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OR 324 Waterworks & Sewer System Refunding & Improvement Revenue Bonds Draft of: 2/6/85 ORDINANCE NO. 324 AN ORDINANCE providing for the issuance of "CITY OF COPPELL, TEXAS, WATERWORKS AND SEWER SYSTEM REFUNDING AND IMPROVEMENT REVENUE BONDS, SERIES 1985," in the aggregate principal amount of ; making provisions for the payment and security of such obligations; providing for the sale and delivery thereof; enacting provisions incident and related to the purposes and subject of this Ordinance. WHEREAS, the City has currently outstanding the following revenue bonds (tile "Outstanding Bonds") secured by and payable frmn a pledge of and lien of the net revenues of the City's combined waterworks and sewer system: (a) "Cily of Coppell, Texas, Waterworks and Sewer System , Revenue Bonds, Series 1966," presently outstanding in the principal amount of $281,000; and (b) "City of Coppell, Texas, Waterworks and Sewer System Revenue Bonds, Series 1981," presently outstanding in the principal amount of $950,000; !~'WHEREAS, under the provisions of Articles 1111 el. seq., V.A.T.C.S., the City 'Cotmcil of the City of Coppelt, Texas (the "City"), is authorized to issue Watet~xorks and Sewer System Revenue Bonds for the pugpose of providing moneys to pay the costs and expenses to be incurred in and incident to the acquisition and construction of improvements to the City's Waterworks System (the "System"); · ~' WHEREAS, the City is authorized to provide that such revenue bonds will be payable from and secured by a first lien on and pledge of the net revenues City's combined Waterworks and Sewer System; ~'! WIIEREAS, this City Council has found and determined that it is necessai~ asld in the best interest of the City and its citizens to issue refunding bonds pursu;~R to this Ordinance, as permitted by the General Laws of the State of Texas, particularly Article 717k, Ven~on's ApJ~otated Texas Civil Statutes, as amended, to eliminate certain restrictive covenants and provisions contained in the ordinm~ees authorizing the Outstanding Bonds and as a result of refunding the Outstas~ding Bonds the ~rmual revenues reqnired to be derived from the operation of the City's combined Waterworks and Sewer System from the amortization of such indebtech~ess will be sig~fific~mtly reduced, thereby delaying and reducing rate increases for setwiees furnished by said systems, and to issue the aforesaid bonds to provide improvements to the City's Waterworks System, as permitted by Articles 1111 et seq.,::yernon's Annotated Texas Civil Statutes, as amended; "'~': WttEREAS, the aforesaid Notice of intention indicated that a meeting to co~sider the ordinance authorizing their issuance was tentatively scheduled for Janu. ary 22, 1985; and .. , .;,~.~.. . . .. - . .~ '~:~ -.. .' ~'WHEREAS, the City met on January 22, 1985 and postponed action on the ordinance to February 12, 1985, to enable the terms, provisions and details of the ordinance to be properly prepared; ?iWIIEREAS, no petition of any kh~d tla_s been filed with the City Secretary, any member of this Council or any other officer of the City requesting a referendum election on tile question of the issua~ce of the Series 1985 Bonds; -. '~W'HEREAS, pursua~t to a resolution heretofore passed by this City Council, Notice' of intention to Issue Watecwor-ks and Sewer System Revenue Bonds was published in the , a newspaper of general circulation in the. City, on and , the date of the first publication of such notice being at least fourteen (14) days prior to the date stated therein for the passage of this Ordinance; :,!~ NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE C1Ty~0F COPPELL, TEXAS: :.i~Section l. Authorization. That, foc the purpose of refunding the Outstanding Bonds'referenced in the preamble of this Ordina~ce and for the purpose of improving and extending the City's Waterworks System, tilere shall be and there is hereby authorized to be issued under and by virtue of the Constitution and Laws of the State~of Texas, including pa. eticularly Articles 1111 et seq., and Article 717k, Vet'non's Texas Civil Statutes, as amended, a single issue of ~evenue bonds [o be kd~own ms "City of Coppell, Texas, Waterworks and Sewer System Reftmding and hnpcovement Revenue Bonds, Series 1985," (the "Series 1985 Bonds") in the aggregate principal ainuant of ($ ;':, ). .',. ;::'Sectiou 2. Dcnomin;ltion and r~latucity. That said Series 1985 Bonds shall be in fully reg'istered forin, without coupons; dated January 15, 1985; shall be nuinbeced consecutively from One (l) upward; shall be in deuominations of $5,000 oc intcg~'a[ lnaltiples thereof; m~d shall become due and payable seriaily on September 1 in each of .th.e. years in the principal ainutrots set forth in the following schedule: .{ YEARS PRINCIPAL YEARS PRINCIPAL - ':~-;(SEPTEMBER 1) AMOUNT (SEPTEMBER 1) AMOUNT .: · '!i' Section 3. Interest Rate, Payment. (a) That said Series 1985 Bonds shall bear' interest from the later of Js_nuary 15, 1985, or the most recent interest payment date to which interest has been paid or duly provided for, at the following r~teS per annum: . : ;~ .. ~.'. with ~said interest to be payable on September 1, 1985, ~ld semia~mually thereafter Lmtil paid on each March I and September 1. {'= ~i" (b) Interest on any Series 1985 Bond which is payable and is pLmctually paid '0r duly provided for on rely interest payment date shall be paid to tile person in whose name that Series 1985 Bond (or one or more predecessor Series 1985 Bonds) is registered at the close of business on the 1st day of the month next preceding such interest payment date (the "Record Date"). However, in the event that interest is not paid on a scheduled interest payment date ~d remains m~pald for thirty (30) days .thereafter, a new record date for such interest payment (a "Special Record Date") shall be established by the Paying Agent/Registrar, if and when fmMs for the payment of such interest have been received from the City. Notice of the Special Record Date rand of the scheduled payment date of the ps.st due interest (which shall be l~days after the Special Record Date) shall be sent at'least five business days prior~to tile Special Record Date by United States mail, first class, postage prepaid, to the address of each O~w~er of a Series 1985 Bond appearing on the Register at the close. of business on the last business day next preceding the date of mailing or such notiCe. "~ -~}' (c) All payments of interest on the Series 1985 Bonds shall be paid by check or draft, dated as of the interest payment date and mailed by the Paying Age~.t/Registr~r (as hereinafter defined) to the person entitled to such payment, first~clmss postage prepaid, at the address of such person as it appears in tile Register or by such other customary banking arrangements acceptable to the Paying Age.i~t/Registrar and the person to whom interest is to be paid; provided, however, ,':X~.."./',"_ ';".: "" - '7";':' .... : '~"" ?"' - "~"' ' "' ':':';.." -.: '.:: ' -..-:%,.::.,...~,~::.., ,: ..-.;:. ',.. .;+.?;;.::~..~ '..:<'.5:.:.,-..,.-: ..:.. ~...:.--. ,.,.-.~ --7:, :.' -:' ""/: :4!:, :: .-:!,.':'*: :'E}!'4 _-".":.:.:,/: ::::i; :.ixi:: iti.'.;i:{i. :. ' ' _ .* . :. . c - . - ' - '," .,.'-' ** ':. ;-' ' ' ':: "' '" · -. ;.;:; .::~,. .: -.....- . ,~' that :'such person shall bes~ all risk and expense of such customary banking arrangements. "(d) Principal of and p~emium, if any, on any Series 1985 Bond shall be paid to the person in whose name such Series 1985 Bond is registered at the maturity or earlier redemption thereof, upon surrender of such Series 1985 Bond to the Paying Agent/Regist?ar for cm~ceilation. : '~':(e) The principal of, premium, if any, and interest on the Series 1985 Bonds shall be payable in any coiu or currency of the United States of America which~ at the time of payment is legal tender for the payment of public and private debts, and such payment of principal of, premium, if any, and interest on the Series 1985Bonds shall be without exchange or collection chgxges to the Owners thereof. ~ '.*,."(f) Each Series 1985 Bond delivered upon transfer or in exchs. nge for or in Heu of any other Series 1985 Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Series 1985 Bond, and each Such Series 1985 Bond shall bern' interest (as specified in this Section 3) so neither gain nor loss in interest shall result from such transfer, exchange, or substitutiou. '~!~ .:i!'Section 4. Optional Redemption. .:';.. (a) The City reserves the right and option to redeem the Series 1985 Bonds maturing on and after , in whole or in part, before their respective scheduled maturity dates, on , or on any interest payment date thereafter at a price equal to the principal amom~t of the Series 1985 Bonds so called for redemption plus accrued interest from the most recent interest payment date on which interest has been paid or duly provided for to the date fixed fo.r. ~emption. · .'(b) If less than all of the Series 1985 Bonds subject to optional redemption are to be redeemed, the City shall determine which maturity or maturities, m~d the amom~ts within each maturity to be redeemed, and shall direct the Paying Agent/Registrar to call for redemption, by lot, Series 1985 Bonds, or portions thereof, within such maturity or maturities and in such amounts. '~ (c) The City, at lea.st 45 days prior to the redemption date (mfiess a shorter period shall be satisfactory to the Paying Agent/Registrar), shall notify the Paying Agent/Registrar of such redemption date and of the principal amount of Series 1985 Bonds to be redeemed. i' ' :;? (d) The Paying Agent/Registrar shall give notice of any redemption of Series' 1985 Bonds by sendLing notice by United States mail, first class, postage prepaid, not less thaz~ 30 days prior to the date fixed for redemption, to the Ow~er of each Series t985 Bond (or portion thereof) to be redeemed, at the address shown in the Register. Such notice shall state among other things, the redemption date, the pt'i~cipal an~ount of the Series 1985 Bonds to be redeemed, that the Series 1985 Bonds so called for redemption shah cease to bear interest after the redemption date and that payment of the Series 1985 Bonds so redeemed shall be made only upon 'the presentation and surrender of Series 1985 Bonds so called for redemption at the principal corporate trust office of the Paying Agent/Registrar. Any notice "'" "~' --:~' ' ' ', 'C - , - ~., :~ , --. . . , ..:.-.., .._ -, , '.:,= . '.... . ,. ., , , ' - ' - ~:";%; ' .- . -" -: ',~2: ' ' ' " '.' - '- ' ":' '~ - '~ =" ': '-' ~' :' ' C ' " '" ' :2-' ~ '~ ::'::' givenf as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner of the Series 1985 Bond, or portion thereof, so railed.for redemption receives such notice. · '~': Section 5. Forms Generally. (a) The Series 1985 Bonds, the Registration Certificate of the Comptroller of Public Aeeotmts of the State of Texas, which may be omitted from the engraved, lithographed or printed Series 1985 Bonds, the Certificate of Registr~ation, and the form of Assignment to be printed on each of the Series 1985 Bonds, shall be substantially in the forms set forth in this Section with sueh~appcopciate ixkSertio|k~, omissio~ks, substitutions, and other va~iatimts as are permj, tted or required by this Ordinance and may have such letters, numbers, or other' marks of identification (including identifying numbers and letters of the COmmittee on Uniform Securities Identification Procedures of the American Baj~kers Association) and such legends and endorsements (including any reproduction of an opinion of bond eotmsel) thereon as may, consistently herewith, be established by the City oc determined b~y' the officers executing such Series 1985 Bonds as evidenced by their execution thereof. Any portion of the text of any Series 1985 Bonds: may ?>e set forth on the reverse thereof, with an appropriate reference thereto on the face of the Series 1985 Bond. '~ Co) The Series 1985 Bonds shall be printed, tithographed, or engraved, produced by any combination of these methods, or produced in any other similar manner, all as determined by the officers executing such Series 1985 Bonds as evidenced by their execution thereof, but the initial Series 1985 Bond or Series 1985 Bonds submitted to the Attorney General of Texas may be typewritten or ph0t09opied or otherwise reproduced. ~' Scotion 6. (a) Form of Series 1985 Bond. REGISTERED REGISTERED No..."? $ ~ United States of America · .~. State of Texas :.I. Cottory of Dallas - ~!~ City of Coppell, Texas :.~", Waterworks and Sewer System .~ 'Z!?' Reftmding and Improvement Revenue Bond :' ':~' Series 1985 Interest Rate: Due: initial Date: CUSIP NO: · .:: January 15, 1985 ..~.- ';Y The City of Coppell (the "City"), in the State of Texas, for value received, hereby, promises to pay to :. ? ::' ~i~: -5- ..-~, ? ~', : · ,~ ~ ~ .- -. ., :.' .-. - .. - . . . I. :~.' - :,.:. '.j~: : or registered assigns, on the due date specified above the sum of and '~'o pay interest on such principal amount from the later of the Initial Date specified above or the most recent Interest payment date to which interest has been paid!or duly provided for, semiannually on and in each year, commencing , at the per annum rate of interest specified above, computed on the basis of a 360-day yea: of twelve 30-day montks. The principal of this bond is payable at the principal corporate office of the Paying Agent/Registrar executing the registration certificate appearing hereon, upon pPesentation and sun'endcr of this bond. The intet~est payable on any interest payment date will be paid to the registered ow~er of this bond whose name appears on the register maintained by the Paying Agent/Registrar at the close of business on the Record Date for such interest, which shall be the first day of the month next preceding such interest payment date. In the event that interest is not paid on a scheduled payment date and remains unpaid for thirty (30) days thereafter, a new recon] 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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (wtfieh date shah be 15 days after the Specia] Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of the owner of tt~s bond as set forth on the books of the Paying Agent/P~egistrar at the close of business on the last business day preceding the date of mailing of such notice. All such payments may be made by the Paying Agent/Registrar by check or draft dated as of the interest payment date and mailed to such registered o~er oc by such other customa~- b~king a~rangements acceptable to the Paying Agent/ Registrar and the person to whom interest iS to be paid; provided, however, that such person shall bear all risk and expense of such customary banking arr~tgements. ALl payments of principal of, premium, if any, and interest on this bond shall be made: in any coin or CLu'renCy Of the United States of America which at the time of payment is legal tender for the payment of public and private debts, without exchange ur coLlection charges to the registered owner of tiffs bond. ;~:: i~[ This bond is one of the series of fully registered bonds specified in its title (the'!,?'Bonds") issued in the aggregate principal amount of $ pursuant to an Ordinance (the "Ordinance") adopted by the govenfing body of the City7 on J~nuary 22, 1985, for the parpose of refu~ding all previously issued and outstanding revenue bonds of the City secured by and payable from any portions of the net revenues of the City's waterworks and sewer system and for the purpose of improving and extending the City's waterworks system in accordance with the Constitution and laws of the State of Texas, particularly Articles 1111 et seq., and Article 717k, V.A.T.C.S. · ~' The City has reserved the option to redeem the Bonds maturing on and after , in whole ur in part, by lot in principal amounts of $5,000 or integ,~'al multiples thereof, on , or on any interest paymeut date thereafter, at a price equal to the principal amom~t of the Bonds so called for rede~.ption [,lus accrued interest to the redemption date. ' :, Notice of redemption shall be given by first class mail, postage prepaid, not less ~tha~ 30 days before the date fLxed for redemption, to the registered owner of each of the Bonds to be redeemed in whole or in part. Notice having been so given, tile Bonds or pogtions thereof designated for redemption shall become due and payable on the redemption date specified in such notice, and from and after such date, ~notwithstanding that any of the Bonds or portio~Ls thereof so called for redemption shall not have been surTendered for payment, interest on such Bonds or portions thereof shah cease to accrue. .l ~'The Bonds constitute special obligations of the City of CopDell, Texas, are payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sewer System. : ".'. TIle City expressly reserves the right to issue additional revenue obligations in all 'thh~gs on a parity with the Bonds, payable solely from and equally secured by a first Hen on and pledge of the net revenues of the City's combined Waterworks and Sewer:System; provided, however, that any ~nd all such additional obligatio~Ls may be so/issued only in accordance with and subject to the covenants, conditions, limitations and restrictions ~elating thereto which are set out and coutained in the Ordinance to which reference is hereby made for more complete and fall particulars. :: :"iThe re~stered o~mer hereof shall never have the right to demand payment of this o~Ligation out of any funds raised or to be ~aised by tmxation. ';~It is hereby certified and recited that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and to be done precedent to and in the issuance of the Bonds to render the same lawful and valid have been properly done, have happened and have been performed in regular und due time, form and m~mer as required by the Constitution and laws of the State of Texas and the Ordinance; that the Bonds do not exceed any constitutional or statutory limitation; and tbat provision has been made for the payment of the principal of and interest on the Bonds by irrevocably pledging the net revenues of the Waterworks and Sewer System of the City of Coppelt, Texas, as hereinabove · '!iSuhject to certain limitations set forth in the Ordinance, this bond is trg.~sferable upon surrender of tbis bond for trmlsfer at the principal office of the Paying Agent/Registrar, dlily endorsed by, or accompmfied by a writteu instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by the registered o~er hereof or his attorney duly authorized in writlug and thereupon one or more new fully regis|cred Bonds of the same stated maturity, of anthorized denominations, bearing the same rate of interest, ~md for the same aggregate principal amount will be issued to the designated tr~msferee or transferees. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of the registered owner hereof any Bond called for redemption in whole or in part within 30 days of tbe date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to any exchange of the urwedeemed balance of any Bond called in part for redemption. ~ The City, the Paying Agent/Registrar, and any agent of either of them may treat 'the person in whose name this bond is registered as the owner hereof for tile purpose of receiving payment as herein provided and for all other parposes, whether or not this bond be overdoe, and neither tbe City, the Paying Agent/Registrar, nor any ~uch agent shall be affected by notice to the contrary. -7- ;~ ~ - ._ ,-.... . :'! In case any provision in this bond or any application thereof shall be invalid, illegal, or tinenforceable. tile validity, legality. and enforceability of the remaining provisions and applicatior~s shall not in any way be affected or impaired thereby. This bond shall be construed in accordance with and shah be governed by the laws of State of Texas. '!',. IN WITNESS WHEREOF, the City Coancll of the City of Coppell, Texas, has caused the seal of said City to be impressed or a facsimile thereof to be printed hereon, and to be executed with the manual or imprinted facsimile signatures of the Mayor and City Secretary of said City. C~ '. :'~,. ity of COUNTERSIGNED: Ci~7'Secret~fy. City of C~ppe)l. Texas [SEAL] .= .~. (b) Form of Registration Ce~ificate of Comptroller of Public Accounls ,, ~ REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER § O~PUBLIC ACCOUNTS § REGISTER NO, THF, iSTA E OF TEXAS § ~ :! I HEREBY CERTIFY THAT this bond has been examined, certified as to validity and appFoved by the Attorney General of the Slate of Texas, and further that" this bond has been registered by the Comptroller of PubLic Accounts of the State of Texas, ~ !:, WITNESS my signature and seal of office this ~: :" Comptroller of Public Accounts ~ ~.I. of the State of Texas [SEAL] .~ -~.: -8- ,. - . ~ .:' :, - ._ - ,-. , _- -~. ,%% , -, '. '?~!(e) Form of Certificate of Paying Agent/Registrar. .~:C. CERTIFICATE OF PAYING AGENT/REGISTRAR ~;;This is one of the bonds referred to in the within-mentioned Ordinmlce and the initial bond of this series was approved by the Attorney General of the State of Texas' and registered by the Comptroller of Public Accounts of the State of Texas under:'Register No. __ : .!f First City Bank of Dallas, Dallas, Texas, .~,~'. as Paying Agent/Registrar Dated: By: ! :~i. Authorized Signatory !~(d) Form of Assignment. i .i" ASSIGNMENT · . i" :' FOR VALUE RECEIVED the undersigned het, eby sells, assigns, and trm~sfers tmto (l?rint or typewrite name, addx~ess, and Zip rode of transferee:) (Social Security or other identifying number: ) the within bond and rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer tile within bond on the books kept for registratiou thereof, with full power of substitution in the premises. DATF~D: ,. :-~ Sigqmt,uce guaranteed by: NOTICE: The sigmature on this assigmmeiR .,~ must correspond with tile name of the ':C:: registered owner as it appears on the face ;' of the within bond in every particular and 'Y. must be gnaranteed by an officer of a :'~ ':~ federal or state bank or a member of the : National Association of Securities Dealers. i( .6uthorized Signatory :C= i~:, (e) Initial Series 1985 Bond Insertions. :' :[?] The Initial Series 1985 Bond shall be substantially in the form set forth in paragraph (a) of this Section, except that: .~ :,-. 'C %i -9- '.,' ~.I (i) immediately under the name of the Series 1985 Bond the :~!~headings "Interest Rate "and "Due "shall both :(fill completed with the expression "as shown below;" ,~. (ii) in the first paragraph: ~!;.,.. (a) the words "on the due date specified above" shall be .:Z: deleted and the following will be inserted: "on the first day of ,¥ September in each of the yea~s, in the principal installments m~d (.C bearing interest at the per annum rates set forth in the following ~, schedule: .~: ~;~.. Principal interest · ;; Year Installments Rate" '~; :~ (Information to be inserted from ?, schedule in Sections 2 and 3 hereof.) "" (b) the words "executing the registration certificate ~.~ appearing hereon" shall be deleted and an additional sentence shah be '~::' added to the paragraph as follows: "The initial Paying Agent/ ';!~i~ Registrar is First City Bank of Dallas, Dallas, Texas."; and '5.~- (iii) the initial Series 1985 Bond shall be numbered T-1. ':.. ;~;~Seetion 7. Execution, Registration, Deliver. and Dating· (a) The seal of the City '~nay be printed, lithographed or impressed on each Series 1985 Bond. The SerieS'1985 Bonds shall be executed on behalf of the City by the Mayor of the City whos~.'signatttre shall be emmtersigned by the City Secretary. The signature of these officers on the Series i985 Bonds may be manual or imprinted or lithogcaphed facsimile. The Series 1985 Bomts bearing the manual or imprinted or lithog~aphed facsimile si~mtures of individuals who were at the time the proper officers of the City shall bind the City, notwithstm,ding that such individuals shall erase to hold such offices prior to the certification or registration and delivery of such Series 1985 Bonds or shall not have held such offices at the date of such Series 1985 Bonds, all as~i~rovide,t in the Bond Procedures Act of 1981. as amended. -. (b) Initially ouc Series 1985 Bond (the "hfitial Series 1985 Boud") representing the entire priucipal amount of all Series 1985 Bonds shall be issued in the name of the initial purchaser of the Series 1985 Bonds or his designore and shall be executed and submitted to the Attorney General of Texas for approval, and thereupon certified by the Comptroller of Public Accounts of the State of Texas, or by a deputy designated in writing to act for the Comptroller, by manual signature of the C~mptrotter or a deputy acting on behalf of the Comptroller. '. (c) If the Paying Agent/Registrar is in receipt of timely written Instructimps (in form and substance satisfactory to the Paying Agent/Registrar) from the initial purchaser of the Series 1985 Bonds, or his designore, designating the persons and their addresses, the maturities and principal areomits to and in which the Initial Series 1985 Bond is to be tra~sferred, then the Paying Agent/Registrar upon'payment of the hfitial Series 1985 Bond shall cm~cel the htitial Series 1985 Bond:and deliver, without cost, registered Series 1985 Bonds pursuant to such instructions. In the absence of such instructions, the Paying Agent/Registra~ shall -. '.~.: -10- ;, -.,~ .~_, deliver the Initial Series 1985 Bond to the h~tial pupchaser of the Series 1985 Bonds upon receipt of the purch~e price therefor. The Paying Agent/Registrar is not required to accept registration instructio~ks after the fifth day prior to the delivery and p,ayment of the Initial Series 1985 Boud. ; (d) No Series 1985 Bond shall be entitled to any right or benefit under this Ordina~ce, or be valid or obligatory for any purpose, unless there appears on such Series 1985 Bond either a certificate of registration substantially in the form provided herein, executed by tt~e Comptroller of Public Accounts of the State of Texas or his duly authorized agent by manual signature, or a certificate of the Paying Agent/Registrax substantially in the form provided herein, executed by an authorized signatory of the Paying Agent/Registrar by meumal signature, and either such certificate upon any Series 1985 Bond shall be conclusive evidence, and the only evidence, that such Series 1985 Bond has been duly certified or registered and delivered. · Section 8. Paying Agent/P~egistrar. (a) The City will at all times maintain a Paying Agent/Registrar meeting the qualifications berein described, for the performance of the duties hereunder. First City Bank of Dallas, Dallas, Texas, is hereby appointed the initial Paying Agent/Registrur for' such purposes. TIle City reserves the right to appoint a successor Paying Agent/Registrar by (1) filing with the person then performing such function a certified copy of a resolution, ordinance or order giving notice of the termination of the Paying Agent/Registrar relationship a,~d appointing a successor and (2) caasing uotice to be given to each bondholder. ':'~ ":'!: (b) Every Paying Agent/Registrar appointed hereunder shall at all times be' a'.'national or state breaking institutiou, trust company, finm~cial institution or other entity duly qualified and legally authorized to serve as and perform tile duties of. Paying Agent/Registrar. "" ~':~(c) The execution and delivery of a Paying Agent/Registrar Agreement, as presented at the meeting at which this Ordinance was considered and passed, specifying the duties and responsibilities of the City and the Paying Agent/ Registrar, is hcreby approved with such changes as may be approved by the Ma~or of the ~ty, and the Mayor of said City is hereby authorized to execute such agreement. s: ~..Z:, Section 9. Definitio~ks. That for all purposes of this Ordinance, the following word~ shall have the following me~u~ings, respectively: .!~. (a) The term "Additional Bonds" means the additional parity Bonds which the City reserves the right to issue under the provisions of Section 20 of this Ordinance. ~ ~'.:' (b) The term "Bouds" mes_ns the Series 1985 Bonds and any Additional BondS~at any time outsteu~ding. ., """"!' (c) The term "Interest and Sinking Fund" me~,s the City of Coppell, Texas, Waterworks and Sewer System Revenue Bonds Interest and Sinking Fund created and established pnrsuant to Section 12 of this Ordinance. :" :?~ (d) The term "Net Revenues" means all income, revenues, and receipts of ever~J nature derived from a~d received by virtue of the access, use and operation of -11- . . ~ S~ ':''=--': .·:--,----._ . -~-? "T ' ;~'~'~ ' - · .' -. - " ' --'~-'. the System (including interest income a~d earnings received from the investment of moneys in the special Fuj~&s created by this Ordin~mce or ordinances authorizing the issuance of Additional Bonds) after deducting and paying, and making provision for the payment of, cun?ent 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 City and the inhabltPmts thereof, or such as might be necessary to meet some physical accident or' condition wtfich would otherwise impair any obligations payable from the Net Revenues of tile System, shall be deducted in determining "Net Revenues"; and provided further than the fees paid to the City for access to the System shah not be included in Net Revenues tinless such fees have actually been received by the City. Contractual payments for the purchase of water or the treatment of sewage shall be a mahntenance and operating expense of the System to the extent provided in the coiltract incuived therefor and as may be authorized by law. Depreciation shall ney~..be considered as an expense of operation and maintenance. ~'7' (e) The term "Ordinance" mea~xs this urdinm~ce, under which the Series 1985 Bonds are authorized and under the provisions of which all Additional Bonds will be issued. .'2 (f) The teem "Reserve Fm~d" mea~ks the City of Coppell, Tex,%s, Waterworks und Sewer System Revenue Bonds Reserve Fund created and established purs..u~mt to Section 12 of this Ordinance. '\ (g) The term "Revenue Fund" memxs the City of Coppell, Texas, Watemvorks m~d Sewer System Revenue Fund created and established putsunfit to SectiOn 12 of this Ordinal/re. -( ":' (h) The term "Series 1985 Bonds" recalls, as aforesaid, the City's waterwor'ks and sewer system revenue bonds, issued pursuant to the provisions of this Ordinm~cc and desig~ated as "City of Coppert, Texas, Waterworks and Sewer Sb~st~ Refuj~ding mid Improvement Revenue Bonds, Series 1985." ":' (i) The term 'System' means the City's combined waterworks system ~nd sewer system, including all properties (real, personal or mixed and tmlgible or intangible) ox~qled, operated, maintained, and vested in, the City for the supply, treatment aJ~d distribution of treated water for domestic, commercial industrial arid other' uses mid tile colleetinn ~nd treatmerit of water-c~u'ried waste, together with all future additiot~s, extensions, replacements and improvements thereto. ..... Section 10. Pledge. (a) That the Bonds are, in all respects, on a parity and equality of lien one with the other payabte from a first and superior pledge of and Lien t~k~on tile Net Revenues of tile System. !'~ (b) That the City eovengJ~ts and agrees that the entire Net Revenues of the System are hereby irrevocably pledged to the payment of the Bonds and to tile establishment and maintenance of Deserves therefor, if any, required by this Ordinance and a~y future ordinances authorizing any Additional Bonds. · Section ll. Rates mid Charges. That, for the benefit of the original purchasers a~d any and all subsequent holders of the Bonds, or any part thereof, and OZg~Z~' ... ~.~: i.. ': ' '-',, ~'. , :~..=:-.'~', .' .'. '- . · ': ~.~.x , , -..: '. ~ _.. , , : ·: . in addition to all other provisions and covenants contained in this Ordina~ee, it is expressly agreed that the City shall, at all times while m~y of the Bonds are outstanding and unpaid, fix and maintain rates and collect charges for tile facilities and services afforded by the System, which will provide revenues aamually at least equal to the axnotu~t required to: · ":~'(a) pay for all operation, maintenance, depreciation, replacement and betterment charges of the System; "j3 (b) establish and maintain the Interest and Sinking Fund and Reserve Ftmd requirements contained in this Ordinance and in the ordinances relating to any Additional Bonds; and ' (e) produce Net Revenues at least equal to the principal and interest requirements of the Bonds from time to time outstanding. ; Sectim~ 12. Funds. That the City covenants and agrees that all revenues derived from the operation of the System shall be kept separate from other funds of the City. To that end, the following special Funds shall be established and maintained in an official depository bank of the City so long as any of the 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 Coppell, Texas, Waterworks and Sewer System Revenue Boncks Interest and Sighking Fm~d," herein called the "Interest and Sinking Fm~d"; and :: (e) "City of Coppell, Texas, Waterworks and Sewer System Revenue BondS. Reserve Fund," berein called the "Reserve Fm~d". T:' Section 13. Revenue Fund. That the City shall deposit, from day to day as collected, all revenues of every nature derived front the operation of the S~stem into the Revenue Fund a~xd the money froin time to time on deposit tilerein shall be appropriated to the following uses in the following order of priority, to-wit: :'7' (a) to the payment of all neeessa~'y and reasonable expenses of operation and m..aintenanee of the System .as said expenses are defined by law; 7 (b) to the "interest and Sinking Fund" and "Resetwe Fund" when eu~d in the amotmts required by this Ordina~ee mid for the payment of the principal of and interest on the Bonds when and as due and payable and for the creation of a reserve therefor; and -' ,~' (e) to any other purpose of the City now or hereafter permitted by law. c' '!i' Section 14. interest amd SinkinK Fund. (a) That, commencing , and on the fifth day of each month thereafter, the City shall deposit into the interest and Sinking Fmld an areomit equal to one-sixth (l/6th) of the interest sehedaled to come due on the Series 1985 Bonds on the ne~ interest payment date thereof, less any amounts already on deposit therein for such purpose derived froin the proceeds of Bonds or from other lawfully available sources. .,~ · -' ~. -13- · . ' ':' · '.."'- -' .'- . .!i~ (b) That, in addition to the deposits required by subsection (a), next above, commencing , and on the fifth day of each month thereafter, the City shall deposit into the Interest and Sinking Fund an amount equal to one-twelth (1/12th) of the principal maturing on the Series 1985 Bonds during eaehT:pf the years 1985 through 2009. 'L~ (e) That, in addition to the above requirements of this Section 14, the City ,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 Ordinunee. !{' (d) That the Interest and SinkIng Fund shall be used solely for the purpose of paying the principal of and interest on the Bonds as such principal matares or is earlier redeemed and as such interest becomes due and payable. ~ Section 15. Reserve Fmld. (a) The City covenants and agrees that it will contInuously maintain in the Reserve Fund an amount equal to not less than the average annual principal and interest requirements on all Bonds from time to time outstanding (the "Reserve Fund Requirement"), and that, upon the issua~ee of Additional Bonds, it will Increase, if necessary, and accumulate the a~nou~,t to be deposited to the Reserve Fund in aeeorda~ee with the requirements set forth in Seetlon 20 hereof. The Reserve Fm~d requirement shall be accumulated in not more than sixty (60) months from the date of the Series 1985 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 tt}ereIn, but should the Reserve Fm~d at any time contain less than the Reserve Fm~d Requirement, then, subieet and subordinate to making tile required deposits to the credit of the Interest and Sinking Fired, the City shall restore such deficiency from the first available Net Revenues on deposit in the Revenue Fm~d. The money on deposit in the Reserve Fm~d shall be used solely for the purpose of paying the principal of and Interest on the Bonds at any time there are not sufficient moueys on deposit in the Interest and Sinking Fund for such purpose. '~ (b) The City may, at its optiou, withdraw all stwplus in tile Reserve Fund o~er .the Reserve Fund Requirement and deposit the same in the Revenue Fund. ,'. (e) For the purpose of determining compliance with the requirements of subseetiou (a) of this Section, Investment securities shall be valued froin time to ti~ne=!at their cost or market value, whichever is lower, except that any direct obligations of the United States (State and Local Goverrunent Series) held for the benefit of the Reserve Fumd in book-entry form shall be continuously valued at their par value or fare principal amount. ": Section 16. Payment of Bonds. That on or before any interest pay~nent date for the Bonds wl~le any of the Bonds are outstanding, the City shall make available to the paying agents therefor, in funds which will be immediately available on the next succeeding business day, out of the Interest and Si~king Fm~d and the Reserve Fmid, if neeessax~4, 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 optional or mandatory redemption. The paying agents shall destroy all paid Bonds and shall furn'.mh the City with an appropriate certificate of cancellation or destruction. ~"Section 17. Invest merit of Certain Funds. That money in any Fmld established pursuant to this Ordinanee may, at the option of the City, be placed in time ":deposits or certificates of deposit secured by obligations of the type heveinafter described, or may be invested, including investments held in book-entwd formjin direct obligations of the United States of America, obligations g~saranteed or insured by the United States of America, which, in the opinion of the Attorney Genenl of the United States, are secured by its full faith and credit or represent its genenl obligations, or hivested in indirect obligations of the United States of America, ineluding, but not limited to, evidences of indebtedness is~sued, iimured or guanmteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Lo~n Banks, Govenunent National Mortgage Association, United States Postal Service, Farmers Homer'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 from a Fm~d to be'available at the proper time or times for the purposes thereof. Except as othem~rise provided in Section 15 hereof, such investments shall be valued each years in terns of current market value as or the last day of the City's fiscal year. All interest and earnings derived from deposits and investments in the lutevest and Sirddng Fired immediately shall be eredited to, a~ld any losses shall be debited to, the interest and Sinking Fund. All such investments shall be sold promptly, when neee~ to prevent any default in eom~eetion with the Bonds. ':':'Section 18. Deficiencies in Funds. If, at any time, the City shall fail to deposit into any Fund ere,~ted by this Ordinanee the full amounts required hereby, the mounts equivalent to such deficiencies shall be set apart and paid into said Fund from the first available and Lmalloeated Net Revenues of the System, and such payments shall be in addition to the amoLmts otherwise required hereby to be paid into said Fm~d.s. To the extent necessary, the City shall increase the rates and eharg~,~ for sew ires of the System to make up for any such deficiencies. "= Section 19. 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 rutlest e~ent required by law for the security of public funds, and such Fm~ds shall be used only for the purposes and in the ma~mer permitted or required by this Ordinunee. ?- "~"Seetion 20. Additional Bonds. (a) That, in addition to the right to issue bonds of inferior Lien as authorized by law, the City resew es the right to issue Additional Boncls, under and in accordance with this Section, for the purpose of improving, extencling, equipping and repairing the System and for the purpose of eefm~ding, in any lawful ma~mer, any part or all of the Bonds then outstmlding. 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 Series 1985 Bonds; and tl,e Series 1985 Bonds, any then outstanding Additional Bonds, and the Additional Bonds then proposed to be issued shall in all respeets be on a parity and of equal dignity as to lien und 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 und until the following conditions have been met, to-wit: · :~'- -15- .'!=: .., ..--. ,- ! - ,- ..: -- , -.. .- " . ' ' .... '.-7 ~, (i) The City is not then in default as to any coveritual, condition :? or obligation prescribed by any ordinance authorizing the issuance of the !fie 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 therehi; .e~ (iii) The City has secured from a Certified Public Accotmtm~t a :.~certificate showing that the Net Eanfings 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 AdditionaJ Bonds is equal to at least 1.25 times the 2~(.average annual principal and interest requirements and at least 1.10 times :::,tile maximum annual principal and interest requirements (calculated on a !;~-fiscal year basis) of all Bonds which will be outstanding after the issuance of :;'iithe proposed Additional Bonds. However, (A) should the certificate of the ?:accountant certify that the Net Earnings of the System for the period · i'['c ered thereby were less than required above, and (B) a change in the rates OV -/;:and charges for water and sewer services afforded by the System became :C:2effective at least 60 days prior to the last day of the period covered by the accotmtant's certificate, and (C) an independent engineer or engineering firm !havh~g a favorable reputation with respect to such matters will certify that, !2had such change in r~tes and charges been effective for tile entire period :.:!covered by the aecountant's certificate, the Net Earnings of the System c~covered by the accounta~t's certificate would have been, in his or their ~:.opinion, equal to at least 1.25 times the average mmual principal and interest f~!requirements and at le,qst 1.10 times the m~Lximum annual principal .~nd ::;Zintecest requirements (calculated on a fiscal year basis) of the outstm~ding .'5~.Bonds after giving effect to the issum~ce of the Additional Bonds, then, in ;:~ such event, the coverage specified in the first sentence of this paragraph (iii) '::.~shall not be required foe the period specified, and such accotmtunt's ..?~certificate will be sufficient if accompanied by an engineer's certificate to 2iii.tlie above effect; (iv) The ocdinm~ce authorizing the Additional Bonds (A) requires · :~that deposits shall be made into the Interest and Sinking Fmld in amounts :!~;adequate to pay the principal mid interest requirements of the Additional :.~Bonds as the same become due; and (B) provides that the aggregate amount to '~"be accumulated and maintained in the Reserve Fund shall be increased to an %"amotmt equal to the Reserve Fund Requirement for all Bonds to be ~.~-;outsta~ding after the issu~_nce of said Additional Bonds. Such additional · :;'.amotmt shall be so accumulated in not more than sixty (60) months from the Yf}idate of the Additional Bonds; and "?i: (v) The Additional Bonds are scheduled to mature only on !!,t~.September 1 or March 1, or both. The term "Net Earnings," as used in this Section, shah mean all income, receipts and revenues derived from the access, use mid operation of the System, including interest eanled on invested moneys in the special Funds created hecein. for the payment asld security of obligations payable from the Net Revenues, after,~deduction of maintenance and operating expenses but not deducting '.~:, -.; -1~- .~'. -' -~' :..X~ . - depreciation, debt service payments on Bonds and other expenditures which, under standard accounting practice, should be classified as capital expenditures. Revenues and receipts resulting solely from the ownership of the System (grants, meter deposits 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 City for access to the System be so included unless such fees have actu~y been received by the City. :(c) Wherever, in this Section, the City reserves the right to issue Additional Bonds, such term shall also include, mean and refer to any other forms or typeS of obligations which may be made lawfully payable from and secured by the same~.S0urce of revenues of the City. :'; (d) The City covenants that, for so long as any principal or interest pertaining to any Bonds remain outstanding and unpaid, it will not authorize or issue any further bonds of the City secured by a lien on and pledge of the revenues of the System superior or senior to the pledge and Hen created herein for the Bonds, or secured by a lien on and pledge of the revenues of the System on a parity with the Bond~.,~ except in conformity with the provisions of this Section. ' , Section 21. Maintenance and Operation, Insurance. (a) That the City hereby covena~ts 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 Bonds are outstanding, the City agrees to maintain insurance on the System of a kb~d and in an amotmt cnstomarily carried by mtuficipal corporations in the State of Texas engaged in a similar type of business. Nothing in this Ordinance shall be construed as requiring the City to expend any lands which are derived from sources other thm~ the operation of the System but nothi.n.g herein shall be coikstrued as preventing the City from doing so. ~:~' (b) That the City further covenants and agrees with the owner or owners of the Bonds from time to time, that it will maintain and operate the System with all possible efficiency while any of the 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 a~d collecting of reasonable and sufficient 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 Ordina~ce. ?' Section 22. Records, Accom~ts, Accounting Reports. That the City hereby covenants and agrees that so long as any of the 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 p'cu'ts separate and apm't from all other records and accotmts of the City in accordm~ce with accepted accounting practices prescribed for municipal corporations, and complete and correct entries shall be made of all transactions relating to the System, as provided by Article 1113, Vernou's Aimotated Texas Civil Statutes, as amended. 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 City further agrees that as soon as possible following the close of each fiscal year, it will cause an audit of such books :~, .. -!,L · -17- ,;~..4. :-.. . :' ",: ~. !:' :~'~;!-;. .. .. _: , ,,:~. . - ,, 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 Accountant, shall particularly include the following: ~(a) A detailed statement of the income and expenditures of the compgnents of the System for such fiscal year; :..;i~ (b) A balance sbeet as of the end of such fiscal year; ~' (c) A detailed statement of the source and disposition of all funds of the Syst~ during such fiscal year; and The Accomltant's comments regarding the rammet in which the City has complied with the covenants and requirements of this Ordina~lce 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 maintenn~ce and operating expenses of the System and paid as such. Copies of the aforesaid a~umal audit shall be immediately furnished, upon written request, to the origingl purchasers and any subsequent holder of the Bonds. '~Section 23. Final Deposits, Governmental Obligations. (a) That any Bond sball be deemed to be paid, retired, and no longer outstanding within the meaning of this Ordin~mce 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) sbail have been made or caused to be made in accord~lce with tile terms thereof (inchidiug the giving of any required notice of redemption), or (ii) shall have been provided by irrevocably depositing with, or making available to, a paying agent therefor, in trt~st and irrevocably set aside exclusively for such payment, (A) money sufficient 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 matta, e as to principal and interest in such amounts and at such times as will insure tile availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation and expenses of such paying agent pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of such paying agent. At such times as a Bond shall be deemed to be paid heretinder, as aforesaid, it shall no longer be secured by or entitled to the benefit of this Ordinance or a lien on mid pledge of the Net Revenues, and shall be entitled to payment solely from such money or Government Obligations. · (b) That money so deposited with a paying agent may, at the direction of the City, be invested in Government Obligations maturing in the amounts and times as hereinbefore set forth, mid all income from all Government Obligations in tile hmlds of the paying agents pursuant to this Section which is not required for tile payment of the Bonds, asld interest thereon, with respect to which such money has been.~eposited, shall be delivered to the City or deposited as directed by the City. That the City covenants that no deposit will be made or accepted under,:Subsection (a) of this Section and no use made of any such deposit which would 0294D:' '.': ..'~ cause the Bonds to be treated as "arbitrage bonds" witl~n the meaning of Section 103(6) of the Internal Revenue Code of 1954, as ~mended. "~:(d) That, for the purpose of this Section, the term "Govenunent Obligations" shah mean direct obligations of the United States of America, Including obligatio~Ls, 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 24. Remedies in Event of Default. That, in addition to all the rights mid remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in payments to be made to the Interest and Sinking Fund or lhe Reserve Fund as required by this Ordinance, or (b) defaults in the observance or perforinance of any other of the coven~mts, 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 City and its officers to observe and perform any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedy herein provided shall be cumulative of all other existing remedies, and the spec~[tcation of such remedy shall not be deemed to be exclusive. ~, Section 25. Bonds as Special Obligations. That the Series 1985 Bonds are special obligations of the City payable solely from Net Revenues and the holders and owners thereof shall never have the right to dema~d payment thereof out of any other.funds of the City or funds raised or to be raised by taxation. "::"'Section 26. Bonds as Negotiable Instruments. That each of the Series 1985 Bonds shall be deemed and construed to be an "investment Security,"and, as such, a negotiable h~strument, within the meaning of Article 8, of the Texas Uniform Commercial Code. '~.: Section 27. Ordinm~ce as a Contract. That the provisions of this Ordinance shalt.'constitute a contract between the City and the o~er or ow~ers from time to timeCof the Series 1985 Bonds and, except as otherwise provided herein, no cha~ge, variation or alteration of aj~y kind of the provisions of this ordinance may be made until.:~he Series 1985 Bonds are no longer outstanding, ':!: Section 28. Further Covenants. That the City hereby further covenants and agrees as follows, to-wit: .:~-' iT"' (a) That it has the lawful power to pledge the Net Revenues to the payment of the Series 1985 Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas; that the Series 1985 Bonds eu~d the Additional Bonds, when issued, shall be catably secured under said pledge in such manner that one Bond shall have no preference over any other Bond of said issues as here.i.gbefore provided. -19- . ..d -- -., "' - ':'-': - -= -' := '- ." . . .. . . ~' (b) That, other than for the payment of the Series 1985 Bonds, the Net Revenues of the System are not in any mmmer now pledged to the payment of any debt or ob[igation of the City or of the System, except for any debt or obligation which has a pledge of the Net Revenues subject and subordinate to the ptedge of the Net Re. venues associated with the Bonds. ' (c) That for so long as any of the Bonds or any Interest thereon remain outstanding, the City will not sell or encumber the physical properties of the System or any subst~mtial part thereof; provided, however, tiffs coven~u~t 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 City 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 City out o( 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 applicable to or necessary with respect to the System, and which have been obtained from any governmental agency; and the City bas or will obtain and keep in full force and effect aH franchises, permits, authorizations and other requirements applicable to or necessary with respect to the acquit!lion, constructiou, equipment, operation and maintenance of the System. "'~'(f) That it will not grant any franchise or permit the acquisition, constructioo or operation of any competing facilities which might be used as a suhstitute for the System 's facilities, and, to the extent that it legally may, the City will p.r. 0hibit any such competing facilities. '~' Section 29. Registered Owners, Notices, Waiver. (a) The City, the Paylog AgentJRegistr~Lr, and any agent of either of them may treat the person In whose nnme.s. ny Series 1985 Bond is registered as the Owner of such Series 1985 Bond for the purpose of receiving payment of the principal of and interest on such Series 1985 Boud .'and for all other purposes whatsoever, and to the extent permitted by law, neither the City, 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 Series 1985 Bond of ~u~y event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States mail, first class postage prepaid, to the address of such Owner as it appears in the register kept by the P.aying Agent/Registrur. ':.! (c) In any case where notice to the Ow~ers of the Series 1985 Bonds is given,by mail, neither the failure to mail such notice to any Owner of a Series 19~5 Bond;nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Series 1985 Bonds. Where this Ordinance provides for notice hi 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 Series 1985 Bond shah be filed with the Paying -20- Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 30. Mutilated, Destroyed, Lost, and Stolen Series 1984 Bonds. (a) If (D any mutilated Series 1985 Bond is surrendered to the Paying Agent/Registrar or the City or the Paying Agent/Registrar receives evidence to its satisfaction of the destruction, loss, or theft of any Series 1985 Bond, and (ii) there is delivered to the City and the Paying Agent/Registrar such security or indemnity as may be required by the Paying Agent/Registrar to save and hold each of them harmless, then, in the absence of notice to the City or the Paying Agent/Registrar that such Series 1985 Bond has been acquired by a bona fide purchaser, the City shah execute and upon its request the Paying Agent/Registrar shall register and deliver, in exchange for or in Hen of any such mutilated, destroyed, lost, or stolen Series 1985 Bond, a new Series 1985 Bond of the same stated maturity and of like tenor and principal amount, bearing a number not contemporaneously outstanding. c' (b) In case any such mutilated, destroyed, lost, or stolen Series 1985 Bond has become or is about to become due and payable, the City, in its discretion may, 'instead of issuing a new Series 1985 Bond. pay such Series 1985 Bond. · (c) Upon the iasuance of any new Series 1985 Bond under this Section, the City may require the payment by the Owner thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expexkses (including the fees and expenses of the Paying Agent/Registrar) connected therewith. .:. (d) Every new Series 1985 Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Series 1985 Bond shall constitute a replacement of the prior obligation of the City, wheti~er or not the mutilated, destroyed, lost, or stolen Series 1985 Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Series 1985 Bonds. ::i. · i.'Z (e) The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment or mutilated, destroyed, lost, or stolen Series 1985 Bonds. .i~.:. !~:Section 31. Cancellation. All Series 1985 Bonds surrendered for payment, redemption, tr~u~sfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Series 1985 Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Series 1985 Bonds so delivered shall be promptly cancelled by tbe Paying Agent/Registrar. All cancelled Series 1985 Bonds held by the p, aying Agent/Registrar shall be disposed of as directed by the City. ~'. Section 32. Registration, Trmksfer, and Excha~ge. (a) The City shall cause to be kept at the principal office of the Paying Agent/Registrar a register (the "l~e,g~s..ter") in which, subject to such reasonable regulations as it may prescribe, -21- -- >'!~ .. - . ,. . . ., =- · .. -:. _ :.. .;' registration of the Series 1985 Bonds and of transfers of the Series 1985 Bonds shall be made as provided herehi. Upon stirrender for traxksfer of any Series 1985 Bond at the principal office of the Paying Agent/Registrar, the City shall execute and the Paying Agent/Registrar shall register and deliver, in the name of the desig~ated transferee or tnmsferees, one or more new Series 1985 Bonds of the same stated maturity, of any a~thorized denomination, and of a like aggregate principal amount. t (c) At the option of the Owner, Series 1985 Bonds may be exchanged for other~ Series 1985 Bonds of the smme stated maturity, of any authorized denomination, bearing the same rate of interest, and of like aggregate principal amount, upon surrender of the Series 1985 Bonds to be exchanged at the principal offine of the Paying Agent/Registrar. Whenever any Series 1985 Bonds are so surrendered for exchange, the City shall execute, and the Paying Agent/Registrar shall register and deliver, the Series 1985 Bonds which the Owner of Series 1985 Bonds making the exchange is entitled to receive. (d) All Series 1985 Bonds issued upon any transfer or exchange of Series 1985 Bonds shall be the valid obligations of the City, evidencing the same debt, and entitled to the same benefits ander this Ordinance, as the Series 1985 Bonds surrendered upon such transfer or exchange. (e) Every Series 1985 Bond presented or stwr~ndered for transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer ea~d assignment in form satisfactory to the Paying Agent/Registrar duly executed, by the Owner thereof or his attorney duly authorized in writing. · (f) No service charge shall be made to the Owner for a~y registration, transfer, or exchange of Series 1985 Bonds, but the City or the Paying Ageut/ Registrar may require payment of a sum sufficient to cover any tax or other governmeutal charge that may be imposed in com,ection with any trarksfer or exch.L~nge of Series 1985 Bonds. i/ ~:' (g) Neither the City or the Paying Agent/Registrar shall be required to issue or tra~tsfer to an assignore of the registered owner of any Series 1985 Bond any Serie~ 1985 Bond called for redemption, in whole or in pad't, within 30 days of the date.fixed for redemption; provided, however, such limitation of transfer shall uot be applicable to an exchas~ge of the unredeemed balance of a~y Series 1985 Bond called in part for redemption. . Section 33. Arbitrage. That the City covenants to as~d with the purchasers of the Series 1985 Bonds that it will make no use of the proceeds of the Series 1985 Bonds at any time throughout the term thereof which would cause the Series 1985 Bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the internal Revelhue Code of 1954, as amended, or any regulations or rulings pertaining thereto. : Section 34. Approval and Registration of Bonds. That the Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders records pending investigation by the Attorney General of the State of Texas, and shall'take and have charge and control of the Series 1985 Bonds pending their approval by the Attorney General and their registration by the Comptroller of Public Accounts. in addition, the Mayor, City Secretary and other City officials are 0294D ::.:'/. :~ ~..~:,: ' :Z"". ':%;,:-: ' E. :V: -'Y' -. . ": · "t: - - /- ~. ,,,,:." . ".,~:: '.:;.~.. . . '::' ,':: -:..':~/~'.:_;'_L~,-..:/ '. :.. . , -_ ~. _ -' . - - . ~ , .-: - . ..-~:. ~,, -: .- / · . :. _ -.. -.. .: :: : :,. . ': i :- , ....., .., ......:!:-:-: ::.',: ::::.._-:.. -'.~'. ":,~t:'.':: '--~--"' ~'""-': '<: ' ""' "" "~"2-E ::::~':"" ~ -:4~c,. ' -¥- ';' ': - "': ....:'"". ~ ":" , :--' ~ " "*'· "" "''' ~"~":':" :" "' ': :'~::>"~"':" !':-'.:'.""'-' :-' ::' ':."-{:'-. -.:. :..-:-., .,,-::. ,.;,'::':L': ', '--:.~,.: ~'',:'. '~::::. >.!c :---.;~':::':" '~'- ' ': ~ "' ' ...... """' ·-- "".i ,'7-::'- :.. :.:-.-!' .-:-.: " ., :. :,.-, ... ,- . . ...,,.. :..:-.:: -. ,' '~ ' · --: ::-'0 .t-:;' 'X y ...'-~:; :-,,--:.:: ::{:5:~-...~ '-:'. '~:---~."':..-..':'-~'~' . :'.....--..'~-':.. .-/, . .... .,. .... :- .. .... ,'~ .~. - , - . . - -:. ~'" ~ZE': ...:-'t, ..... :-,:'.:.,:~. :--." -::. . , . _-"-, . - , :}. hereby authorized to execute such instruments and certifications as may be required to accomplish the issuance and delivery of the Series 1985 Bonds. Section 35. Legal Opinion. That the purchasers' obligation to accept delivery of the Series 1985 Bonds is subject to their being furnished a final opinion of Messrs. Hutchison Price Boyle & Brooks, Attorneys at Law, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. Printing of a true and correct copy of said opinion on the reverse side of each of the Series 1985 Bonds with appropriate certificate pertaining thereto executed by facsimile signature of the City Secretax~j is hereby approved and authorized. Section 36. CUSIP Numbers. That CUSIP numbers may be printed on the Series 1985 Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Series 1985 Bonds shah be of no significance or effect as regards the legality thereof and neither the City nor attorneys appcoving the Series 1985 Bonds as to legality are to be held responsible for CUStP numbers incorrectly printed thereon. Section 37. Confirmation of Sale. That sale of the Series 1985 Bonds to Pcudential-Bache Secarities, on behalf of themselves and others, at the price of $ pins accrued interest is hereby confirmed. Delivery of the Series 1985 Bonds shall be made to said purchasers as soon as may be practical after the adoption of tkis Ordina~ce and upon payment therefor in accordance with and subject to the terms of this Ordinance. Section 98. Disposition of Series 1984 Bond Proceeds. That the proceeds from the sale of the Series 1985 Bonds shall be deposited at a bm~k of closing appcoved by the City Manager and shall be used in the following rammet, to-wit: (a) The accrued interest received from the sale of the Series 1985 Bonds together with $ received from the sale of the Series 1985 Bonds shall be deposited to the Interest and Sinking Fund, to be held by the depository batik of the City. (b) The sum of $ shall be deposited immediately to or upon the order of the First City Bank of Dallas, Dallas, Texas, or such other bmd~ or location as may be ordered by the City Manager of the City, for the sole parpose of acquiring at available prices investment securities, of the type or types described in Section 17 hereof, for the following purposes, to-wit: investment securities having an aggregate face or par value, which, on the basis of interest rates to be paid thereon and without reinvestment, along with any uninvested cash, will be sufficient to defense and pay when due all sums due on the Outstanding Bonds when and as due an payable, such securities to be deposited with the First City B~mk of Dallas, Dallas, Texas, as Escrow Agent for the Escrow Fund created and established in accordance with the Escrow Agreement approved in Section 40 hereof, which amount, together with the amotmts deposited under Section 39 hereof, is sufficient to provide for the full payment, discharge, refunding and retirement of the principal and interest on all Outstanding Bonds. (c) The sum of $7,675,000 shall be deposited to a Waterworks System Construction Fund at the aforesaid depository bank of the City, to be used to make improvements and extensions to the City's Waterworks System. 0294D (d) The sum of $ shall be paid to or upon the order of the City at the City's aforesaid depository ba~,k, which sum shall be used to pay the costs and expenses pertaining to the issuance of the Series 1985 Bonds concurrently with the closing of the delivery thereof. To the extent any of such sum is not used for such purposes, any excess shall be deposited to the Waterworks System Construction Fund. (e) To the extent necessary to accomplish fully the purposes of this Ordinance, the City M~nager is authorized to reallocate the fm~ds herein directed to be used for the purposes specified in subsections (b), (c) and (d) next above. Section 39. Tva~sfer of Existing Funds. The funds on hm~d in the interest mid sinking funds pertaining to the Outstanding Bonds being refunded hereby, shall be transferred and credited to, or upon the order of, the Escrow Agent under and subject to the terms of the "Escrow Agreement" approved in Section 40 of this Ordinance, such funds to be held for the benefit of the holders of the Outsta~ding Bonds, and for the purpose of purchasing the "Open Ms. rket Securities," as defined and listed in the Escrow Agreement. The City Manager, is authorized to enter into agreement to purchase said "Open Market Securities" with the purchasers of the Series 1985 Bonds or others in such manner as will assure that the "Open Market Securities" will be available for the Outstanding Bonds on the date of delivery of the Series 1985 Bonds. Section 40. Escrow Affreement. The City Council hereby approves and autborizes the execution of the "Escrow Agreement" between the City a~ld the First City Bank of Dallas, Dallas, Texas, substantially in the forln attached hereto as Exhibit A, which is hereby incorporated herein by reference and made a part of this Ordinance for all purposes, with such changes therein as shall be approved by the Mayor. Section 41. Approval of Official Statement. That the form a~/d substance of the Preliminary Official Statement, dated , and preseated to and considered at this meeting, is hereby in all respects approved and adopted by the City Council, and the Mayor and tbe City Secretary a. re hereby authorized and directed to execute the same and to deliver appropriate numbers of executed copies thereof to the purchasers of the Series 1985 Bonds. With such appropriate variations as shall be approved by the City Maimgee and the purchasers of the Series 1985 Bonds (the "Official Statement"). The Official Statement may be used by said purchasers in the public offering and sale thereof and the use of the Pvelimina~'y Official Statement in com~eetion with the public offerlug and sale of the Series 1985 Bonds is hereby ratified and approve& The City Secretary is hereby authorized and directed to include and maintain a copy of the Official Statement thus approved among the permanent records of this meeting. PASSED, APPROVED AND EFFECTIVE thi City of Coppel ATTEST: -24- ,. - _ - - .. _ -, ..... '.'~.'.:.f-'.'~....'.~: '-: '..""' '' ';'.-' ~ ,,,'; ~- '.- i,'.'~:'~' '- .v. . ' ~;'. ." - "'z,.' ' ~ '7:%: ' ' ' ~'. ." ~'- "' "' ':'-".'