COUNCIL COMMUNICATION
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DATE: 08/08/2002 |
SUBJECT: FINAL READING OF ORDINANCE 2002-O-179Authorizing the issuance of City
of Laredo, Texas, Sewer System Revenue Refunding Bonds, Series 2002A,
approving an official statement, authorizing the execution of a purchase
contract and the execution of an escrow agreement, and making provisions for
the security thereof, and authorizing amendment to the City’s budget to
appropriate such proceeds for purposes authorized herein, and ordaining other
matters related to the subject. |
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INITIATED BY: Larry Dovalina, City Manager |
STAFF SOURCE: Pete Tart, McCall Parkhurst & Horton, L. L. P. Rosario C. Cabello, Finance Director |
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PREVIOUS COUNCIL ACTION: On May 20, 2002, Noe Hinojosa of Estrada-Hinojosa &
Co., Financial Consultants, presented to City Council the Plan of Finance for
this and other proposed bond issues.
On June 17, 2002, City Council adopted Resolution 2002-R-055
requesting the Texas Water Development Board to consent to an amendment to
Ordinance 91-O-032 authorizing the issue of City of Laredo Subordinate Sewer
System Revenue Bonds, Series 1991. A public hearing and introduction of this ordinance was
held on August 5, 2002 |
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BACKGROUND: The Sewer System bonds are being refunded in order to change
covenants in the existing bond ordinance for the outstanding bonds to permit
the City to contract for operation of the sewer system with a contracting
party that will be of benefit to the City achieving economies and saving in
the operation of the sewer system.
The principal amount of the bonds to be refunded is $1,865,000. |
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FINANCIAL IMPACT: The principal amount of bonds to be refunded is
$1,865,000. The principal and
interest amount of the refunding bonds will be determined at the time of the
sale. A debt service payment will be
incurred and paid semi-annually and will be included on future City of Laredo
budgets. |
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COMMITTEE RECOMMENDATION:
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STAFF RECOMMENDATION:
Hold a public hearing and introduce this ordinance. |
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ORDINANCE NO. 2002-0-179
AUTHORIZING THE ISSUANCE OF CITY OF LAREDO, TEXAS SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2002A, APPROVING AN OFFICIAL STATEMENT, AUTHORIZING THE EXECUTION OF A PURCHASE CONTRACT AND THE EXECUTION OF AN ESCROW AGREEMENT, AND MAKING PROVISIONS FOR THE SECURITY THEREOF, AND AUTHORIZING AMENDMENT TO THE CITY’S BUDGET TO APPRORIATE SUCH PROCEEDS FOR PURPOSES AUTHORIZED HEREIN, AND ORDAINING OTHER MATTERS RELATING TO THE SUBJECT
THE STATE OF TEXAS §
COUNTY OF WEBB §
CITY OF LAREDO §
WHEREAS,
the following sewer system revenue bonds of the City of Laredo
("Issuer" or "City") are presently outstanding:
CITY OF LAREDO, TEXAS Sewer System Revenue
Bonds, New Series 1990, dated September 1, 1990, maturities March 1, 2003
through March 1, 2004, in the aggregate principal amount of $175,000 (the
"Series 1990 Bonds" or "Outstanding Bonds"); and
CITY OF LAREDO, TEXAS Sewer System Revenue
Refunding Bonds, New Series 1996, dated September 1, 1996, maturities March 1,
2003 through March 1, 2011, in the aggregate principal amount of $4,020,000
(the "Series 1996 Bonds" or "Outstanding Bonds");
WHEREAS,
the Issuer now desires to refund maturities 2003 through 2004 of the Series
1990 Bonds in the principal amount of $175,000 and a portion of the principal
amount of the Series 1996 Bonds for maturities 2003 through 2011 in the
principal amount $1,690,000 (shown in following paragraph) for aggregate
principal amount of $1,865,000 (the "Refunded Bonds"); and
WHEREAS,
the Issuer is concurrently issuing its Sewer System Revenue Refunding Bonds,
Series 2002A and Sewer System Revenue Refunding Bonds, Taxable Series 2002B
which together will refund all of the Issuers outstanding Sewer System Revenue
Bonds that were secured by a first lien in the Sewer System as follows:
(a) CITY OF LAREDO, TEXAS Sewer
System Revenue Refunding Bonds, Series 2002A, proceeds used to refund:
all
of maturities of Series 1990 Bonds maturing March 1, 2003 and March 1, 2004
March
1, 2003 $ 75,000
March 1, 2004 $100,000
and
a portion of the
maturities of Series 1996 Bonds maturing March 1, 2003 through March 1, 2011
March
1, 2003 $245,000
March
1, 2004 $245,000
March
1, 2005 $180,000
March
1, 2006 $180,000
March
1, 2007 $185,000
March
1, 2008 $190,000
March
1, 2009 $190,000
March
1, 2010 $195,000
March
1, 2011 $ 80,000
(b) CITY OF LAREDO, TEXAS Sewer
System Revenue Refunding Bonds, Taxable Series 2002B to refund:
a portion of maturities
of Series 1996 Bonds, maturing March 1, 2003 through March 1, 2011
March
1, 2003 $335,000
March
1, 2004 $340,000
March
1, 2005 $250,000
March
1, 2006 $255,000
March
1, 2007 $255,000
March
1, 2008 $260,000
March
1, 2009 $260,000
March
1, 2010 $265,000
March
1, 2011 $110,000;
and
WHEREAS,
the City Council of the Issuer deems it advisable to refund the Refunded Bonds
in order to change covenants in the existing bond ordinances for the
Outstanding Bonds to permit the Issuer to contract for operation of the sewer system with a contracting party that
will be of benefit to the Issuer by achieving economies and savings in the
operation of the sewer system which will result in a gross loss of
approximately $__________ and a net present value loss of $__________; and
WHEREAS,
Chapter 1207, Texas Government Code ("Chapter 1207"), authorizes the
Issuer to issue refunding bonds and to deposit the proceeds from the sale
thereof together with 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,
Chapter 1207 further authorizes the Issuer to enter into an escrow agreement
with the paying agent for the Refunded Bonds with respect to the safekeeping,
investment, reinvestment, administration and disposition of any such deposit,
upon such terms and conditions as the Issuer and such paying agent may agree,
provided that such deposits may be invested and reinvested including
obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, and which shall mature and bear
interest payable at such times and in such amounts as will be sufficient to
provide for the scheduled payment or prepayment of the Refunded Bonds; and
WHEREAS,
The Bank of New York Trust Company of Florida, N.A., Dallas, Texas (successor
to Frost National Bank) is the paying agent for the Series 1990 Bonds and shall
serve as Escrow Agent for the Refunded Bonds, and the Escrow Agreement
hereinafter authorized, constitutes an agreement of the kind authorized and
permitted by said Chapter 1207; and
WHEREAS,
all the Refunded Bonds mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter authorized; and
WHEREAS,
the bonds hereinafter authorized are to be issued and delivered pursuant to
Chapter 1207; and
WHEREAS,
the meeting was open to the public and public notice of the time, place and
purpose of said meeting was given pursuant to Chapter 551, Texas Government
Code.
NOW,
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAREDO, TEXAS:
Section
1. AMOUNT AND PURPOSE OF THE
BONDS. The bond or bonds of the City of
Laredo (the "Issuer") are hereby authorized to be issued and
delivered in the aggregate principal amount of $3,090,000 for the purpose of
refunding the Refunded Bonds.
Section
2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance
shall be designated: "CITY OF
LAREDO, TEXAS SEWER SYSTEM REVENUE REFUNDING BOND, SERIES 2002A", and
initially there shall be issued, sold, and delivered hereunder a single fully
registered bond, without interest coupons, payable in annual installments of
principal (the "Initial Bond"), but the Initial Bond may be assigned
and transferred and/or converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest coupons, having
serial and annual maturities, and in the denomination or denominations of
$5,000 or any integral multiple of $5,000, all in the manner hereinafter
provided. The term "Bonds" as
used in this Ordinance shall mean and include collectively the Initial Bond and
all substitute bonds exchanged therefor, as well as all other substitute bonds
and replacement bonds issued pursuant hereto, and the term "Bond"
shall mean any of the Bonds.
Section
3. INITIAL DATE, DENOMINATION, NUMBER,
MATURITIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL
BOND. (a) The Initial Bond is hereby authorized to be issued, sold, and delivered hereunder as a single fully
registered Bond, without interest coupons, dated July 1, 2002, in the
denomination and aggregate principal amount of $3,090,000, numbered R-1,
payable in annual installments of principal to the initial registered owner
thereof, to-wit: A. G. EDWARDS & SONS, INC., or to the
registered assignee or assignees of said Bond or any portion or portions thereof
(in each case, the "registered owner"), with the annual installments
of principal of the Initial Bond to be payable on the dates, respectively, and
in the principal amounts, respectively, stated in the FORM OF INITIAL BOND set
forth in this Ordinance.
(b) The Initial Bond (i) may be prepaid or
redeemed prior to the respective scheduled due dates of installments of
principal thereof, (ii) may be assigned and transferred, (iii) may be converted
and exchanged for other Bonds, (iv) shall have the characteristics, and (v)
shall be signed and sealed, and the principal of and interest on the Initial
Bond shall be payable, all as provided, and in the manner required or
indicated, in the FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial
Bond shall bear interest from the date of the Initial Bond and will be
calculated on the basis of a 360-day year of twelve 30-day months to the
respective scheduled due dates, of the installments of principal of the Initial
Bond, and said interest shall be payable, all in the manner provided and at the
rates and on the dates stated in the FORM OF INITIAL BOND set forth in this
Ordinance.
Section
5. FORM OF INITIAL BOND. The form of the Initial Bond, including the
form of Registration Certificate of the Comptroller of Public Accounts of the
State of Texas to be endorsed on the Initial Bond, shall be substantially as
follows:
FORM OF INITIAL BOND
NO.
R-1 $3,090,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WEBB
CITY OF LAREDO, TEXAS
SEWER SYSTEM REVENUE
REFUNDING BOND, SERIES 2002A
The
CITY OF LAREDO, in WEBB COUNTY, TEXAS (the "Issuer"), being a
political subdivision of the State of Texas, hereby promises to pay to
A. G. EDWARDS &
SONS, INC.
or
to the registered assignee or assignees of this Bond or any portion or portions
hereof (in each case, the "registered owner") the aggregate principal
amount of
THREE MILLION NINETY
THOUSAND DOLLARS
in annual installments of principal due and payable
on September 1 in each of the years, and in the respective principal amounts,
as set forth in the following schedule:
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YEAR |
AMOUNT |
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YEAR |
AMOUNT |
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2003 |
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2008 |
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2004 |
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2009 |
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2005 |
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2010 |
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2006 |
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2011 |
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2007 |
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and to pay interest, from the date of this Bond
hereinafter stated, on the balance of each such installment of principal,
respectively, from time to time remaining unpaid, at the rates as follows:
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maturity 2003, |
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% |
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maturity 2008, |
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% |
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maturity 2004, |
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% |
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maturity 2009, |
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% |
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maturity 2005, |
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% |
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maturity 2010, |
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% |
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maturity 2006, |
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% |
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maturity 2011, |
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% |
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maturity 2007, |
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% |
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with said interest being payable on March 1,
2003, and semiannually on each September 1 and March 1 thereafter while this
Bond or any portion hereof is outstanding and unpaid.
THE
INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are payable in
lawful money of the United States of America, without exchange or collection
charges. The installments of principal
and the interest on this Bond are payable to the registered owner hereof
through the services of THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA,
N.A., DALLAS, TEXAS, which is the "Paying Agent/Registrar"
for this Bond. Payment of all principal
of and interest on this Bond shall be made by the Paying Agent/Registrar to the
registered owner hereof on each principal and/or interest payment date by check
or draft, dated as of such date, drawn by the Paying Agent/Registrar on, and
payable solely from, funds of the Issuer required by the ordinance authorizing
the issuance of this Bond (the "Bond Ordinance") to be on deposit
with the Paying Agent/Registrar for such purpose as hereinafter provided; and
such check or draft shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, on each such principal and/or
interest payment date, to the registered owner hereof, at the address of the
registered owner, as it appeared on the 15th day of the month next preceding
each such date (the "Record Date") on the Registration Books kept by
the Paying Agent/Registrar, as hereinafter described, or by such other method
acceptable to the Paying Agent/Registrar requested by, and at the risk and
expense of, the registered owner. The
Issuer covenants with the registered owner of this Bond that on or before each
principal and/or interest payment date for this Bond it will make available to
the Paying Agent/Registrar, from the "Interest and Sinking Fund"
created by the Bond Ordinance, the amounts required to provide for the payment,
in immediately available funds, of all principal of and interest on this Bond,
when due.
IF
THE DATE for the payment of the principal of or interest on this Bond 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.
THIS
BOND has been authorized in accordance with the Constitution and laws of the
State of Texas, in the principal amount of $3,090,000 for the purpose of
refunding the Refunded Bonds.
THIS
BOND, to the extent of the unpaid or unredeemed principal balance hereof, or
any unpaid and unredeemed portion hereof in any integral multiple of $5,000,
may be assigned by the initial registered owner hereof and shall be transferred
only in the Registration Books of the Issuer kept by the Paying Agent/Registrar
acting in the capacity of registrar for the Bonds, upon the terms and
conditions set forth in the Bond Ordinance.
Among other requirements for such transfer, this Bond must be presented
and surrendered to the Paying Agent/Registrar for cancellation, together with
proper instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing assignment by the
initial registered owner of this Bond, or any portion or portions hereof in any
integral multiple of $5,000, to the assignee or assignees in whose name or
names this Bond or any such portion or portions hereof is or are to be
transferred and registered. Any
instrument or instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to evidence the assignment of this Bond or any such
portion or portions hereof by the initial registered owner hereof. A new bond or bonds payable to such assignee
or assignees (which then will be the new registered owner or owners of such new
Bond or Bonds) or to the initial registered owner as to any portion of this
Bond which is not being assigned and transferred by the initial registered
owner, shall be delivered by the Paying Agent/Registrar in conversion of and
exchange for this Bond or any portion or portions hereof, but solely in the
form and manner as provided in the next paragraph hereof for the conversion and
exchange of this Bond or any portion hereof.
The registered owner of this Bond shall be deemed and treated by the
Issuer and the Paying Agent/Registrar as the absolute owner hereof for all
purposes, including payment and discharge of liability upon this Bond to the
extent of such payment, and the Issuer and the Paying Agent/Registrar shall not
be affected by any notice to the contrary.
AS
PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the
unpaid or unredeemed principal balance hereof, may be converted into and exchanged
for a like aggregate principal amount of fully registered bonds, without
interest coupons, payable to the assignee or assignees duly designated in
writing by the initial registered owner hereof, or to the initial registered
owner as to any portion of this Bond which is not being assigned and
transferred by the initial registered owner, in any denomination or
denominations in any integral multiple of $5,000 (subject to the requirement
hereinafter stated that each substitute bond issued in exchange for any portion
of this Bond shall have a single stated principal maturity date), upon
surrender of this Bond to the Paying Agent/Registrar for cancellation, all in
accordance with the form and procedures set forth in the Bond Ordinance. If this Bond or any portion hereof is
assigned and transferred or converted each bond issued in exchange for any
portion hereof shall have a single stated principal maturity date corresponding
to the due date of the installment of principal of this Bond or portion hereof
for which the substitute bond is being exchanged, and shall bear interest at
the rate applicable to and borne by such installment of principal or portion
thereof. Such bonds, respectively,
shall be subject to redemption prior to maturity on the same dates and for the
same prices as the corresponding installment of principal of this Bond or
portion hereof for which they are being exchanged. No such bond shall be payable in installments, but shall have
only one stated principal maturity date.
AS PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees,
but the bonds issued and delivered in exchange for this Bond or any portion
hereof may be assigned and transferred, and converted, subsequently, as
provided in the Bond Ordinance. The
Issuer shall pay the Paying Agent/Registrar's standard or customary fees and
charges for transferring, converting, and exchanging this Bond or any portion thereof,
but the one requesting such transfer, conversion, and exchange shall pay any
taxes or governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be
required to make any such assignment, conversion, or exchange (i) during the
period commencing with the close of business on any Record Date and ending with
the opening of business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or portion thereof called for
prepayment or redemption prior to maturity, within 45 days prior to its
prepayment or redemption date.
IN
THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the
Bond Ordinance that it promptly will appoint a competent and legally qualified
substitute therefor, and promptly will cause written notice thereof to be
mailed to the registered owner of this Bond.
IT
IS HEREBY certified, recited, and covenanted that this Bond has been duly and
validly authorized, issued, and delivered pursuant to the laws of the State of
Texas; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance,
and delivery of this Bond and the Series of which it is a part have been
performed, existed, and been done in accordance with law; that this Bond is a
special obligation of said Issuer, and that the principal of and interest on
this Bond, together with other outstanding Sewer System Revenue Bonds of the
Issuer, are payable and secured by a first lien on and pledge of the Net
Revenues of the Issuer's Sewer System.
THE
ISSUER has reserved the right, subject to the restrictions stated, and adopted
by reference, in the Ordinance authorizing this Series of Bonds, to issue
additional parity revenue bonds which also may be made payable from, and
secured by a first lien on and pledge of, the aforesaid Net Revenues.
THE
REGISTERED OWNER HEREOF shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by
taxation, or from any sources whatsoever other than those described in the Bond
Ordinance.
BY
BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to
be bound by such terms and provisions, acknowledges that the Bond Ordinance is
duly recorded and available for inspection in the official minutes and records
of the governing body of the Issuer, and agrees that the terms and provisions
of this Bond and the Bond Ordinance constitute a contract between the
registered owner hereof and the Issuer.
IN
WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual
signature of the Mayor of the Issuer and countersigned with the manual
signature of the City Secretary of the Issuer, has caused the official seal of
the Issuer to be duly impressed on this Bond, and has caused this Bond to be
dated July 1, 2002.
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City
Secretary |
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Mayor |
(CITY SEAL)
FORM OF REGISTRATION
CERTIFICATE OF THE
COMPTROLLER OF PUBLIC
ACCOUNTS:
COMPTROLLER'S
REGISTRATION CERTIFICATE: REGISTER NO.
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 that this Bond has
been registered by the Comptroller of Public Accounts of the State of Texas.
Witness
my signature and seal this
Comptroller
of Public Accounts of the State of Texas
(COMPTROLLER'S
SEAL)
Section
6. ADDITIONAL CHARACTERISTICS OF
THE BONDS. (a) Registration and Transfer. The Issuer shall keep or cause to be kept at
the principal corporate trust office of THE BANK OF NEW YORK TRUST COMPANY OF
FLORIDA, N.A., DALLAS, TEXAS, (the "Paying Agent/Registrar") books or
records of the registration and transfer of the Bonds (the "Registration
Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and make such
transfers and registrations under such reasonable regulations as the Issuer and
Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make
such transfers and registrations as herein provided. The Paying Agent/Registrar shall obtain and record in the
Registration Books the address of the registered owner of each Bond to which
payments with respect to the Bonds shall be mailed, as herein provided; but it
shall be the duty of each registered owner to notify the Paying Agent/Registrar
in writing of the address to which payments shall be mailed, and such interest
payments shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect
the Registration Books during regular business hours of the Paying
Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the
Registration Books confidential and, unless otherwise required by law, shall
not permit their inspection by any other entity. Registration of each Bond may be transferred in the Registration
Books only upon presentation and surrender of such Bond to the Paying
Agent/Registrar for transfer of registration and cancellation, together with
proper written instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, (i) evidencing the
assignment of the Bond, or any portion thereof in any integral multiple of
$5,000, to the assignee or assignees thereof, and (ii) the right of such
assignee or assignees to have the Bond or any such portion thereof registered
in the name of such assignee or
assignees. Upon the assignment and
transfer of any Bond or any portion thereof, a new substitute Bond or Bonds
shall be issued in conversion and exchange therefor in the manner herein
provided. The Initial Bond, to the
extent of the unpaid or unredeemed principal balance thereof, may be assigned
and transferred by the initial registered owner thereof once only, and to one
or more assignees designated in writing by the initial registered owner
thereof. All Bonds issued and delivered
in conversion of and exchange for the Initial Bond shall be in any denomination
or denominations of any integral multiple of $5,000 (subject to the requirement
hereinafter stated that each substitute Bond shall have a single stated
principal maturity date), shall be in the form prescribed in the FORM OF
SUBSTITUTE BOND set forth in this Ordinance, and shall have the
characteristics, and may be assigned, transferred, and converted as hereinafter
provided. If the Initial Bond or any
portion thereof is assigned and transferred or converted the Initial Bond must
be surrendered to the Paying Agent/Registrar for cancellation, and each Bond
issued in exchange for any portion of the Initial Bond shall have a single
stated principal maturity date, and shall not be payable in installments; and
each such Bond shall have a principal maturity date corresponding to the due
date of the installment of principal or portion thereof for which the
substitute Bond is being exchanged; and each such Bond shall bear interest at
the single rate applicable to and borne by such installment of principal or
portion thereof for which it is being exchanged. If only a portion of the Initial Bond is assigned and
transferred, there shall be delivered to and registered in the name of the
initial registered owner substitute Bonds in exchange for the unassigned
balance of the Initial Bond in the same manner as if the initial registered
owner were the assignee thereof. If any
Bond or portion thereof other than the Initial Bond is assigned and transferred
or converted each Bond issued in exchange
shall have the same principal maturity date and bear interest at the
same rate as the Bond for which it is exchanged. A form of assignment shall be printed or endorsed on each Bond,
excepting the Initial Bond, which shall be executed by the registered owner or
its duly authorized attorney or representative to evidence an assignment
thereof. Upon surrender of any Bonds or
any portion or portions thereof for transfer of registration, an authorized
representative of the Paying Agent/Registrar shall make such transfer in the
Registration Books, and shall deliver a new fully registered substitute Bond or
Bonds, having the characteristics herein described, payable to such assignee or
assignees (which then will be the registered owner or owners of such new Bond
or Bonds), or to the previous registered owner in case only a portion of a Bond
is being assigned and transferred, all in conversion of and exchange for said
assigned Bond or Bonds or any portion or portions thereof, in the same form and
manner, and with the same effect, as provided in Section 6(d), below, for the
conversion and exchange of Bonds by any registered owner of a Bond. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for making such transfer and delivery of
a substitute Bond or Bonds, but the one requesting such transfer shall pay any
taxes or other governmental charges required to be paid with respect
thereto. The Paying Agent/Registrar
shall not be required to make transfers of registration of any Bond or any
portion thereof (i) during the period commencing with the close of business on
any Record Date and ending with the opening of business on the next following
principal or interest payment date, or, (ii) with respect to any Bond or any
portion thereof called for redemption prior to maturity, within 30 days prior
to its redemption date.
(b) Ownership of Bonds. The entity in whose name any Bond shall be
registered in the Registration Books at any time shall be deemed and treated as
the absolute owner thereof for all purposes of this Ordinance, whether or not
such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary; and payment of, or on account
of, the principal of, premium, if any, and interest on any such Bond shall be
made only to such registered owner. All
such payments shall be valid and effectual to satisfy and discharge the
liability upon such Bond to the extent of the sum or sums so paid.
(c) Payment of Bonds and Interest. The Issuer hereby further appoints the
Paying Agent/Registrar to act as the paying agent for paying the principal of
and interest on the Bonds, and to act as its agent to convert and exchange or
replace Bonds, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payments made by the Issuer and the Paying Agent/Registrar with respect to the
Bonds, and of all conversions and exchanges of Bonds, and all replacements of Bonds,
as provided in this Ordinance. However,
in the event of a nonpayment of interest on a scheduled payment date, and for
thirty (30) days thereafter, a new record date for such interest payment (a
"Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been
received from the Issuer. Notice of the
Special Record Date and of the scheduled payment date of the past due interest
(which shall be 15 days after the Special Record Date) shall be sent at least
five (5) business days prior to the Special Record Date by United States mail,
first class postage prepaid, to the address of each Bondholder appearing on the
Security Register at the close of business on the last business day next preceding
the date of mailing of such notice.
(d) Conversion and Exchange or Replacement;
Authentication. Each Bond issued and
delivered pursuant to this Ordinance,
to the extent of the unpaid or unredeemed principal balance or principal amount
thereof, may, upon surrender of such Bond at the principal corporate trust
office of the Paying Agent/Registrar, together with a written request therefor
duly executed by the registered owner
or the assignee or assignees thereof, or its or their duly authorized attorneys
or representatives, with guarantee of signatures satisfactory to the Paying
Agent/Registrar, may, at the option of the registered owner or such assignee or
assignees, as appropriate, be converted into and exchanged for fully registered
bonds, without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000, or
any integral multiple of $5,000 (subject to the requirement hereinafter stated
that each substitute Bond shall have a single stated maturity date), as
requested in writing by such registered owner or such assignee or assignees, in
an aggregate principal amount equal to the unpaid or unredeemed principal
balance or principal amount of any Bond or Bonds so surrendered, and payable to
the appropriate registered owner, assignee, or assignees, as the case may
be. If the Initial Bond is assigned and
transferred or converted each substitute Bond issued in exchange for any
portion of the Initial Bond shall have a single stated principal maturity date,
and shall not be payable in installments; and each such Bond shall have a
principal maturity date corresponding to the due date of the installment of
principal or portion thereof for which the substitute Bond is being exchanged; and
each such Bond shall bear interest at the single rate applicable to and borne
by such installment of principal or portion thereof for which it is being
exchanged. If a portion of any Bond
(other than the Initial Bond) shall be redeemed prior to its scheduled maturity
as provided herein, a substitute Bond or Bonds having the same maturity date,
bearing interest at the same rate, in the denomination or denominations of any
integral multiple of $5,000 at the request of the registered owner, and in
aggregate principal amount equal to the unredeemed portion thereof, will be
issued to the registered owner upon surrender thereof for cancellation. If any Bond or portion thereof (other than
the Initial Bond) is assigned and transferred or converted, each Bond issued in
exchange therefor shall have the same principal maturity date and bear interest
at the same rate as the Bond for which it is being exchanged. Each substitute Bond shall bear a letter
and/or number to distinguish it from each other Bond. The Paying Agent/Registrar shall convert and exchange or replace
Bonds as provided herein, and each fully registered bond delivered in
conversion of and exchange for or replacement of any Bond or portion thereof as
permitted or required by any provision of this Ordinance shall constitute one
of the Bonds for all purposes of this Ordinance, and may again be converted and
exchanged or replaced. It is
specifically provided that any Bond authenticated in conversion of and exchange
for or replacement of another Bond on or prior to the first scheduled Record
Date for the Initial Bond shall bear interest from the date of the Initial
Bond, but each substitute Bond so authenticated after such first scheduled
Record Date shall bear interest from the interest payment date next preceding
the date on which such substitute Bond was so authenticated, unless such Bond
is authenticated after any Record Date but on or before the next following
interest payment date, in which case it shall bear interest from such next
following interest payment date; provided, however, that if at the time of
delivery of any substitute Bond the interest on the Bond for which it is being
exchanged is due but has not been paid, then such Bond shall bear interest from
the date to which such interest has been paid in full. THE INITIAL BOND issued and delivered
pursuant to this Ordinance is not required to be, and shall not be,
authenticated by the Paying Agent/ Registrar, but on each substitute Bond
issued in conversion of and exchange for or replacement of any Bond or Bonds
issued under this Ordinance there shall be printed a certificate, in the form
substantially as follows:
"PAYING
AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It
is hereby certified that this Bond has been issued under the provisions of the
Bond Ordinance described on the face of this Bond; and that this Bond has been
issued in conversion of and exchange for or replacement of a bond, bonds, or a
portion of a bond or bonds of an issue which originally was approved by the
Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts of the State of Texas.
Paying Agent/Registrar
Dated __________ By_________________________
Authorized Representative"
An authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Bond, date and manually
sign the above Certificate, and no such Bond shall be deemed to be issued or
outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Bonds
surrendered for conversion and exchange or replacement. No additional ordinances, orders, or
resolutions need be passed or adopted by the governing body of the Issuer or
any other body or person so as to accomplish the foregoing conversion and
exchange or replacement of any Bond or portion thereof, and the Paying
Agent/Registrar shall provide for the printing, execution, and delivery of the
substitute Bonds in the manner prescribed herein, and said Bonds shall be of
type composition printed on paper with lithographed or steel engraved borders
of customary weight and strength.
Pursuant to Chapter 1207, the duty of conversion and exchange or
replacement of Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's
Authentication Certificate, the converted and exchanged or replaced Bond shall
be valid, incontestable, and enforceable in the same manner and with the same
effect as the Initial Bond which originally was issued pursuant to this
Ordinance, approved by the Attorney General, and registered by the Comptroller
of Public Accounts. The Issuer shall
pay the Paying Agent/Registrar's standard or customary fees and charges for
transferring, converting, and exchanging any Bond or any portion thereof, but
the one requesting any such transfer, conversion, and exchange shall pay any
taxes or governmental charges required to be paid with respect thereto as a
condition precedent to the exercise of such privilege of conversion and
exchange. The Paying Agent/Registrar
shall not be required to make any such conversion and exchange or replacement
of Bonds or any portion thereof (i) during the period commencing with the close
of business on any Record Date and ending with the opening of business on the
next following principal or interest payment date, or, (ii) with respect to any
Bond or portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date.
(e) In General.
All Bonds issued in conversion and exchange or replacement of any other
Bond or portion thereof, (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such Bonds to be
payable only to the registered owners thereof, (ii) may be redeemed prior to
their scheduled maturities, (iii) may be transferred and assigned, (iv) may be
converted and exchanged for other Bonds, (v) shall have the characteristics,
(vi) shall be signed and sealed, and (vii) the principal of and interest on the
Bonds shall be payable, all as provided, and in the manner required or
indicated, in the FORM OF SUBSTITUTE BOND set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the
registered owners of the Bonds that it will (i) pay the standard or customary
fees and charges of the Paying Agent/Registrar for its services with respect to
the payment of the principal of and interest on the Bonds, when due, and (ii)
pay the fees and charges of the Paying Agent/Registrar for services with
respect to the transfer of registration of Bonds, and with respect to the
conversion and exchange of Bonds solely to the extent above provided in this
Ordinance.
(g) Substitute Paying Agent/Registrar. The Issuer covenants with the registered
owners of the Bonds that at all times while the Bonds are outstanding the
Issuer will provide a competent and legally qualified bank, trust company,
financial institution, or other agency to act as and perform the services of
Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying
Agent/Registrar will be one entity. The
Issuer reserves the right to, and may, at its option, change the Paying
Agent/Registrar upon not less than 120 days written notice to the Paying Agent/
Registrar, to be effective not later than 60 days prior to the next principal
or interest payment date after such notice.
In the event that the entity at any time acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should
resign or otherwise cease to act as such, the Issuer covenants that promptly it
will appoint a competent and legally qualified bank, trust company, financial
institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the
Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall
transfer and deliver the Registration Books (or a copy thereof), along with all
other pertinent books and records relating to the Bonds, to the new Paying
Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying
Agent/Registrar, the Issuer promptly will cause a written notice thereof to be
sent by the new Paying Agent/Registrar to each registered owner of the Bonds,
by United States mail, first-class postage prepaid, which notice also shall
give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying
Agent/Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of this Ordinance shall be delivered to each
Paying Agent/Registrar.
(h) Book-Entry Only System. The Bonds issued in exchange for the Bonds
initially issued to the purchaser specified herein shall be initially issued in
the form of a separate single fully registered Bond for each of the maturities
thereof. Upon initial issuance, the
ownership of each such Bond shall be registered in the name of Cede & Co.,
as nominee of Depository Trust Company of New York ("DTC"), and
except as provided in subsection (f) hereof, all of the outstanding Bonds shall
be registered in the name of Cede & Co., as nominee of DTC.
With
respect to Bonds registered in the name of Cede & Co., as nominee of DTC,
the Issuer and the Paying Agent/Registrar shall have no responsibility or
obligation to any DTC Participant or to any person on behalf of whom such a DTC
Participant holds an interest on the Bonds.
Without limiting the immediately preceding sentence, the Issuer and the
Paying Agent/Registrar shall have no responsibility or obligation with respect
to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any DTC Participant or any other person, other than a Bondholder,
as shown on the Registration Books, of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any DTC Participant
or any other person, other than a Bondholder, as shown in the Registration
Books of any amount with respect to principal of, premium, if any, or interest
on, as the case may be, the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary,
the Issuer and the Paying Agent/Registrar shall be entitled to treat and
consider the person in whose name each Bond is registered in the Registration
Books as the absolute owner of such Bond for the purpose of payment of
principal, premium, if any, and interest, as the case may be, with respect to
such Bond, for the purpose of giving notices of redemption and other matters
with respect to such Bond, for the purpose of registering transfers with
respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all
principal of, premium, if any, and interest on the Bonds only to or upon the
order of the respective owners, as shown in the Registration Books as provided
in this Ordinance, or their respective attorneys duly authorized in writing,
and all such payments shall be valid and effective to fully satisfy and
discharge the Issuer's obligations with respect to payment of principal of,
premium, if any, and interest on, or as the case may be, the Bonds to the
extent of the sum or sums so paid. No
person other than an owner, as shown in the Registration Books, shall receive a
Bond certificate evidencing the obligation of the Issuer to make payments of
principal, premium, if any, and interest, as the case may be, pursuant to this
Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined
to substitute a new nominee in place of Cede & Co., and subject to the
provisions in this Ordinance with respect to interest checks being mailed to
the registered owner at the close of business on the Record Date, the word
"Cede & Co." in this Ordinance shall refer to such new nominee of
DTC.
(i) Successor Securities Depository; Transfers
Outside Book-Entry Only System. In the
event that the Issuer or the Paying Agent/Registrar determines that DTC is
incapable of discharging its responsibilities described herein and in the
representation letter of the Issuer to DTC and that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated
Bonds, the Issuer or the Paying Agent/Registrar shall (i) appoint a successor
securities depository, qualified to act as such under Section 17(a) of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and
transfer one or more separate Bonds to such successor securities depository or
(ii) notify DTC and DTC Participants of the availability through DTC of Bonds
and transfer one or more separate Bonds to DTC Participants having Bonds
credited to their DTC accounts. In such
event, the Bonds shall no longer be restricted to being registered in the
Registration Books in the name of Cede & Co., as nominee of DTC, but may be
registered in the name of the successor securities depository, or its nominee,
or in whatever name or names Bondholders transferring or exchanging Bonds shall
designate, in accordance with the provisions of this Ordinance.
(j) Payments to Cede & Co. Notwithstanding any other provision of this
Ordinance to the contrary, so long as any Bond is registered in the name of
Cede & Co., as nominee of DTC, all payments with respect to principal of,
premium, if any, and interest on, or as the case may be, such Bond and all
notices with respect to such Bond shall be made and given, respectively, in the
manner provided in the representation letter of the Issuer to DTC.
Section
7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion
and exchange or replacement of any other Bond or portion thereof, including the
form of Paying Agent/Registrar's Certificate to be printed on each of such
Bonds, and the Form of Assignment to be printed on each of the Bonds, shall be,
respectively, substantially as follows, with such appropriate variations,
omissions, or insertions as are permitted or required by this Ordinance.
NO. _____ PRINCIPAL
AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WEBB
SEWER SYSTEM REVENUE
REFUNDING BOND, SERIES
2002A
|
INTEREST RATE
|
|
MATURITY DATE
|
|
DATE OF ORIGINAL ISSUE
|
|
CUSIP NO. |