OR 92-568 Waterworks & sewer System revenue Bonds, $2M
ORDINANCE NO. 92568
AUTHORIZING THE ISSUANCE OF WATERWORKS AND. SEWER SYSTEM
REVENUE BONDS, SERIES 1992, APPROVING AN OFFICIAL STATEMENT,
AUTHORIZING THE EXECUTION OF A PURCHASE CONTRACT, AND
MAKING PROVISIONS FOR THE SECURITY THEREOF, AND ORDAINING
OTHER MATrERS RELATING TO THE SUBJECT
THE STATE OF TEXAS §
COUNTIES OF DALLAS AND DENTON §
CITY OF COPPELL §
WHEREAS, the following revenue bonds of the City of Coppelt are presently
outstanding:
City of Coppen, Texas Waterworks and Sewer System Refunding and
Improvement Revenue Bonds, Series 1985, dated August 15, 1985, maturities
9/1/93 through 9/1/96, in the aggregate principal mount of $1,425,000 (the
"Series 1985 Bonds" or "Outstanding Bonds");
City of Coppen, Texas Waterworks and Sewer System Revenue Refunding
Bonds, Series 1991, dated January 1, 1991, maturities 9/1/93 through 9/1/06,
in the aggregate principal mount of $7,885,000 (the "Series 1991 Refunding
Bonds" or "Outstanding Bonds");
City of Coppen, Texas Waterworks and Sewer System Revenue Bonds, Series
1991, dated May 1, 1991, maturities 9/1/93 through 9/1/07, in the aggregate
principal amount of $2,400,000 (the "Series 1991 Bonds" or "Outstanding
Bonds");
WHEREAS, the City Council has heretofore, on the 28th day of July, 1992, adopted
a resolution authorizing and directing the city secretary to give notice of intention to issue
revenue bonds; and
WHEREAS, said notice has been duly published in the Citizens Advocate, which is
a newspaper of general circulation in said City, in its issues of August 14, 1992 and August
21, 1992; and
WHEREAS, the City Council did not hold the special meeting on September 1, 1992
due to a lack of quorum; and
WHEREAS, the City received no petition from the qualified electors of the City
protesting the issuance of such revenue bonds; and
WHEREAS, the bonds hereinafter authorized are to be issued and delivered
pursuant to Articles 1111 through 1118, V.A.T.C.S., Article 2368a, V.A.T.C.S., and Chapter
252, Local Government Code; 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 Article 6252-17, V.A.T.C.S.
NOW, THEREFORE, BE IT ORDAINrED BY THE CITY COUNCIL OF THE
CITY OF COPPEI .l3 TEXAS:
Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of
the City of Coppell (the "Issuer') are hereby authorized to be issued and delivered in the
aggregate principal amount of $2,000,000, for the purpose of improving and extending the
combined Waterworks and Sewer System.
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this
Ordinance shall be designated: "CITY OF COPPF. I .l ; TEXAS WATERWORKS AND
SEWER SYSTEM REVENUE BOND, SERIES 1992", 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 convened 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, NUMBS, MATURITIES,
INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE IN1TIAL 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 September 1, 1992, in the
denomination and aggregate principal amount of $2,000,000, numbered R-l, payable in
annual installments of principal to the initial registered owner thereof, to-wit: DEAN
W1TTER REYNOLDS 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 install-
ments 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 insts!lments 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
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Initial Bond shall be payahli~all as provided, and in the manner required or indicated, in
the FORM OF INITIAL'~OND set forth ~n 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, or to the respective
dates of prepayment or redemption, 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 $2,000,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DA~ ,l AS AND DENTON
CITY OF COPPI~I .I ~ TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1992
CITY OF COPPEI-I~ in Dallas and Denton Counties, Texas (the "Issuer"), being a
political subdivision of the State of Texas, hereby promises to pay to
DEAN WITTER REYNOLDS l/qC.
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in
each case, the "registered owner") the a~gregate principal mount of
TWO MB .I -ION DOIi
in annual installments of principal due and payable on September 1 in each of the years, and
in the respacfive principal mounts, as set forth in the following schedule:
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YEAR AMOUNT YEAR AMOUNT
1993 $ 70,000 2001 $ 125,000
1994 75,000 2002 130,000
1995 80,000 2003 140,000
1996 85,000 2004 150,000
1997 95,000 2005 165,000
1998 100,000 2006 175,000
1999 105,000 2007 185,000
2000 115,000 2008 205,000
and to pay roterest, 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:
maturity 1993, 7.625% maturity 2001, 5.30%
maturity 1994, 7.625% maturity 2002, 5.50%
maturity 1995, 7.625% maturity 2003, 5.60%
maturity 1996, 7.625% maturity 2004, 5.70% ,
maturity 1997, 7.625% maturity 2005, 5.80%
maturity 1998, 7.625% maturity 20~ 5.90%
maturity 1999, 7.625% maturity 2007, 6.00%
maturity 2000, 5.20% maturity 2008, 6.00%
with said interest being payable on March 1, 1993, and semiannually on each September 1
and March 1 thereafter while this Bond or any portion hereof is outstanding and unpaid.
THE INST.AI .I .MENTS 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 oil ~ Boild are payable to the
registered owner hereof through the services of Ameritrust Texas National Association,
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, dra~a 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 '~ond Ordi-
nance") 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 Registra-
tion Books kept by the Paying Agent/Registrar, as hereinafter desent~ed, 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
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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 $2,000,000 for the purpose of improving and
extending the combined Waterworks and Sewer System.
ON SEPTEMBER 1, 2002, or any date thereafter, the unpaid installments of
principal of this Bond may be prepaid or redeemed prior to their scheduled due dates, at
the option of the Issuer, with funds derived from any available source, as a whole, or in part,
and, ff in part, the Issuer shall select and designate the maturity, or maturities, and the
amount that is to be redeemed, and ff less than a whole maturity is to be called, the Issuer
shah direct the Paying Agent/Registrar to call by lot (provided that a portion of this Bond
may be redeemed only in an integral multiple of $5,000), at the redemption price of the
principal amount, plus accrued interest to the date fixed for prepayment or redemption.
AT l-FAST 30 days prior to the date fixed for any such prepayment or redemption
a written notice of such prepayment or redemption shall be mailed by the Paying Agent/Reg-
istrar to the registered owner hereof. By the date fixed for any such prepayment or
redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for
the payment of the required prepayment or redemption price for this Bond or the portion
hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the date
fixed for prepayment or redemption. ff such written notice of prepayment or redemption
is given, and if due provision for such payment is made, all as provided above, this Bond,
or the portion thereof which is to be so prepaid or redeemed, thereby automatically shah
be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear
interest after the date fixed for its prepayment or redemption, and shall not be regarded as
being outstanding except for the fight of the registered owner to receive the prepayment or
redemption price plus accrued interest to the date fixed for prepayment or redemption from
the Paying Agent/Registrar out of the funds provided for such payment. The Paying
Agent/Registrar shall record in the Registration Books all such prepayments or redemptions
of principal of this Bond or any portion hereof.
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 trans-
ferred 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, my 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 ~th the form and procedures set forth in the Bond Ordinance. If this
Bond or any portion hereof is a~igned 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 thh Bond or portion hereof
for which the su~titute 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
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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
requesting such transfer, conversion, and exchange a g
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 covertanted 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 Waterworks and 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 Waterworks and Sewer System.
THE ISSUER has reserved the fight, 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 REGISTERI~.I'~ OWNER HEREOF shall never have the fight 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 September 1, 1992.
City Secretary 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, cenitied 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
(COMPTROIJ.F.R'S SEAL)
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Section 6. ADDITIONAL CPLM~CTERISTICS OF THE BONDS.
(a) Registration and Transfer. The Issuer shah keep or cause to be kept at the principal
corporate trust office of Ameritrust Texas National Association, 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 lssuer and Paying Agent/Registrar may
prescribe; and the Paying Agent/Registrar shah 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~signment, in form and with guarantee of signatures satisfactory to the
Paying Agent~eglltrar, (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 regis-
tered owner thereof once only, and to one or more as.siguees 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 $5,060 (subject to the requirement hereinafler 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
9
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 shah 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
tra~fer 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 shah 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 shah 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 shah be 15
10
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 [tie 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 mount 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, hi 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 um-edeemed 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. ff 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. ff 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. ff 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
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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 ff 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 shah bear interest from the date to which such interest has been
paid in full. THE INITIAL BOND issued and delivered pursuant to this Ordinance.j.~ 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 conver-
sion 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 composi-
tion printed on paper with lithographed or steel engraved borden of customary weight and
strength. PuBat to Vernon's Ann. Tet Civ. St. Art. 717k-6, and particularly Section 6
thereof, 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 convened and exchanged or replaced Bond
shah 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 customaxy fees and charges for transferring,
converting, and exchanging any Bond or any portion thereof, but the one requesting any such
12
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 tgy' portion thereof (i) during the
period commencing with the close of business on any ti~izorit 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) shah 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 convened 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. :4.:
(f) Pavrnent 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 A~_ent/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 lssuer reserves the
fight 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 ceag to act as such, the lssuer 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
shah 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
D
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 Onlv System. The Bonds issued in exchange for the B0'nds initially
issued to the purchaser specified herein shah 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 CDTC'), 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 respons~ility 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 lssuer and
the Paying Agent/Registrar shall have no respons~ility 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, ff 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, ff any, and interest, as the case
may be, with respect to such Bond, for the purpo~ 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, preminm~ if any, and interest on the Bond~ 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 sam or sumn 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 cas~ 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.
14
(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 certi~cated 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, ff 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, omi-~ions, or insertions as are permitted or
required by this Ordinance.
15
FORM OF SUBSTITUTE BOND
PRINCIPAL
NO. __ AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DAIJAS AND DENTON
CITY OF COPPEI .1 ~ TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1992
INTEREST MATURITY DATE OF CUSIP
RATE DATE ORIGINAL ISSUE NO.
September 1, 1992
ON THE MATURITY DATE specified above THE CITY OF COPPEI .I ~ in Dallas
and Denton Counties, Texas (the "Issuer"), being a political subclivision of the State of Texas,
hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner")
the principal amount of
and to pay interest thereon from September 1, 1992 to the maturity date specified above,
or the date of redemption prior to maturity, at the interest rate per annum specified above;
with interest being payable on March 1, 1993 and semiannually thereafter on each
September 1 and March 1, except that if the date of authentication of this Bond is later than
February 15, 1993, such principal amount shall bear interest from the interest payment date
next preceding the date of authentication, unless such date of authentication is after any
Record Date (hereinafter deemed) but on or before the next following interest payment
date, in which case such principal amount shall bear interest from such next following
interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money
of the United States of America, without exchange or collection charges. The principal of
this Bond shall be paid to the registered owner hereof upon presentation and surrender of
this Bond at maturity or upon the date fixed for its redemption prior to maturity, at the
principal corporate trust office of Ameritrust Texas National Association, Dallas, Texas,
which is the "Paying Agent/Registrar" for this Bond. The payment of interest on this Bond
shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest
payment date by check or draft, dated as of such interest payment date, drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance
authorizing the issace of the Bonds (the '~ond Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft
16
shall be sent by the Paying Agent/Registrar by United States Mail, first-class postage
prepaid, on each such 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 the risk and expense of, the registered owner. Any
accrued interest due upon the redemption of this Bond prior to maturity as provided herein
shall be paid to the registered owner upon presentation and surrender of this Bond for
redemption and payment at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the registered owner of this Bond. that on or
before each principal payment date, interest payment date, and accrued interest payment
date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the ' dinanee, the mounts required to provide for the
payment, in immediately availabl~f~all principal of and interest on the Bonds, when
due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be
a Saturday, Sunday, a legal hobday, or a day on which banking institutions in the City where
the Paying Agent/Registrar is located arc 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 shah have the same force and effect as ff made on the original date
payment was due.
THIS BOND is one of an issue of Bonds initially dated September 1, 1992,
authorized in accordance with the Constitution and laws of the State of Texas in the
principal amount of $2,000,000, for the pm of improving and extending the combined
Waterworks and Sewer System.
ON SEPTEMBER 1, 2002, or any date thereafter, the Bonds of this Series may be
redeemed prior to their scheduled maturitiem, at the option of the Issuer, with funds derived
from any available and lawful source, as a whole, or in part, and, if in part, the Issuer shall
select and designate the maturity or maturities and the mount that is to be redeemed, and
ff less than a whole maturity is to be called, the lsmuer shall direct the Paying
Agent/Registrar to call by lot (provided that a portion of a Bond may be redeemed only in
an integral multiple of $5,000), at the redemption price of the principal amount thereof, plus
accrued interest to the date fixed for redemption.
AT I .FAST 30 days prior to the date fixed for any redemption of Bonds or portions
thereof prior to maturity a written notice of such redemption shah be published once in a
financial publication, journal, or reporter of general circulation among securities dealers in
The City of New York, New York (including, but not limited to, The Bond Buyer and The
War Street Journal), or in the State of Texas (including, but not limited to, The Texas Bond
Reporter). Such notice also shall be sent by the Paying Agent/Registrar by United States
17
mail, first class postage prepaid, not less than 30 days prior to the date f~xed for any such
redemption, to the registered owner of each Bond to be redeemed at its address as it ap-
peared on the 45th day prior to such redemption date; provided, however, that the failure
to send, mail, or receive such notice, 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 it is hereby specifically provided that the publication of such notice as
required above shall be the only notice actually required in connection with or as a
prerequisite to the redemption of any Bonds or portions thereof. By the date fixed for any
such redemption due provision shall be made with the Paying Agent/Registrar for the
payment of the required redemption price for the Bonds or portions thereof which are to
be so redeemed,plus accrued interest thereon to the date fixed for redemption. If such
written notice of redemption is published and if due provision for such payment is made, all
as provided above, the Bonds or portions thereof which are to be so redeemed thereby
automatically shall be treated as redeemed prior to their scheduled maturities, and they shall
not bear interest after the date fixed for redemption, and they shall not be regarded as being
outstanding except for the fight of the registered owner to receive the redemption price plus
accrued interest from the Paying Agent/Registrar out of the funds provided for such
payment. ff a portion of any Bond shall be redeemed a substitute Bond or Bonds having
the same maturity date, bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000, at the written request of the registered
owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be
issued to the registered owner upon the surrender thereof for cancellation, at the expense
of the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL
MULTIPLE OF $5,000 may be assigned 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 assignment and transfer, this Bond must be presented and
surrendered to the Paying Agent/Registrar, together with proper instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing assignment of this Bond or any portion or portions hereof in any integral multiple
of $5,000 to the assignee or assignees in who~e name or nam~ this Bond or any such
portion or portions hereof is or are to be transferred and registered. The form of
Assignment printed or endorsed on this Bond shall be executed by the registered owner or
its duly authorized attorney or representative,to evidence the assignment 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 previous registered owner in the
case of the assj~nment and tr~ns(er of only a portion of this Bond, may be delivered by the
Paying Agent/Registrar in conversion of and exchange for this Bond, all in the form and
manner as provided in the nex~ paragraph hereof for the conversion and exchange of other
Bonds. The Issuer shall pay the Paying AgentJRegistrar's standard or customary fees and
charges for making such transfer, but the one requesting such transfer shall pay any taxes
or other governmental charges required to be paid with respect thereto. The Paying
18
Agent/Registrar shall not be required to make transfers of registration of this Bond or any
penion hereof (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 penion thereof called for redemption
prior to maturity, within 45 days prior to its redemption date. 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 shah not
be affected by any notice to the contrary.
.~.I .l . BONDS OF THIS SERIES are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in
the Bond Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of
the registered owner or the assignee or assignees hereof, be converted into and exchanged
for a like aggregate principal amount of fully registered bonds, without inte.re_~..Coupons,
payable to the appropriate registered owner, assignee, or assignees, as
having the same maturity date, and bearing interest at the same rate, in any d~n0~tlbn
or denominations in any integral multiple of $5,000 as requested in writing by the
appropriate registered owner, assignee, or assignees, as the case may be, upon surrender of
this Bond to the Paying Agent,tRegistrar for cancellation, all in accordance with the form and
procedures set forth in the Bond Ordinance. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for transferring, converting, and
exchanging any Bond or any pertion thereof, but the one requesting such transfer, conver-
sion, 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 (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.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer,
resigns, or othenvise ceases to act as such, the hsuer has coychanted 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 owners of the
Bonds.
IT IS HERFRY 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 Waterworks and Sewer System Revenue Bonds of the
19
Issuer, are payable and secured by a first lien on and pledge of the Net Revenues of the
Issuer's Waterworks and 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 fight to demand
payment of this Bond or the interest hereon out of any funds raised or to be raised by
taxation, or fi'om any sources whatsoever other than th.¢~.' 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 agre.es that the terms and provisions of this Bond and the Bond Ordinance
constitute a contract between each registered owner hereof and the hsuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the
manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual
or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of
the Issuer to be duly impressed, or placed in fa~imile, on this Bond.
City Secretary Mayor
CITY SEAL
20
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed ff this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in conver-
sion or replacement of, or in exchange for, a bond, bonds, or a portion of a bond or bonds
of a Series which originally was approved by the Attorney General of the State of Texas and
registered by 't'he Comptroller of Public Accounts of the State of Texas.
Dated AMERITRUST TEXAS NATIONAL ASSOCIATION
By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly
authorized representative or attorn~ thereof, hereby assigns this Bond to
/ /
(Assignee's Social Security (print or type Assignee's name
or Taxpayer Identification Number and address, including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's
Registration Books with full power of substitution in the premises.
Dated
Signature Guaranteed:
NOTICE: This signature must be gnaranteed by a member of the New York Stock
Exchange or a commercial bank or trust company.
Registered Owner
NOTICE: This signature must correspond with the name of the Registered Owner
appearing on the face of this Bond in every particular without alteration or enlargement or
any change whatsoever.
21
Section 8. DEFINITIONS. That for all pu~ of this Ordinance, the following
words shall have the following meanings, respectively:
(a) The term "Additional Bonds" means the additional parity bonds which the Issuer
reserves the right to issue under the provisions of Section 19 of this Ordinance.
(b) The term "Bonds" means the Series 1992 Bonds and any Additional Bonds at any
time outstanding.
(c) The term "Interest and Sinking Fund" means the City of Coppell, Texas
Waterworks and Sewer System Revenue Bonds Interest and Sinking Fund created and
established pursuant to Section 11 of this Ordinance.
(d) The term "Net Revenues" means all income, revenues, and receipts of every
nature derived from and received by virtue of the access, use and operation of the System
(including interest income and earnings received from the investment of moneys in the
special funds created by this Ordinance or ordinances authorizing the issuance of Additional
Bonds) after deducting and paying, and making provision for the payment of, current
expenses of maintenance and operation thereof, including all salaries, labor, materials,
repairs and extensions necessary to render efficient service; provided, however, that only
such expenses for repairs and extensions as in the judgment of the City Council, reasonably
and fairly exercised, are necessary to keep the System in operation and to render adequate
service to the Issuer and the inhabitants thereof, or such as might be necessary to meet some
physical accident or condition which would otherwise impair any obligations payable from
the Net Revenues of the System, shall be deducted in determining "Net Revenues"; and
provided further that the fees paid to the Is~uer for access to the System shall not be
included in Net Revenues unless such fees have actually been received by the Issuer.
Contractual payments for the purchase of water or the treatment of sewage shall be a
maintenance and operating expense of the System to the extent provided in the contract
incurred therefor and as may be authorized by law. Depreciation shah never be considered
as an expense of operation and maintenance.
(e) The term "Ordinance" means ~ Ordinance, under which the Bonds are
authorized and under the provisions of which all Additional Bonds will be issued.
(f) The term "Reserve Fund" memu the City of Coppelt, Texas Waterworks and
Sewer System Revenue Bonds Reserve Fund created and established pursuant to Section
11 of this Ordinance.
(g) The term "Revenue Fund" means the City of Coppe!l, Texas Waterworks and
Sewer System Revenue Bonds Revenue Fund created and established pursuant to Section
11 of this Ordinance.
(h) The term "Series 1992 Bonds" means the City of Coppell, Texas Waterworks and
Sewer System Revenue Bonds, Series 1992, issued pursuant to the provisions of this
Ordinance.
(i) The term "System" means the Issuer's combined waterworks system and sewer
system, including all properties (real, personal or mixed and tangible or intangible) owned,
operated, maintained, and vested in, the Issuer for the supply, treatment and distribution of
treated water for domestic, commercial industrial and other uses and the collection and
treatment of water-carried waste, together with all future additions, extensions, replacements
and improvements thereto.
Section 9. PLEDGE. (a) That the Bonds, the Outstanding Bonds, together with any
Additional Bonds are, in all respects, on a parity and equality of lien one with the other
payable from a first and superior pledge of and lien upon the Net Revenues of the System.
(b) That the Issuer covenants and agrees that the entire Net Revenues of the System
are hereby irrevocably pledged to the payment of the Bonds and to the establishment and
maintenance of reserves therefor, ff any, required by this Ordinance and any future
ordinances authorizing any Additional Bonds.
(c) That the Bonds authorized hereby are parity "Additional Bonds", as defined and
permitted in the ordinance of the City Council of the Issuer, which authorized the issuance
of the Series 1985 Bonds. Sections 10 through 29 of the Series 1985 Bond Ordinance are
hereby adopted by reference and shall be restated and be applicable to the Bonds for all
purposes, except to the extent hereinafter specifically modified and supplemented.
Section 10. RATES AND CHARGES. That, for the benefit of the original
purchasers and any and all subsequent holders of the Bonds, Outstanding Bonds, or
Additional Bonds, or any pan thereof, and in addition to all other provisions and covenants
contained in this Ordinance, it is expressly agreed that the Issuer shall, at all times while any
of the Bonds, Outstanding Bonds or Additional Bonds are outstanding and unpaid, fix and
maintain rates and collect charges for the facilities and services afforded by the System,
which will provide revenues annually at least equal to the amount required to:
(a) pay for all operation, maintenance, depreciation, replacement and betterment
charges of the Syatem;
(b) eltablish and mslntain the Interest and Snaking Fund and Reserve Fund
requirements contained in this Ordinance and in the ordinances relating to any Additional
Bonds; and
(c) produce Net Revenues at least equal to the principal and interest requirements
of the Bonds and Outstanding Bonds from time to time outstanding.
Section 11. FUNDS. That the Issuer covenants and agrees that all revenues derived
from the operation of the System shall be kept separate from other funds of the Issuer. To
that end, the following special funds have been established and maintained in an official
depository bank of the Issuer so long as any of the Outstanding Bonds and Bonds are
outstanding and unpaid, to-wit:
(a) City of Coppell, Texas Waterworks and Sewer System Revenue Fund, herein
called the "Revenue Fund";
(b) City of Coppelf, Texas Waterworks and Sewer System Revenue Bonds Interest
and Sinking Fund, herein called the "Interest and Sinking Fund";
(c) City of Coppell, Texas Waterworks and Sewer System Revenue Bonds Reserve
Fund, herein called the "Reserve Fund";
Section 12. REVENUE FUND. That the lssuer shall deposit, from day to day as
collected, all revenues of every nature derived from the operation of the System into the
Revenue Fund and the money from time to time on deposit therein shall be appropriated
to the following uses in the following order of priority, to-wit:
(a) to the payment of all necessary and reasonable expenses of operation and
maintenance of the System as said expenses are defined by law;,
(b) to the "Interest and Sinking Fund" and 'Reserve Fund" when and in the amounts
required by this Ordinance and for the payment of the principal of and interest on the
Outstanding Bonds and Bonds when and as due and payable and for the creation of a
reserve therefor; and
(c) to any other purpose of the lssuer now or hereafter permitted by law.
Section 13. INTEREST AND SINKING FUND. (a) That promptly after the
delivery of the Bonds, the Issuer shall cause to be deposited to the credit of the Interest and
Sinking Fund any accrued interest received from the sale and delivery of the Bonds, and any
such deposit shall be used to pay part of the interest next coming due on the Bonds.
(b) That the Is~uer shall lransfer from the Net Revenues and deposit to the credit
Of the Interest and Sinking Fund, in addition to mounts already required for the
Outstanding Bonds, the mounts, at the times, as follows:
(1) such amounts, deposited in approximately equal monthly installments on
or before the 5th day of each month hereafter, commencing with the month during
which the Bonds are delivered, or the month thereafter if delivery is made after the
5th day thereof, as will be sufficient, together with other mounts, if any, then on hand
in the Interest and Sinking Fund and avafiable for such purpose, to pay interest
scheduled to accrue and come due on the next succeeding interest payment date;
(2) such amounts, deposited in approximately equal monthly installments on
or before the 5th day of each month hereafter, commencing with the month during
which the Bonds are delivered, or the month thereafter if delivery is made after the
5th day thereof, as will be sufficient, together with other amounts, ff any, then on
hand in the Interest and Sinking Fund and available for such purpose, to pay
principal scheduled to accrue and come due on the next succeeding principal
payment date;
(c) That, in addition to the above requirements of this Section 13, the Issuer shall
make additional deposits into the Interest and Sinking Fund at the times and in the amounts
specified in any ordinance authorizing the issuance of Additional Bonds pursuant to this
Ordinance.
(d) That the Interest and Sinking Fund shall be used solely for the purpose of paying
the principal of an interest on the Bonds as such principal matures or is earlier redeemed
and as such interest becomes due and payable.
Section 14. RESERVE FUND. (a) The Issuer covenants and agrees that it will
continuously maintain the Reserve Fund an amount equal to not less than the average
annual principal and interest requirements on all Outstanding Bonds and Bonds from time
to time outstanding (the '~Reserve Fund Requirement"), and that, upon the issuance of
Additional Bonds, it will increase, if necessary, and accumulate the amount to be deposited
to the Reserve Fund in accordance with the requirements set forth in Section 19 hereof.
The Reserve Fund requirement shall be accumulated In not more than sixty months from
the date of the Bonds or the Additional Bonds, as applicable. For so long as the funds on
deposit in the Reserve Fund are equal to the Reserve Fund Requirement, no additional
deposits need to be made therein, but should the Reserve Fund at any time contain less than
the Reserve Fund Requirement, then, subject and subordinate to making the required
deposits to the credit of the Interest and Sinking Fund, the Issuer shall restore such
deficiency from the first available Net Revenues on deposit in the Revenue Fund. The
money on deposit in the Reserve Fund shall be used solely for the purpose of paying the
principal of and interest on the Bonds at any time there are not sufficient moneys on deposit
in the Interest and Sinking Fund for such purpo~.
(b) In accordance with the OrdInances that authorized the Series 1985 Bonds, the
Series 1991 Bonds, the Series 1991 Refunding Bonds, and the Series 1992 Bonds, the
amount currently on deposit in the Reserve Fund is $1,387,698, which amount is at least
equal to the Reserve Fund Requirement for the Outstanding Bonds. By virtue of the
issuance of the Bonds, the total mount required to be accumulated and maintained in the
Reserve Fund is $1,361,558, which amount is hereby determined on the date of approval
hereof to be the Reserve Fund Requirement for the Outstanding Bonds and the Bonds
25
herein authorized. The Issuer hereby covenants and agrees to deposit, if needed, from the
first available Net Revenues remaining in the Revenue Fund after the deposits required by
Section 12 hereof, such amounts as are necessary to accumulate, in not more than s/xty (60)
months from the date of the Bonds, an amount equal to the Reserve Fund Requirement for
the Outstanding Bonds and the Bonds. Such additional deposits are not needed since the
Reserve Fund contains the necessary Reserve Fund Requirements.
(c) The Issuer, may, at its option, withdraw aH surplus in the Reserve Fund over the
Reserve Fund Requirement and deposit the same in the Revenue Fund.
(d) For the purpose of determining compliance with the requirements of subsection
(a) of this Section, investment securities shall be valued from time to time at their cost or
market value, whichever is lower, except that any direct obligations of the United States
(State or Local Government Series) held for the benefit of the Reserve Fund in book-entry
form shah be continuously valued at their par value or face principal amount.
Section 15. PAYMENT OF BONDS. That on or before any interest payment date
for the Bonds while any of the Bonds are outstanding the Issuer shah make available to the
Paying Agent/Registrar therefor, in funds which will be immediately available on the next
succeeding business day, out of the Interest and Sinking Fund and the Reserve Fund, if
necessary, money sufficient to pay such interest on and such principal of the Bonds as will
accrue or mature, or will become due by reason of option or mandatory redemption. The
Paying Agent/Registrar shall destroy all paid Bonds and shah furnish the Issuer with an
appropriate certfficate of cancellation or destruction.
Section 16. INVESTMENT OF CERTAIN FUNDS. That money in any fund
established pursuant to this Ordinance may, at the option of the Issuer, be placed in time
deposits or certificates of deposit secured by obligations of the type hereinafter described,
or may 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 secured
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
Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home
Loan Banks, Government National Mortgage Association, United States Postal Service,
Farmers Home Administration, Federal Home Loan Mortgage Association, Small Business
Administration, Federal Housing Association, or Participation Certificates in the Federal
Assets Financing Trust; provided that all such deposits and investments shall be made in
such manner as will permit money required to be expended form a Fund to be available at
the proper time or times for the purposes thereof. Except as otherwise provided in Section
14 hereof, such investments shall be valued each year in terms of current market value as
of the last day of the Issuer's fiscal year. All interest and earnings derived from deposits and
investments in the Interest and Sinking Fund immediately shall be credited to, and any losses
shall be debited to, the Interest and Sinking Fund. All such investments shall be sold
promptly, when necessary, to prevent any default in connection with the Bonds.
Section 17. DEFICIENCIES IN FUNDS. If, at any time, the Issuer shall fail to
deposit into any fund created by this Ordinance the full amounts required hereby, the
amounts equivalent to such deficiencies shall be set apart and paid into said fund from the
first available and unallocated Net Revenues of the System, and such payments shall be in
addition to the amounts otherwise required hereby to be paid into said funds. To the extent
necessary, the Issuer shall increase the rates and charges for services of the System to make
up for any such deficiencies.
Section 18. SECURITY OF FUNDS. That all funds created by this ordinance, to
the extent not invested as herein permitted, shall be secured in the manner and to the fullest
extent required by law for the security of public funds, and such funds shall be used only for
the purposes and in the manner permitted or required by this Ordinance.
Section 19. ADDITIONAL BONDS. (a) That, in addition to the right to issue
bonds of inferior lien as authorized by law, the Issuer reserves the right to issue Additional
Bonds, under and in accordance with this Section, for the purpose of improving, extending
equipping and repairing the System and for the purpo~ of refunding, in any lawful manner,
any part or all of the Outstanding Bonds and the Bonds then outstanding. The Additional
Bonds shall be secured by and payable from a first and superior lien on and pledge of the
Net Revenues in the same manner and to the same extent as the Outstanding Bonds and
the Bonds; and the Outstanding Bonds and the Bonds, any then outstanding Additional
Bonds, and the Additional Bonds then proposed to be issued shall in all respects be on a
parity and of equal dignity as to lien and right. Additional Bonds may be issued under this
Section in one or more installments; provided, however, that none of the Additional Bonds
shah be issued unless and until the following conditions have been met, to-wit:
(i) The Issuer is not then in default as to any covenant, condition or
obligation prescribed by any ordinance authorizing the issuance of the outstanding
Bonds;
(ii) Each of the special funds created for the payment and security of the
Bonds contain the mount of money then required to be on deposit therein.
(iii) The lssuer has secured from a certified public accountant a certificate
showing thz. t the Net Earnings of the System for either the completed fiscal year next
preceding the date of the Additional Bonds or a consecutive twelve-month period out
of the last fifteen months next preceding the date of the Additional Bonds is equal
to at least 1.25 times the average annual principal and interest requirements and at
least 1.10 times the maximum annual principal and interest requirements (calculated
on a fiscal year basis) of all Bonds and Outstanding Bonds which will be outstanding
after the issuance of the proposed Additional Bonds. However, (A) should the
27
certificate of the accountant certify that the Net Earnings of the System for the
period covered thereby were less than required above, and (B) a change in the rates
and charges for water and sewer services afforded by the System became effective at
least 60 days prior to the last day of the period covered by the accountanUs
certificate, and (C) an independent engineer or engineering firm having a favorable
reputation with respect to such matters will certify that, had such change in rates and
charges been effective for the entire period covered by the accountant's certificate,
the Net Earnings of the System covered by the accountant's certificate would have
been, in his or their opinion, equal to at least 1.25 times the average annual principal
and interest requirements and at least 1.10 times the maximum annual principal and
interest requirements (calculated on a fiscal year basis) of the Series 1992 Bonds and
Outstanding Bonds after giving effect to the iss~snce of the Additional Bonds, then,
in such event, the coverage specified in the first sentence of this paragraph (iii) shall
not be required for the period specified, and such accountant's certificate will be
sufficient ff accompanied by an engineer's certificate to the above effect;
(iv) The ordinance authorizing the Additional Bonds (A) requires that
deposits shah be made into the Interest and Sir, king Fund in amounts adequate to
pay the principal and interest requirements of the Additional Bonds as the same
become due; and (B) provides that the aggregate mount to be accumulated and
maintained in the Reserve Fund shall be increased to an amount equal to the
Reserve Fund Requirement for all Bonds to be outstanding after the issuance of said
Additional Bonds. Such additionall amount shall be so accumulated in not more than
sixty months from the date of the Additional Bonds; and
(v) The Additional Bonds are scheduled to mature only on September 1
or March 1, or both.
(b) The term "Net Earning", as used in this Section, shall mean all income, receipts
and revenues derived from the access, use and operation of the System, including interest
earned on invested moneys in the special funds created herein for the payment and security
of obligations payable from the Net R~ventue, s, after deduction of maintenance and operating
expenses but not deducting depreciation, debt service payments on Bonds and other
expenditures which, under standard accounting practice, should be classified as capital
expenditures. Revenue sand receipts resulting solely from the ownership of the System
(grants, meter delx~its and gifts) and interest earned on construction funds created from
Bond proceeds shall not be treated or included as income, revenues or receipts from the
operation of the System for purposes of determining ''Net Earnings" nor shall the fees paid
to the Issuer for access to the System be.. so included unless such fees have actually been
received by the Issuer.
(c) Wherever, in this Section, the Issuer reserves the right to issue Additional Bonds,
such term shah also include, mean and refer to any other forms or types of obligations which
28
may be made lawfully payable from and secured by the same source of revenues of the
Issuer.
(d) The Issuer covenants that, for so long as any principal or interest pertaining to
any Bonds remain outstanding and unpaid, it will not authorize of issue any further bonds
of the Issuer secured by a lien on and pledge of the revenues of the System superior or
senior to the pledge and lien created herein for the Bonds, or secured by a lien on and
pledge of the revenues of the System on a parity with the Bonds except in conformity with
the provisions of this Section.
Section 20. MAINTENANCE AND OPERATION, INSURANCE. (a) That the
Issuer hereby covenants and agrees that the System shall be operated on a fiscal year basis
and shall be maintained in good condition and operated in an efficient manner and at
reasonable cost. So long as any of the Outstanding Bonds and Bonds are outstanding, the
issuer agrees to maintain/nsurance on the System of a kind and in amount customarily
carried by municipal corporations in the State of Texas engaged in similar type of business.
Nothing in this Ordinance shall be construed as requiring the Issuer to expend any funds
which are derived from sources other than the operation of the System but nothing herein
shaU be construed as preventing the Issuer from doing so.
(b) That the Issuer further covenants and agrees with the owner or owners of the
Outstanding Bonds and Bonds from time to time, that it will maintain and operate the
System with all possible efficiency while any of the Outstanding Bonds and Bonds remain
outstanding and unpaid, and that it will faithfully and punctually perform all duties with
reference to the System required by the Constitution and laws of the State of Texas,
including the making and collecting of reasonable and suttcient rates for water and sewer
services supplied by the System, and segregation and application of the revenues of the
System as required by the provisions of this Ordinance.
Section 21. RECORDS, ACCOUNTS, ACCOUNTING REPORTS. That the Issuer
hereby covenants and agrees that so long as any of the Outstanding Bonds and Bonds or any
interest thereon remain outstanding and unpaid, it will keep and maintain a proper and
complete system of records and accounts pertaining to the operation of the System and its
component parts separate and apart from all other records and accounts of the Issuer in
accordance with accepted accounting practices prek-'n'bed for municipal corporations, and
complete and correct entries shall be made of all transactions relating to the System, as
provided by Article 1113, Vernon's Annotated Texas Civil Statutes, as mended. The owner
or owners of any Bonds or any duly authorized agent or agents of such holders, shall have
the right at all reasonable times to inspect all such records, accounts and data relating
thereto and to inspect the System and all properties comprising same. The Issuer further
agrees that as soon as possible 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 account, shall particularly include the following:
29
(a) A detailed statement of the income and expenditures of the components of
the System for such fiscal year;
(b) A balance sheet as of the end of such fiscal year;
(c) A detailed statement of the source and disposition of all funds of the System
during such fiscal year; and
(d) The accountant's comments regarding the manner in which the Issuer has
complied with the covenants and requirements of this Ordinance and his
recommendations for any changes or improvements in the operation, records
and accounts of the System.
Expenses incurred in making the audits above referred to are to be treated as
maintenance and operating expenses of the System and paid as such. Copies of the
aforesaid annual audit shall be immediately haTfished, upon written request, to the original
purchasers and any subsequent holder of the Bonds.
Section 22. FINAL DEPOSITS, GOVERNMENT OBLIGATIONS. (a) That any
Bond shah be deemed to be paid, retired, and no longer outstanding within the meaning of
this Ordinance when payment of the principal and interest thereon to its due date (whether
such due date be by reason of maturity, redemption or otherwise) either (i) shall have been
made or caused to be made in accordance with the terms thereof (including the giving of
any required notice of redemption), or (ii) shall hav~ been provided by irrevocably
depositing with, or making available to, a paying agent/registrar therefor, in trust and
irrevocably set aside exclusively for such payment, (A) money su~cient to make such
payments, or (B) Government Obligations, as hereinafter defined in this Section, certified
by an independent public accounting firm of national reputation to mature as to principal
and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to make such payment, and all necessary and proper fees,
compensation and expenses of such paying agent/regislxar pertaining to the Bonds with
respect to which such deposit is made shall hav~ been paid or the payment thereof provided
for to the satisfaction of such paying agent/registrar. At such times as a Bond shall be
deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to
the benefit of Ithi~ Ordinanc~ or a lien on and pledge of the Net Revenues, and shah be
entitled to payment ~olely from such money or Government Obligations.
(b) That money ao deposited with a paying agent/registrar may, at the direction of
the issuer, be invested in Government Obligations maturing in the amounts and times as
hereinbefore set forth, and all income from all Government Obligations in the hands of the
paying agent/registrar pursuant to this Section which is not required for the payment of the
Bonds, and interest thereon, with respect to which such money has been deposited, shah be
delivered to the Issuer or deposited as directed by the ltsuer.
3O
(c) That, for the purpose of this Section, the term "Government Obligations" shall
mean 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,
which may be United States Treasury obligations such as its State and Local Government
Series, and which may be in book-entry form.
Section 23. REMEDIES IN EVENT OF DEFAULT. That, in addition to all the
rights and remedies provided by the laws of the State of Texas, the Issuer covenants and
agrees particularly that in the event the Issuer (a) defaults in payments to be made to the
Interest and Sinking 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 owner or owners of any of the Bonds shall be
entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and
requiring the Issuer and its officers to observe and perform any covenant, condition or
obligation prescribed in this Ordinance. No delay or omition 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.
Section 24. BONDS AS SPECIAL OBLIGATIONS. That the Bonds are special
obligations of the Issuer payable solely from Net Revenues and the holders and owners
thereof shah never have the right to demand payment thereof out of any other funds of the
Issuer or funds raised to be raised by taxation.
Section 2~. BONDS AS NEGOTIABLE INSTRUMENTS. That each of the Bonds
shah be deemed and construed to be an "Investment Security', and, as such, a negotiable
instrument, within the meaning of Article 8, of the Texas Uniform Commercial Code.
Section 26. ORDINANCE AS A CONTRACT. That the provisions of this
Ordinance shah constitute a contract between the issuer and the owner or owners from time
to time of the Bonds and, except as otherwise provided herein, no change, variation or
alteration of any kind of the provisions of this ordinance may be made until the Bonds are
no longer outstanding.
Section 27. FURTH'I:~.R COVENANTS. That the Issuer hereby further covenants
and agrees as follows, to-wit:
(a) That it has the lawful power to pledge the Net Revenues to the payment of the
Bonds and has lawfully exercised said power under the Constitution and laws of the State
of Texas; that the Bonds and the Additional Bonds, when issued, shall be ratably secured
under said pledge in such manner that one bond shall have no preference over any other
bond of said issues as hereinbefore provided.
31
(b) That, other than for the payment of the Outstanding Bonds and the Bonds, the
Net Revenues of the System are not in any manner now pledged to the payment of any debt
or obligation of the Issuer or of the System, except for any debt or obligation which has a
pledge of the Net Revenues subject and subordinate to the pledge of the Net Revenues
associated with the Bonds.
(c) That for so long as any of the Outstanding Bonds and Bonds or any interest
thereon remain outstanding, the issuer will not sell or encumber the physical properties of
the System or any substantial pan thereof; provided, however, this covenant shall not be
construed to prohibit the sale of such machinery or other properties or equipment which has
become obsolete or otherwise unsuited to the efficient operation of the System.
(d) That no free service of the System shall be allowed, and should the Issuer or any
of its agents or instrumentalities make use of the services and facilities of the System,
payment of the reasonable value thereof shall be made by the issuer out of funds from
sources other than the revenues and income of the System.
(e) That it will comply with all of the terms and conditions of any and all franchises,
permits and authorizations apphcable to or necessary with respect to the System, and which
have been obtained from any governmental agency;, and the Issuer has or will obtain and
keep in full force and effect all franchises, permits, authorizations and other requirements
applicable to or necessary with respect to the acquisition, construction, equipment, operation
and maintenance of the System.
(f) That it will not grant any franchise or permit the acquisition, construction or
operation of any competing facilities which might be used as a substitute for the System's
facilities, and, to the extent that it legally may, the bauer will probal3it any such competing
facilities.
Section 28. REGISTERED OWNERS, NOTICES, WAIVER. (a) The Issuer, the
Paying Agent/Registrar, and any agent of either of them may treat the person in whose
name any Bond is registered as the Owner of such Bond for the purpose of receiving
payment of the principal of and interest on such Bond and for all purposes whatsoever, and
to the extent permitted by law, neither the Issuer, the Paying Agent/Registrar, nor any agent
of either of them shall be affected by notice to the contrary.
(b) Wherever this Ordinance provides for notice to the Owner of a Bond of any
event, such notic~ shall be sufficiently given (unless otheI~vise herein expressly provided) if
in writing and sent by United States mail, first class postage prepaid, to the address of such
Owner as it appears in the register kept by the Paying Agent/Registrar.
(c) In any case where notice to the Owners of the Bonds is given by mail, neither
the failure to mall such notice to any Owner of a Bond, nor any defect in any notice so
mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this
32
Ordinance provides for notice in any manner, such notice may be waived in writing by any
Owner 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 Owners of the Bond 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.
Section 29. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within
the meaning of this Ordinance, except to the extent provided in subsection (d) of this
Section 9, when payment of the principal of such Bond, plus interest thereon to the due date
(whether such due date be by reason of maturity, upon redemption, or othenvise) either (i)
shah have been made or caused to be made in accordance with the terms thereof (including
the giving of any required notice of redemption), or (ii) shall have been provided for on or
before such due date by irrevocably depositing with or matting available to the Paying
Agent/Registrar for such payment (1) lawful money of the United States of America
sufficient to make such payment or (2) Government Obligations which mature as to principal
and interest in such amounts and at such times as will insure the availability, without rein-
vestment, of sufficient money to provide for such payment, and when propar arrangements
have been made by the Issuer with the Paying Agent/Registrar for the payment of its
services until all Defeased Bonds shall have become due and payable. At such time as a
Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the
interest thereon shall no longer be secured by, payable from, or entitled to the benefits of,
the ad valorera taxes herein levied and pledged as provided in this Ordinance, and such
principal and interest shall be payable solely from such money or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer also be invested in Government Obligations, maturing in the amounts
and times as hereinbefore set forth, and all income from such Government Obligations
received by the Paying Agent/Registrar which is not required for the payment of the Bonds
and interest thereon, with respect to which such money has been so deposited, shah be
turned over to the Issuer, or deposited as directed in writing by the Issuer.
(c) The term "Government Obligations" as used in thi.~ Section shall mean 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, which
may be United Statea Treusury obligations such as its State and Local Government Series,
which may be in book-entt7 form.
(d) Until all Defease, d Bonds shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased
Bonds the same as ff they had not been defeased, and the Issuer shall make proper
arrangements to provide and pay for such services as required by this Ordinance.
(e) In the event that the principal and/or interest due on the Bonds shall be paid by
AMBAC Indemnity pursuant to the Municipal Bond Guaranty Insurance Policy, the Bonds
shall remain outstanding for all purposes, not be clefeased or otherwise satisfied and not be
considered paid by the Issuer, and the assignment and pledge of the Trust Estate and all
covenants, agreements and other obligations of the Issuer to the registered owners shall
continue to exist and shall run to the benefit of AMBAC Indemnity, and AMBAC Indemnity
shall be subrogated to the rights of such registered owners.
Section 30. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged,
mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new bond of the same principal mount, maturity, and interest
rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such
Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof to
the Paying Agent/Registrar. In every case of 1o~ theft, or destruction of a Bond, the
registered owner applying for a replacement bond shall furnish to the Issuer and to the
Paying Agent/Registrar such security or indemnity as may be required by them to save each
of them harmless from any loss or damage with respect thereto. Also, in every case of loss,
theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and to the
Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such
Bond, as the case may be. In every case of damage or mutilation of a Bond, the registered
owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged
or mutilated.
(c) No Default Ocmrred. Notwithstanding the foregoing provisions of this Section,
in the event any such Bond shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium; if any, or interest on the
Bond, the Issuer may authorize the payment of the same (without surrender thereof except
in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond,
provided security or indemnity is furnished as above provided in this Section.
(d) Charge for lsauillg Replacement Bonds. Prior to the issace of any replacement
bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all
legal, printinS and other eat-peg in connection therewith. Every replacement bond issued
pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen,
or destroyed shall constitute a contractual obligation of the Issuer whether or not the lost,
stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shah
be entitled to all the benefits of this Ordinance equally and proportionately with any and all
other Bonds duly issued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Section 6 of
Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section of this Ordinance shall constitute
authority for the issuance of any such replacement bond without necessity of further action
by the governing body of the Issuer or any other body or person, and the duty of the
replacement of such bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such bonds
in the form and manner and with the effect, as provided in Section 4(d) of this Ordinance
for Bonds issued in conversion and exchange for other Bonds.
Section 31. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS; AND CONTINGENT INSURANCE
PROVISION, IF OBTAINED. The Mayor of the Issuer is hereby authorized to have
control of the Initial Bond issued hereunder and all necessary records and proceedings
pertaining to the Initial Bond pending its delivery and its Investigation, examination, and
approval by the Attorney General of the State of Texas, and its registration by the
Comptroller of Public Accounts of the State of Texas. Upon registration of the Initial Bond
said Comptroller of Public Accounts (or a deputy designated in writing to act for said
Comptroller) shall manually sign the Comptroller's Registration C. enificate on the Initial
Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the
Initial Bond. In addition, ff bond insurance is obtained, the Bonds may bear an appropriate
legend as provided by the Insurer.
Section 32. COVENANTS REGARDING TAX EX~.MPTION. The Issuer covenants
not to take any action which would adversely affect, and to take any required action to
ensure, the treatment of the Bonds as obligations den'bed in Section 103 of the Internal
Revenue Code of 1986 (the "Code"), the interest on which is not Inchidable 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 10 percent of the proceeds of the
Bonds or the projects financed therewith (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 10 percent of the proceeds or the projects financed therewith are so used, such
amounts, whether or not received by the Issuer, with respect to such private business use,
do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service on
the Bonds, in contravention of Section 141C0)(2) of the Code;
Co) to take any action to assure that in the event that the "private business use"
descn'bed in SubSection (a) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount In excess of 5 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;
3S
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 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 meatring 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 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 3
years or less or, in the case of a refunding bond, for a period of 30 days or less until
such proceeds are needed for the purpose for which the bonds are issued,
(2) mounts invested in a bona fide debt service fund, within the meaning of
Section 1,103-13(b)(12) of the Treasury Regulations, and
(3) mounts deposited in any reasonably required reserve or replacement
fund to the extent such mounts do not exceed 10 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 141t of the Code (relating to arbitrage) and, to the extent
applicable, Section 149(d) of the Code (relating to advance refundlags);
(h) to pay to the United States of America at least once during each five-year period
(be~nning on the date of delivery of the Bonds) an mount that is at least equal to 90
percent of the ~ 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 percent of the mount then required to be paid as a result of Excess Earnings
under Section 148(0 of the Code; and
(i) to maintain such records as will enable the Issuer to fulfill its responsibilities
under this Section and 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.
In order to facilitate compliance with the above covenants (g), (h), and (i), a "Rebate
Fund" is hereby established by the Issuer for the sole benefit of the United States of
America, and such Fund shall not be subject to the claim of any other person, including
without limitation the bondholders. The Rebate Fund is established for the additional
purpose of compliance with Section 148 of the Code.
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 ruling 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 mod/fication 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 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.
Section 33. S~AI F. OF INITIAL BOND. The Initial Bond is hereby sold and shall
be delivered to DEAN W1TFER REYNOLDS INC. and MASTERSON MORELAND
SAUER WHISMAN, INC. (the "Underwriters") for the price of $1,986,497.40, which price
is calculated on the bash of a premium of $59,711.75, an original issue discount of
$10,307.60, a discount to the Underwriters of $20,906.75, and payment of Bond insurance
premium of $42,000, plus accrued interest thereon to date of delivery pursuant to the terms
and provisions of a Purchase Contract in substantially the form attached hereto as Exhibit
A, which the Mayor of the Issuer is hereby authorized and directed to execute and deliver
and which the City Secretary of the issuer is hereby authorized and directed to attest. It is
hereby officially found, determined, and declared that the terms of this sale are the most
advantageous reasonably obtainable. The Bonds shall initially be registered in the name of
Dean Witter Reynolds Inc.
Section 34. APPROVAL OF OFFICIAL STATEMENT. The Issuer hereby
approves the form and content of the Official Statement relating to the Bonds and any
addenda, supplement or amendment thereto, and approves the distribution of such Official
Statement in the reoffering of the Bonds by the Underwriter in final form, with such changes
therein or additions thereto as the officer executing the same may deem advisable, such
determination to be conclusively evidenced by his execution thereof.
Section 35. PUBLIC NOTICE. It is hereby officially found and determined that
public notice of the time, place and purpose of said meeting was given, all as required by
Vernon's Ann. Texas Civ. St. Article 6252-17, and no petition was received by the City
Council requesting a referendum election.
Section 36. PAYMENT PROCEDURE PURSUANT TO MUNICIPAL BOND
GUARANTY INSURANCE POLICY. As long as the bond guaranty insurance shall be in
full force and effect, the Issuer and any Paying Agent/Registrar agree to comply with the
following provisions:
(a) if payment of principal or interest due on the Bonds has not been made to the
Paying Agent/Registrar or any registered owner to whom such payment is due, shall so notify
AMBAC Indemnity by telephone or telegraphic notice, subsequently confirmed in writing,
or written notice by registered or certified mail. Such notice shah specify the amount of the
anticipated deficiency, the Bonds to which such deficiency is applicable and whether such
Bonds will be deficient as to principal or interest, or both. AMBAC Indemnity, on the later
of the date due for payment or within one business day after receipt of notice of
nonpayment, will deposit sufficient moneys with United States Trust Company of New York,
as insurance trustee for AMBAC Indemnity or any successor insurance trustee (the
"Insurance Trustee").
(b) the Paying Agent/Register shall, after giving notice to AMBAC Indemnity as
provided in (a) above, make available to AMBAC Indemnity and, at AMBAC Indemnity's
direction, to the Insurance Trustee, the registration books of the Issuer maintained by the
Paying Agent/Registrar, and all records relating to the Funds and Accounts maintained
under this Ordinunce.
(c) the Paying Agent/Registrar shall provide AMBAC Indemnity and the Insurance
Trustee with a list of registered owners of Bonds entitled to receive principal or interest
payments from AMBAC Indemnity under the terms of the Municipal Bond Guaranty
Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks
or drafts to the registered owners of Bonds entitled to receive full or partial interest
payments from AMBAC Indemnity and (ii) to pay principal upon Bonds surrendered to the
Insurance Trustee by the registered owners of Bonds entitled to receive full or partial
principal payments from AMBAC Indemnity.
(d) the Paying Agent/Registrar shall, at the time it provides notice to AMBAC
Indemnity pursuant to (a) above, notify registered owners of Bonds entitled to receive the
payment of principal or interest from AMBAC Indemnity (i) as to the fact of such
entitlement, (ii) that AMBAC Indemnity will remit to them all or a part of the interest
payments next coming due, (ill) that should they be entitled to receive full payment of
principal from AMBAC Indemnity, they must present and surrender their Bonds together
with any appropriate instrument of assignment for payment to the Insurance Trustee, and
not the Paying Agent/Registrar and (iv) that should they be entitled to receive partial
payment of principal from AMBAC Indemnity, they must present and surrender their Bonds
for payment thereon first the Paying Agent/Registrar, who shall note on such Bonds the
portion of the principal paid by the Paying AgentFRegistrar, and then, along with an
appropriate instrument of assignment, to the Insurance Trustee, which will then pay the
unpaid portion of principal. The Insurance Trustee shall disburse to the registered owners
38
of Bonds, the Paying Agent/Registrar, the payment due less any amount held by the Paying
Agent/Registrar for payment of principal of or interest on Bonds and legally available
therefor.
(e) in the event that the Paying Agent/Registrar has notice that any payment of
principal of or interest on a Bond which has become due for payment and which iS made
to a Bondholder by or on behalf of the Issuer has been deemed a preferential transfer and
theretofore recovered from it registered owner pursuant to the United States Bankruptcy
Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court
having competent jurisdiction, the Paying Agent/Registrar shall, at the time AMBAC
Indemnity is notified pursuant to (a) above, notify all registered owners that in the event that
any registered owner's payment is so recovered, such registered owner will be entitled to
payment from AMBAC Indemnity to the extent of such recovery ff sufficient funds are not
otherwise available, and the Paying Agent/Registrar shall ~xrnish to AMBAC Indemnity its
records evidencing the payments of principal of and interest on the Bonds which have been
made by the Paying Agent/Registrar and subsequently recovered from registered owners and
he dates on which such payments were made.
(f) in addition to those fights granted AMBAC Indemnity under this Ordinance,
AMBAC Indemnity shaH, upon remittance and transfer of Bonds or appropriate instruments
of assignment, become the owner thereof, and to evidence such ownership (i) in the case of
claims for past due interest, the Paying Agent/Registrar shall note AMBAC Indemnity's
rights as owner on the registration books of the Issuer maintained by the Paying
Agent/Registrar upon receipt from AMBAC Indemnity of proof of the payment of interest
thereon to the registered owners of the Bonds and (ii) in the case of claims for past due
principal, the Paying Agent/Registrar shall note AMBAC Indemnity's rights as owner on the
registration books of the Issuer maintained by the Paying Agent/Registrar upon surrender
of the Bonds by the registered owners thereof together with proof of the payment of
principal thereof.
39
APPROVED this the 22nd day of September, 1992.
Mayor
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS :
COUNTIES OF DALLAS AND DENTON :
CITY OF COPPEI .I. :
We, the undersigned officers of said City, hereby certify as follows:
1, The City Council of said City convened in REG~ MEETING ON THE
22ND DAY OF SEPTEMBER, 1992, at the City Hall, and the roll was called of the duly
constituted officers and members of said City Council, to-wit:
Mark Wolfe, Mayor
Bill Smothermon, Mayor Pro Tem
Jim Garrison
Tom Morton
Lanny Mayo
Ron Robertson
David Thomas
Peyton Weaver
Dorothy Timmons, City Secretary
and all of said persons were present, except the following absentees: NONE, thus
constituting a quorum. Whereupon, among other business, the following was transacted at
said Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF WATERWORKS AND SEWER
SYSTEM REVENUE BONDS, SERIES 1992, APPROVING AN OFFICIAL
STATEMENT, AUTHORIZING THE EXECUTION OF A PURCHASE CONTRACT,
AND MAK/NG PROVISIONS FOR THE SECURITY THEREOF, AND
ORDMNING OTHER MATFERS RELATING TO THE SUBJECT
was duly introduced for the consideration of said City Council and read in full. It was then
duly moved and seconded that said Ordinance be passed; and, after due discussion, said
motion carrying with it the passage of said Ordinance, prevailed and carried by the following
vote:
AYES: All members of said City Council shown present above voted "Aye" except
NOES: Weaver
2. That a true, full and correct copy of the aforesaid Ordinance passed at the
Meeting described in the above and foregoing paragraph is attached to and follows this
Certificate; that said Ordinance has been duly recorded in said City Council's minutes of said
Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said
City Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the
persons named in the above and foregoing paragraph are the duly chosen, qualified and
acting officers and members of said City Council as indicated therein; that each of the
officers and members of said City Council was duly and sufficiently notified officially and
personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that
said Ordinance would be introduced and considered for passage at said Meeting, and each
of said officers and members consented, in advance, to the holding of said Meeting for such
purpose, and that said Meeting was open to the public and public notice of the time, place
and purpose of said meeting was given, all as required by Vernon's Ann. Civ. St. Article
6252-17.
3. That the Mayor of said City has approved and hereby approves the aforesaid
Ordinance; that the Mayor and the City Secretary of said City have duly signed said
Ordinance; and that the Mayor and the City Secretary of said City hereby declare that their
signing of this Certificate shall constitute the signing of the attached and following copy of
said Ordinance for all purposes.
SIGNED AND SEALED the 22nd day of September, 199Z2
Dorothy Timmons Mark Wolfe
City Secretary Mayor
SEAL