTITUTE BOND set forth in this Ordinance, and shall have the
characteristics, and may be assigned, transferred, and converted as hereinafter provided. If the Initial
Bond or any portion thereof is assigned and transferred or converted the Initial Bond must be
surrendered to the Paying Agent/Registrar for cancellation, and each Bond issued in exchange for
any portion of the Initial Bond shall have a single stated principal maturity date, and shall not be
payable in installments; and each such Bond shall have a principal maturity date corresponding to
the due date of the installment of principal or portion thereof for which the substitute Bond is being
exchanged; and each such Bond shall bear interest at the single rate applicable to and borne by such
installment of principal or portion thereof for which it is being exchanged. If only a portion of the
Initial Bond is assigned and transferred, there shall be delivered to and registered in the name of the
initial registered owner substitute Bonds in exchange for the unassigned balance of the Initial Bond
in the same manner as if the initial registered owner were the assignee thereof. If any Bond or
portion thereof other than the Initial Bond is assigned and transfened or converted each Bond issued
in exchange shall have the same principal maturity date and bear interest at the same rate as the
9
Bond for which it is exchanged. A form of assignment shall be printed or endorsed on each Bond,
excepting the Initial Bond, which shall be executed by the registered owner or its duly authorized
attorney or representative to evidence an assignment thereof. Upon surrender of any Bonds or any
portion or portions thereof for transfer of registration, an authorized representative of the Paying
Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully
registered substitute Bond or Bonds, having the characteristics herein described, payable to such
assignee or assignees (which then will be the registered owner or owners of such new Bond or
Bonds), or to the previous registered owner in case only a portion of a Bond is being assigned and
transferred, all in conversion of and exchange for said assigned Bond or Bonds or any portion or
portions thereof, in the same form and manner, and with the same effect, as provided in Section 6(d),
below, for the conversion and exchange of Bonds by any registered owner of a Bond. The Issuer
shall pay the Paying AgentlRegistrar's standard or customary fees and charges for making such trans-
fer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall pay any
taxes or other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make transfers of registration of any Bond or any portion
thereof (i) during the period commencing with the close of business on any Record Date and ending
with the opening of business on the next following principal or interest payment date, or, (ii) with
respect to any Bond or any portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date.
(b) OwnershiQ of Bonds. The entity in whose name any Bond shall be registered in the
Registration Books at any time shall be deemed and treated as the absolute owner thereof for all
purposes of this Ordinance, whether or not such Bond shall be overdue, and the Issuer and the
Paying AgentlRegistrar shall not be affected by any notice to the contrary; and payment of, or on
account of, the principal of, premium, if any, and interest on any such Bond shall be made only to
such registered owner. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
(c) Pavment of Bonds and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds, and
to act as its agent to convert and exchange or replace Bonds, all as provided in this Ordinance. The
Paying AgentlRegistrar shall keep proper records of all payments made by the Issuer and the Paying
Agent/Registrar with respect to the Bonds, and of all conversions and exchanges of Bonds, and all
replacements of Bonds, as provided in this Ordinance. However, in the event of a nonpayment of
interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such
interest payment (a "Special Record Date") will be established by the Paying AgentlRegistrar, if and
when funds for the payment of such interest have been received from the Issuer. Notice of the
Special Record Date and of the scheduled payment date of the past due interest (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 Bondholder
appearing on the Security Register at the close of business on the last business day next preceding
the date of mailing of such notice.
10
(d) Conversion and Exchang,e or Replacement; Authentication. Each Bond issued and
delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance
or principal amount thereof, may, upon surrender of such Bond at the principal corporate trust office
of the Paying Agent/Registrar, together with a written request therefor duly executed by the
registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or
representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the
option of the registered owner or such assignee or assignees, as appropriate, be converted into and
exchanged for fully registered bonds, without interest coupons, in the form prescribed in the FORM
OF SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000, or any integral
multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have
a single stated maturity date), as requested in writing by such registered owner or such assignee or
assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or
principal amount of any Bond or Bonds so surrendered, and payable to the appropriate registered
owner, assignee, or assignees, as the case may be. If the Initial Bond is assigned and transferred or
converted each substitute Bond issued in exchange for any portion of the Initial Bond shall have a
single stated principal maturity date, and shall not be payable in installments; and each such Bond
shall have a principal maturity date corresponding to the due date of the installment of principal or
portion thereof for which the substitute Bond is being exchanged; and each such Bond shall bear
interest at the single rate applicable to and borne by such installment of principal or portion thereof
for which it is being exchanged. If a portion of any Bond (other than the Initial Bond) shall be
redeemed prior to its scheduled maturity as provided herein, a substitute Bond or Bonds having the
same maturity date, bearing interest at the same rate, in the denomination or denominations of any
integral multiple of $5,000 at the request of the registered owner, and in aggregate principal amount
equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender
thereof for cancellation. If any Bond or portion thereof (other than the Initial Bond) is assigned and
transferred or converted, each Bond issued in exchange therefor shall have the same principal
maturity date and bear interest at the same rate as the Bond for which it is being exchanged. Each
substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. The Paying
Agent/Registrar shall convert and exchange or replace Bonds as provided herein, and each fully
registered bond delivered in conversion of and exchange for or replacement of any Bond or portion
thereof as permitted or required by any provision of this Ordinance shall constitute one of the Bonds
for all purposes of this Ordinance, and may again be converted and exchanged or replaced. It is
specifically provided that any Bond authenticated in conversion of and exchange for or replacement
of another Bond on or prior to the first scheduled Record Date for the,Initial Bond shall beaz interest
from the date of delivery of the Initial Bond, but each substitute Bond so authenticated after such
first scheduled Record Date shall bear interest from the interest payment date next preceding the date
on which such substitute Bond was so authenticated, unless such Bond is authenticated after any
Record Date but on or before the next following interest payment date, in which case it shall bear
interest from such next following interest payment date; provided, however, that if at the time of
delivery of any substitute Bond the interest on the Bond for which it is being exchanged is due but
has not been paid, then such Bond shall bear interest from the date to which such interest has been
paid in full. THE INITIAL BOND issued and delivered pursuant to this Ordinance is not required
to be, and shall not be, authenticated by the Paying Agent/ Registrar, but on each substitute Bond
11
issued in conversion of and exchange for or replacement of any Bond or Bonds issued under this
Ordinance there shall be printed a certificate, in the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described on the face of this Bond; and that this Bond has been issued in conversion of
and exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which
originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Paying Agent/Registrar
Dated By
Authorized Representative"
An authorized representative of the Paying AgentlRegistraz shall, before the delivery of any such
Bond, date and manually sign the above Certificate, and no such Bond shall be deemed to be issued
or outstanding unless such Certificate is so executed. The Paying AgentJRegistrar promptly shall
cancel all Bonds surrendered for conversion and exchange or replacement. No additional
ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or
any other body or person so as to accomplish the foregoing conversion and exchange or replacement
of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execu-
tion, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be
of type composition printed on paper with lithographed or steel engraved borders of customary
weight and strength. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particulazly Section
6 thereof, the duty of conversion and exchange or replacement of Bonds as aforesaid is hereby
imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying
Agent/Registrar's Authentication Certificate, the converted and exchanged or replaced Bond shall
be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial
Bond which originally was issued pursuant to this Ordinance, approved by the Attorney General, and
registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for transferring, converting, and exchanging any Bond or
any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay any
taxes or governmental charges required to be paid with respect thereto as a condition precedent to
the exercise of such privilege of conversion and exchange. The Paying AgentlRegistrar shall not be
required to make any such conversion and exchange or replacement of Bonds or any portion thereof
(i) during the period commencing with the close of business on any Record Date and ending with
the opening of business on the next following principal or interest payment date, or, (ii) with respect
to any Bond or portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date.
12
such Refunded Bonds may be redeemed at said Bank on the redemption date. A copy of such Notice
of Redemption shall be delivered to the Paying AgentlRegistrar so mentioned, and published in the
Texas Bond Reporter.
Section 25. REASONS FOR REFUNDING. The Issuer deems it advisable to issue the
refunding bonds in Ordinance to achieve a gross savings of approximately $368,694.70 and a present
value savings of approximately $326,722.68.
Section 26. INSURANCE. The Issuer approves the insurance of the Bonds by Financial
Security Assurance, Inc., and the payment of such premium and complies with all of the terms of
the insurance commitment.
Section 27. PUBLIC NOTICE. It is hereby officially found and determined that public
notice of the time, place and purpose of said meeting was given, all as required by Chapter 551,
Texas Government Code.
Section 28. This Ordinance shall become effective on August 13, 1998.
33
PASSED AND ADOPTED this 13th day of August, 1998.
')L~C~/~(N(~--
Ma:tie ~;unningham, C4ty Cle
APPRaVED AS TO FGkM:
~ -
Scott Foster, City f\ftoniey
34
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 17 of this Ordinance.
1. Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually in accordance
with such Section are as specified (and included in the Appendix or under the headings of the Official Statement and
Tables referred to) below:
Tables l, 11, 12, 27 and 29 through 33 (only) in Appendix A and the Issuer's audited fnancial report in
Appendix D.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the notes to
the financial statements referred to in paragraph 1 above.
EXHIBIT B
Bond Purchase Agreement
The Bond Purchase Agreement has been omitted at this point as it appeazs in executed form
elsewhere in this transcript.
EXHIBIT C
Escrow Agreement
The Escrow Agreement has been omitted at this point as it appears in executed form
elsewhere in this transcript.
EXHIBIT D
NOTICE OF REDEMPTION
NOTICE IS HEREBY GIVEN that the City of Pazis, Texas has called for redemption the Outstanding Revenue
Bonds of the City described as follows:
City of Paris, Texas Tax and Revenue Refunding Bonds, Series 1991, dated November 1, 1991,
maturing December 15, 2002 through December 15, 2011, in the principal amount of $5,380,000,
to call date of the Bonds so called for redemption at The Bank of New York, New York, New York.
(successor to NCNB Texas, Dallas, Texas). Date: December 15, 2001.
On December 15, 2001, interest on the Bonds shall cease to accrue and be payable.
THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the
issuance of the aforementioned Bonds and in accordance with the recitals and provisions of said Bonds.
NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment of
said Bonds called for redemption with funds sufficient to pay the principal amount of said Bonds and the interest thereon
to the redemption date. In the event said Bonds, or any of them are not presented for redemption by the date fixed for
their redemption, they shall not thereafter bear interest.
NOTICE IS FURTHER GIVEN that the Bonds should be submitted to either of the following addresses:
In Writine
The Bank of New York
Attn: Redemption Department
1301 Fannin Street, Suite 2250
Houston, Texas 77002
Chazles Neely, Mayor
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in SPECIAL MEETING ON THE 13TH DAY
OF AUGUST, 1998, at the City Hall, and the roll was called of the duly constituted officers and
members of said City Council, to-wit:
Charles Neeley, Mayor
Jerry L. Thomas, Mayor Pro Tem
Alan R. Boyd
Eric C. Clifford
Mary Ann Fisher
Kevin Gray
Gene McWaters
Mattie Cunningham, City Clerk
and all of said persons were present, except the following absentees: S ,
thus constituting a quorum. Whereupon, among other business, the following was transac d at said
Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PARIS, TEXAS TAX AND
REVENUE REFUNDING BONDS, SERIES 1998, APPROVING AN OFFICIAL STATE-
MENT, AUTHORIZING THE EXECUTION OF A BOND PURCHASE AGREEMENT AND
THE EXECUTION OF AN ESCROW AGREEMENT, AND MAKING PROVISIONS FOR
THE SECURITY THEREOF, AND ORDAINING OTHER MATTERS RELATING TO THE
SUBJECT was duly introduced for the consideration of said City Council and read in full. It was then duly
moved and seconded that said Ordinance be passed; and, after due discussion, said motion canying
with it the passage of said Ordinance, prevailed and carried by the following vote:
AYES: All members of said City Council shown present above voted "Aye".
NOES: None.
2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and
foregoing paragraph is a hue, full and correct excerpt from said City Council's minutes of said
Meeting pertaining to the passage of said Ordinance; that the persons named in the above and fore-
going paragraph are the duly chosen, qualified and acting officers and members of said City Council
as indicated therein; that each of the officers and members of said City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place and purpose of the
aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said
Meeting, and each of said officers and members consented, in advance, to the holding of said
Meeting for such purpose, and that said Meeting was open to the public and public notice of the
time, place and purpose of said meeting was given, all as required by Chapter 551, Texas
Government Code.
3. That the Mayor of said City has approved and hereby approves the aforesaid Ordinance;
that the Mayor and the City Clerk of said City have duly signed said Ordinance; and that the Mayor
and the City Clerk of said City hereby declare that their signing of this Certificate shall constitute
the signing of the attached and following copy of said Ordinance for all purposes.
SIGNED AND SEALED the 13th day of August, 1998
Citv Clerk
SEA.L
then the certified public accountant shall determine and certify the amount of Net Revenues as being
the total of (i) the actual Net Revenues for the entire period, plus (ii) a sum equal to the aggregate
amount by which the actual billings to customers of the System during the entire period would have
been increased if such increased rates or chazges had been in effect during the entire period.
(c) An independent registered professional engineer of the State of Texas, or an independent
firm of engineers acting by and through a registered professional engineer of the State of Texas,
signs a written certificate to the effect that, in his or its opinion, during each fiscal year while any
of the Outstanding Revenue Bonds, or any Revenue Bonds are scheduled to be outstanding,
beginning with the fiscal year next following the date of the then proposed Revenue Bonds, the Net
Revenues estimated to be received during each of said fiscal years, respectively, will be at least equal
to 1.10 times the principal and interest requirements, during each such fiscal yeaz, respectively, of
all bonds of any nature or lien which are payable from Net Revenues and which are scheduled to be
outstanding after the issuance of the then proposed Revenue Bonds. In arriving at such opinion there
may be taken into consideration any prospective additions to the System or the Net Revenues, any
scheduled, projected, or reasonably expected changes in rates and charges, anticipated increases or
decreases in Net Revenues or maintenance and operation expenses of the System, and any other
factor which in his or its opinion would have a material impact on the Net Revenues.
(d) Provision shall be made in the ordinance authorizing their issuance for establishing or
contributing to a Reserve Fund for the Revenue Bonds so that the amount therein shall be equal to
at least the average annual principal and interest requirements of all Outstanding Revenue Bonds,
and the proposed Reserve Fund shall be funded, within not more than five years from the date of
such delivery of the Revenue Bonds, by deposits of Net Revenues in approximately equal monthly
installments on or before the lOth day of each month commencing in the month following the
issuance of such Revenue Bonds. The Reserve Fund shall be used solely to pay the principal of and
interest on the Revenue Bonds to the extent of any deficiency in the Interest and Sinking Fund for
the Revenue Bonds. Any amounts so applied shall be replaced by equal monthly deposits over the
period of time determined in the ordinance authorizing such Revenue Bonds.
(e) That all calculations of principal and interest requirements of any bonds made in
connection with the issuance of any then proposed Revenue Bonds shall be made as of the date of
such Revenue Bonds; and also in making calculations for such purpose, and for any other purpose
under this Ordinance, principal amounts of any bonds which must be redeemed prior to maturity
pursuant to any applicable mandatory redemption requirements shall be deemed to be maturing
amounts of principal of such Revenue Bonds.
Section 14. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond
of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or
destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
25
(b) Annlication for Replacement Bonds. Application for replacement of damaged, mutilated,
lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying
AgentlRegistrar. In every case of loss, theft, or destruction of a Bond, the registered owner applying
for a replacement bond shall fiunish to the Issuer and to the Paying Agent/Registrar such security
or indemnity as may be required by them to save each of them hazmless from any loss or damage
with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the registered owner
shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss,
theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of a
Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond
so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Bond shall have matured, and no default has occurred which is then continuing in
the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer may
authorize the payment of the same (without surrender thereof except in the case of a damaged or
mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished
as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond,
the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every replacement bond issued pursuant to the
provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall
constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) AuthoritY far Issuing Replacement Bonds. In accordance with Section 6 of Vernon's
Ann. Tex. Civ. St. Art. 717k-6, this Section 32 of this Ordinance shall constitute authority for the
issuance of any such replacement bond without necessity of further action by the governing body
of the Issuer or any other body or person, and the duty of the replacement of such bonds is hereby
authorized and imposed upon the Paying AgentlRegistrar, and the Paying Agent/Registrar shall
authenticate and deliver such Bonds in the form and manner and with the effect, as provided in
Section 6(a) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 15. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION,
IF OBTAINED. The Mayor of the Issuer is hereby authorized to have control of the Initial Bond
issued hereunder and all necessary records and proceedings pertaining to the Initial Bond pending
its delivery and its investigation, examination, and approval by the Attorney General of the State of
Texas, and its registration by the Comptroller of Public Accounts of the State of Texas. Upon
registration of the Initial Bond said Comptroller of Public Accounts (or a deputy designated in
writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate
26
on the Initial Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on
the Initial Bond. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP
numbers may, at the option of the Issuer, be printed on the Initial Bond or on any Bonds issued and
delivered in conversion of and exchange or replacement of any Bond, but neither shall have any legal
effect, and shall be solely for the convenience and information of the registered owners of the Bonds.
In addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as provided by
the insurer.
Section 16. COVENANTS REGARDING TAX EXEMPTION. The Issuer covenants to
refrain from taking any action which would adversely affect, and to take any required action to
ensure, the treatment of the Bonds as obligations described in Section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"), the interest on which is not includable in the "gross income"
of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants
as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds
or the proj ects financed therewith (less amounts deposited to a reserve fund, if any) are used for any
"private business use," as defined in Section 141(b)(6) of the Code or, if more than 10 percent of the
proceeds or the projects financed therewith are so used, such amounts, whether or not received by
the Issuer, with respect to such private business use, do not, under the terms of this Ordinance, or
any underlying arrangement, directly or indirectly, secure or provide for the payment of more than
10 percent of the debt service on the Bonds, in contravention of Section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described in
Subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent
is used for a"private business use" which is "related" and not "disproportionate," within the meaning
of Section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of $5,000,000,
or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is
directly or indirectly used to finance loans to persons, other than state or local governmental units,
in contravention of Section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds being treated
as "private activity bonds" within the meaning of Section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of Section 149(b) of the Code;
( fl to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds which were used, directly or indirectly, to acquire investment properly
27
(as defined in Section 148(b)(2) of the Code) which produces a materially higher yield over the term
of the Bonds, other than investment property acquired with
(1) proceeds of the Bonds invested for a reasonable temporary period of 3 years or
less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds
are needed for the purpose for which the Bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of Section
1.148-1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds
of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements
of Section 148 of the Code (relating to azbitrage) and, to the extent applicable, Section 149(d) of the
Code (relating to advance refundings); and
(h) to pay to the United States of America at least once during each five-yeaz period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the
"Excess Earnings," within the meaning of Section 148(f) of the Code and to pay to the United States
of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount
then required to be paid as a result of Excess Earnings under Section 148(f) of the Code.
The Issuer understands that the term "proceeds" includes "disposition proceeds" as defined
in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and
proceeds of the refunded bonds expended prior to the date of issuance of the Bonds. It is the
understanding of the Issuer that the covenants contained herein are intended to assure compliance
with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury
pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify
or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to
comply with any covenant contained herein to the extent that such failure to comply, in the opinion
of nationally-recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under Section 103 of the Code. In the event that regulations or
rulings are hereafter promulgated which impose additional requirements which are applicable to the
Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary, in the
opinion of nationally-recognized bond counsel, to preserve the exemption from federal income
taxation of interest on the Bonds under Section 103 of the Code. In furtherance of such intention,
the Issuer hereby authorizes and directs the Mayor of the Issuer to execute any documents,
certificates or reports required by the Code and to make such elections, on behalf of the Issuer, which
may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
28
In order to facilitate compliance with the above covenant (h), a"Rebate Fund" is hereby
established by the Issuer for the sole benefit of the United States of America, and such Fund shall
not be subject to the claim of any other person, including without limitation the bondholders. The
Rebate Fund is established for the additional purpose of compliance with Section 148 of the Code.
Section 17. DISPOSITION OF PROJECT. The Issuer covenants that the property
constituting the Project originally financed by Refunded Bonds will not be sold or otherwise
disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless
the Issuer obtains an opinion of nationally-recognized bond counsel that such sale or other
disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the
foregoing, the portion of the property comprising personal property and disposed in the ordinary
course shall not be treated as a transaction resulting in the receipt of cash or other compensation.
For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains an
opinion that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
Section 18. CONTINUING DISCLOSURE. (a) Annual Reports. (i) The Issuer shall
provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year
ending in or after 1998, financial information and operating data with respect to the Issuer of the
general type included in the final Official Statement authorized by Section 19 of this Ordinance,
being the information described in Exhibit B. Any financial statements so to be provided shall be
prepared in accordance with the accounting principles described in Exhibit B thereto, or such other
accounting principles as the Issuer may be required to employ from time to time pursuant to state
law or regulation, and audited, if the Issuer commissions an audit of such statements and the audit
is completed within the period during which they must be provided. If the audit of such financial
statements is not complete within such period, then the Issuer shall provide audited financial
statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report
on such statements become available.
(ii) If the Issuer changes its fiscal yeaz, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the Issuer
otherwise would be required to provide financial information and operating data pursuant to this
Section. The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The Issuer shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such
event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
29
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds; and
11. Rating changes.
The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the Issuer to provide financial information or operating data in accordance with subsection
(a) of this Section by the time required by such subsection.
(c) Limitations. Disclaimers, and Amendments. (i) The Issuer shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the Issuer
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that
the Issuer in any event will give notice of any deposit made in accordance with this Ordinance or
applicable law that causes Bonds no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to
provide only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation ofthe Issuer's financial
results, condition, or prospects or hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly provided herein. The Issuer does not
make any representation or warranty concerning such information or its usefulness to a decision to
invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART,
OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY
OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section
shall comprise a breach of or default under the Ordinance for purposes of any other provision of this
30
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt
to changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions
of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in
the primary offering of the Bonds in compliance with the Rule, taking into account any amendments
or interpretations of the Rule since such offering as well as such changed circumstances and (2)
either (a) the holders of a majority in aggregate principal amount (or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding
Revenue Bonds consent to such amendment or (b) a person that is unaffiliated with the Issuer (such
as bond counsel) determined that such amendment will not materially impair the interest of the
holders and beneficial owners of the Bonds. If the Issuer so amends the provisions of this Section,
it shall include with any amended financial information or operating data next provided in
accordance with subsection (a) of this Section an explanation, in narrative form, of the reason for
the amendment and of the impact of any change in the type of financial inforxnation or operating data
so provided. The Issuer may also amend or repeal the provisions of this continuing disclosure
agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final
jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent
that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or
selling Bonds in the primary offering of the Bonds.
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from
time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
Section 19. SALE OF INITIAL BOND. The Initial Bond is hereby sold and shall be
delivered to FIRST SOUTHWEST COMPANY (the "Underwriter") for cash for the price of
$5,760,251.90 thereof and accrued interest thereon to date of delivery, (such price includes a
31
discount to the Underwriter of $40,089.00 and an original issue discount to the Underwriter of
$9,659.10) pursuant to the terms and provisions of a Bond Purchase Agreement with the
Underwriter. It is hereby officially found, determined, and declared that the Initial Bond has been
sold pursuant to the terms and provisions of a Bond Purchase Agreement in substantially the form
attached hereto as Exhibit B, which the Mayor of the Issuer is hereby authorized and directed to
execute and deliver and which the City Clerk of the issuer is hereby authorized and directed to attest.
It is hereby officially found, determined, and declared that the terms of this sale are the most
advantageous reasonably obtainable. The Initial Bond shall be registered in the name of First
Southwest Company.
Section 20. INTEREST EARNINGS ON BOND PROCEEDS. The earnings derived from
the investment of proceeds from the sale of the original Refunded Bonds shall be used for the
original project; provided that after completion of such project, if any of such interest earnings
remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is
further provided, however, that interest earnings on the Bonds proceeds which are required to be
rebated to the United States of America pursuant to Section 13 hereof in Ordinance to prevent the
Bonds from being arbitrage bonds shall be so rebated and not considered as interest earnings for the
purpose of this Section
Section 21. APPROVAL OF OFFICIAL STATEMENT. The Issuer hereby approves the
form and content of the Official Statement relating to the Bonds and any addenda, supplement or
amendment thereto, and approves the distribution of such Official Statement in the reoffering of the
Bonds by the Underwriter in final form, with such changes therein or additions thereto as the officer
executing the same may deem advisable, such determination to be conclusively evidenced by his
execution thereof.
Section 22. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS.
The Mayor of the Issuer is hereby authorized and directed to execute and deliver and the City Clerk
of the Issuer is hereby authorized and directed to attest an Escrow Agreement in substantially the
form attached hereto as Exhibit C. In Addition, the Mayor is authorized to execute such subscription
for the purchase of U. S. Treasury Securities, State and Local Government Series, or the purchase
of direct obligations of the United States of America as may be necessary for the Escrow Fund, and
to authorize such contributions as may be necessary for the Escrow Fund.
Section 23. NOTICE OF REDEMPTION. That there is attached to this Ordinance, as
Exhibit D, and made a part hereof for all purposes, a notice of prior redemption for the Refunded
Bonds to be redeemed prior to stated maturity, and such Refunded Bonds described in said notice
of prior redemption are hereby called for redemption and shall be redeemed prior to maturity on the
date, place, and at the price as set forth therein.
Section 24. NOTICE TO PAYING AGENT/REGISTRAR AND PUBLICATION. The
Refunded Bonds described in Exhibit D attached hereto are so called for redemption, and The Bank
of New York, New York, New York is hereby directed to make appropriate arrangements so that
32
(e) In General. All Bonds issued in conversion and exchange or replacement of any other
Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with
the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii)
may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may
be converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed
and sealed, and (vii) the principal of and interest on the Bonds sha11 be payable, all as provided, and
in the manner required or indicated, in the FORM OF SUBSTITUTE BOND set forth in this
Ordinance.
(f) Pavment of Fees and Char~es. The Issuer hereby covenants with the registered owners
of the Bonds that it will (i) pay the standard or customary fees and charges of the Paying
AgentlRegistrar for its services with respect to the payment of the principal of and interest on the
Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with
respect to the transfer of registration of Bonds, and with respect to the conversion and exchange of
Bonds solely to the extent above provided in this Ordinance.
(g) Substitute Paying Ae~nt/Re i~ straz. T'he Issuer covenants with the registered owners of
the Bonds that at all times while the Bonds are outstanding the Issuer will provide a competent and
legally qualified bank, trust company, financial institution, or other agency to act as and perform the
services of Paying Agent/Registraz for the Bonds under this Ordinance, and that the Paying
Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change
the Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/
Registrar, to be effective not later than 60 days prior to the next principal or interest payment date
after such notice. In the event that the entity at any time acting as Paying AgentlRegistrar (or its
successor by merger, acquisition, or other method) should resign or otherwise cease to act as such,
the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying AgentlRegistrar
promptly shall transfer and deliver the Registration Books (or a copy thereo fl, along with all other
pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated and
appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will
cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner
of the Bonds, by United States mail, first-class postage prepaid, which notice also shall give the
address of the new Paying AgentlRegistrar. By accepting the position and performing as such, each
Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a
certified copy of this Ordinance shall be delivered to each Paying AgentlRegistrar.
(h) Book-Entry Onlv Svstem. The Bonds issued in exchange for the Bonds initially issued
to the purchaser specified herein shall be initially issued in the form of a separate single fully
registered Bond for each of the maturities thereof. Upon initial issuance, the ownership of each such
Bond shall be registered in the name of Cede & Co., as nominee of Depository Trust Company of
New York ("DTC"), and except as provided in subsection ( fl hereof, all of the outstanding Bonds
shall be registered in the name of Cede & Co., as nominee of DTC.
13
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer
and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or
to any person on behalf of whom such a DTC Participant holds an interest on the Bonds. Without
limiting the immediately preceding sentence, the Issuer and the Paying AgentlRegistrar shall have
no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co.
or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any
DTC Participant or any other person, other than a Bondholder, as shown on the Registration Books,
of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to
any DTC Participant or any other person, other than a Bondholder, as shown in the Registration
Books of any amount with respect to principal of, premium, if any, or interest on, as the case may
be, the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and
the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each
Bond is registered in the Registration Books as the absolute owner of such Bond for the purpose of
payment of principal, premium, if any, and interest, as the case may be, with respect to such Bond,
for the purpose of giving notices of redemption and other matters with respect to such Bond, for the
purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Bonds
only to or upon the order of the respective owners, as shown in the Registration Books as provided
in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and dischazge the Issuer's obligations with respect to
payment of principal of, premium, if any, and interest on, or as the case may be, the Bonds to the
extent of the sum or sums so paid. No person other than an owner, as shown in the Registration
Books, shall receive a Bond certificate evidencing the obligation of the Issuer to make payments of
principal, premium, if any, and interest, as the case may be, pursuant to this Ordinance. Upon
delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this
Ordinance with respect to interest checks being mailed to the registered owner at the close of
business on the Record Date, the word "Cede & Co." in this Ordinance shall refer to such new
nominee of DTC.
(i) Successor Securities Depositorv: Transfers Outside Book-Entrv Only Svstem. In the
event that the Issuer or the Paying AgentlRegistrar determines that DTC is incapable of discharging
its responsibilities described herein and in the representation letter of the Issuer to DTC and that it
is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated
Bonds, the Issuer or the Paying AgentJRegistrar shall (i) appoint a successor securities depository,
qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended,
notify DTC and DTC Participants of the appointment of such successor securities depository and
transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and
DTC Participants of the availability through DTC of Bonds and transfer one or more separate Bonds
to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall
no longer be restricted to being registered in the Registration Books in the name of Cede & Co., as
nominee of DTC, but may be registered in the name of the successor securities depository, or its
14
nominee, or in whatever name or names Bondholders transferring or exchanging Bonds shall
designate, in accordance with the provisions of this Ordinance.
(j) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, premium, if any, and interest on, or as the case may be, such
Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner
provided in the representation letter of the Issuer to DTC.
Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion
and exchange or replacement of any other Bond or portion thereof, including the form of Paying
Agent/Registrar's Certificate to be printed on each of such Bonds, and the Form of Assignment to
be printed on each of the Bonds, shall be, respectively, substantially as follows, with such
appropriate variations, omissions, or insertions as are permitted or required by this Ordinance.
FORM OF SUBSTITUTE BOND
NO.
PRINCIPAL
AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS, TEXAS
TAX AND REVENUE REFUNDING BOND
SERIES 1998
1NTEREST MATURITY DATE OF CUSIP
RATE DATE ORIGINAL ISSUE NO.
%
September 1, 1998
ON THE MATURITY DATE specified above the City of PARIS, in LAMAR County, Texas
(the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the
principal amount of
and to pay interest thereon from September 1, 1998 to the maturity date specified above, or the date
of redemption prior to maturity, at the interest rate per annum specified above; with interest being
payable on December 15, 1998, and semiannually thereafter on each June 15 and December 15,
except that if the date of authentication of this Bond is later than November 30,1998, such principal
amount shall bear interest from the interest payment date next preceding the date of authentication,
15
unless such date of authentication is after any Record Date (hereinafter defined) but on or before the
next following interest payment date, in which case such principal amount shall bear interest from
such next following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection chazges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of The
Bank of New York, New York, New York, which is the "Paying Agent/Registrar" for this Bond.
The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered
owner hereof on each interest payment date by check or draft, dated as of such interest payment date,
drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by
the ordinance authorizing the issuance of the Bonds (the "Bond Ordinance") to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall
be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each
such interest payment date, to the registered owner hereof, at the address of the registered owner, as
it appeared on the last business day of the month next preceding each such date (the "Record Date")
on the Registration Books kept by the Paying AgentlRegistrar, as hereinafter described, or by such
other method acceptable to the Paying Agent/Registrar requested by, and the risk and expense of,
the registered owner. Any accrued interest due upon the redemption of this Bond prior to maturity
as provided herein shall be paid to the registered owner upon presentation and surrender of this Bond
for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar.
The Issuer covenants with the registered owner of this Bond that on or before each principal payment
date, interest payment date, and accrued interest payment date for this Bond it will make available
to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance,
the amounts required to provide for the payment, in immediately available funds, of all principal of
and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where 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.
THIS BOND is one of an issue of Bonds initially dated September 1, 1998, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$5,810,000, for the purpose of refunding a portion of maturities 2002 through 2011 of the City of
Paris, Texas Tax and Revenue Refunding Bonds, Series 1992.
ON DECEMBER 15, 2008, or any date thereafter, the Bonds of this Series may be redeemed
prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available
and lawful source, as a whole, or in part, and, if in part, the Issuer shall select and designate the
16
maturity or maturities and the amount that is to be redeemed, and if less than a whole maturity is to
be called, the Issuer shall direct the Paying Agent/Registrar to call by lot (provided that a portion of
a Bond may be redeemed only in an integral multiple of $5,000), at the redemption price of the
principal amount thereof, plus accrued interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity a written notice of such redemption shall be published once in a financial publica-
tion, journal, or reporter of general circulation among securities dealers in The City of New York,
New York (including, but not limited to, The Bond Buyer and The Wall Street Journal), or in the
State of Texas (including, but not limited to, The Texas Bond Reporter). Such notice also shall be
sent by the Paying Agent/Registrar by United States mail, first class postage prepaid, not less than
30 days prior to the date fixed for any such redemption, to the registered owner of each Bond to be
redeemed at its address as it appeared on the 45th day prior to such redemption date; provided,
however, that the failure to send, mail, or receive such notice, or any defect therein or in the sending
or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of any Bond, and it is hereby specifically provided that the publication of such notice as required
above shall be the only notice actually required in connection with or as a prerequisite to the
redemption of any Bonds or portions thereof. By the date fixed for any such redemption due
provision shall be made with the Paying Agent/Registrar for the payment of the required redemption
price for the Bonds or portions thereof which are to be so redeemed, plus accrued interest thereon
to the date fixed for redemption. If such written notice of redemption is published and if due
provision for such payment is made, all as provided above, the Bonds or portions thereof which are
to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the registered owner to receive the redemption
price plus accrued interest from the Paying Agent/Registrar out of the funds provided for such
payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount
equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender
thereof for cancellation, at the expense of the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of
the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon
the terms and conditions set forth in the Bond Ordinance. Among other requirements for such
assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guazantee of signatures satisfactory
to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof
in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond
or any such portion or portions hereof is or aze to be transferred and registered. The form of
Assignment printed or endorsed on this Bond shall be executed by the registered owner or its duly
authorized attorney or representative, to evidence the assignment hereof. A new Bond or Bonds
payable to such assignee or assignees (which then will be the new registered owner or owners of
such new Bond or Bonds), or to the previous registered owner in the case of the assignment and
17
transfer of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in
conversion of and exchange for this Bond, all in the form and manner as provided in the next
paragraph hereof for the conversion and exchange of other Bonds. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for making such transfer, but the one
requesting such transfer shall pay any taxes or other governmental chazges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration
of this Bond or any portion hereof (i) during the period commencing with the close of business on
any Record Date and ending with the opening of business on the next following principal or interest
payment date, or, (ii) with respect to any Bond or any portion thereof called for redemption prior to
maturity, within 45 days prior to its redemption date. The registered owner of this Bond shall be
deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for
all purposes, including payment and discharge of liability upon this Bond to the extent of such
payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the
contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond
Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered owner
or the assignee or assignees hereof, be converted into and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, payable to the appropriate registered
owner, assignee, or assignees, as the case may be, having the same maturity date, and beazing
interest at the same rate, in any denomination or denominations in any integral multiple of $5,000
as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may
be, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance
with the form and procedures set forth in the Bond Ordinance. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for transferring, converting, and
exchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, and
exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a
condition precedent to the exercise of such privilege of conversion and exchange. The Paying
Agent/Registrar shall not be required to make any such conversion and exchange (i) during the
period commencing with the close of business on any Record Date and ending with the opening of
business on the next following principal or interest payment date, or, (ii) with respect to any Bond
or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and promptly will cause written
notice thereof to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this
Bond have been performed, existed, and been done in accordance with law, that this Bond is a
18
general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Bond, as such interest
comes due, and as such principal matures, have been pledged for such payment within the limit
prescribed by law, and that this Bond is additionally secured from surplus revenues of the Issuer's
combined Waterworks and Sewer System, remaining after payment of all operation and maintenance
expenses thereof, and all debt service and reserve required and any other payments and deposits
required in connection with the Issuer's Outstanding Revenue Bonds, additional parity revenue bonds
or other revenue bonds (now or hereafter outstanding), which are payable from all or any part of the
Net Revenues of the issuer's combined Waterworks and Sewer System, all as described in the Bond
Ordinance.
THE ISSUER has reserved the right, subject to the restrictions stated and adopted by
reference in the Ordinance authorizing this Series of Bonds, to issue additional parity revenue bonds
which also may be made payable from, and secured by a lien on and pledge of the aforesaid Net
Revenues, superior to the pledge for the payment of the Bonds.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of
this Bond or the interest hereon, or from any sources whatsoever other than those described in the
Bond Ordinance.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that
the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer and countersigned with the manual or facsimile
signature of the City Clerk of the Issuer, and has caused the official seal of the Issuer to be duly
impressed, or placed in facsimile, on this Bond.
City Clerk
SEAL
Mayor
19
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an
executed Registration Certificate of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or in
exchange for, a bond, bonds, or a portion of a bond or bonds of a Series which originally was approved by
the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State
of Texas.
Dated
The Bank of New York
Paying Agent/Registrar
By.
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized
representative or attorney thereof, hereby assigns this Bond to
(Assignee's Social Security
or Taxpayer ldentification Number)
(print or type Assignee's name
and address, including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books with full
power of substitution in the premises.
Dated
Signature Guaranteed:
NOTICE: This signature must be guaranteed by a member of the New York Stock Exchange or a
commercial bank or trust company.
Registered Owner
NOTICE: This signature must correspond with the name of the Registered Owner appearing on the
face of this Bond in every particular without alteration or enlargement or any change whatsoever.
20
Section 8. DEFINITIONS. That for all purposes of this Ordinance, the following words
shall have the following meanings, respectively:
(a) The term "City" or "Issuer" shall mean the City of Paris, in Lamar County, Texas.
(b) The term "City Council" or "Council" shall mean the governing body of the Issuer.
(c) The term "Government Obligations" shall mean direct obligations of the United States
of America, including obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, which may be United States Treasury obligations such
as its State and Local Government Series, which may be in bookentry form.
(d) The terms "Gross Revenues of the System" and "Gross Revenues" shall mean all
revenues and income of every nature derived or received by the Issuer from the operation and
ownership of the System, including the interest income from the investment or deposit of money in
any Fund created by the ordinance for issuance of the Bonds or any Revenue Bonds.
(e) The terms "Net Revenues of the System", and "Net Revenues" shall mean all Gross
Revenues after deducting and paying the current expenses of operation and maintenance of the
System out of the Revenue Fund, hereinafter created, including all salaries, labor, materials, repairs,
and extensions necessary to render efficient service, provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably and fairly exercised by the adoption
of appropriate resolutions, aze necessary to keep the System in operation and render adequate service
to said Issuer and the inhabitants thereof, or such as might be necessary to meet some physical
accident or condition which would otherwise impair the Bonds or Revenue Bonds, shall be deducted
in determining "Net Revenues". Depreciation and amortization shall not be considered as an
expense of operation and maintenance in determining Net Revenues.
(f) The term "Outstanding Revenue Bonds" shall mean the outstanding bonds payable from
a first lien on and pledge of the Net Revenues of the System, being the Series 1992 Bonds, Series
1997 Bonds and the Waterworks and Sewer System Revenue Refunding Bonds, Series 1998 being
authorized concurrently herewith.
(g) The term "Revenue Bonds" shall mean the revenue bonds which the City reserves the
right to issue in the future, all as provided in Section 12 of this Ordinance.
(h) The term "Surplus Revenues" shall mean each month the Net Revenues of the System
after payment provisions for debt service and reserve requirements in connection with a11 of the
Issuer's Outstanding Revenue Bonds or additional parity revenue bonds.
(i) The term "System" or "Waterworks and Sewer System" shall mean the Issuer's entire
existing Waterworks and Sewer System, together with all future extensions, improvements,
enlargements, and additions thereto, and all replacements thereof; provided that, notwithstanding the
21
foregoing, and to the extent now or hereafter authorized or permitted by law, the term System shall
not mean any sewer, water, or other facilities of any kind which are declared not to be a part of the
System, and which are acquired or constructed by the Issuer with the proceeds from the issuance of
"Special Facilities Bonds", which aze hereby defined as being special revenue obligations of the
Issuer which aze not payable from or secured by any Net Revenues, but which are secured by and
payable from liens on and pledges of any other revenues, sources, or payments, including, but not
limited to, special contract revenues or payments received from any other legal entity in connection
with such facilities; and such revenues, sources, or payments shall not be considered as or constitute
Gross Revenues of the System unless and to the extent otherwise provided in the ordinance or
ordinances authorizing the issuance of such "Special Facilities Bonds".
(j) The term "yeaz" or "fiscal year" shall mean the fiscal year used by the Issuer in
connection with the operation of the System.
Section 9. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking
Fund") is hereby created solely for the benefit of the Bonds, and the Interest and Sinking Fund shall
be established and maintained by the Issuer at an official depository bank of the Issuer. The Interest
and Sinking Fund shall be kept separate and apart from all other funds and accounts of the Issuer,
and shall be used only for paying the interest on and principal of the Bonds. All ad valorem taxes
levied and collected for and on account of the Bonds, together with any premium received from the
sale of the Bonds, shall be deposited, as collected, to the credit of the Interest and Sinking Fund.
During each year while any of the Bonds or interest thereon aze outstanding and unpaid, the
governing body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which
will be sufficient to raise and produce the money required to pay the interest on the Bonds as such
interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of its
Bonds as such principal matures (but never less than 2% of the original principal amount of the
Bonds as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of the
Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate
and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable
property in the Issuer for each year while any of the Bonds or interest thereon are outstanding and
unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the
aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of
the interest on and principal of the Bonds, as such interest comes due and such principal matures,
are hereby pledged for such payment, within the limit prescribed by law.
Section 10. REVENUES. That said Bonds are additionally secured by and shall be payable
from and secured by the Surplus Revenues. The Issuer shall deposit such Surplus Revenues to the
credit of the Interest and Sinking Fund created pursuant to Section 9, to the extent necessary to pay
the principal and interest on the Bonds in equal monthly installments after making provisions for the
deposits to the Revenue Bond Interest and Sinking Fund and Reserve Fund. Notwithstanding the
requirement of Section 9, if Surplus Revenues are actually on deposit or budgeted for deposit in the
Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied
for any year, then the amount of taxes which otherwise would have been required to be levied
22
pursuant to Section 9 may be reduced to the extent and by the amount of the Surplus Revenues then
on deposit in the Interest and Sinking Fund or budgeted for deposit therein.
Section 10. TRANSFER. That the Mayor and the City Clerk are hereby ordered to do any
and all things necessary to accomplish the transfer of monies to the interest and Sinking Fund in
ample time to pay such principal and interest.
Section 11. MAINTENANCE OF RATES. T'he Issuer hereby covenants and agrees that
it will at all times, while any of the Bonds, the Outstanding Revenue Bonds, or any Additional parity
revenue bonds, or any interest thereon, are outstanding and unpaid, charge and collect for services
rendered by the System rates sufficient to pay all maintenance, depreciation, replacement,
betterment, and interest charges, and to provide an Interest and Sinking Fund sufficient to pay the
interest and principal of such Bonds, the Outstanding Revenue Bonds or any other Revenue Bonds
as such interest and principal mature, and any outstanding indebtedness of the System, as is required
by applicable statutes of Texas. For the benefit of the original purchasers and all subsequent holders
of the Bonds, the Outstanding Revenue Bonds, and any additional parity revenue bonds, or any part
thereof, and in addition to all other provisions and covenants in the laws of the State of Texas, and
in this Ordinance, it is expressly covenanted that the Issuer shall fix and maintain rates and collect
charges for the facilities and services afforded by the System to the Issuer, and to all other customers,
which will provide revenues sufficient at all times:
(a) to pay all operating, maintenance and replacement charges of the System, as is required
by Article 1113 of the Civil Statutes, as amended, and by other applicable statutes of the State of
Texas;
(b) to establish and maintain the Interest and Sinking Fund for the Bonds and the Interest
and Sinking Fund and the Reserve Fund, if any, for the Bonds, the Outstanding Revenue Bonds and
the additional parity revenue bonds; and
(c) provide Net Revenues at least equal to 1.10 times the principal and interest requirements
of the Bonds, the Outstanding Revenue Bonds, and the additional pazity revenue bonds, if any, from
time to time outstanding.
(d) to pay, in addition, all outstanding indebtedness against the System, other than the
Bonds, the Outstanding Revenue Bonds, and any additional parity revenue bonds, if any, as and
when the same becomes due; and
(e) to provide for the payments into any Contingency Fund as may be required under the
provisions of the ordinances authorizing the issuance of the Outstanding Revenue Bonds, and any
additional parity revenue bonds, with such payments to be made if and only to the extent after
providing for the required monthly deposits to the Interest and Sinking Fund for the Outstanding
Revenue Bonds, and additional parity revenue bonds, if any.
23
Section 12. REVENUE BONDS. (a) That the Issuer shall have the right and power at any
time and from time to time, and in one or more Series or issues, to authorize, issue, and deliver
additional parity revenue bonds (herein called "Revenue Bonds" or "additional parity revenue
bonds"), in accordance with law, in any amounts, for any lawful purpose, including the refunding
of any Bonds, the Outstanding Revenue Bonds, Revenue Bonds, or other obligations. Such Revenue
Bonds, if and when authorized, issued, and delivered in accordance with this Ordinance, may be
payable from and secured by an irrevocable first lien on and pledge of the Net Revenues, all as
hereinafter provided.
(b) That Revenue Bonds, if and when authorized, issued, and delivered in accordance with
this Ordinance, shall be payable from a Interest and Sinking Fund to be created hereafter by the
ordinance authorizing the issuance thereof which shall be funded in equal monthly installments, and
shall be payable from and secured by an irrevocable lien on and pledge of the Net Revenues, equally
and ratably on a parity with all other outstanding Revenue Bonds, if any.
(c) That the principal of and interest on all Revenue Bonds must be scheduled to be paid or
mature on June 15 and/or December 15 of the years in which such principal and interest are
scheduled to be paid or mature.
Section 13. FURTHER REQUIREMENTS FOR REVENUE BONDS. That the Revenue
Bonds shall be issued only in accordance with this Ordinance, and no installment, series, or issue
of Revenue Bonds shall be issued or delivered unless:
(a) The Mayor of the Issuer and the City Clerk sign a written certificate to the effect that the
Issuer is not in default as to any covenant, condition, or obligation in connection with all the Bonds,
the Outstanding Revenue Bonds, and any Revenue Bonds, and the ordinances authorizing same, and
that the Interest and Sinking Fund and Reserve Fund for both the Bonds, the Outstanding Revenue
Bonds, and any Revenue Bonds, each contains the amount then required to be therein.
(b) An independent certified public accountant, or independent firm of certified public
accountants, acting by and through a certified public accountant, signs a written certificate to the
effect that, in his or its opinion, during either the next preceding fiscal yeaz, or any twelve
consecutive calendar month period ending not more than ninety days prior to the passage of the
ordinance authorizing the issuance of the then proposed Revenue Bonds, the Net Revenues were,
if the then proposed Bonds are to be Revenue Bonds, at least equal to the aggregate of 1.10 times
an amount equal to the average annual principal and interest requirements of all then Outstanding
Revenue Bonds of any nature or lien which are payable from Net Revenues and which are scheduled
to be outstanding after the delivery of the then proposed Revenue Bonds.
It is specifically provided, however, that in calculating the amount of Net Revenues for the
purposes of this subsection (b), if there has been any increase in the rates or charges for services of
the System which is then in effect, but which was not in effect during all or any part of the entire
period for which the Net Revenues are being calculated (hereinafter referred to as the "entire period")
24