97-008 ORD AUTHORIZING ISSUANCE/DELIVERY OF COP WATERWORKS AND SEWER SYSTEM REVENUE BONDS SERIES 1997 IN THE PRINCIPAL AMOUNT OF $5,000,000 AND ORDAINING OTHER MATTERS RELATING THERETO
97-008
ORDINANCE
AUTHORIZING THE ISSUANCE AND DELIVERY OF THE CITY OF
PARIS, TEXAS WATERWORKS AND SEWER 5YSTEM REVENUE
BONDS, SERIES 1997, IN THE PRINCIPAL AMOUNT OF $5,000,000, AND
ORDAINING OTHER MATTERS RELATING THERETO
THE STATE OF TEXAS .
COUNTY OF LAMAR .
CITY OF PARIS .
WHEREAS, there is presently outstanding the following bonds of the City of Paris (the
"Issuer"), which are secured by a pledge of the Net Revenues of the Issuer's Waterworks and
Sewer System:
City of Paris, Texas Waterworks and Sewer System Revenue Bonds, Series 1992,
dated December 15, 1992, maturing December 15, 1997 through December 15,
2011, now outstanding in the principal amount of $8,315,000 (the "Series 1992
Bonds"); and
WHEREAS, the following bonds are payable from a tax and surplus revenues, if any, of
the Waterworks and Sewer System:
City of Paris, Texas Tax and Revenue Refunding Bonds, Series 1991, dated
November 1, 1991, maturing December 15, 1997 through December 15, 2009,
now outstanding in the principal amount of $13,650,000 (the "Series 1991
Bonds"); and
WHEREAS, the City Council has heretofore, on the 13th day of January, 1997, adopted
a resolution authorizing and directing the City Clerk to give notice of intention to issue revenue
bonds; and
WHEREAS, said notice has been duly published in The Paris News, which is a newspaper
of general circulation in said City, in its issues of January 19, 1997 and January 26, 1997; and
WHEREAS, the City received no petition from the qualified electors of the City protesting
the issuance of such revenue bonds; and
WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to
Articles 1111 through 1118, V.A.T.C.S., Article 2368a, V.A.T.C.S., and Chapter 252, Local
Government Code.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS:
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Section 1. AMOUNT 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 $5,000,000 for the purpose of improving and extending the Issuer's Waterworks and
Sewer System.
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordin-
ance shall be designated: "CITY OF PARIS, TEXAS WATERWORKS AND SEWER SYSTEM
REVENUE BOND, SERIES 1997", and initially there shall be issued, sold, and delivered
hereunder a single fully registered bond, without interest coupons, payable in installments of
principal (the "Initial Bond"), but the Initial Bond may be assigned and transferred and/or con-
verted into and exchanged for a like aggregate principal amount of fully registered bonds, without
interest coupons, having serial 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 February 15, 1997, in the denomination and aggregate
principal amount of $5,000,000, numbered R-1, payable in annual installments of principal to the
initial registered owner thereof, to-wit: PRUDENTIAL-SECURITIES INCORPORATED, 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.
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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:
FORM OF INITIAL BOND
NO. R-1 $5,000,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1997
CITY OF PARIS, in Lamar County (the "Issuer"), being a political subdivision of the
State of Texas, hereby promises to pay to
PRUDENTIAL-SECURITIES INCORPORATED
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 DOLLARS
in annual installments of principal due and payable on June 15 in each of the years, and in the
respective principal amounts, as set forth in the following schedule:
YEAR AMOUNT YEAR AMOUNT
1999 $ 170,000 2008 $275,000
2000 180,000 2009 290,000
2001 190,000 2010 305,000
2002 200,000 2011 320,000
2003 210,000 2012 340,000
2004 220,000 2013 360,000
2005 235,000 2014 380,000
2006 245,000 2015 400,000
2007 260,000 2016 420,000
and to pay interest, from the date of this Initial Bond, on the balance of each such installment of
principal, respectively, from time to time remaining unpaid, at the rates as follows:
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maturity 1999, 6.50% maturity 2008, 5.90%
maturity 2000, 6.50% maturity 2009, 5.00%
maturity 2001, 6. 50 % maturity 2010, 5.00 %
maturity 2002, 6.50 % maturity 2011, 5.00 %
maturity 2003, 6.50% maturity 2012, 5.00%
maturity 2004, 6.50% maturity 2013, 5.00%
maturity 2005, 6.50 % maturity 2014, 4.50 %
maturity 2006, 6.50% maturity 2015, 4.50%
maturity 2007, 6.50% maturity 2016, 4.50%
with said interest being payable on December 15, 1997, 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 are
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 Texas Commerce Bank National Association, Dallas, Texas, which
is the "Paying Agent/Registrar" 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 princi-
pal and/or interest payment date by check or draft, dated as of such date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance author-
izing 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 regis-
tered 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 Agent/Registrar, as hereinafter
described, or by such other method acceptable to 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 tlie 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.
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THIS BOND has been authorized in accordance with the Constitution and laws of the State
of Texas, in the principal amount of $5,000,000, for the purpose of improving and extending the
Issuer's Waterworks and Sewer System.
ON JUNE 15, 2007, 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.
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 Agent/Registrar for the payment of the
required prepayment 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/Registrar 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 Agent/Registrar for
cancellation, together with proper instruments of assignment, in form and with guarantee of signa-
tures 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 are to be transferred and registered. Any instrument or instruments of assignment satisfac-
tory 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
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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 conver-
sion 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 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. _
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 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 pro-
cedures 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 transferred, and converted, subsequently, as
provided in the Bond Ordinance. The Issuer shall pay the Paying Agent/Registrar'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 taxes 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/Registrar 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
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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, sold, and delivered; that all acts, conditions, and things required or proper to
be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of
this Bond have been performed, existed, and been done in accordance with law, that this Bond
is a special obligation; and that the interest on and principal of this Bond, together with other
outstanding revenue bonds of the Issuer, are payable from and secured by a first lien on and
pledge of the Net Revenues of said Issuer's Waterworks and Sewer System.
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.
THE OWNER HEREOF shall never have the right to demand payment of this obligation
out of any funds raised or to be raised by taxation, or from any source whatsoever other than the
aforesaid Net Revenues.
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 February 15, 1997.
City Clerk Mayor
(CITY SEAL)
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FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNT :
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) Re,gistration and
Transfer. The Issuer shall keep or cause to be kept at the principal corporate trust office of Texas
Commerce Bank National Association, Dallas, Texas, (the "Paying Agent/Registrar") books or
records of the registration 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 registrations 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 conf'idential 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 Agent/Registrar, (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 on1y, and to one or more assignees designated in writing by the
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initial registered owner thereof. All Bonds issued and delivered 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, trans-
ferred, 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 transferred or converted each Bond
issued in exchange shall have the same principal maturity date and bear interest at the same rate
as the 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 Agent/Registrar's standard or customary fees
and charges for making such transfer and delivery of a substitute Bond or Bonds, but the one re-
questing 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 redemp-
tion prior to maturity, within 45 days prior to its redemption date.
(b) Ownership 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 Agent/Registrar 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
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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 Agent/Registrar 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 there-
after, a new record date for such interest payment (a "Special Record Date") will be established
by the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from the Issuer. Notice of the Special Record Date and of the scheduled payment date
of the past due interest (which shall be two 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.
(d) Gonversion and Exchange 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 unre-
deemed 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 transfened 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
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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 bear interest from the date
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
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 Agent/Registrar 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 Agent/Registrar 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, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said
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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
particularly 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 Agent/Registrar 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.
(e) In neral. 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 shall be payable, all as
provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE BOND set
forth in this Ordinance.
(fl PaXment of Fees and Charges. 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
Agent/Registrar 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 Pa,ying Agent/Registrar. The 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/Registrar 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
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or other-
12
wise 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 Agent/Registrar 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 Agent/Registrar. By
accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be
delivered to each Paying Agent/Registrar.
(h) Book-Entrv Only S, sem. 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 may be registered in the name of Cede & Co., as nominee of Depository Trust
Company of New York ("DTC and except as provided in subsection (f) hereof, all of the
outstanding Bonds may be registered in the name of Cede & Co., as nominee of DTC.
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
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a 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 discharge 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
13
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 S, tem. In the
event that the Issuer or the Paying Agent/Registrar 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 Agent/Registrar 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 nominee, or in whatever name or names
Bondholders transfening or exchanging Bonds shall designate, in accordance with the provisions
of this Ordinance.
(j) Pavments 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.
14
FORM OF SUBSTITUTE BOND
PRINCIPAL
NO. AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS, TEXAS
WATERWORKS AND SEWER SYSTEM
REVENUE BOND
SERIES 1997
INTEREST MATURITY DATE OF CUSIP
RATE DATE ORIGINAL ISSUE NO.
% February 15, 1997
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 February 15, 1997 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, 1997 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, 1997, such
principal amount shall bear interest from the interest payment date next preceding the date of
authentication, unless such date of authentication is after any Record Date (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 charges. The principal of this Bond
shall be paid to the registered owner hereof upon presentation and surrender of this Bond at
maturity or upon the date fixed for its redemption prior to maturity, at the principal corporate trust
office of Texas Commerce Bank National Association, Dallas, Texas, which is the "Paying
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the
Paying AgentlRegistrar 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 ,4gent/Registrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of the
15
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 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 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 February 15, 1997, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$5,000,000 for improving and extending the Issuer's Waterworks and Sewer System.
ON JUNE 15, 2007, or on 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 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
publication, 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
16
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 guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any
portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or are to be 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 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
charges 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
17
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 uuredeemed 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 bearing 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 conver-
sion and exchange. The Paying Agent/Registrar shall not be required to make any such conver-
sion 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, sold, and delivered; that all acts, conditions, and things required or proper to
be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of
this Bond have been performed, existed, and been done in accordance with law, that this Bond
is a special obligation; and that the interest on and principal of this Bond, together with other
outstanding revenue bonds of the Issuer, are payable from and secured by a first lien on and
pledge of the Net Revenues of said Issuer's Waterworks and Sewer System.
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.
18
THE OWNER HEREOF shall never have the right to demand payment of this obligation
out of any funds raised or to be raised by taxation, or from any source whatsoever other than the
aforesaid Net Revenues.
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 Mayor
SEAL
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 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.
Dated Texas Commerce Bank National Association,
Dallas, Texas
By
Authorized Representative
19
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 (print or type Assignee's name
or Taxpayer ldentification Number 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.
Section 8. DEFINITIONS. That for all purposes of this Ordinance, the following words
shall have the following meanings, respectively:
(a) The term "Bonds" shall mean the City of Paris, Texas Waterworks and Sewer System
Revenue Bonds, Series 1997, authorized by this Ordinance.
(b) The term "City" or "Issuer" shall mean the City of Paris, in Lamar County, Texas.
(c) The term "City Council" or "Council" shall mean the governing body of the Issuer.
(d) 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
20
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.
(e) 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.
(f) 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, are 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.
(g) The term "Outstanding 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.
(h) 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 23 of this Ordinance.
(i) 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 all of the
Bonds and/or Revenue Bonds.
(j) 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 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 are hereby defined as being special revenue obliga-
tions of the Issuer which are 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".
21
(k) The term "year" or "fiscal year" shall mean the fiscal year used by the Issuer in
connection with the operation of the System.
Section 9. PLEDGE. (a) The Bonds authorized hereby are Revenue Bonds which shall
be on a parity and equal dignity with the Outstanding Bonds.
(b) The Bonds are issued as "Revenue Bonds" in accordance with Sections 24 and 25 of
the Bond Ordinance for the Outstanding Bonds.
(c) The Bonds, the Outstanding Bonds, and any Additional Bonds which may be issued
in accordance with this Ordinance and the interest thereon, are and shall be payable from and
secured by a first lien on an pledge of the Net Revenues of the System, and said Net Revenues
are further pledged irrevocably to the establishment and maintenance of the Funds created by this
Ordinance. Sections 8 through 27 of the Bond Ordinance that authorized the Outstanding Bonds
are hereby adopted by reference and shall be restated and be applicable to the Bonds for all
purposes except to the extent hereafter specifically modified and supplemented.
Section 10. MAINTENANCE OF RATES. The Issuer hereby covenants and agrees that it
will at all times, while any of the Bonds, the Outstanding Bonds, or any 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 Bonds and the 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 Bonds, and any 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 Bonds and the
Revenue Bonds; and
(c) provide Net Revenues at least equal to 1.10 times the principal and interest
requirements of the Bonds, the Outstanding Bonds, and the Revenue Bonds, if any, from time to
time outstanding.
22
(d) to pay, in addition, all outstanding indebtedness against the System, other than the
Bonds, the Outstanding Bonds, and any 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 Bonds, the Outstanding Bonds, and
any 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 Bonds, the Outstanding
Bonds, and Revenue Bonds, if any.
Section 11. REVENUE FUND. That there has been created and there shall be established
and maintained on the books of the Issuer, and accounted for separate and apart from all other
funds of the Issuer, a special fund to be entitled the "City of Paris Waterworks and Sewer System
Revenue Fund" (the "Revenue Fund"). All Gross Revenues shall be credited to the Revenue Fund
immediately upon receipt, unless otherwise provided in this Ordinance. All current expenses of
operation and maintenance of the System shall be paid from such Gross Revenues credited to the
Revenue Fund as a first charge against same. Before making any deposits hereinafter required
to be made from the Revenue Fund, the Issuer shall retain in the Revenue Fund at all times an
amount at least equal to one-sixth of the amount budgeted for the then current fiscal year for the
current operation and maintenance expenses of the System.
Section 12. INTEREST AND SINKING FUND. That for the sole purpose of paying the
principal of and interest on the Bonds, the Outstanding Bonds, and any Revenue Bonds, there has
been created and there shall be established and maintained on the books of the Issuer, and
accounted for separate and apart from all other funds of the Issuer, a separate fund to be entitled
the "City of Paris Waterworks and Sewer System Interest and Sinking Fund" (the "Interest and
Sinking Fund").
Section 13. RESERVE FUND. That there has been created and there shall be established and
maintained at the Issuer's depository bank a separate fund to be entitled the "City of Paris
Waterworks and Sewer System Reserve Fund" (the "Reserve Fund"). The Reserve Fund shall
be used to pay the principal of and interest on the Bonds, the Outstanding Bonds, and any
Revenue Bonds, when and to the extent the amounts in the Interest and Sinking Fund available
for such payment are insufficient for such purpose, and may be used for the purpose of finally
retiring the last of the Bonds, the Outstanding Bonds, and any Revenue Bonds.
Section 14. CONTINGENCY FUND. That there has ben created and shall be established
and maintained at the Issuer's depository bank a separate fund to be entitled the "City of Paris
Waterworks and Sewer System Contingency Fund" (the "Contingency Fund"). The Contingency
Fund shall be used to pay the cost of any repairs or extensions to the System for the payment of
which no other funds are available. The Contingency Fund may also be used to pay the principal
of and interest on the Bonds, the Outstanding Bonds, and any Revenue Bonds, at any time when
23
there are not sufficient monies in the Revenue Fund, Interest and Sinking Fund and Reserve Fund
for such purposes.
Section 15. DEPOSITS OF PLEDGED REVENUES. That Net Revenues shall be credited
to or deposited in the Interest and Sinking Fund, the Reserve Fund, the Contingency Fund, and
other funds when and as required by this Ordinance and any ordinance authorizing the issuance
of Revenue Bonds.
Section 16. INVESTMENTS. TThat money in any Fund established pursuant to this
Ordinance or any ordinance authorizing the issuance of Revenue Bonds, may, at the option of the
Issuer, if permitted by law, be placed in time deposits or certificates of deposit secured by
obligations of the type hereinafter described, or be invested in Government Obligations (as defined
in Section 8 hereo fl or obligations guaranteed or insured by the United States of America, which,
in the opinion of the Attorney General of the United States, are backed by its full faith and credit
or represent its general obligations, or invested in obligations of instrumentalities of the United
States of America, including, but not limited to, evidences of indebtedness issued, insured, or
guaranteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit
Banks, Banks for Cooperatives, Federal Home Loan Banks, Government National Mortgage Asso-
ciation, United States Postal Service, Farmers Home Administration, Federal Home Loan
Mortgage Association, Small Business Administration, Federal Housing Association, or
Participation Certificates in the Federal Assets Financing Trust; provided that all such deposits
and investments shall be made in such manner as will, in the opinion of the Issuer, permit the
money required to be expended from any Fund to be available at the proper time or times as
expected to be needed. Such investments (except United States Treasury Obligations--State and
Local Government Series investments held in book entry form, which shall at all times be valued
at cost) shall be valued in terms of current market value as of the last day of each fiscal year.
Unless otherwise set forth herein, all interest and income derived from such deposits and
investments immediately shall be credited to, and any losses debited to, the Fund from which the
deposit or investment was made, and surpluses in any Fund shall or may be disposed of as
hereinafter provided. Such investments shall be sold promptly when necessary to prevent any
default in connection with the Bonds, the Outstanding Bonds, or any Revenue Bonds consistent
with the ordinances, respectively, authorizing their issuance.
Section 17. FUNDS SECURED. That money in all Funds created by this Ordinance, to the
extent not invested, shall be secured in the manner prescribed by law.
Section 18. PRIORITY OF DEPOSITS AND PAYMENTS FROM REVENUE FUND. That
the Issuer shall make the deposits and payments from Net Revenues in the Revenue Fund when
and as required by this Ordinance and any ordinance authorizing any Revenue Bonds, and such
deposits shall be made in the following manner and with the following irrevocable priorities,
respectively:
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First, to the Interest and Sinking Fund, when and in the amounts required by this
Ordinance and any ordinance authorizing any Revenue Bonds;
Second, to the Reserve Fund, when and in the amounts required by this Ordinance and any
ordinance authorizing any Revenue Bonds; and
Third, to the Contingency Fund, when and in the amounts required by this Ordinance and
any ordinance authorizing any Revenue Bonds; and
Section 19. INTEREST AND SINKING FUND REQUIREMENTS. (a) That promptly after
the delivery of the Bonds the Issuer shall cause to be deposited to the credit of the Interest and
Sinking Fund any accrued interest received from the sale and delivery of the Bonds, and any such
deposit shall be used to pay part of the interest next coming due on the Bonds.
(b) That the Issuer shall transfer from the Net Revenues and deposit to the credit of the
Interest and Sinking Fund the amounts, at the times, as follows:
(1) such amounts, deposited in approximately equal monthly installments on or before
the lOth day of each month hereafter, commencing with the month during which the Bonds
are delivered, or the month thereafter if delivery is made after the lOth day thereof, as will
be sufficient, together with other amounts, if any, then on hand in the Interest and Sinking
Fund and available for such purpose, to pay interest scheduled to accrue and come due on
the Bonds, the Outstanding Bonds, and any Revenue Bonds, on the next succeeding inter-
est payment date;
(2) such amounts, deposited in approximately equal monthly installments on or before
the lOth day of each month hereafter, commencing with the month during which the Bonds
are delivered, or the month thereafter if delivery is made after the lOth day thereof, as will
be sufficient, together with other amounts, if any, then on hand in the Interest and Sinking
Fund and available for such purpose, to pay principal scheduled to mature and come due
on the Bonds, the Outstanding Bonds, and any Revenue Bonds, on the next succeeding
principal payment date; and
Section 20. RESERVE FUND REQUIREMENTS. The Issuer shall cause to be deposited
in the Reserve Fund on the lOth day of each month hereafter $750, until the Reserve Fund shall
contain $1,273,034, which amount is equal to the average annual principal and interest
requirement on the Bonds and the Outstanding Bonds. The Issuer shall maintain an amount of
money and investments equal to the average annual principal and interest requirements of the
Bonds, the Outstanding Bonds, and any Revenue Bonds, if any, (the "Required Reserve
Amount"). Following the issuance of Bonds, the Required Reserve Amount shall be equal to the
average annual principal and interest requirements of the Bonds, and any Revenue Bonds then
outstanding. After the delivery of any Revenue Bonds the Issuer shall cause the Reserve Fund
to be increased, if and to the extent necessary, so that such fund will contain an amount of money
25
and investments equal to the Required Reserve Amount. Any increase in the Required Reserve
Amount may be funded from Net Revenues or from proceeds from the sale of any Revenue
Bonds, or any other available source or combination of sources. All or any part of the Required
Reserve Amount not funded initially and immediately after the delivery of any installment or issue
of Revenue Bonds shall be funded, within not more than five years from the date of such delivery,
by deposits of Net Revenues in approximately equal monthly installments on or before the lOth
day of each month. Principal amounts of the Bonds, the Outstanding Bonds, and any Revenue
Bonds which must be redeemed pursuant to any applicable mandatory redemption requirements
shall be deemed to be maturing amounts of principal for the purpose of calculating principal and
interest requirements on such bonds. When and so long as the amount in the Reserve Fund is not
less than the Required Reserve Amount no deposits shall be made to the credit of the Reserve
Fund; but when and if the Reserve Fund at any time contains less than the Required Reserve
Amount, then the Issuer shall transfer from Net Revenues in the Reserve Fund, and deposit to the
credit of the Reserve Fund, monthly on or before the lOth day of each month, a sum equal to
1/60th of the Required Reserve Amount, until the Reserve Fund is restored to the Required
Reserve Amount. The Issuer specifically covenants that when and so long as the Reserve Fund
contains the Required Reserve Amount, the Issuer shall cause all interest and income derived from
the deposit or investment of the Reserve Fund to be deposited to the credit of the Reserve Fund.
Section 21. CONTINGENCY FUND REQUIREMENTS. The Issuer has on deposit in
the Construction Fund $500,000 (the "Required Contingency Amount"). No deposits shall be
required to be made into the Contingency Fund as long as the Contingency Fund contains said
aggregate amount, but if and whenever said Contingency Fund is reduced below said aggregate
amount, the aforesaid monthly deposits equal to 1/60th of the Required Contingent Amount shall
be resumed and continued until such time as the Contingency Fund has been restored to said
aggregate amount.
Section 22. DEFICIENCIES; EXCESS PLEDGED REVENUES. (a) That if on any
occasion there shall not be sufficient Net Revenues to make the required deposits into the Interest
and Sinking Fund or the Reserve Fund, such deficiency shall be made up as soon as possible from
the next available Net Revenues.
(b) That, subject to making the required deposits to the credit of the various Funds when and
as required by this Ordinance or any ordinance authorizing the issuance of Revenue Bonds, any
Surplus Revenues may be used by the Issuer for any lawful purpose, in particular such Surplus
Revenues shall be deposited into the Interest and Sinking Fund established by the ordinance
authorizing the Bonds in accordance with Section 10 of said ordinance.
Section 23. PAYMENT OF BONDS AND REVENUE BONDS. On or before June 10,
1997, and semiannually on or before each December 10 and June 10 thereafter while the Bonds,
the Outstanding Bonds, and any Revenue Bonds are outstanding and unpaid the Issuer shall make
available to the Paying Agent/Registrar therefor, out of the Interest and Sinking Fund, or if
necessary, out of the Reserve Fund, money sufficient to pay, on each of such dates, the principal
26
of and interest on the Bonds, the Outstanding Bonds, and any Revenue Bonds as the same matures
and comes due, or to redeem the Bonds, the Outstanding Bonds, and Revenue Bonds prior to
maturity, either upon mandatory redemption or at the option of the Issuer. At the direction of the
Issuer the Paying Agent/Registrar shall either deliver paid Bonds, the Outstanding Bonds, and any
Revenue Bonds to the Issuer or destroy all paid Bonds, and any Revenue Bonds, and furnish the
Issuer with an appropriate certificate of cancellation or destruction.
Section 24. 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"), in accordance with law, in any
amounts, for any lawful purpose, including the refunding of any Bonds, the Outstanding 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 25. 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 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 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 year, 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 Rvenue 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
27
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") then the certified public accountant shall deternune 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 charges 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 Bonds, the Outstanding 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 year,
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 so that the amount therein shall be equal to at least the average
annual principal and interest requirements of all Outstanding 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. 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
28
maturity pursuant to any applicable mandatory redemption requirements shall be deemed to be
maturing amounts of principal of such Revenue Bonds. The Issuer has reserved the right to issue,
not to exceed $9,900,000, as Revenue Bonds, for improvements and extensions to the System,
without complying with paragraph (b) of this Section.
Section 26. GENERAL COVENANTS. The Issuer further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance, and each ordinance authorizing the
issuance of the Bonds, the Outstanding Bonds, and any Revenue Bonds; that it will promptly pay
or cause to be paid the principal of and interest on the Bonds, and any Revenue Bonds, on the
dates and in the places and manner prescribed in such ordinances and Bonds, the Outstanding
Bonds, and Revenue Bonds; and that it will, at the times and in the manner prescribed, deposit
or cause to be deposited the amounts required to be deposited into the Interest and Sinking Fund
and the Reserve Fund; and any holder of the Bonds, the Outstanding Bonds, and any Revenue
Bonds, may require the Issuer, its officials, and employees, to carry out, respect, or enforce the
covenants and obligations of this Ordinance, or any ordinance authorizing the issuance of Revenue
Bonds, by all legal and equitable means, including specifically, but without limitation, the use and
filing of mandamus proceedings, in any court of competent jurisdiction, against the Issuer, its
officials, and employees.
(b) Le,iial AuthoritX. The Issuer is a duly created and existing home rule city of the State of
Texas, and is duly authorized under the laws of the State of Texas to create and issue the Bonds,
the Outstanding Bonds, and any Revenue Bonds; that all action on its part for the creation and
issuance of the said obligations has been or will be duly and effectively taken, and that said
obligations in the hands of the holders and owners thereof are and will be valid and enforceable
special obligations of the Issuer in accordance with their terms.
(c) Title. The Issuer has or will obtain lawful title to the lands, buildings, structures, and
facilities constituting the System, that it warrants that it will defend the title to all the aforesaid
lands, buildings, structures, and facilities, and every part thereof, for the benefit of the holders
and owners of the Bonds, the Outstanding Bonds, and any Revenue Bonds, against the claims and
demands of all persons whomsoever, that it is lawfully qualified to pledge the Net Revenues to
the payment of the Bonds, the Outstanding Bonds, and any Revenue Bonds, in the manner
prescribed herein, and has lawfully exercised such rights.
(d) Liens. The Issuer will from time to time and before the same become delinquent pay and
discharge all taxes, assessments, and governmental charges, if any, which shall be lawfully
imposed upon it, or the System, that it will pay all lawful claims for rents, royalties, labor,
materials, and supplies which if unpaid might by law become a lien or charge thereon, the lien
of which would be prior to or interfere with the liens hereof, so that the priority of the liens
granted hereunder shall be fully preserved in the manner provided herein, and that it will not
29
create or suffer to be created any mechanic's, laborer's, materialman's, or other lien or charge
which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the
liens hereof might or could be impaired; provided, however, that no such tax, assessment, or
charge, and that no such claims which might be used as the basis of a mechanic's, laborer's,
materialman's, or other lien or charge, shall be required to be paid so long as the validity of the
same shall be contested in good faith by the Issuer.
(e) Oneration of System: No Free Service. While the Bonds, the Outstnading Bonds, and any
Revenue Bonds, are outstanding and ungaid the Issuer shall continuously and efficiently operate
the System, and shall maintain the System, or cause the System to be operated and maintained in
good condition, repair, and working order, all at reasonable cost. No free service of the System
shall be allowed, and should the Issuer or any of its agencies, instrumentalities, lessors, or
concessionaires make use of the services and facilities of the System, payment monthly of the
standard retail price of the services provided shall be made by the Issuer or any of its agencies,
instrumentalities, lessors, or concessionaires out of funds from sources other than the revenues
of the System, unless made from surplus Net Revenues as permitted by Section 22(b) hereof.
(f) Further Encumbrance. While the Bonds, the Outstanding Bonds, and any Revenue Bonds,
are outstanding and unpaid, the Issuer shall not additionally encumber the Net Revenues in any
manner, except as permitted in this Ordinance in connection with Revenue Bonds, unless said
encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants, and
agreements of this Ordinance and any ordinance authorizing the issuance of Revenue Bonds; but
the right of the Issuer to issue revenue bonds payable from a subordinate lien on surplus Net
Revenues is specifically recognized and retained.
(g) Sale or Disposal of PropeM. While the Bonds, the Outstnading Bonds, and any Revenue
Bonds are outstanding and unpaid, the Issuer shall not sell, convey, mortgage, encumber, lease,
or in any manner transfer title to, or dedicate to other use, or otherwise dispose of, the System,
(except as permitted in paragraph (n) hereo fl or any significant or substantial part thereof;
provided that whenever the Issuer deems it necessary to dispose of any property, machinery,
fixtures, or equipment, or dedicate such property to other use, it may do so either when it has
made arrangements to replace the same or provide substitutes therefor, or it is determined by
resolution of the City Council that no such replacement or substitute is necessary.
(h) Insurance. (1) The Issuer shall cause to be insured such parts of the System as would
usually be insured by corporations operating like properties, with a responsible insurance company
or companies, against risks, accidents, or casualties against which and to the extent insurance is
usually carried by corporations operating like properties, including, to the extent reasonably
obtainable, fire and extended coverage insurance, insurance against damage by floods, and use
and occupancy insurance. Public liability and property damage insurance also shall be carried
unless the City Attorney gives a written opinion to the effect that the Issuer is not liable for clauns
which would be protected by such insurance. All insurance premiums shall be paid as an expense
of operation of the System. At any time while any contractor engaged in construction work shall
30
be fully responsible therefor, the Issuer shall not be required to carry insurance on the work being
constructed if the contractor is required to carry appropriate insurance. All such policies shall be
open to the inspection of the Bondholders and their representatives at all reasonable times. Upon
the happening of any loss or damage covered by insurance from one or more of said causes, the
Issuer shall ~make due proof of loss and shall do all things necessary or desirable to cause the
insuring companies to make payment in full directly to the Issuer. The proceeds of insurance cov-
ering such property, together with any other funds necessary and available for such purpose, shall
be used forthwith by the Issuer for repairing the property damaged or replacing the property
destroyed; provided, however, that if said insurance proceeds and other funds are insufficient for
such purpose, then said insurance proceeds pertaining to the System shall be deposited in a special
and separate trust fund, at an official depository of the Issuer, to be designated the Insurance
Account. The Insurance Account shall be held until such time as other funds become available
which, together with the Insurance Account, will be sufficient to make the repairs or replacements
originally required.
(2) The annual audit hereinafter required may contain a section commenting on whether or
not the Issuer has complied with the requirements of this Section with respect to the maintenance
of insurance, and shall state whether or not all insurance premiums upon the insurance policies
to which reference is made have been paid.
(i) Annual Budget and Rate Covenant. The Issuer shall prepare, prior to the beginning of
each fiscal year, an annual budget, in accordance with law reflecting an estimate of cash receipts
and disbursements for the ensuing fiscal year in sufficient detail to indicate the probable Gross
Revenues and Net Revenues for such fiscal year.
(j) Records. The Issuer shall keep proper books of record and account in which full, true,
proper, and correct entries will be made of all dealings, activities, and transactions relating to the
System, the Net Revenues, and the Funds created pursuant to this Ordinance, and all books,
documents, and vouchers relating thereto shall at all reasonable times be made available for
inspection upon request of any Bondholder or citizen of the Issuer. To the extent consistent with
the provisions of this Ordinance, the Issuer shall keep its books and records in a manner
conforming to standard accounting practices as usually would be followed by private corporations
owning and operating a similar system, with appropriate recognition being given to essential
differences between municipal and corporate accounting practices.
(k) Audi s. After the close of each fiscal year while any of the Bonds, the Outstnading
Bonds, and any Revenue Bonds are outstanding, an audit will be made of the books and accounts
relating to the System and the Net Revenues by an independent certified public accountant or an
independent firm of certified public accountants. As soon as practicable after the close of each
such year, and when said audit has been completed and made available to the Issuer, a copy of
such audit for the preceding year shall be mailed to the Municipal Advisory Council of Texas, to
each paying agent for any bonds payable from Net Revenues, to any Bondholders who shall so
request in writing, and to Southwest Securities Incorporated. The annual audit reports shall be
31
open to the inspection of the Bondholders and their agents and representatives at all reasonable
times.
(1) Governmental Agencies. It will comply with all of the terms and conditions of any and
all franchises, permits, and authorizations applicable to or necessary with respect to the System,
and which have been obtained from any governmental agency; and the Issuer has or will obtain
and keep in full force and effect all franchises, permits, authorization, and other requirements
applicable to or necessary with respect to the acquisition, construction, equipment, operation, and
maintenance of the System.
(m) No Competition. It will not operate, or grant any franchise r, to the extent it legally may,
pernut the acquisition, construction, or operation of, any facilities which would be in competition
with the System, and to the extent that it legally may, the Issuer will prohibit any such competing
facilities.
(n) District or River Authority Contract. Nothing herein shall be construed to prevent the
Issuer from making contracts with a district or river authority operating pursuant to Article 16,
Section 59 of the Texas Constitution, as authorized by Chapter 30, Texas Water Code, or Article
4413 (32c), V.A.T.C.S., under which a district or river authority will make a sewer system or
water system or portions thereof available to the Issuer, and will furnish waste water collection,
transportation, treatment, disposal services or water treatment or water transportation facilities
to the Issuer, through the district's or river authority's sewer system or water system or in such
other manner as deemed appropriate by the Issuer. Such contracts may provide for the operation,
or the acquisition by purchase or lease, of the Issuer's waste water treatment and disposal facilities
or water treatment or water transportation facilities, in whole or in part, by the district or river
authority.
Section 27. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning
of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment
of the principal of such Bond, plus interest thereon to the due date (whether such due date be by
reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused to
be made in accordance with the terms thereof (including the giving of any required notice of
redemption), or (ii) shall have been provided for on or before such due date by irrevocably
depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful
money of the United States of America sufficient to make such payment or (2) Government
Obligations which mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money to provide for such payment, and
when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the
payment of its services until all Defeased Bonds shall have become due and payable. At such time
as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the
interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the
32
revenues herein pledged as provided in this Ordinance, and such principal and interest shall be
payable solely from such money or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction
of the Issuer also be invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from such Government Obligations received by the Paying
Agent/Registrar which is not required for the payment of the Bonds and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the Issuer, or
deposited as directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this Section 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
book-entry form.
(d) Until all Defeased Bonds shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds
the same as if they had not been defeased, and the Issuer shall make proper arrangements to
provide and pay for such services as required by this Ordinance.
Section 28. 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.
(b) Application for Re.placement Bonds. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the registered
owner applying for a replacement bond shall furnish to the Issuer and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or
destruction of a Bond, the registered owner shall furnish to the 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
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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) Authoritv for Issuing Replacement Bonds. In accordance with Article 717k-6,
V. A. T. C. S., as amended, and particularly, this Section of this Ordinance shall constitute authority
for the issuance of any such replacement bond without necessity of further action by the governing
body of 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 Agent/Registrar, and the Paying Agent/Registrar
shall authenticate and deliver such Bonds in the form and manner and with the effect, as provided
in Section 6(d) of this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 29. 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
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 Bond or 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 30. 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:
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(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds
or the projects 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;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly,
to acquire or to replace funds which were used, directly or indirectly, to acquire investment
property (as defined in Section 148(b)(2) of the Code) which produces a materially higher yield
over the term of the Bonds, other than investment property acquired with
(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
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requirements of Section 148 of the Code (relating to arbitrage) and, to the extent applicable,
Section 149(d) of the Code (relating to advance refundings); and
(h) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of
the "Excess Earnings," within the meaning of Section 148(f) of the Code and to pay to the United
States of America, not later than 60 days after the Bonds 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. .
For the purposes of the foregoing (a) and (b), 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.
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 31. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The
Issuer hereby designates the Bonds as "qualified tax-exempt obligations" as defined in Section
265(b)(3) of the Code. In furtherance of such designation, the Issuer represents, covenants and
warrants the following: (a) that during the calendar year in which the Bonds are issued, the Issuer
(including any subordinate entities) has not designated nor will designate obligations, which when
aggregated with the Bonds, will result in more than $10,000,000 of "qualified tax-exempt
obligations" being issued; and (b) that the Issuer reasonably anticipates that the amount of tax-ex-
empt obligations issued, during the calendar year in which the Bonds are issued, by the Issuer (or
any subordinate entities) will not exceed $10,000,000.
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Section 32. 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 1996, financial information and operating data with respect to the Issuer of the
general type included in the final Official Statement authorized by Section 33 of this Ordinance,
being the information described in Exhibit A. Any financial statements so to be provided shall be
prepared in accordance with the accounting principles described in Exhibit A 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 Councils 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 year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the 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;
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.
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(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 of the 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
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
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
38
subsection (a) of this Section an explanation, in nairative form, of the reason for the amendment and
of the impact of any change in the type of financial information 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 33. SALE OF INITIAL BOND. The Initial Bond is hereby sold and shall be
delivered to PRUDENTIAL-SECURITIES, INCORPORATED, for cash for the par value thereof
plus accrued interest thereon to date of delivery. It is hereby officially found, determined, and
declared that the Initial Bond has been sold at public sale to the bidder offering the lowest interest
cost, after receiving sealed bids pursuant to an Official Notice of Sale and Bidding Instructions
and Official Statement dated February 1, 1997, prepared and distributed in connection with the
sale of the Initial Bond. Said Official Notice of Sale and Bidding Instructions and Official State-
ment, and any addenda, supplement, or amendment thereto have been and are hereby approved
by the governing body of the Issuer, and their use in the offer and sale of the Bonds is hereby ap-
proved. It is further officially found, determined, and declared that the statements and repre-
sentations contained in said Off'icial Notice of Sale and Official Statement are true and conect in
all material respects, to the best knowledge and belief of the governing body of the Issuer.
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PASSED AND ADOPTED this the lOth day o e ary, 1997.
c Mayor ~
City Clerk =
APPROVE TO FORM:
City Attorney
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