HomeMy WebLinkAbout1993-2013 - Ordinance - 06/10/1993ORDINANCE NO. 2013
ORDINANCE AUTHORIZING THE ISSUANCE OF ~,99S~00 CITY OF COLLEGE STATION,
TEXAS UTILITY SYSTEM REVENUE AND REFUNDING BONDS, SERIES 1993;
EXECUTION OF AN ESCROW AGREEMENT, A BOND PURCHASE AGREEMENT, AND A
PAYING AGENT/REGISTRAR AGREEMENT; AND ALL OTHER MATTERS RELATED
THERETO. INCLUDING IMMEDIATE EFFECTIVENESS
WHEREAS. the City has herelofore issued the followm~ described outstanding bonds (colleclively, the
"Previously Issued Parity Bonds") lO-wit:
CITY OF COLLEGE STATION, TEXAS. UTILITY SYSTEM REVENUE REFUNDING BONDS, SF, R~S
1985. dated January 15, 1985. originally issued m thc pnncipal amount of $34,185.000 (the "Series 1985
Bonds"); and
CITY OF COLLEGE STATION, TEXAS UT~ITY SYSTEM REVENUE BONDS, S~ 1990 m tho
pnncipal amounl of S4,800.000 (the "Series 1990 Bonds"):
WHEREAS, all of the Prevlonsly Issued Panty Bonds arc secu~xl by a pledge of the net reveanes from the
oparauon of the C~ty's combined wale~vorks system, sewer system, and elecl~ic light and power system and are on
a panty with each other (and any Panty Bonds, hereinafter defined, wfuch ~c hereafter authorized, ~ssued, and
delivered),
WHEREAS, no~ce of mtenuon to issue the bonds authorized hereby has been given by publication thereof
in The Eagle, a newspaper of general circulation in the City, on May 27. 1993 and June 3. 1993;
WHEREAS, the Councd destres to issue advance refunthn8 bonds to refund the Refunded Bonds herinafter
described;
THEREFORE~ BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEGE
STATION. TEXAS THAT:
Section 1. Bonds Authorized. Pursuant to Amclc 71Tk and Article 1111 et. seq.. Vemon's Texas Civil
Statutes, ns amended, and other apphcable law. the Oty's bonds are hereby authorized to be issued to be designated
as the "City of College Slalion, Texas Uuhty System Revenue and Refunding Bonds. Series 1993" with $3.700,000
being issued for the purpose of extenthng and improving the City's existing sanitary sewer system, with S580.000
being ~ssued for the propose of extending and unprovmg the City's ezasttng elcemc Iq~ht and power system, and with
$5,715.000 for the purpose of provichng money for the advanee refunding of the following oulstandin8 bonds of the
City (collectively, the "Refunded Bonds) on February I, 1995, and paying the costs of issuance of the Bonds:
Utdlty System Revenue Refunding Bonds, Series 1985
Amount Maturities
tohe tohe
Refunded Refunded
$5.035.000 $I,115,000 out of
$2,0'25,000 in 1998
and all of 1999 Iln'ough
2001
Seetlon 2. Date~ Maturifief~ and lnterent Rates. Thc Bonds shall he dated June 1. 1993. shall be in the
denominauon of $5.000 or any integral multiple thereof, shall he numbered consecuuvely from R-I upwerd, and shall
matam on the maturity an~,~, in each of the yem~s, and tn the amounts, respecuvaly, ns set forth in the follomng
schedule and shall bear interest at the following rates per annum:
MATURITY DATE: FEBRUARY I
INTF.~T INTF, I~T
y~AR AMOUNTS RATES YEAR AMOUNTS RATES
1994 $205,000 6.~% 2004 $215,000 ~.10~
1995 "..60.000 6.50 2005 225,000 5.2.5
1996 280J300 6.50 2006 240.000 5.40
1997 995.000 4.75 2007 255.000 15.40
1998 1,395.000 4.05 200~ 265.000 5.50
1999 1,745.000 4.il0 2009 280.1300 5.50
2000 1.640.000 4.40 2010 300,000 5.50
2001 1.000.000 4.60 2011 315.000
2002 195.000 4.80 2012 330.000
2003 205,000 5.00 2013 350.000 $.~0
Such mterest shall be payable on Felmmy l, 1994. and semiannually thereafter on August I and February 1. ~
interest shall be payable to the registered owner of any such Bond in the manner provided io the FORM OF BONDS
set forth m this Ordinance.
Section $. R' ht of Prior Redan *ion. The City reserves the fight to redeem the Bonds maturing on or afar
February 1, 2004. in whole or in pan in principal amount of $5,000 or any integral multiple thereof, on Febsua~y
1.2003. or any date thereafter, at the par value thereof to be ~semed and shall direct the Paying Agem/R. eg~x~
to call by lot Bonds. or pomons thereof, within such maturity or mattmties and in such pfincipal amounts, for
redemption.
Not~ce of such redempUon shall be given ss provided m the FORM OF BOND in Section $ beseof. If such
nouce of redampuon is given, and if due p~ov~on for such payment ~s made. the Bonds, or the ix~'tions thereof
which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities, and shall
not bear interest after the date fixed for their redempnan, and shall nee be regarded ss being outstanding except for
the right of the registenxl owner to receive the redemption price plus accrued interest to the date fixed for redemption
from the Paying Agent/Regis~ar out of the funds provaled for such paymenL The Paying Agent/Registrar shall
record m the Registration Books all such redemp~ons of pfinc~pal of the Bonds or any pomon thereof. By the date
fixed for any such redemption due pmvmon shall be made by the OW with the Paying AgenURugistrar for the
payment of the reqoned redempaon pnce for the Bonds. or the pomons thereof which are to be so redeemed, plus
accrued interest thereon to the date fled for redemption. If such notice of redemlmon is gtvan and if due ptowsion
for such payment is mnae. all ss provided above, the Bonds. or the portions thereof which we to be so redeemed.
thereby automatically shall be redeemed prior to their schexinled maturities md shall not bear interest atler the date
fixed for theu' redempuon and shall nee be regarded ss being ontatandmg ezcept for the right of the registered owner
to receive fig redemption lmce plus accrued interest to the date fixed for redemlmon f~om fig Paying Agent/Registrar
out of fig funds provided for such payment. If a portion of any Bond shall be redeemed, a subsotute Bond or Bonds
having the same maturity date. beanug interest at fig same rate. in any denominaUon or danommat'oas in any
integral multiple of $5.000. at the wfiUon request of the registered owner, md in an aggregate imnclpal amount equal
to the unredeemed portion thereof, wdl be issued to the registered owner upon the surrender thereof for cancellation.
at the expense of the City all as provided io this Ordinance.
Section 4, Pa' A t/R istrar. (a) The City shall keep or cause to be kept at the ptincLtel corporate
trust office of fig Paying Agent/RegisUar herein named, or such other bank. trust company, financial matitonon, or
eeber enUty duly quahfied and legally authorized to serve and perfenn dunes of and services of Paying
Agent/Registrar. named m accordance with the provisions of (g) of th,s Section (the "Paying Agant/Rugiatrar'). books
or records of the reg~stratmn and transfer of the Bonds (the 'Registration Books'). and the City hereby appoints the
Paying Agent/Registrar as its registrar and la-ansfer agent to keep such books or records and make such Uansfers and
registrations under such reasonable regulations ss the City and Paying Agont~Regiswar may prescribe; and the Paying
Agent/Rog~swar shah make such transfi:rs and rng~a-~moas as herein provided. It shall be the duty of the Paying
Agnnt/Regisl~as to obtsin from the registered owner and record in the Regzstznfion Books the address of such
registered owner of each Bond to winch payments with respect to the Bonds shall be mniind, ns hereto prowc~l.
The City or its designee shall have the right to inspect the Reglstratson Books during regular buszr~s;~s hours of the
Paying A~enl/Rogtstrar. but othenvire the Paying A. gnnk/Reglstrm' shall keep the Regislrataon Books confidential and,
unless olherwisu required by law. shall not permit their inspection by any other entity. Regls~ation of each Bond
may be ~-ansferred in the Registration Books only upon pmsuatatinn and surrender of such bond to the Paying
Agant~xg~strar for Iransfer of rog~stranon and cancellation, together with proper wri~n ms~uments of assignment,
in form nud with guarantee of Slgl~at~r~s suti~fsctory to the Paying Agnnt/Regislrar, evidencing the assignment of
the bond. or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and the fight
of such nssignee or assignees to have the bond or any such portion thereof reglstegd m the name of such ns~gnee
or assignees. Upon the assignment and transfer of any Bond or any portion thereof, a new subsntote bond or bonds
shall be issued in exchange therefor in the manner heroin provaled.
(b) The entity in whose anme any Bond shall be registered m the Registration Books at any time sbell be
treated ns the absolute owner thereof for all ptu-pores of thru Ordinance, whether or not such bond shall be oven;lan,
and the City and the Paying Agent/Rogtstr~ shall not be affected by any nonce to the contrary unless othetwire
required by law: and payment of, or on account of, the principal of. premium, if any, and inu:n;st on any such bond
shall be made only to such registered owner. Ail such payments shall be vahd and effectual to v. ati~fy and diachnrge
the habihty upon such bond to the extent of the sum or sums so prod.
(c) The Oty hereby further appoints the Paying Agenl/Regislzar to act as the paying agent for paying the
pnnclpal of and interest on thc Bonds. and to act ns its agem to exchange or replace Bonds, nil ns presided in this
Ordinance. The Paying Agent/Registrar shall keep proper records of ali payments nmde by the City and thc Paying
Agent/Registrar with respect to the Bonds, and of all exchanges of such bonds, and all repince~nents of such bonds.
as provided in th~s Orchnance.
(d) Each Bond may be exchanged for fully registered bonds m the manner ret forth herein. Each bond issued
and delivered pmauant to this Ot'dinauce. to the extent of the unpaid or unredeemed Imncipul balance or principal
amount thereof, may. upon sun'ender of such bond at the pnncipal corporate trust olTw. e 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 then' duly antbonzed attofncys or reprerenlatives, with guarantee of signatures ~fi~factory
to the Paying Agnnt/Registrar. at the option of the registered owner or such nssignne or assignees, as al~laopriate,
be exchanged for fully ~ngistered bonds, without interest coupons, m the form prescribed in the H3RM OF BONDS
ret forth in tlus Orchnance. m the denomination of $5.000. or any intelpal multiple of $5.0(X) (subJect to the
requirement hereinafter stated that each substitute Bend shall have a single stated maturity a.qle~, ns requested in
writing by such registered owner or such assignee or n~-'~,gnces, m an aggregate principal amount equul to the orq~d
or unredeemed pnnczpal amount of any bond er bonds so surrendered, and payable to the appropriate reglsl~red
owner, assignee, er assignees, as the c~e may be. If a portion of any Bond shall be redeemed prior to ils schech~led
maturity as provided herein, a substrtute bond or bonds having the same matm'~ty date. bennog interest at the same
ra~. m the denummaUoo or deoommatioas of any integral multiple of $5.000 at the request of the registered owner.
and in an aggregat-' prmcipnl umoont equal to the unredeemed perUon thereof, wdl be issued to the registered owner
upon surrender thereof for cancellation. If any Bond or portion thereof ts assigned and trnns~erred, each bond issued
in exchange therefor shall have the same principal maturity date and bear interest at the same rate ns the bond for
which it is being exchanged. Each subsl~mte bond shall bear a letter and/or number to clistmgmsh it from each other
bond. The Paying Agenl/Reg~swar shall exchange or replace Bonds as plovuled herein, and each fully registered
bond delivered tn exchange for or replacement of any bond or penlon thereof as permitted or required by any
provision of this Ordinance shah consUtote one of the Bonds for all ~ of tius Ordinance. and may again be
exchanged er replaced. It is specifically provided, however, that any bond delivered in exchange for er replacement
of another bond prior to the fu'st scheduled interest payment date oo ~z~ Bends (as stated on the fnce thereof) shall
be dated the same date as such bond. but each subsUtute bond so dalivered on or ~ such fwst scheduled mu:rest
payment dale shall be dated as of the interest payment d~u preeedmg the date on which such substitute bond is
dehvered, unless such bond is delivered on an interest payment date. tn which case it shall be dated m o{ such date
of delivery: larovided, however, that if at the tune of tiehvety of any substitute bond the inte~st on tho bond for
which it IS being exchanged has not been paul then such bend shall be dated as of the date to winch such interest
has been paid in full. On each substitute bund issued in exchange for or replacement of any bund or bonds issued
under the Ordinance thct~ shall be pnnted thereon a Paying Agcnt/RcRmlras's Aathentw. ation Ceilfficato. in the form
hereinafter set forth An authorized representative of the Paying Agent/Rcgtstras shall, before thc dehvery of any
such bond. date such by delang the Authcnt~cetlon Cerlxficate in thc nluunei' ~el fo~ ~ovc. ~[~ manually sign such
Certificate. and no such bond shah he deemed to he issued or outslanding unless such Certificate is so executed.
Thc Paying Agent/RcgmUar promptly shall cancel ah Bonds surrendered fer exchanRe or replacement. No ntldlt!nllfl]
ordinances, orders, or resohittons need be passed or adopted by thc City Council or any other body or person so as
to accomplish the foregoing exchange or replacement of any Bond or portion thereof, and the Paying Agent/Regisum'
shall provide for the printing, execution, and delivery of the substitute bunds m the mannel' prescribed herein, and
smd bonds shall be of type composition pnnted on paper with hthngraphed or steel engraved borders of customary
weight and suength pursuant to Article 717k-6, V.T.C.S. and pamculady Section 6 thereof, the duty of such
exchange or replacement of bunds as aforesaid ~s hereby imposed upon the Paying Agonl/P, nglslrar, and upon thc
execution of the aforemanttoned Paying Agant/Registrar's Autbeaticatmn Cei~icate. thc exchanged or repisced Bond
shah he valid, mconteslable, and enforceable in the same manner and with the same effect as the Bonds which
originally were dehvered pursuant to this Ordinance, approved by the Attorney General, and regmteted by the
Comptroller of Public Accounts. Neither the City nor thc Paying Agent/Registrar shall be reqmred (1) to issue.
Iransfer. or exchange any Bond subJect to redemption dorms a period begiantng at the opemng of business 15 days
before thc day of the first mailing of a no~lce of redemption of Bonds and ending at the close of business on the day
of such mailing, or (2) to uansfer or exchange any Bond ariel' It is selected for ~lempl~on. in whole or in pazt when
such redemption is schedttled IO occm' within 30 calendar days: provided, however, that such hmitetmn shall not be
apphcable to an exchange by the owner of the uncniled principal balance of a Bond.
(e) All Bonds issued m exchange or repincemont of any other Bond or poFaon the~of, ii) shall he issued m
fully registered form. without interes! coupons, with the principal of and interest on such bonds to be payable only
to die registered owners thereof, iii) may be redeemed prior to then' scheduled maturities, fiji) may be tran~rred
and assigned. (iv) may be exchanged for other Bonds. iv) shall have the charactextstins, (vi) shaft be signed and
sealed, and (vii) thc principal of and interest on the Bonds .qmll be payable, all as provided, and in thc manner
required or indicated- in the FORM OF BONDS set forth in this Ordinance.
if) Tie City shall pay all of the Paying Agant/Registrsr's reasonable and customary fi~es and charges tis'
malung tmnal'crs, conversmas, and exchanges of thc Bonds tn accordance w:th an agrecmant betwenn thc City and
the Paying Agent/Registrar'. but the registered owner of any Bond requesting such transfer shall pay any rexes or
other goveimnennd charges reqmred to be prod with respect thereto. In additmn, the City hereby covenants with tho
registered owners of the Bonds that st will pay the reasonable and slandard or customary fens and charges of the
Paying Agenl/Registrar for its services with reapect to the paymenl of the principal of and interest on thc Bonds.
when due.
(g) The City covenants with the registered owners of the Bonds that at all Umes while thc Bonds are
outstanding the City w,II provide a compete, ut and Icgully qualified bank. trust company, financial mstitulaon, or other
enuty duly qualified and legally authorized to serve as and perform the duties and services of Paying Agcnt/Reglsam'.
to act as and perform the services of Paying Agent/Registrar for the Bonds ander this Ordinance. and that the Paying
Agent/Registrar will be one cn*lty The City reserves the right to. nnd nmy. at its option, change thc Paying
Agent/Bogmtrar upon not less than Ca{) days wmten nonce to the Paying Agenl/Regtslrar. In the event that thc entity
at any tunu uctmg as Paying Agent~ngtstrar (er its successor by merger, acquisition, or other method) should resign
or otherwme cease to act as such. the Ctty covenants that promptly it wdl appoint a competent and ingnlly qualified
nanonal or state banking restitution which shall be a corporation organized and doing business under the Inws of the
Untied States of America of of any smte. authonz~ under such laws to exereme trust pew,s, subject to supervisien
or exnminauon by federal or state Autbunty. and whese q,,nhfications substantndly are similar to the previous Paying
Agcnt/Rngmlrar to act as Paying Agent/Registrar under dus Ordinance. Upon any change in the Paying
A~ent/Rcgistrar. the previous Paying Agenl/RegtsUar pt~0mptly shell transfe~ and deliver the Registra~on Books (or
a copy the~of), along w~th all other pertinent beoks and teenrds relating Io the Bonds. to the now Paying Agenl/Reg-
isum' designated and appointed by the City. Upon any chnnge m the Paying Agem/Regisuar. the City promptly will
cause a wnllen noOen thereof to be sent by the new Paymg AgenffRegtslra~ to each registered owce~ of the Bonds.
by United Slates mml. postage prepmd, which notice also shall give the addrer~ of thc new Paying Agent/R~giamir.
By uccepting the posit,on and performing as such. each Paying Agen~egmlrar shall be deemed to have agreed to
the provisions of this Or&nnnce. and a certified copy of this Ordinance shall be delivered to each Paying
AgenqRegi~tr~u'.
Se~ion S. Forms. The form of the Bonds. including the form of Pnymg Agent/Regislnn"s Certificate. the
form of Asmgnment. the form of Statement of Insurnnce. tbe form of the Comptroller's Reg~sumion Certifica~ ~o
accompany the Bonds on the lmual dehvm~ thereof, shall be. respectively, snhelantndly as follows, vnth such
oppsolmate vanntlons, orm~ons, or insemons as nre permitted or reqmred by this Or&neuce:
FORM OF BONDS:
FORM OF DEFINITIVE BONDS
NO.__ $---
Umted Slates of America
State of Texas
CITY OF COt.~.~GE STATION, TEXAS
UT~ITY SYSTEM REVENUE AND RF, FUND~NO BOND, SF_~UF.~ 1993
INTEREST RATE ISSUE DATE CUSIP
% June 1. 1993
PRINCIPAL AMOUNT:. $
REGISTERED OWNER:
THE CITY OF COLLEGE STATION. TEXAS (the "City") homby promises to pay to the Registe~d Owner.
specified above, or the relm~red assignee (the "Regmtered Owner") the Pnucipal Amount. specified above, and to
pay mtcrest thereon from thc Issue Date. ~ccified above, to the Matumy Date. spucilied above, at thc Interest Rate.
spuclfied above, wtth ~ interest being payable on February 1. 1994. and scmiann~ly on euch AusuSt I and
February I thereafter.
THE TERIviS AND PROVISIONS of this Bond arc continued on the reverse side hereof and shall for all
proposes have the same effect as though fully set fo~b at this plsec
THE PRINCIPAL OF AND INTEREST ON flus Bond are payable in lawful moeny of thc Umted States of
America. wdhout exchange or collection charges. The ptluctpal of this Bond shah be paid to the registered owner
bercof upon presenlation and surrender of this Bond at maturity at thc principal collocate I~ast office of TEXAS
COMlVlERCE BANg NATIONAL ASSOCIATION. HOUSTON. TEXAS. which m the "paying Agent/RegmU~"
for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Rcgislmr to the registered
owner hereof as shown by the RegisUat~on Books kept by thc Paying Agent/Reglstrm' at the close of basir--.~s on the
Rconrd Date by check drawn by the Paying Agent/Rellistrar on. and payable sohily flora, funds of thc City rcqtored
to be on de. posit with thc Paying Agcnt/Rcgtstrar fo~ such p~ as hereinafter provzcled, and such check shall be
sent by the Payms Agenl./Rcglstrar by Umted States mad. postage prepaid, on each such inte~e, st payment dale. to
thc regmtered owner beronf at its address as it appents on the Rcgistratton Books kept by the Paym8 A~ent/Reglstrar.
as beremafter dcserthed. Thc record date ("Record Date") ~ the intel*cst payabhi on any interest payment date
means thc fifteenth calendar day of the month ptccedlng a scheduled interast payment. In the event of a non-
payment of interest on a sehedulnd paymem dnze., and fee 30 days thereaftm', a new rceord date for such interest
payment (a "Specml Record Date") will be emblished by the Paying Agent/Registrar. if and when fimds for die
payment of such ~nterest have been received from the City. Nome of rite Special Record Date and of thc scheduled
payment date of thc past due intexest {the "Specml Payment Date". which shall be 15 calendar days nfter the Specud
Record Date) shall be sent at least five business days prior to the Special Record Dnte by United States nmil. first
class, postage prepaid, to the haan;ss of each registered own~ of n Bond appeanng on the books of thc Paying
Agent~egmlrer at the close of business on thc lng besmess day next precedin8 the date of marling of such not,ce.
The City covenants with thc registered ownc~ of this Bond that no taler limn each principal payment date and interest
payment date for flus Bond it vail make available to the Paying Agonl/Regtstun' the amounts reqmred to prowde for
the payment, tn immedmtcly available funds, of all principal of and interest on thc Bonds. when due. in thc []aon~
set forth in the ordinance authorizing the issuance of the bonds adopted by die City Council of the City on June 10.
1993 (the "Onhueuee").
*~ ~ DATE for the payment of the principal of or interest on flus Bond shall be a .qn~y0 a Sunday,
a legal hofiday, or a day on which banking mstltetions [] the city where the Paying Agent/Rcgisffar is located me
authorized by law or executive order to close, then thc date for such payment shall be the next succeeding day which
is not such a Saturday. Sunday. legal holMay, or day on which banking inst/tsrdens are authorized to close: and
payment on such ant,, shall have thc same force nnd effect ns if made on the original date payment wnS flue.
*THIS BOND is one of a serie~ of bonds of like tenor and effect except as to denomination, number, maturity.
interest rate and righl of prior redemption, issued in the nggrel~ate principal nmount of $9.995.000 with $3.700.000
being issued for thc purpose of extending and improving the City's ex~flug sanitsry sewer system, with $$80.000
be[]8 issued for the purpose of extenihng and improving die City's extsting clccuic light and power system, and
$5.715.000 for the purl)ore of providing money fi~r the advance re~undmg of certain outstanding bonds of thc City
(the "Refunded Bonds}. and paying the costs of issuance of the Bonds.
*THE BONDS of thts series scheduled to nmtm~c on and after February 1.2004 may be redeemed pr~or to then'
scheduled maturities, in whole or in pan. m principal nmonnts of $5.000 or any integral muldpin thereof, at the
opuon of thc City. on February I. 2003. or on any date therenfter, for the pnnclpnl amount the~'eof plus accrued
interest to the date f'LXed for redemption.
*NOTICE OF REDEMPTION shah be sent by the Paying Ag~nt/RegisUar by United Statm mnsl, f'u~t-class
postage prepaid, ut least 30 days prior to tho ante fixed for any such redemption, to Ibe registe~l owner of each
Bond. or portion thereof to be redeemed, at its naaress as it appeat~l on the Registnmun Books on the 45th day prior
to such redemption date and to major securities deposttorics, anlmosl bend rating agencies, and bend reformation
services: provided, however, that the failure to send. mad. ec receive such notice, or any defect then:in or in the
sending or mmhng thereof, shall not affect the validity or effectiveness of the pmueech~s fec tho redemption of any
Bond. By the date fixed for any such nxlemption, due pmvislon slmli be made by the City with the Paying
Agant/Rng~unr for the payment of the requn'ed redemption price for this Bond or the portion hereof which ~s to be
so redee[]ed, plus accrued interest thereon to the date fixed for redsmptton. If such notice of redemption is given.
and if due pmvtslon for such paymant is mede, all ns provided above, tins Bond. ec tho portion thereof which is to
he so redeemed, thereby automaucally shall he redeemed prior to its scheduled maturity, and shall not be~ interest
after the date fixed fec its redemption, and shall not be regarded ns being outstanding except for the right of the
registered owner to receive the redompUun price plus accrued interest to the dn~ fixed for redemption from the
Paying Aganl/Rnglstrar out of tho funds provided for such payment. The Paying Agant/Registrar shall record in
the Regislration Book~ all such redampuoos of priueq~l of this Bond or uny po~ion bere, of. If a portion of any
Bond shall be redeemed a sub~t~tote Bond or Bends having the nsm¢ maturity dnt,~, bannng interest ut the same rate.
in any denomination or denominations in any mtelp'al multiple of $$.000. at tho written flXluest of the registered
owner, and m aggregate pflncipal amount equal to the unredeemed portion thereof, wRI be ~sued to the registered
owner upon the surrender tbereof for cauceilat~on, at the expense of the City. ail ns provided in the Ordinance.
6
*ALL BONDS OF THIS SFdm, IES ere lssuable solely as fuUy registered bonds, v,'t[hout interest coupons, in
thc denoufinafion of any integral multiple of $$.000. As provided in the Ordinance, this Bond. or any u~ed
poniou hareof, may. at the request of the rngiste~ owner or [he assignee or assignees hareof, be assigned.
transferred, and exchanged for a hke aggregate Imncipal amount of fully ~gistercd bonds, without interest coupons.
payable to tbe approprin,~ regtstercd owner, assignee, or ns~guees, as thc case may be. hav[]g thc same maturity
date. and bcarmg interest at [he same rate. [] any daenmmaUen or denominations in {my inteBral multiple of S~,000
as requexted tn writing by the appropriate rngiatered owner, assignee, or nssignees, as [he case may be. upon
surrender of [his Bond to the Paying Agenl/Rngmtrar for caneelln~on, ail zn accordance with thc foam and pruecdures
set forth in thc Ordinance. AmenS other req[]rements for such assignment and transfer, this Bond must be ixesunted
and surrendered to the Pa)lng Agem/Rcglsuar, toge[her wi[h IxoPer instromcnts of nssignmant, m form and wi[h
guarantee of signslures satisfactory to [he Paying Agent/R~Rtslrm'. evidencing assignment of flus Bond or any portion
or poniuns henmf in any integral multiple of $5,000 to thc assignee or assignees m whone name or nmuns this Bond
or any such pomon or portions hereof ts or are to be transferred and registered. Thc fo~n of Ass,gnmcnt printed
or endorsed on this Bond may be executed by thc rngistered owner to evidence thc ass,gnmunt bereof, but such
method ts not exclus,ve, and o[her instruments of assignment sausfuetory to thc Paying Agent/Registrar may be used
to evtdenec thc assignment of this Bond or any pofllon or portions hereof from tune to fi{nc by [he registered owner.
Thc City shall pay thc Paying Agem/Regislrar's rensenable stundard or customary leas and charges for transfurnng,
converting and exchanging any Bond or portien thereof; provided, bowcver. [hat any taxes or governmentel charges
required to be paid with respee! [hereto shall be pard by [he one requesting such transfer, conversion and exchange.
In any csreumstunce, nei[her tim City nor the Paying Agenl/Regmtun' shall be requ~ed (I) to ~ any Ransfer or
exchange dunng a period beginning at the opening of besmess 1 ~ days before thc day of the In'st mmlmg of a noUce
of redcmp,,on of bonds and ending at thc closo of bomness on thc day of such mailing, or (2) to Uunsfer or exchange
any Bonds so sulectnd for redcmptlen whan such redemptien is schnduled to occur witiun 30 calendar days; provided,
bowevcr, such lmmdatmn shall not hc applicable to an exchange by [he registered owner of thc uncalled principal
halancc of a Bond.
*IN THE EVENT any Paying Agent/Rcgistrm' fer [he Bonds is changed by the City. resigns, or utherwisc
c~ to act as such. [he Cliy Ires covenanted m Ibe Or[hnancc that I! promptly will appoint a competent and legally
qualtfiod substitute thcrcfor, and promptly w,Ii cause written untiee Ibereof to be mn{lcd to thc reg,stcred owners of
[he Bonds.
'*BY BECOMING [he regtstered owner of dus Bond, the rngistered owner [hereby nc_-knowledges all of [he
terms and pmvminns of thc Ordinance, ag~es to be bound by such terms and provisions, acknowledges that [he
O~hnancc ts duly recorded and available for laspecuou in the off]cml minutes and records of the City. and ngvees
that the terms and provisions of tius Bond and the Ordinance consutute a contract botween each registered owns'
hereof and the City.
*THE CITY HAS RESERVED THE RIOHT. sub. lea to lbo restncUons slated, and adopted by refcrenee. []
[he Ordmanee, to issue addltmnal panty revenue bends whtch also may be mnde payable from. and secured by. a
first hen en and pledge of [he "Net Revenues" of the City's cnmbrend watea'works system, sewer system, and eleclric
light and power system (as defined and dascnbed m [he Ordinance) on a parity with thc previously msund parity
bonds including [he Bonds.
*THE REGISTERED OWNER HEREOF shall never have [he right to demand payment of flus obl,geltoo out
of any funds raised or to be raised by texaUen, or from any source whatseever other dian [he aforesuld Net Revenues.
IT IS H~BY ccm'ufied and covenanted [hat [h,s Bond has hcen duly and validly au[honzcd, issund and
dehvered; Ilmt all acts. conditions and things required or prolx~ to be performed, exist and bc done precedem to or
in the an[honzaliofl, lasOance, and dehvery of this Bond have hcen performed, existed and been done in ueonrdance
with law: that flits Bond is a specml oblig~mon, and that [he principal of and []terest on this Bond togc[her with
omsmndmg parity revenue bonds are payable from, and secured by a first hun on and pledge of. the Net Revenues.
7
IN TESTIMONY WHEREOF. the C~t¥ Council has cans~ the seal of the City to bo duly unpressed or plac~d
in facsun~e Im'enn. and tlus Bond to bo signed with the unprimnd facsiunle signature of the M~yor und
coantersigned hy tbe facsirade siguntu~ of t~ City
COUNI-I=RSIGNED:
City Secretory. City of Collnge Stmion
Mayor. City of College Statmn
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CER'fJ~ICATE
PAYING AGENT/R.EGISTRAR'S AUTHENTICATION CERTIIqCATE
It is bercb~ ccmfied that this Bond has been issued under the provmmns of thc Ordinance described on the
face of this Bond; and that dtis Bond has bean issued in exchange for or repincemcnt of a bond, bonds, or a pomon
of a bond or bond.~ of an issue which ongumiiy was approved by the Attorney General of tho Sta~ of Texas and
re~stered by the Comptroller of Pubhc Accounts of the State of Texas.
Dated. TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
HOUSTON, TEXAS
Paying Agent/Rnglsmn'
By
Authortzed Representative
FORM OF STATEMENT OF INSURANCE
*STATEMENT OF INSURANCE
The Municipal Bond Investors Assurance Coq~oratmn (the '*insurer") hes issued a policy containing the
following provisions, such policy being on file at Texas Commerce Bank National Associauun, Houston, Texas.
The Insurer, in conmdemtion of the payment of the v mium and subject to the tm'ms of this policy, hereby
unconthtiouniiy and irrevocably guerantees to any owner, as hereinafter defined, of the following desoribed
obltgauons, the full and complete payment n~Cluired to be made by or on behalf of the Issuer to Texas Commerce
Bank National Asancmtinn or its succes-~ (the *Paying Agent") of an amount equal to (i) thc principal of (either
at the stated maturity or by any advancement of nmturity pursuant to a nmndatory smlung fund payment) and interest
on. the Obligatmns (as that term ts defined below) as such payments shah become due but shall not bo so paid
(except that m the event of any accelerauou of the due date of such principal by reason of mandatory or optmnul
redemption or acceleration resulting from defanlt or otherwise, other than any advancement of nmtortty porsuant to
a mandatory siulung fund payment, the payments gan[]nteed hereby sludl bo made m such nmounts nmi at such limes
as such payments of pnncipal would have been due lind there not been any such acculoranon): and (ii) thc
reimbursement of any such payment which ts subsequundy recovered from any owner persuant to a t'mai judgment
by a court of competent juriscllcuou Ihat such payment constitutes an avoidnble preference to such ovme~ within the
menning of any ~phcable banlmJptcy law. The amounts refi:t~d to [] clanses (0 and (ii) of thc preceding sentence
shall be referred to herein collectively ns thc "Insured Amounts'*. "Obligations'* shall mean: "$9,995,0(}0 C~ty of
College Station. Texas Uulity System Revenue and Refunding Bonds, Series 1993".
8
Upon receipt of telephomc or telegraphic nome, such not~ce subsequently conf'umed in writing by ragis~red
or ceruf'~d nmil, or upon receipt of written notice by regtsternd or cemfied nmli, by the Insurer ~om the Paying
Agent or nny owner of an Obli~ntion the payment of an Insured Amount for which is then dan, that such required
payment hns not been mnd~: the Insmcr on the due date of such payment or within one business day al~er receipt
of notice of such nonpayment, whichever m later, will make u deposit of funds, in an account with CJtibenk. N,A.
m New York. New York. or ils successor, sufficient for the pay~nent of any such Insured Amounts which m'e then
due. Upon piesenlmeot and surrender of such Obligations m' presentment of such other proof of ownership of the
Obllgeuons. together with my nppropr,~ mstrumenls of assignment lo evidence the assignment of the Insured
Amounts due on the Obhgalions ns are paid by the Insurer. and appropriate instruments to effect the appoimment
of the Insurer as agent for such owners of the Obhgetions in any lagai prucendmg related to payment of Insured
Amounts on the Obligations. such msln~ments being in a form satlsfaclmy lo Citibank. N.A.. Cit,bank. N.A. shall
disinuse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations. less any
amount held by the Paying Agent for the payment of such Inst~ed Amounts and legally available therefor. This
policy does not insure against loss of any prepayment premium which may at any rnno be payable with respect to
any Obhgahon.
As used hereto, the telm "owner" shall mean the rag]stered owner of any Obl~en as indicated m the books
maintained by the Paying Agent. the Issuer, or any des~gnen of the Issuer for such pmposu. The tenn owner shall
not include the Issuer or any party whose ngrcemeat with the Issuer constitutes the underlying sucumy for the
Obhgenons
Any service of process on the Insurer nmy he made to the lnsu~r at ils offices located at 113 King Street,
Annouk. New York 10504.
This pohcy Is non-canccllable ~)r any reason. Thc premmm on this poltcy is not refundable for any reason
including thc paymcm prior to maturity of the Oblxgetlons.
DISCLOSURE OF GUARANTY FUND NONPARTICIPAT~ON: In tho event the Insurer is unable to fuH'dl its
coatructuai obhgat~on under this pohcy or contract or apphcatlon or cemficate or evidence of coverage, tho
policyholder or cemficateholder is not protected by an insurance gu~anty fund or other solvency protection
arrangement.
FORM OF ASSIGNMENT
*ASSIGNMENT
FOR VALUE RECEIVED, the underaigned regL~tered owner of this Bond. or duly anthonzed rept~csenlauve
or attorney thereof, hereby nssigns this Bond to
(AssJgnee's Soma]. Secunty or Tax Payer .(dcnuti~atlm~ nnmber) (Pnnt or ~ Assssnee's mm~ and address mdudm~ mp ~ode)
and hereby irrevocably constitutes and appoints
attorney to transfer the regmn'at~on of this Bond on the Paying Agent/Registrar's Ragmration Books wxth full power
of substttul~.no in the premtses
Dated
Signature Gum'-mteed:
NOTICE: Signeturefs) must he
NOTICE: Thc mgnatu~ above must corrnspond
gt~'anteed by a member I'mn of with the name of the Registered Owner n~ it
the New Yo~k Stock Exchnnge appeara upon the front of tfua Bond in every
or a commercial bank or trust particalnr, without alteration or eninrgement
company, or any change whatsoever.
The following abbreviations, when used m the assignment nbove or on the face of the witlun Bond, shall be
comtrued as though they were written out in full according to apphcable laws or regulaUons:
TEN COM - as tenants m common
TEN ENT - ns tenants by the entireties
JT TEN - as joint tenant with right {ff survivorship and not as tenants in common
UNIF GIFT MIN ACT - Custodinn under Unifman Gifts to Minor Act
(Cust) (Minor)
(Slate)
Adthtmnal abbrcvmuons may also bc used though not in thc list above.
NOTE TO PRINt taR:
*¶s to be on reverse mdc of dct'minve bonds
FORM OF INITIAL BOND
The Imtlnl Bond shall be m the form set fo~h above for the Definitive l~nndn~ exi~pl the fol]owinR ghull
replace the h"adlng and the t-t~t ~ para~raoha:
NO. I-I
United States of America
State of Texas
~ OF COl .I.pGE STATION, TEXAS
UTILITY SYSTEM REVENUE AND REFUNDING BOND, SERIES 1993
lsane Date:
June I, 1993
Regisl~s~l Owner'
Principal Amount: NINE MILLION NINE HUNDRED NINETY THOUSAND DOLLARS ($9.995,000)
THE CITY OF COLLEGE STATION, TEXAS. for value received, acknowledges itself indebted to and hereby
prouuses to pay to Ihe order of thc Regmtered Owner. Sp~lfiOd abOVe, or the registered assigns Ihezeaf (thc
"Rngtstcred Owner"). the Principal Amount, spacified above, with princqml mstalhuents payable ou Fcin'uaty I in
each of the yes~s, and bearing interest at per annum rates in acco~ with the following schedule:
YEARS OF
STATED MATURITIES
PRINCIPAL INTEREST
INSTALLMENTS RATES
$ %
(infonnatmn to be inserted fi'om schedule in Sectmn 2 hereof.)
INTEREST on the unpaid Prmclpal Amount hereof fi-om thc Issue Date, spectt'~l above, or fi~om the mom
recent interest pa}meat date to which interest has been paid or duly provided for untd the Princllxll Amount has
bcconm due and paymeal thereof has been made or duly paovidcd for computed un thc basis of a 360-day year of
10
twelve 30-tiny mnths; such interest being payable on Febmapff I and AuguSt I of each year. commencing I:~
*rl*u~ PPJNCL°AL OF ~ INTF. RI~$T ON flus Bond are payable in lawful money of Ibu Unin~l Stetes of
America. wttbuut exchange or collection charges. The finni payment of principal of this Bond shall be prod to the
Registered Owner hereof upon presentation and sur~nder of this Bond at finni mattmty, at the principal co~pornte
t~ust of~ce of TEXAS COMMERCE BANK NATIONAL ASSOCIATION. Houston. Texas. wluch is the 'Payin8
Agent/Registrar" f~ tins Bond. The payment of pnncq~l mstalfinents and interest on this Bond shall be mad~ by
the Paying Asenl/Regmlrar to the Registered Owner hereof ns shown by the Registration Books kept by the Paying
Agont/Rngistrar at the close of business on the Record Dnte by ch~ck drawn by ~ Paying Agont/Rngistear on, nmi
payable solely from. funds of the CRy required Io be on dspo~t wth the Payml~ Agenl/Regtslmr fo~ such pa~osu
as hereinafter provided; and such check shall be sent by Ihe Paying Agenl/Registr~ by United Sla~s mail. postage
p~pmd, on each such payment date. to the regislered owner hereof at its ~dress as it appears on the Regislration
Books kept by the Paying Agenl/Reg~strer. ns beremafter described. The record date ("Record Date") ~r payments
hereon means the last calender day of the month preceding a scheduled payment. In the event of a non-payment
of imereSt on a scheduled payment date. and fo~ 30 days thercefinr, a new record dale for such payment (a "Special
Record Date") will be established by the Paying Agenl/Regmrar. if and when fonds ~)r the payment thereof have
been received from the City. Notice of the Special Record Date and of the scheduled payment ~le. of the past flue
payment (the "Specml Payment Date". which shall be I'~ calendar days n~er the Special Record Dnte) shall be sent
at least five business days prim' to the Specnd Record Dale by United Slates mad. f~st class, po~nge prq~d, to the
address of the Registered Owner nppannng on the books of the Paying Agent/Regts~r~ at the close of business en
the last business day next preceding the date of nmilmg of such notice. The City covenants with ~ Registered
Owner that no later than each principal mstallmem payment date and interest payment da~ fo~ this Bond it will make
avadable to the Paying Agenl/Registrar the amounts requued to provide fo~ the payment, m immediately avs,lnhle
funds, of all prmclpnl of and interim on the Bonds. when due. in the mann~ set forth in Ibu ordinance authorizing
the issumce of the Bonds adopted by the Oty Council of the City on lane 10. 1993 {the "Ordinance**).
FORM OF COMPTROLLER*S CERTIFICATE
(ATTACHED TO THE INITIAL BOND)
OFFICE OF COMPTROLLER: REGISTER NO.
STATE OF TEXAS:
I hereby certtf~ that tins Bond has be~n enmined, ccmfi~l us to validity, and approved by tke Auorney
General of the Sine of Text. and that this Bond bus been ~gistered by ~ Comptroller of Pabllc Accounts of the
State of Texas.
Wimess my sagnamre and seal this
(SEAL)
XX~XXX
Comptroller of Pabhc Accounts of the State of Texas
lEND OF FORMS]
Section 6. Def'mitione. As used m this Ordinance. in nd&tinn to other defined roms he,in, the followtng
terms shell have the meanings set forth below, unless the text hereof specifically inchcatas otherwise:
**Addiuonni Bonds" means the nddiuonni panty obligations which the City reserves the right to issue in the
futm'c, as provided m Sectton 15 of thts Ordinance.
"Bond** or "Bonds* means one m' mm'c, as the case may be. of the Bonds antburJzcd to be issued by this
Ordinance.
II
"Bond Fund" means the fund provided for m Section 13 of tbe Ordinanec anthonzmg the issu~ce of the Series
1985 Bonds.
"City" and "isaucr" mean the City of College Stmion. Texas. or whe~ al~rOlmate the City Council thereof.
"C~ty Council" means the governing body of the City.
"Junior Lien Ce~lficatea" means the following certificates of obligation issued by the City bering the dates.
in the original Imncqml amounts, and finally matunng ns ~t fi~rth below, to-wit:
Date Pnncipal Amount Final Maturity
4/17/a4 S~A0.000 4/17/94
6/15/85 $393.000 6/15/99
"Net Revenues" means the gross revenues of thc Systems less thc reasonabio expenses of openttion and
mmntonance ~ thc Systems. iucludmg all salaries, labor, materials, rcpmrs, and extanmous necessury to render
eftic~ent service; provided, however, that only such repairs and extensions, as hi thc judgmont of the City Coancfl.
reasonably and fairly exercised, are necessary to kgcp Ibe plant or uulity m operation and render adequate service
to thc City and the inhabitants thereof, or such as might be necessary to meet sonic physical aectdent or condition
which would otherwise impmr the Parity Bonds shall be deducted in determining thc "Net Revenues'.
*Parity Bonds" means collecuvely the Previously Issued Panty Bonds. thc Bonds, and any Additional Bonds.
"Panty Bonds Ordinances" means collectively thc ordinances authmiziog thc Parity Bonds.
"Previously Issued Panty Bonds" means the outstandmg bonds named in the preamble to this Ordinance.
"Refunded Bonds" means those bonds described in the preamble to the Oramnncc.
"Reserve Mmonum" is defined m Section 13(o) hereof.
"Series 1985 Bonds" means the bonds described in the presmblc to thc Ordinance.
"Series 1990 Bonds" means thc bonds described in thc p~ambic to thc Ordln~ncc.
"Systems" means the City's entire exmumg waterworks system, sewer system, and elecmc light and powor
system, including all present and future extensions, anlargaments, additions, mplacemcats, and improvements thereto.
"Systems Fund" means that fund described m Section 9 hereof.
"Year" or "fiscal year" means die regular Rscal year used by the C~ty in connection with Ibe operation of the
Systems. which may be any 12 conseculave months pennd established by the City Council.
Section 7. Pled~. The principal of the Parity Bouds, redemption premium, if any, and any mU:rest payabin
thereon, am and shall be secured by and payable from an irrevocable first hen on and pledge of the Net Revenues.
and the Net Revenues am funber pledged irrevocably to the establishment and nminteannce of the funds created by
thc Parity Bonds Ordinances. The Panty Bonds arc not and wdl not be secured by or pnyable from a mutW, age or
deed tg' trust on any real, perannal, or mixed properties constttetmg the Systems. The owners of the Parity Bonds
shall never Imve the right to demand payment of such obhgnfions out of amy funds raised or to be raised by taxation.
or from any source whatsoever other than thc Net Revenues. This Ordinance shall not be consUmed ns requiring Ihe
12
City to expend any funds which a~e derived from sotaces other gmn the opcr~un of the Systems, but nmhin~ heroin
shall be construed ns preveatmg the City fi'om doing so.
Section 8, Rates. The City covenants and agrees Mth the holders of the Parity Bonds th~ it will:
(a) £LX and maintain rates end collect charges for the fsoflj.les and serwces afforded by thc Systems winch
will provids revenues sufllclcnt at all umes: (i) to pay all operation, mmntenancc, depreciation, repinosmunt, and
bettunncat charges of the Systems: (2) to estabhsh end malatmn the Bond Fund; (3) to geunrate in each yexr Nat
Revenues equal to 1.25 times thc maximum annual requirements foor thc payment of thc Ixmclpal of and interest on
thc Parity Bonds at thc time outstanding (although amounts shall be ~ into thc Bond Fund only in accordance with
Sectlan 9 hereof); and (4) to pay all indabtedness outslundin8 agemst the Systems, other than the Parity Bonds.
including thc Jumor L~cn Certificates as and when thc same hecumc duc: end
(b) dcpom as collected all revenues derived from the opecatxon of thc Systems mm thc Systems F~d.
Section 9. Flow of Funds. There has been created nnd estabHshcd on the books of the City. and accounted
for separate and apart f3'om all other funds of the City, a special Systems Fund. All gsoss reveenes reostved from
operation of thc Systems ~e and shall be deposited into and credited to the Systems Fund iunnndintely upon receipt.
The necessary and reasonnble expenses of opemUon and mmntenance of the Systems shall first be paid f~'om the
Systems Fund. The City shall then mnke substantially equil monthly payments into the Bond Fund (commencmg
with respect to the Bonds and uny Addmonsl Bonds on lite dste of dehve~ to thc initml purclmser thereof) during
each year in winch any of the Panty Bunds m'e outstanding in an aggregate amount equal to 100~ of the amounts
required to meet the interest and principal payments falimg due on or before the next maturity date of the Panty
Bonds. Thc City sludi, at least five days prior to Febtomy 1. 1094. end each August 1 und February I therenf~.
deposit into thc Bond Fund any edditional Net Revenues avadable [] thc Systems Fund which may be ncccssmy to
pay in full the intex'est on and principal, if any. conung due on the Parity Bonds such February I or August 1. [n
no event shall any amount m excess of the amounts stated above be placed in the Bond Fund for the payment of
the interest on or principal of the Parity Bonds. and any amount so placed may be withdrawn by the City end
replaced [] the Systems Fund. Any funds remalmng m thc Systems Fund. after provision for the reasonable cost
of operating and mamtmnmg thc Systems, mid after paying the amounts required to be prod into the Bond Fund. may
he used for any lawful purpese.
Section 10. Investments. Muncy tn any Fund established by the Panty Bonds Ordinances may. at thc option
of thc C~ty. be placnd or invested in any investments then permitted by Texas law end permitted tn the Parity Bonds
Ordmunces.
Section 11. Funds Scented. Money m nil Funds created by flus Ordinance. to thc extent not invested, shall
be secured [] the manner prescnbed by law for secunng funds of the City.
Section 12. Additional Bonds. In addition to inferior hen obhgations, thc City expressly resefl'es the tight
hereafter to msue nddluonnl panty bonds and ethe~ evidences of indebtedness now or hereaf~ enllmnznd by the
Legjslature of Texas (collectively, the "Additional Bonds"), mid the Additional Bonds. when nssuetL may be secured
by and payable from a first lien on and pledge of thc Net Revenues m the same manner and to the same extent as
the outstanding Panty Bonds but subJeCt to thc n~mammg provmions hereof, nnd the Previously Issued Panty Bonds.
the Bonds. and the Additmnal Bonds may be in ~ ~ of equal dxgmty. It is provided, however, that no
Additional Bonds shall be issued unless:
(a) As long as any of thc Previously Issued Panty Bonds are outstanding end unpaid, aH malcmfi concbtions
set forth in the Panty Bonds Ordmunces ~c satisfied~
(b) As long as uny of the Previously Issued Parity Bonds arc outstanding, the "net earnings" (definnd below)
of the Systems for the fiscal year next precndmg the month tn which the or~ authorizing such Additmnal
13
Bonds ts adopted, were equal to each of the provisions fo[lowing in items (c)(i) and (ii) below, datemuned
independently and eemfied by an mdcpendem Fu'm of cerlif~d public accountants, besed upon an annual audit of
the heel• of the Systems.
(c) A~er ail the Series 1985 Bonds are no long outstandmg,
{ I) An independent fu'm of ce•fled public accounlants, based upon an nnnnal au&t of the books of thc
Systems, certified that the net earn•cs of the Systems for the prev~oan fiscal year or ~r any 12 consucunve
month p[]'ted ending not more than 90 days Imor to thc date of the adoption of thc ordinance anthol'~zing such
Additional Bonds or other evidence of indebtedness were equal to each of the following detennincd
mdependentiy:
(i) at lenst 1.40 umes the average annual requucmants for the payment of I~in~pal and interest on the
then oulstanthng Panty Bonds and other evidences of mdehiedness payable fi'om the revenues of the
Systems and on said Addmonul Bonds or other evidences of indebtedness, when **sued. sold, and
dehvercd: and
(ii) at least i.25 runes the maximum annual nXluiremont for the payment of tho principal of and interest
on the Panty Bonds then outstanding and on such ,~,dditional Bonds. when issued, sold. and dehvemd:
provided, however, should thc ce~ficnte of the accountant cerUfy ~ the net e~inss of the Systems for the period
covered the~by were. In cuther case. less dino reqmred above, and a change in the tales and charges for thc services
afforded by ~ Systems became effective at least 60 days lmor to the scheduled date of adoption of the ordinance
authorizing such Additional Bonds, then such Additionul Bonds may nevertheless he issued xf an •dependent
engineer or engineermg f'mn havmg a favorabte reputation with respect to such nm#~.~ ee~ifins that, had such change
in rates and charges been effecuve for the enUre period covered by thc uccoontant's ccmficate would have met thc
tests specified in (t) and (h) above.
Thc term "net earnmgs" ns used in Ilus Section shall mean all of the Net Revenues. exclusive of mc•nc
received specifically for capital ztems, after deduction of thc reasonable expenses of operation mid maintenance of
the Systems excluding expenditures which under standard accoantmg practice should he charged to capital
expenditures or dcpructatton;
(d) Such Additional Bonds or other evidences of indebtedness are made to nm•re on Feb•my I in each of
the years in which they are scheduled to mature; and
(e) The entire issue of such Additional Bonds is insured [] a mar•er re•dar to the Previously Issued Parity
Bonds by an msoraore compeny or association of companies whesc []sumd obligations iec rated by either Moedy's
Investors Service or Standard & Poor's Corporation in tho same or a highe~ rat[]g category than thc insured
obhgations of the Mantctpal Bond Investem Assurance Coil••lion (at the time such bdd~ttonal Bonds ~e to he
issued) or the City shnll nstabltsh a reserve fund for such Additional Bonds by any method or cembln~s~on of
motheds that the City deems ren~onahie and appropriate pmvidad that (i) the mnount of such reserve fund (or
coverage of any surety bond in heu thereof) shall at least equal the maximum ann~ debt service reqouemants of
such Addiuonal Bonds, no~ ~o exceed the []exlm[]n thee penmtted by apphcablc mg-tn**ons, prucedtcres, or
pubhshed •lings of the Internal Revenue Scrvlee (the "Reserve lvtlnanum'*)-' (ii) ~f any cash •serve fund is funded
by malun8 I~ansfcrs of Net Revenues in the Systems Fund, such unosfem shall he made each month ~ an amount
rensonably sufficient to rnach the Reserve Mi•mu[] within a period of not more than five years after such Additional
Bonds arc sold and delivered: and (m) such •serve fund shall he for thc equal benefit of the ownc~ of (x) such
AddRtonal Bonds, (y) any Panty Bonds thcmtoforc issued which arc not insured [] maon~ suniiar to the Previously
Issued Panty Bonds, and (z) any Addmonal Bonds thea*eafter issued wluch arc not so insno~L
14
Section ~. General Covenants. Thc City further covenants, warrants, and agrees thai in accordance with
and to the extent requaud or permitted by ]aw while the Panty Bonds are outstanding and unpazl:
(a) PERFORMANCE. it will faltlffally pon~rm at aH tunes any and all covenants, undcpntri~s, sUpulations,
and provistous contained tn each Panty Bonds Ordiunnces, and in each and oveiT Parity Bond; it will promptly pay
or cause to be prod the principal of and interest on every Parity Bond, on the dates and in the places and manner
preacnbed in thc Parity Bonds Oniiannces; and it will, at the times and in the mm-mm' Meserdied, deposit, or cause
to be deposited, thc amounts required to be deposited into the interest and Sinking Fund and thc Contingency Fund;
and any holder of the Panty Bonds may require thc City, tis officials end emp]oyens, to cant oet, respect, or enforce
the covenants and obligsnon~ of the Panty Bonds Ordinances by all legal mid cqmtable means, including specifically,
but without hmita~on, the usc and i'ding of mandamus prnceedmgs in any court of competent j~isdictmn agantst
thc City, its officials and employees.
Co) CITY'S LEGAL AUTHORITY. It is a duly created and eztsung home rule city of tho State of Texas.
and ts duly authonzed under the laws of the State of Texas to ercate and issue thc Parity Bonds; all action on ils
port for thc ereatlon and issuance of smd obhgetions has been duly and effectively taken; and said obh~tmons in the
hands of the holders and owners thereof are and will be valid and enforceable special oblxga~ons of the City in
accordance with dieu' teflns.
(c) 'III'LE. It has or will obtmn lawful Utie to lite [ands. buddings, stnictu~s, and facthdes constitul~ng thc
Systems; it wdl defend thc tide to all the aforesmd lands, buddings, s~ructures, and faclfides, and every past thereof.
for thc benefit of the holders nnd owners of the Panty Bonds against thc chares and demands of all persons
whomsoever; it ts lawfully quailed to pledge the Net Revenues to the payment of the Panty Bonds in the manner
prescribed he~cin; and a has lawfully exercised such rights.
(d) LIENS. It will fn~n tune to nme and before the snme become dehnquent pay sad discharge aH taxes.
nssessments, and governmental charges, if any. which shall be lawfully imposed upon it or the Systems; it wdl pay
aH lawful clmms for rents, royalties, labor, materials, and supplies which if unpaid might by law become a lien or
charge tbereon, the lien of which would be prior to or interfere with thc liens hereof, so that the priority of thc liens
granted be~under shah be faHy preserved tn thc manner provided herein: and it will not create or suffer to be created
any mcchamc's, laimrer's materialman's, or other hen or charge which might or could be prior to the liens hereof.
or do or saff~r any matter or firing whereby the hens bere~ aught or could be Jmp~ provsded, however, that
no such tax, assessment, or charge, and that no such claims which might be used es the basis of a mechanic's.
laborer's, matermlman's, or other hen or chide, shaH be requaud to be paid so long es the validity of the same shall
be contested in good froth by thc City.
(e) OPERATION OF SYSTEMS: NO FRE~ SERVICE. It shall continuously and efficiently operate thc
Systems and maintain the Systams m good condition, repair, and wotking order, all at reasonable cost. No fzee
service of ~ Systems shall be allowed, and should the City or any of its agencies or msffumeotahdes, lessees, or
concessionaires make use of the services and fnctlittes of the Systems, payment monthly of thc standard retnd price
of thc services provided shall be made by the City or any of its agencies or instnauantahtles, lessees, or
concesmunalres out of funds from sources other than the revenues of the Systems.
(13 I=URTHER ENCUMBRANCE. It shah not adthtienaHy encumber the Net Revenues m any manner, except
ns permstted in the Panty Bonds Ordinances in connection with Additional Bonds. anless ~,d encumlxnnce is nmde
junior and subordinate m all respects to the liens, pledges, covenants, and agreements of the Parity Bonds
Ordinances; but the right of the City to issue obhgations payable from a subordinate lien on the surplus Net Revenues
is specifically recognized and retnincd.
(g) SALE OR DISFOSAL OF PROPERTY. It shall not sell. convey, mortgage, encumber, lease, or m any
manner u'ansfer title to, or dcdicam to other use, or otherwise dispose of the Systems. or any significant or substantial
part tbereof; provided, however, that wben the City deems it nccessnry to dispcec of any other propatly to other use.
15
it may do so e~ther when it has made arrangements to replace the same or provide substitutes therefor, or it is
determined by resolution of thc Caty Council that no such replacement or subsmute is necessary.
(h) INSURANCE. It agrees to maiatmn ]murauce on the Systems. for the benefit of thc holders or owners of
the Panty Bonds. of a kind and m an amount winch usually would he chined by private companies engaged m a
simdar type of busme~ in the same eren
(0 RECORDS AND AUDITS. It shall keep proper books, recorda, and accounts, separate from all ~her
books, records, and accounts, m which complete sod correct entries shall he n~de of nil transucficos f~lnlin~ tO ~
Systems. Upon written request made ant more than fi0 days following the close of the fmc. al ymlr. thc C-~ty shall
furmsh to any holdar of any Panty Bonds complete financial statements of the Systems m reasonable dmml covering
such fiscal year. curtailed by the Caty's andi~'. Any holde~ of 25% an principal amount of the Pnnty Bonds nt the
tune outstanding shall have the right at all reasonable times to inspect the Syslmns and all records, accounts, and
data of the City relanag thereto.
(j) GOVERNMENTAL AGENCIES. It has or wall oblain and keep in full force and effect ntl franchises.
pet'mits, author,,n,un, and other requirements apphcable to or necessary wilh respect to the ncquisiUon, conatmcUon.
equipment, operation, and mainteunnce of the Systems. end it will comply with aH of the ~'ms and conditmas of
any and all franchmes, perunts and anthonmUons apphcablc to or necessary w~th respect to thc Systems.
(k) NO COMPETITION. It wdl not operate, or grant uny frauchme or. to the extent it legally may. penmt
thc acqum~tion, consn~cfion, or operat~un of. any fantlittes which would be in compcufion w~th the Systems. and to
the extent that it legally may. the Ctty will prohibit any such competing fncdiues.
Section 14. Amendment of Ordinance. (a) The holders of the Panty Bonds aggregating in prtncR~al amount
51% of the aggregate princval amount of then outstanding Panty Bonds shall have the fight from thne to tune to
approve any amendment to thru Ordinance winch may be deemed necessary or desm~ble by the Caty: pmvidad.
however, that wathout the consent of thc holders of aH of the Panty Bonds at thc tune outslandmg, nothing herein
contained shall permit or be consl~xtcd to penmt the amendment of the terms and conthl~ons m this Ordmnoce or m
the Parity Bonds so as to:.
(I) Make any change an the maturity of the outstanding Parity Bonds:
(2) Reduce the rat~ of intmest home by any of the outstanding Panty Bonds:
(3) Reduce thc amount of the principal payable on thc outstanding Parity Bonds:
(4) Mothfy the tcrms of payment of principal of or interest on the outstanding Panty Bonds or ~mpose any
cou~huons with respect to such payment:
(5} Affect thc fights of the holders of less than all of the Parity Bonds; or
(6) Change the m[]unum percentegc of thc principal mnount of Parity Bouds necassmy ~n' consent to such
amendment.
(b) t~ at any nme the City shall de.sue to amend the Orthnance under fins Secuon. the City shall cause notice
of the proposed amendment to be published in a financial newspaper or journal published in The City of Now Yod~
New York. once during each calendar week for at least two succes~ve calendm' weeks. Such notice shaH briefly
set forth the nature of the propmed nmendment and shatl state that a copy thereof is on file at the principal office
of the Pnytag Agenl/Ragmtrsr for mspecUon by all holders of Parity Bonds. Such publicntton is not requixcd.
however, af notice in writing as given to each holder of the Parity Bonds.
(c) When ut any tune not less than 30 days. nnd wathin one year. from thc date of the f'unt pubhcatino of smd
nonce or other service of written nouce, the City shall l'c~elve an lnstrumen[ or instmmunts executed by the holders
of at least 51% [] aggregate pnnc~pal amount of nH Parity Bonds. which msh-ument or insla'umunts shah refer to the
proposed amendment descnhed an said notace and which spectfically cun~ent to and approve such amendment []
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subata~tlnlty Ihe form of the copy thereof on file with the Paying Aj~onl/Rnglstrer. the C~ty Council may pass the
amendatory ordinance in subatnnually thc same form.
(d) Upon thc passage of any amendatory ordinance p~suant to tho provisions of this Suction, fids Orditmuce
shall he deemed to he emended m accordance with such amendatoty ordinance, and the respecuve n~hts, duties, and
obhgatlons under this Ordmanee of tho City and all the holders of Parity Bonds shall thereafbu' be datermincd.
exercised, and enforced hereunder, subJect in all respects to such emcedments.
(e) Any consent gtven by thc holder of a Parity Bond pursuant to the provistons of this Sacuon shall be
irrevocable for a period of SLX months from the date of the fu'st pubh~tion of the nouce pmvidsd for m fids Suclmn.
nnd shall ho conclustve and bin&ng upon sil future holdc~ of the same Panty Bond fidrmg such period. Such
consent may be revoked at any tune after mx months from the date of the t'fist pubhcatmn of such notice by the
holder who gave such consent, or by a successor m tide. by fihng notice titereof with the Paying Agent and the City,
but such revuca~on shall not ho effective if the holders of 51% in aggregate principal emonnt of thc Parity Bonds
as tn th~s Secnon dui-reed have, prior to the attempted revocation, consented to and approve the emcndment.
(0 For the p~ of thts Section the fact of thc buldinl~ of Panty Bonds ,*sued in registered ~ vathoat
coupons and thc amounts and numhers of such Parity Bonds and the date of their holding same shah ho proved by
the Rngistratmn Books of thc Paying Agent/Registrar. Thc City may conclusively assume that such ownership
conunues until written notice to thc contrary is served upon tho C~ty.
(g) The foregoing pmwmons of this Section notwithstanding, the City by action of thc City Conucd may
emend this Ordinance for any one or more of the following purposes:
(1) To add to thc covenants and agreements of thc Csty in tins Ordinance contatned, other covenants and
agreements thereafter to be observed, grant nddlt*Ol~q] rights or remedlos to bondholders, or to su~ender,
resmct, or limit any right or power here[] i~s~rved to or coofexl'ed upon tho City:
(2) To make such provisions for the puq~se of curing any emhigaity, or curing, co~rucfidg, or supple-
meriting any defective provmon contained in th~s Ordinance, or in regerd to clarifyreg mntters or quc~..ons
anmng under this Ordinance. as arc necessary or desirable and not contrmT to er inconsistent with flus
Ordinance and which shall not ndversely affect thc mte, n~ts of thc holders of thc Parity Bonds-'
(3) To mo&fy any of the provismns of this Ordianucc in any other respect whatever, prowdsd that (i)
such modlficatton shall he, and be cxt~v, ssed to be, cffecttve only after all Parity Bonds oulatanding at thc dnte
of the adoption of such moddicanon shall cease to be outstanding, and (h) such modification shall ho
specdicelly refcn'ed to tn the text of all Afidmonal Bonds issued after the date of thc ndopuon of such
modification.
Section IS. Dam~ed. Mntildted. Lnst. Stolen. or Ikstroved Bonds. (a) In the event any ontatandmg Bond
is damaged, mutilated, lost. stolen, or destroyed, the Paying Aganl/Rngismtr shah canse to be printed, executed, and
delivered, a new bend of the same priuc~pal amount, nmtumy, and interest rate. ns the dnmnged, mutilated, lost.
stolen, or destroyed Bond. [] replacement for such Bond [] the mnnner hereinafter prowdcd
(b) Apphcatlon for replacement of damaged, muulated, lost, stolen, or deatzoyod Bonds shall be made to the
Paying Ageat/Rngistrar. In every case of loss. theft, of destruction of a Bond. the applicant fi~' a replacement bund
shah furnish to the City and to thc Paying Ageat/Rngtstrer such security or redemrety ns may be requund by them
to save each of them hannhiss from any loss or damngc vnth respect thereto. Also, [] every case of loss, theft, or
deslrucuon of a Bond, the apphcant shall funfish to thc City and to the Paying Agent/Regisuas evidence to dunr
sausfactton of the loss. theft, or destruction of such Bond. as the case may be. In every case of dsmngc or mutilntifMI
of a Bond, the applicant shall s[]runder to the Paymg Agent/Regislrer for cancellanon thc Bond an damaged or
muulated,
17
(c) Notwithsrandm8 the forcltom8 provisions of flus Suctmn. in thc event uny such Bond shall have matu~d.
und no defanlt has occurred winch is gtcn cominmng tn thc payment of thc principal of. redemption premimn, if uny.
or interest on the Bond. the City may authmize thc payment of thc same (without sun,rider thereof cxpact in thc
case of a damaged or mutilated Bond) in~*,~d of issuing a replacement Bond, provided security or indemnity is
fur[]shnd os above provsded m tins Section.
(d) Prior to the issuance of uny replacement bond. the Paying Agent/R~gmlrm' shall charge gtc ownel' of such
Bond with all lea, al. prmt[]g, und other expenses m coanecuon therewith. Evev~ replacement bond issued pursuant
to thc provisions of this Secuon by vu'me of the fact that any Bond is lost. stolen, or destroyed shall constitute a
contractual obligation of the City whether or not gtc lost. stolen or destroyed Bond shall he found at uny time. or
he enforeeable by unyone, and shall he entitled to all tho hencflts of this Ordinaucc equally and proportin~qtely Wlgt
uny and all other Bonds duly issued under this Ordmuncc.
(e) In uccorduncc with Section 6 of Article 717k-6, ¥.T.C.S, this Sccuon of thts Ordinance shall conmtute
unlhonty for thc issuance of uny such replacement bond without neccoslty of f[]gter action by the governing body
of the City or uny other body or parson, and lite duty of the replacement of such bonds is hereby authorized and
imposed upon the Paying Agent/Registrar, and the Paying Agen~Registrm' shall authenticate nnd deliver such bonds
in the form und nmnoer und with the effect, as prowded in Section 4(d) of this Ordmance for Bonds issued in
exchunge for other Bonds.
Section 16. Defeasance of ~e Bonds. (a) Any Bond and the rate,est thereon shall be deemed to be prod,
retired, und no longer outstanding (a "Defessud Bond") within thc meaning of this Ord[]unen. except to the extent
provided [] subsucuon (d) of g'dS Section, when payment of thc principal of such Bond. plus interest thereon to the
duc dale (whethc~ such duc date be by reason of matm'tty, upon rexlcmption, or otherwise) either (i) shah have heen
•adc or cunsnd to be made [] accorduncc with the terms thorenf (mcluthng the g~ving of uny required not, os of
redemption), or (d) shall imve heen provided for on or he fore such duc date by irrevocably depolnting with or malnng
avmlable to thc Paymg Agenl/Rngmtrar for such payment ( 1 ) lawful money of gtc Umted S tales of America sufficient
to make such payment or (2) direct obligations of the United States of America. or obligations the prmcipal of and
[]tereSt on which nrc unconditionally gum'anteed by the United Slates of Ame~ca, wluch may be United Slates
Treastuy obflgatmns such os its Slate nad Local Government Sones. und which nmy be book entry fc~n (hea-aln
"Government Obligations") which mature as to principal and •retest in such amounts und at such time as will insure
the avadablhty, without remveslment, of sufficient money to provide for such payment, und when proper
nrmngemenls lmve been made by the City with the Paying Agent/Registrar for the payment of ilS services until all
Defensed Bonds shall have become due und payable. At such time as a Bond shall be deemed to be a Defensed
Bond hereunder, as aforcsmd, such Bond and the •retest thorenn shah no longer be secured by, payable from, or
entitled to gte benefits of, the revenue hewn levied nmi pledged es provided in this Ordinunen, und such prmcipal
und interest shall be payable solely from such money or Government Obltgntions.
(b) Any money so deposited with the Paying Agenl/Rcgislrm' nmy at the wdllen direction of die City also be
invested as he~c[]hefore set forth, and all income from such Government Obligntians received by the Paymg
Agcnt/Rnglsmlr which ss not required for the payment of the Bonds und []te~st thereon, with respect to which such
money has been so deposited, shall be tm-ned over to the City. or depossted as gtrected in writing by the City.
(c) Until all Defensed BOnds shall have hecorne due und payable, gte Paying Agent/Registrar shall perfo~n
the services of Pay[]g Agenl/Reglstrar for such Defeased Bonds the stone as if they had not been dufeased, nnd thc
City shall make proper arrange[]ents to provide nnd pay for such servtcos ns required by this Ordinuncc.
Section 17. Tax Covenunts. Thc City covenants to talcc uny action to assure, or refrain from uny action
which would adversely affect, thc l~catment of the Bonds as obhgatmns descnhed in sccuon i03 of thc Internal
Rcvenne Code of 1986. as emended (thc '*Code'*). ~ mterest on which is not includable [] thc "Sross income" o~
the holder for purposos of federal mco[]e taxation. In furtherance thereof, the City covenants as follows:
18
(a) to rake uny action to assore that no more than 10% of the proceeds of thc Bonds (less mnonnts
deposited to a rescrvo fund. if any) arc used for any 'private bus~-',~,s usc", as de{'mcd in scctiun 141COX6) of
thc Code or. d' more than 10% of the proceeds m'e so used. that amounts, whcther or not mceavcd by thc City.
with respecl lo such pnvato busiocss usc. do not. under tho terms of this Ordinuncc or any underlying
arrungcmunt, directly or indu'eetiy, seem'e or provide for tho paymont of moro than 10% of tho debt service
on lime Bonds, in cuntraveunun of section 141COX2) of tho Code;
(b) to take uny act,un to asset that in thc ovent that tho "private business use" describud in subsection
(a) hcscof exceeds 5% of the proceeds of the Bonds (less amounts depos,tcd into a reserve fund. if uny) thun
tho remount m excess of 5% is used for a "privato business usu" wluch is "relatcd" and not "dispropoz~unatc",
w,thin the meunm8 of sucUon 141Co)(3) of thc Code, to the governmental usc;
(c) io tsko uny action to essurc flint no amount wluch is greater than the lesser of $5,000,000, or 5% of
the proceeds of the Bonds (less amounts deposited into a reserve fund, if uny) is directly or indirectly used
to fmunce loans to persons, othe~ than state or locnl governmental unnts, in contmvenUon of section 141(c) of
tho Code;
(d) to re~nin from talung uny action which would otherwise result in the Bonds being tzeated as 'lwivate
activity bonds" within tho meamn8 of section 141(a) of the Code;
(e) to refrain from taking uny acuon that would result in the Bonds being "federally gumanteed" within
the meamng of sccuon 149(b) of the Code;
(f) to mfmm f~m asms uny portion of thc proceeds of the Bonds, du'eetiy or mdiructiy, to acquire or
to replace funds which were used, duectly or inthrectly, to acquire investment property (as del"mcd in scot,un
148(b)(2) of the Code) which produces a materially btghcr yield over the Ict'm of thc Bonds. other than
mvestmunt l~Operty acquu~ with --
(1) proceeds of thc Bonds mvcstcd for a reasonable tcm~ period of tbte~ ycass or Ices un',{ such
pruceeds are necdcd for thc propose ~i' which thc Bonds arc issued,
(2) amounts invested in a bona fido debt sc~wce fund, within the meamng of scctiun 1.103-13(b)(12)
of the Tre, asury Regulatmns, und
(3) amounts deposited in uny reasonably xcquL,*ed rescl've or replacement fund to tho extent such
amounts do not exceed 10% of thc proceeds of the Bonds'-
(8) to othcrw~sc restrict thc use of the proceeds of thc Bonds or amounts treated as proceeds of thc Bonds.
as may be neecssary, so that the Bonds do not o~mc contravean the requn*cmunls of section 148 of thc
Code (relaung to m'btlrng¢) und, m the extent npphcable' sccuon 149(d) of the Code (sclnan8 to advance
refund,ng):
(h) to pay to the United Slates of Ammca at least mice dunnl{ each five-year period (beginning on thc
dale of delivery of thc Bonds) so amount that ~s at least equni to 90% of thc "Excess Earnings", within thc
meaning of seeUon 148(0 of the Code und to pay to the Umted States of America. not later than 60 days nfter
the Bonds have been paul in full. 100% of the amount then nXliored to be prod as a result of Excess Enmmgs
under suction 148(0 of the Code; und
(i) to mamtsm such records es will enable thc City to fulfill its respons,biliues under this section and
section 148 of thc Code und to retsm such records for at least six years following tho final payment of
pnucqml und interest on the Bonds.
It is the unde~stundin8 of thc Cmty that the covenants cuntulncd hc~n are intended to assure compliance with the
Code and uny regula-ons or ruhngs promtttsatcd by the U.S. De~cnt of the Treasury pursuunt thereto. In the
19
event that regulations or ruhngs are hezmfter promulgated which mo&fy, or expand pmvisinos of th.e Code. as
applicable to the Bonds, the City wtli not be required to comply with any covenant contaJnnd hamin to thc extent
that such modification or exFansien, in thc opinion of nationally-recogmznd bond counsel, will not advet~ly affect
thc exemption fi'om federal income taxatmn of interest on thc Bonds unticr section 103 of the Code. In the event
thai regtdattnos or ruhngs are hcrenfier promulgated which impose nddltional requirements which am apphcabic to
the Bonds. thc City agrees to comply with the addil, tOll/fl i'equJremollts to tho exteot necessa~j, in the opimon of
natxonaBy-t*ecngn~ed bond cotmscl, to pres~vc the exemption from fedcral income taxatmn of inte~st on thc Bonds
under section 103 of the Code.
Section 18. I~Ionnfinn as Qualif~d Tax-Exempt ~n~. ~e City h~by ~s~ms ~c ~ m
"q~fi~ m~mpt ~ds" ~ ~ in ~on 2~)(3) of ~ C~. In ~ ~ s~h ~tg~. ~
Ci~ ~n~. cove~, ~d w~ ~ ~l~ing' (a) ~g ~ c~ ~ in whi~ ~e ~ ~ ~.
thc City (~clu&ng ~y su~M~ enu~) hm n~ dcA8~ ~ will d~gn~ ~s. which w~n ~
wi~ ~e B~, w~ ms~ m m~ ~ $10~.~ of "q.nli~ ~x~ ~" ~ ~ ~) ~C
~n~ly ~tic~s ~ ~ ~nt of ~xemp ob~mns iss~ ~ the c~ ~ m w~h ~ ~n&
~ mu~ by thc C~y (~ ~y ~ cntm~) ~ ~t ex~ $10~; ~d (c) ~ Oty ~ ~ s~
~tlon ~ ~ ~m such ~tmn ~ n~e~ in ~ ~ ~e Bo~ wRI n~ ~ ~n~ "~ ~fi~ ~"
wi~m ~e m~mg of ~Ron 141 of ~ C~.
Section 19. Sale and Delive~ of Bonds. (a) Sale. Thc sale of thc Bonds to thc Undc~riters pursuant to
the Bond Purehasc Agreement mtached hamto as Exhibit "A" is hareby confirmed and delivezy of thc Bonds to thc
Underwriters shah be made as soon as practicable after thc adoption of this Ordinance. upon payment therefor, tn
accordance with thc Bond Purchase Agreement. Certain maltm*s relating to the cx¢ludabihty from gross Income of
the interest on the Bonds am sell under conmdcrahno; tbercfore the Mayor ts hereby anthortmd to mgn and ctclivc~
the Bond Purchase Agreement only upon resolution of such matters and the approval the~of of thc following
committee which is hereby appointed by Council ~ecJficaily for such purpo~ to wit:
· and
Co) Approval of Official Statement. The Chty hereby approves thc form and content of the Official Statement
relaung to tl~ Bonds and any addenda, supplcmeot, or amendment the~to, and approves thc distribution of such
Official Statement in the moffering of the Bonds by the Unde~wnten~ in final form, Wlth such c[umgc~ therein ~'
additions thereto as the officer executing thc same may deem advisable, such detormum~on to be conclusively
evidenced by his execution thereof. The form and content of and thc distribution and use of the preinplnnry O~cial
Statement dated May 27. 1993. prior to thc date hereof is hereby ra~afied and confirmed. Thc Couacd finds and
determines that the Pmlunmary Officml Statement is "dcemnd final" as that term is del'rand m 17 C.F.R. Section
240.15c2-12
(c) Lenal Ooinlon. The Underwriters' obligation to accept dchvety of the Bonds ~s subject to thc~ being
furnished an opinion of McC-inms. Lochndge & Kdgorc. L.L.P.. Attorneys. such opinion to be dated and delivered
as of thc date of dehve~y and payment for the Bonds.
(d) Renistrafiou and Deliver~. Upon thc re~slratmn of thc IniUal Bond. the CompUollcr of Public Accounts
of the State of Texas is authonzed and instruct to dehvcr the Initial Bond pu~sannt to thc msu'ucUon of ~ Mayor
for dchvery to the Underwriters.
Seetion 20. Escrow Al~eement. The Escrow Agreement .rt~d bereto as Exhibit "B" is hereby ~q~l~o~ed
and the Maym' is hereby authorized and directed to execute and dellvcr· and the City Sccrelm3t is hereby anthorized
and direc~l to attast the Escrow Agreement.
Section Zl. Use of Proceeds. Thc proceeds from thc sale of the Bonds shall be as follows: (i) accrued interest
on thc Bonds shall be depestted to thc credit of rite Bond Fund: (ii) $5.fi42.715.99 of the proceeds shall be deposited
to cretht of thc "Escrow Fund". established in accordance with the provisions of the Escrow Agreement. which
proceeds, together with other funds on deposit therein mid received from the investment thereof, shall be used to
mute the Refunded Bunds: and (m) the balance of the proceeds shall be deposited to a cunsuuctiun fund held at the
Cfly's depository bank aud used for the proposes bemin described.
SeetJon 22. Matters Related to Refundinn. (a) In order that the City shall namfy in a timely mnnner all
of ils obhgatiuns under this Ordinance, the Mayor and all other app, uimate officers and agents of the City ~e h~eby
authorized and directed to take all other argons that nrc reasonably necessary to provide for the refunding of thc
Refunded Bonds. including, without limltatmn, executing and delivering un behalf of the City all enrtificates.
corments, receipts, requests, notices, and other documents es nmy be reasonably necessary to emtimey tho City's
obhgauans under this Ordinance and to threct the transfer and apphcattun of funds of the City consistent with the
provistons of this Ordinance.
(b) The City here. by ffrevocably calls thc Refunded Bonds for redamptmn prior to maturity on Ibe daMS set
forth m. and authorizes and day. ets notice of such redemption to be given es provtded m. the form nnaehed hereto
ns Exinbit *D".
(c) No money of the Issuer otber than precends of the Bonds shall be used to refund thc Refunded Bonds.
(d) To essme the pm'chnse of the Escrowed Securities referred to in the Escrow Agrcemant. the Mayor nmi
the Escrow Agent are hereby nuthonzed to suhecnbe for. ngrce to purchase, and purclmse nno-calinble obhgnfinos
of the United States of America, in such amounts and maturities and bearing interest at such rates es nmy be
provided for in the Report referred to in the Escrow Agreement. and to execute any nmi all subacriptmns, pureimse
agreements, commlUnents, letters of amhonzatson, and other documents necessary to effectuate the forgoing, and
auy acUnos heretofore taken for such purpose are hereby rnt,t~ed and approved.
(e) The Councd finds that thc City will realize a net present value savings of $ as a result of
refunding the Refunded Bonds.
Section 2.3. Paying At. eal/Renistrar Anreemeat. The Paying Ageet/Rngtstrat Agreement. between thc City
and Tezns Commerce Bank Nationei AsancinUon. Houston. Texns attached hereto as Exinbit "C" ts hereby approved.
and thc Mayor is authorized to execute and the City Secrelmy is authorized to attest shine.
Section 24. Municipal Bond lneursmce. The C~ty has obLamed a finauchl gumg. nty imurauce polK:y (the
"Pohcy") from Municipal Bund Investms Assurance Cmporatmn (the "Insurer") msunng the payment of principal
and interest on the Bonds when due. The Mayor is authorized to execute the commluneat to issue a fmancml
gum'anty msurancc policy, and the City and the officers and employees of thc City me directed to do eny mid all
things necessary to oblain the bond insurance pohcy and. in accordance with such policy, the City shall abide with
the foflowmg provtstons:
(a) In the event that. on thc second Business Day. and again un thc Business Day. Imm' to the payment date
on the Bonds. the Paying Agenl/Regtstrar has not received sufficient moneys to pay all pnncipal of and interest mt
thc Bonds due on thc second following ~ fo]lowing, ns thc case may be. Business Day. thc Paying Agent/Reni-.,~.m
shall immedmt~ly notify thc Insmer or ils designee no the same Bumness Day by telephone or telegraph, cnoi'mned
in writing by registered or ce~fied mad. of the amount of the deficieney.
(b) If thc deficiency is made up in whole or in part prior to or un the payment date. thc Paying
Agen~ngtsffar shall so notify the insurer or its designee.
(c) In adthtinn, if the Paying Agen~Registrar has notice Ihat any Bundholder has been nXlalred to disgorge
payments of pnnclpal or mtmest on the Bonds to a mtstee in bankruptcy or ere~to~ or others pursuant to n final
judgment by a court of compatant jurisdiction thet such payment constitutes avotdable pre~mence to such Bondholder
21
mthin ~he meaning of any npphcable I~u~kn~plcy laws. then the Paying Agenl/Ragislrar shall notify lhe Insult a
its desi~cee of such fact by telephone or ~¢grapluc not~ce, continued in writing by regmered or ceslifind nmiL
(d) The Paying Agent/Rcgxstrnr is hereby ~rrevceably dasi~nnted, appointed, directed md authorized to not
ns alte~ey-in-facl for Holdem of the Bonds as follows:
(0 If and to the extent there ts a deficiency in amounts required to pay imesest on the Bonds, the Paying
Agent/Regtstrar shall la) execute and dehver to Cinbank, N,A., or xts successors under the Policy (the
"Insurance Paying Agent*), in the form sntisfactory to the Insurance Paying Agent. an mstrumem nppomtlng
the Insurer as agent for such Holders tn any lelgd proceeding related to thc payment of such interest and an
assignment to the lnstuc'r of the chums for interest to wInch such deficiency relates and winch are paJd by the
Insult, lb) receive as demgnee of the raspecnve Holders (and not as Paying Agent/Ragistras) in accordance
with the tenor of the Policy payment fzom the Insurance Paying Agent with respect to claims for interest so
asstgned, and lc) chsburse thc s~nc to such respective Holclcrs'- and
(ii) If and to the extent of a deficiency m amounts required to pay pnncipal of the Bonds, Iht Paying
Agent/Ragtstrar shall la) execute and deliver to the Insurance Paying Agent in form satisfactory to the
Insurance Paying Agent an instrument appomung the Insmer as agent for such Holder in any legal proceeding
relattng to the payment of such prmcipal and an assignment to the Insurer of any of the Bonds surrenden~l
to tho Inanmnce Paying agent or so inuch of the prmcilm] amount thereof as has not previously been prod or
for which inencys are not held by the Payiag Agenl/Ragislm' end avnilnhl~ for soch payment (but such
asmgnment shall he dehvex~d only if payincm from the Insurance Paying Agent is received), lb) receive as
designee of thc respecuve Holders (and not as Paying Agent/Rag~strm') in accordance w~th thc tenor of the
Policy payinent thnm~r from the Insurance Paying agent, and (c) disburse the same to such Holders.
lc) Payments with respect to claims for interest en and principal of Bonds disbursed by thc Paying
Agent/Rcgmtrar fo~n proceeds of thc Pohcy sindl not he considered to discharge the obhgetton of the [ssue~ wxlh
respect to such Bonds. and the Insm~r shall he come thc owne~ of such unpaid Bonds and clmms for thc interest in
accordance w~th the tenor of the assignment made to it under the provmoas of tins subsection or othexwisc.
(f) h'rnspecttve of whethe~ any such nsmgnment is executed and delivered, the Issuer and the Payin~
Agent/Relilslrar hereby agree for the benefit of the Insurer that,
l0 They recoginze thnt to the extent the Insurer makes payments, directly or mchrectiy (as by payxn~
through the Paying Agent/Rcgmlrar), on account of pnnclpal of or interest on the Bonds, the Insore~ wdi be
subrogated to the rights of such Holders to recetve the amount or' such principal and interest f~om the Issuer,
with interest thereon as provided and solely from the sources stated in lifts Ordinance and thc Bonds: and
(ii) They will aecordmgly pay to the insurer the amount of such principal and interast (Including imnckenl
and interest reenvered under subparagrsph (ii) of thc first para~al,h of thc Pohcy. which principal and interest
shall be deemed pest duc and not to have been paid), with interast thereon as provided in this Ordmance and
thc Bonds. but only from thc sources and in the inanner M'ovided hnmin for the payment of pnnclpal of and
interest on the Bonds to Holders. and will otherwise Uent the Insurer as the owner of such rights to the amount
of such pnncipal and interest.
(g) In coanectton with the ~asuance of Additional Bonds, the lasue~ shall deliver to thc Insurer a copy of the
chscinanre document, if any. circulated with respect to such Adchtlenal Bonds.
(h) Cop~es of any amendments made to the documents executed in connectton with the issuance of the Bonds
which axe consented to by the Insurer shall he sent to Standard & Poor's Corporation.
The Insurer shall receive notice of thc resignation or removal of the Paying Agent/P~gtstrar and the
appeintmenl of a successor thereto.
(j) The Insurer shall receive coplas of all notices reqmred to be delivered to Boudholde~ and, on an aan~
basis, copies of the Issuer's audited financial statements and annual budget.
Notices: Any ant,ce that ~s required to be given to a holder of the Bonds or to the Paying Agenl/Regisum'
pursuanl to Ihe Ordinance shah also be provided to the Insm'er. All notices requi~d lo be given lo the Inanrer undez
the Or(hannce shall be m wnling and shall be sent by registered or certd'ied mail addressed to Mumclpal Bond
Investors Assumnee Corporation. 113 King Street. Armonk. New York 10504. Attenuon: SurveiHance.
Seetion 25. Miscellaneous Provisions. (a) Titles Not RestrietJve. The titles assigned to the vanoas sections
of this Ordinance are for convenience only and shah not be considered restrictive of thc subject matter of any section
or of any part of thru Ordinance
(b) Preamble Adopted. The preamble to this Ordinance is hereby adopted as a par1 of the this Ordiannee.
(c) Inconsistent Prnvislom. All orders and resolutions, or para thereof, which are m coufhct or
inconslstenL with any provlmon of thJs Orthnancn are hereby repealed and declared to be inapplicable, and the
provanons of this Ordinance shall be and remain controlling as to the matters prescribed herein.
(d) SeverabiHtv. If any word. phraso, clause, paragraph, sentence, part. pom~, or provlsmn of this
Or&annee or the apphcation thereof to any person or Cucumslance shall be held to be mvahd, thc remainder of tlus
Orthnanee shall ncverthclc~ be valid and thc City hereby declass that this Ordmanee would have been enacted
wflhout such invalid word, phrase, clause, paragraph, ~entence. part. portion, or provisions.
(e) Governing latw This Ordinance shall be construed .'md enforced m accordance with the laws of the
Slale of Texa~.
(13 Open Meeting. The City officially Finds and determines thai the meeting at which flits Ordinance is
adopted was open to the public: and that public nouc¢ of the time, place, and purpose of such meeting wm given,
all as required by Afltclc 6252-17. Verann's Texas Civil Statutes, as amended.
(g) Immediate Effeet. Notwlthslandms any charter provision or other applicable laws, this Ordmance shall
immediately effective upon ~ts ndpptmn by thc C~ty Council.
PASSED AND APPROVED this June 10. 1993.
Cfly Sccrem~y. City of College S~tou, Texas
{CITY SEAL)
EXHIBIT A
Purclmse Contr~t
EXHIBIT B
E~row A~reement
EX~]BIT C
Pavin~ Anent/Re~ismir ~nt
EXI-I] BIT D
Notice of Rcdcmolion