O-1118-7-92ORDINANCE NO. 1118-7-92
AN ORDINANCE authorizing the issuance of "CITY OF ALLEN,
TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
REFUNDING AND IMPROVEMENT BONDS, SERIES 1992";
pledging the net revenues of the City's combined
Waterworks and Sewer System to the payment of the
principal of and interest on said Bonds; enacting
provisions incident and related to the issuance,
payment, security and delivery of said bonds,
including the approval and execution of a Purchase
Contract and Special Escrow Agreement and the
approval and distribution of an Official Statement
pertaining thereto; and providing an effective
date.
WHEREAS, the City of Allen, Texas (the "City") has duly issued
and/or incurred certain outstanding obligations that aggregate in
amount $6,125,000 and are payable from the Net Revenues of the
City's combined Waterworks and Sewer System (hereinafter referred
to as the "System"); such outstanding obligations (collectively,
hereinafter referred to as the "Refunded Bonds") being identified
and described as follows:
(1) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1972, dated
June 1, 1972, maturing on June 1, 1993 through
June 1, 2003, and now outstanding in the
principal amount of $ 790,000
(2) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1979, dated
August 1, 1979, maturing on June 1, 1993
through June 1, 2009, and now outstanding in
the principal amount of $1,185,000
(3) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1981, dated
June 1, 1981, maturing on June 1, 1993 through
June 1, 2005, and now outstanding in the
principal amount of $ 385,000
(4) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1985, dated
September 1, 1985, maturing on June 1, 1993
through June 1, 2000, and now outstanding in
the principal amount of $2,050,000
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(5) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1986, dated
August 1, 1986, maturing on June 1, 1993
through June 1, 2006, and now outstanding in
the principal amount of $1,715,000
AND WHEREAS, pursuant to the provisions of Article 717k,
V.A.T.C.S., as amended, the City Council is authorized to issue
refunding bonds and deposit the proceeds of sale directly with any
place of payment for the Refunded Bonds, and such deposit, when
made in accordance with said statute, shall constitute the making
of firm banking and financial arrangements for the discharge and
final payment of the Refunded Obligations; and
WHEREAS, the City Council hereby finds and determines that the
Refunded Bonds should be refunded to restructure the debt service
requirements of such indebtedness to allow for extended level
annual principal and interest payments and result in a reduction of
approximately 20% in the annual debt service requirements for the
first eight years and such refunding will add approximately
$834,660.97 to the cost of such indebtedness while resulting in
present value savings on such indebtness of approximately
$37,991.99; and
WHEREAS, in addition to the revenue bonds to be issued for
refunding purposes, the City Council has determined that revenue
bonds in the principal amount of $1,405,000 should be issued to
finance the costs of making improvements and extensions to the
City's combined Waterworks and Sewer System and notice of the
Council's intention to issue such revenue bonds for making
improvements and extensions to the City's combined Waterworks and
Sewer System has been duly posted at the City Hall, Allen, Texas
and duly published in the Allen American, a newspaper hereby found
and determined to be of general circulation in the City of Allen,
Texas, on July 5, 1992 and July 12, 1992, the date of posting and
the date of the first publication of such notice being at least
fourteen (14) days prior to the date of passage of this Ordinance;
and
WHEREAS, no valid petition signed by 10% or more of the
qualified voters of the City, has been submitted or filed with the
City Secretary or other official of the City petitioning the City
Council to submit to a referendum vote the question as to the
issuance of the above revenue bonds for such purposes; and
WHEREAS, the City Council hereby finds and determines that all
of the revenue bonds described in the aforesaid notice to finance
the costs of improvements and extensions to the City's Waterworks
and Sewer System and the bonds for refunding purposes should be
issued and sold at this time one series or issue; now, therefore,
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
TEXAS:
SECTION 1: Authorization -Designation -Principal Amount -
Purpose. Revenue bonds of the City shall be and are hereby
authorized to be issued in conformity with the Constitution and
laws of the State of Texas, including Articles 717k and 1111 et
seq., V.A.T.C.S., as amended, in the aggregate principal amount of
$8,545,000 to be designated and bear the title "CITY OF ALLEN,
TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING AND
IMPROVEMENT BONDS, SERIES 1992" (hereinafter referred to as the
"Bonds") , for the purpose of providing funds for the discharge and
final payment of certain outstanding obligations of the City
(identified in the preamble hereof and referred to as the "Refunded
Bonds") and to provide funds in the amount of $1,405,000 for making
improvements and extensions to the City's combined Waterworks and
Sewer System and paying costs of issuance.
SECTION 2: Fully Registered Obligations - Authorized
Denominations - Stated Maturities - Date. The Bonds shall be
issued as fully registered obligations, without coupons, shall be
dated July 15, 1992 (the "Bond Date") and, other than the single
fully registered Initial Bond referenced in Section 7 hereof, shall
be in denominations of $5,000 or any integral multiple thereof
(within a Stated Maturity), shall be numbered consecutively from
One (1) upward and shall become due and payable on June 1 in each
of the years and in principal amounts (the "Stated Maturities") and
bear interest at per annum rates in accordance with the following
schedule:
Year of
Principal
Interest
Stated Maturity
Amount
Rate(s)
1993
$ 405,000
3.25%
1994
360,000
4.00%
1995
370,000
4.50%
1996
390,000
4.70%
1997
405,000
5.00%
1998
425,000
5.10%
1999
450,000
5.30%
2000
475,000
5.50%
2001
500,000
5.65%
2002
525,000
5.80%
2003
555,000
5.90%
2004
590,000
6.00%
2005
625,000
6.20%
2006
665,000
6.30%
2007
705,000
6.40%
2008
670,000
6.40%
2009
95,000
6.40%
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2010 105,000 6.40%
2011 110,000 6.40%
2012 120,000 6.40%
The Bonds shall bear interest on the unpaid principal amounts
from the Bond Date at the rates) per annum shown in the above
schedule (calculated on the basis of a 360 -day year of twelve
30 -day months). Interest on the Bonds shall be payable on June 1
and December 1 in each year, commencing December 1, 1992.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The
principal of, premium, if any, and the interest on the Bonds, due
and payable by reason of maturity, redemption or otherwise, shall
be payable only to the registered owners or holders of the Bonds
(hereinafter called the "Holders") appearing on the registration
and transfer books (the "Security Register") maintained by the
Paying Agent/Registrar and the payment thereof shall be in any coin
or currency of the United States of America, which at the time of
payment is legal tender for the payment of public and private
debts, and shall be without exchange or collection charges to the
Holders.
The selection and appointment of AMERITRUST TEXAS NATIONAL
ASSOCIATION to serve as Paying Agent/Registrar for the Bonds is
hereby approved and confirmed. The City covenants to maintain and
provide a Paying Agent/Registrar at all times until the Bonds are
paid and discharged, and any successor Paying Agent/Registrar shall
be a bank, trust company, financial institution or other entity
qualified and authorized to serve in such capacity and perform the
duties and services of Paying Agent/Registrar. Upon any change in
the Paying Agent/Registrar for the Bonds, the City agrees to
promptly cause a written notice to be sent to each Holder by United
States Mail, first class postage prepaid, which notice shall
identify and give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be
payable at the Stated Maturities or upon their earlier redemption,
only upon presentation and surrender of the Bonds to the Paying
Agent/Registrar at its principal offices in Dallas, Texas (the
"Designated Payment/Transfer Office"). Interest on the Bonds shall
be paid to the Holders whose names appear in the Security Register
at the close of business on the Record Date (the 15th day of the
month next preceding each interest payment date) and shall be paid
by the Paying Agent/Registrar (i) by check sent United States Mail,
first class postage prepaid, to the address of the Holder recorded
in the Security Register or (ii) by such other method, acceptable
to the Paying Agent/Registrar, requested by, and at the risk and
expense of, the Holder. If the date for the payment of the
principal of or interest on the Bonds shall be a Saturday, Sunday,
a legal holiday, or a day on which banking institutions in the City
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where the Designated Payment/Transfer Office of the Paying
Agent/Registrar is located are authorized by law or executive order
to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday,
or day on which banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if
made on the original date payment was due.
In the event of a non-payment of interest on one or more
maturities on a scheduled payment date, and for thirty (30) days
thereafter, a new record date for such interest payment for such
maturity or maturities (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for
the payment of such interest have been received from the City.
Notice of the Special Record Date and of the scheduled payment date
of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to
the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder of such maturity or
maturities appearing on the Security Register at the close of
business on the last business day next preceding the date of
mailing of such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds
maturing on and after June 1, 2003 shall be subject to redemption
prior to maturity, at the option of the City, in whole or in part
in principal amounts of $5,000 or any integral multiple thereof
(and if within a Stated Maturity by lot by the Paying Agent/
Registrar), on June 1, 2002 or on any date thereafter at the
redemption price of par plus accrued interest to the date of
redemption.
(b) Exercise of Redemption Option. At least
forty-five (45) days prior to a date set for the redemption of
Bonds (unless a shorter notification period shall be satisfactory
to the Paying Agent/Registrar), the City shall notify the Paying
Agent/Registrar of its decision to exercise the right to redeem
Bonds, the principal amount of each Stated Maturity to be redeemed,
and the date set for the redemption thereof. The decision of the
City to exercise the right to redeem Bonds shall be entered in the
minutes of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all
Outstanding Bonds of the same Stated Maturity are to be redeemed on
a redemption date, the Paying Agent/Registrar shall treat such
Bonds as representing the number of Bonds Outstanding which is
obtained by dividing the principal amount of such Bond by $5,000
and shall select the Bonds, or principal amount thereof, to be
redeemed within such Stated Maturity by lot.
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(d) Notice of Redemption. Not less than thirty (30) days
prior to a redemption date for the Bonds, a notice of redemption
shall be sent by United States Mail, first class postage prepaid,
in the name of the City and at the City's expense, to each Holder
of a Bond to be redeemed in whole or in part at the address of the
Holder appearing on the Security Register at the close of business
on the business day next preceding the date of mailing such notice,
and any notice of redemption so mailed shall be conclusively
presumed to have been duly given irrespective of whether received
by the Holder.
All notices of redemption shall (i) specify the date of
redemption for the Bonds, (ii) identify the Bonds to be redeemed
and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state
the redemption price, (iv) state that the Bonds, or the portion of
the principal amount thereof to be redeemed, shall become due and
payable on the redemption date specified, and the interest thereon,
or on the portion of the principal amount thereof to be redeemed,
shall cease to accrue from and after the redemption date, and (v)
specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the
Designated Payment/Transfer Office of the Paying Agent/ Registrar
only upon presentation and surrender thereof by the Holder. If a
Bond is subject by its terms to prior redemption and has been
called for redemption and notice of redemption thereof has been
duly given or waived as herein provided, such Bond (or the
principal amount thereof to be redeemed) shall become due and
payable, and interest thereon shall cease to accrue from and after
the redemption date therefor, provided moneys sufficient for the
payment of such Bonds (or of the principal amount thereof to be
redeemed) at the then applicable redemption price are held for the
purpose of such payment by the Paying Agent/Registrar.
SECTION 5: Registration - Transfer - Exchange of Bonds -
Predecessor Bonds. A Security Register relating to the
registration, payment, and transfer or exchange of the Bonds shall
at all times be kept and maintained on behalf of the City by the
Paying Agent/Registrar, as provided herein and in accordance with
the provisions of an agreement with the Paying Agent/Registrar and
such rules and regulations as the Paying Agent/Registrar and the
City may prescribe. The Paying Agent/Registrar shall obtain,
record, and maintain in the Security Register the name and address
of each registered owner of the Bonds issued under and pursuant to
the provisions of this Ordinance. Any Bond may, in accordance with
its terms and the terms hereof, be transferred or exchanged for
Bonds of other authorized denominations upon the Security Register
by the Holder, in person or by his duly authorized agent, upon
surrender of such Bond to the Designated Payment/Transfer Office of
the Paying Agent/ Registrar, for cancellation, accompanied by a
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written instrument of transfer or request for exchange duly
executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/ Registrar.
Upon surrender for transfer of any Bond (other than the
Initial Bonds authorized in Section 7 hereof) at the Designated
Payment/ Transfer Office of the Paying Agent/Registrar, one or more
new Bonds shall be registered and issued to the assignee or
transferee of the previous Holder; such Bonds to be in authorized
denominations, of like Stated Maturity and of a like aggregate
principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial
Bonds authorized in Section 7 hereof) may be exchanged for other
Bonds of authorized denominations and having the same Stated
Maturity, bearing the same rate of interest and of like aggregate
principal amount as the Bonds surrendered for exchange, upon
surrender of the Bonds to be exchanged at the Designated
Payment/Transfer Office of the Paying Agent/ Registrar. Whenever
any Bonds are surrendered for exchange, the Paying Agent/Registrar
shall register and deliver new Bonds, executed on behalf of, and
furnished by, the City, to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall
be delivered at the Designated Payment/Transfer Office of the
Paying Agent/Registrar, or sent by United States Mail, first class
postage prepaid, to the Holder and, upon the delivery thereof, the
same shall be valid obligations of the City, evidencing the same
obligation to pay, and entitled to the same benefits under this
Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section
shall be made without expense or service charge to the Holder,
except as otherwise herein provided, and except that the Paying
Agent/Registrar shall require payment by the Holder requesting such
transfer or exchange of any tax or other governmental charges
required to be paid with respect to such transfer or exchange.
Bonds cancelled by reason of an exchange or transfer pursuant
to the provisions hereof are hereby defined to be "Predecessor
Bonds," evidencing all or a portion, as the case may be, of the
same obligation to pay evidenced by the Bond or Bonds registered
and delivered in the exchange or transfer therefor. Additionally,
the term "Predecessor Bonds" shall include any mutilated, lost,
destroyed, or stolen Bond for which a replacement Bond has been
issued, registered and delivered in lieu thereof pursuant to
Section 29 hereof and such new replacement Bond shall be deemed to
evidence the same obligation as the mutilated, lost, destroyed, or
stolen Bond.
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Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Bond called for redemption, in
whole or in part, within 45 days of the date fixed for redemption
of such Bond; provided, however, such limitation on transferability
shall not be applicable to an exchange by the Holder of the
unredeemed balance of a Bond called for redemption in part.
SECTION 6: Execution - Registration. The Bonds shall be
executed on behalf of the City by the Mayor under its seal
reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be
manual or facsimile. Bonds bearing the manual or facsimile
signatures of individuals who are or were the proper officers of
the City on the Bond Date shall be deemed to be duly executed on
behalf of the City, notwithstanding that such individuals or either
of them shall cease to hold such offices at the time of delivery of
the Bonds to the initial purchaser(s) and with respect to Bonds
delivered in subsequent exchanges and transfers, all as authorized
and provided in the Bond Procedures Act of 1981, as amended.
No Bond shall be entitled to any right or benefit under this
Ordinance, or be valid or obligatory for any purpose, unless there
appears on such Bond either a certificate of registration
substantially in the form provided in Section 8C, manually executed
by the Comptroller of Public Accounts of the State of Texas or his
duly authorized agent, or a certificate of registration
substantially in the form provided in Section 8D, manually executed
by an authorized officer, employee or representative of the Paying
Agent/ Registrar, and either such certificate upon any Bond duly
signed shall be conclusive evidence, and the only evidence, that
such Bond has been duly certified, registered and delivered.
SECTION 7: Initial Bond(s). The Bonds herein authorized
shall be initially issued either (i) as a single fully registered
bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in
Section 2 hereof and numbered T-1, or (ii) as twenty (20) fully
registered bonds, being one bond for each year of maturity in the
applicable principal amount and denomination and to be numbered
consecutively from T-1 and upward (hereinafter called the "Initial
Bonds)") and, in either case, the Initial Bond(s) shall be
registered in the name of the initial purchaser(s) or the designee
thereof. The Initial Bond(s) shall be the Bonds submitted to the
Office of the Attorney General of the State of Texas for approval,
certified and registered by the Office of the Comptroller of Public
Accounts of the State of Texas and delivered to the initial
purchaser(s). Any time after the delivery of the Initial Bond(s),
the Paying Agent/Registrar, pursuant to written instructions from
the initial purchaser(s), or the designee thereof, shall cancel the
Initial Bond(s) delivered hereunder and exchange therefor
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definitive Bonds of authorized denominations, Stated Maturities,
principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses
identified therefor; all pursuant to and in accordance with such
written instructions from the initial purchaser(s), or the designee
thereof, and such other information and documentation as the Paying
Agent/Registrar may reasonably require.
SECTION 8: Forms. A. Forms Generally. The Bonds, the
Registration Certificate of the Comptroller of Public Accounts of
the State of Texas, the Certificate of Registration, and the form
of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in this Section with such
appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may
have such letters, numbers, or other marks of identification
(including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American
Bankers Association) and such legends and endorsements (including
insurance legends in the event the Bonds, or any maturities
thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be
established by the City or determined by the officers executing
such Bonds as evidenced by their execution thereof. Any portion of
the text of any Bonds may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the Bond.
The definitive Bonds shall be printed, lithographed, or
engraved or produced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their
execution thereof, but the Initial Bond(s) submitted to the
Attorney General of Texas may be typewritten or photocopied or
otherwise reproduced.
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REGISTERED
NO.
B. Form of Definitive Bond.
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING AND IMPROVEMENT BOND
SERIES 1992
Bond Date: Interest Rate:
July 15, 1992
Registered Owner:
Principal Amount:
Stated Maturity:
REGISTERED
CUSIP NO:
DOLLARS
The City of Allen (hereinafter referred to as the "City"), a
body corporate and municipal corporation in the County of Collin,
State of Texas, for value received, hereby promises to pay to the
order of the Registered Owner named above, or the registered
assigns thereof, solely from the revenues hereinafter identified,
on the Stated Maturity date specified above the Principal Amount
stated above (or so much thereof as shall not have been paid upon
prior redemption) and to pay interest (computed on the basis of a
360 -day year of twelve 30 -day months) on the unpaid Principal
Amount hereof from the Bond Date at the per annum rate of interest
specified above; such interest being payable on June 1 and December
1 of each year, commencing December 1, 1992. Principal of this
Bond is payable at its Stated Maturity or redemption to the
registered owner hereof, upon presentation and surrender at the
Designated Payment Transfer/Office of the Paying Agent/Registrar
executing the registration certificate appearing hereon, or its
successor. Interest is payable to the registered owner of this
Bond (or one or more Predecessor Bonds, as defined in the Ordinance
hereinafter referenced) whose name appears on the "Security
Register" maintained by the Paying Agent/ Registrar at the close of
business on the "Record Date", which is the 15th day of the month
next preceding each interest payment date and interest shall be
paid by the Paying Agent/ Registrar by check sent United States
Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the
risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this Bond shall be
without exchange or collection charges to the owner hereof and in
any coin or currency of the United States of America which at the
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time of payment is legal tender for the payment of public and
private debts.
This Bond is one of the series specified in its title issued
in the aggregate principal amount of $8,545,000 (herein referred to
as the "Bonds") for the purpose of providing funds for the
discharge and final payment of certain outstanding obligations of
the City (identified in the preamble hereof and referred to as the
"Refunded Bonds") and to provide funds in the amount of $1,405,000
for making improvements and extensions to the City's combined
Waterworks and Sewer System and paying costs of issuance, under and
in strict conformity with the Constitution and laws of the State of
Texas, including Articles 717k and 1111, V.A.T.C.S., as amended,
and pursuant to an Ordinance adopted by the governing body of the
City (herein referred to as the "Ordinance").
The Bonds maturing on and after June 1, 2003 may be redeemed
prior to their Stated Maturities, at the option of the City, in
whole or in part in principal amounts of $5,000 or any integral
multiple thereof (and if within a Stated Maturity by lot by the
Paying Agent/Registrar), on June 1, 2002 or on any date thereafter
at the redemption price of par plus accrued interest thereon to the
redemption date.
At least thirty days prior to the date fixed for any
redemption of Bonds, the City shall cause a written notice of.such
redemption to be sent by United States Mail, first class postage
prepaid, to the registered owners of each Bond to be redeemed at
the address shown on the Security Register and subject to the terms
and provisions relating thereto contained in the Ordinance. If
this Bond (or any portion of the principal sum hereof) shall have
been duly called for redemption and notice of such redemption duly
given, then upon such redemption date this Bond (or the portion of
the principal sum hereof to be redeemed) shall become due and
payable, and, if moneys for the payment of the redemption price and
the interest accrued on the principal amount to be redeemed to the
date of redemption are held for the purpose of such payment by the
Paying Agent/Registrar, interest shall cease to accrue and be
payable from and after the redemption date on the principal amount
hereof redeemed.
In the event of a partial redemption of the principal amount
of this Bond, payment of the redemption price of such principal
amount shall be made to the registered owner only upon presentation
and surrender of this Bond to the Designated Payment/ Transfer
Office of the Paying Agent/Registrar, and there shall be issued to
the registered owner hereof, without charge, a new Bond or Bonds of
like maturity and interest rate in any authorized denominations
provided in the Ordinance for the then unredeemed balance of the
principal sum hereof. If this Bond is called for redemption, in
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whole or in part, the City and the Paying Agent/Registrar shall not
be required to transfer this Bond to an assignee of the Holder
within 45 days of the redemption date therefor; provided, however,
such limitation on transferability shall not be applicable to an
exchange by the Holder of the unredeemed balance hereof in the
event of its redemption in part.
The Bonds are special obligations of the City, payable solely
from and equally and ratably secured by a first lien on and pledge
of the Net Revenues (as defined in the Ordinance) of the City's
combined Waterworks and Sewer System (hereinafter referred to as
the "System"). The Bonds do not constitute a legal or equitable
pledge, charge, lien or encumbrance upon any property of the City
or the System, except with respect to the Net Revenues. The holder
hereof shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed
therefor, the City has reserved the right to issue additional
revenue obligations payable from and equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System, in
the same manner and to the same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is
on file in the Designated Payment/ Transfer Office of the Paying
Agent/Registrar, and to all of the provisions of which the Holder
by the acceptance hereof hereby assents, for definitions of terms;
the description of and the nature and extent of the security for
the Bonds; the properties constituting the System; the Net Revenues
pledged to the payment of the principal of and interest on the
Bonds; the nature and extent and manner of enforcement of the lien
and pledge securing the payment of the Bonds; the terms and
conditions for the issuance of additional revenue obligations; the
terms and conditions relating to the transfer or exchange of this
Bond; the conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying
Agent/ Registrar; the terms and provisions upon which the liens,
pledges, charges and covenants made therein may be discharged at or
prior to the maturity or redemption of this Bond, and this Bond
deemed to be no longer Outstanding thereunder; and for the other
terms and provisions contained therein. Capitalized terms used
herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the
Ordinance, may be transferred on the Security Register only upon
its presentation and surrender at the Designated Payment/Transfer
Office of the Paying Agent/Registrar, with the Assignment hereon
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Paying Agent/Registrar duly
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executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or
more new fully registered Bonds of the same Stated Maturity, of
authorized denominations, bearing the same rate of interest, and of
the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/ Registrar, and any agent of
either, may treat the registered owner whose name appears on the
Security Register (i) on the Record Date as the owner entitled to
payment of interest hereon, (ii) on the date of surrender of this
Bond as the owner entitled to payment of principal hereof at its
Stated Maturity or its redemption, in whole or in part, and (iii)
on any other date as the owner for all other purposes, and neither
the City nor the Paying Agent/ Registrar, or any agent of either,
shall be affected by notice to the contrary. In the event of
non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest
payment (a "Special Record Date") will be established by the Paying
Agent/ Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record
Date and of the scheduled payment date of the past due interest
(which shall be 15 days after the Special Record Date) shall be
sent at least five (5) business days prior to the Special Record
Date by United States Mail, first class postage prepaid, to the
address of each Holder appearing on the Security Register at the
close of business on the last business day next preceding the date
of mailing of such notice.
It is hereby certified, recited, represented and covenanted
that the City is a duly organized and legally existing municipal
corporation under and by virtue of the Constitution and laws of the
State of Texas; that the issuance of the Bonds is duly authorized
by law; that all acts, conditions and things required to exist and
be done precedent to and in the issuance of the Bonds to render the
same lawful and valid obligations of the City have been properly
done, have happened and have been performed in regular and due
time, form and manner as required by the Constitution and laws of
the State of Texas, and -the Ordinance; that the Bonds do not exceed
any constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of and interest on
the Bonds by a pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any application
thereof shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby.
The terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws of
the State of Texas.
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IN WITNESS WHEREOF, the City Council of the City has caused
this Bond to be duly executed under the official seal of the City
as of the Bond Date.
COUNTERSIGNED:
CITY OF ALLEN, TEXAS
Mayor
City Secretary
(SEAL)
C. *Form of Registration Certificate of Comptroller of Public
Accounts to Appear on Initial Bond(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
REGISTER NO.
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
I HEREBY CERTIFY that this Bond has been examined, certified
as to validity and approved by the Attorney General of the State of
Texas, and duly registered by the Comptroller of Public Accounts of
the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
(SEAL) of the State of Texas
*NOTE TO PRINTER: Do not print on definitive bonds
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D. Form of Certificate of Paying Agent Registrar to Appear on
Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of
the Registered Owner shown above under the provisions of the
within -mentioned Ordinance; the bond or bonds of the above entitled
and designated series originally delivered having been approved by
the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts, as shown by the records of the
Paying Agent/Registrar.
The principal offices of the Paying Agent/Registrar located in
Dallas, Texas, is the "Designated Payment/Transfer Office" for this
Bond.
Registration date:
E.
and
code
Form of Assignment.
FOR VALUE RECEIVED
transfers unto (Print
of transferee:),
AMERITRUST TEXAS
NATIONAL ASSOCIATION,
as Paying Agent/Registrar
By:
Authorized Signature
ASSIGNMENT
the undersigned hereby sells, assigns,
or typewrite name, address, and zip
(Social Security
or other identifying number: ) the
within Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints
attorney
to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
Signature guaranteed:
0019329
NOTICE: The signature on this
assignment must correspond with
the name of the registered owner
as it appears on the face of the
within Bond in every particular.
-15-
F. The Initial Bond(s) shall be in the form set forth in
paragraRh B of this Section, except that the form of a
single fully registered Initial Bond shall be modified as
follows•
(i) immediately under the name of the bond the headings
"Interest Rate " and "Stated Maturity "
shall both be omitted";
(ii) Paragraph one shall read as follows:
The City of Allen (hereinafter referred to as the "City"), a
body corporate and municipal corporation in the County of Collin,
State of Texas, for value received, hereby promises to pay to the
order of the Registered Owner named above, or the registered
assigns thereof, solely from the revenues hereinafter identified,
the Principal Amount hereinabove stated on June 1 in each of the
years and in principal installments in accordance with the
following schedule:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from
schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to
maturity) and to pay interest, computed on the basis of a 360 -day
year of twelve 30 -day months, on the unpaid principal amounts
hereof from the Bond Date at the per annum rates of interest
specified above; such interest being payable on June 1 and December
1 in each year, commencing December 1, 1992. Principal
installments of this Bond are payable in the year of maturity or on
a prepayment date to the registered owner hereof by AMERITRUST
TEXAS NATIONAL ASSOCIATION (the "Paying Agent/Registrar"), upon
presentation and surrender, at its principal offices in Dallas,
Texas (the "Designated Payment/Transfer Office"). Interest is
payable to the registered owner of this Bond whose name appears on
the "Security Register" maintained by the Paying Agent/Registrar at
the close of business on the "Record Date", which is the 15th day
of the month next preceding each interest payment date and interest
shall be paid by the Paying Agent/Registrar by check sent United
States Mail, first class postage prepaid, to the address of
registered owner recorded in the Security Register or by such other
method, acceptable to the Paying Agent/ Registrar, requested by, and
at the risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this Bond shall be
without exchange or collection charges to the owner hereof and in
any coin or currency of the United States of America which at the
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time of payment is legal tender for the payment of public and
private debts.
SECTION 9: Definitions. For all purposes of this Ordinance
and in particular for clarity with respect to the issuance of the
Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are
provided:
"Additional Parity Bonds" - Revenue bonds or other
evidences of indebtedness which the City reserves the
right to issue or enter into, as the case may be, in the
future in accordance with the terms and conditions
provided in Section 17 hereof and which are equally and
ratably secured by a first lien on and pledge of the Net
Revenues of the System.
"Average Annual Debt Service" - That amount which,
at the time of computation, is derived by dividing the
total amount of Debt Service to be paid over a period of
years as the same is scheduled to become due and payable
by the number of years taken into account in determining
the total Debt Service. Capitalized interest payments
provided from bond proceeds shall be excluded in making
the aforementioned computation.
"Bonds" - The "City of Allen, Texas, Waterworks and
Sewer System Revenue Refunding and Improvement Bonds,
Series 199211, dated July 15, 1992, authorized by this
Ordinance.
"Bonds Similarly Secured" - Collectively, the Bonds
and Additional Parity Bonds.
"City" - The City of Allen located in the County of
Collin, Texas.
"Debt Service" - As of any particular date of
computation, with respect to any obligations and with
respect to any period, the aggregate of the amounts to be
paid or set aside by the City as of such date or in
such period for the payment of the principal of, premium,
if any, and interest (to the extent not capitalized) on
such obligations; assuming, in the case of obligations
without a fixed numerical rate, that such obligations
bear, or would have borne, interest at the highest rate
reached, or that would have been applied to such
obligations (using the index or measure for computing
interest applicable to such obligations) during the
twenty-four (24) month, period next preceding the date of
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computation, and further assuming in the case• of
obligations required to be redeemed or prepaid as to
principal prior to maturity, the principal amounts
thereof will be redeemed prior to maturity in accordance
with the mandatory redemption provisions applicable
thereto.
"Fiscal Year" - The twelve month accounting period
used by the City in connection with the operation of the
System which may be any twelve consecutive month period
established by the City.
"Government Obligations" - Direct obligations of the
United States of America, 'including obligations the
principal of and interest on which are fully and
unconditionally guaranteed by the United States of
America, and United States Treasury obligations such as
its State and Local Government Series in book -entry form.
"Gross Revenues" - All income, receipts and revenues
of every nature derived or received from the operation
and ownership (excluding refundable meter deposits,
restricted gifts and grants in aid of construction) of
the System, including earnings and income derived from
the investment or deposit of moneys in any special funds
or accounts created and established for the payment and
security of the Bonds Similarly Secured and other
obligations payable solely from and secured only by a
lien on and pledge of the Net Revenues.
"Operating and Maintenance Expenses" - All current
expenses of operating and maintaining the System,
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, are necessary to maintain the
operations and render adequate service to the City and
the inhabitants thereof, or such as might be necessary to
meet some physical accident or condition which would
otherwise impair obligations payable from Net Revenues
shall be deducted in determining "Net Revenues".
Depreciation charges shall not be considered Operating
and Maintenance Expenses. Operating and Maintenance
Expenses shall include payments under contracts for the
purchase of water supply or the treatment of sewage or
other materials, goods, services or facilities for the
System to the extent authorized by law and the provisions
of such contract.
0019329
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"Net Earnings" - The meaning assigned to such term
in Section 17 hereof.
"Net Revenues" - Gross Revenues of the System, with
respect to any period, after deducting the System's
Operating and Maintenance Expenses during such period.
"Outstanding" - When used in this Ordinance with
respect to Bonds or Bonds Similarly Secured, as the case
may be, means, as of the date of determination, all Bonds
and Bonds Similarly Secured theretofore sold, issued and
delivered by the City, except:
(1) those Bonds or Bonds Similarly
Secured cancelled or delivered to the transfer
agent or registrar for cancellation in
connection with the exchange or transfer of
such obligations;
(2) those Bonds or Bonds Similarly
Secured paid or deemed to be paid in
accordance with the provisions of Section 27
hereof; and
(3) those Bonds or Bonds Similarly
Secured that have been mutilated, destroyed,
lost, or stolen and replacement bonds have
been registered and delivered in lieu thereof.
"Required Reserve" - The amount required to be
accumulated and maintained in the Reserve Fund under the
provisions of Section 13 hereof.
"System" --All properties, facilities and plants
owned, operated and maintained by the City for the
supply, treatment and transmission of potable water and
for the collection, treatment and disposal of
water -carried wastes, together with all future
extensions, improvements, replacements and additions
thereto; provided, however, that notwithstanding the
foregoing, and to the extent now or hereafter authorized
or permitted by law, the term "System" shall not mean to
include facilities of any kind which are declared not to
be a part of the System and which are hereafter acquired
or constructed by or on behalf of the City with the
proceeds from the issuance of "Special Facilities Bonds",
which are hereby defined as being special revenue
obligations of the City which are not Bonds Similarly
Secured but which are payable from and secured by other
liens on and pledges of any revenues, sources or
0019329
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payments, not pledged to the payment of the Bonds
Similarly Secured including, but not limited to, special
contract revenues or payments received from any other
legal entity in connection with such facilities.
SECTION 10: Pledge. That the City hereby covenants and
agrees that the Net Revenues of the System, with the exception of
those in excess of the amounts required for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably
pledged, to the payment and security of the Bonds and Additional
Parity Bonds, if issued, including the establishment and
maintenance of the special funds created and established by this
Ordinance, all as hereinafter provided, and it is hereby ordained
that the lien on and pledge of the Net Revenues securing the
payment of the Bonds Similarly Secured and interest thereon shall
be valid and binding in accordance with the terms hereof without
any filing or recording thereof, except in the official records of
the City, or physical delivery of such Net Revenues or further act
by the City.
SECTION 11: System Fund. The City hereby covenants and
agrees that Gross Revenues of the System (excluding earnings and
income derived from investments held in the Bond Fund and Reserve
Fund) shall be deposited as collected to the credit of a fund
maintained at an official depository of City funds and known on the
books and records of the City as the "Waterworks and Sewer System
Fund" (herein called the "System Fund"), and such revenues of the
System shall be kept separate and apart from all other funds of the
City. All revenues deposited in the System Fund shall be pledged
and appropriated to the extent required for the following uses and
in the order of priority shown:
(1) To the payment of all necessary and reasonable
Operating and Maintenance Expenses of the System as
defined herein or required by statute to be a first
charge on and claim against the Gross Revenues thereof.
(2) To the payment of the amounts required to be
deposited in the Bond Fund for the payment of Debt
Service on the Bonds Similarly Secured as the same
becomes due and payable.
(3) To the payment of the amounts required to be
deposited in the Reserve Fund to establish and maintain
the Required Reserve in accordance with the provisions of
this Ordinance or any other ordinance relating to
issuance of Bonds Similarly Secured.
Any Net Revenues remaining in the System Fund after satisfying
the foregoing payments, or making adequate and sufficient provision
0019329
-20-
for the payment thereof, may be appropriated and used for any other
City purpose now or hereafter permitted by law.
SECTION 12: Bond Fund. For purposes of providing funds to
pay the principal of and interest on the Bonds as the same becomes
due and payable, the City agrees to create or maintain a separate
and special account or fund on the books and records of the City
known as the "City of Allen Interest and Sinking Revenue Bond Fund"
(the "Bond Fund"), and all monies deposited to the credit of such
Fund shall be held in a special banking fund or account maintained
at an official depository of the City. The City covenants that
there shall be deposited into the Bond Fund prior to each principal
and interest payment date from the Net Revenues an amount equal to
one hundred per centum (100%) of the interest on and the principal
of the Bonds then falling due and payable by reason of maturity or
redemption, and such deposits to pay principal and accrued interest
on the Bonds shall be made in substantially equal monthly
installments on or before the 25th day of each month, beginning on
or before the 25th day of the month next following the delivery of
the Bonds to the initial purchaser.
The required monthly deposits to the Bond Fund for the payment
of principal of and interest on the Bonds shall continue to be made
as hereinabove provided until (i) the total amount on deposit in
the Bond Fund and Reserve Fund is equal to the amount required to
fully pay and discharge all Outstanding Bonds Similarly Secured
(principal and interest) or (ii) the Bonds are no longer
Outstanding.
Accrued interest and premium, if any, received from the
purchaser(s) of the Bonds, as well as earnings derived from the
investment of moneys in the Bond Fund, shall be deposited to the
credit of the Bond Fund and taken into consideration and reduce the
amount of the monthly deposits hereinabove required to be deposited
in the Bond Fund from the Net Revenues of the System.
SECTION 13: Reserve Fund. For purposes of accumulating and
maintaining funds as a reserve for the payment of the Bonds
Similarly Secured, the City agrees and covenants to create and
maintain a separate and special fund or account at a depository of
city funds to be known as the "City of Allen Revenue Bond Reserve
Fund" (the "Reserve Fund"), and all funds deposited therein
(excluding earnings and income derived or received from deposits or
investments which may be transferred to the System Fund established
in Section it hereof during such periods as there is on deposit in
the Reserve Fund the Required Reserve) shall be used solely for the
payment of the principal of and interest on the Bonds Similarly
Secured when (whether at maturity, upon a mandatory redemption date
or any interest payment date) other funds available for such
purposes are insufficient,, and, in addition, may be used to the
0019329
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extent not required to maintain the "Required Reserve", to pay, or
provide for the payment of, the final principal amount of a series
of Bonds Similarly Secured so that such series of Bonds Similarly
Secured is no longer deemed to be "Outstanding" as such term is
defined herein.
The total amount to be accumulated and maintained in the
Reserve Fund by reason of the issuance of the Bonds shall be
$678,386 (the "Required Reserve") and simultaneously with the
delivery of the Bonds to the initial purchaser(s) thereof, the City
shall cause to be transferred and deposited in the Reserve Fund the
Required Reserve from moneys and securities held in the reserve
fund maintained for the Refunded Bonds.
When and so long as the cash and investments in the Reserve
Fund total not less than the Required Reserve, no deposits need be
made to the credit of the Reserve Fund; but, if and when the
Reserve Fund at any time contains less than the Required Reserve
(other than as the result of the issuance of Additional Parity
Bonds as provided in the paragraph below), the City covenants and
agrees to cure the deficiency in the Required Reserve by making
monthly deposits to said Fund from the .Net Revenues of the System;
such monthly deposits to be in amounts equal to not less than
1/60th of the then total Required Reserve to be maintained in said
Fund and to be made on or before the 25th day of each month until
the total Required Reserve then to be maintained in said Fund has
been fully restored. The City further covenants and agrees that,
subject only to the payments to be made to the Bond Fund, the Net
Revenues shall be applied and appropriated and used to establish
and maintain the Required Reserve and to cure any deficiency in
such amounts as required by the terms of this Ordinance and any
other ordinance pertaining to the issuance of Additional Parity
Bonds.
As and when Additional Parity Bonds are delivered or incurred,
the Required Reserve shall be increased, if required, to an amount
equal to the lesser of (i) the Average Annual Debt Service
(calculated on a Fiscal Year basis) for all Bonds Similarly Secured
then Outstanding, as determined on the date each series of
Additional Parity Bonds are delivered or incurred, as the case may
be, or (ii) the maximum amount in a reasonably required reserve
fund that can be invested without restriction as to yield pursuant
to Subsection (d) of Section 148 of the Internal Revenue Code of
1986, as amended, and regulations promulgated thereunder. Any
additional amount required to be maintained in the Reserve Fund
shall be so accumulated by the deposit in the Reserve Fund of all
or any part thereof in cash immediately after the delivery of the
then proposed Additional Parity Bonds, or, at the option of the
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City, by the deposit of monthly installments, made on or before the
25th day of each month following the month of delivery of the then
proposed Additional Parity Bonds, of not less than 1/60th of the
additional amount to be maintained in said Fund by reason of the
issuance of the Additional Parity Bonds then being issued (or
1/60th of the balance of the additional amount not deposited
immediately in cash).
During such time as the Reserve Fund contains the total
Required Reserve, the City may, at its option, withdraw all surplus
in the Reserve Fund in excess of the Required Reserve and deposit
such surplus in the System Fund.
SECTION 14: Deficiencies: Excess Net Revenues. (a) If on any
occasion there shall not be sufficient Net Revenues of the System
to make the required deposits into the Bond Fund and the Reserve
Fund, then such deficiency shall be cured as soon as possible from
the next available Net Revenues of the System, or from any other
sources available for such purpose.
(b) Subject to making the required deposits to the Bond Fund
and the Reserve Fund when and as required by this Ordinance, or any
ordinance authorizing the issuance of Additional Parity Bonds, the
excess Net Revenues may be used by the City for any lawful purpose.
SECTION 15: Payment of Bonds. While any of the Bonds are
Outstanding, the Finance Director (or other designated financial
officer of the City) shall cause to be transferred to the Paying
Agent/Registrar, from funds on deposit in the Bond Fund, and, if
necessary, in the Reserve Fund, amounts sufficient to fully pay and
discharge promptly as each installment of interest and principal of
the Bonds accrues or matures or comes due by reason of redemption
prior to maturity; such transfer of funds to be made in such manner
as will cause immediately available funds to be deposited with the
Paying Agent/Registrar for the Bonds at the close of the business
day next preceding the date of payment for the Bonds.
SECTION 16: Investments - Security of Funds. (a) Money in
any Fund established pursuant to this Ordinance may, at the option
of the City, be placed in time deposits or certificates of deposit
secured (to the extent not insured by the Federal Deposit Insurance
Corporation) by obligations of the type hereinafter described, or
be invested, including investments held in book -entry form, in
direct obligations of the United States of America and obligations
guaranteed or insured by the United States of America, which, in
the opinion of the Attorney General of the United States, are
0019329
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backed by its full faith and credit or represent its general
obligations; provided that all such deposits and investments shall
be made in such a manner that the money required to be expended
from any Fund will be available at the proper time or times and
provided further the maximum stated maturity for any investment
acquired with money in the Reserve Fund shall be limited to five
(5) years from the date of the investment of such money. Such
investments (except State and Local Government Series investments
held in book entry form, which shall at all times be valued at
cost) shall be valued in terms of current market value within 45
days of the close of each Fiscal Year and, with respect to
investments held for the account of the Reserve Fund, within
30 days of the date of passage of each ordinance authorizing the
issuance of Additional Parity Bonds. All interest and income
derived from deposits and investments in the Bond Fund immediately
shall be credited to, and any losses debited to, the Bond Fund.
All interest and interest income derived from deposits in and
investments of the Reserve Fund shall, subject to the limitations
provided in Section 13 hereof, be credited to and deposited in the
System Fund. All such investments shall be sold promptly when
necessary to prevent any default in connection with the Bonds.
(b) That money in all Funds created by this Ordinance, to the
extent not invested, shall be secured in the manner and to the
fullest extent required by the laws of the State of Texas for the
security of public funds.
SECTION 17: Issuance of Additional Parity Obligations.
Subject to the provisions hereinafter appearing as to conditions
precedent which must be satisfied, the City reserves the right to
issue, from time to time as needed, Additional Parity Bonds for any
lawful purpose. Such Additional Parity Bonds may be issued in such
form and manner as now or hereafter authorized by the laws of the
State of Texas for the issuance of evidences of indebtedness or
other instruments, and should new methods or financing techniques
be developed that differ from those now available and in normal
use, the City reserves the right to employ the same in its
financing arrangements provided only that the following conditions
precedent for the authorization and issuance of the same are
satisfied, to wit:
(1) The Finance Director of the City (or other
officer of the City then having the primary
responsibility for the financial affairs of the City)
shall have executed a certificate stating (a) that, to
the best of his knowledge and belief, the City is not
then in default as to any covenant, obligation or
agreement contained in any ordinance or other proceeding
relating to any obligations of the City payable from and
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secured by a lien on and pledge of the Net Revenues of
the System that would materially affect the security or
payment of such obligations and (b) either (i) payments
into all special funds or accounts created and
established for the payment and security of all
outstanding obligations payable from and secured by a
lien on and pledge of the Net Revenues of the System have
been made and that the amounts on deposit in such special
funds or accounts are the amounts then required to be on
deposit therein or (ii) the application of the proceeds
of sale of such obligations then being issued will cure\
any such deficiency.
(2) The Additional Parity Bonds shall be scheduled
to mature or be payable as to principal on June 1 or
December 1 (or both) in each year the same are to be
outstanding or during the term thereof.
(3) The City has secured a certificate or opinion
of a Certified Public Accountant to the effect that,
according to the books and records of the City, the Net
Earnings for the last completed Fiscal Year, or for 12
consecutive months out of the 15 months, immediately
preceding the month the ordinance authorizing the
issuance of the Additional Parity Bonds is adopted are at
least equal to 1.20 times the Average Annual Debt Service
for all Outstanding Bonds Similarly Secured after giving
effect to the issuance of the Additional Parity Bonds
then being issued. In making a determination of the Net
Earnings, the Accountant may take into consideration a
change in the rates and charges for services and
facilities afforded by the System that became effective
at least sixty (60) days prior to the last day of the
period for which Net Earnings are determined and, for
purposes of satisfying the above Net Earnings test, make
a pro forma determination of the Net Earnings of the
System for the period of time covered by his
certification or opinion based on such change in rates
and charges being in effect for the entire period covered
by the Accountant's certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean
the Gross Revenues of the System after deducting the Operating and
Maintenance Expenses of the System, but not depreciation charges or
other expenditures which, under generally accepted accounting
principles, should be treated as capital expenditures.
0019329
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SECTION 18: Refunding Bonds. The City reserves the right to
issue refunding bonds to refund all or any part of the Bonds
Similarly Secured (pursuant to any law then available) upon such
terms and conditions as the City Council of the City may deem to be
in the best interest of the City and its inhabitants, and if less
than all such Bonds Similarly Secured then outstanding are
refunded, the conditions precedent prescribed (for the issuance of
Additional Parity Bonds) set forth in subparagraph (3) of
Section 17 hereof shall be satisfied and the Accountant's
certificate or opinion required in subparagraph (3) shall give
effect to the Debt Service of the proposed refunding bonds (and
shall not give effect to the Debt Service of the Bonds Similarly
Secured being refunded following their cancellation or provision
being made for their payment).
SECTION 19: Obligations of Inferior Lien and Pledge. The
City hereby reserves the right to issue obligations payable from
and secured by a lien on and pledge of the Net Revenues of the
System, junior and subordinate in rank and dignity to the lien and
pledge securing the payment of the Bonds Similarly Secured, as may
be authorized by the laws of the State of Texas.
SECTION 20: Rates and Charges. That, for the benefit of the
Holders of the Bonds and in addition to all provisions and
covenants in the laws of the State of Texas and in this Ordinance,
the City hereby expressly stipulates and agrees, while any of the
Bonds are Outstanding, to establish and maintain rates and charges
for facilities and services afforded by the System that are
reasonably expected, on the basis of available information and
experience and with due allowance for contingencies, to produce
Gross Revenues in each Fiscal Year sufficient:
(1) To pay Operating and Maintenance Expenses,
depreciation charges and replacement and betterment
costs,
(2) To produce Net Revenues sufficient to pay the
principal of and interest on the Bonds Similarly Secured
and the amounts required to be deposited in any reserve
or contingency fund created for the payment and security
of the Bonds Similarly Secured, and other obligations or
evidences of indebtedness issued or incurred that are
payable only from and secured solely by a lien on and
pledge of the Net Revenues of the System, and
(3) To produce Net Revenues equal to at least 1.20
times the annual Debt Service for the Fiscal Year on the
Outstanding Bonds Similarly Secured.
0019329
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(4) To pay all other indebtedness payable from the
Net Revenues and/or secured by a lien on the properties
or the revenues of the System.
SECTION 21: Maintenance and Operation - Insurance. The City
shall maintain the System in good condition and operate the System
in an efficient manner and at reasonable cost. While any Bonds are
Outstanding, the City agrees to maintain casualty and other
insurance on the System of a kind and in an amount customarily
carried by municipal corporations owning and operating similar
properties. Nothing in this Ordinance shall be construed as
requiring the City to expend any funds derived from sources other
than the operation of the System, but nothing herein shall be
construed as preventing the City from doing so.
SECTION 22: Sale or Lease of Properties. The City, to the
extent and in the manner authorized by law, may sell or exchange
for consideration representing the fair value thereof, as
determined by the City Council of the City, any property not
necessary or required in the efficient operations of the System, or
any equipment not necessary or useful in the operations thereof or
which is obsolete, damaged or worn out or otherwise unsuitable for
use in the operation of the System. The proceeds of any sale of
properties of the System shall be deposited in the System Fund.
SECTION 23: Records and Accounts. The City hereby covenants
and agrees that so long as any of the Bonds are Outstanding, it
will keep and maintain separate and complete records and accounts
pertaining to the operations of the System in which complete and
correct entries shall be made of all transactions relating
thereto, as provided by Article 1113, V.A.T.C.S. or other
applicable law. The Holders of any Bonds or any duly authorized
agent or agents of such Holders shall have the right at all
reasonable times to inspect such records, accounts and data
relating thereto, and to inspect the System and all properties
comprising same. The City further agrees that following the close
of each Fiscal Year, it will cause an audit of such books and
accounts to be made by an independent firm of Certified Public
Accountants. Each such audit, in addition to whatever other
matters may be thought proper by the accountant, shall particularly
include the following:
(1) A statement of the income and expenses of the
System for such Fiscal Year.
(2 ) A balance sheet for the System as of the end of
such Fiscal Year.
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(3) A statement describing the sources and
application of funds of the System for such Fiscal Year.
(4) The Accountant's comments' regarding the manner
in which the City has carried out the requirements of
this Ordinance and any other ordinance authorizing the
issuance of Additional Parity Bonds and his
recommendations for any changes or improvements in the
operations, records and accounts of the System.
(5) A list of insurance policies in force at the
end of the Fiscal Year covering the properties of the
System, setting out as to each policy the amount thereof,
the risk covered, the name of the insurer and the
policy's expiration date.
Expenses incurred in making an annual audit of the operations
of the System are to be regarded as Operating and Maintenance
Expenses. Copies of each annual audit shall be furnished to the
Executive Director of the Municipal Advisory Council of Texas at
his office in Austin, Texas, and, upon request, to the initial
purchasers of the Bonds and subsequent Holders of any of said
Bonds. The audits herein required shall be made within 120 days
following the close of each Fiscal Year insofar as is possible.
SECTION 24: Special Covenants. The City further covenants
and agrees by and through this Ordinance as follows:
(1) It has the lawful power to pledge the Net
Revenues of the System to the payment of the Bonds to the
extent provided herein and has lawfully exercised said
power under the Constitution and laws of the State of
Texas, and that the Bonds issued hereunder, together with
the Additional Parity Bonds, shall be ratably secured in
such manner that no one bond shall have preference over
any other bond of said issues.
(2) The Net Revenues of the System have not been in
any manner pledged or encumbered to the payment of any
debt or obligation of the City or the System, save and
except for the "Refunded Bonds" identified in the
preamble hereof (until the lien and pledge securing the
payment thereof has been defeased) and the Bonds.
(3) No free services of the System shall be
allowed, and should the City or any of its agents or
instrumentalities make use of the services and facilities
of the System, payment of the reasonable value thereof
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shall be made by the City out of funds from sources other
than the revenues and income of the System.
(4) To the extent that it legally may and while any
of the Bonds are Outstanding, no franchise shall be
granted for the installation or operation of any
competing waterworks or sewer system facilities.
(5) The City 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 ownership and operation of municipal facilities for
the supply and distribution of potable water and the
collection, treatment and disposal of water -carried
wastes, and which have been obtained from any
governmental agency; and the City has or will obtain and
keep in full force and effect all franchises, permits,
authorizations and other requirements applicable to or
necessary with respect to the acquisition, construction,
equipment, operation and maintenance of such properties
and facilities.
SECTION 25: Remedy in Event of Default. In addition to all
rights and remedies provided by the laws of the State of Texas, the
City covenants and agrees particularly that in the event the City
(a) defaults in payments to be made to the Bond Fund or the Reserve
Fund as required by this Ordinance or (b) defaults in the
observance or performance of any other of the covenants, conditions
or obligations set forth in this Ordinance, the Holders of any of
the Bonds shall be entitled to a writ of mandamus issued by a court
of proper jurisdiction, compelling and requiring the City and its
officers to observe and perform any covenant, condition or
obligation prescribed in this Ordinance. No delay or omission to
exercise any right or power accruing upon any default shall impair
any such right or power, or shall be construed to be a waiver of
any such default or acquiescence therein, and every such right and
power may be exercised from time to time and as often as may be
deemed expedient.
The specific remedy herein provided shall be cumulative of all
other existing remedies and the specification of such remedy shall
not be deemed to be exclusive.
SECTION 26: Special Obligations. The Bonds are special
obligations of the City payable from the pledged Net Revenues of
the System and the Holders thereof shall never have the right to
demand payment thereof out of funds raised or to be raised by
taxation.
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SECTION 27: Satisfaction of Obligation of City. If the City
shall pay or cause to be paid, or there shall otherwise be paid to
the Holders, the principal of, premium, if any, and interest on the
Bonds, at the times and in the manner stipulated in this Ordinance,
then the pledge of the Net Revenues of the System under this
Ordinance and all other obligations of the City to the Holders
shall thereupon cease, terminate, and become void and be discharged
and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to
have been paid within the meaning and with the effect expressed
above in this Section when (i) money sufficient to pay in full such
Bonds or the principal amount(s) thereof at maturity or to the
redemption date therefor, together with all interest due thereon,
shall have been irrevocably deposited with and held in trust by the
Paying Agent/Registrar, or an authorized escrow agent, or
(ii) non -callable Government Obligations shall have been
irrevocably deposited in trust with the Paying Agent/ Registrar, or
an authorized escrow agent, which Government Obligations have been
certified by an independent accounting firm to mature as to
principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money,
together with any moneys deposited therewith, if any, to pay when
due the principal of and interest on such Bonds, or the principal
amount(s) thereof, on and prior to the Stated Maturity thereof or
(if notice of redemption has been duly given or waived or if
irrevocable arrangements therefor acceptable to the Paying
Agent/Registrar have been made) the redemption date thereof. The
City covenants that no deposit of moneys or Government Obligations
will be made under this Section and no use made of any such deposit
which would cause the Bonds to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of
1986, as amended, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or
an authorized escrow agent, and all income from Government
Obligations held in trust by the Paying Agent/Registrar or an
authorized escrow agent, pursuant to this Section which is not
required for the payment of the Bonds, or any principal amount(s)
thereof, or interest thereon with respect to which such moneys have
been so deposited shall be remitted to the City or deposited as
directed by the City. Furthermore, any money held by the Paying
Agent/Registrar for the payment of the principal of and interest on
the Bonds and remaining unclaimed for a period of four (4) years
after the Stated Maturity, or applicable redemption date, of the
Bonds such moneys were deposited and are held in trust to pay
shall, upon the request of the City, be remitted to the City
against a written receipt therefor. Notwithstanding the above and
foregoing, any remittance of funds from the Paying Agent/Registrar
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to the City shall be subject to any applicable unclaimed property
laws of the State of Texas.
SECTION 28: Ordinance a Contract - Amendments. This
Ordinance shall constitute a contract with the Holders from time to
time, be binding on the City, and shall not be amended or repealed
by the City so long as any Bond remains Outstanding except as
permitted in this Section. The City, may, without the consent of
or notice to any Holders, from time to time and at any time, amend
this Ordinance in any manner not detrimental to the interests of
the Holders, including the curing of any ambiguity, inconsistency,
or formal defect or omission herein. In addition, the City may,
with the written consent from the owners holding a majority in
aggregate principal amount of the Bonds Similarly Secured then
Outstanding affected thereby, amend, add to, or rescind any of the
provisions of this Ordinance; provided that, without the written
consent of all Holders of Outstanding Bonds, no such amendment,
addition, or rescission shall (1) extend the time or times of
payment of the principal of, premium, if any, and interest on
the Bonds, reduce the principal amount thereof, the redemption
price therefor, or the rate of interest thereon, or in any other
way modify the terms of payment of the principal of, premium, if
any, or interest on the Bonds, (2) give any preference to any Bond
over any other Bond, or (3) reduce the aggregate principal amount
of Bonds or Bonds Similarly Secured, as the case may be, required
to be held for consent to any such amendment, addition, or
rescission.
SECTION 29: Mutilated - Destroyed - Lost and Stolen Bonds.
In case any Bond shall be mutilated, or destroyed, lost or stolen,
the Paying Agent/Registrar may execute and deliver a replacement
Bond of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Bond, or in lieu of and in
substitution for such destroyed, lost or stolen Bond, only upon the
approval of the City and after (i) the filing by the Holder thereof
with the Paying Agent/ Registrar of evidence satisfactory to the
Paying Agent/ Registrar of the destruction, loss or theft of such
Bond, and of the authenticity of the ownership thereof and (ii) the
furnishing to the Paying Agent/Registrar of indemnification in an
amount satisfactory to hold the City and the Paying Agent/Registrar
harmless. All expenses and charges associated with such indemnity
and with the preparation, execution and delivery of a replacement
Bond shall be borne by the Holder of the Bond mutilated, or
destroyed, lost or stolen.
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Every new Bond issued pursuant to this Section in lieu of any
mutilated, destroyed, lost, or stolen Bond shall constitute a
replacement of the prior obligation of the City, whether or not the
mutilated, destroyed, lost, or stolen Bond shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and ratably with all other Outstanding
Bonds.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 30: Notices to Holders -Waiver. Wherever this
Ordinance provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and sent by United States Mail, first class
postage prepaid, to the address of each Holder as it appears in the
Security Register.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice to any particular Holders, nor any
defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Bonds. Where this Ordinance
provides for notice in any manner, such notice may be waived in
writing by the Holder entitled to receive such notice,
either before or after the event with respect to which such notice
is given, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shal-1 be filed with the Paying
Agent/Registrar, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
SECTION 31: Cancellation. All Bonds surrendered for payment,
redemption, transfer or exchange, if surrendered to the Paying
Agent/Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying
Agent/Registrar and, if not already cancelled, shall be promptly
cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds
previously certified or registered and delivered which the City may
have acquired in any manner whatsoever, and all Bonds so delivered
shall be promptly cancelled by the Paying Agent/ Registrar. All
cancelled Bonds held by the Paying Agent/Registrar shall be
destroyed as directed by the City.
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SECTION 32: Covenants to Maintain Tax -Exempt Status.
(a) Definitions. When used in this Section 32, the following
terms have the following meanings:
"Code" means the Internal Revenue Code of 1986, as
amended by all legislation, if any, enacted on or before
the Issue Date.
"Computation Date" has the meaning stated in Treas.
Reg. § 1.148-8(b) (1) .
"Gross Proceeds" has the meaning stated in Treas.
Reg. § 1.148-8(d).
"Investment" has the meaning stated in Treas.
Reg. § 1.148-8(e).
"Issue Date" means the date on which the Bonds are
first authenticated and delivered to the initial
purchasers against payment therefor.
"Nonpurpose Investment" means any Investment in
which Gross Proceeds of the Bonds are invested and which
is not acquired to carry out the governmental purpose of
the Bonds. Obligations acquired with proceeds of the
Bonds that are to be used to discharge the Refunded Bonds
are Nonpurpose Investments.
"Rebatable Arbitrage" has the meaning stated in
Treas. Reg. § 1.148-2.
"Yield of"
(1) any Investment shall be computed in
accordance with Treas. Reg. §1.148-2, and
(2) the Bonds has the meaning stated in
Treas. Reg. § 1.148-3.
(b) Not to Cause Interest to Become Taxable. The City shall
not use, permit the use of, or omit to use Gross Proceeds or any
other amounts (or any property the acquisition, construction, or
improvement of which is to be financed directly or indirectly with
Gross Proceeds) in a manner which, if made or omitted,
respectively, would cause the interest on any Bond to become
includable in the gross income, as defined in section 61 of the
Code, of the owner thereof for federal income tax purposes.
Without limiting the generality of the foregoing, unless and until
the City shall have received a written opinion of counsel
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u
nationally recognized in the field of municipal bond law to the
effect that failure to comply with such covenant will not adversely
affect the exclusion of interest on any Bond from gross income for
federal income tax purposes pursuant to Section 103 of the Code,
the City shall comply with each of the -specific covenants in this
Section.
(c) No Private Use or Private Payments. Except as permitted
by section 141 of the Code and the regulations and rulings
thereunder, the City, at all times prior to the last Stated
Maturity of Bonds,
(1) shall exclusively own, operate, and possess all
property acquired, constructed or improved directly or
indirectly with Gross Proceeds of the Bonds (including
property financed with Gross Proceeds of the Refunded
Bonds) and shall not use or permit the use of such Gross
Proceeds or any property acquired, constructed, or
improved with such Gross Proceeds in any activity carried
on by any person or entity other than a state or local
government, unless such use is solely as a member of the
general public, or
(2) shall not directly or indirectly impose or
accept any charge or other payment for use of Gross
Proceeds of the Bonds (including property financed with
the Gross Proceeds of the Refunded Bonds) or for any
property acquired, constructed or improved indirectly
with such Gross Proceeds, other than taxes of general
application within the City or interest earned on
investments acquired with such Gross Proceeds pending
application for their intended purposes.
(d) No Private Loan. Except to the extent permitted by
section 141 of the Code and the regulations and rulings thereunder,
the City shall not use Gross Proceeds of the Bonds to make or
finance loans to any person or entity other than a state or local
government. For purposes of the foregoing covenant, such Gross
Proceeds are considered to be "loaned" to a person or entity if (1)
property acquired, constructed, or improved with such Gross
Proceeds 'is sold or leased to such person or entity in a
transaction which creates a debt for federal income tax purposes,
(2) capacity in or service from such property is committed to such
person or entity under a take -or -pay, output, or similar contract
or arrangement, or (3) indirect benefits, or burdens and benefits
of ownership, of such Gross Proceeds or any property acquired,
constructed, or improved with such Gross Proceeds are otherwise
transferred in a transaction which is the economic equivalent of a
loan.
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(e) Not to Invest at Higher Yield. Except to the extent
permitted by section 148 of the Code and the regulations and
rulings thereunder, the City shall not, at any time prior to the
final Stated Maturity of the Bonds, directly or indirectly invest
Gross Proceeds of the Bonds in any Investment (or use such Gross
Proceeds to replace money so invested), if as a result of such
investment the Yield of all Investments allocated to such Gross
Proceeds whether then held or previously disposed of, exceeds the
Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted
by section 149(b) of the Code and the regulations and rulings
thereunder, the City shall not take or omit to take any action
which would cause the Bonds to be federally guaranteed within the
meaning of Section 149(b) of the Code and the regulations and
rulings thereunder.
(g) Information Report. The City shall timely file with the
Secretary of the Treasury the information required by section
149(e) of the Code with respect to the Bonds on such form and in
such place as such Secretary may prescribe.
(h) Payment of Rebatable Arbitrage. Except to the extent
otherwise provided in section 148(f) of the Code and the
regulations and rulings thereunder,
(1) The City shall account for all Gross Proceeds
of the Bonds (including all receipts, expenditures, and
investments thereof) on its books of account separately
and apart from all other funds (and receipts,
expenditures, and investments thereof) and shall maintain
all records of such accounting with the official
transcript of the proceedings relating to the issuance of
the Bonds until six years after the final Computation
Date. The City may, however, to the extent permitted by
section 148(f) of the Code and the regulations
thereunder, commingle Gross Proceeds of the Bonds with
other money of the City, provided that the City
separately accounts for each receipt and expenditure of
such Gross Proceeds and the obligations acquired
therewith.
(2) Not less frequently than each Computation Date,
the City shall either (i) cause to be calculated by a
nationally recognized accounting or financial advisory
firm or (ii) calculate and cause its calculations to be
verified by a nationally recognized accounting or
financial advisory firm, in either case in accordance
with rules set forth in section 148(f) of the Code and
Treas. Reg. § 1.148-2 and rulings thereunder, the
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Rebatable Arbitrage with respect to the Bonds. The City
shall maintain such calculations relating to the issuance
of the Bonds until six years after the final Computation
Date.
(3) As additional consideration for the purchase of
the Bonds,by the initial purchasers thereof and the loan
of the money represented thereby, and in order to induce
such purchase by measures designed to result in the
excludability of the interest thereon from the gross
income of the owners thereof for federal income tax
purposes, the City shall pay to the United States the
amount described in paragraph (2) above and the amount
described in paragraph (4) below, at the times, in the
installments, to the place, in the manner, and
accompanied by such forms or other information as is or
may be required by section 148(f) of the Code and
Treas. Reg. §§ 1.148-1 through 1.148-9 and rulings
thereunder.
(4) The City shall exercise reasonable diligence to
assure that no errors are made in the calculations
required by paragraph (2) and, if such error is made, to
discover and promptly to correct such error within a
reasonable amount of time thereafter, including payment
to the United States of any Correction Amount as
described in Treas. Reg. § 1.148-1(c)(2) and any penalty
under Treas. Reg. § 1. 148-1 (c) (3) (ii) (B) .
(5) The City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the
Bonds, enter into any transaction that reduces the amount
required to be paid to the United States pursuant to this
subsection (h) because such transaction results in a
smaller profit or a larger loss than would have resulted
if the transaction had been at arm's length and had the
Yield of the Bonds not been relevant to either party.
(i) Qualified Advance Refunding. The Bonds are being issued
in part to refund the Refunded Bonds, and the Bonds will be issued
more than 90 days before the redemption of the Refunded Bonds. The
City represents that:
(1) None of the Refunded Bonds are "private
activity bonds," within the meaning of section 141 of the
Code. Specifically, the covenants set forth in
subsection (c) and (d) of this Section are true, correct,
and complete with respect to the Refunded Bonds, their
proceeds, and the facilities financed therewith.
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(2) The Bonds are the first advance refunding
(within the meaning of section 149(d)(5) of the Code) of
the Refunded Bonds.
(3) The Refunded Bonds are being called for
redemption, and will be redeemed, not later than the
earliest date on which each such issue may be redeemed at
par or at a premium of 3 percent or less.
(4) The initial temporary period under section
148(c) of the Code will end (i) with respect to the
proceeds of the Bonds not later than 30 days after the
date of issue of such Bonds and (ii) with respect to
proceeds of the Refunded Bonds on the date of issuance of
the Bonds if not ended prior thereto.
(5) Section 148 (e) of the Code did not apply to the
Refunded Bonds. On and after the date of issue of the
Bonds no proceeds of the Refunded Bonds will be invested
in Nonpurpose Investments having a Yield in excess of the
Yield on the Refunded Bonds to which any of such proceeds
relate.
(6) The Bonds are being issued for the purposes
stated in the preamble of this Ordinance. The debt
service savings achieved by the City are a result solely
of the interest rates on the Bonds being lower than the
interest rate of the Refunded Bonds. In the issuance of
the Bonds the City has employed no "device" to obtain a
material financial advantage (based on arbitrage), within
the meaning of section 149(d)(4) of the Code, apart from
savings attributable to lower interest rates.
SECTION 33: Sale of Bonds - Official Statement Approval. The
Bonds authorized by this Ordinance are hereby sold by the City to
Southwest Securities, Inc. (herein referred to collectively as the
"Purchasers") in accordance with the Purchase Contract, dated July
20, 1992, attached hereto as Exhibit A and incorporated herein by
reference_as a part of this Ordinance for all purposes. The Mayor
is hereby authorized and directed to execute said Purchase Contract
for and on behalf of the City and as the act and deed of this
Council, and in regard to the approval and execution of the
Purchase Contract, the Council hereby finds, determines and
declares that the representations, warranties and agreements of the
City contained in the Purchase Contract are true and correct in all
material respects and shall be honored and performed by the City.
Furthermore, the use of the Official Statement by the
Purchasers in connection with the public offering and sale of the
Bonds is hereby ratified, confirmed and approved in all respects.
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The final Official Statement, which reflects the terms of sale,
attached as Exhibit A to the Purchase Contract (together with such
changes approved by the Mayor or City Secretary, one or both of
said officials), shall be and is -hereby in all respects approved
and the Purchasers are hereby authorized to use and distribute said
final Official Statement, dated July 20, 1992, in the reoffering,
sale and delivery of the Bonds to the public. The Mayor and City
Secretary are further authorized and directed to manually execute
and deliver for and on behalf of the City copies of said Official
Statement in final form as may be required by the Purchasers, and
such final Official Statement in the form and content manually
executed by said officials shall be deemed to be approved by the
City Council and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 34: Special Escrow Agreement Approval and Execution.
The "Special Escrow Agreement" (the "Agreement") by and between the
City and Ameritrust Texas National Association (the "Escrow
Agent"), attached hereto as Exhibit B and incorporated herein by
reference as a part of this Ordinance for all purposes, is hereby
approved as to form and content, and such Agreement in
substantially the form and substance attached hereto, together with
such changes or revisions as may be necessary to accomplish the
refunding or benefit the City, is hereby authorized to be executed
by the Mayor and City Secretary for and on behalf of the City and
as the act and deed of this City Council; and such Agreement as
executed by said officials shall be deemed approved by the City
Council and constitute the Agreement herein approved.
Furthermore, the Mayor and City Secretary, either or both of
said officials, in cooperation with the Escrow Agent are hereby
authorized and directed to make the necessary arrangements for the
purchase of the Federal Securities referenced in the Agreement and
the delivery thereof to the Escrow Agent on the day of delivery of
the Bonds to the Purchasers for deposit to the credit of the
"SPECIAL CITY OF ALLEN, TEXAS, REVENUE REFUNDING BOND ESCROW FUND"
(the "Escrow Fund"), all as contemplated and provided in Article
717k, V.A.T.C.S., as amended, this Ordinance and the Agreement.
SECTION 35: Control and Custody of Bonds. The Mayor of the
City shall be and is hereby authorized to take and have charge of
all necessary orders and records pending investigation by the
Attorney General of the State of Texas, including the printing and
supply of definitive Bonds, and shall take and have charge and
control of the Initial Bonds pending the approval thereof by the
Attorney General, the registration thereof by the Comptroller of
Public Accounts and the delivery thereof to the Purchasers.
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Furthermore, the Mayor, City Secretary, Finance Director and
City Manager, any one or more of said officials, are hereby
authorized and directed to furnish and execute such documents and
certifications relating to the City and the issuance of the Bonds,
including certifications as to facts, estimates, circumstances and
reasonable expectations pertaining to the use, expenditure and
investment of the proceeds of the Bonds, as may be necessary for
the approval of the Attorney General, the registration by the
Comptroller of Public Accounts and the delivery of the Bonds to the
Purchasers, and, together with the City's financial advisor, bond
counsel and the Paying Agent/Registrar, make the necessary
arrangements for the delivery of the Initial Bond(s) to the
Purchasers and the initial exchange thereof for definitive Bonds.
SECTION 36: Proceeds of Sale. Immediately following the
delivery of the Bonds, the proceeds of sale thereof (less certain
costs of issuance, the accrued interest received from the
Purchasers of the Bonds and the amounts to be deposited to the
credit of the construction fund) shall be deposited with the Escrow
Agent for application and disbursement in accordance with the
provisions of the Agreement. The proceeds of sale of the Bonds not
so deposited with the Escrow Agent for the refunding of the
Refunded Bonds shall be disbursed and deposited for payment of
costs of issuance, deposited in the Bond Fund and deposited in the
construction fund, all in accordance with written instructions from
the City. Pending expenditure for authorized projects and
purposes, the proceeds of sale of the Bonds deposited to the
construction fund may be invested in authorized investments and any
investment earnings realized may be expended for such authorized
projects or purposes or deposited in the Bond Fund as shall be
determined by the City Council. All surplus proceeds of sale of
the Bonds deposited in the construction fund, including investment
earnings, remaining after completion of all authorized projects or
purposes shall be deposited to the credit of the Bond Fund.
SECTION 37: Printed Opinion. The obligation of the
Purchasers to accept delivery of the Bonds is subject to being
furnished a final opinion of Fulbright & Jaworski, Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said
opinion to be dated and delivered as of the date of delivery and
payment for such Bonds. Printing of a true and correct
reproduction of said opinion on the reverse side of each of the
definitive Bonds is hereby approved and authorized.
SECTION 38: CUSIP Numbers. CUSIP numbers may be printed or
typed on the definitive Bonds. It is expressly provided, however,
that the presence or absence of CUSIP numbers on the definitive
Bonds shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving said Bonds
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as to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the definitive Bonds.
SECTION 39: Benefits of Ordinance. Nothing in this
Ordinance, expressed or implied, is intended or shall be construed
to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal
or equitable, under or by reason of this Ordinance or any provision
hereof, this Ordinance and all its provisions being intended to be
and being for the sole and exclusive benefit of the City, the
Paying Agent/Registrar and the Holders.
SECTION 40: Inconsistent Provisions. All ordinances, orders
or resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this
Ordinance shall be and remain controlling as to the matters
contained herein.
SECTION 41: Governing Law. This Ordinance shall be construed
and enforced in accordance with the laws of the State of Texas and
the United States of America.
SECTION 42: Incorporation of Findings and Determinations. The
findings and determinations of the City Council contained in the
preamble hereof are hereby incorporated by reference and made a
part of this Ordinance for all purposes as if the same were
restated in full in this Section.
SECTION 43: Severability. If any provision of this Ordinance
or,the application thereof to any circumstance shall be held to be
invalid, the remainder of this Ordinance and the application
thereof to other circumstances shall nevertheless be valid, and the
Council hereby declares that this Ordinance would have been enacted
without such invalid provision.
SECTION 44: Construction of Terms. If appropriate in the
context of this Ordinance, words of the singular number shall be
considered to include the plural, words of the plural number shall
be considered to include the singular, and words of the masculine,
feminine or neuter gender shall be considered to include the other
genders.
SECTION 45: Public Meeting. It is officially found,
determined, and declared that the meeting at which this Ordinance
is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered
at such meeting, including this Ordinance, was given, all as
required by Article 6252-17, Vernon's Texas Civil Statutes, as
amended.
0019329
-40-
SECTION 46: Effective Date. This Ordinance shall take
effective immediately upon its passage and adoption on the date
shown below.
PASSED AND ADOPTED, this July 20, 1992.
CITY OF ALLEN, TEXAS
M or
ATTEST:
C y Se etary
(City Seal)
0019329
-41-
EXHIRr A
$8,545,000
CITY OF ALLEN, TEXAS
Waterworks and Sewer System
Revenue Refunding and Improvement Bonds,
Series 1992
PURCHASE CONTRACT
July 20, 1992
THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS
City of Allen
One Butler Circle
Allen, Texas 75002
Dear Mayor and City Council Members:
Southwest Securities Incorporated (the 'Underwriter'), offers to enter into this Purchase Contract with
the City of Allen, Texas (the "City'). This offer is made subject to the City's acceptance of this Purchase
Contract on or before 9:00 p.m., Central Daylight Savings Time on July 20, 1992.
1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the
representations set forth herein, the Underwriter hereby agrees to purchase from the City, and the City hereby
agrees to sell and deliver to the Underwriter an aggregate of $8,545,000 principal amount of City of Allen,
Texas Waterworks and Sewer System Revenue Refunding and Improvement Bonds, Series 1992 (the "Bonds').
The Bonds shall be dated July 15, 1992 and shall have the maturities and bear interest from their date at the
rate or rates per annum as shown on the cover page of the Official Statement (hereinafter defined), such
interest being payable on December 1, 1992, and semi-annually thereafter on June 1 and December 1 in each
year. The purchase price of the Bonds shall be 58,351,549.60 (representing the par amount of the Bonds of
$8,545,000, less an underwriter's discount thereon of 5135,865.50 and less original issue discount of $57,584.90)
plus accrued interest on the Bonds from their date to the date of Closing Exhibit A hereto is the Official
Statement, including the cover page and Appendices thereto, of the City dated July 20, 1992, with respect to
the Bonds. The Official Statement, including the cover page and Appendices thereto, as further amended only
in the manner hereinafter provided, is hereinafter called the 'Official Statement.'
2. Ordinance. The Bonds shall be as described in and shall be issued and secured under the
provisions of an ordinance with respect to each issue of Bonds adopted by the City on July 20, 1992 (the
'Ordinance'). The Bonds shall be subject to redemption and shall be payable as provided in the Ordinance.
3. Public Offering. It shall be a condition of the obligation of the City to sell and deliver the
Bonds to the Underwriter, and of the obligation of the Underwriter to purchase and accept delivery of the
Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered
by the City and accepted and paid for by the Underwriter at the Closing The Underwriter agrees to make
a bona fide public offering of all of the Bonds, at not in excess of the initial public offering prices, as set forth
on the cover page of the Official Statement, plus interest accrued thereon from the date of the Bonds and
confirm in writing to the City the principal amount (or percentage of principal amount) of each maturity and
the corresponding price for each maturity (or the yield from each maturity resulting from such price) at which
the Bonds sold pursuant to such bona fide public offering. Unless otherwise notified in writing by the
Underwriter by the Closing, the City can assume that the 'end of the underwriting period' for purposes of
Rule 15c2-12 of the federal Securities Exchange Act of 1934 (the 'Rule') shall be the Closing. In the event
such notice is so given in writing by the Underwriter, the Underwriter agrees to notify the City in writing
following the occurrence of the "end of the underwriting period' as defined in the Rule.
4. Security Deposit. Delivered to the City herewith is a corporate check of Southwest Securities
Incorporated payable to the order of the City in the amount of $25,000. The City agrees to hold such check
uncashed until the Closing to ensure the performance by the Underwriter of its obligation to purchase, accept
delivery of and pay for the Bonds at the Closing. Concurrently with the payment by the Underwriter of the
purchase price of the Bonds, the City shall return such check to Southwest Securities Incorporated as provided
in Paragraph 7 hereof. Should the City fail to deliver the Bonds at the Closing, or should the City be unable
to satisfy the conditions of the obligations of the Underwriter to purchase, accept delivery of and pay for the
Bonds, as set forth in this Purchase Contract (unless waived by the Underwriter), or should such obligation
of the Underwriter be terminated for any reason permitted by this Purchase Contract, such check shall
immediately be returned to the Southwest Securities Incorporated. In the event the Underwriter fails (other
than for a reason permitted hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing
as herein provided, such check shall be retained by the City as and for full liquidated damages for such failure
of the Underwriter and for any defaults hereunder on the part of the Underwriter. The Underwriter hereby
agrees not to stop or cause payment on said check to be stopped unless the City has breached any of the terms
of this Purchase Contract.
5. OMcial Statement. The City hereby authorizes the Escrow Agreement, hereinafter defined,
the Ordinance and the Oficial Statement and the information therein contained to be used by the Underwriter
in connection with the public offering and sale of the Bonds. The City hereby ratifies and confirms the use
by the Underwriter in the offering of the Bonds prior to the date hereof of the Preliminary Official Statement
for the Bonds dated July 10, 1992 and that the Preliminary Official Statement was "deemed final' by the City,
as of the date of its initial mailing within the meaning, and for the purposes, of the Rule. The City agrees to
cooperate with the Underwriter to provide a supply of final Official Statements within seven business days of
the date hereof in sufficient quantities to comply with the Underwriter's obligations under applicable MSRB
Rules and the Rule. The Underwriter will use its best efforts to assist the City in the preparation of the final
Official Statement in order to ensure compliance with the aforementioned rules.
6. Representations, Warranties and Agreements of City. On the date hereof, the City represents,
warrants and agrees as follows:
(a) The City is a municipal corporation, a political subdivision of the State of Texas and
a body politic and corporate, and has full legal right, power and authority to enter into this Purchase
Contract, and the Escrow Agreement, between the City and the Escrow Agent named in the Official
Statement (the 'Escrow Agreement'), to adopt the Ordinance, to sell the Bonds, and to issue and
deliver the Bonds to the Underwriter as provided herein and to carry out and consummate all other
transactions contemplated by the Ordinance, the Escrow Agreement and this Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance hereof, the
City has duly adopted the Ordinance, has duty authorized and approved the execution and delivery
of, and the performance by the City of the obligations contained in the Bonds, the Escrow Agreement
and this Purchase Contract and has duly authorized and approved the performance by the City of its
obligations contained in the Ordinance, the Escrow Agreement and in this Purchase Contract;
(c) The City is not in breach of or default under any applicable law or administrative
regulation of the State of Texas or the United States or any applicable judgment or decree or any loan
EXH18TT A
2
agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official
Statement, to which the City is a party or is otherwise subject, which would have a material and
adverse effect upon the business or financial condition of the City, including the Waterworks and
Sewer System of the City (the 'System'); and the execution and delivery of the Escrow Agreement and
this Purchase Contract by the City and the execution and delivery of the Bonds and the adoption of
the Ordinance by the City and compliance with the provisions of each thereof will not violate or
constitute a breach of or default under any existing law, administrative regulation, judgment, decree
or any agreement or other instrument to which the City is a party or is otherwise subject;
(d) All approvals, consents and orders of any governmental authority or agency having
jurisdiction of any matter which would constitute a condition precedent to the performance by the
City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the
Closing;
(e) At the time of the City's acceptance hereof and at the time of the Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(f) Between the date of this Purchase Contract and Closing, the City will not, without
the prior written consent of the Underwriter, issue any additional bonds, certificates of obligation,
notes or other obligations for borrowed money payable in whole or in part from ad valorem taxes or
surplus Net Revenues of the System, and the City will not incur any material liabilities, direct or
contingent, relating to, nor will there be any adverse change of a material nature in the financial
position of, the City or the System;
(g) Except as descnbed in the Official Statement, no litigation is pending or, to the
knowledge of the City, threatened in any court affecting the corporate existence of the City, the title
of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of
the Bonds, or the collection of the ad valorem taxes or the collection of revenues of the System
pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting
or affecting the issuance, execution, delivery, payment, security or validity of the Bonds, or in any way
contesting or affecting the validity or enforceability of the Ordinance, the Escrow Agreement or this
Purchase Contract, or contesting the powers of the City, or any authority for the Bonds, the
Ordinance, the Escrow Agreement, or this Purchase Contract or contesting in any way the
completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement or
materially and adversely affecting the financial condition of the City or the System;
(h) 'Ile City will cooperate with the Underwriter in arranging for the qualification of
the Bonds for We and the determination of their eligibility for investment under the laws of such
jurisdictions as the Underwriter designates, and will use their best efforts to continue such
qualifications in effect so long as required for distribution of the Bonds; provided, however, that the
City will not be required to execute a general consent to service of process or to qualify to do business
in connection with any such qualification in any jurisdiction;
(i) The descriptions contained in the Official Statement of the Bonds, the Escrow
Agreement and the Ordinance accurately reflect the provisions of such instruments, and the Bonds,
when validly executed, authenticated and delivered in accordance with the Ordinance and sold to the
Underwriter as provided herein, will be validly issued and outstanding obligations of the City entitled
to the benefits of, and subject to the limitations contained in, the Ordinance;
0) If prior to the Closing an event occurs affecting the City which is materially adverse
for the purpose for which the Official Statement is to be used and is not disclosed in the Official
Statement, the City shall notify the Underwriter, and if in the opinion of the Underwriter such event
requires a supplement or amendment to the Official Statement, the City will supplement or amend
the Official Statement in a form and in a manner approved by the Underwriter's Counsel; and
(k) If, after the Closing and until twenty-five (25) days after the end of the underwriting
period, any event shall occur as a result of which it is necessary to amend or supplement the Official
Statement in order to make the statements therein, in the light of the circumstances when the Official
Statement is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement
the Official Statement to comply with law, the City agrees to notify Southwest Securities Incorporated
(and for the purposes of this clause (k) to provide the Underwriter with such information as they may
from time to time request), and to forthwith prepare and furnish, at its own expense (in a form and
manner approved by Southwest Securities Incorporated), a reasonable number of copies of either
amendments or supplements to the Official Statement so that the statements in the Official Statement
as so amended and supplemented will not, in light of the circumstances when the Official Statement
is delivered to a purchaser, be misleading or so that the Official Statement will comply with law.
7. Closing. At 10:00 AM., Central Daylight Savings Time, on August 20, 1992, the City will
deliver the initial certificates to the Underwriter and, provided the Underwriter shall have given written
instructions to the Paying Agent/Registrar (as defined in the Ordinance) for the Bonds as hereinafter provided,
will have available for immediate exchange the Bonds in definitive form, duly executed and authenticated,
together with the other documents hereinafter mentioned, and the Underwriter will accept such delivery and
pay the respective purchase prices of the Bonds as set forth in Paragraph 1 hereof in immediately available
funds. Concurrently with such payment by the Underwriter, the City shall return to Southwest Securities
Incorporated, the check referred to in Paragraph 4 hereof. Delivery and payment as aforesaid shall be made
at the offices of Fulbright & Jaworski, 2800 Texas Commerce Bank Tower, 2200 Ross Avenue, Dallas, Texas
75201, or such other place, as shall have been mutually agreed upon by the City and the Underwriter. The
Bonds (except for the initial bonds which may be typed) shall be printed or lithographed; shall be prepared
and delivered as fully registered bonds in the denominations of $5,000 or any multiple thereof; shall be
registered in the names as shall be requested by written instructions of the Underwriter to the Paying
Agent/Registrar for the Bonds at least five business days prior to the Closing; and, if the Underwriter shall
so request, shall be made available to the Underwriter at least one business day before the Closing for purpose
of inspection in New York, New York or such other place as shall be mutually satisfactory to the City and the
Underwriter.
8. Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the
representations and warranties of the City contained herein and to be contained in the documents and
instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder,
both as of the date hereof and as of the date of Closing. Accordingly, the Underwriter's obligations under this
Purchase Contract to purchase and pay for the Bonds shall be subject to the performance by the City of its
obligations to be performed hereunder and under such documents and instruments at or prior to the Closing,
and shall also be subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of Closing,
as if made on the date of Closing;
(b) At the time of the Closing, the Ordinance and the Escrow Agreement shall be in full
force and effect, and the Ordinance and the Escrow Agreement shall not have been amended, or
UNIT A
4
supplemented and the Official Statement shall not have been amended, modified or supplemented,
except as may have been agreed to by the Underwriter,
(c) At the time of the Closing, all official action of the City related to the Ordinance and
the Escrow Agreement shall be in full force and effect and shall not have been amended, modified
or supplemented;
(d) The City shall not have failed to pay principal or interest when due on any of its
outstanding obligations for borrowed money;
(e) The City will purchase the government securities necessary to provide the funds
needed to refund the City's outstanding obligations as contemplated by the Escrow Agreement;
(f) At or prior to the Closing, the Underwriter shall have received two copies of each
of the following documents:
(1) The Official Statement of the City executed on behalf of the City by the
Mayor and City Secretary of the City,
(2) The Ordinance certified by the City Secretary of the City under its seal as
having been duly adopted by the City and as being in effect, with such changes or
amendments as may have been agreed to by the Underwriter,
(3) An unqualified opinion, dated the date of Closing, of Fulbright & Jaworski,
Bond Counsel to the City, in substantially the forms and substance of Appendix C to the
Official Statement;
(4) An unqualified opinion or certificate, dated on or prior to the date of
Closing. of the Attorney General of Texas, approving the Bonds as required by law and a
certificate of the Comptroller of Public Accounts of the State of Texas regarding the
registration of the Bonds as required by law;
(5) The supplemental opinion, dated the date of Closing, of Fulbright &
Jaworski, Bond Counsel to the City, addressed to the City and the Underwriter, to the effect
that (A) in its capacity as Bond Counsel, such firm has reviewed the information in the
Official Statement under the captions, 'Plan of Financing; The Series 1992 Bonds' and the
following subcaptions under the heading 'Legal Matters' thereunder 'Tax Exemption; Tax
Accounting Treatment of Original Issue Discount Bonds; and The 1992 Bonds as Legal
Investments in Teras' and such firm is of the opinion that the information relating to the
Bonds and the Ordinance contained under such captions in all respects accurately and fairly
reflects the provisions thereof; (B) the Bonds are exempt from registration pursuant to the
Securities Act of 1933, as amended, and the Ordinance is exempt from qualification as an
indenture pursuant to the Trust Indenture Act of 1939, as amended; (C) in the performance
of their duties as Bond Counsel for the City, without having undertaken to determine
independently the accuracy and completeness of the statements contained in the Official
Statement, nothing has come to the attention of such counsel which would lead them to
believe that the Official Statement (excluding the financial and statistical data and forecasts
included therein, all as to which no view need be expressed) contains any untrue statement
of a material fact or omits to state a material fact necessary to make the statements therein,
in light of the circumstancesr whi h they were made, not misleading,
uMIEN
(6) The opinion of McCall, Parkhurst & Horton LLP., as Underwriter's
Counsel, dated the date of the Closing addressed to the Underwriter to the effect that the
Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and
the Ordinance is exempt from qualification as an indenture pursuant to the Trust Indenture
Act of 1939, as amended. The opinion of such Counsel shall also state that, based upon their
participation in the preparation of the Official Statement, such Counsel has no reason to
believe that the Official Statement (except for the financial statements and other financial and
statistical data contained therein, as to which no view need be expressed), as of the date of
the Official Statement, contained any untrue statement of a material fact or omitted to state
any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(7) A certificate, dated the date of Closing, signed by the City Manager and the
Director of Finance of the City, to the effect that (i) the representations and warranties of
the City contained herein are true and correct in all material respects on and as of the date
of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the Official
Statement, no litigation is pending or, to the knowledge of such persons, threatened in any
court to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the ad
valorem taxes or the surplus Net Revenues of the System pledged or to be pledged to pay the
principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or
affecting the validity of the Bonds, the Ordinance, the Escrow Agreement or this Purchase
Contract, or contesting the powers of the City or contesting the authorization of the Bonds
or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the
Preliminary Official Statement or the Official Statement (but in lieu of or in conjunction with
such certificate the Underwriter may, in their discretion, accept certificates or opinions of the
City Attorney that, in his or her opinion, the issues raised in any such pending or threatened
litigation are without substance or that the contentions of all plaintiffs therein are without
merit); and (iii) to the best of their knowledge, no event affecting the City has occurred since
the date of the Official Statement which should be disclosed in the Official Statement for the
purpose for which it is to be used or which it is necessary to disclose therein in order to make
the statements and information therein not misleading in any respect;
(8) A certificate, dated the date of Closing, of the Director of Finance of the
City to the effect that there has not been any material and adverse change in the affairs or
financial condition of the City or the System since September 30, 1991, the latest date as to
which audited financial information is available;
(9) A certificate, dated the date of the Closing, of an appropriate official of the
City to the effect that, on the basis of the facts, estimates and circumstances in effect on the
date of delivery of the Bonds, it is not reasonably expected that the proceeds of the Bonds
will be used in a manner that would cause the Bonds to be arbitrage bonds within the
meaning of Section 148(a).of the Internal Revenue Code of 1986, as amended;
(10) A copy of a special report prepared by the independent Certified Public Accountants
named in the Official Statement, addressed to the City, Bond Counsel, the Underwriter and
Underwriter's Counsel verifying the arithmetical computations of the adequacy of the
maturing principal and interest on the escrowed securities and uninvested cash on hand under
the Escrow Agreement to pay, when due, the principal of and interest on the bonds being
refunded by the Bonds and the computation of the yield with respect to such securities and
the Bonds;
EXHIBIT J
6
(11) Evidence of the ratings on the Bonds shall be delivered in a form acceptable
to the Underwriter,
(12) Such additional legal opinions, certificates, instruments and other documents
as Bond Counsel or the Underwriter may reasonably request to evidence the truth, accuracy
and completeness, as of the date hereof and as of the date of Closing, of the City's
representations and warranties contained herein and of the statements and information
contained in the Official Statement and the due performance and satisfaction by the City at
or prior to the date of Closing of all agreements then to be performed and all conditions then
to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but
only if, they are satisfactory to the Underwriter.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase,
to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the obligations of
the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor
the City shall be under further obligation hereunder, except that: (i) the check referred to in Paragraph 4
hereof shall be immediately returned to Southwest Securities Incorporated by the City, and (ii) the respective
obligations of the City and the Underwriter set forth in Paragraphs 10 and 12 hereof shall continue in full
force and effect
9. Termination. The Underwriter may terminate its obligation to purchase at any time before
the Closing if any of the following should occur.
(a) (i) Legislation (including any amendment thereto) shall have been introduced in or
adopted by either House of the Congress of the United States, or recommended to the Congress for
passage by the President of the United States or favorably reported for passage to either House of the
Congress by any Committee of such House, or (ii) a decision shall have been rendered by a court
established under Article III of the Constitution of the United States or by the United States Tax
Court, or (iii) an order, ruling or regulation shall have been issued or proposed by or on behalf of
the Treasury Department of the United States or the Internal Revenue Service or any other agency
of the United States, or (iv) a release or official statement shall have been issued by the President of
the United States or by the Treasury Department of the United States or by the Internal Revenue
Service, the effect of which, in any such case described in clause (i), (ii), (iii), or (iv), would be to
impose, directly or indirectly, federal income taxation upon interest received on obligations of the
general character of the Bonds or upon income of the general character to be derived by the City,
other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the
date hereof, in such a manner as in the judgment of the Underwriter would materially impair the
marketability or materially reduce the market price of obligations of the general character of the
Bonds.
(b) Any action shall have been taken by the Securities and Exchange Commission or by
a court which would require registration of any security under the Securities Act of 1933, as amended,
or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection
with the public offering of the Bonds, or any action shall have been taken by any court or by any
governmental authority suspending the use of the Official Statement or any amendment or supplement
thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court
or by any such authority.
ir�,'I81 T IL
(c) (i) The Constitution of the State of Texas shall be amended or an amendment shall
be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to
matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by or
on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status
of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in
the judgment of the Underwriter would materially affect the market price of the Bonds.
(d) (i) A general suspension of trading in securities shall have occurred on the New York
Stock Exchange, or (ii) the United States becomes engaged in any outbreak of armed hostilities
(whether or not foreseeable at the time of execution hereof) or hostilities previously commenced shall
escalate, the effect of which, in either rase described in clause (i) and (ii), is, in the judgment of the
Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Bonds on the terms and in the manner contemplated in this
Purchase Contract and the Official Statement, including without limitation any material adverse effect
on the market price of the Bonds.
(e) An event described in Paragraph 60) hereof occurs which, in the opinion of the
Underwriter, requires a supplement or amendment to the Official Statement.
(f) A general banking moratorium shall have been declared by authorities of the United
States, the State of New York or the State of Texas.
(g) A lowering of the ratings initially assigned to the Bonds below 'Baa' and 'BBB' by
either Moody's Investors Service, Inc. and Standard & Pooes Corporation, respectively, shall occur
prior to Closing or failure to provide evidence of the confirmation of each rating.
(h) Any event occurs which prevents the United States Treasury Department from
delivering on the Closing Date the State and Local Government Securities subscribed for by the City
in connection with the issuance of the Bonds.
10. Expenses. (a) The Underwriter shall be under no obligation to pay, and the City shall pay,
any expenses incident to the performance of the City's obligations hereunder, including but not limited to:
(i) the cost of the preparation, printing and distribution of the Official Statement; (ii) the cost of the
preparation and printing of the Bonds; (iii) the fees and expenses of Bond Counsel to the City; (iv) the fees
and disbursements of the City's accountants, advisors, and of any other experts or consultants retained by the
City, and (v) fees and premiums for bond ratings and any travel or other expenses incurred incident thereto.
(b) The Underwriter shall pay: (i) all advertising expenses of the Underwriter in connection with
the offering of the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents,
including this Purchase Contract and (iii) all other expenses incurred by them in connection with their offering
and distribution of the Bonds, including the fees of Counsel to the Underwriter.
11. Notices. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing at the address for the City set forth above, and any
notice or other communication to be given to the Underwriter under this Purchase Contract may be given by
delivering the same in writing to Southwest Securities Incorporat41201 Elm Street, Suite 4300, Dallas, Texas
75201, Attention: Mr. Dan Almon.
EXHIBIT A
8
12. Parties in Interest This Purchase Contract is made solely for the benefit of the City and the
Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have
any right hereunder or by virtue hereof. The City's representations, warranties and agreements contained in
this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any investigations
made by or on behalf of the Underwriter and (ii) delivery of any payment for the Bonds hereunder, and the
City's representations and warranties contained in Paragraph 6 of this Purchase Contract shall remain
operative and in full force and effect, regardless of any termination of this Purchase Contract.
13. Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such
acceptance.
Accepted:
This day of July, 1992
By:
Mayor,
City of Allen, Texas
(SEAL)
Attest:
City Secretary,
City of Allen, Texas
Very truly yours,
SOUTHWEST SECURITIES INCORPORATED
Br-,
EXHIBIT A
Vj
Exhibit A
Official Statement
10
SPECIAL ESCROW AGREEMENT
THE STATE OF TEXAS
S
COUNTY OF DALLAS
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and
entered into as of July 20, 1992, by and between the City of Allen,
Texas, a duly incorporated municipal corporation in Collin County,
Texas (the "City") acting by and through the Mayor and City
Secretary, and Ameritrust Texas National Association, a banking
association organized and existing under the laws of the United
States of America, or its successors or assigns hereunder (the
"Bank"),
W I T N E S S E T H:
WHEREAS, the City has duly issued certain obligations now
outstanding in the aggregate amount $6,125,000 (hereinafter
referred to as the "Refunded Bonds") and more particularly
described as follows:
(1) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1972, dated
June 1, 1972, maturing on June 1, 1993 through
June 1, 2003, and now outstanding in the
principal amount of $ 790,000
(2) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1979, dated
August 1, 1979, maturing on June 1, 1993
through June 1, 2009, and now outstanding in
the principal amount of $1,185,000
(3) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1981, dated
June 1, 1981, maturing on June 1, 1993 through
June 1, 2005, and now outstanding in the
principal amount of $ 385,000
(4) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1985, dated
September 1, 1985, maturing on June 1, 1993
through June 1, 2000, and now outstanding in
the principal amount of $2,050,000
WkR_11
(5) City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1986, dated
August 1, 1986, maturing on June 1, 1993
through June 1, 2006, and now outstanding in
the principal amount of $1,715,000
AND WHEREAS, in accordance with the provisions of Article
717k, V.A.T.C.S., as amended (the "Act"), the City is authorized to
sell refunding bonds in an amount sufficient to provide for the
payment of obligations to be refunded, deposit the proceeds of such
refunding bonds with any place of payment for the obligations being
refunded and enter into an escrow or similar agreement with such
place of payment for the safekeeping, investment, reinvestment,
administration and disposition of such deposit, upon such terms and
conditions as the parties may agree, provided such deposits may be
invested only in direct obligations of the United States of
America, including obligations the principal of and interest on are
unconditionally guaranteed by the United States of America, and
which may be in book entry form and which shall mature and/or bear
interest payable at such times and in such amounts as will be
sufficient to provide for the scheduled payment of such
obligations; and
WHEREAS, the Refunded Bonds are scheduled to mature, or be
redeemed, and interest thereon is payable on the dates and in the
manner set forth in Exhibit A attached hereto and incorporated
herein by reference as a part of this Agreement for all purposes;
and
WHEREAS, the City on the 20th day of July, 1992, pursuant to
an ordinance (the "Bond Ordinance") passed and adopted by the City
Council, authorized the issuance of bonds known as "City of Allen,
Texas, Waterworks and Sewer System Revenue Refunding and
Improvement Bonds, Series 1992" (the "Bonds"), and such Bonds are
being issued in part to refund, discharge and make final payment of
the principal of and interest on the Refunded Bonds; and
WHEREAS, upon the delivery of the Bonds, the proceeds of sale,
together with other available funds of the City, are to be
deposited with the Bank and used in part to purchase United States
Government Obligations (the "Open Market Securities" or "Federal
Securities") for immediate credit and deposit to the "Escrow Fund"
established with the Bank in accordance with this Agreement; and
WHEREAS, a list and description of the Open Market Securities
to be purchased and held for the account, of the Escrow Fund is
attached hereto as Exhibit B which is hereby incorporated by
reference and made a part of this Agreement for all purposes; and
&M1B1T 'D
001
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WHEREAS, the "Federal Securities", together with the beginning
cash balance in the Escrow Fund, shall mature and the interest
thereon shall be payable at such times to insure the existence of
monies sufficient to pay the principal amount of the Refunded Bonds
and the accrued interest thereon, as the same shall become due in
accordance with the terms of the ordinances authorizing the
issuance of the Refunded Bonds and as set forth in Exhibit A
attached hereto; and
WHEREAS, the City has completed all arrangements for the
purchase of the Open Market Securities for deposit and credit to
the Escrow Fund as provided herein; and
WHEREAS, the Bank is a banking association organized and
existing under the laws of the United States of America, possessing
trust powers and is fully qualified and empowered to enter into
this Agreement; and
WHEREAS, in Section 34 of the Bond Ordinance, the City Council
duly approved and authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be,
shall take all action necessary to call, pay, redeem and retire
said Refunded Bonds in accordance with the provisions thereof,
including, without limitation, all actions required by the
ordinances authorizing the Refunded Bonds, the Act, the Bond
Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and to secure the payment of the principal of and
the interest on the Refunded Bonds as the same shall become due,
the City and the Bank hereby mutually undertake, promise and agree
as follows:
SECTION 1: Receipt of Refunded Bond Ordinance. Receipt of
true and correct copies of the ordinances authorizing the issuance
of the Refunded Bonds and the Bond Ordinance are hereby
acknowledged by the Bank. Reference herein to or citation herein
of any provision of said documents shall be deemed an incorporation
of such provision as a part hereof in the same manner and with the
same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation/ Funding. There is hereby
created by the City with the Bank a special segregated and
irrevocable trust fund designated "SPECIAL CITY OF ALLEN, TEXAS,
REVENUE REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow
Fund") for the benefit of the holders of the Refunded Bonds, and,
immediately following the delivery of the Bonds, the City agrees
and covenants to cause to be deposited with the Bank the following
amounts:
EXHIBIT
0019354
-3-
$ 6,871,049.21 for the purchase of the Open Market
Securities identified in Exhibit B to be
held for the account of the Escrow Fund;
$ 904.54 for a beginning cash balance in the
Escrow Fund
The Bank hereby accepts the Escrow Fund and further agrees to
receive said moneys, apply the same as set forth herein, and to
hold the cash and Federal Securities deposited and credited to the
Escrow Fund for application and disbursement for the purposes and
in the manner provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby
represents the cash and Federal Securities, together with the
interest to be earned thereon, deposited to the credit of the
Escrow Fund will be sufficient to pay the principal of and premium
and interest on the Refunded Bonds as the same shall become due and
payable, and such Refunded Bonds, and the interest thereon, are to
mature or be redeemed and shall be paid at the times and in the
amounts set forth and identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of (i) notices of
redemption with respect to the Series 1972 and Series 1979 Refunded
Bonds and (ii) a copy of the resolution providing for the
redemption of (a) the Series 1972 Refunded Bonds on December 1,
1992 at the redemption price of par plus accrued interest, (b) the
Series 1979 Refunded Bonds maturing in the years 2000 through 2009
on June 1, 1999 at the redemption price of par plus accrued
interest, (c) the Series 1985 Refunded Bonds maturing in the years
1996 through 2000 on June 1, 1995 at the redemption price of par
plus accrued interest and (d) the Series 1986 Refunded Bonds
maturing in the years 1997 through 2006 on June 1, 1996 at the
redemption price of par plus accrued interest; all in accordance
with the provisions of the notice requirements applicable to said
Refunded Bonds and the notice requirements contained in the
respective ordinances authorizing the Refunded Bonds.
The Bank agrees that on the redemption date for the Series
1972 and Series 1979 Refunded Bonds, or as such obligations are
presented for payment, a notice of redemption will be given by
United States Mail, f irst class, postage prepaid, to the then known
owners or holders at the City's expense.
The Bank agrees to cause a notice of redemption pertaining to
the Series 1985 and Series 1986 Refunded Bonds to be sent to the
registered owners thereof appearing on the registration books at
least thirty (30) days prior to the redemption date therefor.
001s&,
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SECTION 4: Pledge of Escrow. The Bank agrees that all cash
and Federal Securities, together with any income or interest earned
thereon, held in the Escrow Fund shall be and is hereby irrevocably
pledged to the payment of the principal of and interest on the
Refunded Bonds which will mature and become due on and after the
date of this Agreement, and such funds initially deposited and to
be received from maturing principal and interest on the Federal
Securities in the Escrow Fund shall be applied solely in accordance
with the provisions'of this Agreement.
SECTION 5: Escrow Insufficiency - City Warranty to Cure. If,
for any reason, the funds on hand in the Escrow Fund shall be
insufficient to make the payments set forth in Exhibit A attached
hereto, as the same becomes due and payable, the City shall make
timely deposits to the Escrow Fund, from lawfully available funds,
of additional funds in the amounts required to make such payments.
Notice of any such insufficiency shall be immediately given by the
Bank to the City by the fastest means possible, but the Bank shall
in no manner be responsible for the City's failure to make such
deposits.
SECTION 6: Escrow Fund Securities ISegregation. The Bank
shall hold said Federal Securities and moneys in the Escrow Fund at
all times as a special and separate trust fund for the benefit of
the holders of the Refunded Bonds, wholly segregated from other
moneys and securities on deposit with the Bank; shall never
commingle said Federal Securities and moneys with other moneys or
securities of the Bank; and shall hold and dispose of the assets
therein only as set forth herein. Nothing herein contained shall
be construed as requiring the Bank to keep the identical moneys, or
any part thereof, in said Escrow Fund, if it is impractical, but
moneys of an equal amount, except to the extent such are
represented by the Federal Securities, shall always be maintained
on deposit in the Escrow Fund by the Bank, as trustee; and a
special account evidencing such facts shall at all times be
maintained on the books of the Bank.
SECTION 7: Escrow Fund Collections/Payments. The Bank shall
from time to time collect and receive the principal of and interest
on the Federal Securities as they respectively mature and become
due and credit the same to the Escrow Fund. On or before each
principal and/or interest payment date or redemption date, as the
case may be, for the Refunded Bonds shown in Exhibit A attached
hereto, the Bank, without further direction from anyone, including
the City, shall cause to be withdrawn from the Escrow Fund the
amount required to pay the accrued interest on the Refunded Bonds
due and payable on said payment date and the principal of the
Refunded Bonds due and payable on said payment date or redemption
date, as the case may be, and the amount withdrawn from the Escrow
Fund shall be immediately transmitted and deposited with the paying
001s&,
EX6�16FT
-5-
agent for the Refunded Bonds to be paid with such amount. The
paying agent for the Refunded Bonds is the Bank.
If any Refunded Bond or interest coupon thereon shall not be
presented for payment when the principal thereof or interest
thereon shall have become due, and if cash shall at such times be
held by the Bank in trust for that purpose sufficient and available
to pay the principal of such Refunded Bond and interest thereon it
shall be the duty of the Bank to hold said cash without liability
to the holder of such Refunded Bond for interest thereon after such
maturity or redemption date, in trust for the benefit of the holder
of such Refunded Bond, who shall thereafter be restricted
exclusively to said cash for any claim of whatever nature on his
part on or with respect to said Refunded Bond, including for any
claim for the payment thereof and interest thereon. All cash
required by the provisions hereof to be set aside or held in trust
for the payment of the Refunded Bonds, including interest thereon,
shall be applied to and used solely for the payment of the Refunded
Bonds and interest thereon with respect to which such cash has been
so set aside in trust.
Subject to the provisions of the last sentence of Section 25
hereof, cash held by the Bank in trust for the payment and
discharge of any of the Refunded Bonds and interest thereon which
remains unclaimed for a period of four (4) years after the stated
maturity date or redemption date of such Refunded Bonds shall be
returned to the City. Notwithstanding the above and foregoing, any
remittance of funds from the Bank to the City shall be subject to
any applicable unclaimed property laws of the State of Texas.
SECTION 8: Disposal of Refunded Bonds. All Refunded Bonds
cancelled on account of payment by the Bank shall be disposed of or
otherwise destroyed by the Bank, and an appropriate certificate of
destruction furnished the City.
SECTION 9: Escrow Fund Encumbrance. The escrow created
hereby shall be irrevocable and the holders of the Refunded Bonds
shall have an express lien on all moneys and Federal Securities in
the Escrow Fund until paid out, used and applied in accordance with
this Agreement.
Unless disbursed in payment of the Refunded Bonds, all funds
and the Federal Securities received by the Bank for the account of
the City hereunder shall be and remain the property of the Escrow
Fund and the City and the owners of the Refunded Bonds shall be
entitled,to a preferred claim and shall have a first lien upon such
funds and Federal Securities enjoyed by a trust beneficiary. The
funds and Federal Securities received by the Bank under this
Agreement shall not be considered as a banking deposit by the City
and the Bank and the City shall have no right or title with respect
0019&. LA' HIBIT B �
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thereto, except as otherwise provided herein. Such funds and
Federal Securities shall not be subject to checks or drafts drawn
by the City.
SECTION 10: Absence of Bank Claim/Lien on Escrow Fund.
The Bank shall have no lien whatsoever upon any of the moneys or
Federal Securities in the Escrow Fund for payment of services
rendered hereunder, services rendered as paying agent/registrar for
the Refunded Bonds, or for any costs or expenses incurred hereunder
and reimbursable from the City.
SECTION 11: Substitution of Investments/Reinvestments. (a)
The Bank shall be authorized to accept initially and temporarily
cash and/or substituted securities pending the delivery of the
Federal Securities identified in Exhibit B attached hereto, or
shall be authorized to redeem the Federal Securities and reinvest
the proceeds thereof, together with other moneys held in the Escrow
Fund in noncallable direct obligations of the United States of
America provided such early redemption and reinvestment of proceeds
does not change the repayment schedule of the Refunded Bonds
appearing in Exhibit A and the Bank receives the following:
001983
(1) an opinion by an independent certified public
accountant to the effect that (i) the initial and/or
temporary substitution of cash and/or securities for one
or more of the Federal Securities identified in Exhibit B
pending the receipt and delivery thereof to the Escrow
Agent or (ii) the redemption of one or more of the
Federal Securities and the reinvestment of such funds in
one or more substituted securities (which shall be
noncallable direct obligations of the United States of
America), together with the interest thereon and other
available moneys then held in the Escrow Fund, will, in
either case, be sufficient to pay, as the same become due
in accordance with Exhibit A, the principal of, and
interest on, the Refunded Bonds which have not previously
been paid, and
(2) with respect to an early redemption of Federal
Securities and the reinvestment of the proceeds thereof,
an unqualified opinion of nationally recognized municipal
bond counsel to the effect that (a) such investment will
not cause interest on the Bonds or Refunded Bonds to be
included in the gross income for federal income tax
purposes, under the Code and related regulations as in
effect on the date of such investment, or otherwise make
the interest on the Bonds or the Refunded Bonds subject
to Federal income taxation and (b) such reinvestment
complies with the Constitution and laws of the State of
E I\ 1 I I V I 1 11
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Texas and with all relevant documents relating to the
issuance of the Refunded Bonds and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments -
Reinvestment. Except as provided in Section 11 hereof, moneys in
the Escrow Fund will be invested only in the Federal Securities
listed in Exhibit B and neither the City nor the Bank shall
reinvest any moneys deposited in the Escrow Fund except as
specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through redemption
or cancellation of the Refunded Bonds there exists or will exist
excesses of interest on or maturing principal of the Federal
Securities in excess of the amounts necessary hereunder for the
Refunded Bonds, the Bank may transfer such excess amounts to or on
the order of the City, provided that the City delivers to the Bank
the following:
(1) an opinion by an independent certified public
accountant that after the transfer of, such excess, the
principal amount of securities in""the Escrow Fund,
together with the interest thereon and other available
monies then held in the Escrow Fund, will be sufficient
to pay, as the same become due, in accordance with
Exhibit A, the principal of, and interest on, the
Refunded Bonds which have not previously been paid, and
(2) an unqualified opinion of nationally recognized
municipal bond counsel to the effect that (a) such
transfer will not cause interest on the Bonds or the
Refunded Bonds to be included in gross income for federal
income tax purposes, under the Code and related
regulations as in effect on the date of such transfer, or
otherwise make the interest on the Bonds or the Refunded
Bonds subject to Federal income taxation, and (b) such
transfer complies with the Constitution and laws of the
State of Texas and with all relevant documents relating
to the issuance of the Refunded Bonds or the Bonds.
SECTION 14: Collateralization. The Bank shall continuously
secure the monies in the Escrow Fund not invested in Federal
Securities by a pledge of direct obligations of the United States
of America, in the par or face amount at least equal to the
principal amount of said uninvested monies to the extent such money
is not insured by the Federal Deposit Insurance Corporation.
SECTION 15: Absence of Bank's Liability for Investments.
The Bank shall not be liable or responsible for any loss resulting
from any investment made in the Federal Securities or substitute
securities as provided in Section 11 hereof.
001s.U, EXHIBIT g8_
SECTION 16: Bank's Compensation - Escrow Administration/
Settlement of Paving Agent's Chartres. The City agrees to pay the
Bank for the performance of services hereunder and as reimbursement
for anticipated expenses to be incurred hereunder the amount of
$8775.00 and, except for reimbursement of costs and expenses
incurred by the Bank pursuant to Sections 3, 11, and 19 hereof, the
Bank hereby agrees said amount is full and complete payment for the
administration of this Agreement.
The City also agrees to deposit with the Bank on the effective
date of this Agreement, the sum of $11,800, which deposit is the
total charges due all paying agents for the Refunded Bonds, and the
Bank acknowledges and agrees that the above amount is and
represents the total amount of compensation due the Bank for
services rendered as paying agent for the Refunded Bonds. The Bank
hereby agrees to pay, assume and be fully responsible for any
additional charges that it may incur in the performance of its
duties and responsibilities as paying agent for the Refunded Bonds.
The City acknowledges and agrees that the above amount
deposited with the Escrow Agent to cover paying agents' charges and
expenses does not include amounts which shall become due and
payable for services rendered as registrar and transfer agent for
fully registered Refunded Bonds, and the City agrees to pay
directly to each "registrar" for the Refunded Bonds all reasonable
costs, expenses and charges incurred in connection with the
maintenance of the registration books and records and the transfer
of such fully registered obligations as and when such costs,
expenses and charges are incurred and against written invoices,
statements or bills submitted therefor.
SECTION17: Escrow Agent's DutiesJResponsibilities/Liability.
The Bank shall not be responsible for any recital herein, except
with respect to its organization and its powers and authority. As
to the existence or nonexistence of any fact relating to the City
or as to the sufficiency or validity of any instrument, paper or
proceedings relating to the City, the Bank shall be entitled to
rely upon a certificate signed on behalf of the City by its City
Manager or Mayor and/or City Secretary of the City as sufficient
evidence of the facts therein contained. The Bank may accept a
certificate of the City Secretary under the City's seal, to the
effect that a resolution or other instrument in the form therein
set forth has been adopted by the City Council of the City, as
conclusive evidence that such resolution or other instrument has
been duly adopted and is in full force and effect.
The duties and obligations of the Bank shall be determined
solely by the express provisions of this Agreement and the Bank
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, and no
EXHIBIT B
0019331
-9-
implied covenants or obligations shall be read into this Agreement
against the Bank.
In the absence of bad faith on the part of the Bank, the Bank
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificate
or opinion furnished to the Bank, conforming to the requirements of
this Agreement; but notwithstanding any provision of this Agreement
to the contrary, in the case of any such certificate or opinion or
any evidence which by any provision hereof is specifically required
to be furnished to the Bank, the Bank shall be under a duty to
examine the same to determine whether it conforms to the
requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Bank unless
it shall be proved that the Bank was negligent in ascertaining or
acting upon the pertinent facts.
The Bank shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in aggregate
principal amount of all said Refunded Bonds at the time outstanding
relating to the time, method and place of conducting any proceeding
for any remedy available to the Bank not in conflict with the
intent and purpose of this Agreement. For the purposes of
determining whether the holders of the required principal amount of
said Refunded Bonds have concurred in any such direction, Refunded
Bonds owned by any obligor upon the Refunded Bonds, or by any
person directly or indirectly controlling or controlled by or under
direct or indirect common control with such obligor, shall be
disregarded, except that for the purposes of determining whether
the Bank shall be protected in relying on any such direction only
Refunded Bonds which the Bank knows are so owned shall be so
disregarded.
The term "Responsible Officers" of the Bank, as used in this
Agreement, shall mean and include the Chairman of the Board of
Directors, the President, any Vice President and any Second Vice
President, the Secretary and any Assistant Secretary, the Treasurer
and any Assistant Treasurer, and every other officer and assistant
officer of the Bank customarily performing functions similar to
those performed by the persons who at the time shall be officers,
respectively, or to whom any corporate trust matter is referred,
because of his knowledge of and familiarity with a particular
subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or
persons.
AISITg .r
009&,
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SECTION 18: Limitation Re: Bank's Duties/Responsibilities/
Liabilities to Third Parties. The Bank shall not be responsible or
liable to any person in any manner whatever for the sufficiency,
correctness, genuineness, effectiveness, or validity of this
Agreement with respect to the City, or for the identity or
authority of any person making or executing this Agreement for and
on behalf of the City. The Bank is authorized by the City to rely
upon the representations of the City with respect to this Agreement
and the deposits made pursuant hereto and as to the City's right
and power to execute and deliver this Agreement, and the Bank shall
not be liable in any manner as a result of such reliance. The duty
of the Bank hereunder shall only be to the City and the holders of
the Refunded Bonds. Neither the City nor the Bank shall assign or
attempt to assign or transfer any interest hereunder or any portion
of any such interest. Any such assignment or attempted assignment
shall be in direct conflict with this Agreement and be without
effect.
SECTION 19: Interpleader. In the event conflicting demands
or notices are made upon the Bank growing out of or relating to
this Agreement or the Bank in good faith is in doubt as to what
action should be taken hereunder, the Bank shall have the right at
its election to:
(a) Withhold and stop all further proceedings in,
and performance of, this Agreement with respect to the
issue in question and of all instructions received
hereunder in regard to such issue; and
(b) File a suit in interpleader and obtain an order
from a court of appropriate jurisdiction requiring all
persons involved to interplead and litigate in such court
their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in
connection with this Section, the City, to the extent permitted by
law agrees to indemnify and save the Bank harmless from all loss,
cost, damages, expenses and attorney fees suffered or incurred by
the Bank as a result thereof. The obligations of the Bank under
this Agreement shall be performable at the principal corporate
office of the Bank in the City of Dallas, Texas.
The Bank may advise with legal counsel in the event of any
dispute or question regarding the construction of any of the
provisions hereof or its duties hereunder, and in the absence of
negligence or bad faith on the part of the Bank, no liability shall
be incurred by the Bank for any action taken pursuant to this
Section and the Bank shall be fully protected in acting in
accordance with the opinion and instructions of legal counsel that
FVI�� •'
0019&U 8 '�
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is knowledgeable and has expertise in the field of law addressed in
any such legal opinion or with respect to the instructions given.
SECTION 20: Accounting - Annual Report. Promptly after
September 30th of each year, commencing with the year 1992, while
the Escrow Fund is maintained under this Agreement, the Bank shall
forward by letter to the City, to the attention of the City
Manager, or other designated official of the City, a statement in
detail of the Federal Securities and monies held, and the current
income and maturities thereof, and the withdrawals of money from
the Escrow Fund for the preceding 12 month period ending September
30th of each year.
SECTION 21: Notices. Any notice, authorization, request or
demand required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given when mailed by
registered or certified mail, postage prepaid addressed as follows:
CITY OF ALLEN, TEXAS
One Butler Circle
Allen, texas 75002
Attention: City Manager
AMERITRUST TEXAS N.A.
P. O. Box 2320
Dallas, Texas 75221-2320
Attention: Debt Administration
The United States Post Office registered or certified mail receipt
showing delivery of the aforesaid shall be conclusive evidence of
the date and fact of delivery.
Any party hereto may change
to be delivered by giving to the
(10) days prior notice thereof.
the address to which notices are
other parties not less than ten
SECTION 22: Performance Date. Whenever under the terms of
this Agreement the performance date of any provision hereof,
including the date of maturity of interest on or principal of the
Refunded Bonds, shall be a Sunday or a legal holiday or a day on
which the Bank is authorized by law to close, then the performance
thereof, including the payment of principal of and interest on the
Refunded Bonds, need not be made on such date but may be performed
or paid, as the case may be, on the next succeeding business day of
the Bank with the same force and effect as if made on the date of
EXHIBIT B
0019954
-12-
performance or payment and with respect to a payment, no interest
shall accrue for the period after such date.
SECTION 23: Warranty of Parties Re: Power to Execute and
Deliver Escrow Agreement. The City covenants that it will
faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this
Agreement, in any and every said Refunded Bond as executed,
authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Bonds shall have been modified as provided
in this Agreement. The City covenants that it is duly authorized
under the Constitution and laws of the State of Texas to execute
and deliver this Agreement, that all actions on its part for the
payment of said Refunded Bonds as provided herein and the execution
and delivery of this Agreement have been duly and effectively taken
and that said Refunded Bonds and coupons in the hands of the
holders and owners thereof are and will be valid and enforceable
obligations of the City according to the import thereof as provided
in this Agreement.
SECTION 24: Severability. If any one or more of the
covenants or agreements provided in this Agreement on the part of
the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or
agreement shall be deemed and construed to be severable from the
remaining covenants and agreements herein contained and shall in no
way affect the validity of the remaining provisions of this
Agreement. In the event any covenant or agreement contained in
this Agreement is declared to be severable from the other
provisions of this Agreement, written notice of such event shall
immediately be given to Moody's Investors Service, 99 Church
Street, New York, New York 10007, Attention: Public Finance Rating
Desk - Refunded Bonds.
SECTION 25: Termination. This Agreement shall terminate when
the Refunded Bonds, including interest due thereon, have been paid
and discharged in accordance with the provisions of this Agreement.
If any Refunded Bonds are not presented for payment when due and
payable, the nonpayment thereof shall not prevent the termination
of this Agreement. Funds for the payment of any nonpresented
Refunded Bonds and accrued interest thereon shall upon termination
of this Agreement be held by the Bank for such purpose in
accordance with Section 7 hereof. Any moneys or Federal Securities
held in the Escrow Fund at termination and not needed for the
payment of the principal of or interest on any of the Refunded
Bonds shall be paid or,transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the
essence in the performance of obligations from time to time imposed
upon the Bank by this Agreement.
0019334
RIO't-T is
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SECTION 27: Successors/Assigns. (a) Should the Bank not be
able to legally serve or perform the duties and obligations under
this Agreement, or should the Bank be declared to be insolvent or
closed for any reason by federal of state regulatory authorities or
a court of competent jurisdiction, the City, upon being notified or
discovering the Bank's inability or disqualification to serve
hereunder, shall forthwith appoint a successor to replace the Bank,
and upon being notified of such appointment, the Bank shall (i)
transfer all funds and securities held hereunder, together with all
books, records and accounts relating to the Escrow Fund and the
Refunded Bonds, to such successor and (ii) assign all rights,
duties and obligations under this Agreement to such successor. If
the City should fail to appoint such a successor within ninety (90)
days from the date the City discovers, or is notified of, the event
or circumstance causing the Bank's inability or disqualification to
serve hereunder, the Bank, or a bondholder of the Refunded Bonds,
may apply to a court of competent jurisdiction to appoint a
successor or assigns of the Bank and such court, upon determining
the Bank is unable to continue to serve, shall appoint a successor
to serve under this Agreement and the amount of compensation, if
any, to be paid to such successor for the remainder of the term of
this Agreement for services to be rendered both for administering
the Escrow Fund and for paying agent duties and responsibilities
for the Refunded Bonds.
(b) Furthermore, the Bank may resign and be discharged from
performing its duties and responsibilities under this Agreement
upon notifying the City in writing of its intention to resign and
requesting the City to appoint a successor. No such resignation
shall take effect until a successor has been appointed by the City
and such successor has accepted such appointment and agreed to
perform all duties and obligations hereunder for a total
compensation equal to the unearned proportional amount paid the
Bank under Section 16 hereof for the administration of this
Agreement and the unearned proportional amount of the paying agents
fees for the Refunded Bonds due the Bank.
Any successor to the Bank shall be a bank, trust company or
other financial institution authorized and empowered to perform the
duties and obligations contemplated by this Agreement and organized
and doing business under the laws of the United States or the State
of Texas, having its principal office and place of business in the
State of Texas, having a combined capital and surplus of at least
$5,000,000 and be subject to the supervision or examination by
Federal or State authority.
Any successor or assigns to the Bank shall execute,
acknowledge and deliver to the City and the Bank, or its successor
or assigns, an instrument accepting such appointment hereunder, and
the Bank shall execute and deliver an instrument transferring to
FXHIBrT R
0019&U.
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such successor, subject to the terms of this Agreement, all the
rights, powers and trusts created and established and to be
performed under this Agreement. Upon the request of any such
successor Bank, the City shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to
such successor Bank all such rights, powers and duties. The term
"Bank" as used herein shall be the Bank and its legal assigns and
successor hereunder.
SECTION 28: Escrow Agreement - Amendment/Modification. This
Agreement shall be binding upon the City and the Bank and their
respective successors and legal representatives and shall inure
solely to the benefit of the holders of the Refunded Bonds, the
City, the Bank and their respective successors and legal
representatives. Furthermore, no alteration, amendment or
modification of any provision of this Agreement shall (1) alter the
firm financial arrangements made for the payment of the Refunded
Bonds or (2) be effective unless (i) prior written consent of such
alteration, amendment or modification shall have been obtained from
the holders of all Refunded Bonds outstanding at the time of such
alteration, amendment or modification and (ii) such alteration,
amendment or modification is in writing and signed by the parties
hereto; provided, however, the City and the Bank may, without the
consent of the holders of the Refunded Bonds, amend or modify the
terms and provisions of this Agreement to cure in a manner not
adverse to the holders of the Refunded Bonds any ambiguity, formal
defect or omission in this Agreement. If the parties hereto agree
to any amendment or modification to this Agreement, prior written
notice of such amendment or proposed modification, together with
the legal documents amending or modifying this Agreement, shall be
furnished to Moody's Investors Service, 99 Church Street, New York,
New York 10007, Attention: Public Finance Rating Desk - Refunded
Bonds, prior to such amendment or modification being executed.
SECTION 29: Effect of Headings. The Section headings herein
are for convenience only and shall not affect the construction
hereof.
DRI 1 B
0019&U
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SECTION 30: Executed Counterparts. This Agreement may be
executed in several counterparts, all or any of which shall be
regarded for all purposes as one original and shall constitute and
be but one and the same instrument. This Agreement shall be
governed by the laws of the State of Texas and shall be effective
as of the date of the delivery of the Bonds.
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be executed by their duly authorized officers and
their corporate seals to be hereunto affixed and attested as of the
date first above written.
ATTEST:
City Secretary
(City Seal)
ATTEST:
Authorized Signer
(Bank Seal)
0019&U
CITY OF ALLEN, TEXAS
Mayor
AMERITRUST TEXAS NATIONAL
ASSOCIATION, as Escrow Agent
Vice President
EXH1 IR
-16-
AFFIDAVIT AND PROOF OF PUBLICATION
THE STATE OF TEXAS
COUNTY OF COLLIN
BEFORE ME, the undersigned authority, on this day personally appeared DEBBIE
TACKETT, who having been by me duly sworn, on oath deposes and says:
That she is the General Manager of THE ALLEN AMERICAN, a newspaper published
in COLLIN COUNTY, TEXAS, not less frequently than once a week, having a general
circulation in said county, and having been published regularly and continously for more
than twelve (12) months prior to publishing
Ordinance ///,f—%-9;3-�
of which the attached is a true and written copy, and which was published in THE ALLEN
AMERICAN on
Sunday July 26, 1992 & Wednesday July 29, 1992
and which was issued on July 26, 1992 ,
by City of Allen of COLLIN COUNTY, TEXAS.
A printed copy of said publication is attached hereto.
SUBSCRIBED AND SWORN to before me this. day of D. 19
Y.A. TODD
My COMMISSION EXPIRES
D d,1992
ARY PUBLIC in and for COLLIN COUNTY, TEXAS
Publisher's fee $ 31 .50
9Cn
CITY OF ALLEN
PUBLIC NOTICE
Notice is hereby given that the Allen City
_
CITY OF ALLEN ` -
Council adopted the following ordinance atPUBLIC
a special called meeting held on Monda y'
NOTICE I
Notice is hereby given that the Allen City'l
Council
July 20, 1992 (Title onl
Ordinance No. 1118-7-92: An Ordinance
adopted the following ordinance at
a special called meeting held on Monday,
July
of the City of Allen, Collin County, Texas;
Authorizing the Issuance of "CITY OF AL-
20, 1992 (Title only):
Ordinance No. 1118-7-92 An Ordinance
LEN, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUEREFUND-
of the City of Allen, Collin County, Texas,
Authorizing the Issuance of "CITY OF AL-
ING AND IMPROVEMENT BONDS, SE-
RIES 1992"; Pledging the Net Revenues
SEWER LEN, TEXAS, WATERWORKS AND
M REVENUE REF
of
the City's Combined Waterworks and
Sewer System to the Payment of the Prin=
N AND IMPROVEMENT BONDSUSED-
RIES 1992"; Pledging the Net Revenues
cipal of and Interest on Said Bonds; Enact-
ing Provisions Incident and Related to the
of
the City's Combined Waterworks and
Sewer System to the Payment of the Prin-
Issuance, Payment, Security and Delivery
of Said Bonds, Including the Approval
cipal of and Interest on Said Bonds; Enact -
ing Provisions Incident and Related to the
and
Excution of a Purchase Contract and Spe=
tial Escrow Agreement and the Approval
Issuance, Payment, Security and Delivery
of Said Bonds, Including the Approval
and Distribution of an Official Statement
Pertaining Thereto; and Providing an Ef-
and
Excution of a Purchase Contract and Spe-
tial Escrow Agreement and the Approval
fective Date.
A copy of this ordinance may be
and Distribution of an Official Statement
Pertaining Thereto; and Providing an Ef-
fective
read or
purchased in the office of the City Secret-
ary, City of Allen, One Butler Circle, Allen,
Date.
A copy of this ordinance may be read or
Texas 75002.
'S/ Judy Morrison
purchased in the office of the City Secret -
ary, City of Allen, One Butler Circle, Allen,
.,dy Secretary
Texas 75002.
/s/ Judy Morrison
City Secretary