R97-29 05-12-97RESOLUTION NO. R97-29
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, APPROVING THE RESOLUTION OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 2 AUTHORIZING THE ISSUANCE OF
$4,380,000 WATERWORKS AND SEWER SYSTEM COMBINATION
UNLIMITED TAX AND REVENUE BONDS, SERIES 1997.
WHEREAS, the Brazoria County Municipal Utility District No. 2 (the "District")
is located within the extraterritorial jurisdiction of the City of Pearland, Texas (the
"City"); and
WHEREAS, by Resolution No. R80-5, dated January 28, 1980, the City
consented to the creation of the District, and placed certain conditions on the issuance
of bonds by the District, including the approval by the City Council of the District's
resolution authorizing the issuance of such bonds; and
WHEREAS~ the City Council has considered such a bond resolution in
connection with the issuance of the District's proposed $4,380,000 Waterworks and
Sewer System Combination Unlimited Tax and Revenue Bonds, Series 1997, and has
found it to be acceptable; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
All of the matters and facts set forth in the preamble hereof are
Section 1.
true and correct.
Section 2. The resolution of the board of directors of Brazoria County
Municipal Utility District No. 2, attached hereto and made a part hereof as Exhibit "A",
authorizing the issuance of its $4,380,000 Waterworks and Sewer System
Combination Unlimited Tax and Revenue Bonds, Series 1997, is hereby approved.
RESOLUTION NO. R97-29
Section 3. The Mayor of the City of Pearland is hereby authorized to execute
such letters or other documents required to be provided to the Attorney General of
Texas in connection with the issuance of such bonds by the District.
Section 4. This Resolution shall take effect immediately from and after its
passage in accordance with the provisions of the Charter of the City of Pearland and
it is accordingly so resolved.
PASSED, APPROVED and ADOPTED this the/,¢~-~day of(~'~% ,A. D.,
1997.
TOM-~'-~iD
MAYOR
ATTEST:
AM'Y~M
CITY Aq
D AS TO FORM:
)TE~McCULI~OUGH ~
~ORNEY
2
BOND ORDER
TH3 STATE OF TLTA~
COUHT¥ OF BRASORZA
BRAIORZ]L COUNTY MUNICIPAL ~TILIT¥ DISTRICT NO, 2
EXHIBIT
I
BE IT ORDERED BY THE BOARD OF DIRECTORS OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 2:
WHEREAS, Brazoria Cou~nty Municipal Utility District
No. 2 situated in Brazoria County, Texas (hereinafter referred
to as "District" or "Issuern), is a conservation and
reclanat£on district created pursuant to the provisions of
Chapter 54, Texas Water Code, as amended (the "Water Code" or
the "Act"); and t. he provisions of Article XVI, Section 59, of
the Texas Constitution.
~I'IEI:LEAS, 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), =he District
was authorized to issue ~he 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 tAe 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: ~Z~\t4E~d4C~E¥.tC2\B~dOOeO.9;' i
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 %he
Texas Water Code, together with all amendments and
additions thereto;
the elections described in Paragraphs (b) and (c)
hereof ware 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);
(e)
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;
(f)
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 single-family
lots in Sections within the District; (ii)
finance the District's acquisition and/or
construction of capacity in the wastewater
treatment plant expansion, Phase II which the
District shares with adjoining municipal utility
districts; (iii) finance the purchase or
construction and expansion of water supply
facilities; (iv) finance the District's portion of
the cost of acquisition of land for water supply
facilities; (v) pay certain engineering fees
related to the aforementioned facilities and
projects; (vi) pay for contingencies arising during
&: \2&\#E~I, IOM~Y. BC2%J, ONOOl~C). 97 2
the construction of the aforementioned facilities,
(vii) pay interest on funds advanced on the
District'e behalf by %he Developer;
capitalize and escrow a sum equal to two years in
interest payments on the Bonds; (ix) and pay for
the administrative, organizational, and issuance
costs, legal fees, fiscal agent's fees, a fee to
the Texas Natural Resource Conservation Commission
("TNR¢¢"), and certain financial costs related to
the issuance of the Bonds.
the Board of Directors reserves the'right to issue
the remaining $10,360,000 bonds which were voted on
November ~, 1981 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 TNR¢C, acting through its Executive Director,
has approved the issuance of the Bonds described
herein by Order issued on ·
W~EREAS, 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 TNR¢¢ 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 t/xey were authorized.
IT IS THEREFORE ORDERED BY THE~OARD OF DIRECTORS OF
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 2:
SSCTXO~_gNE
8~CTI0~.I~ Definitions. When used in this Order
and in any orders amendstory, 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:
(1) Board of_~ireotors. The terl~s "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 ~nds. The term "Additional Bonds" shall
mean the additional bonds which the District expressly
reserves the right to issue in this Order.
(4) 9~. The term "Bond" or "Bonds" shall mean any
obligation of the Distrio= 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) Vond F~d. The terms "Bond Pund" or "Debt Service
Fund" shall mean ~he District's debt service fund which is
created and established in this Order and defined in Section
6.2.
(6) Bon~ ~gq4steF. The term ~Bond Register" is a
register required to be kept by the paying agent pursuant to
Section 2.5.
(7) ~X. 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) Co~st~ct~o~ FUnd. The term "Construction Fund"
shall mean the District's construction fund which is created
and established in this Order and define4 in Section 6.4.
(9) Code.
Revenue Code of
enacted prior to
The term "Code" shall mean t~e Internal
1986, as amended by any amendments thereto
the Issue Date.
(10) D%Dpsitory. The term "Depository" shall mean %he
bank or banks which ~he District may select from time to time
as its depository or depositories.
(11) ~oVe~i~ B~d¥. The term "Governing Body" shall
mean the board of directors of the Issuer.
(12) ~overn~ental Secg~ities. 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 ~hs time of investment, obligations issued by or on
behalf of any state or political subdivision or municipality
thereof which, at the time of deposit as defined herein, have
been assigned ratings in the highest rating category of bo~h
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(l)
and (2) only if such obligations may not be called for
redemption prior to maturity.
(13) ~ross Prpceeds. The term "Gross Proceeds" shall
mean all amounts received by the Issuer from the sale of the
~: \2~.\#F.',ddG#EY. B~BOHOORO .91' 4
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) Zol~er. The term, when used with respect to any
Bond, shall mean the Person in whose name luch Bond is
registered in the Bond Register.
(15) Interest ~a1~lewt D-re. The term "Interes: Payment
Date" shall mean the Stated Naturity of an installment of
interest on the Bonds.
(15) ?mvese-e~t. 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,
(d) any other investment-type property,
excluding from the foregoing, Tax-Exempt Obligations.
but
(17) Xssus.Da~e. 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.
(19) ~ssuer Re~%~. 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) ~ssue Pr~e. 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 ~ub~an~ial amount of Bonds of ~uch Stated
Maturity are first sold to such public, including accrued
interest to the Issue Date, if any.
r- (.~_1.} Ma~%lr{~v. The term .Maturity~ when used with
~specn =o any Bond shall mean the date on which the rinc
.o.f__,3ch ,.end. beoomes due and payabl, a,
whether a= ~he Stated Maturity or by call for redem
(22) Net ~eve--ee. The term "Net Revenues. shall mean
all ~ncome or increment which may grow out of the ownership
nd operation of the Distr~ct,s plants, facil~ties, and
reproresents (as same are purchased, constructed, or otherwise
acquired) (such plants, fac~lities, and ~mprovements herein
p trion for the administration, efficient operation, and
(23) Outstanding. The term "Outstanding. when u~ed with
respect to Bonds s~all mean as of the date of determination,
all Bonds theretofore authentic~ted and delivered under this
Order, except, without duplicat~on:
(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 g~ven pursuant to this Order,
irrevocably provided for to the satisfaction of the Payin
Agent, or waived, g
(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:
Redemption(e) Bonds for the payment of the principal (or
Price) of and interes~ on which money or
Governmental Securities or both are held by the Person and
with the effect specified in Section 8.1.
(24) Pavln~ ac%nt.. 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 thxs Order, and thereafter "Paying
Agent" shall mean such ~uccessor Paying Agent.
(25) ~1~. The term "Person" shall mean any
individual co.rl~oration, partnership, Joint venture,
association, Joint-stock company, trust, unincorporated
organization, or government or any agency or political
subdivision thereof.
(26) ~Ace of Payment. The term "Place of Payment"
shall ~ean ~he principal office of the Paying Agent in the
City of Houston, Texas.
(27) Pr.e_decessor 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 defin£tion, 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) Re,emerSon Da~e. 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) ~edemDt~on Pric~. The term"Redemption Price"when
used wi~h respect to any ~ond to be redeemed shall mean
price at which it is to be redeemed pursuant to the ter~s
hereof, excluding installments of interest whose Stated
Maturity is on or before the Redemption Date.
(30) Hecord Date. The term "Record Date" for the
interest payable on any Interest Payment Date shall mean the
l~th day (whether or not a business day) of the calendar month
next preceding such Interest Payment Date.
(31) 8t~te4 Ratur~t¥. 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.
(32) T=--~x-mpt Obligations. The term "Tax-Exempt
Obligations" shall mean obligations the interest on which is
sxcludable from the gross income of any owner thereof under
the Code or any regulations promulgated pursuant thereto.
(33) ~. 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, ~roduces 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 el! payments
of principal of and interest on, or sales proceeds (net of
sales commissions) in respec= 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.
-~OTIO# 1,Sz Notices. Wherever=his 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
?.he 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 ~he Person entitled to received such notice,
either before or after the event with respect to which .such
notice is given, and such waiver shall be the equivalent of
such notice. Waivers of notice by 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.
BECTIQN 1.3~ Effect of He-dings ~ud_ T~le of
¢on~e~ts. The Section headings herein and in ~he Table of
Contents are for convenience only and shall not affect the
construction hereof.
BBCT~0N 1.4~ Order a contract: ~endmeats. This
Order shall constitute a contract with ~he 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
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 defeot 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 Outstandi~g affected thereby, amend, add to, or
rescind any of ~ha provisions of this Order; provided that,
without: consent of the Holders of all of ~he affected
Outst~d~ng Bonds, ~o such ~en~en=, addition, or
shall (1) ch~ge ~e Stated Maturity of ~e ~nds or any
installment of in~erest ~ereon, reduce ~e principal
~mrmof, ~m R~emp:lon ~ice ~erefor, or the rate of
interest ~ereon, change ~e place or places at, or the coin
or ~ency in, which any ~nd or ~e interest thetmon
payola, or in any o~er way modify ~he te~s of pa~mn~ of
~e principal of or in~erest on the Bonds, (2) give
preference %o ~y ~nd over any o~er Bond, or (3) m~ify
of ~e provisions of ~is Section, except to
percentage provided her~y or to provide ~at ce~ain
prov~s~ons of ~s Order cannot be modified or waived
~he co~sen~ of ~e Holder of ea~ ~nd affected
~ION 1.58 me-eries of Order. Nothing in this
Order, expressed or implied, is intended or shall be construed
to confer upon any Person (o~her than the Issuer and the
Bondholders) any right, remedy, or claim, legal or epui=able,
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.
i~CT2ON 1.6. ~. 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, a~d ~he provisions of this
Order shall be and remain controlling as to the eattars
prescribed herein.
S~CTIpN 1.7~ ~overn%ng 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.
S~cTION 1.98 Severability. If any provisions of
this Order or any application thersof 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.
SECTION 1.*~ Opqn Meetina. It is hereby officially
found and determined that the meeting at which this order was
adopted was open to ~he public, and public notice of the time,
place, and putposed 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.
A: \2/, \NEkeEC~EY. 9C~\BO~0~49.97' 9
~CTTOI~ ~ · ~Q: &uthol~ tv o~ Off~csr!. The President
and the Vice President of the Governing ~5ody, or either o~
~, and ~he Secreta~, and any ~puty or Acting Secreta~ of
~e Governing Body, or any o~ ~em, are authori~ed to evidence
adoption of ~s Order and to do any and
neces~a~ to ca~ out ~e intent hereof.
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 ~.his Order by or on ~shal£ o£
~he District, except as otherwise provided herein, shall bind
and inure to ~e benefit of its ~uccessors and assigns whe~er
or not so e~ressed.
~CT~OM '.~: nefsasano9 and ~sfu~dinq. The
District reserves the right to derease or refund the Bonds in
any manner provided by law.
TWO.
XUT~ORTt&TION, D~SCR~PTZON, ~ ~]tO~TTON OF ~ONDa
SECTION ~.1~ Amo_unt, N~e, FUroOJp, ,~d
&uthoriz-2~on. The Bonds of the g-istrict] to be known and
designated as Brazerid County Municipal Utility District ~o.
2.Waterworks and Sewer System Co~ination Unlimited Tax ~d
Revenue Bonds, Ser~es 1997 shall be issued in ~e aggregate
principal amount of $4,380,000. The District her~y
au~orizes issuance of bonds of the Issuer, in the fo~
spec~fied herein and bearing the te~s herein .provided,
order ~o (i) ~inance the Distr~ct's po~ion of ~e cost o~
ac~s~tion or const~ction of wa~er d~stribu~ion, wastewater
collection and $to~ drainage facilities to sere
single-family lots in Sections within the
f~nance the District's acquisition and/or const~ction of
capacity in 2he wastewater treatmen~ plant expansion, Phase
which ~e Distri~ shares with adjoining mun~cipal u~ility
districts~ (iii) finance =he purchase or const~ction-and
e~ansion of water supply facilit~es~ (iv) finance
Distric=~s po~ion of ~e cost of ac~isition of land for
water supply facili=ies~ (v) pay ce~ain engineering fees
rela~ed 20 =he aforementioned facilit~es and projects: (vi)
pay for contingencies arising during ~e const~ction of
aforementioned facilities, (vii) pay [nteres~ on funds
advanced on the District's behalf by ~he Developer~
capitalize and escrow a sum e~al 2o =we years in
pa~ents on the Bonds; (ix) and pay for the administrative,
organizational, and issuance costs, legal fees, fiscal agent's
fees, a fee to the Texas Natural Resource Consedation
Co~iss~on ("TNRCC"), and certain f~nancial costs related
=he issuance of ~he Bonds, which under applicable law may
i: \~/. \Uk"dC~Y. BCt\B(mO4~. 97 10
properly be paid from the proceeds of such bonds, all under
and in ~trict conformity wi~11 Article XVI, Section 59 of the
Constitution of the State of Texas and ~he laws of the State
of Texas, including particularly (but not by way of
l~itation) ~apter ~4 of ~e Texas Water Code, t~e~her with
all ~en~ents and addi~ions ~ere~o, by authority of an
election held for and within ~e Issuer on NoV~r 3, 1981.
BKCTION 2, ~: ~.teo Deno-~ nation, In.~erest
][gtur4tt~o The ~nds will be ~ssued ~n fully regis~ered
fo~, in the denotinat~on of $5,000 or any ln~egral ~ultiple
=hereof. ~e Stated ~turities of the Bonds shall be 1
of ~e years and as to ~e principal amours set fo~h b~w,
and lnteres~ on ~e Bonds of such Stated Maturities shall
accra from 1, 19__, wht~ shall be ~e "~tad Date"
~ereof, or ~e m6s~ rece~ Interest Pa~ent Date to which
~terest has been paid or duly provided for, until such
are paid or due provision therefor is made
~turity ~ereof, a= ~he ~r ann~ ra=e set fo~h after
S~ated Maturity below, calculated on the basis of a 360-day
year of twelve 10-day monks and payable semia~ually on each
1 and 1 cohenclog
mon~ interest pa~en~):
¥elr of Year of
$tltld Prir~tpei [nteeest CUSIP Stated Principal Interest
leC~ION 2.38 Psimeats. The principal of and
interest on the ~onds shall be payable at the Place of Payment
all s~ject ~o ~he ~e~s and condi~ions of this Order. If the
specified date for any pa~en~ of principal (or Redemption
Price) of or tnteres~ on ~e ~nds shall be a Saturday,
Sunday, or legal ~oliday or e~ivalen= (o~her ~han a
moratorium) for banking institutions generally in the city in
whi~ 2he Place of Payment is located, such pa~ent ~y be
made on the next succeeding day which ts not one of the
forgoing days withou~ additional interes~ and with ~he same
force and effect as if made on the specified date for such
pa~enC.
A: \2& ¥i£t,dNONIY. MZ,\BONOO(O. 97 11
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.
G~CTTO~ 9.4! DeliFeL~ Ind wxe~tio- of Bonds. The
Bonds shall be executed on behalf of the Issuer by the
President or Vice President of the Governing Body under its
s~al reproduced or impressed thereon and attested by its
Secretary or one of its Deputy or Acting Secretaries. The
signatures of a~ly of these officers on the Bonds~ay be mantml
or facsimile. Bonds bearing the manual or facsimile
signatures of individua!s 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 ~overning
Body shall execute one Bond of each Stated Maturity, dated
October 1, 1996 representing ~he entire principal amount of
all Bonds of such Stated Maturity, in the.name of the initial
purchaser t. hereof 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 P-1 through
P-20 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 oft he 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
receipt of instructions from the payee named therein
designating the Persons, maturities, and principal amounts to
and in which such Bonds are 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 obligator~ for any purpose,
unless there appears on such Bond either a certificate of.
registration substantially in the form provided in Section
4.3, 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 form provided in Section 4.4, executed by the Paying Agent
by manual signature and either such certificate upon any Bond
shall be conclusive evide~oe, and the only evidence, that such
Bond has been duly certified or authenticated and delivered.
The Xssuer shall cause to be kept at ~he Place of Payment a
register (herein referred to aethe "Bond Register") in which,
subject to such reasonable regulations as the Issuer or the
PayingAgent may prescribe, the PayingAgent shall provide for
12~e registration of the Bonds and of transfers of the Bends as
herein provided.
Upon surrender for transfer of anyBond 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 transferess, one or more new Bonds of the same
Staked Maturity, of any authorized denominations, and of a
like aggregate principal amount.
At ~he option of the Holder, Bonds may be exchanged
for other ~onds 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 whicAtheBondholder making
l~he 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.
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 Aqent shall be
required (1) to transfer or exchange any ~ond during a period
begir~inq at ~he opening or business 15 days before the day of
~he 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 9ar~
any Bond so selected for redemption.
Interest on ~s 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 n~e~at Bond (or
one or ~ore Predecessor Bonds) is r~stered at the close of
business on ~e 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 ~nterest#)
shall for~with cease =o 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
Intersit, 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 ~.he Paying Agent an amount of money equal to the
aggregate amount proposed to be paid in respect o~ such
Defaulted Interest or make arrangements satisfactory ~o the
Paying Agent for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
~rust 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
proposed payment and not leas than 10 day~ 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 ~he name and at the expense of the
Issuer, shall cause notice of the proposed payment of such
Defaulted Interest and =he Special Record Date therefor to be
mailed, first-class po~tage prepaid, to each Bondholder at the
address of such Bondholder as i= appears in the Bond Register
not less than 10 days prior to such special Record Date.
Notice of the proposed pa.~men~ of such Defaulted Interest and
the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid =o the
Persons in whose names the ~onds (or their respective
Predecessor Bonds) are registered on such Special Record Date.
A: \Z~.\~#OgEY. IC2\101fi)OilD. 9? 14
All payments of interest on ~he Bonds shall Me paid
by check or draft mailed, first-class postage prepaid, bM the
Paying Agent to the Person entitled to such payment at
address of such Person as it appears in ~he 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 resuit from such transfer, exchange, or
substitution.
gEOTXON ~.7: Mutil~tnd, nestro¥_e4, T~lt, ,,rid Itole~
~0~1. If (1) any mutilated ~ond is surr~dered to ~e Payi~
Agent, or ~e Issuer and the Paying Agent received evid~ce to
~eir satisfaction of ~e dest~ction, loss, or ~eft o~ any
~nd, and (2) ~era is delivered =o ~e Issuer and ~e Paying
Agent such security or inde~ity as may be re~ired by th~ to
· ave each of ~ ha~le~s, ~en, in ~e absence of notice to
the Issuer and the Paying Agent ~at such Bond ha~ ~en
ac~ired by a bona fide purchaser, the Issuer shall exerts
and upon t~s revest the Paying Agent shall authenticate and
deliver, in ex~ange for or in lieu o~ any such mutilate,
destroyed, los2, or stolen Bond, a new Bond of =he same Stat~
Maturity and of like tenor and principal amo~t, bearing a
n~er no= 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.
Upon the issuance of any new Bond under ~his
Section, the Issuer or the Paying Agent may require
payment of a sum sufficient =o cover any ~ax or other
governmental charge that may be imposed in relation thereto
and any other expenses connected therewith.
Every new Bond issued pursuant to this Section in
lieu of any mutilated, destroyed, lost, or stolen ~ond 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 o~her rights and
re~ed~es w~th reBpeo~ to the repl&cement and payment of
mutilated, destroyed, lost, or stolen Bonds.
Into~e-t. Subject to,he further provisions of ~s Section,
~he Distri~, ~e Paying Agent, and any o~er~rson ~a~ trea~
absolute O~er of su~ ~nd for ~he pu~ose of making and
receiving all pa~en~s once Bond and for all o~er pu~oses,
whe~er or no~ su~ ~ ~ overdue, and neither~e
nor~e Paying Agent sha11~bound by any no~co or~owledge
~o ~e contra~. All pa~en~s made to~e~rso~doemed ~o be
tho~er of any~nd In accordance wi~th~s
valid and offseXual and shall discha~e ~o
Distri~ and ~e Paying Agent upon such ~nd ~o'~e e~ont of
~o s~s ~id. ~incipal and ~n~erost de~ted wi~
Paying Apen~ and re~ining~claimed for ~hr~e (3) years shall
be reposed and disposed of in accordance wi~he
of T~tle 6 of ~e Texas Property c~e, as amended,
e~ent ~a~ such provis~ons are applicable.
p~CTTOH 2.~: C~a~el!=~n. AllBonds surrendered
for payment, redemption, ~ransfer, exchange, or replacement,
if ~urrendored to ~he Paying Agent, shall be promptly
cancelled by it and, if surrendered to ~he 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 ~he Paying Agent for cancellation
any Bonds previously ce~ified or authenticated and delivered
which the Issuer may ~ave 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,
excep~ as expressly provided by this Order. All cancelled
Bonds held by the Paying Agent shall be disposed of as
directed by Issuer Request.
8~.CTTON
PRIOR REDEMPTION OP ~OND~
~CTION 3.1: Redemp2i9n of Bonda. The Bonds
maturing on or after , are subject to redemption
prior to their scheduled maturities at 2he option of
Issuer, as a whole or from time to time in part, on 1,
or on any date thereafter at a price equal 'to
p~c~pal amount of the Bonds called ~or redemption plus
accrued interest fromthe most recent interest payment date to
the date fixed for redemption.
SECTION 3.2: ~xerc~Se Of Option. The exercise by
the Issuer of its option to redeem any Bonds shall be by Order
a: ~,~ \~£~Htx~Y. K2\IC~0aD. 97 16
or Resolution antsred in ~he minutes of the Board of Directors
of ~e District. ~hs District shall, at least thtay
days prior to the R~de~ptton Date (unless a sho~er notice
Agen~ of su~ Red~ption Da~a and of ~e principal ~o~ of
~nds ~f ~ach Sta~d ~aturity ~o ~s r~e~ed.
S~C~TOI~. 3.2: ~rooe4ureJ. 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
~e Outstanding Bonds which have not previously been calle~
for redemption, by such random method as the District shall
deem customary and equitable and which ~ay provide for the
selection for redemption of por~ions (equal to $S,000 or a
multiple thereof) of the principal amount of Bonds of a
denomination lar~er than $5,000. The District shall promptly
notify the Payin9 Agent in writing of the Bonds selecte~ 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 contex~ o~herwise requires,
all provisions relating to :he rededion of Bonds shall
relate, in the case of any Bond redeemed only in part, to the
por~ion of the principal of such Bond which has or is to be
redeemed.
,wc~loM 3.4: !~tioe t~ w~lde~s ~ Itede~s~io-.
~o~ice of redemption shall be mailed by the Paying Agen~ in
the name of ~nd at ~e e~ense o~ ~e Oistric~, no~ less ~
~i~y (30) days prior to the Redemption ~te, to each Holder
of ~nds ~o be r~eemed. Notice of red~p~ion shall also be
given by p~lica~ion of notice one ti~e, no~ less ~han ~i~y
(30) days prior to ~e Retemption ~e, in a financial Journal
or p~Iication of general circulation in ~he United States of
~erica. All no~ices of redemptions shall include a statemen=
as to (i) ~e Redemp~ion Da~e, (ii) ~e Redemption Price,
(iii) the principal amount and identifi~ton (by ~ond and
~SlP nu~er, SCared Ma=urtty, in=eres~ race, and Issue Da~e
and, in ~e case of pa~ial rederap=ion, ~e respective
principal amounts) of the ~nds to be rede~ed, (~v) ~ha~ on
=he Redemption Da~e ~he Redemption Price of each of the Bonds
~o ~e redeemed will become due and payola and ~ha~ in~eres~
~ereon shall cease ~o a~c~e from and after such da~e, and
(v) ~a~ such ~n~s are to be surrendered ~or pa~en~ of ~e
Redemption Price a~ the principal office of ~e Paying Agen=,
and ~e address of such office.
The Paying Agent shall give 'written no:ice of
redemption, by registered mail, overnight delivery, or other
comparably secure means, not less than 30 days prior to ~he
Redemption Date, to each registered securities depository (and
to each national information service that disseminates
A: ~Z&\#E'.flOilET .tC~\IOW)C~O .gT 17
redemption notices) known to the Paying Agent, but nei~chsr the
failure to give such notice nor any defect therein shall
affect the sufficiency of notice given to Bondholders as
hereinabove stated.
leCT~ON 3, S: P=v~ent. Notice of redemption having
been given as aforesaid, the Bonds so to be redeemed shall, on
the Redemption Date, become due and payable at ~he Redemption
Price, and from and after such date (unless the District shall
default in the payment of the Redemption Price) such bonds
$hall 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 Ioney supplied by the District. Installments of
interest with a Stated Maturity on or prior to the Redemption
Date shall be payable to the Holder~ of such bonds registered
as such on the relevant Record Dates according to their term~.
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.
amCTTall 3.G: PAetial Rede-pt!on. Any Bond which
is to be redeemed only in par~ 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 fo~ 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 tot he
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.
$tCTZON FOUR
8~CT?ON 4.1: Fo~ms 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 Assigrlment 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, ~umbers, or other marks of identification
A; \2/, \#E',J4C~dEY. lC2~ICNOOIO. 97 18
(~cludtng ident£f¥ing numbers and letters of~ha Co~ml~tee on
Un~for~ Securitiel ldentificat~on Procedures o£ ~he A~erioan
Bankers ~sociation) and such legends and endorsements
(lncludinq any reproduction of an opinion of counsel or notice
of insurance) thereon as may, consistent herewig. h, be
deter~ined by the officers executing such Bonds al evidenced
by their execution thereof. Any portion of the text of any
Bonds ~a¥ be set forth on ~he reverse thereof, v[th an
appropr~&te reference thereto on the face o~ the Bond.
The definitiveBonds shall be printed, lithoqraphed,
enqraved, or produced by any combination o~ these aethods, all
as determined by the o~icers executinq such Bond~ as
evidenced by their execution ~hereof, but the initial Bonds
submit~ed to the At~orneyOener&l of Texas ~ay be typewritten,
photocopied, or otherwise reproduced.
8~T~ON 4.t: Zoz'~9g 8o~. The Bonds authorized
by th~s Order shall be in substantially the following form,
with such o~issions, insertions, and variations as ~ay be
necessary and desirable and consistent with the terms of ~his
Order:
REGISTERED REGISTERED
NO. $
United States of America
State of Texas
County of Brazoria
BRAZORIA COUMT¥ MUNICIPAL UTILITY DISTRICT NO. 2
WATF. RWORKS ANDSEWER SYSTEM
COMBINATION UNLIMITED TAX AND ILEVENUE BONDS
SERIES 1997
Interest Rate: Stated Maturity: Date of Series: CUSIP No.
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 "I~suer"), FOR VALUE
RECEIVED hereby acknowledges itself indebted to and PROMISES
TO PAY TO
or registered assigns, on ~e Stated ~(aturity specified above,
the principal sun o~
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 I and I in each year comaencing
1, 1997 ( Bonth interest paF~ent), at the per a'nnua
Interest Rate'specified above, computed on the basis of a 360°
day year o£ 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
debt) is registered at the close of business on the Record'
Date for such interest, which shall be the 15%h day (whether
or not a business day) of the calendar month next preceding
sucl% 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
such Record Date, and shall be paid to the Person in whose
name this Bond (or one or note 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 Houston, Texas
(hereinafter referred to as the "Place of Payment"), which
shall initially be the principal office of Texas Commerce Bank
National Association, Houston, 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 otJ%er customary arrangements
acceptable to the Paying Agent made by the Holder. The
principal or Redemption Price of this Bond is payable at
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
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
2O
TOTI::IL. P. 22
fore~oing days without additional interest and with the same
force and effect as if made on ~he specified date for such
payment.
The obligation to pay ~he principal of and ~he
interes~ 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 ~he City of Pentland, Texas, Brazetie
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 ~ond from any source
whatsoever.
This Bond is one of ~he series specified in l~s
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 ,
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
collec~ion and storm drainage facilities to serve ... platted
single-family residential lots in 3 section? located in
District~ financing ~he District's acquisxtion and/or
construction of capacity in the wastewater treatment plant
expansion, Phase II which ~he District shares with adjoining
municipal utility districts~ financing the purchase or
construction and expansion of water supply facilitiss~
financing the DisCrict's por~ion or,he cost of acquisition of
land for water supply facilities~ pay certain engineering fees
related to the aforementioned facilities and projects= pay for
cont~ngenoles arising during the construction of the
aforementioned facilities~ pay interest on funds advanced on
~he District's behalf by the Developer; capitalize and escrow
a sum equal to two years in interest payments on the Bonds~
and pay for the administrative, organizational, and issuance
costs, legal fees, fiscal agent,s fees, a fee to the Texas
Natural Resource Conservation Commission ("TNRCC"), and
certain financial costs related Co the issuance of the Bonds,
which under applicable law may properly be paid from ~he
proceeds of such bonds as authorized by ~he Constitution and
laws of the State of Texas including specifically (but not by
way of limitation) Chapter 54 of ~he Texas Water Code,
together wi~h all amendments and additions thereto, by
authority of an election held for and within the Issuer on
November'3, 1981.
The Bonds maturing on or after 1, may be
redeemed aCt he option of the Issuer, on not 1-'----~ss tha~-30da¥s
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
1, or on any date thereafter, upon payment o£ the
Redemption Price, which shall Consist of ~he principal a~ount
thereof to~ether with interest, if any, accrued thereon from
most recent Interest Payment Date to the Redemption Date.
Bonds o£ a denomination larger ~han $5,000 may be
rede~ed in parc ($5,000 or any integra! multiple thereof) and
upon any partial redemption of any such Bond the same shall be
~urrendered in exchange for one or more new Bonds or,he same
Stated Maturity in authorized denominations fort he unredeeaed
per, ion of p~inoipal. Bonds (oF poz~cions thereof) for whose
redemption and payment provision £s made in accordance with
~heBond Order shall ~hereupon cease to bear interest from and
after the Redemption Date.
The Bonds are payable from the proceeds of a tax
levied upon el! taxable property within the Issuer which i~
not legally limited as to rate or amount and are further
payable from and secured by a pled~ of all income or
increment vh~ch~a~ gro~ ou~ of the ownership and operation of
the Distcict~s improvements or facilities less suchportion of
said revenue income as reasonably may be required to provide
for ~e administration, efficient operation and adequate
maintenance of said service facilities as authorized by the
Constitution and laws of ~he 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 or,he Holders of such Bonds and the Issuer,
and the term~ upon which such Bonds are, and are to be,
authenticated and delivered. ~otwithstanding any provision
hereof to the contrary, however, the obligation of ~he Issuer
to make money available to pay this Bond may be defeas%d by
the deposit of money and/or certain debt obligat~ons
sufficient for such purpose as provided in the Bond Order,
and, ££ the District is abolished and dissolved by a City
Ordinance and ~he City assumes the assets and liabilities of
the District, including this Bond, the sources of payment of
~hie 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 modificat~on
of the rights and obligations of the Issuer and the rights of
the Holders of the Bonds under the Bond Order at any ~ime by
the Issuer with =he consent of ~he ~olders of a majority in
aggregate principal amount of the Bonds at
outstanding affected by such modification. Any such consen~
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 ~ransfer 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 car'cain
1tlitations 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
1;ransf&r in form satisfa~cory to the Paying Agent duly
executed by the regis~ered Holder hereof or his attorney duly
au~horized in writing, and thereupon one or more new fully
registered Bonds of the sa~e Stated Maturity, of authorized
denominations, and for the same aggregate principal aaount
will be issued to ~he designated translates or transferess.
The Bonds are issuable as fully registered Bonds in
t, he denomination of $5,000 and any integral ~ultiple thereof.
Upon surrender of this Bond for exchange ~o the Paying Agent
at the Place of Payment, and subject to certain limitations
set £o~ch in the Bond Order, one or more new fully registered
Bonds of the sa~e Stated Naturity, of designated authorized
denominations, and for '~he 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 ~herewith.
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 cer~ified, covertanted, and represented
that all ac~cs, conditions, and things required to be
performed, exist, and be done precedent to or in the isguance
of this Bond in order to render ILhe same a legal, valid, and
binding obligation of the Issuer have been performed, exist,
and have been done, in regular and due tLme, form, and~anner,
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
applica~ions 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 s~a~e of Texas and the federal law
of the United $ta~es of America.
A: \2,~d~f:m~'r. ecY~m~ca~. 97 2 3
Coaptroller of Public Accoun~,s of the State of Texas or the
Ce~cLficate of Authentiaation hereon has been executed By such
Comptroller or hLs duly authorized agent or by the Paying
Agent, respectively, by manual s~gnature, th~s Bond shall not
be entitled ~o &ny benefl~ under the Bond Order or be valid or
obligatory for any purpose.
IN WITN~SS WHEREOF, the Issuer has caused this Bond
to be duly executed under its official seal.
BRAZORIA COUNTY MUNICIPAL
UTILITY DISTRICT NO. 2
BY:
ATTF~T:
(SEAL~
UuGISTRATION CBRTXFXCATI OF
COMPTROLLBR OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
R~GISTERNO.
I HEREBY CERTIFY THAT there is on file and of record
in my office a certificate to the effect that ~he Attorney
General of the State of Texas has examined and finds thee 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 Distric~ No.
2 and further that this Bond has been registered this day by
day of
WITNESS
my signature and seal of
, 199__.
office this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
A: ~.&\.~b14C~Y.K2~340C~.97 24
~ of
This is one of~e Bonds referred to in the within-
mentioned Bond Order, a Predecessor Bond for which has been
approved by the Attorney ~aneral of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
as Paying Agent
Authorized SignatUre
Date of Authentication:
FOR VALUE RECEIVED the undersigned hereby sells,
assigns, and transfers unto
(Please print or type name, address, and zi~ code of
Traneferee)
(Please insert S~o~ial Security or Tax Ident£fication Number of
Transfores)
~he within Bond and all rights ~hereunder, and hereby
irrevocably constitutes and appoints
atCornb~ to -transfer said Bond on the books kept for
registration thereof, wi~h full power of substitution in the
premises.
DATE:
Signature Guaranteed:
NOTICE: Signature must
be guarantoed by a
member firm of ~he New
York Stock Exchange or
a commercial bank or
trust company.
Registe~edOwner
NOTICE: The signature above must
correspond to the name of the
registered owner as shown on the
face of this bond in every
particular, without any el=era=ion,
enlargement, or change whatsoever.
.9? 2 $
The following abbreviations, when used in the
inscription on the face of the within Bond or above
Assignment, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COH -- as tenants
in common
TEN ENT -- as tenants
by the
entireties
JT TEN -- as Joint
tenants with
right of
survivorship
and not as
tenan~ 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.
8ECU3tXT~ OF T~ BONm~
IZCTXON 5.1: Piedee sad T~v~.Qf T-Yes. For each
year while any Bond is Outstanding and ~he 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 a~ a rate from
year to year sufficient, full allowance being made for
antioipa=ed delinquencies, together wi~h revenuesand receip=s
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 =he 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
valorem taxes shall specify (a) the portion of such rate
levied to pay principal (and Redemption Price) of, interest
on, and Paying Agen= fees and expenses with respect to the
Bonds (including silocable delinquencies), (b) the portion. if
any, of such rate levied ~o 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 ~he tax year with respect to which such taxes are
owed. For so long as any ~ond remains Outstanding, all
collectlone of Issuer taxes levied to pay debt service
re~uirements on the Bonds, less silocable expenses of
assessing and collecting euch taxes, shall be deposited not
less frequently than monthly to the Bond ~und.
S~CT~ON S.2: ~ledge Qf Reveaues. The Net Revenues
are her~¥ 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
thte pledge without any physical delivery thereof or further
act, and~he lien of this pledge shall be valid and binding as
against all parties of any kind having a claim of any kind in
tor~, contract, or otherwise against the District,
irres~ective 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.
SwCTI~N $.~: Creation o~.Fua~s.
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 oft he District. The Bond Fund shall constitute a trust
fund which shall be held in trust for the benefit of ~he
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.
GBCT~ON 6.2: Bond ~und. The District shall
deposit or cause to be deposited into the Bond Fund the
aggregate of the following at the time specified;
(a)
As soon as practicable after the Bonds are
sold, accrued interest on the Bonds from their
dated date to the date of their delivery.
A: \2;,~J~q~v.lc2\sc~oeo.9? 2 7
As soon as practicable after ~he Bonds are
sold, a sum equal to two (2) years 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 ~hat which is
sufficient to pay the principal which matures on such date,
the interest which accrues on such date, and the Paying
Ag~n~s fees for handling such payments on that date.
meC~?oM E,_3: ODe~,t~J~g_ ~,pd. The District shall
cause to be deposited int~ the Operating Fund the revenues
from operation and certain proceeds of the Bonds as may be
approved for use in the administratzon and efficient operation
of the District.
I~CT?ON 6.4: Const~uotio~,nA. 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 6.2 (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 ~he 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 CoverningBody to transfer such unexpended proceeds or
income to the Bond Fu~d or to apply the same for any other
lawful purpose for which surplus construction funds may be
used, subject to ~he 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 ~he TNRCC.
SECTION 6.S: Investneats and SscurXtv for Funds.
Subject to Section 7.4, the Governing Body may deposit money
held for ~he credit of any fund or accoun= 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 e~pected to be required for ~he purposes intended.
Obligations so purchased as an investment of money credited 2o
A: ~2& \#f bd~:m~¥. OC2\iObOC~f) .97 2 8
any such fund or account shall at all times be deemed to be a
par~ of such fund or account.
Each fund and account established or confirmed by
~his Order sh&11 be secured in the manner and to the fullest
extent required by law for 47e security of funds of ~he
Issuer, subject to Section 7.
~mCTION ?.~ LqJRPX. The Issuer will at all times
maintain an ageneff in the City of Houston, Texas, meeting the
qua!i£ications herein described, for the performance of the
dtR:ies of the Pa~ing Agent hereunder. Texas Conmarta Bank
National Associat~on, Houston, Texas iS hereby appointed
Paying Agent for such purposes. The Paying Agent ma~ be
re~oved from its duties hereunder at any time with or without
cause by acUcion of the GoverningBod¥ oft he Issuer entered in
its minutes and not less than 30 da~s notice to each
Bondholder specifying the substitution of another Paying
Agent, the e~fect~ve date thereof, and the address of such
successor Paying A~ent, but no such removal shall become
ef£ective until such successor shall have accepted ?,he duties
of the Pa~ing Agent hereunder by written instrument.
Eve~yPayingAgent appointed hereunder shall at all
times be a corporation organized and doing business under the
laws of the United Sta~es of America or of any state,
authorizedunder such laws to exercise corporate trust powers,
subject to supervision or examination by federal or s~ate
authority, having authority to ac? as Paying Agent/Registrar
for the Bonds, and hav~n~ an off~ce £n the City of Houston,
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 ~hem, are hereby authorized
~o execute and deliver such agreement for and on behalf of the
Issuer substantially in the form and to the effect attached
hereto.
SECTION ?Tt: T9 Mairt~ain and T~sure P~oport7. The
Issuer shall maintain its properties in good conditions and
repair, ordfnary 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 ~ype of
business, but considering any governmental immunities to which
the Issuer may be entitled.
SUCTTON 7.3: l-d~ t nOOkS and Inspect{ seq. The
Issuer shall keep accurate records and accounts and employ
independent cer~if£ed public accountant to audit and report on
its financial affairs at ~he close of each fiscal year. Such
audits shall be in accordance with applicable laws, rules,
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 fielders of not less than
25% in principal amount of the Bonds then Outstanding to
inspec~ ~he properties of the Issuer relating thereto at &11
reasonable times and shall furnish a copy of such audit report
to any such Holders upon request.
A. pot ~9 ¢~gso.lnteroet to Become ?*wablo. The
Issuer shall not use, permit ~he use of, or omit to use Gross
Proceeds or any other amounts (or any property acquired,
constructed, or improved with Gr~sa Proceeds) in a manner
which, if made or omitted, respectively, would cause interest
on any Bond not to be excludehie 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 recognize~ 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 Subsaction of this Section to the contrary
notwithstanding.
B. No Pri~ato Use oF Private P~ments, 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 t~an a state or local government or (if) 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 ~usiness
carried on by any Person (or in any activity of any Person
other than a natural person) other than a state ~elOCal
government, in either case at all times prior to last
Maturity of Bonds, unlsss 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
(l) has a term (including renewal options)
which does not exceed five years,
(ii) may be cancelled by the Issuer at ~he
end of any three-year psriod, 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 $0% of
such compensation annually, is based on a.periodic
fixed fee,
(b) no member of the Govsrning Body, individually or
with other such members, owns a controlling interest in
such Person or is an employes 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
contraoK 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 fort he amount
of use and any corresponding rate adjustment) are
different from the basis or terms on which such ssrvice
is provided (or committed or reserved) to members of the
public generally~
A .' \2~ \K,,J40~iEY, M~Smo~. 97 3 1
(5) such Person is a developer and a significant
a~ount of property acquired, constructed, o~ ~aprov~
~ proceeds f~o~ ~e sa~ o~ ~e ~nds (o~ ~nco~e
~e investor ~reof) se~es only ~ l~m~ted area
s~s~tally all of which is owned by such Person, or
l~ted ~oup of develo~rs, ~less such area
developed and sold to (and occupied by) me~ers of
general p~1tc wi~ reason~le spe,d~ or
(6) substantial burdens and benefits of ownership
of such property are otherwise effectively transferred to
such Person.
C. No P~dv~te T~an. The Issuer shall not use
Cross 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 pu~omes. For purposes of this S~section
C, Gross ~oceeds are considered to be "loaned- ~o a Person If
(1) prope~y aceired, constructed, or ~roved wl~ Gross
Proceeds is mold or leased to such Person In a transaction
whi~ creates a debt for [ederal inc~. ~ax pukesee, (2)
capacity in or seaice from such property is co~itted to such
Person under a take-or-pay,output, or similar contract or
arrangement, or (3) indirect benefits, or burdens and benefits
of o~ership,of Gross Proceeds or such prope~y are othe~ise
transferr~ to su~ Person in a transaction which is ~e
economic e~ivalent of a loan.
D. No~ to Invest at ~igher TdelA. The Issuer
shall not, at any time prior to She 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 IssueD ate 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 ~he 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 ~n¢ome 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 ~ala of the Bonds, to the
extent such Investments are held during the first year after
receipt of such income~
(3) Certain investments acquired with~ounts held
for the credit of ~he Bond Fund to the extent such
investments are held for ~he durations specified in the
Code or current regulations~ and
(4) Any other Investments to the extent ~he
aggregate coet~hereof, adJusted upward by,he amo~cized
portion (calculated on a straight-line basis) of any
discount at which such Investments were acquired, does
not exceed ~he lesser of $100,000 or St of the proceeds
from sale of the Bonds.
The Issuer
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~ermit to
be pledged) or o~herwise 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 inves~men~thereof, directly
or ifidirectly~ to pay principal of or interest on any o~her
indebtedness o~ the Iasuer~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, inves~
amounte held ~orthe credit of the Bond Fund in any investment
for which there is not an established market at the time of
such inves~ment, except for Investments described in Clauses
(1) through (5) of this Subsec~ion 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 Reb-~e Require_d.
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) 12re aggregate face amount of all debt
obligations issued or expected to be issued by the Issuer in
~he calendar year o~ the Issue Date (including the Bonds) is
not reasonably expected to exceed $~,000,00o;
(3) there are no o~her 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
10~ of ~he Code~ and
~: \24 \p{Elae:m4iY. Icz,~.~4~lxmA. 9t' 3 3
(4) consequently the Xssuer satis~ies ~he
re~uirements of paragraphs (2) and (3) of section X4S(f) of
~he Code wi~h respect to ~he Bonds without saking ~he payments
to the United States described in such
F. ~o Yeder~ O,,~r~atv The District covenants
and agrees not to ~ake any action, 'or knowingly omit to take
any action within its control, ~at, if ~aken or omitte~,
respectively, woul~ cause ~e Bon~s to be "federally
~aran~eed" within ~e meaning of Sectio~ 149(b) of ~e ~e
and applic~le =~la~ions ~ere~der, except as peri,ted by
Section 149(b) (3) of the C~e and such r~la~ons.
9. Tn£o~a2~on Roporti~g. The District covenants
and agrees to file or cause to be filed with the Secretary of
~e Treasury, not later than ~he 1Sth day of the second
calendar month after the close of the calendar quarter in
whio~ the Bonds are ~ssued, an information statement
concerning the Bonds, all under and in accordance with Section
149(e) of ~he Code and applicable regulations ~hereunder.
~CTTOM ?.S: nondh9~dsrts X~ud~tus. If the Issuer
shall default ~n ~he payment of ~e principal of or lnterut
on ~e ~n~ when due or In the obse~ance or perromance of
any of ~e oovenan~, condi~iono, or obligations set fo~
this Order, any ~ndholder shall, In addition to all
riqh2s ~d r~ies of such ~ndholder provided by =he laws of
the State of Texas, be entitled ~o a ~it of uandamus ~ssued
by a cou~ of proper Jur~sdic=ion compelling and retiring the
Gove~ing ~y and o~er officers of the Issuer to make such
pa~e~2 or to obsess and perfo~ such covenant, obligation,
or condition. No delay or omission by any ~n~older
exercise an~ riqh2 or ~wer acc~ing to such BenZolder upon
defaul~ shall impair any such righ~ and power, or shall
cons2~ed to be a waiver of any such default or ac~iescence
~erein, and in every such righ~ or ~wer may be exercised
from ~i~e 2o time and as of 2en as ~y be deemed e~odiont.
~ECTION ~Z~T
CONTINUING DISCLOSU]~ UND~IITAKING
OBCTXON 8.!. ~efinitto-s. As used in this Section,
the following terms have the meanings ascribed to such terms
below:
#MSRB" means the Municipal Securities Rulemaking
Bond.
"gRMSIR" means each person whom the SEC or its staff
has determined to be a nationally recognized municipal
A: %24\#GM:N[¥. 8C2%.KN0OEI0.97
securities information repository within t~e meaning of the
Rule .from time to time.
"Rule" means SEC Rule lSc2-12, as amended from time
to time.
"$EC" means the United
Exchange Commission.
States Securities and
"SID" means any person designed by the State of
Texas or an authorized department, office, or agency thereof
am, and detelmined by the SEC or its staff to be a state
information depository within the meaning of the Rule from
time to ti~e.
~J, gJl~l: ~w,val ReDq~te. The District shall
provide annually to each Nl~tSXR and any $ID, within six monf~hs
after the end of each fiscal year ending in or after 1996,
financial information and operating data with respect to the
District of the general type included in the final Official
Statement authorized by Section 11.2 of ~-his 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
wA~ 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 h~MSXR 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 mID of the change (and of the date
of the new fiscal year end) prior to the next date by which
~he 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 ~o 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 £rom the I~RB) and
~.heretofore has been provided to each ~A~RSIR and any SID or
filed with the SEC.
SWOTXON ~..~. MateFlaX event Notices. The District
shall notify any $ID and either each NRMSIR or the MSRB, in a
timely manner, of any of the followln~ events wif~h respec~ to
35
A. Principal and interest payment delinquencies~
B. Non-payment related defaults~
Unscheduled draws on debt service reserves
reflec~ing financial difficulties~
Unscheduled draws on credit enhancements
reflec~ing 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~
Modifications to rights of holders of the
Bonds;
Bond caller
I. Defeasancest
Je
Release, substitution, or sale of proper~¥
securing repayment of the Bonds; and
K. Bring changes.
The District shall no2ify any SID and either each
NRMSIR or ~hsMSRB, in a timely manner, of any failure by the
District to provide financial infor~ation or operating data in
accordance with Section 7.3 of this Order by the time required
by sUCh Section.
I~?O~ 1.4. T..~-{tatioas, Discl&i-9rs,
~en~H~. The District shall be obligated to observe and
perfor~ the covenants specified in this Section for so long
as, the District remains an "obligated person" with respect to
the Bonds within =he mean£ng of the Rule, excep~ that the
D~s~rict in any event w~11 give notice of any deposit made in
accordance with Section 10.~, Ar=£cle 717k, Ver~on~s Texas
Civil Statutes, as amended that causes Bonds no longer to be
ou~s~anding.
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 ~ive any
benefi~ or any legal or equitable right, remedy, or claim
hereund.r ~o any other per,on. The DistriCt u~dertakes to
provide only the flnanc£al infor~acion, operating data,
financial stataents, and notices which it has e~re~l~
a~reed to pr~ide pursuant ~o this Se~ion and does no2 har~y
undereke ~o provide an~ o~her info.etlon ~a~ ~ be
relevant or ~atertal to a complete presentation of the
D~s~r~ct's financ~al results, condition, or prospec~ or
hereby ~de~ake 2o update any ~fo~atton provided ~n
acco~ance wi~ ~is Section or o=he~tse, except as e~ressly
provided herein. ~e D~str~ct does no~ make ~y
representation or warranty concerning su~ info,at&on or i~s
usefulness ~o a decision to invest in or sell ~nds a~ any
~e date.
UNDER NO CIRCU~ST~CES SHALL TH~ DISTRICT
TO ~ HO~ OR ~FICI~ 0~ OF ~ ~ND OR ~Y
P~ON, IN CON~CT OR ~RT ~R ~GES ~LTING IN ~0~ OR
WI~O~ FAULT ON ITS P~ OF ~Y ~N~ SPSCIFIED IN
SE~ION, ~ ~Y RIGHT ~D ~DY OF ~Y SUCH PERSON,
CON~ OR ~RT, FOR OR ON AC~T OF ~ SU~ B~A~
BE L~ITED ~ ~ A~ION FOR ~D~S OR SPECIFIC PERFORCE.
No default by the District In observing or
performing its obligations under this Section shall co~prisa
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 o~herwise limit Che duties of the District
under federal and state securities laws.
The provisions of this Section ~a¥ be a~endedbythe
DistriCt from t£~e to time to adopt to changed circumstances
~J~at arise from a change in legal requirements, a change in
law, or a change in the £dentIty, nature, status, or t~ps of
operations of the District, but only if (1) the provisions of
this Section, as so a~ended would have permitted an
underwriter to purchase off sell Bonds in ~he primar~f offering
of the Bonds in compliance ~h ~he Rule, tak£ng into account
any a~ench~ents or itterpretations o~ the Rule since such
offering as well as such changed circumstances and (2) either
(a) ~.he Holders of a ~ajority in aggregate principal amoun~
(or any greater amount required by any other provision of this
Order ~hat authorizes such a amendment) off the Outstanding
Bonds consent to such amendment or (b) ~ Person 2hat is
unaffiliated with the Distr~ct (such as nationally recognized
bond counsel) de~ez~ined ~hat such a~enchnent ~ill not
materially ~mpair the ~nterest off the Holders and beneficia~
o~ners of ~he Bonds. If the District so a~endsthe provisions
of this Section, it shal! include wi~ any amended financial
£nfo~atton or operating data next provided in accordance with
Section 7.3 an explanation, in narrative form, or the reason
A: \2& \klEI,14ONEY. aC2',,IO#OOItO .97 3 ?
for ~he amendment and of the impact of any change in ~he type
of financial information or operatir~ data so provided.
District ~y also amend or repeal ~e provisions of
continuing d~sclosur. aqree~tnt ~f ~e SEC ~ends or
~ appl~c~le p~ovisions of ~ Rul~ o~ a cou~ of
are i~valid, but only if and to the extent that the provisions
of this sentence would not prevent an underwriter fro~
lawfully purchasinq or selling Bonds in the primary offering
o~ ~he Bonds.
SeO~vO~ ~..~: Rdditioaal ms,ds. 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.
and equally secured by to
Such bonds may be ~ayable from (i)
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 vi~h the lien on ~he Bonds.
~BCTTON 9.2. 8stuBdine Bonds. The District
reserves the right to issue Refundinq Bonds in any manner
permitted by law to refund any bonds at or prior to their
respective dates of maturity or redemption.
B~CTXON Tw~
DmF~8~wC~
$~c~rox x0.1: Disgharae of O~liaa~io~s. 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 ln~eres~ on such Bond to the Stated
~aturity ~hareof or (if notice of redemption shall have been
duly given, irrevocably provided for, or valved as provided
herein) to the Redemption Date shall have been made or shall
have been provided for by deposit wi~h the Paying Agent for
such payment (or with any other bank or t~ust 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 inves=ment
or reinvestment or either the principal amount thereof or the
interest earnings therefrom, be sufficient to make sucl~
payment, or (3) a combinatio~ of mo~y and ~overnmenCal
Securities together so certifxed sufficient to make such
payment, provided tha~ all ~he expenses
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 i~ made with respect to
some but not all of the Bonds then Outstanding, the Issuer
shall designate the Stated ~aturities of the Bonds with
respect to which such deposit is made. If such deposit shall
be sufficient t:o 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 Bonds of such Stated l~atur~ty
with raspecsc to which such deposit if made by such rando~
method as the District shall deem fair and appropriate and
which may provide for the selection of portions (equal to
$5,000 or any integral multiple ~hereof) of the principal
amount of Bonds of a denomination larger ~han $5,000.
Notwithstanding anything herein to the contrary, no
such deposit shall have the effect described in ~his 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 ?-ha~ neither such deposit: nor the invsstmnt
f~hereof 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 Secur£~ies deposited for
such purpose shall be held by ~he Paying Agent (or other bank
or trust company) with which ~uch deposit ~s ~ade ~n a
s~reqated accoun~ ~n t~s~ or escrow for ~he Holders of ~e
~nda wl~ respe~ to which such deposi~ is made and, ~oge~er
wi~ any investment income therefrom, sha~l be disbur~
solely to ~ the principal of and interest on such ~nds when
due, except ~at cash receipts ~ay be wi~a~ and paid
~e Issuer provided ~e date and ~ount of such windfalls
are t~en into account in ~e most recent verification
accosting fi~ referred to in ~is Sactic,. ~o ~o~ey or
Gove~ental Securities so de~sfted shall be invest~ or
reinvested unless in Governmental Se~rities and unless such
money and ~overnmental Securities not invested and such
i~ves~ents are t~ether ce~ified by an independent p~lic
accounting fi~ of national reputation to be of such
maturi~ies, and interest pa~ent. dates and to bear suc~
interest as will, without further investment or reinves~ent
of eider the principal amount thereof or the inserat
earnings therefrom, be sufficient to make such pa~ent.
At such times as a Bond shall be deemed to be paid
hereunder, aa aforesaid, i~ shall no longer be entitled to the
Danefits of this Order, excep~ for the purposes of any such
paymemt from such money or Governmental Securities.
B~OTXON
Sm~T~Ol~ 11.1: ~ale. The Soysming Body hereby
confirms the sale of the Bonds to
, _. after the taking of public bids
~erefor on ~a da~e, at a price of 97% of par plus acc~
in~erest to ~e date of deliver, in accordance wi~ the ta~s
specified in ~he Official Notice of Sale. The efffective
interest rate of the ~nds as cal~lat~ p~suan~ ~o Article
71~k-2, Yarnoh's Texas Civil Statutes, as amended, is
/~CTXOM ,~.~: 0~1~1.1~ S~a~emt-~. The Board hereby
ratifies, authorizes, and approves, in connection with the
sale of the Bonds, ~he preparation and distribution of the
Preliminary Official Statemen~ dated , 1997 and a
final Official S~atement' substantially in the same form
containing such additional information and amendments as
be necessary to conform to the terms of the Bonds, this Order,
and ~he bond purchase agreement for =he Bonds. The
a~propriate officials of the District are hereby authorized 2o
sign such Official Statement and/or deliver ce~cificates
pertaining to such Official Statement as prescribed therein,
dated as of the date of payment for and delivery of the Bonds.
~CTION 11.3: o~alifitd T.---~a~t_ O~ligatio~.
The District hereby designates the Bonds as "qualified tax-
exempt obligations" for purpose of Section 265(b) of ~he Code.
~n connection therewith, the Distric~ represents (a) that the
aggregate amoun~ of tax-exemp~ obligations issued by the
District during calendar year 1997, includinq~he bonds, which
have been desi9~ated as 'qualified tax-exempt obligations"
under Section 265(b) (3) of the Code does no= exceed
$10,000,000. For purposes of this Section 11.3, the term "tax-
exempt obligations" does not include private activity bonds"
within the meaning of Section 141 of the Code, other than
"qualified S01(c) (3) bonds" within the meaning of Section 145
of ~e Code. Inaddition, ~he purposes of this Section 11.3
~he Dfstrict includes all governmental units which are
nsubordinata entities" of the District, within the meaning of
Section 255(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
day of ,
1997.
ATTEST:
P~esident,
Board of Directcots
Secretary,
Board of Directors
(SEAL)
Attachment:
Paying Aqent/Registrar's Agreement
Exhibit "A" - District's Audit
TOTAL P. 12