HomeMy WebLinkAbout1993-O-20 - Issuance of BondsORDINANCE NO. 1993-20
ORDINANCE AUTHORIZING THE ISSUANCE OF
UTILITY SYSTEM REVENUE BONDS
THE STATE OF TEXAS
COUNTY OF ERATH
CITY OF STEPHENVILLE
WHEREAS, there are presently outstanding bonds issued
by the City of Stephenville (the "City") which are secured
by a pledge of, and first lien on, the net revenues of its
Utility System, to wit: City of Stephenville, Texas
Waterworks and Sewer System Refunding and Improvement
Revenue Bonds, Series 1985 (the 111985 Bonds") and City of
Stephenville, Texas Utility System Refunding Revenue Bonds,
Series 1988 (the 111988 Bonds"); and
WHEREAS, there are presently outstanding bonds issued
by the City which are secured by a pledge of, and
subordinate lien on, the net revenues of its Utility System,
to wit: City of Stephenville, Texas Utility System
Subordinate Lien Revenue Bonds, Series 1993-A (the "Refunded
Bonds"), in the aggregate principal amount of $1,535,000;
and
WHEREAS, the City desires to authorize and issue its
Utility System Revenue Bonds for the purpose of making
improvements and extensions to its Wastewater System and
refunding all of the Refunded Bonds; and
WHEREAS, Article 717k, V.A.T.C.S. ("Article 717k"),
authorizes the City to issue refunding bonds and to deposit
the proceeds from the sale thereof, and any other available
funds or resources, directly with a place of payment (paying
agent) for the Refunded Bonds, and such deposit, if made
before such payment dates, shall constitute the making of
firm banking and financial arrangements for the discharge
and final payment of the Refunded Bonds; and
WHEREAS, the Texas Water Development Board, as the
registered owner of all of the Refunded Bonds, has agreed to
present the Refunded Bonds for redemption and payment
without further notice; and
WHEREAS, the City Council reserved the right in the
ordinances authorizing the issuance of the 1985 Bonds and
1988 Bonds to issue bonds for any lawful purpose, which
bonds may be on a parity with the 1985 Bonds and 1988 Bonds;
and
WHEREAS, NationsBank of Texas, N.A., Austin, Texas, is
the paying agent for the Refunded Bonds; and
WHEREAS, the Refunded Bonds are scheduled to mature, or
are subject to redemption prior to maturity, not more than
20 years from the date of the bonds hereinafter authorized;
and
WHEREAS, Article 717k provides that the Issuer may
issue refunding bonds in combination with bonds for making
the improvements and extensions to the Issuer's Wastewater
System; and
WHEREAS, the bonds hereinafter authorized to be issued
shall be on a parity with the 1985 Bonds and 1988 Bonds; and
WHEREAS, the bonds hereafter authorized are being
issued and delivered pursuant to Articles 1111 through 1118,
et seq., 717k-6 and 717k, V.A.T.C.S.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
STEPHENVILLE, TEXAS:
SECTION 1. Recitals, Authorization, Designation,
Principal Amount and Purpose of the Bonds. The recitals set
forth in the preamble hereof are incorporated herein and
shall have the same force and effect as if set forth in this
Section. Revenue bonds of the City shall be and are hereby
authorized to be issued in the aggregate principal amount of
$7,680,000, to be designated and bear the title "City of
Stephenville, Texas, Utility System Revenue Bonds, Series
1993" (hereinafter referred to as the "Bonds"), for the
purpose of refunding certain outstanding obligations of the
City (identified in the preamble hereof as the "Refunded
Obligations") and making improvements and extensions to the
City's Wastewater System.
SECTION 2. Authorized Denominations and Maturities of
Bonds. The Bonds shall be issued in fully registered form
only, shall be dated , 1993 (the "Bond Date") and
shall be in denominations of $5,000 or any integral multiple
thereof, and shall become due and payable on June 1 in each
of the years and in principal amounts (the "Stated
Maturities") and bear interest at the rates per annum in
accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount($) Rate (%)
The Bonds shall bear interest on the unpaid principal
amounts from their date of delivery to the initial purchaser
1 of the Bonds at the rates per annum shown above in this
Section. Interest on the Bonds shall be payable on June 1
and December 1 in each year, commencing December 1, 1993.
SECTION 3. Terms of Payment; Paving Agent/Registrar.
The principal of, premium, if any, and the interest on the
Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or
holders of the Bonds (hereinafter called the "Holders")
appearing on the registration and transfer books (the
"Registration Books") maintained by the Paying
Agent/Registrar (hereinafter defined) and the payment
thereof shall be in any coin or currency of the United
States of America, which at the time of payment is legal
tender for the payment of public and private debts, and
shall be without exchange or collection charges to the
Holders.
The selection and appointment of
Texas to serve as Paying
Agent/Registrar for the Bonds (the "Paying Agent/Registrar")
is hereby approved and confirmed. The execution by the
officials of the City of the "Paying Agent/Registrar
Agreement" in substantially the form attached as Exhibit A
is hereby authorized. The City covenants to maintain and
provide a Paying Agent/Registrar at all times until the
Bonds are paid and discharged, and any successor Paying
Agent/Registrar shall be a commercial bank, trust company or
other financial institution organized under the laws of the
United States or a state thereof, and qualified and
authorized to serve in such capacity and perform the duties
and services of Paying Agent/Registrar. Upon any change in
the Paying Agent/Registrar for the Bonds, the City agrees to
promptly cause a written notice thereof to be sent to each
registered owner of the Bonds by United States Mail, first
class postage prepaid, which notice shall also give the
address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be
payable at the Stated Maturity or the redemption thereof,
only upon presentation and surrender of the Bonds to the
Paying Agent/Registrar at its principal office. Interest on
the Bonds shall be paid to the Holder whose name appears on
the Registration Books at the close of business on the 15th
day of the month next preceding each interest payment date
(the "Record Date") and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first
class postage prepaid, to the address of the registered
owner recorded on the Registration Books or (ii) by such
other method, acceptable to the Paying Agent/Registrar,
requested by, and at the risk and expense of, the Holder.
If the date for the payment of the principal of or interest
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on the Bonds shall be a Saturday, Sunday, a legal holiday,
or a day on which banking institutions in the City where the
Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment
shall be the next succeeding day which is not such a
Saturday, Sunday, legal holiday, or day on which banking
institutions are authorized to close; and payment on such
date shall have the same force and effect as if made on the
original date payment was due.
SECTION 4. Redemption. (a) Optional Redemption. The
Bonds having Stated Maturities on and after June 1, ,
shall be subject to redemption prior to maturity, at the
option of the City, in whole or in part in principal amounts
of $5,000 or any integral multiple thereof (and if within a
Stated Maturity by lot by the Paying Agent/Registrar), on
June 1, 1998 or on any interest payment date thereafter, at
the redemption price of par plus accrued interest to the
date of redemption.
(b) Exercise of Redemption Option. At least forty-
five (45) days prior to a redemption date for the Bonds
(unless a shorter notification period shall be satisfactory
to the Paying Agent/Registrar), the City shall notify the
Paying Agent/Registrar of the decision to redeem Bonds, the
principal amount of each Stated Maturity to be redeemed, and
the date of the redemption therefor. The decision of the
City to exercise the right to redeem Bonds shall be entered
in the minutes of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than
all Outstanding Bonds of the same Stated Maturity are to be
redeemed on a redemption date, the Paying Agent/Registrar
shall treat such Bonds as representing the number of Bonds
Outstanding which is obtained by dividing the principal
amount of such Bonds by $5,000 and shall select the Bonds to
be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30)
days prior to a redemption date for the Bonds, (i) a notice
of redemption shall be sent by United States Mail, first
class postage prepaid, in the name of the City and at the
City's expense, to each Holder of a Bond to be redeemed in
whole or in part at the address of the Holder appearing on
the Registration Books at the close of business on the
business day next preceding the date of mailing such notice
and to major securities depositories, national bond rating
agencies and bond information services, and (ii) a notice of
such redemption shall be published one (1) time in a
financial journal or publication of general circulation in
the United States of America carrying as a regular feature
notices of municipal bonds called for redemption; provided,
however, that the failure to send, mail or receive such
notice described in (i) above, or any defect therein or in
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the sending or mailing thereof, shall not affect the
validity or effectiveness of the proceedings for the
!! redemption of any Bond, and the publication of notice as
described in (ii) above shall be the only notice actually
required in connection with or as a prerequisite to the
redemption of any Bonds.
All notices of redemption shall (i) specify the date of
redemption for the Bonds, (ii) identify the Bonds to be
redeemed and, in the case of a portion of the principal
amount to be redeemed, the principal amount thereof to be
redeemed, (iii) state the redemption price, (iv) state that
the Bonds, or the portion of the principal amount thereof to
be redeemed, shall become due and payable on the redemption
date specified, and the interest thereon, or on the portion
of the principal amount thereof to be redeemed, shall cease
to accrue from and after the redemption date, and (v)
specify that payment of the redemption price for the Bonds,
or the principal amount thereof to be redeemed, shall be
made at the principal office of the Paying Agent/Registrar
only upon presentation and surrender thereof by the Holder.
If a Bond is subject by its terms to prior redemption and
has been called for redemption and notice of redemption
thereof has been duly given or waived as provided in Sec-
tion 35, such Bond (or the principal amount thereof to be
redeemed) shall become due and payable, and interest thereon
f shall cease to accrue from and after the redemption date
therefor; provided moneys sufficient for the payment of such
Bonds (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the
purpose of such payment by the Paying Agent/Registrar.
SECTION 5. Registration; Transfer and Exchange of
Bonds. Registration Books relating to the registration,
payment, and transfer or exchange of the Bonds shall at all
times be kept and maintained by the City at the principal
office of the Paying Agent/Registrar, as provided herein and
in accordance with the provisions of the Paying
Agent/Registrar Agreement and such rules and regulations as
the City and the Paying Agent/Registrar may prescribe. The
Paying Agent/Registrar shall obtain, record, and maintain in
the Registration Books the name and address of each and
every Holder or, if appropriate, the nominee thereof. Any
Bond may, in accordance with its terms and the terms hereof,
be transferred or exchanged for Bonds of other authorized
denominations by the Holder, in person or by his duly
authorized agent, upon surrender of such Bond to the Paying
Agent/Registrar for cancellation, accompanied by a written
instrument of transfer or request for exchange duly executed
by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond at the princi-
pal office of the Paying Agent/Registrar, the Paying
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A Agent/Registrar shall register and deliver, in the name of
jj the designated transferee or transferees, one or more new
Bonds of authorized denominations and having the same Stated
Maturity and of a like aggregate principal amount as the
Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds may be exchanged for
other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of
like aggregate principal amount as the Bonds surrendered for
exchange, upon surrender of the Bonds to be exchanged at the
principal office of the Paying Agent/Registrar. Whenever
any Bonds are surrendered for exchange, the Paying
Agent/Registrar shall register and deliver new Bonds to the
Holder requesting the exchange.
All Bonds issued in any transfer or exchange of Bonds
shall be delivered to the Holders at the principal office of
the Paying Agent/Registrar, or sent by United States Mail,
first class postage prepaid, to the Holder, and, upon the
delivery thereof, the same shall be valid obligations of the
City, evidencing the same obligation to pay, and entitled to
the same benefits under this Ordinance, as the Bonds surren-
dered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this
Section shall be made without expense or service charge to
any Holder, except as otherwise herein provided, and except
that the Paying Agent/Registrar shall require payment by any
Holder requesting such transfer or exchange of any tax or
other governmental charges required to be paid with respect
to such transfer or exchange.
Bonds cancelled by reason of an exchange or transfer
pursuant to the provisions hereof are hereby defined to be
"Predecessor Bonds", evidencing all or a portion, as the
case may be, of the same obligation to pay evidenced by the
new Bond or Bonds registered and delivered in the exchange
or transfer therefor. Additionally, the term "Predecessor
Bonds" shall include any mutilated, lost, destroyed, or
stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Sec-
tion 28 hereof and such new replacement Bond shall be deemed
to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
Neither the City nor the Paying Agent/Registrar shall
be required to transfer or exchange any Bond called for
redemption, in whole or in part, within 45 days of the date
fixed for redemption of such Bond; provided, however, such
limitation on transferability shall not be applicable to an
exchange by the Holder of an unredeemed balance of a Bond
called for redemption in part.
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SECTION 6. Execution; Registration. The Bonds shall
be executed on behalf of the City by the Mayor under its
seal reproduced or impressed thereon and countersigned by
the City Secretary. The signature of said officers on the
Bonds may be manual or facsimile. Bonds bearing the manual
or facsimile signatures of individuals who are or were the
proper officers of the City on the Bond Date shall be deemed
to be duly executed on behalf of the City, notwithstanding
that such individuals or either of them shall cease to hold
such offices at the time of delivery of the Bonds to the
initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, all as authorized and
provided in Article 717k-6, V.A.T.C.S., as amended.
No Bond shall be entitled to any right or benefit under
this Ordinance, or be valid or obligatory for any purpose,
unless there appears on such Bond either a certificate of
registration, manually executed by the Comptroller of Public
Accounts of the State of Texas or his duly authorized agent,
or a certificate of registration, manually executed by an
authorized officer, employee or representative of the Paying
Agent/Registrar, substantially in the form provided in
Section 7, and either such certificate upon any Bond duly
signed shall be conclusive evidence, and the only evidence,
that such Bond has been duly certified, registered and
delivered.
SECTION 7. Form of Bond. The Bonds, the Registration
Certificate of the Comptroller of Public Accounts of the
State of Texas, the Paying Agent/Registrar's Registration
Certificate, and the form of Assignment to be printed on
each of the Bonds, shall be substantially in the forms set
forth in this Section with such appropriate insertions,
omissions, substitutions, and other variations as are
permitted or required by this Ordinance and may have such
letters, numbers, or other marks of identification (includ-
ing 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)
thereon as may, consistently herewith, be established by the
City or determined by the officers executing such Bonds as
evidenced by their execution. Any portion of the text of
any Bonds may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Bond.
The definitive Bonds shall be printed, lithographed, or
engraved or produced in any other similar manner, all as
determined by the officers executing such Bonds as evidenced
by their execution, but Bonds submitted to the Attorney
General of Texas may be typewritten or photocopied or
otherwise reproduced.
NO.
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF ERATH
CITY OF STEPHENVILLE, TEXAS
UTILITY SYSTEM REVENUE BOND
SERIES 1993
DATE OF STATED
ISSUANCE INTEREST RATE MATURITY CUSIP NO.
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Stephenville (hereinafter referred to as
the "City"), a body corporate and political subdivision in
the County of Erath, State of Texas, for value received,
hereby promises to pay to the order of the registered owner
named above, or the registered assigns thereof (the
"registered owner"), solely from the revenues hereinafter
identified, on the Stated Maturity date specified above, the
Principal Amount stated above (or so much thereof as shall
not have been paid upon prior redemption) and to pay
interest on the unpaid Principal Amount hereof from the Date
of Issuance at the per annum rate of interest specified
above; such interest being payable on June 1 and December 1
in each year, commencing December 1, 1993. Principal of
this Bond is payable at its Stated Maturity or redemption
prior to its Stated Maturity to the registered owner hereof,
upon presentation and surrender, at the principal office of
the Paying Agent/Registrar executing the registration
certificate appearing hereon, or its successor. Interest is
payable to the registered owner of this Bond (or one or more
Predecessor Bonds, as defined in the Ordinance hereinafter
referenced) whose name appears on the "Registration Books"
maintained by the Paying Agent/Registrar at the close of
business on the "Record Date", which is the 15th day of the
month next preceding each interest payment date. All
payments of principal of, premium, if any, and interest on
this Bond shall be in any coin or currency of the United
States of America which at the time of payment if legal
tender for the payment of public and private debts and
interest shall be paid by the Paying Agent/Registrar by
check sent United States Mail, first class postage prepaid,
to the address of the registered owner recorded in the
Registration Books or by such other method, acceptable to
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the Paying Agent/Registrar, requested by, and at the risk
and expense of, the registered owner.
*This Bond is one of a series of bonds issued in the
aggregate principal amount of $7,680,000 (herein referred to
as the "Bonds") for the purpose of refunding certain
outstanding obligations of the City (identified in the
Ordinance) and making improvements and extensions to the
City's Wastewater System, under and in strict conformity
with the Constitution and laws of the State of Texas,
including Article 717k, as amended, V.A.T.C.S., and pursuant
to an ordinance adopted by the governing body of the City
(herein referred to as the "Ordinance").
*The Bonds maturing on and after June 1, , may be
redeemed prior to their Stated Maturities, at the option of
the City, in whole or in part in principal amounts of $5,000
or any integral multiple thereof (and if within a Stated
Maturity by lot by the Paying Agent/Registrar), on June 1,
1998, or on any interest payment date thereafter, at the
redemption price of par, together with accrued interest to
the date of redemption.
*Not less than 30 days prior to the redemption date,
(i) written notice of redemption shall be sent by United
States Mail, first class postage prepaid, to registered
owners of the Bonds to be redeemed, and to major securities
depositories, national bond rating agencies and bond
information services, and subject to the terms and
provisions relating thereto contained in the Ordinance and
(ii) a notice of such redemption shall be published one (1)
time in a financial journal or publication of general
circulation in the United States of America carrying as a
regular feature notices of municipal bonds called for
redemption; provided, however, that the failure to send,
mail or receive such notice described in (i) above, or any
defect therein or in the sending or mailing thereof, shall
not affect the validity or effectiveness of the proceedings
for the redemption of any Bond, and the publication of
notice as described in (ii) above shall be the only notice
actually required in connection with or as a prerequisite to
the redemption of any Bonds. If this Bond (or any portion
of the principal sum hereof) shall have been duly called for
redemption and notice of such redemption duly given, then
upon such redemption date this Bond (or the portion of the
principal sum hereof to be redeemed) shall become due and
payable, and interest thereon shall cease to accrue from and
after the redemption date therefor; provided moneys for the
payment of the redemption price and the interest on the
principal amount to be redeemed to the date of redemption
are held for the purpose of such payment by the Paying
Agent/Registrar.
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*In the event of a partial redemption of the principal
( amount of this Bond, payment of the redemption price of such
E principal amount shall be made to the registered owner only
upon presentation and surrender of this Bond to the Paying
Agent/Registrar at its principal office, and there shall be
issued, without charge therefor, to the registered owner
hereof, a new Bond or Bonds of like maturity and interest
rate in any authorized denominations provided in the
Ordinance for the then unredeemed balance of the principal
sum hereof. If this Bond is called for redemption, in whole
or in part, the City and the Paying Agent/Registrar shall
not be required to transfer this Bond to an assignee of the
registered owner within 45 days of the redemption date
therefor; provided, however, such limitation on transfer-
ability shall not be applicable to an exchange by the
registered owner of the unredeemed balance hereof in the
event of its redemption in part.
*The Bonds, together with other outstanding revenue
bonds of the City, are special obligations of the City,
payable solely from and equally and ratably secured by a
first lien on and pledge of the Net Revenues (as defined in
the Ordinance) of the City's Utility System (the "System").
The Bonds do not constitute a legal or equitable pledge,
charge, lien or encumbrance upon any property of the City or
the System, except with respect to the Net Revenues. The
holder hereof shall never have the right to demand payment
of this obligation out of any funds raised or to be raised
by taxation.
*Subject to satisfying the terms and conditions pre-
scribed therefor, the City has reserved the right to issue
additional revenue obligations payable from, and together
with the Bonds equally and ratably secured by a parity lien
on and pledge of, the Net Revenues of the System.
*Reference is hereby made to the Ordinance, a copy of
which is on file in the principal office of the Paying
Agent/Registrar, and to all of the provisions of which the
owner or holder of this Bond by the acceptance hereof hereby
assents, for definition of terms; the description of and the
nature and extent of the security for the payment of the
Bonds; the properties constituting the System; the Net
Revenues pledged to the payment of the principal of and
interest on the Bonds; the nature and extent and manner of
enforcement of the lien and pledge securing the payment of
the Bonds; the terms and conditions for the issuance of
additional revenue obligations; the terms and conditions
relating to the transfer or exchange of this Bond; the
conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the
rights, duties, -and obligations of the City and the Paying
Agent/Registrar; the terms and provisions upon which the
liens, pledges, charges and covenants made therein may be
10
discharged at or prior to the maturity or redemption of this
Bond, and this Bond shall be deemed to be no longer
Outstanding thereunder; and for other terms and provisions
contained therein. Capitalized terms used herein have the
same meanings assigned in the Ordinance.
*The Bonds, subject to certain limitations contained in
the Ordinance, may be transferred on the Registration Books
only upon its presentation and surrender at the principal
office of the Paying Agent/Registrar, .with the 'Assignment
hereon duly endorsed by, or accompanied by a written instru-
ment of transfer in form satisfactory to the Paying
Agent/Registrar duly executed by, the registered owner
hereof, or his duly authorized agent. When a transfer on
the Registration Books occurs, one or more new fully regis-
tered Bonds of the same Stated Maturity, of authorized
denominations, bearing the same rate of interest, and of the
same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
*The City and the Paying Agent/Registrar, and any agent
of either, may treat the registered owner hereof whose name
appears on the Registration Books (i) on the Record Date as
the owner entitled to payment of interest hereon, (ii) on
the date of surrender of this Bond as the owner entitled to
payment of principal hereof at its Stated Maturity or its
redemption, in whole or in part, and (iii) on any other date
as the owner for all other purposes, and neither the City
nor the Paying Agent/Registrar, or any agent of either,
shall be affected by notice to the contrary.
It is hereby certified, recited, represented and
covenanted that the City is a body corporate and political
subdivision duly organized and legally existing under and by
virtue of the Constitution and laws of the State of Texas;
that the issuance of the Bonds is duly authorized by law;
that all acts, conditions and things required to exist and
be done precedent to and in the issuance of the Bonds to
render the same lawful and valid special obligations of the
City have been properly done, have happened and have been
performed in regular and due time, form and manner as
required by the Constitution and laws of the State of Texas,
and the Ordinance; that the Bonds do not exceed any
constitutional or statutory limitation; and that due
provision has been made for the payment of the principal of
and interest on the Bonds by a pledge of the Net Revenues of
the System as aforestated. In case any provision in this
Bond or any application thereof shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of
the remaining provisions and applications shall not in any
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way be affected or impaired thereby. The terms and
provisions of this Bond and the Ordinance shall be construed
in accordance with and shall be governed by the laws of the
State of Texas.
IN WITNESS WHEREOF, the City has caused this Bond to be
signed with the manual or facsimile signature of the Mayor
of the City and countersigned with the manual or facsimile
signature of the City Secretary of the City, and has caused
the official seal of the City to be duly impressed, or
placed in facsimile, on this Bond.
CITY OF STEPHENVILLE, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(SEAL)
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**Form of Registration Certificate of Comptroller
of Public Accounts to Appear on Initial Bond(s) only
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
OF PUBLIC ACCOUNTS )
REGISTER NO.
THE STATE OF TEXAS i
I HEREBY CERTIFY that this Bond has been examined,
certified as to validity and approved by the Attorney
General of the State of Texas, and duly registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
NOTE TO PRINTER:
*is printed on back of Bonds
**Comptroller Certificate not printed on Bonds
Form of Certificate of Paving Agent/Registrar
to appear on Bonds
PAYING AGENT/REGISTRAR REGISTRATION CERTIFICATE
This Bond has been duly issued and registered in the
name of the Registered Owner shown above under the provi-
sions of the within -mentioned Ordinance; the bond or bonds
of the above entitled and designated series originally
delivered having been approved by the Attorney General of
the State of Texas and registered by the Comptroller of
Public Accounts, as shown by the records of the Paying
Agent/Registrar.
, Texas
as Paying Agent/Registrar
Registration Date:
B y
Authorized Signature
13
FOR
assigns,
address,
JawtKOL01
ASSIGNMENT
VALUE RECEIVED the undersigned
and transfers unto (print or
and zip code of transferee:)
hereby sells,
typewrite name,
(Social Security or other identifying number:
) the within Bond and all rights
thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for
registration thereof, with full power of substitution in the
premises,
IIl:M421DT
NOTICE: The signature on
this assignment must corres-
pond with the name of the
registered owner as it
appears on the face of the
within Bond in every partic-
ular.
Signature guaranteed:
The printing of a true and correct reproduction of the
final opinion of McCall, Parkhurst & Horton L.L.P., Dallas,
Texas, approving such Bonds as to their validity, is hereby
approved and authorized.
CUSIP numbers may be printed or typed on the definitive
Bonds. It is expressly provided, however, that the presence
or absence of CUSIP numbers on the definitive Bonds shall be
of no significance or effect as regards the legality thereof
and neither the City nor attorneys approving said Bonds as
to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the definitive Bonds.
The City hereby authorizes the printer of the Bonds to
print thereon any statement of insurance with respect to the
Bonds furnished by the municipal bond insurance company
insuring the Bonds, as described in Section 38.
SECTION 8. Reasons for Refunding. The City is issuing
the Bonds for, among other reasons, the purpose of refunding
the Refunded Bonds, which shall result in the fixing of
variable rate debt, thereby removing the uncertainties as to
interest due on the Refunded Bonds, and enabling the City to
14
more accurately predict the need for increases for water and
sewer services.
SECTION 9. Definitions. For all purposes of this
Ordinance and in particular for clarity with respect to the
issuance of the Bonds herein authorized and the pledge and
appropriation of revenues to the payment of the Bonds, the
following definitions are provided:
"Additional Bonds" - Revenue bonds or other
evidences of indebtedness which the City reserves the
right to issue or enter into, as the case may be, in
the future in accordance with the terms and conditions
prescribed therefore and which are equally and ratably
secured by a first lien on and pledge of the Net
Revenues of the System.
"Amortization Installment" - With respect to any
Term Bonds of the Bonds or any series of Additional
Bonds, shall mean the amount of money which is required
to be deposited into the Mandatory Redemption Account
for retirement of such Term Bonds (whether at maturity
or by mandatory redemption and including redemption
premium, if any) provided that the total Amortization
Installments for such Term Bonds shall be sufficient to
provide for retirement of the aggregate principal
amount of such Term Bonds.
"Average Annual Debt Service" - That average
amount which, at the time of computation, will be
required to pay the Debt Service of obligations when
due and derived by dividing the total of such Debt
Service by the number of complete Fiscal Years then
remaining before final maturity. Capitalized interest
payments provided from bond proceeds shall be excluded
in making the aforementioned computation.
"Bonds" - The "City of Stephenville, Texas,
Utility System Revenue Bonds, Series 199311, dated
, 1993, authorized by this Ordinance.
"Bonds Similarly Secured" - Collectively, the
Prior Issue, the 1988 Bonds, the Bonds and Additional
Bonds.
"City" or "Issuer" - The City of Stephenville,
located in the County of Erath, Texas.
"Code" - The Internal Revenue Code of 1986, and
any amendments thereto.
"Debt Service" - As of any particular date of
computation, with respect to any obligations and with
respect to any period, the aggregate of the amounts to
15
be paid or set aside by the City as of such date or in
such period for the payment of the principal of (in-
cluding Amortization Installments), premium, if any,
and interest (to the extent not capitalized) on such
obligations; provided however, if the Additional Bonds
to be issued bear interest at a variable rate of
interest, prior to the issuance of such obligations,
the Director of Finance, subject to the approval of the
governing body of the City, shall determine as of the
date of the adoption of the ordinance authorizing the
issuance of such Additional Bonds:
(a) the maturity schedule of the fixed rate
obligations which would have otherwise been
issued on a schedule normally utilized by the
City in financing improvements, extensions,
or repairs to the System, and
(b) the fixed rate that would have been applica-
ble under market conditions at the time to
such obligations had they been issued and
delivered on such maturity schedule.
The debt service requirements based upon such determi-
nation shall thereafter be considered (including any calcu-
lation thereafter to be made when such Additional Bonds are
considered as Bonds Similarly Secured) as the debt service
requirements with respect to such Additional Bonds.
"Fiscal Year" - the twelve month accounting period
used by the City in connection with the operation of
the System, which may be any twelve consecutive month
period established by the City.
"Government Obligations" - Direct obligations of
the United States of America, including obligations the
principal of and interest on which are unconditionally
guaranteed by the United States of America, and United
States Treasury obligations such as its State and Local
Government Series in book -entry form.
"Gross Revenues" - All income, receipts and
revenues of every nature derived or received from the
operation and ownership (excluding refundable meter
deposits, restricted gifts and grants in aid of con-
struction, but including all fees paid to and on
deposit with the City at the start of the Fiscal Year
for access to the System) of the System, including
earnings and income derived from the investment or
deposit of moneys in any special funds or accounts
created and maintained for the payment and security of
the Bonds Similarly Secured and other obligations
payable solely from and secured only by a lien on and
pledge of the Net Revenues.
F[7
"Maintenance and Operating Expenses" - All current
expenses of operating and maintaining the System,
including all salaries, labor, materials, repairs and
extensions necessary to render efficient service;
provided, however, that only such repairs and
extensions, as in the judgment of the City Council,
reasonably and fairly exercised, are necessary to
maintain the operations of the System and render
adequate service to the City and the inhabitants
thereof, or such as might be necessary to meet some
physical accident or condition which would otherwise
impair obligations payable from Net Revenues shall be
deducted in determining "Net Revenues". Depreciation
charges shall not be considered Maintenance and
Operating Expenses. Maintenance and Operating Expenses
shall include payment under contracts for the purchase
of water supply, treatment of sewage or other
materials, goods or services for the System to the
extent authorized by law and the provisions of such
contract.
"Net Earnings" - The meaning assigned to such term
in Section 18 hereof.
"Net Revenues" - Gross Revenues of the System,
with respect to any period, after deducting the
System's Maintenance and Operating Expenses during such
period.
111988 Bonds" - The bonds so described in the
preamble to this Ordinance.
"Outstanding" - When used in this Ordinance with
respect to Bonds means, as of the date of determina-
tion, all Bonds theretofore issued and delivered under
this Ordinance, except:
(1) those Bonds cancelled by the Paying
Agent/Registrar or delivered to the Paying
Agent/Registrar for cancellation;
(2) those Bonds deemed to be paid by the City in
accordance with the provisions of Section 29 hereof by
the irrevocable deposit with the Paying
Agent/Registrar, or an authorized escrow agent, of
money or Government Obligations, or both, in the amount
necessary to fully pay the principal of (including
Amortization Installments), premium, if any, and
interest thereon to maturity or redemption, as the case
may be, provided that, if such Bonds are to be re-
deemed, notice of redemption thereof shall have been
duly given pursuant to this Ordinance or irrevocably
provided to be given to the satisfaction of the Paying
Agent/Registrar, or waived; and
17
(3) those Bonds that have been mutilated,
destroyed, lost, or stolen and replacement Bonds have
been registered and delivered in lieu thereof as
provided in Section 28 hereof.
"Paying Agent/Registrar" - The , bank, trust
company, financial institution or other entity so named
in accordance with the provisions of Section 3.
"Prior Issue" - The presently outstanding and
unpaid 1985 Bonds payable in whole or in part from a
lien on and pledge of the Net Revenues of the System,
more particularly described in the preamble of this
Ordinance.
"Refunded Bonds" - The presently outstanding and
unpaid obligations of the City to be refunded with the
proceeds of the Bonds, more particularly described in
the preamble of this Ordinance.
"Required Reserve" - The amount required to be
accumulated and maintained in the Reserve Fund under
the provisions of Section 13.
"System" - All properties, facilities and plants
currently owned, operated and maintained by the City
for the supply, treatment and transmission of treated
potable water, the collection, treatment and disposal
of water -carried wastes and the generation,
transmission and distribution of electricity, together
with all future extensions, improvements, replacements
and additions thereto; provided, however, that
notwithstanding the foregoing, and to the extent now or
hereafter authorized or permitted by law, the term
"System" shall not mean to include facilities of any
kind which are declared not to be a part of the System
and which are acquired or constructed by or on behalf
of the City with the proceeds from the issuance of
"Special Facilities Bonds", which are hereby defined as
being special revenue obligations of the City which are
not Bonds but which are payable from and secured by
other liens on and pledges of any revenues, sources or
payments, not pledged to the payment of the Bonds
including, but not limited to, special contract
revenues or payments received from any other legal
entity in connection with such facilities.
"Term Bonds" - Those Bonds or Additional Bonds so
designated in the ordinances authorizing such bonds
which shall be subject to retirement by operation of
the Mandatory Redemption Account.
If appropriate in the context of this Ordinance, words
of the singular number shall be considered to include the
18
plural, words of the plural number shall be considered to
include the singular, and words of the masculine, feminine
or neuter gender shall be considered to include the other
genders.
SECTION 10. Pledge. That the City hereby covenants
and agrees that the Net Revenues of the System, with the
exception of those in excess of the amounts required for the
payment and security of the Bonds Similarly Secured, are
hereby pledged to the payment and security of the Bonds and
Additional Bonds, if issued, including the establishment and
maintenance of the special funds created and to be main-
tained by this Ordinance, all as hereinafter provided; and
it is hereby ordained that the Bonds Similarly Secured, and
the interest thereon, shall constitute a first lien on the
Net Revenues of the System and be valid and binding without
any physical delivery thereof or further act by the City.
SECTION 11. Utility System Fund. The City hereby
covenants and agrees that Gross Revenues of the System
(excluding earnings and income from investments held for the
benefit of special funds created for the payment and
security of obligations payable in whole or in part from the
Net Revenues) shall be deposited to the credit of an account
created and maintained by the City and known as the "City of
Stephenville Utility System Fund" (herein called the "System
Fund"). The revenues of the System deposited in the System
Fund shall be pledged and appropriated to the extent
required for the following uses in the order of priority
shown:
FIRST: To the payment of all necessary and
reasonable Maintenance and Operating Expenses of the
System as defined herein or required by statute to be a
first charge on and claim against the Gross Revenues.
SECOND: To the payment of the amounts required
to be deposited in the Bond Fund created and
established for the payment of Debt Service on the
Bonds Similarly Secured as the same becomes due and
payable.
THIRD: To the payment of the amounts required
to be deposited in the Reserve Fund to establish and
maintain the Required Reserve in accordance with the
provisions of this Ordinance or any other ordinance
relating to issuance of Bonds Similarly Secured.
Any Net Revenues remaining in the System Fund after
satisfying the foregoing payments, or making adequate and
sufficient provision for the payment thereof, may be appro-
priated and used for any other City purpose now or hereafter
permitted by law.
iF]
SECTION 12. Bond Fund. For purposes of providing
funds to pay the principal of and interest on the Bonds
Similarly Secured as the same becomes due and payable, the
City agrees to create and maintain a separate and special
account or fund known as the "City of Stephenville Interest
and Sinking Revenue Bond Fund" (the "Bond Fund"). The City
covenants that there shall be deposited to the credit of the
Bond Fund prior to each principal and interest payment date
from the Net Revenues an amount equal to one hundred per
centum (100%) of the amount required to fully pay the
interest on and the principal of the Bonds then falling due
and payable, such deposits to pay maturing principal
(including Amortization Installments) and accruing interest
on the Bonds to be made in substantially equal monthly
installments on or before the 15th day of each month,
beginning on or before the 15th day of the month next
following the month the Bonds are delivered to the initial
purchaser(s).
The required monthly deposits to the Bond Fund for the
payment of principal of and interest on the Bonds shall
continue to be made as hereinabove provided until such time
as (i) the total amount on deposit in the Bond Fund and
Reserve Fund is equal to the amount required to fully pay
and discharge all Outstanding Bonds Similarly Secured
(principal, including Amortization Installments, and inter-
est) or (ii) the Bonds are no longer Outstanding.
SECTION 13. Reserve Fund. For purposes of accumulat-
ing and maintaining funds as a reserve for the payment of
the Bonds Similarly Secured, the City agrees and covenants
to create a separate and special fund or account to be know
as the "City of Stephenville Revenue Bond Reserve Fund" (the
"Reserve Fund") , and all funds deposited to the credit of
said Fund (excluding earnings and income derived or received
from investments which may be transferred to the System Fund
during such periods as there is on deposit in the Reserve
Fund the Required Reserve) shall be used solely for the
payment of the principal of and interest on the Bonds
Similarly Secured, when and to the extent an amount is not
required for the maintenance of the Required Reserve, such
excess amount may also be used to pay, or provide for the
payment of, the final principal amount of a series of Bonds
Similarly Secured so that such series of Bonds Similarly
Secured is no longer deemed to be "Outstanding" within the
meaning of Section 29 hereof.
The total amount to be accumulated and maintained in
the Reserve Fund by reason of the issuance of the Bonds
shall be $ (the "Required Reserve"). Simultaneously
with the delivery of the Bonds to the initial purchaser(s)
.thereof, the City shall deposit to the credit of the Reserve
Fund an amount equal to at least $ (the "Initial
Deposit") from the proceeds of sale of the Bonds.
20
Additionally, on or before the 15th day of the month next
following the delivery of the Bonds to the initial
purchasers and on or before the last day of each month
thereafter until the Required Reserve has been fully
accumulated, the City agrees to deposit, from sources other
than Bond proceeds, a sum equal to 1/60th of the difference
between the Required Reserve and the Initial Deposit.
As and when Additional Bonds are delivered or incurred,
the Required Reserve shall be increased, if required, to an
amount equal to not less than the Average Annual Debt
Service (calculated on a Fiscal Year basis) for all Bonds
Similarly Secured then outstanding, as determined on the
date the last series of Additional Bonds are delivered or
incurred, as the case may be. Any additional amount
required to be maintained in the Reserve Fund shall be so
accumulated by the deposit in the Reserve Fund of all or any
part thereof in cash immediately after the delivery of the
then proposed Additional Bonds, or, at the option of the
City, by the deposit of monthly installments, made on or
before the 15th day of each month following the month of
delivery of the Additional Bonds, of not less than 1/60th of
the additional amount to be maintained in said Fund by
reason of the issuance of the Additional Bonds then being
issued (or 1/60th of the balance of the additional amount
not deposited immediately in cash).
When and so long as the cash and investments in the
Reserve Fund total not less than the Required Reserve, no
deposits need be made to the credit of the Reserve Fund;
but, if and when the Reserve Fund at any time contains less
than the Required Reserve (other than as the result of the
reissuance of Additional Bonds as provided in the preceding
paragraph), the City covenants and agrees to cure the
deficiency in the Required Reserve by resuming monthly
deposits to said Fund from the Net Revenues of the System,
such monthly deposits to be in amounts equal to not less
than 1/60th of the then total Required Reserve to be main-
tained in said Fund and made on or before the 15th day of
each month until the total Required Reserve then to be
maintained in said Fund has been fully restored. The City
further covenants and agrees that, subject only to the
payments to be made to the Bond Fund, the Net Revenues shall
be applied and appropriated and used to establish and
maintain the Required Reserve and to cure any deficiency in
such amounts as required by the terms of this Ordinance and
any other ordinance pertaining to the issuance of Additional
Bonds.
During such time as the Reserve Fund contains the total
Required Reserve, the City may, at its option, withdraw all
surplus in the Reserve Fund in excess of the Required
Reserve and deposit such surplus in the System Fund.
21
SECTION 14. Depository for Funds; Security. All funds
fftt required to be maintained by the City pursuant to the
provisions of this Ordinance shall be kept at an official
depository of the City and moneys deposited to the credit of
such Funds, to the extent not invested, shall be secured in
the manner prescribed by law for securing other funds of the
City.
SECTION 15. Deficiencies; Excess Net Revenues. (a) If
on any occasion there shall not be sufficient Net Revenues
to make the required deposits into the Bond Fund and the
Reserve Fund, then such deficiency shall be cured as soon as
possible from the next available Net Revenues of the System,
or from any other sources available for such purpose.
(b) Subject to making the required deposits to the
Bond Fund (including the Mandatory Redemption Account) and
the Reserve Fund when and as required by this Ordinance, or
any ordinance authorizing the issuance of Additional Bonds,
the excess Net Revenues may be used by the City for any
lawful purpose.
SECTION 16. Payment of Bonds. While any of the Bonds
are Outstanding, authorized officials of the City shall
cause to be transferred to the Paying Agent/Registrar, from
funds on deposit in the Bond Fund and, if necessary, in the
Reserve Fund, amounts sufficient to fully pay and discharge
promptly as each installment of interest and principal of
the Bonds accrues or matures or comes due by reason of
redemption prior to maturity; such transfer of funds to be
made in such manner as will cause immediately available
funds to be deposited with the Paying Agent/Registrar at the
close of the business day next preceding the date of payment
for the Bonds.
SECTION 17. Investments. Money in any Fund required
to be maintained pursuant to this ordinance may, at the
option of the City, be placed in time deposits or
certificates of deposit secured (to the extent not insured
by the Federal Deposit Insurance Corporation) by obligations
of the type hereinafter described, or be invested, including
investments held in book -entry form, in direct obligations
of the United States of America, obligations guaranteed or
insured by the United States of America, which, in the
opinion of the Attorney General of the United States, are
backed by its full faith and credit or represent its general
obligations, or invested in indirect obligations of the
United States of America, including, but not limited to,
evidences of indebtedness issued, insured or guaranteed by
such governmental agencies as the Federal Home Loan Banks,
Government National Mortgage Association, Farmers Home
Administration, Federal Home Loan Mortgage Association,
Federal Housing Association, or Participation Certificates
in the Federal Assets Financing Trust; provided that all
22
/1 such deposits and investments shall be made in such a manner
( that the money required to be expended from any fund will be
available at the proper time or times. Such investments
(except State and Local Government Series investments held
in book entry form, which shall at all times be valued at
cost) shall be valued in terms of current market value
within 45 days of the close of each Fiscal Year and, with
respect to investments held for the account of the Reserve
Fund, within 30 days of the date of passage of the ordinance
authorizing the issuance of Additional Bonds. All interest
and income derived from deposits and investments in the Bond
Fund immediately shall be credited to, and any losses
debited to, the Bond Fund. All interest and interest income
derived from deposits in and investments of the Reserve Fund
shall, subject to the limitations provided in Section 13
hereof, be credited to and deposited in the System Fund.
All such investments shall be sold promptly when necessary
to prevent any default in connection with the Bonds
Similarly Secured.
SECTION 18. Issuance of Additional Parity obligations.
Subject to the provisions hereinafter appearing as
conditions precedent which must be satisfied, the City
reserves the right to issue, from time to time as needed,
Additional Bonds for any lawful purpose. Such Additional
Bonds may be issued in such form and manner as now or
hereafter authorized by the laws of the State of Texas for
the issuance of evidences of indebtedness or other
instruments, and should new methods or financing techniques
be developed that differ from those now available and in
normal use, the City reserves the right to employ the same
in its financing arrangements provided only that the
following conditions precedent for the authorization and
issuance of the same are satisfied, to wit:
(1) The City Treasurer of the City (or other
officer of the City then having the primary responsi-
bility for the financial affairs of the City) shall
have executed a certificate stating (a) that, to the
best of his knowledge and belief, the City is not then
in default as to any covenants, obligation or agreement
contained in any ordinance or other proceeding relating
to any obligations of the City payable from and secured
by a lien on and pledge of the Net Revenues of the
System that would materially affect the security or
payment of such obligations and (b) either (i) payments
into all special funds or accounts created and
established for the payment and security of all
outstanding obligations payable from and secured by a
lien on and pledge of the Net Revenues of the System
have been made and that the amounts on deposit in such
special funds or accounts are.the amounts then required
to be on deposit therein or (ii) the application of the
23
n proceeds of sale of such obligations then being issued
t will cure any such deficiency.
RR (2) The Additional Bonds shall be scheduled to
mature or be payable as to principal on June 1 and
December 1 (or both) in each year the same are to be
outstanding or during the term thereof.
(3) The City has secured a certificate or opinion
of a Certified Public Accountant to the effect that,
according to the books and records of the City, the Net
Earnings, for the preceding Fiscal Year or for a 12
consecutive month period out of the 15 consecutive
months immediately preceding the month the ordinance
authorizing the issuance of the Additional Bonds is
adopted are equal to (a) at least (i) 1.40 times the
Average Annual Debt Service for all Bonds Similarly
Secured then Outstanding and (ii) 1.10 times the
maximum annual Debt Service payment to be paid in a
Fiscal Year for the Bonds Similarly Secured then
Outstanding after giving effect to the issuance of the
Additional Bonds then being issued, or (b) at least
1.25 times the Average Annual Debt Service of the Bonds
Similarly Secured after giving effect to the issuance
of the proposed Additional Bonds, and in making the
determination of the Net Earnings under this paragraph
(b), the Accountant may take into consideration a
change in the rates and charges for services and
facilities afforded by the System that became effective
at least sixty (60) days prior to the last day of the
period for which Net Earnings are determined and, for
purposes of satisfying the above Net Earnings test,
make a pro forma determination of the Net Earnings of
the System for the period of time covered by this
certification or opinion based on such changed in rates
and charges being in effect for the entire period
covered by the Accountant's certificate or opinion.
The foregoing notwithstanding, at such point in time as
there are no longer any bonds of the Prior Issue Outstand-
ing, the following condition shall be substituted in lieu of
the condition described in (3) above, to -wit:
"The City has secured a certificate or opinion of
a Certified Public Accountant to the effect that,
according to the books and records of the City, the Net
Earnings, for the preceding Fiscal Year or for a 12
consecutive month period out of the 15 consecutive
months immediately preceding the month the ordinance
authorizing the issuance of the Additional Bonds is
adopted are equal to at least (i) 1.25 times the
Average.Annual Debt Service for all Bonds Similarly
Secured then Outstanding and (ii) 1.10 times the
maximum annual Debt Service payment to be paid in a
24
Fiscal Year for the Bonds Similarly Secured then
Outstanding after giving effect to the issuance of the
Additional Bonds then being issued, and in making the
determination of the Net Earnings under this paragraph,
the Accountant may take into consideration a change in
the rates and charges for services and facilities
afforded by the System that became effective at least
sixty (60) days prior to the last day of the period for
which Net Earnings are determined and, for purposes of
satisfying the above Net Earnings test, make a pro
forma determination of the Net Earnings of the System
for the period of time covered by this certification or
opinion based on such change in rates and charges being
in effect for the entire period covered by the Accoun-
tant's certificate or opinion."
As used in this Section, the term "Net Earnings" shall
mean the Gross Revenues of the System after deducting the
Maintenance and Operating Expenses of the System, but not
depreciation charges or expenditures which, under generally
accepted accounting principles, should be charged to capital
expenditures.
SECTION 19. Refunding Bonds. The City reserves the
right to issue refunding bonds to refund all or any part of
the outstanding Bonds Similarly Secured (pursuant to any law
then available) upon such terms and conditions as the City
Council of the City may deem to be in the best interest of
the City and its inhabitants, and if less than all such
outstanding Bonds Similarly Secured are refunded, the
conditions precedent prescribed (for the issuance of Addi-
tional Bonds) set forth in subparagraph (3) of Section 18
shall be satisfied and the Accountant's certificate or
opinion required in subparagraph (3) shall give effect to
the Debt Service of the proposed refunding bonds (and shall
not give effect to the Debt Service of the Bonds Similarly
Secured being refunded following their cancellation or
provision being made for their payment).
SECTION 20. Obligations of Inferior Lien and Pledge.
The City hereby reserves the right to issue obligations
payable from and secured by a lien on and pledge of the Net
Revenues of the System, junior and subordinate in rank and
dignity to the lien and pledge securing the payment of the
Bonds Similarly Secured, as may be authorized by the laws of
the State of Texas.
SECTION 21. Rates and Charges. That, for the benefit
of the Holders of the Bonds and in addition to all provi-
sions and covenants in the laws of the State of Texas and in
fp this Ordinance, the City hereby expressly stipulates and
agrees, while any of the Bonds are Outstanding, to establish
and maintain rates and charges for facilities and services
afforded by the System that are reasonably expected, on the
25
basis of available information and experience, with due
allowance for contingencies, and giving effect to revenues
I on hand and budgeted for system expenditures at the
beginning of the Fiscal Year to produce Gross Revenues in
each Fiscal Year sufficient:
(1) To pay Maintenance and Operating Expenses,
depreciation charges and replacement and betterment
costs
(2) To produce Net Revenues sufficient to pay the
principal of and interest on the Bonds Similarly
Secured and the amounts required to be deposited in any
reserve or contingency fund created for the payment and
security of the Bonds Similarly Secured, and other
obligations or evidences of indebtedness issued or
incurred that are payable only from and secured solely
by a lien on and pledge of the Net Revenues of the
System, and
(3) To produce Net Revenues equal to at least
1.10 times the Debt Service due and payable on the
outstanding Bonds Similarly Secured.
SECTION 22. Maintenance and Operation; Insurance. The
City shall maintain the System in good condition and operate
the System in an efficient manner and at reasonable cost.
While any Bonds are Outstanding, the City agrees to maintain
casualty and other insurance on the System of a kind and in
an amount customarily carried by municipal corporations
owning and operating similar properties. The City is in
compliance with all franchises, permits and authorizations
necessary for the operation of the System and required by
any governmental agency; and the City has obtained or will
obtain, and shall keep in full force and effect while the
Bonds are Outstanding, all franchises, permits,
authorizations and approvals required for or with respect to
the operation and maintenance of the System.
SECTION 23. Sale or Lease of Properties. The City, to
the extent and in the manner authorized by law, may sell or
exchange for consideration representing the fair value
thereof, as determined by the City Council of the City, any
property not necessary or required in the efficient
operations of the System, or any equipment not necessary or
useful in the operations thereof or which is obsolete,
damaged or worn out or otherwise unsuitable for use in the
operation of the System. The proceeds of any sale of
properties of the System shall be deposited in the System
Fund.
SECTION 24. Records and Accounts. The City hereby
covenants and agrees that so long as any of the Bonds or any
interest thereon remain outstanding, it will keep and
M
maintain separate and complete records and accounts
pertaining to the operations of the System in which complete
and correct entries shall be made of all transactions
relating thereto, as provided by Article 1113, V.A.T.C.S.,
or other applicable law. The holder or holders of any Bonds
Similarly Secured or any duly authorized agent or agents of
such holders shall have the right at all reasonable times to
inspect such records, accounts and date relating thereto,
and to inspect the System and all properties comprising
same. The City further agrees that following the close of
each Fiscal Year, it will cause an audit of such books and
accounts to be made by an independent firm of Certified
Public Accountants. Each such audit, in addition to
whatever other matters may be thought proper by the Accoun-
tant, shall particularly include the following:
(a) A statement of the income and expenses of the
System for such Fiscal Year.
(b) A balance sheet for the System as of the end
of such Fiscal Year.
(c) A statement describing the sources and
applications of funds of the Systems for such Fiscal
Year.
(d) The Accountant's comments regarding the
manner in which the City has carried out the
requirements of this Ordinance and any other ordinance
authorizing the issuance of Additional Bonds and his
recommendations for any changes or improvements in the
operations, records and accounts of the System.
(e) A list of insurance policies in force at the
end of the Fiscal Year covering the properties of the
System, setting out as to each policy the amount
thereof, the risk covered, the name of the insurer and
the policy's expiration date.
Expenses incurred in making an annual audit of the
operations of the System are to be regarded as Maintenance
and Operating Expenses. Copies of each annual audit shall
be furnished to the Executive Director of the Municipal
Advisory Council of Texas at his office in Austin, Texas,
the City's Financial Advisor and, upon request, to the
original purchaser of the Bonds and subsequent Holders of
any of said Bonds. The audits herein required shall be made
within 120 days following the close of each Fiscal Year
insofar as is possible.
SECTION 25. Special Covenants. The City further
covenants and agrees by and through this Ordinance as
follows:
27
(a) It has the lawful power to pledge the Net
Revenues of the System to the payment of the Bonds to
the extent provided herein and has lawfully exercised
said power under the Constitution and laws of the State
of Texas, and that the Bonds issued hereunder, together
with any Additional Bonds shall be ratably secured in
such manner that no one Bond shall have preference over
any other Bond of said issues.
(b) The Net Revenues of the System have not been
in any manner pledged or encumbered to the payment of
any debt or obligation of the City or the System, save
and except for the Prior Issue, the 1988 Bonds and the
Refunded Bonds, other than as made herein for the
payment and security of the Bonds.
(c) That no free services of the System shall be
allowed, and should the City or any of its agents or
instrumentalities make use of the services and facili-
ties of the System, payment of the reasonable value
thereof shall be made by the City out of funds from
sources other than the revenues and income of the
System.
(d) To the extent that it legally may, the City
further covenants and agrees that, so long as any of
the Bonds or any interest thereon are Outstanding, no
franchise shall be granted for the installation or
operation of any competing waterworks and sewer
facilities other than those owned by the City, and the
operation of any such competing system or facilities by
anyone other than this City is hereby prohibited.
SECTION 26. Remedy in Event of Default. In addition
to all rights and remedies provided by the laws of the State
of Texas, the City covenants and agrees particularly that in
the event the City (a) defaults in payments to be made to
the Bond Fund or the Reserve Fund as required by this
Ordinance or (b) defaults in the observance or performance
of any other of the covenants, conditions or obligations set
forth in this Ordinance, the Holder of any of the Bonds
shall be entitled to a writ of mandamus issued by a court of
proper jurisdiction, compelling and requiring the City and
its officers to observe and perform any covenant, condition
or obligation prescribed in this Ordinance. No delay or
omission to exercise any right or power accruing upon any
default shall impair any such right or power, or shall be
construed to be a waiver of any such default or acquiescence
therein, and every such right and power may be exercised
from time'to time and as often as may be deemed expedient.
The specific remedy herein provided shall be cumulative
of all other existing remedies and the specification of such
remedy shall not be deemed to be exclusive.
28
SECTION 27. Special Obligations. The Bonds are
special obligations of the City payable from the pledged Net
Revenues of the System and the Holders thereof shall never
have the right to demand payment thereof out of funds raised
or to be raised by taxation.
SECTION 28. Mutilation, Destroyed; Lost and Stolen
Bonds. In case any Bond shall be mutilated, or destroyed,
lost or stolen, the Paying Agent/Registrar, in its
discretion and subject to City approval, may execute and
deliver a replacement Bond of like form and tenor, and in
the same denomination and bearing a number not
contemporaneously outstanding, in exchange and substitution
for such mutilated Bond, or in lieu of and in substitution
for such destroyed, lost or stolen Bond, only upon (i) the
filing by the Holder thereof with the Paying Agent/Registrar
of evidence satisfactory to the Paying Agent/Registrar of
the destruction, loss or theft of such Bond, and of the
authenticity of the ownership thereof and (ii) the
furnishing to the Paying Agent/Registrar of indemnification
in an amount satisfactory to hold the City and the Paying
Agent/Registrar harmless. All expenses and charges
associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be borne
by the Holder of the Bond mutilated, or destroyed, lost or
stolen.
Every replacement Bond issued pursuant to this Section
shall be a valid and binding obligation, and shall be
entitled to all the benefits of this Ordinance equally and
ratably with all other Outstanding Bonds, notwithstanding
the enforceability of payment by anyone of the destroyed,
lost, or stolen Bonds.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and
remedies with respect to the replacement and payment of
mutilated, destroyed, lost or stolen Bonds.
SECTION 29. Cancellation. All Bonds surrendered for
payment, redemption, transfer, exchange, or replacement, if
surrendered to the Paying Agent/Registrar, shall be promptly
cancelled by it and, if surrendered to the City, shall be
delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying
Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the City may
have acquired in any manner whatsoever, and all Bonds so
delivered shall be promptly cancelled by the Paying
Agent/Registrar. All cancelled Bonds held by the Paying
Agent/Registrar shall be destroyed as directed by the City.
29
n SECTION 30. Satisfaction of Obligation of City. If
#} the City shall pay or cause to be paid, or there shall
otherwise be paid to the Holders, the principal of, premium,
if any, and interest on the Bonds, at the times and in the
manner stipulated in this Ordinance, then the pledge of the
Net Revenues of the System under this Ordinance and all
other obligations of the City to the Holders shall thereupon
cease, terminate, and become void and be discharged and
satisfied.
Bonds or any principal amount(s) thereof shall be
deemed to have been paid within the meaning and with the
effect expressed above in this Section when (i) money
sufficient to pay in full such Bonds or the principal
amount(s) thereof at maturity or to the redemption date
therefor, together with all interest due thereon, shall have
been irrevocably deposited with and held in trust by the
Paying Agent/Registrar, or an authorized escrow agent, or
(ii) Government Obligations shall have been irrevocably
deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Obligations have
been certified by an independent accounting firm to mature
as to principal and interest in such amounts and at such
times as will insure the availability, without reinvestment,
of sufficient money, together with any moneys deposited
therewith, if any, to pay when due the principal of and
interest on such Bonds, or the principal amount(s) thereof,
on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable
arrangements therefor acceptable to the Paying
Agent/Registrar have been made) the redemption date thereof.
The City covenants that no deposit of moneys or Government
Obligations will be made under this Section and no use made
of any such deposit which would cause the Bonds to be
treated as "arbitrage bonds" within the meaning of section
148 of the Code, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Regis-
trar, or an authorized escrow agent, and all income from
Government Obligations held in trust by the Paying
Agent/Registrar or an authorized escrow agent, pursuant to
this Section which is not required for the payment of the
Bonds, or any principal amount(s) thereof, or interest
thereon with respect to which such moneys have been so
deposited shall be remitted to the City or deposited as
directed by the City. Furthermore, any money held by the
Paying Agent/Registrar for the payment of the principal of
and interest on the Bonds and the remaining unclaimed for a
period of three (3) years after the Stated Maturity, or
applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the
request of the City, and subject to the applicable unclaimed
property laws of Texas, be remitted to the City against a
written receipt therefor.
30
SECTION 31. Ordinance a Contract; Amendments. This
Ordinance shall constitute a contract with the Holders from
time to time, be binding on the City, and shall not be
amended or repealed by the City so long as any Bond remains
Outstanding except as permitted in this Section. The City,
may, without the consent of or notice to any Holders, from
time to time and at any time, amend this Ordinance in any
manner not detrimental to the interests of the Holders,
including the curing of any ambiguity, inconsistency, or
formal defect or omission herein. In addition, the City
may, with the written consent of Holders holding a majority
in aggregate principal amount of the Bonds Similarly Secured
then Outstanding affected thereby, amend, add to, or rescind
any of the provisions of this Ordinance; provided that,
without the consent of all Holders of Outstanding Bonds, no
such amendment, addition, or rescission shall (1) extend the
time or times of payment of the principal of, premium, if
any, and interest on the Bonds, reduce the principal amount
thereof, the redemption price therefore, or the rate of
interest thereon, or in any other way modify the terms of
payment of the principal of, premium, if any, or interest on
the Bonds, (2) give any preference to any Bond over any
other Bonds, or (3) reduce the aggregate principal amount of
Bonds required to be held by Holders for consent to any such
amendment, addition or rescission. Nothing in this
Ordinance, expressed or implied, is intended or shall be
construed to confer upon any person other than the City, the
Paying Agent/Registrar and the Holders, any right, remedy,
or claim, legal or equitable, under or by reason of this
Ordinance or any provisions hereof, this Ordinance and all
its provisions being intended to be and being for the sole
and exclusive benefit of the City, the Paying Agent/Reg-
istrar and the Holders.
SECTION 32. Notices to Holders; Waiver. Wherever this
Ordinance provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States
Mail, first class postage prepaid, to the address of each
Holder as it appears on the Registration Books.
In any case where notice to Holders is given by mail,
neither the failure to mail such notice to any particular
Holders, nor any defect in any notice so mailed, shall
affect the sufficiency of such notice with respect to all
other Bonds. Where this Ordinance provides for notice in
any manner, such notice may be waived in writing by the
Holder entitled to receive such notice, either before or
after the event with respect to which such notice is given,
and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition
precedent to the validity of any action taken in reliance
upon such waiver.
31
SECTION 33. Covenants Regarding Tax Exemption. The
Issuer covenants to take any action to assure, or refrain
from any action which would adversely affect, the treatment
of the Bonds as obligations described in section 103 of the
Internal Revenue Code of 1986 (the "Code"), the interest on
which is not includable in the "gross income" of the holder
for purposes of federal income taxation. In furtherance
thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more
than ten percent of the proceeds of the Bonds (less
amounts deposited to a reserve fund, if any) are used
for any "private business use", as defined in section
141(b)(6) of the Code or, if more than ten percent of
the proceeds are so used, that amounts, whether
received by the Issuer, with respect to such private
business use, do not, under the terms of this Order or
any underlying arrangement, directly or indirectly,
secure or provide for the payment of more than ten
percent of the debt service on the Bonds, in
contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the
event that the "private business use" described in
subsection (a) hereof exceeds five percent of the
proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) then the amount in excess of five
percent is used for a "private business use" which is
"related" and not "disproportionate", within the
meaning of section 141(b)(3) of the Code, to the
governmental use;
(c) to take any action to assure that no amount
which is greater than the lesser of $5,000,000, or five
percent of the proceeds of the Bonds (less amounts
deposited into a reserve fund, if any) is directly or
indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of
section 141(c) of the Code;
(d) to refrain from taking any action which would
otherwise result in the Bonds being treated as "private
activity bonds" within the meaning of section 141(b) of
the Code;
(e) to refrain from taking any action that would
result in the Bonds being "federally guaranteed" within
the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the
proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds which. were used, directly
or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code) which
32
produces a materially higher yield over the term of the
Bonds, other than investment property acquired with --
(1) proceeds of the Bonds invested for a
reasonable temporary period of three years or less
until such proceeds are needed for the purpose for
which the bonds are issued,
(2) amounts invested in a bona fide debt
service fund, within the meaning of section 1.103-
13(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably
required reserve or replacement fund to the extent
such amounts do not exceed ten percent of the
proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds
of the Bonds or amounts treated as proceeds of the
Bonds, as may be necessary, so that the Bonds do not
otherwise contravene the requirements of section 148 of
the Code (relating to arbitrage) and, to the extent
applicable, section 149(d) of the Code (relating to
advance refundings);
(h) to pay to the United States of America at
least once during each five-year period (beginning on
the date of delivery of the Bonds) an amount that is at
least equal to 90 percent of the "Excess Earnings",
within the meaning of section 148(f) of the Code and to
pay to the United States of America, not later than 60
days after the Bonds have been paid in full, 100 per-
cent of the amount then required to be paid as a result
of Excess Earnings under section 148(f) of the Code;
and
(i) to maintain such records as will enable the
Issuer to fulfill its responsibilities hereunder and
under section 148 of the Code and to retain such
records for at least six years following the final
payment of principal and interest on the Bonds.
It is the understanding of the Issuer that the covenants
contained herein are intended to assure compliance with the
Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event
that regulations or rulings are hereafter promulgated which
modify or expand provisions of the Code, as applicable to
the Bonds, the Issuer will not be required to comply with
any covenant contained herein to the extent that such
modification or expansion, in the opinion of nationally -
recognized bond .counsel, will not adversely affect the
exemption from federal income taxation of interest on the
Bonds under section 103 of the Code. In the event that
33
regulations or rulings are hereafter promulgated which
impose additional requirements which are applicable to the
Bonds, the Issuer agrees to comply with the additional
requirements to the extent necessary, in the opinion of
nationally -recognized bond counsel, to preserve the
exemption from federal income taxation of interest on the
Bonds under section 103 of the Code.
(j) The Issuer hereby designates the Bonds as
"qualified tax-exempt bonds" as defined in section 265(b)(3)
of the Code. In furtherance of such designation, the Issuer
represents, covenants and warrants the following: (i) that
during the calendar year in which the Bonds are issued, the
Issuer (including any subordinate entities) has not
designated nor will designate bonds, which when aggregated
with the Bonds, will result in more than $10,000,000 of
"qualified tax-exempt bonds" being issued; (ii) that the
Issuer reasonably anticipates that the amount of tax-exempt
obligations issued during the calendar year in which the
Bonds are issued, by the Issuer (or any subordinate
entities) will not exceed $10,000,000; and (iii) that the
Issuer will take such action ov refrain from such action as
necessary, and as more particularly set forth in this
Ordinance, in order that the Bonds will not be considered
"private activity bonds" within the meaning of section 142
of the Code.
SECTION 34. Confirmation of Sale of the Bonds. The
Bonds are hereby initially sold and shall be delivered to,
and registered in the name of, the TEXAS WATER DEVELOPMENT
BOARD, for cash at a price of par.
SECTION 35. Control and Custody of Bonds. The Mayor
of the City shall be and is hereby authorized to take and
have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas,
including the printing and supply of the Bonds, and shall
take and have charge and control of the Bonds pending their
approval by the Attorney General, the registration thereof
by the Comptroller of Public Accounts and the delivery
thereof to the Purchaser.
Furthermore, the Mayor and City Secretary of the City
and City Treasurer, any one or more of said officials, are
hereby authorized and directed to furnish and execute such
documents relating to the City and its financial affairs as
may be necessary for the issuance of the Bonds, the approval
of the Attorney General and their registration by the
Comptroller of Public Accounts and, together with the city's
financial advisor, bond counsel and the Paying
Agent/Registrar, make the necessary arrangements for the
delivery of the Bonds to the Purchaser.
ri!
n SECTION 36. Interest Earnings on Bond Proceeds.
t Interest earnings derived from the investment of proceeds
€€ from the sale of the Bonds shall be used along with other
bond proceeds for the purpose for which the Bonds are issued
set forth in Section 1 hereof; provided that after
completion of such purpose, if any of such interest earnings
remain on hand, such interest earnings shall be deposited in
the Bond Fund and utilized in the manner provided in Section
39 hereof. It is further provided, however, that any
interest earnings on bond proceeds which are required to be
rebated to the United States of America pursuant to Section
33 hereof in order to prevent the Bonds from being arbitrage
bonds shall be so rebated and not considered as interest
earnings for the purposes of this Section.
SECTION 37. Final Accounting. The City shall render a
final accounting to the Texas Water Development Board in
reference to the total cost incurred by the City for the
project together with a copy of "as built" plans of the
project upon completion.
SECTION 38. Construction Fund. Immediately after the
delivery of the Bonds, the City shall cause a Construction
Fund to be established with the City's depository bank. The
costs of issuance of the Bonds, being legal, fiscal and
engineering, may be paid from this Fund. The cost of the
construction of the project will be paid from this Fund upon
direction of the City Council of the City.
SECTION 39. Surplus Bond Proceeds/Completion
Certificate. The City shall use any surplus proceeds from
the Bonds sold to the Texas Water Development Board
remaining after completion of the project, which completion
date shall be set forth in a completion certificate to be
delivered by the City to the Texas Water Development Board
promptly following completion of the project as determined
by the City's engineer for the project, to redeem, in
inverse order of maturity, the Bonds owned by the Texas
Water Development Board.
SECTION 40. Annual and Monthly Reports. Monthly
operating statements and annual audits of the City shall be
delivered to the Texas Water Development Board as long as
the State of Texas owns any of the Bonds, and the monthly
operating statement shall be in such detail as requested by
the Development Fund Manager of the Texas Water Development
Board until this requirement is waived by the Development
Fund Manager.
ou
SECTION 41. Compliance with the Texas Water
Development Board's Rules and Regulations. The City
covenants to comply with the rules and regulations of the
Texas Water Development Board, and to maintain insurance on
the City's System in that amount required by the Texas Water
Development Board.
SECTION 42. State Bonds. In addition to the covenants
contained in Section 33, the City further covenants that it
will not take, or omit to take, any action which action or
omission would adversely affect the excludability for
federal income tax purposes of interest payable on any
series of bonds issued by the Texas Water Development Board
or the Texas Water Resources Finance Authority.
SECTION 43. Inconsistent Provisions. All ordinances,
orders or resolutions, or parts thereof, which are in
conflict or inconsistent with any provision of this ordi-
nance, are hereby repealed and cancelled and the provisions
of this Ordinance shall supersede and control as to the
matters contained herein.
SECTION 44. Governing Law. This Ordinance shall be
construed and enforced in accordance with the laws of the
State of Texas and the United States of America.
SECTION 45. Severability. If any provision of this
Ordinance or the application thereof to any circumstance
shall be held to be invalid, the remainder of this Ordinance
and the application thereof to other circumstances shall
nevertheless be valid, and this City Council hereby declares
that this Ordinance would have been enacted without such
invalid provision.
SECTION 46. Escrow Agreement. The Mayor and City
Secretary are hereby authorized and directed to execute and
deliver an Escrow Agreement substantially in the form
attached hereto as Exhibit A, with such changes as may be
approved by the Mayor, such approval to be evidenced by his
execution thereof.
SECTION 47. Escrow Account. Upon delivery of the
Bonds and receipt of the proceeds thereof, the City shall
immediately deposit into the Escrow Account established by
the Escrow Agreement all of the proceeds, less an amount
equal to the principal of the Refunded Bonds and any accrued
interest, to be administered, held and released in
accordance with the terms of the Escrow Agreement.
SECTION 48. Refunding. The Mayor and City Manager are
authorized and directed to transfer to the paying agent for
the Refunded Bonds, on the date of closing and delivery of
W1
the Bonds to the Texas Water Development Board, an amount of
t! money in immediately available funds sufficient to pay the
interest accrued and due on the Refunded Bonds to and
through the day preceding such closing and delivery, which
amount, together with $1,535,000 derived from the sale of
the Bonds, will be used immediately to pay, redeem and
retire the Refunded Bonds by consent of the Texas Water
Development Board.
37
EXHIBIT A
ESCROW AGREEMENT
City of Stephenville, Texas Utility System Revenue
Bonds, Series 1993.
THIS ESCROW AGREEMENT, dated as of , 1993
(herein, together with any amendments or supplements hereto,
called the "Agreement"), is entered into by and between the
City of Stephenville, Texas (herein called the "Issuer") and
, Texas,
as escrow agent (herein, together with any successor in such
capacity, called the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Issuer has authorized and sold to the
Texas Water Development Board the City of Stephenville,
Texas Utility System Revenue Bonds, Series 1993, dated
1993, in the aggregate principal amount of
$7,680,000 (hereinafter called the "Bonds"); and
WHEREAS, in accordance with Approval of the Texas Water
Development Board, it is necessary to escrow $6,145,000 of
the proceeds from the sale of the Bonds until such time as
the Texas Water Development Board approves the release of
such funds from escrow; and
WHEREAS, the Bank is a commercial bank, located in the
State of Texas, is a member of the Federal Deposit Insurance
Corporation, and is otherwise qualified and empowered to
enter into this Escrow Agreement.
NOW, THEREFORE, in consideration of the mutual
agreements herein contained and in consideration of Ten
Dollars ($10.00) duly paid by the Issuer to the Bank
concurrently herewith, the receipt whereof is hereby
acknowledged, and in order to secure the deliver of the
Bonds, the parties hereto mutually undertake, promise and
agree for themselves, their respective representatives,
successors and assigns as follows:
1. That there is hereby deposited by the Issuer with
the Bank, to be held in a special trust fund and separate
trust account, designated as "City of Stephenville, Texas
Escrow Account", hereinafter called "Escrow Account", the
sum of $6,145,000 from the proceeds of the sale of the
Bonds. The Texas Water Development Board has directed that
only upon written order of the Texas Water Development Board
may all or any part of these monies may be released from
escrow.
n 2. That the Bank shall invest the monies in the Escrow
jI i1 Account as directed by the Issuer, and if not so directed,
such monies shall be invested in direct obligations of the
United States of America or obligations fully guaranteed by
the United States of America, any income made from such
investments shall be deposited into the Escrow Account.
3. That monies in this Escrow Account shall be secured
in the same manner as all other public funds of the Issuer.
4. That upon notification of the approval of the
release of those monies from the Escrow Account by the Texas
Water Development Board, the Bank shall transfer such
monies, together with any interest, to such account as
directed by the Issuer.
5. That the Bank shall not be liable for any act done
or step taken or omitted by it or any mistake of fact or
law, except for its negligence or default or failure in the
performance of any obligation imposed upon it hereunder.
The Bank shall not be responsible in any manner from any
proceedings in connection with the Bonds or any recitation
contained in the Bonds.
6. That this escrow shall expire upon transfer of the
funds in the Escrow Account to the Issuer.
IN WITNESS WHEREOF, the Mayor signed this instrument on
behalf of said Issuer, and the Issuer's official seal is
affixed hereto, and the Mayor's signature is attested to by
the City Secretary, and the Bank has caused this instrument
to be signed in its corporate name by its President or one
of its Vice Presidents, and sealed with its corporate seal,
and attested to by ,
all as of the day of , 1993.
CITY OF STEPHENVILLE, TEXAS
Mayor
ATTEST:
ty Secretary
(SEAL)
ATTEST:
Title:
, Texas
Title:
3