R98-02 01-12-98RESOLUTION NO. R98-2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, APPROVING THE BOND ORDER OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 1 AUTHORIZING THE ISSUANCE OF
$2,700,000 WATERWORKS AND SEWER SYSTEM COMBINATION
UNLIMITED TAX AND REVENUE BONDS, SERIES 1998.
WHEREAS, the Brazoria County Municipal Utility District No. 1 (the "District")
is located within the extraterritorial jurisdiction of the City of Pearland, Texas (the
"City"); and
WHEREAS, by Resolution No. R80-5, dated January 28, 1980, the City
consented to the creation of the District, and placed certain conditions on the issuance
of bonds by the District, including the approval by the City Council of the District's
resolution authorizing the issuance of such bonds; and
WHEREAS, the City Council has considered such a bond resolution in
connection with the issuance of the District's proposed 92,700,000 Waterworks and
Sewer System Combination Unlimited Tax and Revenue Bonds, Series 1998 and has
found it to be acceptable; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. All of the matters and facts set forth in the preamble hereof are true
and correct.
Section 2. The resolution of the board of directors of Brazoria County Municipal
Utility District No. 1, attached hereto and made a part hereof as Exhibit "A",
authorizing the issuance of its 92,700,000 Waterworks and Sewer System
Combination Unlimited Tax and Revenue Bonds, Series 1998, is hereby approved.
RESOLUTION NO. R98-2
Section 3. The Mayor of the City of Pearland is hereby authorized to execute
such letters or other documents required to be provided to the Attorney General of
Texas in connection with the issuance of such bonds by the District.
Section 4. This Resolution shall take effect immediately from and after its
passage in accordance with the provisions of the Charter of the City of Pearland and
it is accordingly so resolved.
PASSED, APPROVED and ADOPTED this the
A.D., 1998.
12thdayof January
TOM REID
MAYOR
ATTEST:
l'
APP~'~/ED AS TO FORM:
CITY A-TORNEY
2
PAUL A. PHILBIN & ASSOC., P.C.
PAUL A PHILBIN
Attorneys at Law
s
t 1
6363 Woodway • Ste. 725 • Houston, Texas 77057-1792 ��� 1 79��
(713) 783-4120 • FAX(713)783-8812
CITY ATI I O,-IN Y
March 6, 1998
Ms. Amy McCullough, City Attorney
City of Pearland
P. O. Box 145
Pearland, TX 77588
Dear Ms. McCullough
RE: Brazoria County Municipal Utility District No. 1
$2,700, 000 Waterworks and Sewer System Combination
Unlimited Tax and Revenue Bonds, Series 1998
In connection with the subject Bonds, enclosed is a copy of
the final Bond Order as submitted to the Attorney General.
The Bond Order is an attachment to Mayor Reid's letter
approving the Bonds.
We appreciate your assistance in this matter and should you
have any questions, please feel free to call.
Very truly yours,
PcuPrJcI\r )
Paul A. Philbin
Attorney for District
vjw
enc.
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EXHIBIT
BOND ORDER a?t,m
THE STATE OF TEXAS
COUNTY OF BRAZORIA
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 1
ORDER AUTHORIZING THE ISSUANCE OF $2,700,000
WATERWORKS AND SEWER SYSTEM COMBINATION UNLIMITED
TAX AND REVENUE BONDS, SERIES 1998; PRESCRIBING THE
TERMS AND PROVISIONS THEREOF; MAKING PROVISION FOR
THE PAYMENT OF THE INTEREST THEREON AND THE PRINCIPAL
THEREOF; AUTHORIZING THE SALE THEREOF; AND CONTAINING
OTHER PROVISIONS RELATING TO THE SUBJECT
BE IT ORDERED BY THE BOARD OF DIRECTORS OF BRAZORIA COUNTY
MUNICIPAL UTILITY DISTRICT NO. 1:
WHEREAS, Brazoria County Municipal Utility District
No. 1 situated in Brazoria County, Texas (hereinafter referred
to as "District" or "Issuer") , is a conservation and
reclamation district created pursuant to the provisions of
Chapter 54, Texas Water Code, as amended (the "Water Code" or
the "Act") ; and the provisions of Article XVI, Section 59, of
the Texas Constitution.
WHEREAS, it is hereby found, determined, and
declared that:
(a) the matters and facts set forth in the preamble of
this Order are true and correct;
(b) the creation of the District was confirmed at an
election held on November 3, 1981;
(c) at elections held on November 3, 1981 ($10, 000, 000)
and September 8, 1984 ($12,700, 000) , the District
was authorized to issue the bonds of the District
in the total maximum amount of $22,700, 000 for the
purpose or purposes of, inter alia, purchasing and
constructing plants, facilities, and improvements
for waterworks and sewer systems, including
drainage facilities, as well as all expenses in any
manner incidental thereto in accordance with the
Engineer's Report, and paying such expenses as are
incidental to the organization, administration, and
financing of the District, which under applicable
law may properly be paid from the proceeds of such
bonds and to provide for the payment of principal
of and interest on such bonds by the levy and
collection of a sufficient tax upon all taxable
property within the District and further by a
pledge of all income or increment which may grow
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out of the ownership and operation of the
District's improvements or facilities, less such
portion of said revenue income as may be required
to provide for the administration, efficient
operation, and adequate maintenance of said service
facilities as authorized by the Constitution and
laws of the State of Texas including particularly
(but not by way of limitation) Chapters 49 and 54
of the Texas Water Code, together with all
amendments and additions thereto;
(d) the elections described in Paragraphs (b) and (c)
hereof were called and held under and in strict
conformity with the Constitution and laws of the
State of Texas, and of the United States of
America, and the Board of Directors has heretofore
officially declared the results of said elections
and declared that the District was legally created
and authorized to issue the bonds described in
Paragraph (c) ;
(e) The District has heretofore issued a first
installment of Bonds, Series 1985 in the amount of
$4,200, 000 and a second installment of Bonds,
Series 1993 in the amount of $2, 240, 000 and a third
installment of Bonds, Series 1996 in the amount of
$1,500,000. The District also issued and Unlimited
Tax Refunding Bonds, Series 1993 in the amount of
$4,235, 000. The Series 1993 Refunding Bonds
advance refunded and defeased $3 ,410, 000 of the
Series 1985 Bonds. These Bonds are the fourth
installment of a total of $22,700,000 bonds
authorized at elections held for that purpose
within the District, of which $11,235,000 in bonds
will remain authorized but unissued after the sale
of the Bonds;
(f) the Bonds authorized by this Order should be issued
to (i) finance the District's portion of the cost
of acquisition or construction of water
distribution, wastewater collection and storm
drainage facilities to serve (a) Southwyck Section
Three, Phase 2 (88-single-family residential lots) ,
(b) Southwyck Section 3, Phase 3 (106 single-family
residential lots) , (c) Southwyck Section 3, Phase 4
(96 single-family residential lots) , (d) Southwyck
Section 8, Phase 2 (78 single-family residential
lots) ; and (e) Southwyck Section 8, Phase 3 (98
single-family residential lots) , plus District's
pro rata share of (f) Water Plant No. 3 elevated
storage tank; (g) repainting of Water Plant No. 1;
(h) modifications of the detention pond control
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structures; and (i) Mary's Creek channel
improvements for 1997) and to (j ) pay certain
engineering fees related to the aforementioned
facilities and projects; (k) pay interest on funds
advanced on the District's behalf by developers of
land located within the District; and (1) pay for
the administrative and issuance costs, legal fees,
fiscal agent's fees, a fee to the Texas Natural
Resource Conservation Commission ("TNRCC") , and
costs associated with condemnation and acquisition
of off-site drainage, and certain financing costs
related to the issuance of the Bonds.
(g) the Board of Directors reserves the right to issue
the remaining $11,235, 000 bonds which were voted on
November 3, 1981 and September 8, 1984 in one or
more series at a future date or dates when, in the
Board's judgment, such amounts are required for the
authorized purposes.
(h) The TNRCC, acting through its Executive Director,
has approved the issuance of the Bonds described
herein by Order issued on
WHEREAS, it is in the best interest of the District
to issue the bonds described in this Order to perform and
construct the project approved by the TNRCC in its order
approving the bonds and to reserve the right to issue
remaining unissued balance of the bonds authorized at the
aforementioned election in one or more series at a future date
or dates, when in the opinion of the District, the proceeds
from the sale of the bonds are needed for any of the purposes
for which they were authorized.
IT IS THEREFORE ORDERED BY THE BOARD OF DIRECTORS OF
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 1:
SECTION ONE
SECTION 1.1: Definitions. When used in this Order
and in any orders amendatory, or supplemental hereto, the
terms listed below shall have the meanings specified below,
unless it is otherwise expressly provided or unless the
context otherwise requires:
(1) Board of Directors. The terms "Board of Directors"
or "Board" shall mean the governing body of the District.
(2) Bondholders. The term "Bondholders" shall mean the
holder of a Bond or Bonds.
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(3) Additional Bonds. The term "Additional Bonds" shall
mean the additional bonds which the District expressly
reserves the right to issue in this Order.
(4) Bonds. The term "Bond" or "Bonds" shall mean any
obligation of the District authorized and issued pursuant to
this Order, whether initially delivered or issued in exchange
for, upon transfer of, or in lieu of any Bond previously
issued.
(5) Bond Fund. The terms "Bond Fund" or "Debt Service
Fund" shall mean the District's debt service fund which is
created and established in this' Order and defined in Section
6.2.
(6) Bond Register. The term "Bond Register" is a
register required to be kept by the paying agent pursuant to
Section 2 .5.
(7) City. The term "City" shall mean the City of
Pearland, Texas, or any other municipal corporation succeeding
to the powers, rights, privileges, and functions of the City,
and when appropriate, the City Council of the City.
(8) Construction Fund. The term "Construction Fund"
shall mean the District's construction fund which is created
and established in this Order and defined in Section 6.4.
(9) Code. The term "Code" shall mean the Internal
Revenue Code of 1986, as amended by any amendments thereto
enacted prior to the Issue Date.
(10) Depository. The term "Depository" shall mean the
bank or banks which the District may select from time to time
as its depository or depositories.
(11) Governing Body. The term "Governing Body" shall
mean the board of directors of the Issuer.
(12) Governmental Securities. The term "Governmental
Securities" shall mean (1) direct obligations of, or
obligations the timely payment of the principal of and
interest on which are fully and unconditionally guaranteed by,
the United States of America- and (2) to the extent allowed by
law at the time of investment, obligations issued by or on
behalf of any state or political subdivision or municipality
thereof which, at the time of deposit as defined herein, have
been assigned ratings in the highest rating category of both
Moody's Investors Service :;; Inc. and Standard & Poor's
Corporation, or any successor to the bond rating operations of
either such corporation, but in the case of both Clauses (1)
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and (2) only if such obligations may not be called for
redemption prior to maturity.
(13) Gross Proceeds. The term "Gross Proceeds" shall
mean all amounts received by the Issuer from the sale of the
Bonds, all amounts received as a result of the investment of
such amounts, and all amounts held for the credit of the Bond
Fund or reasonably expected to be used to pay debt service on
the Bonds.
(14) Holder. The term, when used with respect to any
Bond, shall mean the Person in whose name such Bond is
registered in the Bond Register.
(15) Interest Payment Date. The term "Interest Payment
Date" shall mean the Stated Maturity of an installment of
interest on the Bonds.
(16) Investment. The term "Investment" shall mean
(a) a share of stock in a corporation or a right to
subscribe for or to receive such a share,
(b) any indebtedness or evidence thereof, including
without limitation United States Treasury bonds, notes, and
bills (whether or not of the State and Local Government
Series) and bank deposits (whether or not certificated or
interest bearing or made pursuant to a depository contract) ,
(c) any annuity contract, or any other deferred
payment contract acquired to fund an obligation of the Issuer,
or
(d) any other investment-type property, but
excluding from the foregoing, Tax-Exempt Obligations.
(17) Issue Date. The term "Issue Date" shall mean the
date on which the Bonds are first authenticated and delivered
to the initial purchasers thereof against payment therefor.
(18) Issuer. The term "Issuer" shall mean Brazoria
County Municipal Utility District' No. 1, a conservation and
reclamation district organized, created, and established
pursuant to Article XVI, Section 59 of the Constitution of the
State of Texas within Brazoria County, Texas.
(19) Issuer Request. The term "Issuer Request" shall
mean a request signed in the name of the Issuer by the
President, Vice, or Treasurer and by the Secretary or a Deputy
or Acting Secretary of the Governing Body and delivered to the
Paying Agent.
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(20) Issue Price. The term "Issue Price" of a Bond of
any Stated Maturity shall mean the offering price to the
public (excluding bond houses, brokers, and similar Persons
acting in the capacity of underwriters or wholesalers) at or
below which a substantial amount of Bonds of such Stated
Maturity are first sold to such public, including accrued
interest to the Issue Date, if any.
(21) Maturity. The term "Maturity" when used with
respect to any Bond shall mean the date on which the principal
of such Bond becomes due and payable as therein provided,
whether at the Stated Maturity or by call for redemption or
otherwise.
(22) Net Revenues. The term "Net Revenues" shall mean
all income or increment which may grow out of the ownership
and operation of the District's plants, facilities, and
improvements (as same are purchased, constructed, or otherwise
acquired) (such plants, facilities, and improvements herein
defined as the "System") , being the gross revenue income less
such portion for the administration, efficient operation, and
adequate maintenance of the District's plants, improvements,
and facilities.
(23) Outstanding. The term "Outstanding" when used with
respect to Bonds shall mean as of the date of determination,
all Bonds theretofore authenticated and delivered under this
Order, except, without duplication:
(a) Bonds theretofore cancelled by the Paying Agent
or delivered to the Paying Agent for cancellation;
(b) Bonds for whose payment or redemption money in
the necessary amount has been theretofore deposited with the
Paying Agent in trust for the Holder of such Bonds, provided
that, if such Bonds are to be redeemed, notice of such
redemption has been duly given pursuant to this Order,
irrevocably provided for to the satisfaction of the Paying
Agent, or waived;
(c) Bonds in exchange for or in lieu of which other
Bonds have been authenticated and delivered pursuant to this
Order;
(d) Bonds alleged to have been destroyed, lost, or
stolen which have been paid as provided in Section 2.7;
(e) Bonds for the payment of the principal (or
Redemption Price) of and interest on which money or
Governmental Securities or both are held by the Person and
with the effect specified in Section 8. 1.
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(24) Paying Agent. The term "Paying Agent" shall mean
the corporation named as the "Paying Agent" herein until a
successor Paying Agent shall have become such pursuant to the
applicable provisions of this Order, and thereafter "Paying
Agent" shall mean such successor Paying Agent.
(25) Person. The term "Person" shall mean any
individual corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization, or government or any agency or political
subdivision thereof.
(26) Place of Payment. The term "Place of Payment"
shall mean the principal office of the Paying Agent in the
City of Dallas, Texas.
(27) Predecessor Bonds. The term "Predecessor Bonds"
shall mean every previous Bond evidencing all or a portion of
the same debt as that evidenced by such particular Bond, and,
for purposes of this definition, any. Bond authenticated and
delivered pursuant to this Order in lieu of a mutilated, lost,
destroyed, or stolen Bond shall be deemed to evidence the same
debt as the mutilated, lost, destroyed, or stolen Bond.
(28) Redemption Date. The term "Redemption Date" when
used with respect to any Bond to be redeemed shall mean the
date fixed for such redemption pursuant to the terms of this
Order.
(29) Redemption Price. The term "Redemption Price" when
used with respect to any Bond to be redeemed shall mean the
price at which it is to be redeemed pursuant to the terms
hereof, excluding installments of interest whose Stated
Maturity is on or before the Redemption Date.
(30) Record Date. The term "Record Date" for the
interest payable on any Interest Payment Date shall mean the
15th day (whether or not a business day) of the calendar month
next preceding such Interest. Payment Date.
(31) Stated Maturity. The Term "Stated Maturity" when
used with respect to any Bond or any installment of interest
thereon shall mean the date specified in such Bond as the
fixed date on which the principal of such Bond or such
installment of interest is due and payable.
(32) Tax-Exempt Obligations. The term "Tax-Exempt
Obligations" shall mean obligations the interest on which is
excludable from the gross income of any owner thereof under
the Code or any regulations promulgated pursuant thereto.
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(33) Yield. The term "Yield" of the Bonds shall mean:
(a) the discount factor which, when used to compute
the present value on the Issue Date of all payments of
principal and interest paid or to be paid on the Bonds,
compounding semiannually, produces an amount equal to the sum
of the Issue Prices of the Bonds,
(b) Investments acquired with Gross Proceeds prior
to any date shall mean the discount factor which, when used in
computing the present value on the Issue Date of all payments
of principal of and interest on, or sales proceeds (net of
sales commissions) in respect of, such Investments either
received on or before such date or thereafter scheduled to be
received, compounding semiannually, results in an amount equal
to the aggregate present value on- the Issue Date, compounding
semiannually at the same discount rate, of the respective
Costs of such Investments.
SECTION 1.2: Notices. Wherever this Order provides
for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein provided) if in
writing and mailed, first-class postage prepaid, to each
Bondholder, at the address of such Bondholder as it appears in
the Bond Register. Neither the . failure to mail such notice,
nor any defect in any notice so mailed, to any particular
Bondholder shall affect the sufficiency of such notice with
respect to all other Bondholders. ` Wherever this Order
provides for notice in any manner, such notice may be waived
in writing by the Person entitled to received such notice,
either before or after the event with respect to which such
notice is given, and such waiver shall be the equivalent of
such notice. Waivers of notice by Bondholders shall be filed
with the Issuer, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon
such waiver.
SECTION 1.3: Effect of:3 Headings and Table of
Contents. The Section headings herein and in the Table of
Contents are for convenience only and shall not affect the
construction hereof.
SECTION 1.4: Order a Contract: Amendments. This
Order shall constitute a contract ' with the Holders of the
Bonds from time to time accepted by the initial purchaser of
the Bonds, shall be binding on the Issuer and its successors
and assigns whether or not so expressed, and shall not be
amended or repealed by the Issuer so long as any Bond remains
Outstanding except as permitted in this Section.
The Issuer may, without the consent of or notice to
any Bondholder, from time to time and at any time amend this
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Order in any manner not detrimental to the interests of the
Holders of the Bonds, including the curing of any ambiguity,
inconsistency, or form defect or omission herein or therein.
In addition, the Issuer may, with the written consent of the
Holders of a majority in aggregate principal amount of the
Bonds then Outstanding affected thereby, amend, add to, or
rescind any of the provisions of this Order; provided that,
without consent of the Holders of all of the affected
Outstanding Bonds, no such amendment, addition, or rescission
shall (1) change the Stated Maturity of the Bonds or any
installment of interest thereon, reduce the principal amount
thereof, the Redemption Price therefor, or the rate of
interest thereon, change the place or places at, or the coin
or currency in, which any Bond or the interest thereon is
payable, or in any other way modify the terms of payment of
the principal of or interest on the Bonds, (2) give any
preference to any Bond over any other Bond, or (3) modify any
of the provisions of this Section, except to increase the
percentage provided hereby or to provide that certain other
provisions of this Order cannot be modified or waived without
the consent of the Holder of each Bond affected thereby.
SECTION 1.5: Benefits of Order. Nothing in this
Order, expressed or implied, is intended or shall be construed
to confer upon any Person (other than the Issuer and the
Bondholders) any right, remedy, or claim, legal or equitable,
under or by reason of this Order or any provision hereof, this
Order and all its provisions being intended to be and being
for the sole and exclusive benefit of the Issuer and the
Bondholders.
SECTION 1.6. Repealer. All orders and resolutions,
or parts thereof, which are in conflict with any provision of
this Order are hereby repealed and declared to be inapplicable
to the extent of such conflict, and the provisions of this
Order shall be and remain controlling as to the matters
prescribed herein.
SECTION 1.7: Governing Law. This Order shall be
construed in accordance with and governed by the laws of the
State of Texas and the federal law of the United States of
America.
SECTION 1.8: Severability. If any provisions of
this Order or any application thereof shall be invalid,
illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions and applications
shall not in any way be affected or impaired thereby.
SECTION 1.9: Open Meeting. It is hereby officially
found and determined that the meeting at which this Order was
adopted was open to the public, and public notice of the time,
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place, and purposed of said meeting was given, all as required
by the Texas Government Code, Section 551 and Section 49.063
and 49.064, Texas Water Code, as amended.
SECTION 1.10: Authority of Officers. The President
and the Vice President of the Governing Body, or either of
them, and the Secretary, and any Deputy or Acting Secretary of
the Governing Body, or any of them, are authorized to. evidence
adoption of this Order and to do any and all things proper and
necessary to carry out the intent hereof.
SECTION 1.11: District's Successor's and Assigns.
Whenever in this Order the District is named and referred to
it shall be deemed to include its successors and assigns, and
all covenants and agreements in this Order by or on behalf of
the District, except as otherwise provided herein, shall bind
and inure to the benefit of its successors and assigns whether
or not so expressed.
SECTION 1.12: Defeasance and Refunding. The
District reserves the right to defease or refund the Bonds in
any manner provided by law.
SECTION TWO
AUTHORIZATION, DESCRIPTION, AND EXECUTION OF BONDS
SECTION 2.1: Amount, Name, Purpose, and
Authorization. The Bonds of the District, to be known and
designated as Brazoria County Municipal Utility District No.
1 Waterworks and Sewer System Combination Unlimited Tax and
Revenue Bonds, Series 1998 shall be issued in the aggregate
principal amount of $2,700, 000. The District hereby
authorizes issuance of bonds of the Issuer, in the form
specified herein and bearing the terms herein provided, in
order to (i) finance the District's portion of the cost of
acquisition or construction of water distribution, wastewater
collection and storm drainage facilities to serve (a)
Southwyck Section Three, Phase 2 (88-single-family residential
lots) , (b) Southwyck Section 3, Phase 3 (106 single-family
residential lots) , (c) Southwyck Section 3, Phase 4 (96
single-family residential lots) , (d) Southwyck Section 8,
Phase 2 (78 single-family residential lots) ; and (e) Southwyck
Section 8, Phase 3 (98 single-family residential lots) , plus
District's pro rata share of (f) Water Plant No. 3 elevated
storage tank; (g) repainting of Water Plant No. 1; (h)
modifications of the detention pond control structures; and
(i) Mary's Creek channel improvements for 1997) and to (j) pay
certain engineering fees related to the aforementioned
facilities and projects; (k) pay interest on funds advanced on
the District's behalf by developers of land located within the
District; and (1) pay for the administrative and issuance
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costs, legal fees, fiscal agent's fees, a fee to the Texas
Natural Resource Conservation Commission ("TNRCC") , and
certain financing costs related to the issuance of the Bonds,
which under applicable law may properly be paid from the
proceeds of such bonds, all under and in strict conformity
with Article XVI, Section 59 of the Constitution of the State
of Texas and the laws of the State of Texas, including
particularly (but not by way of limitation) Chapters 49 and
54 of the Texas Water Code, together with all amendments and
additions thereto, by authority of elections held for and
within the Issuer on November 3, 1981 and September 8, 1984.
SECTION 2.2: Date, Denomination, Interest Rate, and
Maturities. The Bonds will be issued in fully registered
form, in the denomination of $5,000 or any integral multiple
thereof. The Stated Maturities of the Bonds shall be
1 of the years and as to the principal amounts set
forth below, and interest on the Bonds of such Stated
Maturities shall accrue from , 1998, which shall be
the "Dated Date" thereof, or the most recent Interest Payment
Date to which interest has been paid or duly provided for,
until such Bonds are paid or due provision therefor is made at
or after the Maturity thereof, at the per annum rate set forth
after the Stated Maturity below, calculated on the basis of a
360-day year of twelve 30-day months and payable semiannually
on each March 1 and September 1 commencing September 1, 1998
( -month interest payment) :
Year of Year of
Bond Stated Principal Interest CUSIP Bond Stated Principal Interest CUSIP
No. Maturity Amount Rate . % No. No. Maturity Amount Rate % No.
B-1 1998 $ 30,000 % B-11 2008 $ 45,000
B-2 1999 35,000 % 8-12 2009 45,000
8=3 2000 40,000 % B-13 2010 200,000
B-4 2001 40,000 % B-14 2011 210,000
B-5 2002 45,000 % B-15 2012 220,000
B-6 2003 45,000 % B-16 2013 225,000
B-7 2004 45,000 % B-17 2014 240,000
B-8 2005 50,000 % B-18 2015 250,000
B-9 2006 45,000 % B-19 2016 270,000
B-10 2007 45,000 % B-20 2017 280,000
B-21. 2018 295,000
SECTION 2.3: Payments. The principal of and
interest on the Bonds shall be payable at the Place of Payment
all subject to the terms and conditions of this Order. If the
specified date for any payment of principal (or Redemption
Price) of or interest on the Bonds shall be a Saturday,
Sunday, or legal holiday or equivalent (other than a
moratorium) for banking institutions generally in the city in
which the Place of Payment is located, such payment may be
made on the next succeeding day which is not one of the
foregoing days without additional , interest and with the same
force and effect as if made on the a specified date for such
payment.
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The Paying Agent shall pay the principal or
Redemption Price of the Bonds at the Maturity thereof, upon
surrender, to the Holders thereof from funds deposited with it
for such purpose by the Issuer.
SECTION 2.4: Delivery and Execution of Bonds. The
Bonds shall be executed on behalf of the Issuer by the
President or Vice President of the Governing Body under its
seal reproduced or impressed thereon and attested by its
Secretary or one of its Deputy or Acting Secretaries. The
signatures of any of these officers on the Bonds may be manual
or facsimile. Bonds bearing the manual or facsimile
signatures of individuals who were at the time of execution
the proper officers of the Governing Body shall bind the
Issuer, notwithstanding that such individuals or any of them
shall cease to hold such offices prior to the certifications
or authentication and delivery of such Bonds.
The President or Vice President of the Governing
Body shall execute one Bond of each Stated Maturity, dated
representing the entire principal amount of all
Bonds of such Stated Maturity, in the name of the initial
purchaser thereof or his designee, and shall submit such
Bonds, together with the record of the proceedings authorizing
the issuance thereof and any and all other necessary orders,
certificates, and records, to the Attorney General of Texas
for approval. The initial bonds shall be numbered B-1 through
B-21 and the definitive or printed Bonds shall be numbered
sequentially starting with 0001. After the Attorney General
has approved such Bonds, the President or Vice President of
the Governing Body shall cause such Bonds to be delivered to
the Comptroller of Public Accounts of the State of Texas for
registration. Upon registration of the Bonds, the Comptroller
is authorized and directed to deliver the Bonds in accordance
with instructions of the President or Vice President of the
Governing Body. At any time thereafter the Issuer may deliver
such Bonds to the Paying Agent together with definitive Bonds
to be issued in exchange therefor, and the Paying Agent shall
thereupon, within not more than five business days following
receipt of instructions from the payee named therein
designating the Persons, maturities, and principal amounts to
and in which such Bonds are to be transferred, authenticate,
and deliver such Bonds as provided in such instructions. The
officers or acting officers of the Governing Body are
authorized to execute and deliver on behalf of the Governing
Body such certificates and instruments as may be necessary to
accomplish or in furtherance of the delivery of the Bonds to
and payment therefor by the initial purchaser thereof.
All Bonds authenticated and delivered by the Paying
Agent hereunder shall be dated the date of their
authentication.
A:\30\NEWMONEY.BC1\BONDORD.98 12
V
rligh)
I_ t
No Bond shall be entitled to any right or benefit
under this Order, or be valid or obligatory for any purpose,
unless there appears on such Bond either a certificate of
registration substantially in the form provided in Section
5. 3, executed by the Comptroller of Public Accounts of the
State of Texas or his duly authorized agent by manual
signature, or a certificate of authentication substantially in
the form provided in Section 5.4, executed by the Paying Agent
by manual signature and either such certificate upon any Bond
shall be conclusive evidence, and the only evidence, that such
Bond has been duly certified or authenticated and delivered.
SECTION 2.5: Registration, Transfer, and Exchange.
The Issuer shall cause to be kept at the Place of Payment a
register (herein referred to as the "Bond Register") in which,
subject to such reasonable regulations as the Issuer or the
Paying Agent may prescribe, the Paying Agent shall provide for
the registration of the Bonds and of transfers of the Bonds as
herein provided.
Upon surrender for transfer of any Bond at the Place
of Payment, the Issuer shall execute and the Paying Agent
shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Bonds of the same
Stated Maturity, of any authorized denominations, and of a
like aggregate principal amount.
At the option of the Holder, Bonds may be exchanged
for other Bonds of the same Stated Maturity, of any authorized
denominations, and of like aggregate principal amount, upon
surrender of the Bonds to be exchanged at the Place of
Payment. Whenever any Bonds are so surrendered for exchange,
the Issuer shall execute and the Paying Agent shall
authenticate and deliver the Bonds which the Bondholder making
the exchange is entitled to receive.
All Bonds issued upon any transfer or exchange of
Bonds shall be the valid obligations of the Issuer evidencing
the same debt, and entitled to the same benefits under this
Order, as the Bonds surrendered upon such transfer or
exchange.
Every Bond presented or surrendered for transfer or
exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the
Paying Agent duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to the Holder for
any registration, transfer, or exchange of Bonds, but the
Issuer or the Paying Agent may require payment by the
Bondholder requesting such transfer or exchange of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of
Bonds.
A:\30\NEWMONEY.BC1\BONDORD.98 13
Neither the Issuer nor the Paying Agent shall be
required (1) to transfer or exchange any Bond during a period
beginning at the opening or business 15 days before the day of
the first mailing of a notice of redemption of Bonds hereunder
and ending at the close of business on the day of such mailing
or (2) thereafter to transfer or exchange in whole or in part
any Bond so selected for redemption.
SECTION 2.6: Interest Rights and Payments.
Interest on the bonds, which is punctually paid or duly
provided for on or within 10 days after any Interest Payment
Date, shall be paid to the Person in whose name that Bond (or
one or more Predecessor Bonds) is registered at the close of
business on the Record Date therefor.
Interest on the bonds which is payable on any
Interest Payment Date but is not paid or duly provided for by
10 days after (herein referred to as "Defaulted Interest")
shall forthwith cease to be payable to the Holder on the
relevant Record Date solely by virtue of having been such
Holder; and such Defaulted Interest shall be paid to the
Persons in whose names such Bonds (or their respective
Predecessor Bonds) are registered at the close of business on
a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Issuer shall notify the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Bond and the
date of the proposed payment and shall simultaneously deposit
with the Paying Agent an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or make arrangements satisfactory to the
Paying Agent for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Section provided. Thereupon,
the Paying Agent shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more
than 15 nor less than 10 days after the receipt of the
proposed payment and not less than 10 days after the receipt
by the Paying Agent of the notice of the proposed payment.
The Paying Agent shall promptly notify the Issuer of such
Special Record Date and, in the name and at the expense of the
Issuer, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Bondholder at the
address of such Bondholder as it appears in the Bond Register
not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Bonds (or their respective
Predecessor Bonds) are registered on such Special Record Date.
A:\30\NEWMONEY.BC1\BONDORD.98 14
n (41111)
All payments of interest on the Bonds shall be paid
by check or draft mailed, first-class postage prepaid, by the
Paying Agent to the Person entitled to such payment at the
address of such Person as it appears in the Bond Register or
by such other customary banking arrangements to which such
Person and the Paying Agent may agree.
Subject to the foregoing provisions of this Section,
each Bond delivered under this Order upon transfer or in lieu
of or in exchange for any other Bond shall carry all the
rights to interest accrued and unpaid, and to accrue, which
were carried by such other Bond, and each such Bond shall bear
interest from such date, that neither gain nor loss in
interest shall result from such transfer, exchange, or
substitution.
SECTION 2.7: Mutilated, Destroyed, Lost, and Stolen
Bonds. If (1) any mutilated Bond is surrendered to the Paying
Agent, or the Issuer and the Paying Agent received evidence to
their satisfaction of the destruction, loss, or theft of any
Bond, and (2) there is delivered to the Issuer and the Paying
Agent such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to
the Issuer and the Paying Agent that such Bond has been
acquired by a bona fide purchaser, the Issuer shall execute
and upon its request the Paying Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost, or stolen Bond, a new Bond of the same Stated
Maturity and of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost, or
stolen Bond has become or is about to become due and payable,
the Issuer in its discretion may pay such Bond instead of
issuing a new Bond.
Upon the issuance of any new Bond under this
Section, the Issuer or the Paying Agent may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and any other expenses connected therewith.
Every new Bond issue pursuant to this Section in
lieu of any mutilated, destroyed, lost, or stolen Bond shall
constitute an original additional contractual obligation of
the Issuer, whether or not the mutilated, destroyed, lost, or
stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Order equally
and ratably with all other Outstanding Bonds.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
A:\30\NEWMONEY.BC7\BONDORD.98 15
remedies with respect to the replacement and payment of
mutilated, destroyed, lost, or stolen Bonds.
SECTION 2.8: Ownership; Unclaimed Principal and
Interest. Subject to the further provisions of this Section,
the District, the Paying Agent, and any other person may treat
the person in whose name any Bond is registered as the
absolute Owner of such Bond for the purpose of making and
receiving all payments on the Bond and for all other purposes,
whether or not such Bond is overdue, and neither the District
nor the Paying Agent shall be bound by any notice or knowledge
to the contrary. All payments made to the person deemed to be
the Owner of any Bond in accordance with this Section shall be
valid and effectual and shall discharge the liability of the
District and the Paying Agent upon such Bond to the extent of
the sums paid. Principal and interest deposited with the
Paying Agent and remaining unclaimed for three (3) years shall
be reported and disposed of in accordance with the provisions
of Title 6 of the Texas Property code, as amended, to the
extent that such provisions are applicable.
SECTION 2.9: Cancellation. All Bonds surrendered
for payment, redemption, transfer, exchange, or replacement,
if surrendered to the Paying Agent, shall be promptly
cancelled by it and, if surrendered to the Issuer, shall be
delivered to the Paying Agent and, if not already cancelled,
shall be promptly cancelled by the Paying Agent. The Issuer
may at any time deliver to the Paying Agent for cancellation
any Bonds previously certified or authenticated and delivered
which the Issuer may have acquired in any manner whatsoever,
and all Bonds so delivered shall be promptly cancelled by the
Paying Agent. No Bond shall be authenticated in lieu of or in
exchange for any Bond cancelled as provided in this Section,
except as expressly provided by this Order. All cancelled
Bonds held by the Paying Agent shall be disposed of as
directed by Issuer Request.
SECTION THREE
PRIOR REDEMPTION OF BONDS
SECTION 3.1: Redemption of Bonds. The Bonds
maturing on or after are subject to
redemption prior to their scheduled maturities at the option
of the Issuer, as a whole or from time to time in part, on
, 200_, or on any date thereafter at a price equal
to the principal amount of the Bonds called for redemption
plus accrued interest from the most recent interest payment
date to the date fixed for redemption.
SECTION 3.2 : Exercise of Option. The exercise by
the Issuer of its option to redeem any Bonds shall be by Order
A:\30\NEWMONEY.BC1\BONDORD.98 16
i f r `�
amb
or Resolution entered in the minutes of the Board of Directors
of the District. The District shall, at least thirty (30)
days prior to the Redemption Date (unless a shorter notice
shall be satisfactory to the Paying Agent) , notify the Paying
Agent of such Redemption Date and of the principal amount of
Bonds of each Stated Maturity to be redeemed.
SECTION 3.3: Procedures. If less than all of the
Outstanding Bonds of any Stated Maturity are to be redeemed,
the particular Bonds of such Stated Maturity or portions
thereof to be redeemed shall be selected by the District from
the Outstanding Bonds which have not previously been called
for redemption, by such random method as the District shall
deem customary and equitable and which may provide for the
selection for redemption of portions (equal to $5, 000 or a
multiple thereof) of the principal amount of Bonds of a
denomination larger than $5,000. The District shall promptly
notify the Paying Agent in writing of the Bonds selected for
redemption and, in the case of any Bond selected for partial
redemption, the principal amount thereof to be redeemed. For
purposes of this Order, unless the context otherwise requires,
all provisions relating to the redemption of Bonds shall
relate, in the case of any Bond redeemed only in part, to the
portion of the principal of such Bond which has or is to be
redeemed.
SECTION 3.4: Notice to Holders of Redemption.
Notice of redemption shall be mailed by the Paying Agent in
the name of and at the expense of the District, not less than
thirty (30) days prior to the Redemption Date, to each Holder
of Bonds to be redeemed. Notice of redemption shall also be
given by publication of notice one time, not less than. thirty
(30) days prior to the Redemption Date, in a financial journal
or publication of general circulation in the United States of
America. All notices of redemptions shall include a statement
as to (i) the Redemption Date, (ii) the Redemption Price,
(iii) the principal amount and identification (by Bond and
CUSIP number, Stated Maturity, interest rate, and Issue Date
and, in the case of partial redemption, the respective
principal amounts) of the Bonds to be redeemed, (iv) that on
the Redemption Date the Redemption .Price of each of the Bonds
to be redeemed will become due and payable and that interest
thereon shall cease to accrue from and after such date, and
(v) that such Bonds are to be surrendered for payment of the
Redemption Price at the principal office of the Paying Agent,
and the address of such office.
The Paying Agent shall give written notice of
redemption, by registered mail, overnight delivery, or other
comparably secure means, not less than 30 days prior to the
Redemption Date, to each registered securities depository (and
to each national information service that disseminates
A:\30\NEWMONEY.BC1\BONDORD.98 17
I
redemption notices) known to the Paying Agent, but neither the
failure to give such notice nor any defect therein shall
affect the sufficiency of notice given to Bondholders as
hereinabove stated.
SECTION 3.5: Payment. Notice of redemption having
been given as aforesaid, the Bonds so to be redeemed shall, on
the Redemption Date, become due and payable at the Redemption
Price, and from and after such date (unless the District shall
default in the payment of the Redemption Price) such bonds
shall cease to bear interest. Upon the surrender of such
Bonds for redemption in accordance with such notice, such
Bonds shall be paid by the Paying Agent at the Redemption
Price out of money supplied by the District. Installments of
interest with a Stated Maturity on or prior to the Redemption
Date shall be payable to the Holders of such bonds registered
as such on the relevant Record Dates according to their terms.
If any Bond called for redemption shall not be so paid on the
date set for redemption by reason of the failure of the
District to provide collected funds, the same shall continue
to bear interest from the Redemption Date at the rate borne by
such Bond.
SECTION 3.6: Partial Redemption. Any Bond which
is to be redeemed only in part shall be surrendered at the
office of the Paying Agent (if payment is to be made to other
than the registered owner with due endorsement by, or a
written instrument of transfer in form satisfactory to the
Paying Agent duly executed by, the Holder thereof or his
attorney duly authorized in writing) and the District shall
execute and the Paying Agent shall register and deliver to the
Holder of such Bond, without service charge to the Holder, a
new Bond or Bonds of the same Stated Maturity and of any
authorized denomination or denominations as requested by such
Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Bond so
surrendered.
SECTION FOUR
FORM OF BONDS AND CERTIFICATES
SECTION 4.1: Forms Generally. The Bonds, the
Registration Certificate of the Comptroller of Public Accounts
of the State of Texas to be reproduced on the initial Bonds,
the Certificate of Authentication to be reproduced on
subsequently delivered Bonds, and the form of Assignment to be
reproduced on each of the Bonds shall be substantially in the
forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as
are permitted or required by this Order, and the Bonds may
have such letters, numbers, or other marks of identification
A:\30\NEWMONEY.BC1\BONDORD.98 18
(including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American
Bankers Association) and such legends and endorsements
(including any reproduction of an opinion of counsel or notice
of insurance) thereon as may, consistent herewith, be
determined by the officers executing such Bonds as evidenced
by their execution thereof. Any portion of the text of any
Bonds may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Bond.
The definitive Bonds shall be printed, lithographed,
engraved, or produced by any combination of these methods, all
as determined by the officers executing such Bonds as
evidenced by their execution thereof, but the initial Bonds
submitted to the Attorney General of Texas may be typewritten,
photocopied, or otherwise reproduced.
SECTION 4.2 : Form of Bonds. The Bonds authorized
by this Order shall be in substantially the following form,
with such omissions, insertions, and variations as may be
necessary and desirable and consistent with the terms of this
Order:
REGISTERED REGISTERED
NO. $
United States of America
State of Texas
County of Brazoria
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 1
WATERWORKS AND SEWER SYSTEM
COMBINATION UNLIMITED TAX AND REVENUE BONDS
SERIES 1998
Interest Rate: Stated Maturity: Date of .Series: CUSIP No.
1, 1, 1998
BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 1 a
conservation and reclamation district, a body politic and
corporate and a governmental agency created under the
Constitution and laws of the State of Texas, situated in
Brazoria County, Texas (herein the "Issuer") , FOR VALUE
RECEIVED hereby acknowledges itself indebted to and PROMISES
TO PAY TO
A:\30\NEWMONEY.BC1\BONDORD.98 19
or registered assigns, on the Stated Maturity specified above,
the principal sum of
DOLLARS
and to pay interest thereon from the. Date of Series specified
above, or from the most recent Interest Payment Date to which
interest has been paid or duly -provided for, until such
principal is paid or duly provided :.for on or after such Stated
Maturity or any earlier Redemption Date, payable semiannually
on 1 and 1 in each.:year commencing
1, 1998 ( -months' interest payment) , at the per annum
Interest Rate specified above, computed on the basis of a 360-
day year of twelve 30-day months.
The interest so payable on, and punctually paid or
duly provided for on or within 10 days after, any Interest
Payment Date will be paid to the Person in whose name this
Bond (or one or more Predecessor Bonds evidencing the same
debt) is registered at the close of business on the Record
Date for such interest, which shall be the 15th day (whether
or not a business day) of the calendar month next preceding
such Interest Payment Date. Any such interest not so
punctually paid or duly provided shall forthwith cease to be
payable to the Person in whose name such Bond is registered on
such Record Date, and shall be paid to the Person in whose
name this Bond (or one or more Predecessor Bonds) is
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the
Paying Agent, notice whereof being given to the Holders of the
Bonds not less than 10 days prior to the Special Record Date.
All such interest shall be payable at the principal office of
the Paying Agent of the Issuer in the City of Dallas, Texas
(hereinafter referred to as the "Place of Payment") , which
shall initially be the principal office of Texas Commerce Bank
National Association, Dallas, Texas, and shall be paid by
check or draft mailed to the address of the Holder as the same
appears on the Bond Register of the Issuer kept by the Paying
Agent or in accordance with other customary arrangements
acceptable to the Paying Agent made by the Holder. The
principal or Redemption Price of this Bond is payable at the
Place of Payment upon presentation and surrender of this Bond.
All payments hereon shall be made in such coin or currency of
the United States of America as at the time of payment is
legal tender for payment of public and private debts.
If the specified date for any such payment shall be
a Saturday, Sunday, or legal holiday or equivalent (other than
a moratorium) for banking institutions generally in the city
in which the Place of Payment is located, such payment may be
A:\30\NEWMONEY.BC1\BONDORD.98 20
a _ Z
made on the next succeeding day which is not one of the
foregoing days without additional interest and with the same
force and effect as if made on the specified date for such
payment.
The obligation to pay the principal of and the
interest on this Bond is solely and exclusively the obligation
of the Issuer until such time, if ever, as the Issuer is
dissolved and this Bond is assumed as described below. No
other entity, including the City of Pearland, Texas, Brazoria
County, Texas, and the State of Texas, is obligated, directly,
indirectly, contingently, or in any other manner, to pay the
principal of or interest on this Bond from any source
whatsoever.
This Bond is one of the series specified in its
title issued in the aggregate principal amount of $2,700,000
(herein referred to as the "Bonds") pursuant to an order of
the board of directors of the Issuer adopted ,
1998 (hereinafter referred to as the "Bond Order") , to pay for
the District's portion of the cost of acquisition or
construction of water distribution, wastewater collection and
storm drainage facilities to serve (a) Southwyck Section
Three, Phase 2 (88-single-family residential lots) , (b)
Southwyck Section 3, Phase 3 (106 single-family residential
lots) , (c) Southwyck Section 3, Phase 4 (96 single-family
residential lots) , (d) Southwyck Section 8, Phase 2 (78
single-family residential lots) ; and (e) Southwyck Section 8,
Phase 3 (98 single-family residential lots) , plus District's
pro rata share of (f) Water Plant No. 3 elevated storage tank;
(g) repainting of Water Plant No. 1; (h) modifications of the
detention pond control structures; and (i) Mary's Creek
channel improvements for 1997) and to (j ) pay certain
engineering fees related to the aforementioned facilities and
projects; (k) pay interest on funds advanced on the District's
behalf by developers of land located within the District; and
(1) pay for the administrative and issuance costs, legal fees,
fiscal agent's fees, a fee to the Texas Natural Resource
Conservation Commission ("TNRCC") , and costs associated with
condemnation and acquisition of off-site drainage, and certain
financing costs related to the issuance of the Bonds, which
under applicable law may properly be paid from the proceeds of
such bonds as authorized by the Constitution and laws of the
State of Texas including specifically (but not by way of
limitation) Chapters 49 and 54 of the Texas Water Code,
together with all amendments and additions thereto, by
authority of elections held for and within the Issuer on
November 3, 1981 and September 8, 1984.
The Bonds maturing on or after 1, may
be redeemed at the option of the Issuer, on not less than 30
days prior notice to the Holders thereof by mail as provided
A:\30\NEWMONEY.BC1\BONDORD.98 21
in the Bond Order, as a whole or from time to time in part on
1, or on any date thereafter, upon payment of
the Redemption Price, which shall consist of the principal
amount thereof together with interest, if any, accrued thereon
from most recent Interest Payment Date to the Redemption Date.
Bonds of a denomination larger than $5,000 may be
redeemed in part ($5,000 or any integral multiple thereof) and
upon any partial redemption of any such Bond the same shall be
surrendered in exchange for one or more new Bonds of the same
Stated Maturity in authorized denominations for the unredeemed
portion of principal. Bonds (or portions thereof) for whose
redemption and payment provision is made in accordance with
the Bond Order shall thereupon cease to bear interest from and
after the Redemption Date.
The Bonds are payable from the proceeds of a tax
levied upon all taxable property within the Issuer which is
not legally limited as to rate or amount and are further
payable from and secured by a pledge of all income or
increment which may grow out of the ownership and operation of
the District's improvements or facilities less such portion of
said revenue income as reasonably may be required to provide
for the administration, efficient operation and adequate
maintenance of said service facilities as authorized by the
Constitution and laws of the State of Texas. Reference is
hereby made to the Bond Order for a description of the
covenants by which the Bonds are secured, the respective
rights thereunder of the Holders of such Bonds and the Issuer,
and the terms upon which such Bonds are, and are to be,
authenticated and delivered. Notwithstanding any provision
hereof to the contrary, however, the obligation of the Issuer
to make money available to pay this Bond may be defeased by
the deposit of money and/or certain debt obligations
sufficient for such purpose as provided in the Bond Order,
and, if the District is abolished and dissolved by a City
Ordinance and the City assumes the assets and liabilities of
the District, including this Bond, the sources of payment of
this Bond may be modified under the laws of the State of
Texas.
The Bond Order permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Issuer and the rights of
the Holders of the Bonds under the Bond Order at any time by
the Issuer with the consent of the Holders of a majority in
aggregate principal amount of the Bonds at the time
outstanding affected by such modification. Any such consent
by the Holder of this Bond or any Predecessor Bond herefor
evidencing the same debt shall be conclusive and binding upon
such Holder and all future Holders of this Bond and of any
Bond issued upon the transfer or in lieu hereof or in exchange
A:\30\NEWMONEY.BC1\BONDORD.98 22
hereof, whether or not notation of such consent is made upon
this Bond.
As provided in the Bond Order and subject to certain
limitations therein set forth, this Bond is transferable on
the Bond Register of the Issuer upon surrender of this Bond
for transfer to the Paying Agent at the Place of Payment duly
endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Paying Agent duly
executed by the registered. Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new fully
registered Bonds of the same Stated Maturity, of authorized
denominations, and for the same aggregate principal amount
will be issued to the designated transferee or transferees.
The Bonds are issuable as fully registered Bonds in
the denomination of $5,000 and any integral multiple thereof.
Upon surrender of this Bond for exchange to the Paying Agent
at the Place of Payment, and subject to certain limitations
set forth in the Bond Order, one or more new fully registered
Bonds of the same Stated Maturity, of designated authorized
denominations, and for the same aggregate principal amount
will be issued to the registered Holder of this Bond.
No service charge shall be made for any transfer or
exchange hereinabove referred to, but the Issuer or the Paying
Agent may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Issuer, the Paying Agent, and any agent of
either of them may treat the Person in whose name this Bond is
registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether
or not this Bond be overdue, and the Issuer, the Paying Agent,
and any such agent shall not be affected by notice to the
contrary.
It is hereby certified, covenanted, and represented
that all acts, conditions, and things required to be
performed, exist, and be done precedent to or in the issuance
of this Bond in order to render the same a legal, valid, and
binding obligation of the Issuer have been performed, exist,
and have been done, in regular and due time, form, and manner,
as required by law, and that the issuance of the Bonds does
not exceed any constitutional or statutory limitation. For
the faithful performance of all covenants, recitals, and
stipulations herein contained, the full faith, credit, and
resources of the Issuer are hereby pledged. In case any
provision in this Bond or any application thereof shall be
invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired
A:\30\NEWMONEY.BC1\BONDORD.98 23
thereby. This Bond shall be construed in accordance with and
governed by the laws of the State of Texas and the federal law
of the United States of America.
Unless either the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas or the
Certificate of Authentication hereon has been executed by such
Comptroller or his duly authorized agent or by the Paying
Agent, respectively, by manual signature, this Bond shall not
be entitled to any benefit under the Bond Order or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Bond
to be duly executed under its official seal.
BRAZORIA COUNTY MUNICIPAL
UTILITY DISTRICT NO. 1
BY:
President
ATTEST:
Secretary
(SEAL)
SECTION 4.3: Form of Registration Certificate of
Comptroller of Public Accounts.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS §
§ REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY THAT there is on file and of record
in my office a certificate to the effect that the Attorney
General of the State of Texas has examined and finds that this
Bond has been issued in conformity with the Constitution and
laws of the State of Texas and is a valid and binding
obligation of Brazoria County Municipal Utility District No.
1 and further that this Bond has been registered this day by
me.
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WITNESS my signature and seal of office this
day of , 199_
Comptroller of Public Accounts
of the State of Texas
(SEAL)
SECTION 4.4: Form of Certificate of
Authentication.
This is one of the Bonds referred to in the within-
mentioned Bond Order, a Predecessor Bond for which has been
approved by the Attorney General of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
as Paying Agent
BY:
Authorized Signature
Date of Authentication:
SECTION 4.5: Form of Assignment.
ASSIGNMENT.
FOR VALUE RECEIVED the undersigned hereby sells,
assigns, and transfers unto
(Please print or type name, address, and zip code of
Transferee)
(Please insert Social Security or Tax Identification Number of
Transferee)
the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to transfer said Bond on the books kept for
registration thereof, with full power of substitution in the
premises.
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t
DATE:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the
registered owner as shown on the
NOTICE: Signature must face of this bond in every
be guaranteed by a particular, without any alteration,
member firm of the New enlargement, or change whatsoever.
York Stock Exchange or
a commercial bank or
trust company.
The following abbreviations, when used in the
inscription on the face of the within Bond or above
Assignment, shall be construed as though they were written out
in full according to applicable laws or regulations:
UNIF GIFT MIN ACT
TEN COM -- as tenants Custodian
in common (Cust. ) (Minor)
TEN ENT -- as tenants under Uniform Gifts to Minors Act
by the
entireties State
JT TEN -- as joint
tenants with
right of
survivorship
and not as
tenants in
common
Additional abbreviations may also be used though not in the
above list.
SECTION FIVE
SECURITY OF THE BONDS
SECTION 5.1: Pledge and Levy of Taxes. For each
year while any Bond is Outstanding and the Issuer remains in
existence there shall be and is hereby levied and assessed a
continuing direct annual ad valorem tax upon each $100
valuation of taxable property within the Issuer at a rate from
year to year sufficient, full allowance being made for
anticipated delinquencies, together with revenues and receipts
from other sources which are legally available for such
purposes, (1) to pay interest on the Bonds as it becomes due,
(2) to provide a sinking fund for the payment of the principal
of the Bonds when due or the Redemption Price at any earlier
required Redemption Date, and (3) to pay the expenses of
assessing and collecting such tax. The Issuer shall timely
assess and diligently collect such tax and apply the
collections thereof solely as provided herein. Each order of
the Governing Body levying and establishing the rate of ad
valorem taxes shall specify (a) the portion of such rate
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/ ft
levied to pay principal (and Redemption Pride) of, interest
on, and Paying Agent fees and expenses with respect to the
Bonds (including allocable delinquencies) , (b) the portion, if
any, of such rate levied to pay other contractual obligations
of the Issuer payable in whole or in part from taxes, and (c)
the portion, if any, of such rate levied for operating and
maintenance purposes. All collections of ad valorem taxes,
including penalty and interest attributable thereto, shall be
allocated among such purposes in proportion to the respective
levies in the tax year with respect to which such taxes are
owed. For so long as any Bond remains Outstanding, all
collections of Issuer taxes levied to pay debt service
requirements on the Bonds, less allocable expenses of
assessing and collecting such taxes, shall be deposited not
less frequently than monthly to the Bond Fund.
SECTION 5.2: Pledge of Revenues. The Net Revenues
are hereby pledged to the payment of the principal, interest,
redemption price, and bank charges on the Bonds. The Revenues
hereby pledged shall immediately be subject to the lien of
this pledge without any physical delivery thereof or further
act, and the lien of this pledge shall be valid and binding as
against all parties of any kind having a claim of any kind in
tort, contract, or otherwise against the District,
irrespective of whether such parties have notice thereof. To
the extent provided by law, such pledge of Revenues will
terminate when any city or cities annexes or abolishes the
District in its entirety, and assumes all of the assets and
obligations of the District.
SECTION SIX
DISPOSITION OF BOND PROCEEDS
SECTION 6.1: Creation of Funds. There shall be
created the following funds:
(a) The Bond Fund;
(b) The Construction Fund; and
(c) The Operating Fund.
Each fund shall be kept separate and apart from all other
funds of the District. The Bond Fund shall constitute a trust
fund which shall be held in trust for the benefit of the
Bondholders and, to the extent allowed by law, the Holders of
Additional Bonds, if any. The Construction Fund shall also
constitute a trust fund and shall be used solely as provided
in this Order.
SECTION 6.2 : Bond Fund. The District shall
deposit or cause to be deposited into the Bond Fund the
aggregate of the following at the time specified;
(a) As soon as practicable after the Bonds are
sold, accrued interest on the Bonds from their
dated date to the date of their delivery.
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(b) As soon as practicable after the Bonds are
sold, a sum equal to eighteen (18) months
interest on the Bonds.
No later than five (5) days prior to any principal and/or
interest payment date on the Bonds, the Board of Directors
shall cause the transfer of monies out of the Bond Fund to the
Paying Agent in an amount not less than that which is
sufficient to pay the principal which matures on such date,
the interest which accrues on such date, and the Paying
Agent's fees for handling such payments on that date.
SECTION 6.3: Operating Fund. The District shall
cause to be deposited into the Operating Fund the revenues
from operation and certain proceeds of the Bonds as may be
approved for use in the administration and efficient operation
of the District.
SECTION 6.4: Construction Fund. The Construction
Fund shall comprise the capital improvements funds of the
Issuer. The Issuer shall deposit to the credit of the
Construction Fund the balance of the proceeds of the Bonds
remaining after the deposits to the Bond Fund provided in
Section 6.2 (less the amounts, if any, required by the TNRCC
to be placed in escrow) . The Construction Fund shall be
applied solely (1) to pay the costs necessary or appropriate
to accomplish the purposes described in Section 2 . 1 for which
the Bonds are issued, and (2) to the extent the proceeds of
any series of bonds deposited to the Construction Fund and
investment income attributable thereto are in excess of the
amounts required for any such purpose, then at the discretion
of the Governing Body to transfer such unexpended proceeds or
income to the Bond Fund or to apply the same for any other
lawful purpose for which surplus construction funds may be
used, subject to the prior approval of the TNRCC, if such
approval is required. The Bond proceeds, if any, required to
be placed in escrow by the TNRCC shall be deposited in an
escrow fund established under a separate escrow agreement, to
be utilized as provided and in accordance with the orders and
rules of the TNRCC.
SECTION 6.5: Investments and Security for Funds.
Subject to Section 7.4, the Governing Body may deposit money
held for the credit of any fund or account established or
confirmed by this Order in time or demand deposits and may
invest such money in any obligation authorized by law at the
time of such investment. Any such obligation shall mature, or
shall be subject to redemption by the holder thereof at the
option of the holder, not later than the respective dates when
money is expected to be required for the purposes intended.
Obligations so purchased as an investment of money credited to
any such fund or account shall at all times be deemed to be a
part of such fund or account.
Each fund and account established or confirmed by
this Order shall be secured in the manner and to the fullest
extent required by law for the security of funds of the
Issuer, subject to Section 7.4.
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. L 1
,
SECTION SEVEN
ISSUER COVENANTS
SECTION 7.1: Agency. The Issuer will at all times
maintain an agency in the City of Dallas, Texas, meeting the
qualifications herein described, for the performance of the
duties of the Paying Agent hereunder. Texas Commerce Bank
National Association, Dallas, Texas is hereby appointed Paying
Agent for such purposes. The Paying Agent may be removed from
its duties hereunder at any time with or without cause by
action of the Governing Body of the Issuer entered in its
minutes and not less than 30 days notice to each Bondholder
specifying the substitution of another Paying Agent, the
effective date thereof, and the address of such successor
Paying Agent, but no such removal shall become effective until
such successor shall have accepted the duties of the Paying
Agent hereunder by written instrument.
Every Paying Agent appointed hereunder shall at all
times be a corporation organized and doing business under the
laws of the United States of America or of any state,
authorized under such laws to exercise corporate trust powers,
subject to supervision or examination by federal or state
authority, having authority to act as Paying Agent/Registrar
for the Bonds, and having an office in the City of Dallas,
Texas.
The terms of the agreement with the initial Paying
Agent attached hereto are hereby approved, and the President
and the Vice President of the Governing Body, or either of
them, and the Secretary and any Assistant or Acting Secretary
of the Governing Body, or any of them, are hereby authorized
to execute and deliver such agreement for and on behalf of the
Issuer substantially in the form and to the effect attached
hereto.
SECTION 7 .2: To Maintain and Insure Property. The
Issuer shall maintain its properties in good conditions and
repair, ordinary wear and tear and obsolescence excepted.
The Issuer shall maintain insurance on its
properties of a kind and in an amount which usually would be
carried by private companies engaged in a similar type of
business, but considering any governmental immunities to which
the Issuer may be entitled.
SECTION 7.3: Audit Books and Inspections. The
Issuer shall keep accurate records and accounts and employ an
independent certified public accountant to audit and report on
its financial affairs at the close of each fiscal year. Such
audits shall be in accordance with applicable laws, rules, and
A:\30\NEWMONEY.BC1\BONDORD.98 29
regulations in effect from time to time, including
particularly Section 49. 191 et seq. of the Texas Water Code,
as amended, and the Water District Accounting Manual, as
amended and adopted by the TNRCC. .A copy of such audit shall
be filed in the office of the Issuer and shall be open to
inspection by any interested person during normal office
hours. The Issuer shall allow any Holders of not less than
25% in principal amount of the Bonds then Outstanding to
inspect the properties of the Issuer relating thereto at all
reasonable times and shall furnish a copy of such audit report
to any such Holders upon request.
SECTION 7.4: Tax-Exempt Status of Bonds.
A. Not to Cause Interest to Become Taxable. The
Issuer shall not use, permit the use of, or omit to use Gross
Proceeds or any other amounts (or any property acquired,
constructed, or improved with Gross Proceeds) in a manner
which, if made or omitted, respectively, would cause interest
on any Bond not to be excludable from the gross income, as
defined in Section 61 of the Code, of the owners thereof for
federal income tax purposes in accordance with Section 103 of
the Code. Without limiting the generality of the foregoing,
the Issuer shall comply with each of the specific covenants in
this Section, unless and until the Issuer shall have received
a written opinion of counsel nationally recognized in the
field of municipal bond law to the effect that failure to
comply with such covenant either generally or to the extent or
in the instance stated therein will not adversely affect any
such excludability of interest, and thereafter such covenant
shall no longer be binding upon the Issuer either generally or
to such extent or in such instance, as applicable, anything in
any other Subsection of this Section to the contrary
notwithstanding.
B. No Private Use or Private Payments. The Issuer
shall either, (i) not use or permit the use of Gross Proceeds
(or any property acquired, constructed, or improved with Gross
Proceeds) in any trade or business carried on by any Person
(or in any activity of any Person other than a natural person)
other than a state or local government or (ii) not directly or
indirectly impose or accept any charge or other payment for
use of Gross Proceeds (or any property acquired, constructed,
or improved with Gross Proceeds) in any trade or business
carried on by any Person (or in any activity of any Person
other than a natural person) other than a state or local
government, in either case at all times prior to the last
Maturity of Bonds, unless either (a) such use is merely as a
member (and is extended by the Issuer on the same terms as to
all other members) of the general public or (b) such charge or
payment consists of taxes of general application within the
A:\30\NEWMONEY.BC1\BONDORD.98 30
Issuer or interest earned on Investments acquired with Gross
Proceeds pending application for their intended purposes. For
purposes of this Subsection B, property is considered to be
"used" by a Person if:
(1) it is sold or otherwise disposed of, or leased
to such Person;
(2) it is operated, managed, or otherwise
physically employed, utilized, or consumed by such
Person, excluding operation or management pursuant to an
agreement if (a) such agreement
(i) has a term (including renewal options)
which does not exceed five years.,
(ii) may be cancelled by the Issuer at the
end of any three-year period, and
(iii) provides for compensation to such
Person that is reasonable in relation to the
services performed, is not based on a share of net
profits or net revenue, and, as to not less 50% of
such compensation annually, is based on a periodic
fixed fee,
(b) no member of the Governing Body, individually or
with other such members, owns a controlling interest in
such Person or is an employee or member of the governing
board of such Person, and (c) no employee of the Issuer
is a member of the governing board of such Person;
(3) capacity in or output or service from such
property is reserved or committed to such Person under a
take-or-pay, output, incentive payment, or similar
contract or arrangement;
(4) such property is used to provide service to (or
such service is committed to or reserved for) such Person
on a basis or terms which (except possibly for the amount
of use and any corresponding rate adjustment) are
different from the basis or terms on which such service
is provided (or committed or reserved) to members of the
public generally;
(5) such Person is a developer and a significant
amount of property acquired, constructed, or improved
with proceeds from the sale of the Bonds (or income from
the investment thereof) serves only a limited area
substantially all of which is owned by such Person, or a
limited group of developers, unless such area is
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i
7 1
developed and sold to (and occupied by) members of the
general public with reasonable speed; or
(6) substantial burdens and benefits of ownership
of such property are otherwise effectively transferred to
such Person.
C. No Private Loan. The Issuer shall not use
Gross Proceeds to make or finance loans to any Person other
than a state or local government, excluding loans consisting
of temporary investments of Gross Proceeds pending application
for their intended purposes. For purposes of this Subsection
C, Gross Proceeds are considered to be "loaned" to a Person if
(1) property acquired, constructed, or improved with Gross
Proceeds is sold or leased to such Person in a transaction
which creates a debt for federal income tax purposes, (2)
capacity in or service from such property is committed to such
Person under a take-or-pay,output, or similar contract or
arrangement, or (3) indirect benefits, or burdens and benefits
of ownership,of Gross Proceeds or such property are otherwise
transferred to such Person in a transaction which is the
economic equivalent of a loan.
D. Not to Invest at Higher Yield. The Issuer
shall not, at any time prior to the final Maturity of the
Bonds, directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so
invested) , if as a result of such investment the Yield from
the Issue Date of all Investments acquired with Gross Proceeds
(or with money replaced thereby) , whether then held or
previously disposed of, exceeds the Yield of the Bonds.
Notwithstanding the foregoing, however, the following
Investments shall be excluded from the limitation and
calculation described in this Subsection D:
(1) Investments acquired with proceeds from the
sale of Bonds or income from the investment thereof, to
the extent such Investments are held during the first
three years after the Issue Date and, in the case of
proceeds or income held for the account of the
Construction Funds, prior to the date on which the
project or projects for which the Bonds are being issued
have been completed, if earlier;
(2) Investments acquired with income from
investment of proceeds from the sale of the Bonds, to the
extent such Investments are held during the first year after
receipt of such income;
(3) Certain investments acquired with amounts held
for the credit of the Bond Fund to the extent such
A:\30\NEWMONEY.BC1\BONDORD.98 32
investments are held for the durations specified in the
Code or current regulations; and
(4) Any other Investments to the extent the
aggregate cost thereof, adjusted upward by the amortized
portion (calculated on a straight-line basis) of any
discount at which such Investments were acquired, does
not exceed the lesser of $100, 000 or 5% of the proceeds
from sale of the Bonds.
The Issuer shall pursue work on the project or projects for
which the Bonds are being issued with due diligence until
completion. The Issuer shall not (a) use any money to pay
principal of or interest on the Bonds, or pledge (or permit to
be pledged) or otherwise restrict any money, funds, or
Investments so as to give reasonable assurance of their
availability for such purpose, except in each case amounts
deposited to the Bond Fund, (b) apply any proceeds from the
sale of Bonds or income from the investment thereof, directly
or indirectly, to pay principal of or interest on any other
indebtedness of the Issuer,or any corporate or other
instrumentality of the Issuer or any such governmental entity,
or (c) at any time prior to the Maturity of the Bonds, invest
amounts held for the credit of the Bond Fund in any investment
for which there is not an established market at the time of
such investment, except for Investments described in Clauses
(1) through (5) of this Subsection to the extent such
Investments are acquired and either mature or are disposed of
during the period, if any, described in such Clause.
E. No Rebate Required. The Issuer warrants and
represents that
(1) all of the proceeds of the Bonds and income
from the investment thereof will be used for the governmental
activities of the Issuer.;
(2) the aggregate face amount of all debt
obligations issued or expected to be issued by the Issuer in
the calendar year of the Issue Date (including the Bonds) is
not reasonably expected to exceed $5,000, 000;
(3) there are no other Persons which derive their
authority from or are subject to the control of the Issuer and
which have authority to issue obligations described in section
103 of the Code; and
(4) consequently the Issuer satisfies the
requirements of paragraphs (2) and (3) of section 148 (f) of
the Code with respect to the Bonds without making the payments
to the United States described in such section.
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(401
"SEC" means the United States Securities and
Exchange Commission.
"SID" means any person designed by the State of
Texas or an authorized department, office, or agency thereof
as, and determined by the SEC or its staff to be a state
information depository within the meaning of the Rule from
time to time.
SECTION 8.2 : Annual Reports. The District shall
provide annually to each NRMSIR and any SID, within six months
after the end of each fiscal year ending in or after 1998,
financial information and operating data with respect to the
District of the general type included in the final Official
Statement authorized by Section 13 .2 of this Order, being the
information described in Exhibit "A" hereto. Any financial
statements so to be provided shall be (1) prepared in
accordance with the accounting principles described in Exhibit
"A" hereto, or such other accounting principles as the
District may be required to employ from time to time pursuant
to state law or regulation, and (2) audited, if the District
commissions an audit of such statements and the audit is
completed within the period during which they must be
provided. If the audit of such financial statements is not
complete within such period, then the District shall provide
unaudited financial statements by the required time and will
provide audited financial statements for the applicable fiscal
year to each NRMSIR and any SID, :when and if the audit report
on such statements become available.
If the District changes its fiscal year, it will
notify each NRMSIR and any SID ofthe change (and of the date
of the new fiscal year end) prior to the next date by which
the District otherwise would be required to provide financial
information and operating data' pursuant to this Section.
The financial information and operating data to be
provided pursuant to this Section may be set forth in full in
one or more documents or may be included by specific reference
to any document (including an official statement or other
offering document, if it is available from the MSRB) and
theretofore has been provided to each NRMSIR and any SID or
filed with the SEC.
SECTION 8.3. Material Event Notices. The District
shall notify any SID and either each NRMSIR or the MSRB, in a
timely manner, of any of the following events with respect to
the Bonds if such event is material within the meaning of the
federal securities laws:
A. Principal and interest payment delinquencies;
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a ,1,
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 rights of holders of the
Bonds;
H. Bond calls;
I. Defeasances;
J. Release, substitution, or sale of property
securing repayment of the-` Bonds; and
K. Rating changes.
The District shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, of any failure by the
District to provide financial information or operating data in
accordance with Section 8. 3 of this Order by the time required
by such Section.
SECTION 8.4. Limitations, Disclaimers, and
Amendments. The District shall be obligated to observe and
perform the covenants specified in this Section for so long
as, the District remains an "obligated person" with respect to
the Bonds within the meaning of the Rule, except that the
District in any event will give notice of, any deposit made in
accordance with Section 10. 1, Article 717k, Vernon's Texas
Civil Statutes, as amended that causes Bonds no longer to be
outstanding.
The provisions of this Section are for the sole
benefit of the Holders and beneficial owners of the Bonds, and
nothing in this Article, express or implied, shall give any
benefit or any legal or equitable right, remedy, or claim
hereunder to any other person. The District undertakes to
provide only the financial information, operating data,
financial statements, and notices which it has expressly
agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be
relevant or material to a complete presentation of the
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J
District's financial results, condition, or prospects or
hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly
provided herein. The District does not make any
representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Bonds at any
future date.
UNDER NO CIRCUMSTANCES SHALL THE DISTRICT BE LIABLE
TO THE HOLDER OR BENEFICIAL OWNERS OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT FOR DAMAGES RESULTING IN WHOLE OR
IN PART FROM ANY BREACH BY THE DISTRICT, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS
SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN
CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL
BE LIMITED TO AN ACTION FOR MANDAMUS OR. SPECIFIC PERFORMANCE.
No default by the District in observing or
performing its obligations under this Section shall comprise
a breach of or default under the Order for purposes of any
other provision of this Order.
Nothing in this Section is intended or shall act to
disclaim, waive, or otherwise limit the duties of the District
under federal and state securities laws.
The provisions of this Section may be amended by the
District from time to time to adopt to changed circumstances
that arise from a change in legal requirements, a change in
law, or a change in the identity, nature, status, or type of
operations of the District, but only if. (1) the provisions of
this Section, as so amended would have permitted an
underwriter to purchase of sell Bonds in the primary offering
of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either
(a) the Holders of a majority in aggregate principal amount
(or any greater amount required by any other provision of this
Order that authorizes such a amendment) of the Outstanding
Bonds consent to such amendment or (b) a Person that is
unaffiliated with the District (such as nationally recognized
bond counsel) determined that such amendment will not
materially impair the interest of the Holders and beneficial
owners of the Bonds. If the District so amends the provisions
of this Section, it shall include with any amended financial
information or operating data next provided in accordance with
Section 7.3 an explanation, in narrative form, or the reason
for the amendment and of the impact of any change in the type
of financial information or operating data so provided. The
District may also amend or repeal the provisions of this
ontinuing disclosure agreement if the SEC amends or repeals
the applicable provisions of the Rule or a court of final
A:\30\NEWMONEY.BC1\BONDORD.98 37
'- 'y'i , (^)
(1111
1\
e
jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions
of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primary offering
of the Bonds.
SECTION NINE
TAX COVENANTS--LIMITATIONS ON EXPENDITURE ON
PROCEEDS AND DISPOSITIONS OF PROPERTY
SECTION 9.1: Allocation of, and Limitation on,
Expenditures for the Project. The Issuer covenants to account
for the expenditure of sale proceeds and investment earnings
to be used for the purposes described in Section 2. 1 of this
Order (the "Project") on its books and records by allocating
proceeds to expenditures within 18 months of the later of the
date that (1) the expenditure is made, or (2) the Project is
completed. The foregoing notwithstanding, the Issuer shall
not expend sale proceeds or investment earnings thereon more
than 60 days after the earlier of (1) the fifth anniversary of
the delivery of the Bonds, or (2) the date- the Bonds are
retired, unless the Issuer obtains an opinion of nationally-
recognized bond counsel that such expenditure will not
adversely affect the tax-exempt status of the Bonds. For
purposes hereof, the Issuer shall not be obligated to comply
with this covenant if it obtains an opinion that such failure
to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
SECTION 9.2 : Disposition of Project. The Issuer
covenants that the property constituting the Project will not
be sold or otherwise disposed in a transaction resulting in
the receipt by the Issuer of cash or other compensation,
unless the Issuer obtains an opinion of nationally-recognized
bond counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the Bonds. For
purposes of the foregoing, the portion of the property
comprising personal property and disposed in the ordinary
course shall not be treated as a transaction resulting in the
receipt of cash or other compensation. For purposes hereof,
the Issuer shall not be obligated to comply with this covenant
if it obtains an opinion that such failure to comply will not
adversely affect the excludability for federal income tax
purposes from gross income of the interest.
SECTION TEN
ADDITIONAL BONDS AND REFUNDING BONDS
SECTION 10.1: Additional Bonds. The District
expressly reserves the right to issue, in one or more series,
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the remaining authorized but unissued bonds'as well as such
e other bonds as may be authorized at subsequent elections.
Such bonds may be payable from and equally secured by (i) to
the extent permitted by law, a pledge of taxes and (ii) Net
Revenues to the same extent as pledged for and in all things
on a parity with the lien on the Bonds.
SECTION 10.2. Refunding Bonds. The District
reserves the right to issue Refunding Bonds in any manner
permitted by law to refund any bonds at or prior to their
respective dates of maturity or redemption.
SECTION ELEVEN
DEFEASANCE
SECTION 11.1: Discharge of Obligations. Any Bond
shall be deemed to be paid and shall no longer be considered
to be a Bond within the meaning of this Order when payment of
the principal of and interest on such Bond to the Stated
Maturity thereof or (if notice of redemption shall have been
duly given, irrevocably provided for, or waived as provided
herein) to the Redemption Date shall have been made or shall
have been provided for by deposit with the Paying Agent for
such payment (or with any other bank or trust company which
has agreed to hold the same for such purpose) (1) money
sufficient to make such payment, (2) Governmental Securities
certified by an independent public accounting firm of national
reputation to be of such maturities and interest payment dates
and to bear such interest as will, without further investment
or reinvestment or either the principal amount thereof or the
interest earnings therefrom, be sufficient to make such
payment, or (3) a combination of money and Governmental
Securities together so certified sufficient to make such
payment, provided that all the expenses pertaining to the
Bonds with respect to which such deposit is made shall have
been paid or the payment thereof provided for to the
satisfaction of the Paying Agent (and to such other bank or
trust company) .
In the event such deposit is made with respect to
some but not all of the Bonds then Outstanding, the Issuer
shall designate the Stated Maturities of the Bonds with
respect to which such deposit is made. If such deposit shall
be sufficient to provide for the payment of the principal of
and interest on some but not all Outstanding Bonds of a
particular Stated maturity so designated, the Paying Agent
shall select the Outstanding Bonds of such Stated Maturity
with respect to which such deposit if made by such random
method as the District shall deem fair :and appropriate and
which may provide for the selection of portions (equal to
$5, 000 or any integral multiple thereof) of the principal
amount of Bonds of a denomination larger than $5, 000.
Notwithstanding anything herein to the contrary, no
such deposit shall have the effect described in this Section
(a) if made during the existence of a default in the payment
of any Bond unless made with respect to all of the Bonds then
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Carib) (41114)
Outstanding or (b) unless accompanied by an opinion of counsel
of recognized standing in the field of federal income taxation
to the effect that neither such deposit nor the investment
thereof shall adversely affect the excludability of interest
on any Bond from the gross income of any owner thereof for
federal income tax purposes.
Any money and Governmental Securities deposited for
such purpose shall be held by the Paying Agent (or other bank
or trust company) with which such deposit is made in a
segregated account in trust or escrow for the Holders of the
Bonds with respect to which such deposit is made and, together
with any investment income therefrom, shall be disbursed
solely to pay the principal of and interest on such Bonds when
due, except that cash receipts may be withdrawn and paid to
the Issuer provided the date and amount of such withdrawals
are taken into account in the most recent verification of the
accounting firm referred to in this Section. No money or
Governmental Securities so deposited shall be invested or
reinvested unless in Governmental Securities and unless such
money and Governmental Securities not invested and such new
investments are together certified by an independent public
accounting firm of national reputation to be of such amounts,
maturities, and interest payment dates and to bear such
interest as will, without further investment or reinvestment
of either the principal amount thereof or the interest
earnings therefrom, be sufficient to make such payment.
At such times as a Bond shall be deemed to be paid
hereunder, as aforesaid, it shall no longer be entitled to the
benefits of this Order, except for the purposes of any such
payment from such money or Governmental Securities.
SECTION TWELVE
SALE AND TAX EXEMPTION
SECTION 12.1: Sale. The Governing Body hereby
confirms the sale of the Bonds to
after the taking of public bids therefor on this date, at a
price of 97% of par plus accrued interest to the date of
delivery, in accordance with the terms specified in the
Official Notice of Sale. The effective interest rate of the
Bonds as calculated pursuant to Article 717k-2, Vernon's Texas
Civil Statutes, as amended, is %.
SECTION 12.2 : Official Statement. The Board hereby
ratifies, authorizes, and approves, in connection with the
sale of the Bonds, the preparation and distribution of the
Preliminary Official Statement dated , 1998 and
a final Official Statement substantially in the same form
containing such additional information and amendments as may
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•, a ,
be necessary to conform to the terms of the Bonds, this Order,
and the bond purchase agreement for the Bonds. The
appropriate officials of the District are hereby authorized to
sign such Official Statement and/or deliver certificates
pertaining to such Official Statement as prescribed therein,
dated as of the date of payment for and delivery of the Bonds.
SECTION 12.3: Oualified Tax-Exempt Obligations.
The District hereby designates the Bonds as "qualified tax-
exempt obligations" for purpose of Section 265 (b) of the Code.
In connection therewith, the District represents (a) that the
aggregate amount of tax-exempt obligations issued by the
District during calendar year 1998, including the bonds, which
have been designated as "qualified tax-exempt obligations"
under Section 265 (b) (3) of the Code does not exceed
$10,000,000. For purposes of this Section 12. 3, the term "tax-
exempt obligations" does not include private activity bonds"
within the meaning of Section 141 of the Code, other than
"qualified 501(c) (3) bonds" within the meaning of Section 145
of the Code. In addition, the purposes of this Section 12 . 3
the District includes all governmental units which are
"subordinate entities" of the District, within the meaning of
Section 265(b) of the Code.
This Order shall be in force and effect from and
after its passage, and it is so ordered.
PASSED AND APPROVED this day of ,
1998.
President,
Board of Directors
ATTEST:
Secretary,
Board of Directors
(SEAL)
Attachment: Paying Agent/Registrar's Agreement
Exhibit "A" - District's Audit
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