R2000-040 03-27-00RESOLUTION NO. R2000-40
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, APPROVING A BOND ORDER OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 6 AUTHORIZING THE ISSUANCE OF
$3,740,000 UNLIMITED TAX BONDS, SERIES 2000.
WHEREAS, the Brazoria County Municipal Utility District No. 6 (the "District")
is located within the extraterritorial jurisdiction of the City of Pearland, Texas
(the "City"); and
WHEREAS, by Resolution No. R86-7, dated February 10, 1986, 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 $3,740,000 Unlimited Tax
Bonds, Series 2000, 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 true
Section 1.
and correct.
Section 2.
The bond order of the board of directors of Brazoria County
Municipal Utility District No. 6, attached hereto and made a part hereof as Exhibit "A",
authorizing the issuance of its $3,740,000 Tax Bonds, Series 2000, is hereby
approved.
Section 3. The Mayor of the City of Peadand 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.
RESOLUTION NO. R2000-40
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
March , A. D., 2000.
and ADOPTED this the 2?th day of
TOM REID
MAYOR
ATTEST:
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
2
Exhibit "A"
[reso of MUD 6]
EXHiBiT
ORDER AUTHORIZING THE ISSUkNCE OF $3,740,000 UNLIMITED TAX
BONDS, SERIES 2000; PRESCRIBING THE TER~S AND PROVISIONS
THEREOF; MAKING PROVISION FOR THE PAYMENT OF THE INTEREST
THEREON AND THE PRINCIPAL THEREOF; AUTHORIZING THE SALE AND
DELIVERY THEREOF; AND CONTAINING OTHER PROVISIONS RELATING
TO THE SUBJECT
BE IT ORDERED BY THE BOARD OF DIRECTORS OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 6, OF BRAZORIA COUNTY, TEXAS:
ARTICLE ONE
STATUTORY AUTHORITY, RECITALS AND FINDINGS
SECTION 1.01: AUTHORITY FOR THE DISTRICT. Brazoria County
Municipal Utility District No. 6, of Brazoria County, Texas (the
"District"), was organized, created and established as a
conservation and reclamation district by an Order of the Texas
Water Commission, predecessor to the Texas Natural Resource
Conservation Commission, dated April 1, 1987 , pursuant to the
provisions of Chapter 54, V.T.CoA. Water Code, as amended, and
the provisions of Article XVI, Section 59, of the Texas
Constitution, and operates pursuant to Chapter 49 and Chapter 54,
V.T.C.A. Water Code, as amended ("Water Code").
SECTION 1.02: PURPOSES OF THE DISTRICT. The District was
created and operates by and pursuant to the Water Code for the
following purposes:
the control, storage, preservation and distribution of
its storm water and floodwater, the water of its rivers
and streams for irrigation, power, and all other useful
purposes;
(b) the reclamation and irrigation of its arid, semiarid,
and other land needing irrigation;
(c) the reclamation and drainage of its overflowed land and
other land needing drainage;
(d) the conservation and development of its forests, water,
and hydroelectric power;
(e) the navigation of its inland and coastal water;
(f) the control, abatement, and change of any shortage or
harmful excess of water;
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(g)
the protection, preservation and restoration of the
purity and sanitary condition of water within the
state; and
(h) the preservation of all natural resources of the state.
SECTION 1.03: POWERS OF THE DISTRICT. The District is
authorized by the Water Code to purchase, construct, acquire,
own, operate, maintain, repair, improve, or extend inside and
outside its boundaries any and all works, improvements,
facilities, plants, equipment and appliances necessary to
accomplish the purposes of its creation, including all works,
improvements, facilities, plants, equipment and appliances
incident, helpful, or necessary to:
(a) supply water for municipal uses, domestic uses, power
and commercial purposes and all other beneficial uses
or controls;
(b)
collect, transport, process, dispose of and control all
domestic, industrial, or communal wastes whether in
fluid, solid, or composite state;
(c) gather, conduct, divert, and control local storm water
or other local harmful excesses of water in the
District;
(d) irrigate the land in the District;
(e) alter land elevation in the District where it is
needed; and
(f) navigate coastal and inland waters of the District.
SECTION 1.04: AUTHORITY OF THIS ORDER. The District is
authorized by the Water Code to issue bonds for the purpose of
purchasing, constructing, acquiring, owning, operating,
repairing, improving, or extending any District works,
improvements, facilities, plants, equipment, and appliances
needed to accomplish the purposes for which the District was
created, including works, improvements, facilities, plants,
equipment and appliances needed to provide a waterworks system,
sanitary sewer system, drainage system, and solid waste disposal
system, or to make payment of sums due or to become due under
contracts for such purposes, or to refund or provide for payment
of any outstanding bonds, notes or other obligations of the
District. Said bonds are authorized by the Water Code and by
V.T.C.A. Government Code, ~1201.001 et seq., as amended, to be
issued in various series or issues, with or without interest
coupons, in any denomination, payable at such time or times, in
such amount or amounts or installments, at such place or places,
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in such form, under such terms, conditions, and details, in such
manner, redeemable prior to maturity at any time or times,
bearing no interest, or bearing interest at any rate or rates
(either fixed, variable, floating, adjustable, or otherwise), all
as determined by the Board of Directors of the District, and the
Board of Directors finds that issuance of said bonds in multiple
series or issues over an extended period of time is in the best
interests of the District in order to ensure the continuing and
orderly development of the District on terms and conditions which
are feasible and practical.
SECTION 1.05: FINDINGS.
declared that:
It is hereby found, determined and
(a) the matters and facts set out in this Article One are
true and correct;
(b) the creation of the District was confirmed at an
election held within and for the District on May 3,
1997;
(c)
at an election held within and for the District on May
3, 1997, the District was authorized to issue bonds in
the maximum aggregate principal amount of $38,500,000
for the purpose or purposes of purchasing,
constructing, acquirinG, owning, operating, repairing,
improving, or extending a waterworks system, a sanitary
sewer system, and a drainage and storm sewer system,
including, but not limited to, all additions to such
systems and all works, improvements, facilities,
plants, equipment, appliances, interests in property
and contract rights needed therefor, and administrative
facilities needed in connection therewith, and to
provide for the payment of the principal of and
interest on such bonds by the levy and collection
annually of a sufficient tax upon all taxable property
within the District;
(d)
at an election held within and for the District on May
3, 1997, the District was authorized to issue refunding
bonds in the maximum aggregate principal amount of
$38,500,000 to provide for the refunding by any lawful
means of all or any portion of the Outstanding Bonds
(hereinafter defined), the Bonds (hereinafter defined),
Additional Bonds (hereinafter defined) or refunding
bonds payable in whole or in part from taxes;
(e)
the elections described in paragraphs (b), (c), and (d)
hereof were called and held under and in strict
conformity with the Constitution and laws of the State
of Texas and of the United States of America, and the
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(f)
(g)
(h)
(±)
Board of Directors of the District 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 paragraphs
(c) and (d) above;
pursuant to the authority of the election held May 3,
1997 as described in paragraph (c) above, the District
has heretofore issued its $4,690,000 Unlimited Tax
Bonds, Series 1999, dated as of December 1, 1999 (the
"Series 1999 Bonds") to finance the acquisition and/or
construction of water, sanitary sewer and storm
drainage improvements to serve land within the District
and, as of the date hereof, there remains outstanding
and unpaid $4,690,000 in aggregate principal amount of
the Series 1999 Bonds (the "Outstanding Bonds");
the $3,740,000 bonds authorized by this Order should be
issued pursuant to the authority of the election held
on May 3, 1997, as described in paragraph (c) above,
for the acquisition and/or construction of water,
sanitary sewer and storm drainage facilities to serve
land within the District and to pay certain other
costs and expenses relating to the issuance of the
bonds;
the District has been authorized to levy taxes in
payment of such bonds, and the taxes to be levied and
collected will be sufficient to pay the principal of
the bonds herein authorized as it matures and the
interest thereon as it accrues and becomes payable; and
the Board of Directors reserves the right to issue the
remaining $30,070,000 unissued bonds which were
authorized at the election described in paragraph (c)
hereof, in one or more series, at a future date or
dates when, in the judgment of the Board of Directors,
such amounts are required for authorized purposes.
(End of Article One)
ef:0006~ONDS2000/Anicle01
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ARTICLE TWO
DEFINITIONS AND INTERPRETATIONS
SECTION 2.01: DEFINITIONS. The following definitions
together with the supplemental definitions in Article Five and
Article Eleven, shall apply with equal force herein (except in
Section 8.01 hereof and in Exhibits "A", "B", and "C" hereto) and
in any amendment or supplement hereto.
Additional Bonds.
The term "Additional Bonds" shall mean any additional bonds,
including Additional Tax Bonds, revenue bonds, contract revenue
bonds, special project revenue bonds, refunding bonds and other
bonds which the Board of Directors expressly reserves the right
to issue in Article Nine of this Order.
Additional Tax Bonds.
The term "Additional Tax Bonds" shall mean all or any
portion of the $30,070,000 unissued bonds authorized at the
election described in paragraph (c) of Section 1.05 of this
Order, and such other bonds, including refunding bonds, payable
wholly from ad valorem taxes, which the District may now or
hereafter be authorized to issue from time to time.
Authorized Investments.
The term "Authorized Investments" shall mean all instruments
which are authorized under the District's policies for investment
of funds of the District adopted by the Board of Directors of the
District from time to time, but in any event, all such
instruments shall be authorized under the laws of the State of
Texas for investment of funds of municipal utility districts.
Board of Directors.
The term "Board of Directors" shall mean the governing body
of the District, as now or hereafter constituted.
Bond Counsel.
The term "Bond Counsel" shall mean the law firm of Schwartz,
Page & Harding, L.L.P., Houston, Texas.
Bond Fund.
The term "Bond Fund" shall mean the District's debt service
fund created and established pursuant to the 1999 Order
(hereinafter defined).
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Bonds.
The term "Bond" or "Bonds" shall mean any Bond or Bonds, as
the case may be, of the issue of $3,740,000 Unlimited Tax Bonds,
Series 2000, initially dated as of April 1, 2000, and authorized,
issued and delivered pursuant to this Order.
Business Day.
The term "Business Day" or "Business Days" shall mean any
calendar day or days which fall on Monday through Friday, but
shall not include any such day which is designated as an official
state or national holiday or a day on which financial
institutions where the Paying Agent is located are authorized or
required by state or national law or by executive order to close.
Construction Fund.
The term "Construction Fund" shall mean the District's
construction fund created and established pursuant to the 1999
Order.
District.
The term "District" is defined in Article One hereof and
shall mean and include any successors and assigns of the District
and, where appropriate, shall refer to the Board of Directors of
the District.
Fiscal Year.
The term "Fiscal Year" shall mean the annual period from
August 1 through July 31, or such other period as may hereafter
be established by resolution of the Board of Directors of the
District.
Holder.
The term "Holder" or "Holders" shall mean, when used with
respect to any Bond, the Person or Persons in whose name such
Bond is registered on the Register.
Initial Bonds.
The term "Initial Bond" or "Initial Bonds" shall mean any
one or more of the Bonds authorized, issued and initially
delivered hereunder upon which the manually executed certificate
of registration of the Comptroller of Public Accounts of the
State of Texas, or his duly authorized deputy, substantially in
the form prescribed in Section 5.03 hereof, has been placed.
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Initial Date.
The term "Initial Date" shall mean April 1, 2000.
Initial Purchaser.
The term "Initial Purchaser" shall mean the Person or
Persons to whom the Bonds are to be sold and delivered, as
provided in Section 13.01 hereof.
Interest Pavment Date.
The term "Interest Payment Date" shall mean the date on
which interest on any then outstanding Bond is due and payable,
as provided in Section 3.04 hereof.
Maturity Date.
The term "Maturity Date" shall mean any date on which the
principal of any then outstanding Bond is due and payable, as
provided in Section 3.03 hereof.
Net Proceeds.
The term "Net Proceeds" shall mean all proceeds received by
the District from the sale of the Bonds, except those proceeds
deposited into the Bond Fund pursuant to the provisions of
Section 7.04 hereof.
Order.
The term "Order" shall mean this Order and all amendments
hereof and supplements hereto.
1999 Order.
The term "1999 Order" shall mean the order of the Board of
Directors of the District adopted on November 29, 1999,
authorizing the issuance of the District's Series 1999 Bonds and
all amendments and supplements thereto.
0utstandinq Bonds.
The term "Outstanding Bonds" is defined in Section 1.05
hereof.
Pa¥inq Aqent.
The term "Paying Agent" shall mean the agency or agencies
selected and maintained from time to time by the District for the
purpose of making payment on behalf of the District of the
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principal of and the interest on the Bonds, as provided in
Section 12.07 of this Order.
Person.
The term "Person" shall mean any individual, corporation,
partnership, firm, joint venture, association, joint stock
company, trust, unincorporated organization or government, or any
agency or political subdivision thereof.
Predecessor Bonds.
The term "Predecessor Bonds" shall mean, with respect to any
particular Bond, every previous Bond evidencing all or a portion
of the same obligation as that evidenced by such particular Bond,
and, for the purposes of this definition, any Bond registered and
delivered pursuant to Section 3.10 hereof shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or
stolen Bond in lieu of which such Bond was delivered.
Record Date.
The term "Record Date" shall mean, with respect to an
Interest Payment Date of March 1, the preceding February 15, and
with respect to an Interest Payment Date of September 1, the
preceding August 15, whether or not such dates are Business Days.
Redemption Date.
The term "Redemption Date" shall
respect to any Bond, the date fixed for
pursuant to the terms of this Order.
mean, when used with
redemption of such Bond
Reqister.
The term "Register" shall mean the registry books maintained
on behalf of the District by a Registrar designated by the
District for such purpose in which are maintained the names and
addresses of Holders and the principal amounts of the Bonds
registered in the name of each Holder.
Reqistrar.
The term "Registrar" shall mean the trust or banking corpo-
ration or association designated and acting in such capacity from
time to time, as provided in Section 12.06 of this Order.
Series 1999 Bonds.
The terms "Series 1999 Bonds" is defined in Section 1.05
hereof.
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System.
The term "System" shall mean the waterworks system, sanitary
sewer system, and drainage and storm sewer system, of the
District, including, but not limited to, all works, improvements,
facilities, plants, equipment, appliances, interest in property
and contract rights needed therefor and administrative facilities
needed in connection therewith, now owned or hereafter purchased,
constructed or otherwise acquired, and all extensions and
replacements thereof and improvements thereto whensoever made.
Water Code.
The term "Water Code" is defined in Article One hereof.
SECTION 2.02: INTERPRETATIONS; TIME OF PERFORMANCE. The
titles and headings of the articles and sections of this Order
have been inserted for convenience of reference only and are not
to be considered a part hereof and shall not in any way modify or
restrict any of the terms or provisions hereof. This Order and
all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein and to sustain the
validity of the Bonds and the validity of the taxes levied in
payment thereof. Unless a time period specified for performance
of any action under this Order is specified to be a Business Day
or Business Days, such performance time period means the number
of calendar days for such performance to be accomplished.
(End of Article Two)
c f:0006kB onds00/Arficle02
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ARTICLE THREE
AUTHORIZATION, DESCRIPTION AND EXECUTION OF BONDS
SECTION 3.01: AMOUI~T, NAME, PURPOSE AND AUTHORIZATION. The
Bonds of the District, to be known and designated as "Brazoria
County Municipal Utility District No. 6, of Brazoria County,
Texas Unlimited Tax Bonds, Series 2000", shall be issued in the
aggregate principal amount of Three Million Seven Hundred Forty
Thousand Dollars ($3,740,000) for the purpose or purposes of
purchasing, constructing, acquiring, owning, operating,
repairing, improving or extending a waterworks system, a sanitary
sewer system, and a drainage and storm sewer system for the
District, including but not limited to, all additions to such
systems and all works, improvements, facilities, plants,
equipment, appliances, interests in property, and contract rights
needed therefor and administrative facilities needed in
connection therewith, all under and in strict conformity with the
Constitution and laws of the State of Texas, including,
particularly, Section 59 of Article XVI of the Constitution of
Texas and the Water Code.
SECTION 3.02: FORM, INITIAL DATE, NUMBERS AND DENOMIN-
ATIONS. The Initial Bonds shall be issued and delivered in fully
registered form, without interest coupons, and shall be dated as
of the Initial Date. Thereafter, each Bond registered and
delivered by the Registrar hereunder shall be similarly dated as
of the Initial Date, but shall include thereon the date of its
authentication by the Registrar. Each Initial Bond submitted for
approval, registration and delivery in accordance with Section
3.07 hereof shall be numbered "IR-", followed by the last two
digits of the year in which such Initial Bond is scheduled to
mature. Each Bond registered and delivered by the Registrar
thereafter shall be numbered consecutively, in succession,
beginning with the numeral "1", which shall be preceded by the
prefix "R-", and shall be in denominations of $5,000, or any
integral multiple thereof.
SECTION 3.03: INTEREST RATES AND MATURITY DATES. The Bonds
shall be serial Bonds, shall bear interest from the later of the
Initial Date, or the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate or rates
set forth in the following schedule, and shall mature and become
payable, subject to prior redemption in accordance with the pro-
visions of Article IV hereof, on September 1 in each of the years
and in the principal amounts set forth in the schedule below:
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Principal
Amount
Year of
Maturity
Interest
Rate
$100
105
110
120
125
135
140
150
160
17(
180
195
205
220
230
245
260
280
295
315
000 2001
000 2002
000 2003
000 2004
000 2005
000 2006
000 2007
000 2008
000 2009
000 2010
000 2011
000 2012
000 2013
000 2014
000 2015
000 2016
000 2017
000 2018
000 2019
000 2020
SECTION 3.04: DATES AND MANNER OF PAYMENT OF INTEREST.
Interest on the Bonds shall be payable semiannually on March 1
and September 1 of each year, commencing on September 1, 2000,
until payment of the principal thereof has been made or duly
provided for. The amount of interest on the Bonds payable on
each Interest Payment Date, Maturi.ty Date or Redemption Date
shall be computed on the basis of a 360-day year of twelve 30-day
months. Not later than ten (10) days before each Interest
Payment Date, Maturity Date or Redemption Date, the Paying Agent
shall compute the amount of interest to be due and payable on
such date and shall send to the District notice of the amount so
computed to be due and payable on such date.
The payments of interest on the Bonds shall be payable, at
the option of the District, by check mailed by the Paying Agent
to the Holder, at the address shown on the Register; or by wire
transfer to such Holder at the expense of the Holder, or by such
other customary banking arrangements as may be acceptable to the
Paying Agent and the Holder, at the risk and expense of such
Holder. The interest so payable on any Interest Payment Date
will be paid to the Person in whose name each Bond (or one or
more Predecessor Bonds evidencing the same obligation) is regis-
tered at the close of business on the Record Date for such
Interest Payment Date. Each Bond delivered pursuant to the terms
of this Order upon transfer or in exchange for or in lieu of any
Predecessor Bond shall carry all the rights to interest, both
accrued and unpaid, and to accrue, which were carried by such
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Predecessor Bond, and each such Bond shall bear or accrue
interest as specified herein so that neither gain nor loss in
interest shall result from such transfer, exchange or
substitution.
SECTION 3.05: MEDIU~ AND PLACE OF PAYMENT AT MATURITY OR
REDEMPTION. The principal of the Bonds payable at any Maturity
Date or Redemption Date, shall be payable, without exchange or
collection charges, in any coin or currency of the United States
of America which on such dates of payment is legal tender for the
payment of debts due the United States of America, upon the
presentation and surrender of such Bonds, as they become due or
at their earlier Redemption Date, at the designated corporate
trust office of the Paying Agent.
SECTION 3.06: EXECUTION. The Bonds shall be signed on
behalf of the District by the President and Secretary of the
Board of Directors of the District, and the District's seal shall
be placed or impressed thereon. Such signatures may be manually
executed or placed in facsimile on the Bonds, and the District's
seal may be manually impressed or printed or otherwise
mechanically reproduced in facsimile on the Bonds. In case any
official of the District who shall have signed any of the Bonds,
either manually or by facsimile signature, shall cease to be such
officer before the Bonds so signed shall have been authenticated
and delivered by the Registrar, or disposed of by the District,
such Bonds, nevertheless, may be authenticated and delivered or
disposed of as though the Person who signed such Bonds had not
ceased to be such officer of the District, and any Bond may be
signed on behalf of the District by such Person as, at the actual
time of execution of such Bond, shall be a proper officer of the
District, although at the date of such Bond or of the adoption of
this Order, such Person was not such officer. Minor
typographical and other minor errors in the text of any Bond or
minor defects in the seal or facsimile signature on any Bond
shall not affect the validity or enforceability of such Bond, if
same has been duly authenticated by the Registrar or registered
by the Comptroller of Public Accounts of the State of Texas, as
required herein.
SECTION 3.07: APPROVAL~ REGISTRATION AND DELIVERY. The
Initial Bonds shall consist of one Bond for each year of maturity
specified in Section 3.03 hereof, representing the entire
principal amount of the Bonds scheduled to mature in each of such
years of maturity, and shall be made payable to the Initial
Purchaser, or its designee. The President and Secretary of the
Board of Directors of the District and representatives of the
District's Bond Counsel are each hereby authorized and directed
to submit the Initial Bonds and a transcript of the proceedings
relating to the issuance of the Bonds to the Attorney General of
Texas for approval and, following said approval, to submit the
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Initial Bonds to the Comptroller of Public Accounts of the State
of Texas for registration. Upon registration of the Initial
Bonds, the Comptroller of Public Accounts (or a deputy designated
in writing to act for the Comptroller) shall manually sign the
Comptroller's registration certificate prescribed herein to be
printed and endorsed on each Initial Bond. After the Initial
Bonds have been registered and signed by the Comptroller, they
shall be registered on the Register in the name of and shall be
delivered to the Initial Purchaser, but only upon receipt of the
full purchase price therefor.
At any time after delivery of the Initial Bonds, the Initial
Purchaser or any subsequent Holder may, subject to the
requirements of and in accordance with the procedures prescribed
in Section 3.09 hereof, surrender any Bonds to the Registrar for
transfer or exchange, accompanied by instructions specifying the
name(s) and address(es) of the Person(s) to whom such Bonds are
to be transferred and the principal amount(s) of the Bond(s) to
be authenticated and delivered in exchange therefor, and the
Registrar shall thereupon, within not more than three (3)
Business Days, authenticate and register Bonds conforming to such
instructions and the provisions of this Order.
No Initial Bond shall be entitled to any right or benefit
under this Order, or be valid or obligatory for any purpose,
unless there appears on such Initial Bond a certificate of
registration substantially in the form provided in Section 5.03
hereof, duly executed by the Comptroller of Public Accounts of
the State of Texas, or his duly authorized deputy, by manual
signature; nor shall any Bond authenticated and delivered
subsequent to the Initial Bonds be so entitled or be valid or
obligatory, unless there appears on such Bond a Certificate of
Registrar substantially in the form provided in Section 5.02
hereof, duly executed by an authorized officer or employee of the
Registrar, by manual signature. Such Certificate of Registrar
upon any Bond authenticated and delivered subsequent to the
Initial Bonds shall be conclusive evidence that such Bond has
been so certified or registered and delivered.
SECTION 3.08: OWNERSHIP OF BONDS. The District, the Paying
Agent, the Registrar and any other Person may treat the Person in
whose name any Bond is registered as the absolute owner of such
Bond for the purpose of making and receiving payment of the
principal thereof and interest thereon and for all other
purposes, whether or not such Bond is overdue, and neither the
District, the Paying Agent, nor the Registrar shall be bound by
any notice or knowledge to the contrary. All payments made to
the Person deemed to be the owner of any Bond in accordance with
this Section 3.08 shall be valid and effective for all purposes
and shall discharge the liability of the District, the Paying
Agent and the Registrar to the extent of the sums paid.
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SECTION 3.09: REGISTRATIONf TRANSFER AND EXCHANGE. So long
as any Bonds remain outstanding, the Registrar shall keep and
maintain at its designated corporate trust office a Register in
which, subject to such reasonable regulations as it may
prescribe, the Registrar shall provide for the registration,
transfer and exchange of Bonds in accordance with the terms of
this Order.
Each Bond shall be transferable only upon the presentation
and surrender thereof at the office designated by the Registrar,
duly endorsed for transfer or accompanied by an assignment duly
executed by the registered owner or his authorized
representative. Within three (3) Business Days following due
presentation for registration of the transfer of any Bond, the
District shall cause to be executed and the Registrar shall
authenticate in the name of the transferee or transferees one or
more exchange Bonds in a like aggregate principal amount and a
like interest rate and shall deliver or mail same to the
transferee or transferees by United States mail, first class,
postage prepaid.
Ail Bonds shall be exchangeable upon the presentation and
surrender thereof at the office designated by the Registrar for a
Bond or Bonds having the same maturity and interest rate, in any
authorized denomination, and in an aggregate principal amount
equal to the unpaid principal amount of the Bond or Bonds
presented for exchange. Within three (3) Business Days following
due presentation for exchange of any Bond, the District shall
cause to be executed and the Registrar shall authenticate,
register and deliver or send to the Holder, by United States
mail, first class, postage prepaid, exchange Bonds in accordance
with the provisions of this Section 3.09.
Each Bond transferred or exchanged and duly authenticated
and delivered in accordance with this Section 3.09 shall be
entitled to the benefits and security of this Order to the same
extent as the Bond or Bonds in lieu of which such exchange Bond
is delivered. No service charge shall be made for any transfer
or exchange referred to above, but the District or the Registrar
may require the Holder of any Bond to pay a sum sufficient to pay
any tax or other governmental charge that may be imposed in
connection with the transfer or exchange of such Bond.
The Registrar shall not be required to transfer or exchange
any Bond on any date subsequent to a Record Date and prior to the
next succeeding Interest Payment Date, or during any period
beginning fifteen (15) calendar days prior to, and ending on the
date of the mailing of, notice of redemption of Bonds prior to
maturity, nor shall the Registrar be required to transfer or
exchange any Bond selected for redemption in whole or in part
3-5
when such Redemption Date is scheduled to occur within thirty
(30) calendar days.
SECTION 3.10: REPLACEMENT BONDS. Upon the presentation and
surrender to the Registrar of a mutilated Bond, the District
shall cause to be executed, and the Registrar shall authenticate,
register and deliver in exchange therefor, a replacement Bond of
like tenor and principal amount bearing a number not contemporan-
eously outstanding. In the event that any Bond is lost,
apparently destroyed or wrongfully taken, the District, pursuant
to the applicable laws of the State of Texas, and in the absence
of actual notice or knowledge that such Bond has been acquired by
a bona fide purchaser, shall cause to be executed, and the
Registrar shall authenticate, register and deliver, a replacement
Bond of like tenor, interest, and principal amount bearing a
number not contemporaneously outstanding, provided that the
Holder thereof shall have:
(a)
furnished to the Registrar and the District
satisfactory evidence of the ownership and the
circumstances of the loss, destruction or theft of such
Bond;
(b)
furnished such security or indemnity as may be required
by the Registrar, the District and the Paying Agent to
save the District, the Registrar and the Paying Agent
harmless;
(c)
paid all expenses and charges in connection therewith,
including, but not limited to, printing costs, legal
fees, fees and expenses of the Registrar, the District
and Paying Agent and any tax or other governmental
charge that may be imposed; and
(d) met any other reasonable requirements of the District,
the Registrar and the Paying Agent.
If, after the delivery of such replacement Bond, a bona fide
purchaser of the original Bond in lieu of which such replacement
Bond was issued presents for payment such original Bond, the
District, the Registrar and the Paying Agent shall be entitled to
recover upon such replacement Bond from the Person to whom it was
delivered or any Person taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the District, the Registrar and the
Paying Agent in connection therewith.
In the event that any such mutilated, lost, apparently
destroyed or wrongfully taken Bond has become or is about to
become due and payable, the Paying Agent, with the concurrence of
3-6
the Registrar, in their discretion, may pay such Bond, in lieu of
issuance of a replacement Bond.
Each replacement Bond delivered in accordance with this
Section 3.10 shall be entitled to the benefits and security of
this Order to the same extent as the Bond or Bonds in lieu of
which such replacement Bond is delivered.
SECTION 3.11: CANCELLATION. Ail Bonds paid or redeemed in
accordance with this Order, and all Bonds in lieu of which
exchange Bonds or replacement Bonds are executed, authenticated,
registered and delivered in accordance with Section 3.09 or
Section 3.10 of this Order, shall be cancelled and destroyed upon
the making of proper records regarding such payment, redemption,
exchange or replacement. The Paying Agent and Registrar shall
periodically furnish the District with certificates of
destruction of such Bonds.
(End of Article Three)
¢f:0006~ onds00/Arficle03
3-7
ARTICLE FOUR
REDEMPTION OF BONDS BEFORE MATURITY
SECTION 4.01: REDEMPTION OF BONDS. The District reserves
the right, at its option, to redeem the Bonds maturing on or
after September 1, 2011, prior to their scheduled maturities, in
whole or, from time to time, in part, on September 1, 2010, or on
any interest payment date thereafter, at a price equal to the
principal amount thereof to be redeemed plus accrued interest on
the Bonds called for redemption to the Redemption Date. The
District shall, at least forty-five (45) calendar days prior to
the Redemption Date (unless a shorter notice shall be satisfac-
tory to the Registrar and Paying Agent), notify the Registrar and
Paying Agent of such Redemption Date and of the principal amount
of the Bonds of each maturity to be redeemed. If less than all
of the Bonds of the same maturity are to be redeemed, the
particular Bonds to be redeemed in whole or in part from within
each such maturity shall be selected by the Registrar from the
Bonds which have not previously been called for redemption, by
method of random selection; provided, however, that in the event
that a Bond subject to redemption is in a denomination larger
than $5,000, a portion of such Bond may be redeemed, but only in
a principal amount equal to $5,000 or an integral multiple
thereof. The Registrar shall promptly notify the District and
the Paying Agent, if different than the Registrar, in writing, of
the Bonds selected for redemption and, in the case of any Bond
selected for partial redemption, of the principal amount thereof
to be redeemed.
For purposes of this Order, unless the context otherwise
requires, all provisions relating to the redemption of Bonds
shall relate, in the case of any Bond redeemed or to be redeemed
only in part, to the portion of the principal amount of such Bond
which has been or is to be redeemed. Upon surrender of any Bond
for redemption in part, the Registrar, in accordance with Section
3.09 of this Order, shall authenticate, register and deliver an
exchange Bond or Bonds of like interest rate and in aggregate
principal amount equal to the unredeemed portion of the Bond so
surrendered.
SECTION 4.02: NOTICE OF REDEMPTION. Notice of each
exercise of the reserved right of redemption shall be given by
the District, or at the District's request, by the Registrar, at
least thirty (30) calendar days prior to the Redemption Date by
sending such notice by first class United States mail, postage
prepaid, to the Holder of each Bond to be redeemed in whole or in
part at the address shown on the Register on the date which is
4-1
forty-five (45) calendar days prior to the Redemption Date. Such
notice shall state the Redemption Date, the redemption price, the
principal amounts of the Bonds to be redeemed and, if less than
all of the then outstanding Bonds are to be redeemed, the identi-
fication (and, in the case of partial redemptions within a
maturity, the respective principal amounts) of the Bonds to be
redeemed, the amount of accrued interest payable on the
Redemption Date and the place at 'which the Bonds are to be
surrendered for payment. Any notice mailed as provided in this
Section 4.02 shall be conclusively presumed to have been duly
given, whether or not the Holder actually receives such notice.
Except as otherwise provided in Section 11.03 of this Order, no
other notice of the reserved right of redemption shall be given
unless otherwise required by law. By the Redemption Date, due
provision shall be made with the Paying Agent for the payment of
the principal of the Bonds to be redeemed, plus accrued interest
thereon to the Redemption Date. When Bonds have been called for
redemption, in whole or in part, as provided above, and due
provision has been made to redeem same, such Bonds, or portions
thereof, shall no longer be regarded as outstanding, except for
the purpose of receiving payment from the funds provided for
redemption, and the right of the Holders to collect interest
which would otherwise accrue after the Redemption Date upon the
principal of such Bonds or the portions thereof so called for
redemption shall be terminated.
(End of Article Four)
CE0006~Bonds00/Ar~iole04
4-2
ARTICLE FIVE
FORM OF BONDS AND CERTIFICATES;INSURkNCE
SECTION 5.01: FORM OF BONDS. The Bonds authorized by this
Order shall be in substantially the forms specified in Exhibits
"A" and "B" attached hereto and made a part hereof for all
purposes, with such omissions, insertions and variations as may
be necessary or desirable and consistent with the terms of this
Order.
SECTION 5.02: CERTIFICATE OF REGISTRAR. The following form
of Certificate of Registrar shall be printed on the face of each
of the Bonds authenticated, registered and delivered subsequent
to the Initial Bonds:
CERTIFICATE OF REGISTRAR
This is to certify that this bond is one of the bonds issued
under the provisions of the within-mentioned Bond Order, and it
is hereby further certified that this bond has been authorized
and delivered in conversion and exchange for, or in replacement
of, a bond, bonds or portions thereof (or one or more prior
conversion, exchange or replacement bonds) originally issued by
Brazoria County Municipal utility District No. 6, of Brazoria
County, Texas, approved by the Attorney General of Texas, and
initially registered by the Comptroller of Public Accounts of the
State of Texas.
The Bank of New York,
New York, New York, Registrar
Dated: By:
Authorized Signatory
SECTION 5.03: REGISTRATION OF BONDS BY STATE COMPTROLLER
AND CERTIFICATE. The Initial Bonds shall be registered by the
Comptroller of Public Accounts of the State of Texas, as provided
by law. In lieu of the Certificate of Registrar specified in
Section 5.02 hereof, the registration certificate of the
Comptroller of Public Accounts of the State of Texas shall be
printed or typed on each of the Initial Bonds and shall be in
substantially the following form:
5-1
OFFICE OF THE COMPTROLLER
THE STATE OF TEXAS
REGISTER NO.
I HEREBY CERTIFY that there is on file and of record in my
office a certificate of the Attorney General of the State of
Texas to the effect that this bond has been examined by him as
required by law, that he finds that it has been issued in
conformity with the Constitution and laws of the State of Texas,
and it is a valid and binding obligation of Brazoria County
Municipal Utility District No. 6, of Brazoria County, Texas, and
said bond has this day been registered by me.
WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas,
Comptroller of Public Accounts of the State of Texas
SECTION 5.04: FORM OF ASSIGNMENT. The following form of
Assignment shall be printed on the back of each of the Bonds:
ASSIGNMENT
For value received, the undersigned hereby sells, assigns
and transfers unto (print or typewrite name, address and zip code
of transferee):
(Social Security or other identifying number): the
within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer said
Bond on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:
The signature of the Registered
Owner appearing on this Assign-
ment is hereby verified as true
and genuine and is guaranteed
by:
(Bank, Trust Company, or
Brokerage Firm)
By:
(Authorized Representative)
Registered Owner
NOTICE: The signature on this
Assignment must correspond in
every particular with the name
of the Registered Owner as it
appears on the face of the
within Bond.
5-2
SECTION 5.05: CUSIP REGISTRATION. The officers and
representatives of the District may secure the printing of
identification numbers on the Bonds through the CUSIP Service
Bureau Division of Standard & Poors Corporation, New York, New
York.
SECTION 5.06: LEGAL OPINION. The approving opinion of the
District's Bond Counsel may be printed on the Bonds over the
certification of the Secretary of the Board of Directors, which
may be executed in facsimile.
SECTION 5.07: MUNICIPAL BOND INSURANCE POLICY. Notwith-
standing any part or provision of this Order to the contrary, the
following provisions shall govern and be controlling with respect
to any and all matters concerning the policy of municipal bond
insurance to be issued in connection with the Bonds.
(a) Definitions.
(i) "Insurance Trustee" shall mean the United States
Trust Company of New York, or its successor as insurance
trustee.
(ii) "Insurer" shall mean Asset Guaranty Insurance
Company, as the provider of a municipal bond insurance
policy for the Bonds.
(iii) "Policy" shall mean the municipal bond insurance
policy provided by the Insurer relating to the Bonds.
SECTION 5.08: REPORTING REQUIREMENTS. The District shall
furnish to Insurer:
(a) Within sixty (60)
accepted by, the District,
the District and a copy of
District;
days of being made available to, and
a copy of any financial statement of
any audit or financial report of the
(b) A copy of any notice or report:
(i) required to be given to the Holders of the Bonds,
including, without limitation, notice of any redemption of
or defeasance of the Bonds and any certificate rendered
pursuant to this Order relating to the security for the
Bonds; and
(ii) required to be given pursuant to United States
Securities and Exchange Commission Rule 15c2-12 (the
"Rule") to any nationally recognized municipal securities
information repository, any person designated by the State
of Texas or any authorized department, officer or agency
5-3
thereof as, and determined by the United States Securities
and Exchange Commission (the "SEC") or its staff to be, a
state information depository within the meaning of the
Rule, or the Municipal Securities Rule Making Board
(irrespective of the availability of any exemption from the
Rule).
(c) Such additional information as the Insurer may
reasonably request.
SECTION 5.09: INTERESTED PARTIES. Nothing in this Order,
expressed or implied, is intended or shall be construed to confer
upon, or to give to, any person or entity, other than the
District, the Insurer, the Paying Agent/Registrar and the Holders
of the Bonds any right, remedy or claim under or by reason of
this Order or any covenant, condition or stipulation hereof, and
all covenants, stipulations, provisions and agreements in the
Order contained by or on behalf of the District, the Insurer, the
Paying Agent/Re§istrar and the Holders of the Bonds are made and
included for their sole and exclusive benefit.
SECTION 5.10: MODIFICATION OF DOCUMENTS~ CONSENT REQUIRE-
MENTS.
(a) No provision of this Order, and no provision of any
other document delivered in connection with the issuance of the
Bonds, shall be amended or modified in any manner without the
prior written consent of the Insurer.
(b) Insurer's consent shall be required with respect to:
(i) initiation or approval of any action which requires
consent of the Holders of the Bonds.
SECTION 5.11: RIGHTS OF INSURER TO DIRECT PROCEEDINGS~
SUBROGATION. In the event of default, as defined herein,
notwithstanding anything to the contrary, unless the Insurer is
then in default under the Policy, the following provisions shall
apply:
(a) If the principal of and/or interest on the Bonds shall
be paid by the Insurer pursuant to the Policy, the Bonds shall
remain outstanding for all purposes, shall not be defeased or
otherwise satisfied and shall not be considered paid by the
District. All covenants, agreements and other obligations of the
District to the Holders of the Bonds shall continue to exist and
shall run to the benefit of the Insurer and the Insurer shall be
subrogated to the rights of such Holders of Bonds.
5-4
SECTION 5.12: PAYMENT PROCEDURE.
(a) The District hereby agrees to deposit with the Paying
Agent/Registrar not less than five (5) business days prior to
each payment date an amount sufficient to pay the principal
and/or interest due on such payment date. At least five (5)
business days prior to each payment date, the District agrees to
and shall determine whether there will be sufficient funds
available to pay the principal and/or interest due on the Bonds
on such payment date. If the District determines that there will
be insufficient funds for the payment thereof, the District shall
immediately upon such determination, by telephonic notice
immediately confirmed in writing, notify the Paying
Agent/Registrar that there will be insufficient funds to make
such payment and the amount of such deficiency. Upon receipt of
such notice, the Paying Agent/Registrar shall, not less than
three (3) business days prior to such payment date for which the
Paying Agent/Registrar has received such notice of deficiency,
give telephonic notice of such anticipated deficiency,
immediately confirmed in writing, to the Insurer. Such notice
shall specify the amount of the anticipated deficiency, the Bonds
to which such deficiency is applicable and whether such Bonds
will be deficient as to principal or interest or both. The
Insurer will deposit in an account with the Insurance Trustee
funds sufficient to make payments of principal or interest due on
the Bonds on the later of the due date for such payment or within
one (1) business day next following the date on which the Insurer
shall have received notice from the Paying Agent/Registrar of
such deficiency. The Insurance Trustee shall disburse to the
Holders of such Bonds or to the Paying Agent/Registrar the
amounts due on such Bonds in accordance with the provisions of
the Policy.
(b) The Paying Agent/Registrar shall, after giving notice
to the Insurer as provided in paragraph (a) above, make available
to the Insurance Trustee the registration books of the District
maintained by the Paying Agent/Registrar and all records relating
to the funds maintained under this Order.
(c) The Paying Agent/Registrar shall provide the Insurance
Trustee with a list of Holders of Bonds entitled to receive
principal and/or interest payments from the Insurer under the
terms of the Policy, and shall make arrangements with the
Insurance Trustee to (i) mail checks to the Holders of the Bonds
entitled to receive full or partial interest payments from the
Insurer and (ii) to pay principal upon the Bonds surrendered to
the Insurance Trustee by the Holders thereof entitled to receive
full or partial principal payments from the Insurer.
(d) The Paying Agent/Registrar shall, at the time it
provides notice to the Insurer pursuant to paragraph (a) above,
5-5
notify the Holders of the Bonds entitled to receive the payment
of principal or interest thereon from the Insurer (i) as to the
fact of such entitlement, (ii) that the Insurance Trustee will
remit to them all or part of the interest payments next coming
due upon proof of owner entitlement to interest payments and
delivery to the Insurance Trustee of, in form satisfactory to the
Insurance Trustee, an appropriate assignment of the right of the
Holders of the Bonds to payment of amounts paid by the Insurer
and appropriate instruments to effect the appointment of the
Insurer as agent for the Holders of the Bonds in any legal
proceeding related to the payment of amounts due on such Bonds,
(iii) that, should they be entitled to receive full payment of
principal from the Insurer, they must surrender their Bonds
(along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of such
Bonds to be registered in the name of the Insurer) for payment to
the Insurer, and not the Paying Agent/Registrar, and (iv) that,
should they be entitled to receive partial payment of principal
from the Insurer, they must surrender their Bonds for payment
thereon first, to the Paying Agent/Registrar which shall note on
such Bonds the portion of the principal paid by the Paying
Agent/Registrar, and then, together with an appropriate
instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee which will then pay the unpaid
portion of principal in accordance with the terms of the Policy.
(e) If the Paying Agent/Registrar has notice that any
payment of principal of or interest on a Bond, which has become
due for payment and which had been made to a Holder by or on
behalf of the District, has been deemed a preferential transfer
and theretofore recovered from its registered owner pursuant to
the United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having
competent jurisdiction, the Paying Agent/Registrar shall give
notice of such recovery as provided in paragraph (a) above and
shall notify all Holders of Bonds that in the event that any
Holder's payment is so recovered, such Holder will be entitled to
payment from the Insurer to the extent of such recovery if
sufficient funds are not otherwise available, and the Paying
Agent/Registrar shall furnish to the Insurance Trustee its
records evidencing the payments of principal of and interest on
the Bonds which have been made by the Paying Agent/Registrar and
subsequently recovered from the Holders and the dates on which
such payments are made.
(f) In addition to those rights granted the Insurer under
this Order, the Insurer shall, to the extent it makes payment of
principal of and/or interest on Bonds, become the owner (or
partial owner) of such Bonds and shall become subrogated to the
rights of recipients of such payments in accordance with the
terms of the Policy, and to evidence such ownership and
5-6
subrogation (i) in the case of subrogation as to claims for past
due interest, the Paying Agent/Registrar shall note the Insurer's
rights as partial owner and subrogee on the registration books of
the District maintained by the Paying Agent/Registrar, upon
receipt from the Insurer of proof of payment of interest thereon
to the Holders of the Bonds, and (ii) in the case of subrogation
as to claims for past due principal, the Paying Agent/Registrar
shall note the Insurer's rights as owner and subrogee on the
registration books of the District maintained by the Paying
Agent/Registrar upon surrender of the Bonds by the Holders
thereof together with proof of payment of principal thereof.
SECTION 5.13: BOND INSURANCE PROCEEDINGS. The officers and
representatives of the District are hereby authorized and
directed (i) to make application for and to execute, attest and
deliver any and all certificates, agreements or other instruments
necessary to secure the Policy with respect to the Bonds by or
through the Insurer, and (ii) to provide for the printing of a
statement or legend relating to such insurance on the Bonds, all
as may be deemed necessary to comply with the provisions of
Sections 5.07 through 5.12 hereof by said officers and
representatives.
(End of Article Five)
cf:0006~iSonds00/Arficle05
5-7
ARTICLE SIX
SECURITY FOR THE BONDS
SECTION 6.01: SECURITY FOR THE BONDS. The Bonds are se-
cured by and payable from the levy of a continuing, direct,
annual ad valorem tax, without legal limitation as to rate or
amount, upon all taxable property within the District.
SECTION 6.02: LEVY OF TAX. To pay the interest on the
Bonds, and to create a sinking fund for the payment of the
principal thereof when due, and to pay the expenses of assessing
and collecting such taxes and making payments in respect of the
Bonds, there is hereby levied, and there shall be assessed and
collected in due time, a continuing, direct, annual ad valorem
tax, without limit as to rate or amount, on all taxable property
in the District for each year while any of the Bonds are
outstanding. All of the proceeds of such collections, except
costs incurred in that connection, shall be paid into the Bond
Fund and the aforementioned tax and such payments into the Bond
Fund shall continue until the Bonds and the interest thereon,
together with all expenses incurred in making payments in respect
of the Bonds and all amounts due to the United States of America
pursuant to Section 8.01(h) hereof, have been fully paid and
discharged, and such proceeds shall be used for such purposes and
no other. While said Bonds, or any of them, are outstanding and
unpaid, an ad valorem tax, each year at a rate from year to year
as will be ample and sufficient to provide funds to pay the
current interest on said Bonds and to provide the necessary
sinking fund to pay the principal and accrued interest on the
Bonds when due, with full allowance being made for delinquencies
and costs of collection, shall be levied, assessed and collected,
as follows:
(a)
After receipt of the certified roll of taxable property
in each year, and at such time as required by then
applicable law, the Board of Directors shall consider
the taxable property in the District and determine the
actual rate per $100 valuation of taxable property
which is to be levied in that year and shall levy such
tax against all taxable property in the District.
(b)
In determining the actual rate to be levied in each
year, the Board of Directors shall consider, among
other matters:
(1)
the amount which should be levied for the payment
of the principal of or the interest, payment
expenses and redemption price on each series of
bonds or notes of the District payable in whole or
in part from taxes, including, but not limited to,
6-1
the Bonds, the Outstanding Bonds and any
Additional Bonds; and
(2) the percentage of anticipated tax collections and
the costs of assessing and collecting such taxes.
(c)
In determining the amount of taxes which should be
levied each year, the Board of Directors may also
consider whether proceeds from the sale of bonds of the
District have been capitalized or placed in escrow to
pay interest during construction and whether the Board
of Directors reasonably expects to have investment
earnings from the Bond Fund or excess arbitrage profits
payable to the United States of America, or revenues or
receipts available from other sources which are legally
available to pay the principal of or the interest,
payment expenses or redemption price on the Bonds, the
Outstanding Bonds or any Additional Bonds or notes
payable in whole or in part from taxes.
In addition to the tax levied pursuant to this Section 6.02, the
District may also levy from time to time taxes for maintenance
and operation purposes, for contract obligations payable from
taxes, and for any other purpose or purposes authorized by law.
(End of Article Six)
cf:0006kB onds00/Arfcle06
6-2
ARTICLE SEVEN
APPLICATION OF BOND PROCEEDS; FLOW OF FUNDS AND INVESTMENTS
SECTION 7.01: BOND PROCEEDS. Proceeds from the sale of the
Bonds will be disbursed in accordance with this Article Seven.
SECTION 7.02: CREATION OF FUNDS AND ACCOUNTS. Notwith-
standing any part or provision hereof to the contrary, the
creation of the District's Bond Fund and Construction Fund
pursuant to the provisions of the 1999 Order is hereby confirmed,
which funds shall be kept separate and apart from all other funds
of the District. The Bond Fund, to the extent permitted by law,
shall constitute a trust fund for the benefit of the Holders of
the Bonds, the Outstanding Bonds and any Additional Bonds payable
in whole or in part from taxes, and shall be applied only to pay
interest and principal on the Bonds, the Outstanding Bonds and
any Additional Bonds payable in whole or in part from taxes and
the fees and expenses of any Paying Agent or Registrar in respect
of same, and to defray the expenses, if any, of assessing and
collecting taxes levied for payment of the interest on and
principal of the Bonds, the Outstanding Bonds and any Additional
Bonds payable in whole or in part from taxes, to pay any tax
anticipation notes issued together with interest thereon, as such
tax anticipation notes shall become due, and to pay to the United
States of America any excess arbitrage profits in respect of the
Bonds, the Outstanding Bonds and any Additional Bonds payable in
whole or in part from taxes which may hereafter come due.
SECTION 7.03: SECURITY OF ACCOUNTS. Any cash balance in
any fund of the District, to the extent not insured by the Bank
Insurance Fund managed and maintained by the Federal Deposit
Insurance Corporation, or a successor insurance fund, shall be
continuously secured by a valid pledge to the District of
securities eligible under the laws of Texas to secure the funds
of districts such as the District, having an aggregate market
value, exclusive of accrued interest, at all times at least equal
to the uninsured cash balance in the fund to which such
securities are pledged or such higher amount as required by the
District's policies for investment of funds of the District.
SECTION 7.04: DEPOSITS TO AND WITHDRAWALS FROM BOND FUND.
The District shall deposit or cause to be deposited into the Bond
Fund the aggregate of the following at the times specified:
(a)
As soon as practicable after the Initial Bonds are sold
and delivered, moneys received from the Initial
Purchaser representing accrued interest on the Bonds
from the Initial Date to the date of their delivery;
and
7-1
(b)
As soon as practicable after the Initial Bonds are sold
and delivered, out of the proceeds of the sale of the
Bonds, a sum equal to the initial twelve (12) months of
interest on the Bonds; and
(c)
As collected, the proceeds from collection of the ad
valorem tax levied pursuant to Section 6.02 hereof,
less the costs of collection thereof.
Not later than five (5) calendar days prior to any Maturity Date,
Redemption Date and/or Interest Payment Date on the Bonds, the
Board of Directors shall cause moneys to be deposited into the
Bond Fund in an amount not less than that which is sufficient to
pay the principal of the Bonds which matures and becomes payable
on such date, the interest which accrues and becomes payable on
such date, and the fees and expenses of the Paying AGent and the
ReGistrar for handlinG and making such payments on the Bonds on
such date, and not later than two (2) Business Days prior to such
payment dates shall cause such amounts to be wire transferred to
the Paying AGent.
SECTION 7.05: CONSTRUCTION FUND. The District shall
deposit or cause to be deposited into the Construction Fund the
Net Proceeds of the Bonds provided, however, that pursuant to the
applicable Rules of the Texas Natural Resource Conservation
Commission and the requirements of the order of said Commission
dated February 23, 2000, approving the issuance of the Bonds, the
sum of Five Hundred Thirty-one Thousand Two Hundred EiGhty-Three
Dollars $531,283 shall be deposited and held i~ escrow in or for
the account of the Construction Fund. Moneys on deposit in the
Construction Fund shall be used solely for the payment of the
expenses incident to the issuance of the Bonds, including
financial advisory, legal and enGineerinG fees and expenses,
administration, organization and printing expenses of the
District, and the costs of purchasinG, constructinG, acquirinG,
owninG, operatinG, repairinG, improving or extending the System.
SECTION 7.06: SURPLUS CONSTRUCTION FUNDS. After completion
of the facilities for which the Bonds are issued and the payment
of all lawful obligations, at the option of the Board, and, if
required, with the consent of any regulatory authority having
jurisdiction, the funds remaining in the Construction Fund ,
together with investment earnings thereon, may be used to provide
additional facilities which will become part of the System and/or
for any other legally authorized purpose if such use, in the
opinion of Bond Counsel, does not adversely affect the status of
the exemption of interest on the Bonds from federal income taxes.
Any moneys remaining in the Construction Fund after completion of
the entire System shall be deposited into the Bond Fund.
7-2
SECTION 7.07: INVESTMENTS; EARNINGS. Moneys deposited into
the Bond Fund, the Construction Fund, and any other fund or funds
which the District may lawfully create may be invested or
reinvested from time to time, but only in Authorized Investments.
Except to the extent otherwise required to maintain compliance
with the covenants set forth in Section 8.01 hereof, all
investments and any profits realized from or interest accruing on
such investments shall belong to the fund from which the moneys
for such investment were taken; provided, however that in the
discretion of the Board of Directors, and, if required, with the
consent of any regulatory authority having jurisdiction, the
profits realized from and interest accruing on investments made
from any fund may be transferred to the Bond Fund. If any moneys
are so invested, the District shall have the right to have sold
in the open market a sufficient amount of such investments to
meet its obligations in the event any fund does not have
sufficient uninvested moneys on hand to meet the obligations
payable out of such fund. After such sale, the moneys resulting
therefrom shall belong to the fund from which such investments
were initially taken. The District shall not be responsible to
the Holders for any loss arising out of the sale of any
investments.
(End of Article Seven)
cfi 000G~Bonds00/Ariicle07
7-3
ARTICLE EIGHT
TAX EXEMPTION
SECTION 8.01: TAX EXEMPTION. For purposes of this Section
8.01, the term "Net Proceeds" means the proceeds derived from the
sale of the Bonds, plus interest earnings thereon, less any
amounts deposited in a reasonably required reserve or replacement
fund; the term "Person" includes any individual, corporation,
partnership, unincorporated association or any other entity
capable of carrying on a trade or business; and the term "trade
or business" means, with respect to any natural person, any
activity regularly carried on for profit and, with respect to
Persons other than natural persons, means any activity other than
an activity carried on by a governmental unit.
The District covenants that it shall make such use of the
Net Proceeds of the Bonds, regulate investments thereof and take
such other and further actions as may be required by Sections 103
and 141-150 of the Internal Revenue Code of 1986 (the "Code"),
and all applicable temporary, proposed and final regulations and
procedures promulgated thereunder or promulgated under the
Internal Revenue Code of 1954, to the extent applicable to the
Code (the "Regulations"), necessary to assure that interest on
the Bonds is excludable from gross income for federal income tax
purposes. Without limiting the generality of the foregoing, the
District hereby covenants as follows:
(a) The District has not permitted and will not permit
more than ten percent (10%) of the Net Proceeds of the Bonds
to be used in the trade or business of any Person (other
than use as a member of the general public) other than a
governmental unit ("private-use proceeds").
(b) The District has not permitted and will not permit
more than five percent (5%) of the Net Proceeds of the Bonds
to be used in the trade or business of any Person, other
than a governmental unit, if such use is unrelated to the
governmental purpose of the Bonds; and further, the amount
of private-use proceeds of the Bonds in excess of five
percent (5%) of the Net Proceeds of the Bonds ("excess
private-use proceeds") will not exceed the proceeds of the
Bonds expended for the governmental purpose of the Bonds to
which such excess private-use proceeds relate;
(c) The principal of and interest on the Bonds will be
paid from ad valorem tax collections, together with
investment profits and interest earnings thereon;
(d) The District has not permitted and will not permit
an amount exceeding the lesser of (i) $5,000,000 or (ii)
8-1
five percent (5%) of the Net Proceeds of the Bonds to be
used directly or indirectly to finance loans to Persons
other than governmental units;
(e) The District will not use the proceeds of the
Bonds in a manner that would cause the Bonds or any portion
thereof to be an "arbitrage bond" within the meaning of
Section 148 of the Code or otherwise in any manner which
would cause the Bonds to violate the provisions of Section
149(d) of the Code. The District will monitor the yield on
the investment of the proceeds of the Bonds and moneys
pledged to the payment of the Bonds, other than amounts not
subject to yield restriction because of their deposit in a
reasonably required reserve or replacement fund or a bona
fide debt service fund, and will restrict the yield on such
investments to the extent required by the Code or the
Regulations. without limiting the generality of the
foregoing, the District will take appropriate steps to
restrict the yield on (i) all Net Proceeds of the Bonds on
hand on a date that is three (3) years from the date of
delivery of the Bonds and on all amounts within the Bond
Fund not disbursed within thirteen (13) months of the date
of deposit therein (using a last-in, first out accounting
conversion) and (ii) all investment earnings on hand on a
date that is three (3) years from the date of delivery of
the Bonds or one (1) year from the date such investment
proceeds are received, whichever is later, to a yield which
is not materially higher than the yield on the Bonds (in
both cases calculated in accordance with the Code and the
Regulations);
(f) The District will not cause the Bonds to be
treated as "federally guaranteed" obligations within the
meaning of Section 149(b) of the Code (as same may be
modified in any applicable rules, rulings, policies,
procedures, regulations or other official statements
promulgated or proposed by the Department of the Treasury or
the Internal Revenue Service with respect to "federally
guaranteed" obligations described in Section 149(b) of the
Code);
(g) To the extent, if applicable, required by the Code
or Regulations, the District will take all necessary steps
to comply with the requirement that "excess arbitrage
profits" earned on the investment of the gross proceeds of
the Bonds, if any, be rebated to the United States of
America, and specifically, the District will (i) maintain
records regarding the investment of the gross proceeds of
the Bonds as may be required to calculate such "excess
arbitrage profits" separately from records of amounts on
deposit in the funds and accounts of the District which are
8-2
allocable to other bond issues of the District or moneys
which do not represent gross proceeds of any bonds of the
District, (ii) calculate, not less often than required by
applicable federal law and the Regulations, the amount of
"excess arbitrage profits", if any, earned from the
investment of the gross proceeds of the Bonds and (iii) pay,
not less often than required by applicable federal law and
the Regulations, all amounts required to be rebated to the
United States of America; and the District will not
indirectly pay any amount otherwise payable to the United
States of America pursuant to the foregoing requirements to
any Person other than the United States of America by
entering into any investment arrangement with respect to the
gross proceeds of the Bonds that might result in a smaller
profit or a larger loss than would have resulted if the
arrangement had been at arm's length and had the yield on
the issue not been relevant to either party; and
(h) The District will timely file a statement with the
United States of America setting forth the information
required pursuant to Section 149(e) of the Code.
For purposes of the foregoing (a) and (b), the District
understands that the term "Net Proceeds" includes "disposition
proceeds" as defined in the Regulations and, in the case of
refunding bonds, transferred proceeds (if any) and proceeds of
the refunded bonds expended prior to the date of issuance of the
Bonds. It is the understanding of the District that the
covenants contained herein are intended to assure compliance with
the Code and any regulations or rulings promulgated by the United
States Department of the Treasury pursuant thereto. In the event
that regulations or rulings are hereafter promulgated which
modify or expand provisions of the Code, as applicable to the
Bonds, the District will not be required to comply with any
covenant contained herein to the extent that such failure to
comply, in the opinion of nationally-recognized bond counsel,
will not adversely affect the exemption from federal income
taxation of interest on the Bonds under Section 103 of the Code.
In the event that regulations or rulings are hereafter
promulgated which impose additional requirements which are
applicable to the Bonds, the District agrees to comply with the
additional requirements to the extent necessary, in the opinion
of nationally-recognized bond counsel, to preserve the exemption
from federal income taxation of interest on the Bonds under
Section 103 of the Code. In furtherance of such intention, the
District hereby authorizes and directs the President or Vice
President of the Board to execute any documents, certificates or
reports required by the Code and to make such elections, on
behalf of the District, which may be permitted by the Code as are
consistent with the purpose for the issuance of the Bonds.
Furthermore, all officers, employees and agents of the District
8-3
are authorized and directed to provide certifications of facts,
estimates and circumstances which are material to the reasonable
expectations of the District as of the date the Initial Bonds are
delivered and paid for, and any such certifications may be relied
upon by Bond Counsel, by the Holders of the Bonds, and by any
person interested in the exclusion of interest on the Bonds from
gross income for federal income tax purposes. Moreover, the
District covenants that it shall make such use of the proceeds of
the Bonds, regulate investments of proceeds thereof, and take
such other and further actions as may be required to maintain the
exclusion of interest on the Bonds from gross income for federal
income tax purposes.
SECTION 8.02. QUALIFIED TAX-EXEMPT OBLIGATIONS. The
District hereby designates the Bonds as "qualified tax-exempt
obligations" for purposes of Section 265(b) of the Code and
covenants that it shall take all actions necessary to satisfy
with respect to the Bonds the requirements of Section 265(b) (3)
of the Code. In particular, the District represents that:
(a) the aggregate amount of tax-exempt obligations
issued by the District during calendar year 2000, including
the Bonds, which have been designated as "qualified tax-
exempt obligations" under Section 265(b) (3) of the Code,
does not exceed $10,000,000; and
(b) the reasonably anticipated amount of tax-exempt
obligations which will be issued by the District during the
calendar year 2000, including the Bonds, will not exceed
$10,000,000.
For purposes of this Section 8.02, the term "tax-exempt
obligation" does not include "specified private activity bonds"
within the meaning of Section 141 of the Code, other than "quali-
fied 501(c) (3) bonds" within the meaning of Section 145 of the
Code. In addition, for purposes of this Section 8.02, the
District includes all governmental units of which the District is
a "subordinate entity" and governmental units which are
"subordinate entities" of the District, within the meaning of
Section 265(b) (3) (E) of the Code.
SECTION 8.03: ALLOCATION OF, AND LIMITATION ON,
EXPENDITURES. The District covenants to account for the
expenditure of the proceeds of the sale of the Bonds and
investment earnings to be used for the purposes for which the
Bonds are issued on its books and records by allocating proceeds
to expenditures within 18 months of the later of the date that
(1) the expenditure is made, or (2) the facilities to be
constructed and/or purchased with the proceeds of the Bonds are
completed. The foregoing notwithstanding, the District shall not
expend sale proceeds or investment earnings thereon more than 60
8-4
days after the earlier of (1) the fifth anniversary of the
delivery of the Bonds, or (2) the date the Bonds are retired.
For purposes of determining compliance with this covenant the
District and its officers, agents and representatives may rely
upon an opinion of nationally recognized bond counsel or tax
counsel to the effect that the proposed actions or omissions of
the District will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
SECTION 8.04: DISPOSITION OF FACILITIES. The District
covenants that the property constituting the facilities to be
constructed and/or purchased with the proceeds of the Bonds will
not be sold or otherwise disposed in a transaction resulting in
the receipt by the District of cash or other compensation unless
the District obtains an opinion of nationally recognized bond
counsel or tax counsel to the effect that the proposed actions of
the District will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
For purposes of the foregoing, the portion of the property
comprising personal property and disposed in the ordinary course
shall not be treated as a transaction resulting in the receipt of
cash or other compensation.
(End of Article Eight)
cfi 0006XBonds00/Arficlel 0
8-5
ARTICLE NINE
ADDITIONAL BONDS AND REFUNDING BONDS
SECTION 9.01: ADDITIONAL BONDS. The District expressly
reserves the right to issue, in one or more installments,
Additional Bonds for authorized purposes, including, without
limitation:
(a) the remaining unissued bonds which were authorized at
the election described in Section 1.05 (c) of this
Order; and
(b) such other bonds as the District may hereafter be
authorized to issue from time to time.
SECTION 9.02: REFUNDING BONDS. The District further
reserves the right to issue refunding bonds including, without
limitation, the refunding bonds which were authorized at the
election described in Section 1.05 (d) of this Order, in any
manner permitted by law to refund the Bonds, the Outstanding
Bonds, and any Additional Bonds, at or prior to their respective
Maturity Dates or on any Redemption Dates.
(End of Article Nine)
cfi 0006~Bonds00/Arficle09
9-1
ARTICLE TEN
DEFAULT PROVISIONS
SECTION 10.01: REMEDIES IN EVENT OF DEFAULT. In addition to
any other rights and remedies provided by the laws of the State
of Texas, the District covenants and agrees that in the event of
default in the payment of the principal of or interest on any of
the Bonds when due, or, in the event the District fails to make
the payments required to be made into the Bond Fund, or defaults
in the observance or performance of any other of the covenants,
conditions or obligations set forth in this Order, the Holders
shall be entitled to seek a writ of mandamus issued by a court of
competent jurisdiction compelling and requiring the District and
the officials thereof to observe and perform the covenants,
obligations or conditions prescribed in this Order. Any delay or
omission in the exercise of any right or power accruing upon any
default shall not impair any such right or power or be construed
to be a waiver of any such default or acquiescence therein, and
every such right and power may be exercised from time to time and
as often as may be deemed expedient.
SECTION 10.02: ORDER IS CONTRACT. In consideration of the
purchase and acceptance of the Bonds by the Holders, the
provisions of this Order shall be deemed to be and shall consti-
tute a contract between the District and such Holders, and the
covenants and agreements herein set forth to be performed on
behalf of the District shall be for the equal benefit, protection
and security of each of such Holders. Each of the Bonds,
regardless of the time or times of their issue, authentication,
registration, delivery or maturity, shall be of equal rank,
without preference, priority or distinction of any Bond over any
other, except as expressly provided herein.
(End of Article Ten)
cf:0006kB onds00/Ar ticle 10
10-1
ARTICLE ELEVEN
CONTINUING DISCLOSURE
SECTION 11.01: DEFINITIONS. As used in this Article, the
following terms have the meanings ascribed to them below:
The term "MSRB" means the Municipal Securities Rulemaking
Board.
The term "NRMSIR" means each person whom the SEC or its
staff has determined from time to time to be a nationally
recognized municipal securities information repository, within
the meaning of the Rule.
The term "obligated person" has the meaning assigned to such
term in the Rule.
The term "Offering" has the meaning assigned to such term in
the Rule.
The term "Rule" means SEC Rule 15c2-12, as amended from time
to time.
The term "SEC" means the United States Securities and
Exchange Commission.
The term "SID" means any person designated by the State of
Texas, or an authorized department, officer or agency thereof as,
and determined by the SEC or its staff from time to time to be, a
state information depository, within the meaning of the Rule.
SECTION 11.02: AI~NUAL REPORTS. The Bonds qualify for the
Rule 15c2-12(d) (2) exemption from Rule 15c2-12(b) (5) regarding
the District's continuing disclosure obligations because the
District does not have more than $10,000,000 in aggregate amount
of outstanding bonds, including the Bonds, and no person is
committed by contract or other arrangement with respect to
payment of the Bonds. As required by the exemption, the District
shall provide within six (6) months after the end of each Fiscal
Year ending in or after 2000, to the SID, financial information
and operating data which is customarily prepared by the District
and is publicly available being the information and data
described in Exhibit "C" attached hereto.
If the District changes its Fiscal Year, the District will
notify any SID of the change (and of the date of the new Fiscal
Year end) prior to the next date by which the District otherwise
would be required to provide financial information and operating
data pursuant to this Section 11.02. The District shall notify
any SID and either each NRI~SIR or the MSRB, in a timely manner,
11-1
of any failure of the District to provide financial information
or operating data in accordance with this Section 11.02 by the
time required herein.
SECTION 11.03: MATERIAL EVENT NOTICES. The District shall
notify any SID and either each NRMSIR or MSRB, in a timely
manner, of any of the following events with respect to the Bonds,
if such event is material within the meaning of the applicable
provisions of the federal securities laws:
(a) Principal and interest payment delinquencies;
(b) Non-payment related defaults;
(c) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(d) Unscheduled draws on credit enhancements reflecting
financial difficulties;
(e)
Substitution of credit or liquidity providers, or their
failure to perform;
(f)
Adverse tax opinions or events affecting the tax-exempt
status of the Bonds;
(g) Modifications to the rights of the Holders of the
Bonds;
(h) Calls for redemption of the Bonds;
(i) Defeasances of the Bonds;
(j) Release, substitution or sale of property securing
repayment of the Bonds; or
(k) Rating changes.
SECTION 11.04: LIMITATIONS, DISCLAIMERS AND AMENDMENTS.
(a) The District shall be obligated to observe and perform
the covenants specified in this Article for so long as, but only
for so long as, the District remains an "obligated person" with
respect to the Bonds, within the meaning of the Rule, except that
the District in any event will give notice of any call for
redemption of the Bonds or defeasance of the Bonds, in whole or
in substantial part, made in accordance with this Order or
applicable law that causes such Bonds to no longer be
outstanding.
(b) The provisions of this Article are for the sole benefit
of the Holders and beneficial owners of the Bonds, and nothing
11-2
herein, expressed or implied, shall be deemed to confer any
benefit or any legal or equitable right, remedy or claim
hereunder upon any other person. The District undertakes to
provide only the financial information, operating data financial
statements and notices which it has expressly agreed to provide
pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a
complete presentation of the District's financial results,
conditions or prospects of the District, nor does the District
undertake to update any information provided in accordance with
this Article or otherwise, except as expressly provided herein.
The District does not make any representation or warranty
concerning such information or its usefulness to a decision to
invest in or to sell Bonds at any future date.
(c) Under no circumstances shall the District be liable to
the Holder or beneficial owners of any Bond or any other person,
in contract or in tort, for damages resulting, in whole or in
part, from any breach by the District, whether negligent or
without fault on its part, of any covenant specified in this
Article, but every right and remedy of any such person, in
contract or in tort, for or on account of any such breach, shall
be limited to an action for mandamus or specific performance.
(d) No default by the District in observing or performing
its obligations under this Article shall constitute a breach of
or default under this Order for purposes of any other provision
of this Order.
(e) Nothing in this Article is intended or shall act to
disclaim, waive or otherwise limit the duties of the District
under applicable federal and state securities laws.
(f) Except as provided hereinafter, the provisions of this
Article may be amended by the District from time to time, in its
discretion, to adapt to changed circumstances that arise from a
change in law, the identity, nature, status or type of operations
of the District, or other circumstances, but only if (i) the
provisions of this Article, as so amended, would have permitted
an underwriter to purchase or sell the Bonds in a primary
offering of the Bonds in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date
of such amendment, as well as such changed circumstances, and
(ii) either (A) the Holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of
this Order that authorizes such an amendment) of the outstanding
Bonds consent to such amendment, or (B) a person that is
unaffiliated with the District (such as nationally recognized
bond counsel) determines that such amendment will not materially
impair the interests of the Holders of the Bonds.
Notwithstanding the foregoing, the District may also repeal or
11-3
amend the provisions of this Article if the SEC amends or repeals
the applicable provisions of the Rule or if any court of final
jurisdiction enters judqment that such provisions of the Rule are
invalid, but, in either case, only if and to the extent that any
such amendment or repeal by the District would not prevent an
underwriter from lawfully purchasing or selling the Bonds in the
primary offering of the Bonds. If this Article is so amended,
the District shall include with any amended financial information
or operating data next provided in accordance with this Article
an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of
financial information or operating data so provided.
(End of Article Eleven)
cl~ 0006~B onds00/Arfiele 11
11-4
ARTICLE TWELVE
MISCELLANEOUS PROVISIONS
SECTION 12.01: PAYMENT OF BONDS AND PERFORMANCE OF
OBLIGATIONS. The District covenants to pay promptly the
principal of and the interest on the Bonds as the same become due
and payable, whether at maturity or by prior redemption, in
accordance with the terms of the Bonds and this Order, and to
keep and perform faithfully all of its covenants, undertakings
and agreements contained in this Order, the Initial Bonds or in
any Bond executed, authenticated, registered and delivered
hereunder.
SECTION 12.02: ISSUANCE OF BONDS UNDER CERTAIN TERMS AND
CONDITIONS. The Bonds shall be issued upon and subject to the
further terms and conditions contained in the 1999 Order, which
shall apply with equal force to the Bonds as if set forth fully
herein; provided, however, that where the provisions of the 1999
Order are inconsistent or in conflict with the terms and
provisions of this Order, the terms and provisions of this Order
shall govern.
SECTION 12.03: DISTRICT'S SUCCESSORS AND ASSIGNS. Whenever
in this Order the District is named and referred to, such naming
or reference shall be deemed to include the District's successors
and assigns, ~nd all covenants and agreements in this Order by or
on behalf of the District, except as otherwise provided herein,
shall bind and inure to the benefit of the District's successors
and assigns, whether or not so expressed.
SECTION 12.04: NO RECOURSE AGAINST DISTRICT OFFICERS. No
recourse shall be had for the payment of the principal of or
interest on the Bonds or for any claim based thereon or on this
Order against any officer of the District or any Person executing
the Bonds.
SECTION 12.05: PAYING AGENT MAY OWN BONDS. The Paying
Agent, in its individual or any other capacity, may become the
owner or pledgee of the Bonds with the same rights it would have
if it were not Paying Agent.
SECTION 12.06: REGISTRAR. The initial Registrar in respect
of the Bonds shall be The Bank of New York, New York, New York.
The District will maintain at least one Registrar in the State of
Texas, where the Bonds may be surrendered for registration of
transfer and/or for exchange or replacement for other Bonds, and
for the purpose of maintaining the Register on behalf of the Dis-
trict. The Registrar shall at all times be a duly qualified and
comDetent trust or banking corporation or association organized
and doing business under the laws of the United States of
12-1
America, or of any State thereof, with a combined capital and
surplus of at least $25,000,000, which is subject to supervision
of or examination by federal or State banking authorities, and
which is a transfer agent duly registered with the United States
Securities and Exchange Commission. The District, by order,
resolution or other appropriate action, reserves the right and
authority to change any Registrar or to appoint additional Regis-
trars, and upon any such change or appointment, the District
covenants and agrees to promptly cause written notice thereof,
specifying the name and address of such changed or additional
Registrar, to be sent to each Holder of the Bonds by United
States mail, first class, postage prepaid.
SECTION 12.07: PAYING AGENT. The initial Paying Agent in
respect of the Bonds shall be The Bank of New York, New York, New
York. To the extent practicable, the District will maintain in
the City of Houston, Texas, at least one (1) duly qualified and
competent trust or banking corporation or association organized
and doing business under the laws of the United States of
America, or of any State thereof, where the Bonds may be
presented or surrendered for payment of principal. The District,
by order, resolution or other appropriate action, reserves the
right and authority to change any Paying Agent or to appoint
additional Paying Agents, and upon any such change or
appointment, the District covenants and agrees to promptly cause
written notice thereof, specifying the name and address of such
changed or additional Paying Agent, to be sent to each Holder of
the Bonds by United States mail, first class, postage prepaid.
SECTION 12.08: DISCHARGE BY DEPOSIT. The District may
discharge its obligation to the Holders to pay the principal of
and the interest on the Bonds and may defease the Bonds in
accordance with the provisions of then applicable law, including,
without limitation, V.T.C.A. Government Code §1207.001 et seq.,
as amended.
SECTION 12.09: LEGAL HOLIDAYS. In any case when any
Interest Payment Date, Maturity Date or Redemption Date for any
Bond is not a Business Day, then payment by the Paying Agent of
such principal, interest or redemption price need not be made on
such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on the scheduled
Interest Payment Date, Maturity Date or Redemption Date, and no
further interest shall accrue beyond such scheduled date.
SECTION 12.10: ESCHEAT LAWS. Notwithstanding any part or
provision of the Bonds or this Order to the contrary, the powers,
rights, duties, functions and responsibilities of the District,
the Paying Agent, the Registrar, the Initial Purchaser, and the
Holders shall at all times conform and be subject to the
requirements, limitations, procedures and provisions of Title 6,
12 -2
Texas Property Code, as now and hereafter amended, and in case of
any conflict or inconsistency therewith now existing or hereafter
created, the provisions of such laws shall prevail and control,
and the provisions of this Order and the Bonds shall be deemed to
be supplemented or amended to conform thereto.
SECTION 12.11: BENEFITS OF ORDER. Nothing in this Order or
in the Bonds, expressed or implied, shall give or be construed to
give any Person, other than the District, the Paying Agent, the
Registrar, Asset Guaranty Insurance Company and the Holders, any
legal or equitable right or claim under or in respect of this
Order, or under any covenant, condition or provision herein
contained, and all the covenants, conditions and provisions
contained in this Order or in the Bonds shall be for the sole
benefit of the District, the Paying Agent, the Registrar, Asset
Guaranty Insurance Company and the Holders.
SECTION 12.12: SEVERABILITY CLAUSE. If any word, phrase,
clause, sentence, paragraph, section or other part of this Order,
or the application thereof to any Person or circumstance, shall
ever be held to be invalid or unconstitutional by any court of
competent jurisdiction, the remainder of this Order and the
application of such word, phrase, clause, sentence, paragraph,
section or other part of this Order to any other Persons or
circumstances shall not be affected thereby.
SECTION 12.13: ACCOUNTING. The District will keep proper
records and accounts regarding the levy and collection of taxes,
which records and accounts will be made available to any Holder
on reasonable request. Each year while any of the Bonds are
outstanding, the District shall have an audit of its books and
accounts performed by a certified public accountant or firm of
certified public accountants, based on its Fiscal Year, and
copies of such audits will be made available to any Holder upon
request and upon payment by such Holder of the reasonable costs
to the District of providing same.
SECTION 12.14: NOTICE. Except as otherwise expressly
provided herein, any notice, authorization, request or demand
required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when deposited in the
United States mail, first class postage prepaid, and addressed to
the Person to be notified and, with respect to notice to any
Holder shall be addressed to the latest address shown on the
Register.
If required by the terms of the municipal bond insurance
policy, any notice that is required to be given to a Holder of
the Bonds or the Paying Agent pursuant to this Order shall also
be provided to the insurer and shall be sent by certified mail to
the address for notices specified in the policy.
12 -3
SECTION 12.15: FURTHER PROCEEDINGS. The President, Vice
President, Secretary and Assistant Secretary of the Board of
Directors and other appropriate officials of the District are
hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms of this Order.
SECTION 12.16: AMENDMENT OF ORDER. The District may,
without the consent of or notice to any Holder of the Bonds,
amend, change or modify this Order as may be required (a) by the
provisions hereof (including, without limitation, Article Eleven
hereof); (b) for the purpose of curing any ambiguity,
inconsistency, or formal defect or omission herein; or (c) in
connection with any other change which is not to the prejudice of
the Holders of the Bonds. Except for such amendments, changes or
modifications, the District shall not amend, change or modify
this Order in any manner without the consent of the Holders of
all the Bonds then outstanding in any manner, which would (a)
extend the time or times of payment of the principal of and
interest on the Bonds, or reduce the principal amount thereof or
the rate or interest thereon or in any way modify the terms or
sources of payment of the principal of or interest on the Bonds;
(b) create any lien ranking prior to the lien of the Bonds; (c)
give preference of any Bond over any other Bonds; or (d) extend
any waiver of default to subsequent defaults. If the insurer,
pursuant to the terms of the municipal bond insurance policy
issued with respect to the Bonds, is required to consent to any
amendment of this Order, any such amendment shall be forwarded to
the insurer.
(End of Article Twelve)
cf:0006~B onds00/Ar ticle 12
12 -4
ARTICLE THIRTEEN
SALE AND DELIVERY OF BONDS
SECTION 13.01: SALE OF BONDS. Sale of the Bonds is hereby
awarded to (the "Initial Purchaser"), for the
sum of $ , plus accrued interest on the Bonds from the
Initial Date to the date of delivery, subject to the issuance of
an approving opinion as to legality of the Initial Bonds of the
Attorney General of Texas and of Bond Counsel for the District.
It is hereby found and declared that the bid of the Initial
Purchaser produces the lowest net effective interest rate to the
District and is the best obtained for the Bonds pursuant to and
after taking public bids therefor, as required by law, and that
the net effective interest rate resulting from said bid is
% which is less than the maximum of 7.98% permitted by
the District's Official Notice of Sale.
SECTION 13.02: NOTICE OF SALE. It is hereby affirmatively
found and declared that notice of the time and place of this sale
and the details concerning the sale of the Bonds was given by
publishing an appropriate notice of sale:
(a)
at least one (1) time not less than ten (10) days
before the date of sale in a newspaper of general
circulation in the county in which the District is
located; and
(b)
at least one (1) time in a recognized financial
publication of general circulation in the State of
Texas, as approved by the Attorney General of Texas.
SECTION 13.03: APPROVAL, REGISTRATION AND DELIVERY. The
President and Secretary of the Board of Directors of the District
and Bond Counsel for the District are hereby authorized and
directed to submit the Initial Bonds, and a transcript of the
proceedings relating to the issuance of the Bonds, to the
Attorney General of Texas for approval and, following said
approval, to submit the Initial Bonds to the Comptroller of
Public Accounts of the State of Texas for registration. Upon
registration of the Initial Bonds, the Comptroller of Public
Accounts (or a deputy designated in writing to act for such
Comptroller) shall manually sign such Comptroller's registration
certificate prescribed herein to be endorsed on each Initial
Bond. After the Initial Bonds have been registered and signed by
such Comptroller, they shall be delivered to the Initial
Purchaser, but only upon receipt of the full purchase price
therefor.
(End of Article Thirteen)
cf:0006~Bonds00/Articlel 3
13-1
ARTICLE FOURTEEN
OPEN MEETING AND EFFECTIVE DATE
SECTION 14.01: OPEN MEETING. The Board of Directors
officially finds, determines and declares that this Order was
reviewed, considered and adopted at a meeting of the Board of
Directors beginning at 12:00 Noon, Houston, Texas, time on March
28,, 2000, and that a sufficient written notice of the date,
hour, place and subject of this meeting was posted at the
District's administrative office and at a place readily
accessible and convenient to the public within the District and
was timely furnished to the County Clerk of Brazoria County,
Texas, for posting on a bulletin board located at a place
convenient to the public in the Brazoria County Courthouse for
the time prescribed by law preceding this meeting, as required by
the Open Meetings Law, Chapter 551, Texas Government Code, as
amended, and Section 49.063 of the Texas Water Code, as amended,
and that this meeting has been open to the public, as required by
law, at all times during which this Order and the subject matter
hereof has been discussed, considered and acted upon. The Board
of Directors further ratifies, approves and confirms such written
notice and the contents and posting thereof.
SECTION 14.02:
take effect and be
passage.
EFFECTIVE DATE OF ORDER. This Order shall
in full force and effect upon and after its
PASSED AND ADOPTED this 28th day of March, 2000.
ATTEST:
President, Board of Directors
Brazoria County Municipal
Utility District No. 6,
of Brazoria County, Texas
Secretary, Board of Directors
Brazoria County Municipal
Utility District No. 6,
of Brazoria County, Texas
(SEAL)
c f:OOO6~B ondsOO/Arficle 14
(End of Article Fourteen)
14-1
REGISTERED
NUMBER
IR-
EXHIBIT "A"
(FORM OF INITIAL BOND)
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZORIA
REGISTERED
AMOUNT
$
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO.
OF BRAZORIA COUNTY, TEXAS
UNLIMITED TAX BOND
SERIES 2000
Interest Rate: Maturity Date:
September 1,
Initial Date:
April 1, 2000
CUSIP NO.:
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 6, of
Brazoria County, Texas, a conservation and reclamation district,
a body politic and corporate and a governmental agency and
political subdivision created under the Constitution and laws of
the State of Texas, situated in Brazoria County, Texas (herein
the "District"), FOR VALUE RECEIVED hereby acknowledges itself
indebted to and PROMISES TO PAY TO
or registered assigns, on the due date specified above, the
principal sum of
DOLLARS
(or so much thereof as shall not have been paid or deemed to have
been paid uDon prior redemption), and to pay interest thereon
from the later of the initial date specified above or the most
recent Interest Payment Date (hereinafter defined) to which
interest has been paid or duly provided for, at the per annum
rate of interest specified above, computed on the basis of a 360-
day year of twelve 30-day months. Interest hereon is payable
semiannually on March 1 and September 1 (individually, an
"Interest Payment Date") of each year, commencing on September 1,
2000, until the maturity or redemption date of this Bond, as
provided in the order of the Board of Directors of the District
duly adopted on March 28, 2000 (the "Bond Order"), authorizing
the issuance of this Bond, to the person in whose name this Bond
is registered at the close of business on the 15th day (whether
or not a business day) of the calendar month next preceding such
Interest Payment Date (the "Record Date"). Principal of this
Bond due at maturity or upon prior redemption is payable in any
coin or currency of the United States of America which, on the
date of payment, is legal tender for the payment of debts due the
United States of America, upon presentation and surrender of this
Bond at the designated corporate trust office of the agency
selected by the District for such purpose (the "Paying Agent").
Interest on this Bond is payable by mailing of a check of the
Paying Agent for such interest payable to, or upon written order
of, the registered owner hereof at the address shown on the
registry books maintained on behalf of the District by a trust or
banking corporation or association selected by the District for
such purpose (the "Registrar") at the expense of the registered
owner, or by such other customary banking arrangements as may be
acceptable to the Paying Agent and the registered owner hereof,
at the risk and expense of the registered owner hereof. The
initial Registrar and Paying Agent shall be The Bank of New York,
New York, New York.
THIS BOND IS ONE OF AN AUTHORIZED ISSUE OF BONDS,
aggregating Three Million Seven Hundred Forty Thousand and No/100
Dollars ($3,740,000) (the "Bonds"), issued for the purpose or
purposes of purchasing, constructing, acquiring, owning,
operating, repairing, improving, or extending a waterworks
system, a sanitary sewer system, and a drainage and storm sewer
system for the District, including, but not limited to, all
additions to such systems and all works, improvements,
facilities, plants, equipment, appliances, interests in property,
contract rights needed therefor and administrative facilities
needed in connection therewith, by authority of an election held
within and for the District on May 3, 1997, and pursuant to the
Bond Order and under and in strict conformity with the Constitu-
tion and laws of the State of Texas.
THE TRANSFER OF THIS BOND may be accomplished by due
execution of the provisions for assignment hereon and is
registerable at the designated office of the Registrar by the
registered owner hereof, or by his duly authorized
representative, but only in the manner and subject to the
limitations provided in the Bond Order, and only upon surrender
of this Bond. Upon any such registration of transfer, one or
more exchange Bonds, in authorized denominations, for a like
interest rate and aggregate principal amount, shall be
authenticated by the Registrar and registered and delivered or
sent by United States mail, first class, postage prepaid, to the
transferee in exchange therefor. This Bond, with or without
others of like form and series, may in like manner be exchanged
for one or more registered bonds of other authorized
denominations at the same interest rate and in the same aggregate
principal amount. No service charge shall be made for any such
transfer or exchange, but the District and/or the Registrar may
impose a charge sufficient to defray any tax or governmental
charge in connection therewith.
THE DISTRICT RESERVES THE RIGHT, AT ITS OPTION, TO REDEEM
the bonds of this issue maturing on or after September 1, 2011,
in whole or, from time to time, in part, prior to their scheduled
maturities, on September 1, 2010, or on any Interest Payment Date
thereafter, at a price equal to the principal amount thereof to
be redeemed, plus accrued interest thereon to the date fixed for
redemption. In the event that a Bond subject to redemption is in
a denomination larger than $5,000, a portion of such bond may be
redeemed, but only in a principal amount equal to $5,000, or an
integral multiple thereof, and only upon the delivery of one or
more exchange bonds of the same interest rate and in aggregate
principal amount equal to the unredeemed portion of the bond so
redeemed in part.
NOTICE OF THE EXERCISE OF THE RESERVED RIGHT OF REDEMPTION
will be given by mailing same to the registered owners of the
bonds to be redeemed, in whole or in part, at least thirty (30)
days prior to the date fixed for redemption. By the date fixed
for redemption, due provision will have been made with the Paying
Agent for payment of the principal amount of the bonds so called
for redemption, plus accrued interest thereon to the date fixed
for redemption. When bonds have been called for redemption, in
whole or in part, and due provision has been made to redeem same,
such bonds, or the portions thereof so called for redemption,
shall no longer be regarded as outstanding, except for the
purpose of receiving payment from the funds provided for
redemption, and the rights of the owners to collect interest
which would otherwise accrue after the redemption date on the
principal of the bonds, or the portions thereof so called for
redemption, will be terminated.
NEITHER THE DISTRICT NOR THE REGISTRAR SHALL BE REQUIRED to
transfer or exchange any bond on any date subsequent to a Record
Date and prior to the next succeeding Interest Payment Date, or
during any period beginning fifteen (15) calendar days prior to,
and ending on the date of, the mailing of any notice of
redemption prior to maturity; nor shall the District or the
Registrar be required to transfer or exchange any bond so
selected for redemption, in whole or in part, when such
redemption is scheduled to occur within thirty (30) calendar days
thereafter.
PRIOR TO DUE PRESENTATION OF THIS BOND FOR REGISTRATION OF
TRANSFER, the District, the Paying Agent and the Registrar may
deem and treat the registered owner hereof as the absolute owner
of this Bond (whether or not this Bond shall be overdue and
notwithstanding any notation of ownership or other writing
hereon) for the purpose of receiving payment hereof, or on
account hereof, and interest due hereon, and for all other
purposes, and neither the District, the Paying Agent nor the
Registrar shall be bound or affected by any notice to the
contrary.
THE DISTRICT HAS DESIGNATED THE BONDS AS "qualified tax-
exempt obligations" pursuant to the provisions of Section 265(b)
of the Internal Revenue Code of 1986 in effect on the date of the
issuance of the Bonds.
THIS BOND, AND THE OTHER BONDS OF THE SERIES OF WHICH IT IS
A PART, are payable from the proceeds of an ad valorem tax levied
without legal limitation as to rate or amount upon all taxable
property within the District. Reference is hereby made to the
Bond Order for a complete description of: the terms, covenants
and provisions pursuant to which this Bond and said series of
bonds are secured and made payable; the respective rights
thereunder of the registered owners of the bonds and of the
District, the Paying Agent and the Registrar; and the terms upon
which the bonds are, and are to be, registered and delivered. By
acceptance of this Bond, the owner hereof expressly assents to
all of the provisions of the Bond Order.
Asset Guaranty Insurance Company ("AGIC"), a New York
corporation, has issued its Policy (the "Policy") insuring the
payment of principal of and interest on this Bond on the due
date, as described in the Policy. Reference is made to the
Policy for the complete provisions thereof. All payments
required to be made under the Policy shall be made in accordance
with the provisions thereof. The owner of this Bond acknowledges
and consents to the subrogation and transfer rights of AGIC as
more fully set forth in the Policy.
IT IS HEREBY CERTIFIED, RECITED AND REPRESENTED that the
issuance of this Bond, and the series of bonds of which it is a
part, is duly authorized by law; that all acts, conditions, and
things required to exist and to be done precedent to and in the
issuance of this Bond and said series of bonds to render the same
lawful and valid have been properly done and performed and have
happened in regular and due time, form and manner, as required by
law; that due provision has been made for the payment of the
interest on and the principal of this Bond and the series of
bonds of which it is a part by the levy of a direct, annual ad
valorem tax upon all taxable property within the District
sufficient for said purposes; and that the issuance of this Bond
and said series of bonds does not exceed any constitutional or
statutory limitation.
UNLESS AND UNTIL A CERTIFICATE OF REGISTRATION of the
Comptroller of Public Accounts of the State of Texas (or his duly
authorized deputy) has been manually executed as provided in the
Bond Order, this Bond shall not be entitled to the benefit and
security of the Bond Order nor be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, BRAZORIA COUNTY MUNICIPAL UTILITY
DISTRICT NO. 6, of Brazoria County, Texas, has caused this Bond
to be executed by the manual or facsimile signatures of the
President and Secretary of its Board of Directors and its
official seal to be impressed or placed in facsimile hereon.
BRAZORIA COUNTY MUNICIPAL
UTILITY DISTRICT NO. 6, of
Brazoria County, Texas
ATTEST:
By:
President, Board of Directors
By:
Secretary, Board of Directors
(SEAL)
OFFICE OF THE COMPTROLLER
THE STATE OF TEXAS
REGISTER NO.
I HEREBY CERTIFY that there is on file and of record in my
office a certificate of the Attorney General of the State of
Texas to the effect that this bond has been examined by him as
required by law, that he finds that it has been issued in
conformity with the Constitution and laws of the State of Texas,
and it is a valid and binding obligation of Brazoria County
Municipal Utility District No. 6, of Brazoria County, Texas, and
said bond has this day been registered by me.
WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
ASSIGNMENT
For value received, the undersigned hereby sells, assigns
and transfers unto (print or typewrite name, address and zip code
of transferee):
(Social Security or other identifying number):
the within Bond and does hereby irrevocably constitute and
appoint as attorney to
transfer said Bond on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:
The signature of the Registered
Owner appearing on this Assign-
ment is hereby verified as true
and genuine and is guaranteed
by:
(Bank, Trust Company, or
Brokerage Firm)
By:
(Authorized Representative)
Registered Owner
NOTICE: The signature on this
Assignment must correspond in
every particular with the
name of the Registered Owner
as it appears on the face of
the within Bond.
cE 0006XBonds00/B ondOrder ExMbit A
EXHIBIT "B"
(FORM OF PRINTED BOND)
REGISTERED
NUMBER
R-
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZORIA
REGISTERED
AMOUNT
$
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO.
OF BRAZORIA COUNTY, TEXAS
UNLIMITED TAX BOND
SERIES 2000
Interest Rate: Maturity Date: Initial Date:
September 1, April 1, 20000
CUSIP NO.:
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 6, of
Brazoria County, Texas, a conservation and reclamation district,
a body politic and corporate and a governmental agency and
political subdivision created under the Constitution and laws of
the State of Texas, situated in Brazoria County, Texas (herein
the "District"), FOR VALUE RECEIVED hereby acknowledges itself
indebted to and PROMISES TO PAY TO
or registered assigns, on the due date specified above, the
principal sum of
DOLLARS
(or so much thereof as shall not have been paid or deemed to have
been paid upon prior redemption), and to pay interest thereon
from the later of the initial date specified above or the most
recent Interest Payment Date (hereinafter defined) to which
interest has been paid or duly provided for, at the per annum
rate of interest specified above, computed on the basis of a
360-day year of twelve 30-day months. Interest hereon is payable
semiannually on March 1 and September 1 (individually, an
"Interest Payment Date") of each year, commencing on September 1,
2000, until the maturity or redemption date of this Bond, as
provided in the order of the Board of Directors of the District
duly adopted on March 28, 2000 (the "Bond Order"), authorizing
the issuance of this Bond, to the person in whose name this Bond
is registered at the close of business on the 15th day (whether
or not a business day) of the calendar month next preceding such
Interest Payment Date (the "Record Date"). Principal of this
Bond due at maturity or upon prior redemption is payable in any
coin or currency of the United States of America which, on the
date of payment, is legal tender for the payment of debts due the
United States of America, upon presentation and surrender of this
Bond at the designated corporate trust office of the agency
selected by the District for such purpose (the "Paying Agent").
Interest on this Bond is payable, at the option of the District,
by mailing of a check of the Paying Agent for such interest
payable to, or upon written order of, the registered owner hereof
at the address shown on the registry books maintained on behalf
of the District by a trust or banking corporation or association
selected by the District for such purpose (the "Registrar"), or
by such other customary banking arrangements as may be acceptable
to the Paying Agent and the registered owner hereof, at the risk
and expense of the registered owner hereof. The initial
Registrar and Paying Agent shall be The Bank of New York, New
York, New York.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE
THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
THIS BOND IS ONE OF AM AUTHORIZED ISSUE OF BONDS,
aggregating Three Million Seven Hundred Forty Thousand and No/100
Dollars ($3,740,000) (the "Bonds"), issued for the purpose or
purposes of purchasing, constructing, acquiring, owning,
operating, repairing, improving, or extending a waterworks
system, a sanitary sewer system, and a drainage and storm sewer
system for the District, including, but not limited to all
additions to such systems and all works, improvements,
facilities, plants, equipment, appliances, interests in property,
contract rights needed therefor and administrative facilities
needed in connection therewith, by authority of an election held
within and for the District on May 3, 1997, and pursuant to the
Bond Order and under and in strict conformity with the Constitu-
tion and laws of the State of Texas.
THE TRANSFER OF THIS BOND may be accomplished by due
execution of the provisions for assignment hereon and is
registerable at the designated office of the Registrar by the
registered owner hereof, or by his duly authorized
representative, but only in the manner and subject to the
limitations provided in the Bond Order, and only upon surrender
of this Bond. Upon any such registration of transfer, one or
more exchange Bonds, in authorized denominations, for a like
interest rate and aggregate principal amount, shall be
authenticated by the Registrar and registered and delivered or
sent by United States mail, first class, postage prepaid, to the
transferee in exchange therefor. Th~s Bond, with or w~thout
others of like form and series, may in like manner be exchanged
for one or more registered bonds of other authorized
denominations at the same interest rate and in the same aggregate
principal amount. No service charge shall be made for any such
transfer or exchange, but the District and/or the Registrar may
impose a charge sufficient to defray any tax or governmental
charge in connection therewith.
THE DISTRICT RESERVES THE RIGHT, AT ITS OPTION, TO REDEEM
the bonds of this issue maturing on or after September 1, 2011,
in whole or, from time to time, in part, prior to their scheduled
maturities, on September 1, 2010, or on any Interest Payment Date
thereafter, at a price equal to the principal amount thereof to
be redeemed, plus accrued interest thereon to the date fixed for
redemption. In the event that a bond subject to redemption is in
a denomination larger than $5,000, a portion of such bond may be
redeemed, but only in a principal amount equal to $5,000, or an
integral multiple thereof, and only upon the delivery of one or
more exchange bonds of the same interest rate and in aggregate
principal amount equal to the unredeemed portion of the bond so
redeemed in part.
NOTICE OF THE EXERCISE OF THE RESERVED RIGHT OF REDEMPTION
will be given by mailing same to the registered owners of the
bonds to be redeemed, in whole or in part, at least thirty (30)
days prior to the date fixed for redemption. By the date fixed
for redemption, due provision will have been made with the Paying
Agent for payment of the principal amount of the bonds so called
for redemption, plus accrued interest thereon to the date fixed
for redemption. When bonds have been called for redemption, in
whole or in part, and due provision has been made to redeem same,
such bonds, or the portions thereof so called for redemption,
shall no longer be regarded as outstanding, except for the
purpose of receiving payment from the funds provided for
redemption, and the rights of the owners to collect interest
which would otherwise accrue after the redemption date on the
principal of the bonds, or the portions thereof so called for
redemption, will be terminated.
NEITHER THE DISTRICT NOR THE REGISTRAR SHALL BE REQUIRED to
transfer or exchange any bond on any date subsequent to a Record
Date or during any period beginning fifteen (15) calendar days
prior to, and ending on the date of, the mailing of any notice of
redemption prior to maturity; nor shall the District or the
Registrar be required to transfer or exchange any bond so
selected for redemption, in whole or in part, when such
redemption is scheduled to occur within thirty (30) calendar days
thereafter.
PRIOR TO DUE PRESENTATION OF THIS BOND FOR REGISTRATION OF
TRANSFER, the District, the Paying Agent and the Registrar may
deem and treat the registered owner hereof as the absolute owner
of this Bond (whether or not this Bond shall be overdue and
notwithstanding any notation of ownership or other writing
hereon) for the purpose of receiving payment hereof, or on
account hereof, and interest due hereon, and for all other
purposes, and neither the District, the Paying Agent nor the
Registrar shall be bound or affected by any notice to the
contrary.
THE DISTRICT HAS DESIGNATED THE BONDS AS "qualified
tax-exempt obligations" pursuant to the provisions of Section
265(b) of the Internal Revenue Code of 1986 in effect on the date
of the issuance of the Bonds.
THIS BOND, AND THE OTHER BONDS OF THE SERIES OF WHICH IT IS
A PART, are payable from the proceeds of an ad valorem tax levied
without legal limitation as to rate or amount upon all taxable
property within the District. Reference is hereby made to the
Bond Order for a complete description of: the terms, covenants
and provisions pursuant to which this Bond and said series of
bonds are secured and made payable; the respective rights
thereunder of the registered owners of the bonds and of the
District, the Paying Agent and the Registrar; and the terms upon
which the bonds are, and are to be, registered and delivered. By
acceptance of this Bond, the owner hereof expressly assents to
all of the provisions of the Bond Order.
Asset Guaranty Insurance Company ("AGIC"), a New York
corporation, has issued its Policy (the "Policy") insuring the
payment of principal of and interest on this Bond on the due
date, as described in the Policy. Reference is made to the
Policy for the complete provisions thereof. All payments
required to be made under the Policy shall be made in accordance
with the provisions thereof. The owner of this Bond acknowledges
and consents to the subrogation and transfer rights of AGIC as
more fully set forth in the Policy.
IT IS HEREBY CERTIFIED, RECITED AND REPRESENTED that the
issuance of this Bond, and the series of bonds of which it is a
part, is duly authorized by law; that all acts, conditions, and
things required to exist and to be done precedent to and in the
issuance of this Bond and said series of bonds to render the same
lawful and valid have been properly done and performed and have
happened in regular and due time, form and manner, as required by
law; that due provision has been made for the payment of the
interest on and the principal of this Bond and the series of
bonds of which it is a part by the levy of a direct, annual ad
valorem tax upon all taxable property within the District
sufficient for said purposes; and that the issuance of this Bond
and said series of bonds does not exceed any constitutional or
statutory limitation.
UNLESS AIqD UNTIL A CERTIFICATE OF REGISTRATION of the
Registrar has been manually executed by an authorized
representative of the Registrar, as provided in the Bond Order,
this Bond shall not be entitled to the benefit and security of
the Bond Order nor be valid or obligatory for any purpose.
IN WITNESS WHEREOF, BRAZORIA COUNTY MUNICIPAL UTILITY
DISTRICT NO. 6, of Brazoria County, Texas, has caused this Bond
to be executed by the manual or facsimile signatures of the
President and Secretary of its Board of Directors and its
official seal to be impressed or placed in facsimile hereon.
BRAZORIA COUNTY MUNICIPAL
UTILITY DISTRICT NO. 6, of
Brazoria County, Texas
ATTEST:
By:
President, Board of Directors
By:
Secretary, Board of Directors
(SEAL)
CERTIFICATE OF REGISTRAR
This is to certify that this Bond is one of the bonds issued
under the provisions of the within-mentioned Bond Order, and it
is hereby further certified that this Bond has been authorized
and delivered in conversion and exchange for, or in replacement
of, a bond, bonds or portions thereof (or one or more prior
conversion, exchange or replacement bonds) originally issued by
Brazoria County Municipal Utility District No. 6, of Brazoria
County, Texas, approved by the Attorney General of Texas, and
initially registered by the Comptroller of Public Accounts of the
State of Texas.
THE BANK OF NEW YORK,
NEW YORK, NEW YORK
Registrar
Dated: By:
Authorized Signatory
ASSIGNMENT
For value received, the undersigned hereby sells, assigns
and transfers unto (print or typewrite name, address and zip code
of transferee):
(Social Security or other identifying number): the
within Bond and does hereby irrevocably constitute and appoint
as attorney to transfer said
Bond on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:
The signature of the Registered
Owner appearing on this Assign-
ment is hereby verified as true
and genuine and is guaranteed
by:
(Bank, Trust Company, or
Brokerage Firm)
By:
(Authorized Representative)
Registered Owner
NOTICE: The signature on this
Assignment must correspond in
every particular with the name
of the Registered Owner as it
appears on the face of the
within Bond.
cf:0006~B onds/BondOrder ExhibitB
EXHIBIT "C"
CONTINUING DISCLOSURE
The information to be updated includes all quantitative
financial information and operating data with respect to the
District of the general type included in the Official Statement
under the sections entitled: "APPENDIX A".
The Municipal Advisory Council of Texas ("MAC"), has been
designated by the State of Texas as a SID and has been recognized
by the SEC as a qualified SID. The current mailing address and
telephone number of MAC is: P.O. Box 2177, Austin, Texas 78768-
2177, (512) 476-6947.
Any financial statements of the District will be prepared in
accordance with generally accepted accounting principles for
local government units as prescribed by the Governmental
Accounting Standards Board or such other accounting principles as
the District may be required to employ from time to time pursuant
to State law or regulation.
c f:0006~B ond00/BondO rderExhibitC