R97-30 05-12-97RESOLUTION NO. R97-30
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
APPLY TO THE TEXAS DEPARTMENT OF TRANSPORTATION FOR
GRANT FUNDS TO CONDUCT A SAFE AND SOBER WAVE SELECTIVE
TRAFFIC ENFORCEMENT PROGRAM.
WHEREAS, the City of Pearland wishes to apply for a grant from the Texas
Department of Transportation for the funding of a Safe and Sober Wave Selective
Traffic Enforcement Program (STEP); and
WHEREAS, the goal of this project is to reduce traffic speeds in excess of the
posted speed limit and increase safety belt and safety seat usage rates through
enhanced enforcement and public information during the following holiday weekends:
Memorial Day, July 4th, and Labor Day; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City Manager or his designee is hereby authorized to make
application to the Texas Department of Transportation for grant funds as set forth
below:
Funding for a Safe and Sober Wave Selective Traffic
Enforcement Program estimated at $7,500.00 from Federal
Grant Funds, administered through the Texas Department
of Transportation, said grant to be federally funded in its
entirety with no matching requirements.
Section 2. The City Manager or his designee is hereby authorized to sign any
and all documents necessary to carry out this grant application.
RESOLUTION NO. R97-30
PASSED,
APPROVED and
· A.D., 1997.
,ADOPTED
this the /~'~ ~'~//
day
TOM REID
MAYOR
of
ATTEST:
7Y SE(~R'ETARY
APPROVED AS TO FORM:
'A'MY M~TES McCULLOUGH
CITY A-~TORNEY
PAUL A. PHILBIN & ASSOC., P.C.
PAUL A PHILBIN
Attorneys at Law
6363 Woodway · Ste. 725 · Houston, Texas 77057-1792
(713) 783-4120 · FAX (713) 783-8812
CITY A TTOFINEv
June 6, 1997
Ms. Amy McCullough, City Attorney
City of Pearland
P.O. Box~4~
Pearlandr/TX 77588
Dear Ms. McCullough
RE:
Brazoria County Municipal Utility District No. 2
$4,380,000 Waterworks and Sewer System Combination
Unlimited Tax and Revenue Bonds, Series 1997
In connection with the subject Bonds, enclosed is a copy of
the final Bond Order as submitted to the Attorney General.
The Bond Order is an attachment to Mayor Reid's letter
approving the Bonds.
We appreciate your assistance in this matter and should you
have any questions, please feel free to call.
Very truly
Paul A. Philbin
Attorney for District
vjw
enc.
A: \25\LETTER\MCCUPEAR. BC2
BOND ORDER
THE STATE OF TEXAS
COUNTY OF BP, AZORIA
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 2
ORDER AUTHORIZING THE ISSUANCE OF $4,380~000
WATERWORKS AND SEWER SYSTEM COMBINATION UNLIMITED
TAX AND REVENUE BONDS, SERIES 1997; PRESCRIBING THE
TERMS AND PROVISIONS THEREOF; MAKING PROVISION FOR
THE PAYMENT OF THE INTEREST THEREON AND THE PRINCIPAL
THEREOF; AUTHORIZING THE SALE THEREOF; AND CONTAINING
OTHER PROVISIONS RElenTING TO THE SUBJECT
BE IT ORDERED BY THE BOARD OF DIRECTORS OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 2:
WHEREAS, Brazoria County Municipal Utility District
No. 2 situated in Brazoria County, Texas (hereinafter referred
to as "District" or "Issuer"), is a conservation and
reclamation district created pursuant to the provisions of
Chapter 54, Texas Water Code, as amended (the "Water Code" or
the "Act"); and the provisions of Article XVI, Section 59, of
the Texas Constitution.
WHEREAS, it is hereby found, determined, and
declared that:
(a)
the matters and facts set forth in the preamble of
this Order are true and correct;
(b)
the creation of the District was confirmed at an
election held on November 3, 1981;
(c)
at elections held on November 3, 1981 ($18,900,000)
and September 8, 1984 ($4,500,000), the District
was authorized to issue the bonds of the District
in the total maximum amount of $23,400,000 for the
purpose or purposes of, inter alia, purchasing and
constructing plants, facilities, and improvements
for waterworks and sewer systems, including
drainage facilities, as well as all expenses in any
manner incidental thereto in accordance with the
Engineer's Report, and paying such expenses as are
incidental to the organization, administration, and
financing of the District, which under applicable
law may properly be paid from the proceeds of such
bonds and to provide for the payment of principal
of and interest on such bonds by the levy and
collection of a sufficient tax upon all taxable
property within the District and further by a
pledge of all income or increment which may grow
A: \Z4\NEWMONEY. BC2\BONDORD. 97 1
(d)
(e)
(f)
out of the ownership and operation of the
District's improvements or facilities, less such
portion of said revenue income as may be required
to provide for the administration, efficient
operation, and adequate maintenance of said service
facilities as authorized by the Constitution and
laws of the State of Texas including particularly
(but not by way of limitation) Chapter 54 of the
Texas Water Code, together with all amendments and
additions thereto;
the elections described in Paragraphs (b) and (c)
hereof were called and held under and in strict
conformity with the Constitution and laws of the
State of Texas, and of the United States of
America, and the Board of Directors has heretofore
officially declared the results of said elections
and declared that the District was legally created
and authorized to issue the bonds described in
Paragraph (c);
The District has heretofore issued a first
installment of Bonds, Series 1985 in the amount of
$4,015,000 and a second installment of Bonds,
Series 1995 in the amount of $3,700,000. The
District also issued and Unlimited Tax Refunding
Bonds, Series 1992 in the amount of $4,090,000.
The Series 1992 Refunding Bonds advance refunded
and defeased $3,145,000 of the Series 1985 Bonds.
These Bonds are the third installment of a total of
$23,400,000 bonds authorized at elections held for
that purpose within the District, of which
$10,360,000 in bonds will remain authorized but
unissued after the sale of the Bonds;
the Bonds authorized by this Order should be issued
to (i) finance the District's portion of the cost
of acquisition or construction of water
distribution, wastewater collection and storm
drainage facilities to serve (a) Meadowview at
Silverlake, Section 1 (76-single-family residential
lots), (b) Lakepointe at Silverlake, Section 2 (59
single-family residential lots), (c) Southwyck,
Section 9, Phase 1 (57 single-family residential
lots), and (d) Cambridge at Silverlake, Section 1
(79 single-family residential lots), all four of
which section have been developed, plus (e)
Southwyck Parkway and County Road 90 (1996
Contract), (f) County Road 90 extension and force
main; (g) Cambridge Cove lift station; (h)
Southwyck Parkway and County Road 90 (1988
Contract); (i) Southwyck Detention Pond Phases II,
A: \24\NEt,~IONEY. BC2\BONDORD. 97 2
III and IV Expansions; (j) Southwyck Lake Road
Utilities, and (k) Southwyck, Section 7 utilities;
(ii) finance the District's pro rata share of the
cost of construction of joint water supply
facilities; (iii) finance the District's pro rata
share of the cost of the expansion of a joint
wastewater treatment facility; (iv) pay certain
engineering fees related to the aforementioned
facilities and projects; (v) pay interest on funds
advanced on the District's behalf by developers of
land located within the District; (vi) capitalize
and escrow a sum equal to eighteen months of
interest payments on the Bonds; and (ix) pay for
the administrative and issuance costs, legal fees,
fiscal agent's fees, a fee to the Texas Natural
Resource Conservation Commission ("TNRCC"), and
costs associated with condemnation and acquisition
of off-site drainage, and certain financing costs
related to the issuance of the Bonds.
(g)
the Board of Directors reserves the right to issue
the remaining $10,360,000 bonds which were voted on
November 3, 1981 and September 8, 1984 in one or
more series at a future date or dates when, in the
Board's judgment, such amounts are required for the
authorized purposes.
(h)
The TNRCC, acting through its Executive Director,
has approved the issuance of the Bonds described
herein by Order issued on May 16, 1997.
WHEREAS, it is in the best interest of the District
to issue the bonds described in this Order to perform and
construct the project approved by the TNRCC in its order
approving the bonds and to reserve the right to issue
remaining unissued balance of the bonds authorized at the
aforementioned election in one or more series at a future date
or dates, when in the opinion of the District, the proceeds
from the sale of the bonds are needed for any of the purposes
for which they were authorized.
IT IS THEREFORE ORDERED BY THE BOARD OF DIRECTORS OF
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 2:
SECTION ONE
SECTION 1.1: Definitions. When used in this Order
and in any orders amendatory, or supplemental hereto, the
terms listed below shall have the meanings specified below,
unless it is otherwise expressly provided or unless the
context otherwise requires:
A: \24\NEI,.~40NEY. BC2\BOFiDORD .97 3
(1) Board of Directors. The terms "Board of Directors"
or "Board" shall mean the governing body of the District.
(2) Bondholders. The term "Bondholders" shall mean the
holder of a Bond or Bonds.
(3) Additional Bonds. The term "Additional Bonds" shall
mean the additional bonds which the District expressly
reserves the right to issue in this Order.
(4) Bonds. The term "Bond" or "Bonds" shall mean any
obligation of the District authorized and issued pursuant to
this Order, whether initially delivered or issued in exchange
for, upon transfer of, or in lieu of any Bond previously
issued.
(5) Bond Fund. The terms "Bond Fund" or "Debt Service
Fund" shall mean the District's debt service fund which is
created and established in this Order and defined in Section
7.2.
(6) Bond Register. The term "Bond Register" is a
register required to be kept by the paying agent pursuant to
Section 2.5.
(7) City. The term "City" shall mean the City of
Pearland, Texas, or any other municipal corporation succeeding
to the powers, rights, privileges, and functions of the City,
and when appropriate, the City Council of the City.
(8) Construction Fund. The term "Construction Fund"
shall mean the District's construction fund which is created
and established in this Order and defined in Section 7.4.
(9) Code. The term "Code" shall mean the Internal
Revenue Code of 1986, as amended by any amendments thereto
enacted prior to the Issue Date.
(10) Depository. The term "Depository" shall mean the
bank or banks which the District may select from time to time
as its depository or depositories.
(11) Governing Body. The term "Governing Body" shall
mean the board of directors of the Issuer.
(12) Governmental Securities. The term "Governmental
Securities" shall mean (1) direct obligations of, or
obligations the timely payment of the principal of and
interest on which are fully and unconditionally guaranteed by,
the United States of America and (2) to the extent allowed by
law at the time of investment, obligations issued by or on
behalf of any state or political subdivision or municipality
A: \24\NENMONEY . BCZ\BONOORD . 97 4
thereof which, at the time of deposit as defined herein, have
been assigned ratings in the highest rating category of both
Moody's Investors Service, Inc. and Standard & Poor's
Corporation, or any successor to the bond rating operations of
either such corporation, but in the case of both Clauses (1)
and (2) only if such obligations may not be called for
redemption prior to maturity.
(13) Gross Proceeds. The term "Gross Proceeds" shall
mean all amounts received by the Issuer from the sale of the
Bonds, all amounts received as a result of the investment of
such amounts, and all amounts held for the credit of the Bond
Fund or reasonably expected to be used to pay debt service on
the Bonds.
(14) Holder. The term, when used with respect to any
Bond, shall mean the Person in whose name such Bond is
registered in the Bond Register.
(15) Interest Payment Date. The term "Interest Payment
Date" shall mean the Stated Maturity of an installment of
interest on the Bonds.
(16) Investment. The term "Investment" shall mean
(a) a share of stock in a corporation or a right to
subscribe for or to receive such a share,
(b) any indebtedness or evidence thereof, including
without limitation United States Treasury bonds, notes, and
bills (whether or not of the State and Local Government
Series) and bank deposits (whether or not certificated or
interest bearing or made pursuant to a depository contract),
(c) any annuity contract, or any other deferred
payment contract acquired to fund an obligation of the Issuer,
or
(d) any other investment-type property,
excluding from the foregoing, Tax-Exempt Obligations.
but
(17) Issue Date. The term "Issue Date" shall mean the
date on which the Bonds are first authenticated and delivered
to the initial purchasers thereof against payment therefor.
(18) Issuer. The term "Issuer" shall mean Brazoria
County Municipal Utility District No. 2, a conservation and
reclamation district organized, created, and established
pursuant to Article XVI, Section 59 of the Constitution of the
State of Texas within Brazoria County, Texas.
A: \2&\NEg#ONEY. BC2\BOI~DORD. 97 5
(19) Issuer Rec~uest. The term "Issuer Request" shall
mean a request signed in the name of the Issuer by the
President, Vice, or Treasurer and by the Secretary or a Deputy
or Acting Secretary of the Governing Body and delivered to the
Paying Agent.
(20) Issue Price. The term "Issue Price" of a Bond of
any Stated Maturity shall mean the offering price to the
public (excluding bond houses, brokers, and similar Persons
acting in the capacity of underwriters or wholesalers) at or
below which a substantial amount of Bonds of such Stated
Maturity are first sold to such public, including accrued
interest to the Issue Date, if any.
(21) Maturity. The term "Maturity" when used with
respect to any Bond shall mean the date on which the principal
of such Bond becomes due and payable as therein provided,
whether at the Stated Maturity or by call for redemption or
otherwise.
(22) Net Revenues. The term "Net Revenues" shall mean
all income or increment which may grow out of the ownership
and operation of the District's plants, facilities, and
improvements (as same are purchased, constructed, or otherwise
acquired) (such plants, facilities, and improvements herein
defined as the "System"), being the gross revenue income less
such portion for the administration, efficient operation, and
adequate maintenance of the District's plants, improvements,
and facilities.
(23) Outstandinq. The term "Outstanding" when used with
respect to Bonds shall mean as of the date of determination,
all Bonds theretofore authenticated and delivered under this
Order, except, without duplication:
(a) Bonds theretofore cancelled by the Paying Agent
or delivered to the Paying Agent for cancellation;
(b) Bonds for whose payment or redemption money in
the necessary amount has been theretofore deposited with the
Paying Agent in trust for the Holder of such Bonds, provided
that, if such Bonds are to be redeemed, notice of such
redemption has been duly given pursuant to this Order,
irrevocably provided for to the satisfaction of the Paying
Agent, or waived;
(c) Bonds in exchange for or in lieu of which other
Bonds have been authenticated and delivered pursuant to this
Order;
(d) Bonds alleged to have been destroyed, lost, or
stolen which have been paid as provided in Section 2.7;
A: \24\NEI,~EY . BC2\BONDORD . 97 6
(e) Bonds for the payment of the principal (or
Redemption Price) of and interest on which money or
Governmental Securities or both are held by the Person and
with the effect specified in Section 12.1.
(24) Pa¥in~ Agent. The term "Paying Agent" shall mean
the corporation named as the "Paying Agent" herein until a
successor Paying Agent shall have become such pursuant to the
applicable provisions of this Order, and thereafter "Paying
Agent" shall mean such successor Paying Agent.
(25) Person. The term "Person" shall mean any
individual corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization, or government or any agency or political
subdivision thereof.
(26) Place of Payment. The term "Place of Payment"
shall mean the principal office of the Paying Agent in the
City of Dallas, Texas.
(27) Predecessor Bonds. The term "Predecessor Bonds"
shall mean every previous Bond evidencing all or a portion of
the same debt as that evidenced by such particular Bond, and,
for purposes of this definition, any Bond authenticated and
delivered pursuant to this Order in lieu of a mutilated, lost,
destroyed, or stolen Bond shall be deemed to evidence the same
debt as the mutilated, lost, destroyed, or stolen Bond.
(28) Redemption Date. The term "Redemption Date" when
used with respect to any Bond to be redeemed shall mean the
date fixed for such redemption pursuant to the terms of this
Order.
(29) Redemption Price. The term"Redemption Price" when
used with respect to any Bond to be redeemed shall mean the
price at which it is to be redeemed pursuant to the terms
hereof, excluding installments of interest whose Stated
Maturity is on or before the Redemption Date.
(30) Record Date. The term "Record Date" for the
interest payable on any Interest Payment Date shall mean the
15th day (whether or not a business day) of the calendar month
next preceding such Interest Payment Date.
(31) Stated Maturity. The Term "Stated Maturity" when
used with respect to any Bond or any installment of interest
thereon shall mean the date specified in such Bond as the
fixed date on which the principal of such Bond or such
installment of interest is due and payable.
A: \24\NE~EY. BC2\BONDORD. 97' 7
(32) Tax-Exempt Obliqations. The term "Tax-Exempt
Obligations" shall mean obligations the interest on which is
excludable from the gross income of any owner thereof under
the Code or any regulations promulgated pursuant thereto.
(33) Yield. The term "Yield" of the Bonds shall mean:
(a) the discount factor which, when used to compute
the present value on the Issue Date of all payments of
principal and interest paid or to be paid on the Bonds,
compounding semiannually, produces an amount equal to the sum
of the Issue Prices of the Bonds,
(b) Investments acquired with Gross Proceeds prior
to any date shall mean the discount factor which, when used in
computing the present value on the Issue Date of all payments
of principal of and interest on, or sales proceeds (net of
sales commissions) in respect of, such Investments either
received on or before such date or thereafter scheduled to be
received, compounding semiannually, results in an amount equal
to the aggregate present value on the Issue Date, compounding
semiannually at the same discount rate, of the respective
Costs of such Investments.
SECTION 1.2: Notices. Wherever this Order provides
for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein provided) if in
writing and mailed, first-class postage prepaid, to each
Bondholder, at the address of such Bondholder as it appears in
the Bond Register. Neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular
Bondholder shall affect the sufficiency of such notice with
respect to all other Bondholders. Wherever this Order
provides for notice in any manner, such notice may be waived
in writing by the Person entitled to received such notice,
either before or after the event with respect to which such
noti6e is given, and such waiver shall be the equivalent of
such notice. Waivers of notice by Bondholders shall be filed
with the Issuer, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon
such waiver.
SECTION 1.3: Effect of HeadinGs and Table of
Contents. The Section headings herein and in the Table of
Contents are for convenience only and shall not affect the
construction hereof.
SECTION 1.4: Order a Contract= Amendments. This
Order shall constitute a contract with the Holders of the
Bonds from time to time accepted by the initial purchaser of
the Bonds, shall be binding on the Issuer and its successors
A: \24\NEI,AIONEY. BC2\BONDORD. 97 8
and assigns whether or not so expressed, and shall not be
amended or repealed by the Issuer so long as any Bond remains
Outstanding except as permitted in this Section.
The Issuer may, without the consent of or notice to
any Bondholder, from time to time and at any time amend this
Order in any manner not detrimental to the interests of the
Holders of the Bonds, including the curing of any ambiguity,
inconsistency, or form defect or omission herein or therein.
In addition, the Issuer may, with the written consent of the
Holders of a majority in aggregate principal amount of the
Bonds then Outstanding affected thereby, amend, add to, or
rescind any of the provisions of this Order; provided that,
without consent of the Holders of all of the affected
Outstanding Bonds, no such amendment, addition, or rescission
shall (1) change the Stated Maturity of the Bonds or any
installment of interest thereon, reduce the principal amount
thereof, the Redemption Price therefor, or the rate of
interest thereon, change the place or places at, or the coin
or currency in, which any Bond or the interest thereon is
payable, or in any other way modify the terms of payment of
the principal of or interest on the Bonds, (2) give any
preference to any Bond over any other Bond, or (3) modify any
of the provisions of this Section, except to increase the
percentage provided hereby or to provide that certain other
provisions of this Order cannot be modified or waived without
the consent of the Holder of each Bond affected thereby.
SECTION 1.5: Benefits of Order. Nothing in this
Order, expressed or implied, is intended or shall be construed
to confer upon any Person (other than the Issuer and the
Bondholders) any right, remedy, or claim, legal or equitable,
under or by reason of this Order or any provision hereof, this
Order and all its provisions being intended to be and being
for the sole and exclusive benefit of the Issuer and the
Bondholders.
SECTION 1.6. Repealer. All orders and resolutions,
or parts thereof, which are in conflict with any provision of
this Order are hereby repealed and declared to be inapplicable
to the extent of such conflict, and the provisions of this
Order shall be and remain controlling as to the matters
prescribed herein.
SECTION 1.?: Governing Law. This Order shall be
construed in accordance with and governed by the laws of the
State of Texas and the federal law of the United States of
America.
SECTION 1.8: Severability. If any provisions of
this Order or any application thereof shall be invalid,
illegal, or unenforceable, the validity, legality, and
A: \24\NEWMONEY . BC2\BONDORD .97 9
enforceability of the remaining provisions and applications
shall not in any way be affected or impaired thereby.
SECTION 1.9: Open Meetinq. It is hereby officially
found and determined that the meeting at which this Order was
adopted was open to the public, and public notice of the time,
place, and purposed of said meeting was given, all as required
by the Texas Government Code, Section 551 and Section 49.063
and 49.064, Texas Water Code, as amended.
SECTION 1.10: Authority of Officers. The President
and the Vice President of the Governing Body, or either of
them, and the Secretary, and any Deputy or Acting Secretary of
the Governing Body, or any of them, are authorized to evidence
adoption of this Order and to do any and all things proper and
necessary to carry out the intent hereof.
SECTION 1.11: District's Successor's and Assigns.
Whenever in this Order the District is named and referred to
it shall be deemed to include its successors and assigns, and
all covenants and agreements in this Order by or on behalf of
the District, except as otherwise provided herein, shall bind
and inure to the benefit of its successors and assigns whether
or not so expressed.
SECTION 1.12: Defeasance and Refunding. The
District reserves the right to defease or refund the Bonds in
any manner provided by law.
SECTION TWO
AUTHORIZATION, DESCRIPTION, AND EXECUTION OF BONDS
SECTION 2.1: Amount, Name, Purpose, and
Authorization. The Bonds of the District, to be known and
designated as Brazoria County Municipal Utility District No.
2 Waterworks and Sewer System Combination Unlimited Tax and
Revenue Bonds, Series 1997 shall be issued in the aggregate
principal amount of $4,380,000. The District hereby
authorizes issuance of bonds of the Issuer, in the form
specified herein and bearing the terms herein provided, in
order to (i) finance the District's portion of the cost of
acquisition or construction of water distribution, wastewater
collection and storm drainage facilities to serve (a)
Meadowview at Silverlake, Section 1 (76-single-family
residential lots), (b) Lakepointe at Silverlake, Section 2 (59
single-family residential lots), (c) Southwyck, Section 9,
Phase i (57 single-family residential lots), and (d) Cambridge
at Silverlake, Section 1 (79 single-family residential lots),
all four of which section have been developed, plus (e)
Southwyck Parkway and County Road 90 (1996 Contract), (f)
County Road 90 extension and force main; (g) Cambridge Cove
A: \24\NEWHONEY . BC2\BONDORD .97 1 0
lift station; (hi Southwyck Parkway and County Road 90 (1988
Contract); (i) Southwyck Detention Pond Phases II, III and IV
Expansions; (j) Southwyck Lake Road Utilities, and (k)
Southwyck, Section 7 utilities; (ii) finance the District's
pro rata share of the cost of construction of joint water
supply facilities; (iii) finance the District's pro rata share
of the cost of the expansion of a joint wastewater treatment
facility; (iv) pay certain engineering fees related to the
aforementioned facilities and projects; (v) pay interest on
funds advanced on the District's behalf by developers of land
located within the District; (vii capitalize and escrow a sum
equal to eighteen months of interest payments on the Bonds;
and (ix) pay for the administrative and issuance costs, legal
fees, fiscal agent's fees, a fee to the Texas Natural Resource
Conservation Commission ("TNRCC"), and costs associated with
condemnation and acquisition of off-site drainage, and certain
financing costs related to the issuance of the Bonds, which
under applicable law may properly be paid from the proceeds of
such bonds, all under and in strict conformity with Article
XVI, Section 59 of the Constitution of the State of Texas and
the laws of the State of Texas, including particularly (but
not by way of limitation) Chapter 54 of the Texas Water Code,
together with all amendments and additions thereto, by
authority of elections held for and within the Issuer on
November 3, 1981 and September 8, 1984.
SECTION Z.Z: Date, Denomination, Interest Rate, and
Maturities. The Bonds will be issued in fully registered
form, in the denomination of $5,000 or any integral multiple
thereof. The Stated Maturities of the Bonds shall be
September I of the years and as to the principal amounts set
forth below, and interest on the Bonds of such Stated
Maturities shall accrue from June 1, 1997, which shall be the
"Dated Date" thereof, or the most recent Interest Payment Date
to which interest has been paid or duly provided for, until
such Bonds are paid or due provision therefor is made at or
after the Maturity thereof, at the per annum rate set forth
after the Stated Maturity below, calculated on the basis of a
360-day year of twelve 30-day months and payable semiannually
on each March 1 and September 1 commencing March 1, 1998
(nine-month interest payment):
Year of
Bond Stated Principal Interest CUSIP Bond Stated
No. Maturity Amount Rate % No. No. Maturity Amount
B-1 2000 $115,000 7.500% 106046CK9 B-10 2009 $ 180,000
B-2 2001 120,000 7.500% 1060~6CL7 B-11 2010 185,000
B-3 2002 125,000 7.500% 106046CM5 8-12 2011 200,000
8-4 2003 130,000 7.500% 106046CN3 B-13 2012 205,000
B-5 2004 140,000 7.500% 106046CP8 B-14 2013 215,000
B-6 2005 145,000 7.500~ 1060~6CQ6 8-15 2014 230,000
B-7 2006 155,000 7.500% 106046CR4 B-16 2015 595,000
8-8 2007 160,000 5.750% 1060~6CS2 B-17 2016 635,000
B-9 2008 170,000 5.100% 106046CT0 B-18 2017 675,000
Year of
Principal Interest CUSIP
Rate % No.
5.200% 106046CU7
5.250% 106046CV5
5.375% 106046C~/5
5.400% 106046CXl
5.500% 106046CY9
5.350% 106046C26
5.375% 1060460A0
5.000% 1064060B8
5,000% 1060460C6
A:\24\NEt, dHO,qEY.BCZ\BONDORD.97 11
SECTION 2.3: Payments. The principal of and
interest on the Bonds shall be payable at the Place of Payment
all subject to the terms and conditions of this Order. If the
specified date for any payment of principal (or Redemption
Price) of or interest on the Bonds shall be a Saturday,
Sunday, or legal holiday or equivalent (other than a
moratorium) for banking institutions generally in the city in
which the Place of Payment is located, such payment may be
made on the next succeeding day which is not one of the
foregoing days without additional interest and with the same
force and effect as if made on the specified date for such
payment.
The Paying Agent shall pay the principal or
Redemption Price of the Bonds at the Maturity thereof, upon
surrender, to the Holders thereof from funds deposited with it
for such purpose by the Issuer.
SECTION 2.4: Delivery and Execution of Bonds. The
Bonds shall be executed on behalf of the Issuer by the
President or Vice President of the Governing Body under its
seal reproduced or impressed thereon and attested by its
Secretary or one of its Deputy or Acting Secretaries. The
signatures of any of these officers on the Bonds may be manual
or facsimile. Bonds bearing the manual or facsimile
signatures of individuals who were at the time of execution
the proper officers of the Governing Body shall bind the
Issuer, notwithstanding that such individuals or any of them
shall cease to hold such offices prior to the certifications
or authentication and delivery of such Bonds.
The President or Vice President of the Governing
Body shall execute one Bond of each Stated Maturity, dated
June 1, 1997 representing the entire principal amount of all
Bonds of such Stated Maturity, in the name of the initial
purchaser thereof or his designee, and shall submit such
Bonds, together with the record of the proceedings authorizing
the issuance thereof and any and all other necessary orders,
certificates, and records, to the Attorney General of Texas
for approval. The initial bonds shall be numbered B-1 through
B-18 and the definitive or printed Bonds shall be numbered
sequentially starting with 0001. After the Attorney General
has approved such Bonds, the President or Vice President of
the Governing Body shall cause such Bonds to be delivered to
the Comptroller of Public Accounts of the State of Texas for
registration. Upon registration of the Bonds, the Comptroller
is authorized and directed to deliver the Bonds in accordance
with instructions of the President or Vice President of the
Governing Body. At any time thereafter the Issuer may deliver
such Bonds to the Paying Agent together with definitive Bonds
to be issued in exchange therefor, and the Paying Agent shall
thereupon, within not more than five business days following
A: \24\NEt,a40NEY . BC2\BONDORD . 97 1 2
~receipt of instructions from the payee named therein
designating the Persons, maturities, and principal amounts to
and in which such Bonds ate to be transferred, authenticate,
and deliver such Bonds as provided in such instructions. The
officers or acting officers of the Governing Body are
authorized to execute and deliver on behalf of the Governing
Body such certificates and instruments as may be necessary to
accomplish or in furtherance of the delivery of the Bonds to
and payment therefor by the initial purchaser thereof.
All Bonds authenticated and delivered by the Paying
Agent hereunder shall be dated the date of their
authentication.
No Bond shall be entitled to any right or benefit
under this Order, 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
5.3, executed by the Comptroller of Public Accounts of the
State of Texas or his duly authorized agent by manual
signature, or a certificate of authentication substantially in
the formprovided in Section 5.4, executed by the Paying Agent
by manual signature and either such certificate upon any Bond
shall be conclusive evidence, and the only evidence, that such
Bond has been duly certified or authenticated and delivered.
SECTION 2.5: Reqistration, Transfer, and Exchange.
The Issuer shall cause to be kept at the Place of Payment a
register (herein referred to as the "Bond Register") in which,
subject to such reasonable regulations as the Issuer or the
PayingAgent mayprescribe, the Paying Agent shall provide for
the registration of the Bonds and of transfers of the Bonds as
herein provided.
Upon surrender for transfer of any Bond at the Place
of Payment, the Issuer shall execute and the Paying Agent
shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Bonds of the same
Stated Maturity, of any authorized denominations, and of a
like aggregate principal amount.
At the option of the Holder, Bonds may be exchanged
for other Bonds of the same Stated Maturity, of any authorized
denominations, and of like aggregate principal amount, upon
surrender of the Bonds to be exchanged at the Place of
Payment. Whenever any Bonds are so surrendered for exchange,
the Issuer shall execute and the Paying Agent shall
authenticate and deliver the Bonds which the Bondholder making
the exchange is entitled to receive.
All Bonds issued upon any transfer or exchange of
Bonds shall be the valid obligations of the Issuer evidencing
the same debt, and entitled to the same benefits under this
Order, as the Bonds surrendered upon such transfer or
exchange.
A: \24\NEt4MONEY. BC2\BONDORO. 97' 13
Every Bond presented or surrendered for transfer or
exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the
Paying Agent duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to the Holder for
any registration, transfer, or exchange of Bonds, but the
Issuer or the Paying Agent may require payment by the
Bondholder requesting such transfer or exchange of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Bonds.
Neither the Issuer nor the Paying Agent shall be
required (1) to transfer or exchange any Bond during a period
beginning at the opening or business 15 days before the day of
the first mailing of a notice of redemption of Bonds hereunder
and ending at the close of business on the day of such mailing
or (2) thereafter to transfer or exchange in whole or in part
any Bond so selected for redemption.
SECTION Z.6: Interest Rights and Payments.
Interest on the bonds, which is punctually paid or duly
provided for on or within 10 days after any Interest Payment
Date, shall be paid to the Person in whose name that Bond (or
one or more Predecessor Bonds) is registered at the close of
business on the Record Date therefor.
Interest on the bonds which is payable on any
Interest Payment Date but is not paid or duly provided for by
10 days after (herein referred to as "Defaulted Interest")
shall forthwith cease to be payable to the Holder on the
relevant Record Date solely by virtue of having been such
Holder; and such Defaulted Interest shall be paid to the
Persons in whose names such Bonds (or their respective
Predecessor Bonds) are registered at the close of business on
a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Issuer shall notify the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Bond and the
date of the proposed payment and shall simultaneously deposit
with the Paying Agent an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or make arrangements satisfactory to the
Paying Agent for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Section provided. Thereupon,
the Paying Agent shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more
than 15 nor less than 10 days after the receipt of the
A: \24\NEWMONEY . BC2\BONDORD. 97
14
proposed payment and not less than 10 days after the receipt
by the Paying Agent of the notice of the proposed payment.
The Paying Agent shall promptly notify the Issuer of such
Special Record Date and, in the name and at the expense of the
Issuer, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Bondholder at the
address of such Bondholder as it appears in the Bond Register
not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Bonds (or their respective
Predecessor Bonds) are registered on such Special Record Date.
All payments of interest on the Bonds shall be paid
by check or draft mailed, first-class postage prepaid, by the
Paying Agent to the Person entitled to such payment at the
address of such Person as it appears in the Bond Register or
by such other customary banking arrangements to which such
Person and the Paying Agent may agree.
Subject to the foregoing provisions of this Section,
each Bond delivered under this Order upon transfer or in lieu
of or in exchange for any other Bond shall carry all the
rights to interest accrued and unpaid, and to accrue, which
were carried by such other Bond, and each such Bond shall bear
interest from such date, that neither gain nor loss in
interest shall result from such transfer, exchange, or
substitution.
SECTION 2.7: Mutilated, Destroyed, Lost, and Stolen
Bon4s. If (1) any mutilated Bond is surrendered to the Paying
Agent, or the Issuer and the Paying Agent received evidence to
their satisfaction of the destruction, loss, or theft of any
Bond, and (2) there is delivered to the Issuer and the Paying
Agent such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to
the Issuer and the Paying Agent that such Bond has been
acquired by a bona fide purchaser, the Issuer shall execute
and upon its request the Paying Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost, or stolen Bond, a new Bond of the same Stated
Maturity and of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost, or
stolen Bond has become or is about to become due and payable,
the Issuer in its discretion may pay such Bond instead of
issuing a new Bond.
A: \24\NEI,a40gEY. BC2\BONDORD . 97 1 5
Upon the issuance of any new Bond under this
Section, the Issuer or the Paying Agent may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and any other expenses connected therewith.
Every new Bond issue pursuant to this Section in
lieu of any mutilated, destroyed, lost, or stolen Bond shall
constitute an original additional contractual obligation of
the Issuer, 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 Order 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 2.8: Ownership; Unclaimed Principal and
Interest. Subject to the further provisions of this Section,
the District, the Paying Agent, and any other person may treat
the person in whose name any Bond is registered as the
absolute Owner of such Bond for the purpose of making and
receiving all payments on the Bond and for all other purposes,
whether or not such Bond is overdue, and neither the District
nor the Paying Agent shall be bound by any notice or knowledge
to the contrary. All payments made to the person deemed to be
the Owner of any Bond in accordance with this Section shall be
valid and effectual and shall discharge the liability of the
District and the Paying Agent upon such Bond to the extent of
the sums paid. Principal and interest deposited with the
Paying Agent and remaining unclaimed for three (3) years shall
be reported and disposed of in accordance with the provisions
of Title 6 of the Texas Property code, as amended, to the
extent that such provisions are applicable.
SECTION 2.9: Cancellation. All Bonds surrendered
for payment, redemption, transfer, exchange, or replacement,
if surrendered to the Paying Agent, shall be promptly
cancelled by it and, if surrendered to the Issuer, shall be
delivered to the Paying Agent and, if not already cancelled,
shall be promptly cancelled by the Paying Agent. The Issuer
may at any time deliver to the Paying Agent for cancellation
any Bonds previously certified or authenticated and delivered
which the Issuer may have acquired in any manner whatsoever,
and all Bonds so delivered shall be promptly cancelled by the
Paying Agent. No Bond shall be authenticated in lieu of or in
exchange for any Bond cancelled as provided in this Section,
except as expressly provided by this Order. All cancelled
Bonds held by the Paying Agent shall be disposed of as
directed by Issuer Request.
A: \24 \NE~MONEY . BC2\BONDORD . 97 1 6
SECTION THREE
PRIOR REDEMPTION OF BONDS
SECTION 3.1: RedemDtion of Bonds. The Bonds
maturing on or after September 1, 2007 are subject to
redemption prior to their scheduled maturities at the option
of the Issuer, as a whole or from time to time in part, on
September 1, 2006, or on any date thereafter at a price equal
to the principal amount of the Bonds called for redemption
plus accrued interest from the most recent interest payment
date to the date fixed for redemption.
SECTION 3.2: Exercise of Option. The exercise by
the Issuer of its option to redeem any Bonds shall be by Order
or Resolution entered in the minutes of the Board of Directors
of the District. The District shall, at least thirty (30)
days prior to the Redemption Date (unless a shorter notice
shall be satisfactory to the Paying Agent), notify the Paying
Agent of such Redemption Date and of the principal amount of
Bonds of each Stated Maturity to be redeemed.
SECTION 3.3: Procedures. If less than all of the
Outstanding Bonds of any Stated Maturity are to be redeemed,
the particular Bonds of such Stated Maturity or portions
thereof to be redeemed shall be selected by the District from
the Outstanding Bonds which have not previously been called
for redemption, by such random method as the District shall
deem customary and equitable and which may provide for the
selection for redemption of portions (equal to $5,000 or a
multiple thereof) of the principal amount of Bonds of a
denomination larger than $5,000. The District shall promptly
notify the Paying Agent in writing of the Bonds selected for
redemption and, in the case of any Bond selected for partial
redemption, the principal amount thereof to be redeemed. For
purposes of this Order, unless the context otherwise requires,
all provisions relating to the redemption of Bonds shall
relate, in the case of any Bond redeemed only in part, to the
portion of the principal of such Bond which has or is to be
redeemed.
SECTION 3.4: Notice to Holders of Redemption.
Notice of redemption shall be mailed by the Paying Agent in
the name of and at the expense of the District, not less than
thirty (30) days prior to the Redemption Date, to each Holder
of Bonds to be redeemed. Notice of redemption shall also be
given by publication of notice one time, not less than thirty
(30) days prior to the Redemption Date, in a financial journal
or publication of general circulation in the United States of
America. All notices of redemptions shall include a statement
as to (i) the Redemption Date, (ii) the Redemption Price,
(iii) the principal amount and identification (by Bond and
A: \24\NEI~ONEY . BCZ\BONDORD . 97 1 7
CUSIP number, Stated Maturity, interest rate, and Issue Date
and, in the case of partial redemption, the respective
principal amounts) of the Bonds to be redeemed, (iv) that on
the Redemption Date the Redemption Price of each of the Bonds
to be redeemed will become due and payable and that interest
thereon shall cease to accrue from and after such date, and
(v) that such Bonds are to be surrendered for payment of the
Redemption Price at the principal office of the Paying Agent,
and the address of such office.
The Paying Agent shall give written notice of
redemption, by registered mail, overnight delivery, or other
comparably secure means, not less than 30 days prior to the
Redemption Date, to each registered securities depository (and
to each national information service that disseminates
redemption notices) known to the Paying Agent, but neither the
failure to give such notice nor any defect therein shall
affect the sufficiency of notice given to Bondholders as
hereinabove stated.
SECTION 3.5: Payment. Notice of redemption having
been given as aforesaid, the Bonds so to be redeemed shall, on
the Redemption Date, become due and payable at the Redemption
Price, and from and after such date (unless the District shall
default in the payment of the Redemption Price) such bonds
shall cease to bear interest. Upon the surrender of such
Bonds for redemption in accordance with such notice, such
Bonds shall be paid by the Paying Agent at the Redemption
Price out of money supplied by the District. Installments of
interest with a Stated Maturity on or prior to the Redemption
Date shall be payable to the Holders of such bonds registered
as such on the relevant Record Dates according to their terms.
If any Bond called for redemption shall not be so paid on the
date set for redemption by reason of the failure of the
District to provide collected funds, the same shall continue
to bear interest from the Redemption Date at the rate borne by
such Bond.
SECTION 3.6: Partial Redemption. Any Bond which
is to be redeemed only in part shall be surrendered at the
office of the Paying Agent (if payment is to be made to other
than the registered owner with due endorsement by, or a
written instrument of transfer in form satisfactory to the
Paying Agent duly executed by, the Holder thereof or his
attorney duly authorized in writing) and the District shall
execute and the PayingAgent shall register and deliver to the
Holder of such Bond, without service charge to the Holder, a
new Bond or Bonds of the same Stated Maturity and of any
authorized denomination or denominations as requested by such
Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Bond so
surrendered.
A: \24\NEUNONEY. BC2\BONDORD.~7 1 8
SECTION FOUR
FINANCIAL GUARANTY INSURANCE POLICY
SECTION 4.1 Definitions.
"Insurance Trustee" shall mean the United States
Trust Company of New York, or its successor as Insurance
Trustee.
"Insurer" shall mean Asset Guaranty Insurance
Company, as the provider of a municipal bond insurance policy
for the Bonds.
"Policy" shall mean the municipal bond insurance
policy provided by the Insurer relating to the Bonds.
"Physical Plant" shall mean any waterworks, sanitary
sewer system, drainage and storm sewer system and/or physical
plant which the District owns, leases or shares under shared
costs and capacity agreements with other governmental
entities.
"System", if not otherwise defined herein, shall
mean the District's waterworks, sanitary sewer system,
drainage and storm sewer system, as they may now exist and may
be improved, added to, or extended hereafter, there being
included in such term all facilities now or hereafter owned or
operated by the District and including all real and personal
property of every kind and nature comprising any part of or
used or useful in the operation of the waterworks, sanitary
sewer system, drainage and storm sewer system of the District.
SECTION 4.2. Purpose and Purchase of Bond
Insurance. The initial purchaser of the Bonds is authorized
to purchase a municipal bond insurance policy from the Insurer
guaranteeing the scheduled payment of principal of and
interest on the Bonds, in accordance with the terms of the
Policy. The purchase of the Policy from the Insurer is hereby
approved and the President, Vice President and other officers
of the District, are authorized to execute such documents and
take such actions as are necessary and desirable to effectuate
such purchase. In consideration for the Insurer's issuance of
the Policy, the District hereby makes the agreements,
covenants and representations set forth in this Section. The
provisions of this Section Four shall be in effect only for so
long as the Bonds are outstanding and the Policy is in effect
with respect to the Bonds. This Section has been adopted
solely for the benefit of the Insurer, and may be modified or
amended at any time with the consent of, or may be waived in
A: \2&\#EgtIONEY. BC2\BONDORD. 97 1 9
whole or in part by, the Insurer, and may not be enforced or
relied upon, in any way, by any of the Owners of the Bonds.
SECTION 4.3. Covenants.
The District hereby covenants and agrees, for so
long as the Bonds are outstanding, as follows, to wit:
To the extent applicable to the District, to
maintain or cause to be maintained the
Physical Plant in good condition and to
operate or cause to be operated such Physical
Plant in an efficient manner and at a
reasonable cost.
Be
To maintain insurance with respect to the
Physical Plant and the System insuring against
such risks (including casualty, accident and
worker's compensation), in such amounts and
with such deductibles as are consistent with
customary coverage as from time to time in
effect in connection with the operation of a
system of type and size comparable to the
System and as maintained by a political
subdivision similar to the District. All such
insurance must be provided by recognized
insurance companies rated not less that A-X by
A.M. Best Company or be approved in writing by
the Insurer.
Ce
To provide the Insurer copies of any
engineer's report relating to the condition of
the District's Physical Plant or the System
within thirty (30) days of the receipt thereof
by the District. The District's obligation
under this covenant is limited to engineer's
reports that describe any conditions or
circumstances that would have a material
adverse effect on the condition, operation,
maintenance, or capacity of the Physical Plant
or System.
(i)
To maintain and impose a schedule of
reasonable rates and charges for use of
the System;
(ii) That no free service of the System will
be permitted; and
(ii) That the District will not sell or
encumber the System or any substantial
part thereof and that, with the exception
A: \24\NEI~40NEY. 8C2\BOIdDORD. 97 2 0
of any "Additional Bond", if permitted
under the Bond Order, the District will
not encumber any revenues thereof unless
such encumbrance is made junior and
subordinate to the provisions of the Bond
Order.
SECTION 4.4. Reporting Requirements.
The District shall furnish to the Insurer:
Within sixty (60) days of being made available
to, and accepted by, the District, a copy of
any financial statement of the District and a
copy of any audit or financial report of the
District;
B. A copy of any notice or report:
(i)
when and as required to be given to
the Texas Natural Resource
Conservation Commission, the United
States Environmental Protection
Agency, or their respective
successor agencies, relating
materially to the financial or
physical condition of the District;
(ii)
when and as required to be given to
the Owners or any other party to any
of the Bond Documents executed in
connection with the issuance of the
Bonds, including, without
limitation, notice of any redemption
of or defeasance of the Bonds and
any certificate rendered pursuant to
this Bond Order relating to the
security for the Bonds; and
(iii)
when and as required to be given
pursuant to United States Securities
and Exchange Commission Rule 15c2-12
(the "Rule") to any nationally
recognized municipal securities
information repository, any person
designated by the State of Texas or
any authorized department, office or
agency thereof as, and determined by
the United States Securities and
Exchange Commission (the "SEC") or
its staff to be, a state information
depository within the meaning of the
A: \24\#EWMONEY. BC2\BONDORD. 97 2 1
Rule, or the Municipal Securities
Rule Making Board.
Ce
Such additional information as the Insurer may
reasonably request.
The District's officers are hereby authorized and
directed to discuss with the Insurer the affairs, finances and
accounts of the District and its facilities or any information
the Insurer may reasonably request regarding the security for
the Bonds. The Insurer is hereby authorized to have, at any
reasonable time, access to the District's facilities and
access to and copies of all books and records relating to the
District the Bonds, the District's facilities, and the
District's ad valorem tax receipts.
SECTION 4.5. Interested Parties.
Nothing in this Bond Order, expressed or implied, is
intended or shall be construed to confer upon, or to give to,
any person or entity, other than the District, the Insurer,
the Paying Agent/Registrar and the Owners any right, remedy or
claim under this Bond Order or any covenant condition or
stipulation hereof, and all covenants, stipulations, promises
and agreements in this Bond Order contained by or on behalf of
the District, the Insurer, the Paying Agent/ Registrar and the
Owners are made and included for their sole and exclusive
benefit.
SECTION 4.6.
Requirements.
Modification of Documents; Consent
A. Except as provided in Section 1.4 of this Bond
Order, no provision of this Bond Order, and no provision of
any other document delivered in connection with the issuance
of the Bonds, shall be amended or modified in any manner
without the prior written consent of the Insurer.
B. Insurer's consent shall be required with
respect to:
(i)
the execution and delivery of any supplement
to the Bond Order or any other document
executed in connection with the issuance of
the Bonds;
(ii) removal of the Paying
appointment of a
Agent/Registrar; and
Agent/Registrar and
successor Paying
A: \24\NE%~HONEY . BC2\BONDORD .97 2 2
(iii)
initiation or approval of any action not
described in clauses (i) and (ii) above
which requires consent of Owner.
SECTION 4.7. Right
Proceedings; Subrogation.
of Insurer to Direct
In the event of default in payment of principal or
interest on any of the Bonds when due, or, in the event the
District fails to make the payments required to be made into
any fund established or maintained hereunder, or defaults in
the observance or performance of any other of the covenants,
conditions or obligations set forth in this Bond Order, then
notwithstanding anything herein to the contrary, unless the
Insurer is then in default under the Policy, the following
provisions shall apply;
A. No remedy herein conferred or reserved is
intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder
or under the Bonds or now or hereafter existing at law or in
equity; provided, however, that notwithstanding any other
provision of this Bond Order, the right to accelerate the debt
evidenced by the Bonds shall not be available as a remedy
under this Bond Order without the prior written consent of the
Insurer.
B. The exercise of any remedy herein conferred or
reserved shall not be deemed a waiver of any other available
remedy.
C. Any remedies to be sought by the Owners on
behalf of the Owners shall be subject to the prior written
approval of, and shall be solely directed by, the Insurer.
D. If the principal of and/or interest on the
Bonds shall be paid by the Insurer pursuant to the Policy, the
Bonds shall remain outstanding for all purposes, shall not be
defeased or otherwise satisfied and shall not be considered
paid by the District. All covenants, agreements and other
obligations of the District to the Owners shall continue to
exist and shall run to the benefit of the Insurer and the
Insurer shall be subrogated to the rights of such Owners.
SECTION 4.8. Payment Procedures.
A. At least five (5) business days prior to each
payment date, the District agrees to and shall determine
whether there will be sufficient funds available to pay the
principal of and/or interest due on the Bonds on such payment
date. If the District determines that there will be
A:\24\#EgNONEY.BC2\BONDORD.97 2 3
insufficient funds for the payment thereof the District shall
immediately upon such determination, by telephonic notice
immediately confirmed in writing, notify the Paying
Agent/Registrar that there will be insufficient funds to make
such payment and the amount of such deficiency. Upon receipt
of such notice, the Paying Agent/Registrar shall, not less
than three (3) business days prior to such payment date for
which the Paying Agent/Registrar has received such notice of
deficiency, give telephonic notice of such anticipated
deficiency, immediately confirmed in writing, to the Insurer.
Such notice shall specify the amount of the anticipated
deficiency, the Bonds to which such deficiency is applicable
and whether such Bonds will be deficient as to principal or
interest or both. The Insurer will deposit in an account with
the Insurance Trustee funds sufficient to make payments of
principal or interest due on the Bonds on the later of the due
date for such payment or within one (1) business day next
following the date on which the Insurer shall have received
notice from the Paying Agent/Registrar of such deficiency.
The Insurance Trustee shall disburse to the Owners of such
Bonds or to the Paying Agent/Registrar the amounts due on such
Bonds in accordance with the provisions of the Policy.
B. The Paying Agent/Registrar shall, after giving
notice to the Insurer as provided in paragraph A above, make
available to the Insurance Trustee the registration books of
the District maintained by the Paying Agent/Registrar and all
records relating to the funds maintained under this Bond
Order.
C. The Paying Agent/Registrar shall provide the
Insurance Trustee with a list of Owners of Bonds entitled to
receive principal and/or interest payments from the Insurer
under the terms of the Policy, and shall make arrangements
with the Insurance Trustee to (i) mail checks to the Owners of
the Bonds entitled to receive full or partial interest
payments from the Insurer and (ii) to pay principal upon the
Bonds surrendered to the Insurance Trustee by the Owners
thereof entitled to receive full or partial principal payments
from the Insurer.
D. The Paying Agent/Registrar shall, at the time
it provides notice to the Insurer pursuant to paragraph A
above, notify the Owners entitled to receive the payment of
principal or interest thereon from the Insurer (i) as to the
fact of such entitlement, (ii) that the Insurance Trustee will
remit to them all or part of the interest payments next coming
due upon proof of owner entitlement to interest payments and
delivery to the Insurance Trustee of, in form satisfactory to
the Insurance Trustee, an appropriate assignment of the right
of the Owners to payment of amounts paid by the Insurer and
aDDroDriate instruments to effect the appointment of the
A: \24\N E~dI40NEY . BC2\BONDORD . 97 2 4
Insurer as agent for the Owners in any legal proceeding
related to the payment of amounts due on such Bonds, (iii)
that, should they be entitled to receive full payment of
principal from the Insurer, they must surrender their Bonds
(along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of
such Bonds to be registered in the name of the Insurer) for
payment to the Insurer, and not the Paying Agent/Registrar,
and (iv) that, should they be entitled to receive partial
payment of principal from the Insurer, they must surrender
their Bonds for payment thereon first, to the Paying
Agent/Registrar which shall note on such Bonds the portion of
the principal paid by the Paying Agent/Registrar, and then,
together with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee, to the Insurance
Trustee which will then pay the unpaid portion of principal in
accordance with the terms of the Policy.
E. If the Paying Agent/Registrar has notice that
any payment of principal of or interest on a Bond, which has
become due for payment and which has been made to an Owner by
or on behalf of the District, has been deemed a preferential
transfer and theretofore recovered from its owner pursuant to
the United States Bankruptcy Code a trustee in bankruptcy in
accordance with the final, nonappealable order of a court
having competent jurisdictions the Paying Agent/Registrar
shall give notice of such recovery as provided in paragraph A
above and shall notify all Owners that in the event that any
Owners payment is so recovered, such Owner will be entitled to
payment from the Insurer to the extent of such recovery if
sufficient funds are not otherwise available, and the Paying
Agent/Registrar shall furnish to the Insurance Trustee its
records evidencing the payments of principal of and interest
on the Bonds which have been made by the Paying
Agent/Registrar and subsequently recovered from Owners and the
dates on which such payments are made.
F. In addition to those rights granted the Insurer
under this Bond Order, the Insurer shall, to the extent it
makes payment of principal of and/or interest on Bonds, become
the owner (or partial owner) of such Bonds and shall become
subrogated to the rights of the recipients of such payments in
accordance with the terms of the Policy, and to evidence such
ownership and subrogation (i) in the case of subrogation as to
claims for past due interest, the Paying Agent/Registrar shall
note the Insurer's rights as partial owner and subrogee on the
registration books of the District maintained by the Paying
Agent/Registrar, upon receipt from the Insurer of proof of the
payment of interest thereon to the Owners, and (B) in the case
of subrogation as to claims for past due principal, the Paying
Agent/Registrar shall note the Insurer's rights as owners and
subrogee on the registration books of the District maintained
A: \24WEI,~EY · BC2\BONDORD . 97 2 5
by the Paying Agent/Registrar upon surrender of the Bonds by
the Owners thereof together with proof of the payment of
principal thereof.
SECTION FIVE
FORM OF BONDS AND CERTIFICATES
SECTION 5.1: Forms Generally. The Bonds, the
Registration Certificate of the Comptroller of Public Accounts
of the State of Texas to be reproduced on the initial Bonds,
the Certificate of Authentication to be reproduced on
subsequently delivered Bonds, and the form of Assignment to be
reproduced 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 Order, and the Bonds 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 any reproduction of an opinion of counsel or notice
of insurance) thereon as may, consistent herewith, be
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,
engraved, or produced by any combination of these methods, all
as determined by the officers executing such Bonds as
evidenced by their execution thereof, but the initial Bonds
submitted to the Attorney General of Texas may be typewritten,
photocopied, or otherwise reproduced.
SECTION 5.2: Form of Bonds. The Bonds authorized
by this Order shall be in substantially the following form,
with such omissions, insertions, and variations as may be
necessary and desirable and consistent with the terms of this
Order:
A: \24 \NEWMONEY , 8C2\BONDORD , 97 2 6
REGISTERED
NO.
REGISTERED
$
United States of America
State of Texas
County of Brazoria
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 2
WATERWORKS AND SEWER SYSTEM
COMBINATION UNLIMITED TAX AND REVENUE BONDS
SERIES 1997
Interest Rate: Stated Maturity: Date of Series: CUSIP No.
September 1,
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 a
conservation and reclamation district, a body politic and
corporate and a governmental agency created under the
Constitution and laws of the State of Texas, situated in
Brazoria County, Texas (herein the "Issuer"), FOR VALUE
RECEIVED hereby acknowledges itself indebted to and PROMISES
TO PAY TO
or registered assigns, on the Stated Maturity specified above,
the principal sum of
DOLLARS
and to pay interest thereon from the Date of Series specified
above, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, until such
principal is paid or duly provided for on or after such Stated
Maturity or any earlier Redemption Date, payable semiannually
on March 1 and September 1 in each year commencing March 1,
1998'(nine-month interest payment), at the per annum Interest
Rate specified above, computed on the basis of a 360-day year
of twelve 30-day months.
The interest so payable on, and punctually paid or
duly provided for on or within 10 days after, any Interest
Payment Date will be paid to the Person in whose name this
Bond (or one or more Predecessor Bonds evidencing the same
debt) is registered at the close of business on the Record
Date for such interest, which shall be the 15th day (whether
or not a business day) of the calendar month next preceding
such Interest Payment Date. Any such interest not so
punctually paid or duly provided shall forthwith cease to be
payable to the Person in whose name such Bond is registered on
A: \24\NEb~40NEY. BC2\BONDORD .97 2 7
such Record Date, and shall be paid to the Person in whose
name this Bond (or one or more Predecessor Bonds) is
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the
Paying Agent, notice whereof being given to the Holders of the
Bonds not less than 10 days prior to the Special Record Date.
All such interest shall be payable at the principal office of
the Paying Agent of the Issuer in the City of Dallas, Texas
(hereinafter referred to as the "Place of Payment"), which
shall initially be the principal office of Texas Commerce Bank
National Association, Dallas, Texas, and shall be paid by
check or draft mailed to the address of the Holder as the same
appears on the Bond Register of the Issuer kept by the Paying
Agent or in accordance with other customary arrangements
acceptable to the Paying Agent made by the Holder. The
principal or Redemption Price of this Bond is payable at the
Place of Payment upon presentation and surrender of this Bond.
All payments hereon shall be made in such coin or currency of
the United States of America as at the time of payment is
legal tender for payment of public and private debts.
If the specified date for any such payment shall be
a Saturday, Sunday, or legal holiday or equivalent (other than
a moratorium) for banking institutions generally in the city
in which the Place of Payment is located, such payment may be
made on the next succeeding day which is not one of the
foregoing days without additional interest and with the same
force and effect as if made on the specified date for such
payment.
The obligation to pay the principal of and the
interest on this Bond is solely and exclusively the obligation
of the Issuer until such time, if ever, as the Issuer is
dissolved and this Bond is assumed as described below. No
other entity, including the City of Pearland, Texas, Brazoria
County, Texas, and the State of Texas, is obligated, directly,
indirectly, contingently, or in any other manner, to pay the
principal of or interest on this Bond from any source
whatsoever.
This Bond is one of the series specified in its
title issued in the aggregate principal amount of $4,380,000
(herein referred to as the "Bonds") pursuant to an order of
the board of directors of the Issuer adopted May 28, 1997
(hereinafter referred to as the "Bond Order"), for the purpose
of financing the District's portion of the cost of acquisition
or construction of water distribution, wastewater collection
and storm drainage facilities to serve (a) Meadowview at
Silverlake, Section 1 (76-single-family residential lots), (b)
Lakepointe at Silverlake, Section 2 (59 single-family
residential lots), (c) Southwyck, Section 9, Phase 1 (57
single-family residential lots), and (d) Cambridge at
A: \24\NEWMONEY. BC2\BONDORD. 97 2 8
Silverlake, Section 1 (79 single-family residential lots), all
four of which section have been developed, plus (e) Southwyck
Parkway and County Road 90 (1996 Contract), (f) County Road 90
extension and force main; (g) Cambridge Cove lift station; (h)
Southwyck Parkway and County Road 90 (1988 Contract); (i)
Southwyck Detention Pond Phases II, III and IV Expansions; (j)
Southwyck Lake Road Utilities, and (k) Southwyck, Section 7
utilities; financing the District's pro rata share of the cost
of construction of joint water supply facilities; financing
the District's pro rata share of the cost of the expansion of
a joint wastewater treatment facility; paying certain
engineering fees related to the aforementioned facilities and
projects; paying interest on funds advanced on the District's
behalf by developers of land located within the District;
capitalizing and escrowing a sum equal to eighteen months of
interest payments on the Bonds; and paying for the
administrative and issuance costs, legal fees, fiscal agent's
fees, a fee to the Texas Natural Resource Conservation
Commission ("TNRCC"), and costs associated with condemnation
and acquisition of off-site drainage, and certain financing
costs related to the issuance of the Bonds, which under
applicable law may properly be paid from the proceeds of such
bonds as authorized by the Constitution and laws of the State
of Texas including specifically (but not by way of limitation)
Chapter 54 of the Texas Water Code, together with all
amendments and additions thereto, by authority of elections
held for and within the Issuer on November 3, 1981 and
September 8, 1984.
The Bonds maturing on or after September 1, 2007 may
be redeemed at the option of the Issuer, on not less than 30
days prior notice to the Holders thereof by mail as provided
in the Bond Order, as a whole or from time to time in part on
September 1, 2006 or on any date thereafter, upon payment of
the Redemption Price, which shall consist of the principal
amount thereof together with interest, if any, accrued thereon
from most recent Interest Payment Date to the Redemption Date.
Bonds of a denomination larger than $5,000 may be
redeemed in part ($5,000 or any integral multiple thereof) and
upon any partial redemption of any such Bond the same shall be
surrendered in exchange for one or more new Bonds of the same
Stated Maturity in authorized denominations for the unredeemed
portion of principal. Bonds (or portions thereof) for whose
redemption and payment provision is made in accordance with
the Bond Order shall thereupon cease to bear interest from and
after the Redemption Date.
The Bonds are payable from the proceeds of a tax
levied upon all taxable property within the Issuer which is
not legally limited as to rate or amount and are further
payable from and secured by a pledge of all income or
A: \24\NEtJHONEY. BC2\BONDORD. 97 2 9
increment which may grow out of the ownership and operation of
the District's improvements or facilities less such portion of
said revenue income as reasonably may be required to provide
for the administration, efficient operation and adequate
maintenance of said service facilities as authorized by the
Constitution and laws of the State of Texas. Reference is
hereby made to the Bond Order for a description of the
covenants by which the Bonds are secured, the respective
rights thereunder of the Holders of such Bonds and the Issuer,
and the terms upon which such Bonds are, and are to be,
authenticated and delivered. Notwithstanding any provision
hereof to the contrary, however, the obligation of the Issuer
to make money available to pay this Bond may be defeased by
the deposit of money and/or certain debt obligations
sufficient for such purpose as provided in the Bond Order,
and, if the District is abolished and dissolved by a City
Ordinance and the city assumes the assets and liabilities of
the District, including this Bond, the sources of payment of
this Bond may be modified under the laws of the State of
Texas.
The Bond Order permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Issuer and the rights of
the Holders of the Bonds under the Bond Order at any time by
the Issuer with the consent of the Holders of a majority in
aggregate principal amount of the Bonds at the time
outstanding affected by such modification. Any such consent
by the Holder of this Bond or any Predecessor Bond herefor
evidencing the same debt shall be conclusive and binding upon
such Holder and all future Holders of this Bond and of any
Bond issued upon the transfer or in lieu hereof or in exchange
hereof, whether or not notation of such consent is made upon
this Bond.
As provided in the Bond Order and subject to certain
limitations therein set forth, this Bond is transferable on
the Bond Register of the Issuer upon surrender of this Bond
for transfer to the Paying Agent at the Place of Payment duly
endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Paying Agent duly
executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new fully
registered Bonds of the same Stated Maturity, of authorized
denominations, and for the same aggregate principal amount
will be issued to the designated transferee or transferees.
The Bonds are issuable as fully registered Bonds in
the denomination of $5,000 and any integral multiple thereof.
Upon surrender of this Bond for exchange to the Paying Agent
at the Place of Payment, and subject to certain limitations
set forth in the Bond Order, one or more new fully registered
A: \24\NEI, I~)NEY. BC2\BONDORD. 97 3 0
Bonds of the same Stated Maturity, of designated authorized
denominations, and for the same aggregate principal amount
will be issued to the registered Holder of this Bond.
No service charge shall be made for any transfer or
exchange hereinabove referred to, but the Issuer or the Paying
Agent may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Issuer, the Paying Agent, and any agent of
either of them may treat the Person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether
or not this Bond be overdue, and the Issuer, the Paying Agent,
and any such agent shall not be affected by notice to the
contrary.
It is hereby certified, covenanted, and represented
that all acts, conditions, and things required to be
performed, exist, and be done precedent to or in the issuance
of this Bond in order to render the same a legal, valid, and
binding obligation of the Issuer have been performed, exist,
and have been done, in regular and due time, form, and manner,
as required by law, and that the issuance of the Bonds does
not exceed any constitutional or statutory limitation. For
the faithful performance of all covenants, recitals, and
stipulations herein contained, the full faith, credit, and
resources of the Issuer are hereby pledged. 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. This Bond shall be construed in accordance with and
governed by the laws of the State of Texas and the federal law
of the United States of America.
Unless either the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas or the
Certificate of Authentication hereon has been executed by such
Comptroller or his duly authorized agent or by the Paying
Agent, respectively, by manual signature, this Bond shall not
be entitled to any benefit under the Bond Order or be valid or
obligatory for any purpose.
A: \2&\#EkP, ONEY. BC2\BONDORD .97 3 1
IN WITNESS WHEREOF, the Issuer has caused this Bond
to be duly executed under its official seal.
BRAZORIA COUNTY MUNICIPAL
UTILITY DISTRICT NO. 2
BY:
ATTEST:
(SEAL)
SECTION 5.3: Form of Registration Certificate of
Comptroller of Public Accounts.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
REGISTER NO.
I HEREBY CERTIFY THAT there is on file and of record
in my office a certificate to the effect that the Attorney
General of the State of Texas has examined and finds that this
Bond has been issued in conformity with the Constitution and
laws of the State of Texas and is a valid and binding
obligation of Brazoria County Municipal Utility District No.
2 and further that this Bond has been registered this day by
me.
day of
WITNESS my signature and seal of office this
, 199__.
(SEAL)
Comptroller of Public Accounts
of the State of Texas
A: \24\NEUHONEY . BC2\BONDORD . 97 3 2
SECTION 5.4:
Authentication.
Form of
Certificate of
This is one of the Bonds referred to in the within-
mentioned Bond Order, a Predecessor Bond for which has been
approved by the Attorney General of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.'
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
as Paying Agent
BY:
Authorized Signature
Date of Authentication:
SECTION 5.5: Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns, and transfers unto
(Please print or type name, address, and zip code of
Transferee)
(Please insert Social Security or Tax Identification Number of
Transferee)
the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to transfer said Bond on the books kept for
registration thereof, with full power of substitution in the
premises.
DATE:
Signature Guaranteed:
NOTICE: Signature must
be guaranteed by a
member firm of the New
York Stock Exchange or
a commercial bank or
trust company.
Registered Owner
NOTICE: The signature a~ove must
correspond to the name of the
registered owner as shown on the
face of this bdnd in every
particular, without any alteration,
enlargement, or change whatsoever.
A: \24\NE~IONEY . BCZ\BONDORD .97 3 3
The following abbreviations, when used in the
inscription ~ the face of the within Bond or above
Assignment, shdll be construed as though t~ey were written out
in full according to applicable laws or regulations:
TEN COM -- as tenants
in common
TEN ENT -- as tenants
by the
entireties
JT TEN -- as joint
tenants with
right of
survivorship
and not as
tenants in
common
UNIF GIFT MIN ACT
Custodian
(Cust.) (Minor)
under Uniform Gifts to Minors Act
State
Additional abbreviations may also be used though not in the
above list.
SECTION 5.6:
Form of Insurance Legend and/or
Statement of Insurance.
LEGEND
Asset Guaranty Insurance Company ("AGIC"), a New York
corporation, has issued its Policy (the "Policy")
insuring the payment of and interest on this Bond on the
"due date", as defined in the Policy. Reference is made
to the Policy for the complete provisions thereof. All
payments required to be made under the Policy shall be
made in accordance with the provisions thereof. The
owner of this Bond acknowledges and consents to the
subrogation and transfer rights of AGIC as more fully set
forth in the Policy.
SECTION SIX
SECURITY OF THE BONDS
SECTION 6.1: Pledge and Levy of Taxes. For each
year while any Bond is Outstanding and the Issuer remains in
existence there shall be and is hereby levied and assessed a
continuing direct annual ad valorem tax upon each $100
valuation of taxable property within the Issuer at a rate from
year to year sufficient, full allowance being made for
anticipated delinquencies, together with revenues and receipts
from other sources which are legally available for such
purposes, (1) to pay interest on the Bonds as it becomes due,
(2) to provide a sinking fund for the payment of the principal
of the Bonds when due or the Redemption Price at any earlier
required Redemption Date, and (3) to pay the expenses of
assessing and collecting such tax. The Issuer shall timely
assess and diligently collect such tax and apply the
collections thereof solely as provided herein. Each order of
the Governing Body levying and establishing the rate of ad
A: \:~4\NE~a40NEY. BC2\BONDORD. 97 3 4
valorem taxes shall specify (a) the portion of such rate
levied to pay~rincipal (and RedemptionSice) of, interest
on, and Payin9 Agent fees and expenses wxth respect to the
Bonds (including allocable delinquencies), (b) the portion, if
any, of such rate levied to pay other contractual obligations
of the Issuer payable in whole or in part from taxes, and (c)
the portion, if any, of such rate levied for operating and
maintenance purposes. All collections of ad valorem taxes,
including penalty and interest attributable thereto, shall be
allocated among such purposes in proportion to the respective
levies in the tax year with respect to which such taxes are
owed. For so long as any Bond remains Outstanding, all
collections of Issuer taxes levied to pay debt service
requirements on the Bonds, less allocable expenses of
assessing and collecting such taxes, shall be deposited not
less frequently than monthly to the Bond Fund.
SECTION 6.2: Pledge of Revenues. The Net Revenues
are hereby pledged to the payment of the principal, interest,
redemption price, and bank charges on the Bonds. The Revenues
hereby pledged shall immediately be subject to the lien of
this pledge without any physical delivery thereof or further
act, and the lien of this pledge shall be valid and binding as
against all parties of any kind having a claim of any kind in
tort, contract, or otherwise against the District,
irrespective of whether such parties have notice thereof. To
the extent provided by law, such pledge of Revenues will
terminate when any city or cities annexes or abolishes the
District in its entirety, and assumes all of the assets and
obligations of the District.
SECTION SEVEN
DISPOSITION OF BOND PROCEEDS
SECTION 7.1: Creation of Funds.
created the following funds:
There shall be
(a) The Bond Fund;
(b) The Construction Fund; and
(c) The Operating Fund.
Each fund shall be kept separate and apart from all other
funds of the District. The Bond Fund shall constitute a trust
fund which shall be held in trust for the benefit of the
Bondholders and, to the extent allowed by law, the Holders of
Additional Bonds, if any. The Construction Fund shall also
constitute a trust fund and shall be used solely as provided
in this Order.
SECTION 7.2: Bond Fund. The District shall
deposit or cause to be deposited into the Bond Fund the
aggregate of the following at the time specified;
A: \2&\NEI~I401~IE Y. BC2\BONDORD .97 :3 §
(a) As soon as practicable after the Bonds are
~sold, accrued interest once Bonds from their
dated date to the date o~ their delivery.
(b)
As soon as practicable after the Bonds are
sold, a sum equal to eighteen (18) months
interest on the Bonds.
No later than five (5) days prior to any principal and/or
interest payment date on the Bonds, the Board of Directors
shall cause the transfer of monies out of the Bond Fund to the
Paying Agent in an amount not less than that which is
sufficient to pay the principal which matures on such date,
the interest which accrues on such date, and the Paying
Agent's fees for handling such payments on that date.
8ECTION 7.3: Operatinq Fund. The District shall
cause to be deposited into the Operating Fund the revenues
from operation and certain proceeds of the Bonds as may be
approved for use in the administration and efficient operation
of the District.
SECTION 7.4: Construction Fund. The Construction
Fund shall comprise the capital improvements funds of the
Issuer. The Issuer shall deposit to the credit of the
Construction Fund the balance of the proceeds of the Bonds
remaining after the deposits to the Bond Fund provided in
Section 7.2 (less the amounts, if any, required by the TNRCC
to be placed in escrow). The Construction Fund shall be
applied solely (1) to pay the costs necessary or appropriate
to accomplish the purposes described in Section 2.1 for which
the Bonds are issued, and (2) to the extent the proceeds of
any series of bonds deposited to the Construction Fund and
investment income attributable thereto are in excess of the
amounts required for any such purpose, then at the discretion
of the Governing Body to transfer such unexpended proceeds or
income to the Bond Fund or to apply the same for any other
lawful purpose for which surplus construction funds may be
used, subject to the prior approval of the TNRCC, if such
approval is required. The Bond proceeds, if any, required to
be placed in escrow by the TNRCC shall be deposited in an
escrow fund established under a separate escrow agreement, to
be utilized as provided and in accordance with the orders and
rules of the TNRCC.
SECTION 7.5: Investments and Security for Funds.
Subject to Section 7.4, the Governing Body may deposit money
held for the credit of any fund or account established or
confirmed by this Order in time or demand deposits and may
invest such money in any obligation authorized by law at the
time of such investment. Any such obligation shall mature, or
shall be subject to redemption by the holder thereof at the
option of the holder, not later than the respective dates when
money is expected to be required for the purposes intended.
Obligations so purchased as an investment of money credited to
any such fund or account shall at all times be deemed to be a
part of such fund or account.
A: \24\gEglqONEY . BC2\BONDORD . 97 3 6
Each fund and account established or confirmed by
this Order shall be secured in the manner and to the fullest
extent required by law for the security of funds of the
Issuer, subject to Section 7.4.
SECTION EIGHT
ISSUER COVENANTS
SECTION 8.1: Aqenc¥. The Issuer will at all times
maintain an agency in the City of Dallas, Texas, meeting the
qualifications herein described, for the performance of the
duties of the Paying Agent hereunder. Texas Commerce Bank
National Association, Dallas, Texas is hereby appointed Paying
Agent for such purposes. The Paying Agent may be removed from
its duties hereunder at any time with or without cause by
action of the Governing Body of the Issuer entered in its
minutes and not less than 30 days notice to each Bondholder
specifying the substitution of another Paying Agent, the
effective date thereof, and the address of such successor
Paying Agent, but no such removal shall become effective until
such successor shall have accepted the duties of the Paying
Agent hereunder by written instrument.
Every Paying Agent appointed hereunder shall at all
times be a corporation organized and doing business under the
laws of the United States of America or of any state,
authorized under such laws to exercise corporate trust powers,
subject to supervision or examination by federal or state
authority, having authority to act as Paying Agent/Registrar
for the Bonds, and having an office in the City of Dallas,
Texas.
The terms of the agreement with the initial Paying
Agent attached hereto are hereby approved, and the President
and the Vice President of the Governing Body, or either of
them, and the Secretary and any Assistant or Acting Secretary
of the Governing Body, or any of them, are hereby authorized
to execute and deliver such agreement for and on behalf of the
Issuer substantially in the form and to the effect attached
hereto.
SECTION 8.2: To Maintain and Insure Property. The
Issuer shall maintain its properties in good conditions and
repair, ordinary wear and tear and obsolescence excepted.
The Issuer shall maintain insurance on its
properties of a kind and in an amount which usually would be
carried by private companies engaged in a similar type of
business, but considering any governmental immunities to which
the Issuer may be entitled.
A: \24\N Eb'MOI~EY . BC2\BONDORD . 97 3 7
SECTION 8.3: Audit Books and Inspections. The
Issuer shall keep accurate records and accounts and employ an
independent certified public accountant to audit and report on
its financial affairs at the close of each fiscal year. Such
audits shall be in accordance with applicable laws, rules, and
regulations in effect from time to time, including
particularly Section 49.191 et seq. of the Texas Water Code,
as amended, and the Water District Accounting Manual, as
amended and adopted by the TNRCC. A copy of such audit shall
be filed in the office of the Issuer and shall be open to
inspection by any interested person during normal office
hours. The Issuer shall allow any Holders of not less than
25% in principal amount of the Bonds then Outstanding to
inspect the properties of the Issuer relating thereto at all
reasonable times and shall furnish a copy of such audit report
to any such Holders upon request.
SECTION 8.4: Tax-Exempt Status of Bonds.
A. Not to Cause Interest to Become Taxable. The
Issuer shall not use, permit the use of, or omit to use Gross
Proceeds or any other amounts (or any property acquired,
constructed, or improved with Gross Proceeds) in a manner
which, if made or omitted, respectively, would cause interest
on any Bond not to be excludable from the gross income, as
defined in Section 61 of the Code, of the owners thereof for
federal income tax purposes in accordance with Section 103 of
the Code. Without limiting the generality of the foregoing,
the Issuer shall comply with each of the specific covenants in
this Section, unless and until the Issuer shall have received
a written opinion of counsel nationally recognized in the
field of municipal bond law to the effect that failure to
comply with such covenant either generally or to the extent or
in the instance stated therein will not adversely affect any
such excludability of interest, and thereafter such covenant
shall no longer be binding upon the Issuer either generally or
to such extent or in such instance, as applicable, anything in
any other Subsection of this Section to the contrary
notwithstanding.
B. No Private Use or Private Payments. The Issuer
shall either, (i) not use or permit the use of Gross Proceeds
(or any property acquired, constructed, or improved with Gross
Proceeds) in any trade or business carried on by any Person
(or in any activity of any Person other than a natural person)
other than a state or local government or (ii) not directly or
indirectly impose or accept any charge or other payment for
use of Gross Proceeds (or any property acquired, constructed,
or improved with Gross Proceeds) in any trade or business
carried on by any Person (or in any activity of any Person
other than a natural person) other than a state or local
government, in either case at all times prior to the last
A: \24\#EldMONEY. BC2\BONDORD. 97 3 8
Maturity of Bonds, unless either (a) such use is merely as a
member (and is extended by the Issuer on the same terms as to
all other members) of the general public or (b) such charge or
payment consists of taxes of general application within the
Issuer or interest earned on Investments acquired with Gross
Proceeds pending application for their intended purposes. For
purposes of this Subsection B, property is considered to be
"used" by a Person if:
(1) it is sold or otherwise disposed of, or leased
to such Person;
(2) it is operated, managed, or otherwise
physically employed, utilized, or consumed by such
Person, excluding operation or management pursuant to an
agreement if (a) such agreement
(i) has a term (including renewal options)
which does not exceed five years,
(ii) may be cancelled by the Issuer at the
end of any three-year period, and
(iii) provides for compensation to such
Person that is reasonable in relation to the
services performed, is not based on a share of net
profits or net revenue, and, as to not less 50% of
such compensation annually, is based on a periodic
fixed fee,
(b) no member of the Governing Body, individually or
with other such members, owns a controlling interest in
such Person or is an employee or member of the governing
board of such Person, and (c) no employee of the Issuer
is a member of the governing board of such Person;
(3) capacity in or output or service from such
property is reserved or committed to such Person under a
take-or-pay, output, incentive payment, or similar
contract or arrangement;
(4) such property is used to provide service to (or
such service is committed to or reserved for) such Person
on a basis or terms which (except possibly for the amount
of use and any corresponding rate adjustment) are
different from the basis or terms on which such service
is provided (or committed or reserved) to members of the
public generally;
(5) such Person is a developer and a significant
amount of property acquired, constructed, or improved
with proceeds from the sale of the Bonds (or income from
A: \24\NEt~t40NEY . BC2\BONDORD . 97 :3 9
the investment thereof) serves only a limited area
substantially all of which is owned by such Person, or a
limited group of developers, unless such area is
developed and sold to (and occupied by) members of the
general public with reasonable speed; or
(6) substantial burdens and benefits of ownership
of such property are otherwise effectively transferred to
such Person.
C. No Private Loan. The Issuer shall not use
Gross Proceeds to make or finance loans to any Person other
than a state or local government, excluding loans consisting
of temporary investments of Gross Proceeds pending application
for their intended purposes. For purposes of this Subsection
C, Gross Proceeds are considered to be "loaned" to a Person if
(1) property acquired, constructed, or improved with Gross
Proceeds is sold or leased to such Person 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 under a take-or-pay,output, or similar contract or
arrangement, or (3) indirect benefits, or burdens and benefits
of ownership,of Gross Proceeds or such property are otherwise
transferred to such Person in a transaction which is the
economic equivalent of a loan.
D. Not to Invest at ~igher Yield. The Issuer
shall not, at any time prior to the final Maturity of the
Bonds, directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so
invested), if as a result of such investment the Yield from
the Issue Date of all Investments acquired with Gross Proceeds
(or with money replaced thereby), whether then held or
previously disposed of, exceeds the Yield of the Bonds.
Notwithstanding the foregoing, however, the following
Investments shall be excluded from the limitation and
calculation described in this Subsection D:
(1) Investments acquired with proceeds from the
sale of Bonds or income from the investment thereof, to
the extent such Investments are held during the first
three years after the Issue Date and, in the case of
proceeds or income held for the account of the
Construction Funds, prior to the date on which the
project or projects for which the Bonds are being issued
have been completed, if earlier;
(2) Investments acquired with income from
investment of proceeds from the sale of the Bonds, to the
extent such Investments are held during the first year after
receipt of such income;
A: \2&\NEI, MONEY. BC2\BONDORD. 97 4 0
(3) Certain investments acquired with amounts held
for the credit of the Bond Fund to the extent such
investments are held for the durations specified in the
Code or current regulations; and
(4) Any other Investments to the extent the
aggregate cost thereof, adjusted upward by the amortized
portion (calculated on a straight-line basis) of any
discount at which such Investments were acquired, does
not exceed the lesser of $100,000 or 5% of the proceeds
from sale of the Bonds.
The Issuer shall pursue work on the project or projects for
which the Bonds are being issued with due diligence until
completion. The Issuer shall not (a) use any money to pay
principal of or interest on the Bonds, or pledge (or permit to
be pledged) or otherwise restrict any money, funds, or
Investments so as to give reasonable assurance of their
availability for such purpose, except in each case amounts
deposited to the Bond Fund, (b) apply any proceeds from the
sale of Bonds or income from the investment thereof, directly
or indirectly, to pay principal of or interest on any other
indebtedness of the Issuer,or any corporate or other
instrumentality of the Issuer or any such governmental entity,
or (c) at any time prior to the Maturity of the Bonds, invest
amounts held for the credit of the Bond Fund in any investment
for which there is not an established market at the time of
such investment, except for Investments described in Clauses
(1) through (5) of this Subsection to the extent such
Investments are acquired and either mature or are disposed of
during the period, if any, described in such Clause.
E. No Rebate Require4.
represents that
The Issuer warrants and
(1) all of the proceeds of the Bonds and income
from the investment thereof will be used for the governmental
activities of the Issuer;
(2) the aggregate face amount of all debt
obligations issued or expected to be issued by the Issuer in
the calendar year of the Issue Date (including the Bonds) is
not reasonably expected to exceed $5,000,000;
(3) there are no other Persons which derive their
authority from or are subject to the control of the Issuer and
which have authority to issue obligations described in section
103 of the Code; and
(4) consequently the Issuer satisfies the
requirements of paragraphs (2) and (3) of section 148(f) of
A: \24\NEb'HO#EY. BC2\BONDORD . 97 4 1
the Code with respect to the Bonds without making the payments
to the United States described in such section.
F. No Federal Guaranty. The District covenants
and agrees not to take any action, or knowingly omit to take
any action within its control, that, if taken or omitted,
respectively, would cause the Bonds to be "federally
guaranteed" within the meaning of Section 149(b) of the Code
and applicable regulations thereunder, except as permitted by
Section 149(b) (3) of the Code and such regulations.
G. Information ReDortlng. The District covenants
and agrees to file or cause to be filed with the Secretary of
the Treasury, not later than the 15th day of the second
calendar month after the close of the calendar quarter in
which the Bonds are issued, an information statement
concerning the Bonds, all under and in accordance with Section
149(e) of the Code and applicable regulations thereunder.
SECTION 8.5: Bondholder's Mandamus. If the Issuer
shall default in the payment of the principal of or interest
on the Bonds when due or in the observance or performance of
any of the covenants, conditions, or obligations set forth in
this Order, any Bondholder shall, in addition to all other
rights and remedies of such Bondholder provided by the laws of
the State of Texas, be entitled to a writ of mandamus issued
by a court of proper jurisdiction compelling and requiring the
Governing Body and other officers of the Issuer to make such
payment or to observe and perform such covenant, obligation,
or condition. No delay or omission by any Bondholder to
exercise any right or power accruing to such Bondholder upon
default shall impair any such right and power, or shall be
construed to be a waiver of any such default or acquiescence
therein, and in every such right or power may be exercised
from time to time and as often as may be deemed expedient.
SECTION NINE
CONTINUING DISCLOSURE UNDERTAKING
SECTION 9.1. Definitions. As used in this Section,
the following terms have the meanings ascribed to such terms
below:
"MSRB" means the Municipal Securities Rulemaking
Bond.
"NRMSIR" means each person whom the SEC or its staff
has determined to be a nationally recognized municipal
securities information repository within the meaning of the
Rule from time to time.
A: %24 \NE',,'MONEY. BC2\BONDORD. 97 4 2
"Rule" means SEC Rule 15c2-12, as amended from time
to time.
"SEC" means the United States Securities and
Exchange Commission.
"SID" means any person designed by the State of
Texas or an authorized department, office, or agency thereof
as, and determined by the SEC or its staff to be a state
information depository within the meaning of the Rule from
time to time.
SECTION 9.2: Annual Reports. The District shall
provide annually to each NRMSIR and any SID, within six months
after the end of each fiscal year ending in or after 1997,
financial information and operating data with respect to the
District of the general type included in the final Official
Statement authorized by Section 13.2 of this Order, being the
information described in Exhibit "A" hereto. Any financial
statements so to be provided shall be (1) prepared in
accordance with the accounting principles described in Exhibit
"A" hereto, or such other accounting principles as the
District may be required to employ from time to time pursuant
to state law or regulation, and (2) audited, if the District
commissions an audit of such statements and the audit is
completed within the period during which they must be
provided. If the audit of such financial statements is not
complete within such period, then the District shall provide
unaudited financial statements by the required time and will
provide audited financial statements for the applicable fiscal
year to each NRMSIR and any SID, when and if the audit report
on such statements become available.
If the District changes its fiscal year, it will
notify each NRMSIR and any SID of the change (and of the date
of the new fiscal year end) prior to the next date by which
the District otherwise would be required to provide financial
information and operating data pursuant to this Section.
The financial information and operating data to be
provided pursuant to this Section may be set forth in full in
one or more documents or may be included by specific reference
to any document (including an official statement or other
offering document, if it is available from the MSRB) and
theretofore has been provided to each NRMSIR and any SID or
filed with the SEC.
SECTION 9.3. Material Event Notices. The District
shall notify any SID and either each NRMSIR or the MSRB, in a
timely manner, of any of the following events with respect to
the Bonds if such event is material within the meaning of the
federal securitle~ laws:
A: \24\NEI,I#ONE¥ .BC2\BONDORD. 97 4 3
A. Principal and interest payment delinquencies;
B. Non-payment related defaults;
Ce
Unscheduled draws on debt service reserves
reflecting financial difficulties;
Be
Unscheduled draws on credit enhancements
reflecting financial difficulties;
Substitution of credit or liquidity providers,
or their failure to perform;
Adverse tax opinions or events affecting the
tax-exempt status of the Bonds;
G. Modifications to rights of holders of the
Bonds;
H. Bond calls;
I. Defeasances;
We
Release, substitution, or sale of property
securing repayment of the Bonds; and
K. Rating changes.
The District shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, of any failure by the
District to provide financial information or operating data in
accordance with Section 8.3 of this Order by the time required
by such Section.
SECTION 9.4. Limitations, Disclaimers, and
Amendments. The District shall be obligated to observe and
perform the covenants specified in this Section for so long
as, the District remains an "obligated person" with respect to
the Bonds within the meaning of the Rule, except that the
District in any event will give notice of any deposit made in
accordance with Section 10.1, Article 717k, Vernon's Texas
Civil Statutes, as amended that causes Bonds no longer to be
outstanding.
The provisions of this Section are for the sole
benefit of the Holders and beneficial owners of the Bonds, and
nothing in this Article, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim
hereunder to any other person. The District undertakes to
provide only the financial information, operating data,
financial statements, and notices which it has expressly
agreed to provide pursuant to thi~ Section and doe~ not hereby
A: \24\#Ek~IEY.BC2\BONDORD. 97 4 4
undertake to provide any other information that may be
relevant or material to a complete presentation of the
District's financial results, condition, or prospects or
hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly
provided herein. The District does not make any
representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Bonds at any
future date.
UNDER NO CIRCUMSTANCES SHALL THE DISTRICT BE LIABLE
TO THE HOLDER OR BENEFICIAL OWNERS OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT FOR DAMAGES RESULTING IN WHOLE OR
IN PART FROM ANY BREACH BY THE DISTRICT, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS
SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN
CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL
BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the District in observing or
performing its obligations under this Section shall comprise
a breach of or default under the Order for purposes of any
other provision of this Order.
Nothing in this Section is intended or shall act to
disclaim, waive, or otherwise limit the duties of the District
under federal and state securities laws.
The provisions of this Section may be amended by the
District from time to time to adopt to changed circumstances
that arise from a change in legal requirements, a change in
law, or a change in the identity, nature, status, or type of
operations of the District, but only if (1) the provisions of
this Section, as so amended would have permitted an
underwriter to purchase of sell Bonds in the primary offering
of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either
(a) the Holders of a majority in aggregate principal amount
(or any greater amount required by any other provision of this
Order that authorizes such a amendment) of the Outstanding
Bonds consent to such amendment or (b) a Person that is
unaffiliated with the District (such as nationally recognized
bond counsel) determined that such amendment will not
materially impair the interest of the Holders and beneficial
owners of the Bonds. If the District so amends the provisions
of this Section, it shall include with any amended financial
information or operating data next provided in accordance with
Section 7.3 an explanation, in narrative form, or the reason
for the amendment and of the impact of any change in the type
of financial information or operating data so provided. The
District may also amend or repeal the provisions of this
A: \24\NEk~NONEY. BC2\BONDORD. 97 4 5
continuing disclosure agreement if the SEC amends or repeals
the applicable provisions of the Rule or a court of final
jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions
of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primary offering
of the Bonds.
SECTION TEN
TAX COVENANTS--LIMITATIONS ON EXPENDITURE ON
PROCEEDS AND DISPOSITIONS OF PROPERTY
SECTION 10.1: Allocation of, and Limitation on,
ExDenditures for the Project. The Issuer covenants to account
for the expenditure of sale proceeds and investment earnings
to be used for the purposes described in Section 2.1 of this
Order (the "Project") on its books and records by allocating
proceeds to expenditures within 18 months of the later of the
date that (1) the expenditure is made, or (2) the Project is
completed. The foregoing notwithstanding, the Issuer shall
not expend sale proceeds or investment earnings thereon more
than 60 days after the earlier of (1) the fifth anniversary of
the delivery of the Bonds, or (2) the date the Bonds are
retired, unless the Issuer obtains an opinion of nationally-
recognized bond counsel that such expenditure will not
adversely affect the tax-exempt status of the Bonds. For
purposes hereof, the Issuer shall not be obligated to comply
with this covenant if it obtains an opinion that such failure
to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
SECTION 10.2: Disposition of Project. The Issuer
covenants that the property constituting the Project will not
be sold or otherwise disposed in a transaction resulting in
the receipt by the Issuer of cash or other compensation,
unless the Issuer obtains an opinion of nationally-recognized
bond counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the Bonds. For
purposes of the foregoing, the portion of the property
comprising personal property and disposed in the ordinary
course shall not be treated as a transaction resulting in the
receipt of cash or other compensation. For purposes hereof,
the Issuer shall not be obligated to comply with this covenant
if it obtains an opinion that such failure to comply will not
adversely affect the excludability for federal income tax
purposes from gross income of the interest.
A: \26,\NE~dI40NEY. BC2\BONDORD. 97 4 6
SECTION ELEVEN
ADDITIONAL BONDS AND REFUNDING BONDS
SECTION 11.1: Additional Bonds. The District
expressly reserves the right to issue, in one or more series,
the remaining authorized but unissued bonds as well as such
other bonds as may be authorized at subsequent elections.
Such bonds may be payable from and equally secured by (i) to
the extent permitted by law, a pledge of taxes and (ii) Net
Revenues to the same extent as pledged for and in all things
on a parity with the lien on the Bonds.
SECTION 11.2. Refunding Bonds. The District
reserves the right to issue Refunding Bonds in any manner
permitted by law to refund any bonds at or prior to their
respective dates of maturity or redemption.
SECTION TWELVE
DEFEASANCE
SECTION 12.1: Discharge of Obligations. Any Bond
shall be deemed to be paid and shall no longer be considered
to be a Bond within the meaning of this Order when payment of
the principal of and interest on such Bond to the Stated
Maturity thereof or (if notice of redemption shall have been
duly given, irrevocably provided for, or waived as provided
herein) to the Redemption Date shall have been made or shall
have been provided for by deposit with the Paying Agent for
such payment (or with any other bank or trust company which
has agreed to hold the same for such purpose) (1) money
sufficient to make such payment, (2) Governmental Securities
certified by an independent public accounting firm of national
reputation to be of such maturities and interest payment dates
and to bear such interest as will, without further investment
or reinvestment or either the principal amount thereof or the
interest earnings therefrom, be sufficient to make such
payment, or (3) a combination of money and Governmental
Securities together so certified sufficient to make such
payment, provided that all the expenses pertaining to the
Bonds with respect to which such deposit is made shall have
been paid or the payment thereof provided for to the
satisfaction of the Paying Agent (and to such other bank or
trust company).
In the event such deposit is made with respect to
some but not all of the Bonds then Outstanding, the Issuer
shall designate the Stated Maturities of the Bonds with
respect to which such.deposit is made. If such deposit shall
be sufficient to provide for the payment of the principal of
and interest on some but not all Outstanding Bonds of a
particular Stated maturity so designated, the Paying Agent
shall select the Outstanding Bond~ of ~uch ~tated Maturity
with respect to which such deposit if made by such random
method as the District shall deem fair and appropriate and
which may provide for the selection of portions (equal to
A: \24\NEM40NEY. BCZ\BOI4DORD. 97 4 7
$5,000 or any integral multiple thereof) of the principal
amount of Bonds of a denomination larger than $5,000.
Notwithstanding anything herein to the contrary, no
such deposit shall have the effect described in this Section
(a) if made during the existence of a default in the payment
of any Bond unless made with respect to all of the Bonds then
Outstanding or (b) unless accompanied by an opinion of counsel
of recognized standing in the field of federal income taxation
to the effect that neither such deposit nor the investment
thereof shall adversely affect the excludability of interest
on any Bond from the gross income of any owner thereof for
federal income tax purposes.
Any money and Governmental Securities deposited for
such purpose shall be held by the Paying Agent (or other bank
or trust company) with which such deposit is made in a
segregated account in trust or escrow for the Holders of the
Bonds with respect to which such deposit is made and, together
with any investment income therefrom, shall be disbursed
solely to pay the principal of and interest on such Bonds when
due, except that cash receipts may be withdrawn and paid to
the Issuer provided the date and amount of such withdrawals
are taken into account in the most recent verification of the
accounting firm referred to in this Section. No money or
Governmental Securities so deposited shall be invested or
reinvested unless in Governmental Securities and unless such
money and Governmental Securities not invested and such new
investments are together certified by an independent public
accounting firm of national reputation to be of such amounts,
maturities, and interest payment dates and to bear such
interest as will, without further investment or reinvestment
of either the principal amount thereof or the interest
earnings therefrom, be sufficient to make such payment.
At such times as a Bond shall be deemed to be paid
hereunder, as aforesaid, it shall no longer be entitled to the
benefits of this Order, except for the purposes of any such
payment from such money or Governmental Securities.
SECTION THIRTEEN
SALE AND TAX EXEMPTION
SECTION 13.1: Sale. The Governing Body hereby
confirms the sale of the Bonds to Rauscher Pierce Refsnes,
Inc. after the taking of public bids therefor on this date, at
a price of 97% of par plus accrued interest to the date of
delivery, in accordance with the terms specified in the
Official Notice of Sale. The effective interest rate of the
Bonds as calculated pursuant to Article 717k-2, Vernon's Texas
Civil Statutes, as amended, is 5.623272%.
A: \24\NEk~NEY. BC2\BONDORD. 9? 4 8
SECTION 13.2: official Statement. The Board hereby
ratifies, authorizes, and approves, in connection with the
sale of the Bonds, the preparation and distribution of the
Preliminary Official Statement dated May 16, 1997 and a final
Official Statement substantially in the same form containing
such additional information and amendments as may be necessary
to conform to the terms of the Bonds, this Order, and the bond
purchase agreement for the Bonds. The appropriate officials
of the District are hereby authorized to sign such Official
Statement and/or deliver certificates pertaining to such
Official Statement as prescribed therein, dated as of the date
of payment for and delivery of the Bonds.
SECTION 13.3: Oualified Tax-Exempt Obligations.
The District hereby designates the Bonds as "qualified tax-
exempt obligations" for purpose of Section 265(b) of the Code.
In connection therewith, the District represents (a) that the
aggregate amount of tax-exempt obligations issued by the
District during calendar year 1997, including the bonds, which
have been designated as "qualified tax-exempt obligations"
under Section 265(b) (3) of the Code does not exceed
$10,000,000. For purposes of this Section 13.3, the term "tax-
exempt obligations" does not include private activity bonds"
within the meaning of Section 141 of the Code, other than
"qualified 501(c) (3) bonds" within the meaning of Section 145
of the Code. In addition, the purposes of this Section 13.3
the District includes all governmental units which are
"subordinate entities" of the District, within the meaning of
Section 265(b) of the Code.
* * * * *
This Order shall be in force and effect from and
after its passage, and it is so ordered.
PASSED AND APPROVED this 28th day of May, 1997.
ATTEST:
/s/ Sandy Ginqles
President,
Board of Directors
/s/ Kevin Wilson
Secretary,
Board of Directors
(SEAL)
Attachment:
Paying Agent/Registrar's Agreement
Exhibit "A" - District's Audit
A: \24\#Ek~/EY. BC2\BONDORD.97 4 9