O-86-2224 - 3/31/1986Ordinance no. 2224
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF ROUND ROCK
We, the undersigned officers of said City, hereby certify
as follows:
1. The City Council of said City convened in SPECIAL
MEETING ON THE 31ST DAY OF MARCH, 1986, at the City Hall, and
the roll was called of the duly constituted officers and
members of said City Council, to -wit:
Mike Robinson, Mayor
Mike Heiligenstein, Pro -Tem
Joanne Land, City Secretary
Graham Howell
Pete Correa
Trudy L. Lee
Charles Culpepper
Ronnie Jean
and all of said persons re present, . excepts ti}e fo lowin
absentees: ,4!)
thus constituting a quorum. Whereupon, among other business,
the following was transacted at said Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF REVENUE BONDS
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, pre-
vailed and carried by the following vote:
AYES: All members of said City Council shown
present above voted "Aye".
NAYS: None.
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 Certifi-
cate; 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 fore-
going 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 31st day of March, 1986.
ORDINANCE AUTHORIZING THE ISSUANCE OF REVENUE BONDS
THE STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF ROUND ROCK
WHEREAS, the following revenue bonds of said City are
presently outstanding:
Waterworks and Sewer System Refunding Revenue Bonds,
Series 1985, dated November 1, 1985, now outstanding in
the principal amount of $7,180,000.
WHEREAS, the City has published notice of intention to
issue the proposed revenue bonds in the Round Rock Leader on
March 6, 1986 and March 13, 1986; and
WHEREAS, no petition has been received requesting a refer-
endum on the proposed revenue bonds; and
WHEREAS, the bonds hereinafter authorized and designated
are to be issued and delivered pursuant to Vernon's Articles
1111 through 1118; and
WHEREAS, it is hereby officially found and determined that
a case of emergency or urgent public necessity exists which
requires the holding of the meeting at which this Ordinance is
passed, such emergency or urgent public necessity being that
the proceeds from the sale of said bonds are required as soon
as possible and without delay for necessary and urgently needed
public improvements; 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.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OE ROUND
ROCK:
Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or
bonds of the City of Round Rock (the "Issuer") are hereby au-
thorized to be issued and delivered in the aggregate principal
amount of $7,450,000, for the purpose of improving and
extending the Issuer's combined Waterworks and Sewer System.
Section 2. DESIGNATION OF THE BONDS. Each bond issued
pursuant to this Ordinance shall be designated: "CITY OF ROUND
ROCK, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES
1986", and initially there shall be issued, sold, and delivered
hereunder a single fully registered bond, without interest cou-
pons, payable in installments of principal (the "Initial
Bond"), but the Initial Bond may be assigned and transferred
and/or converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest
coupons, having serial maturities, and in the denomination or
denominations of $5,000 or any integral multiple of $5,000, all
in the manner hereinafter provided. The term "Bonds" as used
in this Ordinance shall mean and include collectively the
Initial Bond and all substitute bonds exchanged therefor, as
well as all other substitute bonds and replacement bonds issued
pursuant hereto, and the term "Bond" shall mean any of the
Bonds.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURI-
TIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INI-
TIAL BOND. (a) The Initial Bond is hereby authorized to be
issued, sold, and delivered hereunder as a single fully regis-
tered Bond, without interest coupons, dated April 1, 1986, in
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the denomination and aggregate principal amount of $7,450,000,
numbered R-1, payable in annual installments of principal to
the initial registered owner thereof, to -wit:
or to the registered assignee or assignees of said Initial Bond
or any portion or portions thereof (in each case, the "regis-
tered owner"), with the annual installments of principal of the
Initial Bond to be payable on the dates, respectively, and in
the principal amounts, respectively, stated in the FORM OF INI-
TIAL BOND set forth in this Ordinance.
(b) The Initial Bond (i) may be prepaid or redeemed prior
to the respective scheduled due dates of installments of prin-
cipal thereof, (ii) may be assigned and transferred, (iii) may
be converted and exchanged for other Bonds, (iv) shall have the
characteristics, and (v) shall be signed and sealed, and the
principal of and interest on the Initial Bond shall be payable,
all as provided, and in the manner required or indicated, in
the FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the
Initial Bond shall bear interest from the date of the Initial
Bond to the respective scheduled due dates, or to the respec-
tive dates of prepayment or redemption, of the installments of
principal of the Initial Bond, and said interest shall be pay-
able, all in the manner provided and at the rates and on the
dates stated in the FORM OF INITIAL BOND set forth in this Ord-
inance.
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 en-
dorsed on the Initial Bond, shall be substantially as follows:
NO. R-1
FORM OF INITIAL BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF ROUND ROCK, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1986
$7,450,000
THE CITY OF ROUND ROCK, in Williamson County (the
"Issuer"), being a political subdivision of the State of Texas,
hereby promises to pay to
or to the registered assignee or assignees of this Bond or any
portion or portions hereof (in each case, the "registered
owner") the aggregate principal amount of
SEVEN MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS
in annual installments of principal due and payable on February
1 in each of the years, and in the respective principal
amounts, as set forth in the following schedule:
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YEAR AMOUNT
1988 $200,000
1989 200,000
1990 225,000
1991 250,000
1992 250,000
1993 275,000
1994 300,000
1995 325,000
1996 375,000
and to pay interest, from the
stated, on the balance of each
respectively, from time to time
as follows:
(I "a/
T°o%
a
YEAR
1997
1998
1999
2000
2001
2002
2003
2004
2005
AMOUNT
$400,000
425,000
475,000
500,000
550,000
600,000
650,000
700,000
750,000
date of this Bond hereinafter
such installment of principal,
remaining unpaid, at the rates
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
per annum on the above installment of
principal due and payable on February 1,
7 , ° %'per annum on the above installment of
principal due and payable on February 1,
7-e°% per annum on the above installment of
principal due and payable on February 1,
.5-0% per annum on the above installment of
principal due and payable on February 1,
ko .2) % per annum on the above installment of
principal due and payable on February 1,
1988;
1989;
1990;
1991;
1992;
1993;
1994;
1995;
1996;
1997;
1998;
1999;
2000;
2001;
2002;
2003;
2004;
2005;
with said interest being payable on February 1, 1987, and semi-
annually on each August 1 and February 1 thereafter while this
Bond or any portion hereof is outstanding and unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this
Bond are payable in lawful money of the United States of
America, without exchange or collection charges. The install-
ments of principal and the interest on this Bond are payable to
the registered owner hereof through the services of First City
National Bank of Austin, Austin, Texas, which is the "Paying
Agent/Registrar" for this Bond. Payment of all principal of
and interest on this Bond shall be made by the Paying Agent/
Registrar to the registered owner hereof on each principal and/
or interest payment date by check or draft, dated as of such
date, drawn by the Paying Agent/Registrar on, and payable sole-
ly from, funds of the Issuer required by the ordinance
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authorizing the issuance of this Bond (the "Bond Ordinance") to
be on deposit with the Paying Agent/Registrar for such purpose
as hereinafter provided; and such check or draft shall be sent
by the Paying Agent/Registrar by United States mail, first-
class postage prepaid, on each such principal and/or interest
payment date, to the registered owner hereof, at the address of
the registered owner, as it appeared on the 15th day of the
month next preceding each such date (the "Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as
hereinafter described. The Issuer covenants with the regis-
tered owner of this Bond that on or before each principal
and/or interest payment date for this Bond it will make avail-
able
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 inter-
est 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 amount of
$7,450,000 for the purpose of improving and extending the
Issuer's combined Waterworks and Sewer System.
ON FEBRUARY 1, 1996, or on any interest payment 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 avail-
able source, as a whole, or in part, and, if in part the Issuer
shall select and designate the maturity or maturities and the
amount that is to be redeemed, and if less than a whole matur-
ity is to be redeemed, the Issuer shall 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),
plus accrued interest to the date fixed for prepayment or re-
demption. At least 30 days prior to the date fixed for any
such prepayment or redemption a written notice of such prepay-
ment or redemption shall be mailed by the Paying Agent/Regis-
trar 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. If 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 shall be
treated as prepaid or redeemed prior to its scheduled due date,
and shall not bear interest after the date fixed for its pre-
payment or redemption, and shall not be regarded as being out-
standing except for the right of the registered owner to re-
ceive 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.
4
THIS BOND, to the extent of the unpaid or unredeemed prin-
cipal 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 Ord-
inance. 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 assign-
ment, in form and with guarantee of signatures satisfactory to
the Paying Agent/Registrar, evidencing assignment by the ini-
tial registered owner of this Bond, or any portion or portions
hereof in any integral multiple of $5,000, to the assignee or
assignees in whose name or names this Bond or any such portion
or portions hereof is or are to be transferred and registered.
Any instrument or instruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assignment
of this Bond or any such portion or portions hereof by the ini-
tial registered owner hereof. A new bond or bonds payable to
such assignee or assignees (which then will be the new regis-
tered owner or owners of such new Bond or Bonds) or to the ini-
tial 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 con-
version of and exchange for this Bond or any portion or por-
tions 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 con-
trary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to
the extent of the unpaid or unredeemed principal balance here-
of, may be converted into and exchanged for a like aggregate
principal amount of fully registered bonds, without interest
coupons, payable to the assignee or assignees duly designated
in writing by the initial registered owner hereof, or to the
initial registered owner as to any portion of this Bond which
is not being assigned and transferred by the initial registered
owner, in any denomination or denominations in any integral
multiple of $5,000 (subject to the requirement hereinafter
stated that each substitute bond issued in exchange for any
portion of this Bond shall have a single stated principal ma-
turity date), upon surrender of this Bond to the Paying Agent/
Registrar for cancellation, all in accordance with the form and
procedures set forth in the Bond Ordinance. If this Bond or
any portion hereof is assigned and transferred or converted
each bond issued in exchange for any portion hereof shall have
a single stated principal maturity date corresponding to the
due date of the installment of principal of this Bond or por-
tion hereof for which the substitute bond is being exchanged,
and shall bear interest at the rate applicable to and borne by
such installment of principal or portion thereof. Such bonds,
respectively, shall be subject to redemption prior to maturity
on the same dates and for the same prices as the corresponding
installment of principal of this Bond or portion hereof for
which they are being exchanged. No such bond shall be payable
in installments, but shall have only one stated principal ma-
turity date. AS PROVIDED IN THE BOND ORDINANCE, THIS BOND IN
ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED
ONCE ONLY, and to one or more assignees, but the bonds issued
and delivered in exchange for this Bond or any portion hereof
may be assigned and transferred, and converted, subsequently,
as provided in the Bond Ordinance. The Issuer shall pay the
5
Paying Agent/Registrar's standard or customary fees and charges
,for transferring, converting, and exchanging this Bond or any
portion thereof, but the one requesting such transfer, conver-
sion, and exchange shall pay any taxes or governmental charges
required to be paid with respect thereto. The Paying Agent/
Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing with
the close of business on any Record Date and ending with the
opening of business on the next following principal or interest
payment date, or, (ii) with respect to any Bond or portion
thereof called for prepayment or redemption prior to maturity,
within 45 days prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond is
changed by the Issuer, resigns, or otherwise ceases to act as
such, the Issuer has covenanted in the Bond Ordinance that it
promptly will appoint a competent and legally qualified sub-
stitute 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, sold, and
delivered; 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 have
been performed, existed, and been done in accordance with law;
that this Bond is a special obligation; and that the interest
on and principal of this Bond, together with other revenue
bonds of the Issuer, are payable from, and secured by a first
lien on and pledge of the Pledged Revenues, as defined in the
Ordinance authorizing this Series of Bonds, and which include
the Net Revenues of said Issuer's combined Waterworks and Sewer
System.
SAID ISSUER has reserved the right, subject to the re-
strictions 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 lien on and pledge of the Pledged Revenues.
THE HOLDER HEREOF shall never have the right to demand
payment of this obligation out of any funds raised or to be
raised by taxation.
BY BECOMING the registered owner of this Bond, the regis-
tered owner thereby acknowledges all of the terms and provi-
sions 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 Ordi-
nance 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 April 1, 1986.
City Secretary Mayor
(CITY SEAL)
6
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, certi-
fied 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
xxxxxxxx
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS.
Registration and Transfer. (a) The Issuer shall keep or cause
to be kept at the principal corporate trust office of First
City National Bank of Austin, Austin, 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 regis-
trar and transfer agent to keep such books or records and make
such transfers and registrations under such reasonable regula-
tions as the Issuer and Paying Agent/Registrar may prescribe;
and the Paying Agent/Registrar shall make such transfers and
registrations as herein provided. The Paying Agent/Registrar
shall obtain and record in the Registration Books the address
of the registered owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but
it shall be the duty of each registered owner to notify the
Paying Agent/Registrar in writing of the address to which
payments shall be mailed, and such interest payments shall not
be mailed unless such notice has been given. The Issuer shall
have the right to inspect the Registration Books during regular
business hours of the Paying Agent/Registrar, but otherwise the
Paying Agent/Registrar shall keep the Registration Books
confidential and, unless otherwise required by law, shall not
permit their inspection by any other entity. Registration of
each Bond may be transferred in the Registration Books only
upon presentation and surrender of such Bond to the Paying
Agent/Registrar for transfer of registration and cancellation,
together with proper written instruments of assignment, in form
and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, (i) evidencing the assignment of the Bond, or
any portion thereof in any integral multiple of $5,000, to the
assignee or assignees thereof, and (ii) the right of such
assignee or assignees to have the Bond or any such portion
thereof registered in the name of such assignee or assignees.
Upon the assignment and transfer of any Bond or any portion
thereof, a new substitute Bond or Bonds shall be issued in
conversion and exchange therefor in the manner herein provided.
The Initial Bond, to the extent of the unpaid or unredeemed
principal balance thereof, may be assigned and transferred by
the initial registered owner thereof once only, and to one or
more assignees designated in writing by the initial registered
owner thereof. All Bonds issued and delivered in conversion of
and exchange for the Initial Bond shall be in any denomination
or denominations of any integral multiple of $5,000 (subject to
the requirement hereinafter stated that each substitute Bond
shall have a single stated principal maturity date), shall be
in the form prescribed in the FORM OF SUBSTITUTE BOND set forth
in this Ordinance, and shall have the characteristics, and may
be assigned, transferred, and converted as hereinafter pro-
vided. If the Initial Bond or any portion thereof is assigned
and transferred or converted the Initial Bond must be surren-
dered to the Paying Agent/Registrar for cancellation, and each
Bond issued in exchange for any portion of the Initial Bond
7
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 substi-
tute Bonds in exchange for the unassigned balance of the.
Initial Bond in the same manner as if the initial registered
owner were the assignee thereof. If any Bond or portion
thereof other than the Initial Bond is assigned and transferred
or converted each Bond issued in exchange therefor shall have
the same principal maturity date and bear interest at the same
rate as the Bond for which it is exchanged. A form of assign-
ment shall be printed or endorsed on each Bond, excepting the
Initial Bond, which shall be executed by the registered owner
or its duly authorized attorney or representative to evidence
an assignment thereof. Upon surrender of any Bonds or any
portion or portions thereof for transfer of registration, an
authorized representative of the Paying Agent/Registrar shall
make such transfer in the Registration Books, and shall deliver
a new fully registered substitute Bond or Bonds, having the
characteristics herein described, payable to such assignee or
assignees (which then will be the registered owner or owners of
such new Bond or Bonds), or to the previous registered owner in
case only a portion of a Bond is being assigned and trans-
ferred, all in conversion of and exchange for said assigned
Bond or Bonds or any portion or portions thereof, in the same
form and manner, and with the same effect, as provided in
Section 6(d), below, for the conversion and exchange of Bonds
by any registered owner of a Bond. The Issuer shall pay the
Paying Agent/Registrar's standard or customary fees and charges
for making such transfer and delivery of a substitute Bond or
Bonds, but the one requesting such transfer shall pay any taxes
or other governmental charges required to be paid with respect
thereto. The Paying Agent/Registrar shall not be required to
make transfers of registration of any Bond or any portion
thereof (i) during the period commencing with the close of
business on any Record Date and ending with the opening of
business on the next following principal or interest payment
date, or, (ii) with respect to any Bond or any portion thereof
called for redemption prior to maturity, within 45 days prior
to its redemption date.
(b) Ownership of Bonds. The entity in whose name any
Bond shall be registered in the Registration Books at any time
shall be deemed and treated as the absolute owner thereof for
all purposes of this Ordinance, whether or not such Bond shall
be overdue, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary; and payment of,
or on account of, the principal of, premium, if any, and
interest on any such Bond shall be made only to such registered
owner. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
(c) Payment of Bonds and Interest. The Issuer hereby
further appoints the Paying Agent/Registrar to act as the
paying agent for paying the principal of and interest on the
Bonds, and to act as its agent to convert and exchange or
replace Bonds, all as provided in this Ordinance. The Paying
Agent/Registrar shall keep proper records of all payments made
by the Issuer and the Paying Agent/Registrar with respect to
the Bonds, and of all conversions and exchanges of Bonds, and
all replacements of Bonds, as provided in this Ordinance. How-
ever, in the event of a nonpayment of interest on a scheduled
8
it
•
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
District. Notice of the past due interest (which shall be 15
days after the Special Record Date) shall be sent at least five
(5) business days prior to the Special Record Date by United
States mail, first class postage prepaid, to the address of
each Bondholder appearing on the Security Register at the close
of business on the last business day next preceding the date of
mailing of such notice.
(d) Conversion and Exchange or Replacement; Authentica-
tion. Each Bond issued and delivered pursuant to this Ordin-
ance, to the extent of the unpaid or unredeemed principal bal-
ance or principal amount thereof, may, upon surrender of such
Bond at the principal corporate trust office of the Paying
Agent/Registrar, together with a written request therefor duly
executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or represen-
tatives, with guarantee of signatures satisfactory to the Pay-
ing Agent/Registrar, may, at the option of the registered owner
or such assignee or assignees, as appropriate, be converted
into and exchanged for fully registered bonds, without interest
coupons, in the form prescribed in the FORM OF SUBSTITUTE BOND
set forth in this Ordinance, in the denomination of $5,000, or
any integral multiple of $5,000 (subject to the requirement
hereinafter stated that each substitute Bond shall have a
single stated maturity date), as requested in writing by such
registered owner or such assignee or assignees, in an aggregate
principal amount equal to the unpaid or unredeemed principal
balance or principal amount of any Bond or Bonds so surren-
dered, and payable to the appropriate registered owner, assign-
ee, or assignees, as the case may be. If the Initial Bond is
assigned and transferred or converted each substitute Bond
issued in exchange for any portion of the Initial Bond shall
have a single stated principal maturity date, and shall not be
payable in installments; and each such Bond shall have a prin-
cipal maturity date corresponding to the due date of the in-
stallment of principal or portion thereof for which the sub-
stitute Bond is being exchanged; and each such Bond shall bear
interest at the single rate applicable to and borne by such
installment of principal or portion thereof for which it is
being exchanged. If a portion of any Bond (other than the
Initial Bond) shall be redeemed prior to its scheduled maturity
as provided herein, a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in the denom-
ination 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 cancella-
tion. If any Bond or portion thereof (other than the Initial
Bond) is assigned and transferred or converted, each Bond is-
sued in exchange therefor shall have the same principal matur-
ity 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 re-
place 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 authenti-
cated after such first scheduled Record Date shall bear
9
interest from the interest payment date next preceding the date
on which such substitute Bond was so authenticated, unless such
Bond is authenticated after any Record Date but on or before
the next following interest payment date, in which case it
shall bear interest from such next following interest payment
date; provided, however, that if at the time of delivery of any
substitute Bond the interest on the Bond for which it is being
exchanged is due but has not been paid, then such Bond shall
bear interest from the date to which such interest has been
paid in full. THE INITIAL BOND issued and delivered pursuant
to this Ordinance is not required to be, and shall not be, au-
thenticated by the Paying Agent/Registrar, but on each substi-
tute Bond issued in conversion of and exchange for or replace-
ment of any Bond or Bonds issued under this Ordinance there
shall be printed a certificate, in the form substantially as
follows:
"PAYING AGENT/REGISTRAR' S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Bond Ordinance described on the
face of this Bond; and that this Bond has been issued in
conversion of and exchange for or replacement of a bond, bonds,
or a portion of a bond or bonds of an issue which originally
was approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
of Texas.
Dated By
Paying Agent/Registrar
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 ex-
ecuted. 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, execu-
tion, and delivery of the substitute Bonds in the manner pre-
scribed herein, and said Bonds shall be of type composition
printed on paper with lithographed or steel engraved borders of
customary weight and strength. Pursuant to Vernon's Ann. Tex.
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 converted and exchanged or
replaced Bond shall be valid, incontestable, and enforceable
in the same manner and with the same effect as the Initial Bond
which originally was issued pursuant to this Ordinance, ap-
proved by the Attorney General, and registered by the Comp-
troller of Public Accounts. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for
transferring, converting, and exchanging any Bond or any
portion thereof, but the one requesting any such transfer,
conversion, and exchange shall pay any taxes or governmental
charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege of conversion and
exchange. The Paying Agent/ Registrar shall not be required to
make any such conversion and exchange or replacement of Bonds
or any portion thereof (i) during the period commencing with
the close of business on any Record Date and ending with the
10
opening of business on the next following principal or interest
payment date, or, (ii) with respect to any Bond or portion
thereof called for redemption prior to maturity, within 45 days
prior to its redemption date.
(e) In General. All Bonds issued in conversion and
exchange or replacement of any other Bond or portion thereof,
(i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be
payable only to the registered owners thereof, (ii) may be
redeemed prior to their scheduled maturities, (iii) may be
transferred and assigned, (iv) may be converted and exchanged
for other Bonds, (v) shall have the characteristics, (vi) shall
be signed and sealed, and (vii) the principal of and interest
on the Bonds shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF SUBSTITUTE BOND
set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby
covenants with the registered owners of the Bonds that it will
(i) pay the standard or customary fees and charges of the
Paying Agent/Registrar for its services with respect to the
payment of the principal of and interest on the Bonds, when
due, and (ii) pay the fees and charges of the Paying Agent/
Registrar for services with respect to the transfer of regis-
tration of Bonds, and with respect to the conversion and
exchange of Bonds solely to the extent above provided in this
Ordinance.
(g) Substitute Paying Agent/Registrar. The Issuer coven-
ants with the registered owners of the Bonds that at all times
while the Bonds are outstanding the Issuer will provide a
competent and legally qualified bank, trust company, financial
institution, or other agency to act as and perform the services
of Paying Agent/Registrar for the Bonds under this Ordinance,
and that the Paying Agent/Registrar will be one entity. The
Issuer reserves the right to, and may, at its option, change
the Paying Agent/Registrar upon not less than 120 days written
notice to the Paying Agent/Registrar, to be effective not later
than 60 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any
time acting as Paying Agent/Registrar (or its successor by
merger, acquisition, or other method) should resign or other-
wise cease to act as such, the Issuer covenants that promptly
it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as
Paying Agent/Registrar under this Ordinance. Upon any change
in the Paying Agent/Registrar, the previous Paying Agent/Regis-
trar promptly shall transfer and deliver the Registration Books
(or a copy thereof), along with all other pertinent books and
records relating to the Bonds, to the new Paying Agent/Regis-
trar 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/Reg-
istrar to each registered owner of the Bonds, by United States
mail, first-class postage prepaid, which notice also shall give
the address of the new Paying Agent/Registrar. By accepting
the position and performing as such, each Paying Agent/Regis-
trar 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.
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
11
such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance.
FORM OF SUBSTITUTE BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF ROUND ROCK, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1986
PRINCIPAL
AMOUNT
INTEREST RATE MATURITY DATE DATE OF ORIG. ISSUE CUSIP NO.
April 1, 1986
ON THE MATURITY DATE specified above, THE CITY OF ROUND
ROCK, in Williamson County (the "Issuer"), being a political
subdivision 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 April 1, 1986 to the maturity
date specified above, or the date of redemption prior to matur-
ity, at the interest rate per annum specified above with inter-
est being payable February 1, 1987 and semiannually on each
August 1 and February 1 thereafter; except that if the date of
authentication of this Bond is later than January 15, 1987,
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 (herein-
after defined) 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 First City National Bank of Austin, Austin,
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 pay-
ment date, drawn by the Paying Agent/Registrar on, and payable
solely from, funds of the Issuer required by the ordinance au-
thorizing the issuance of the Bonds (the "Bond Ordinance") to
be on deposit with the Paying Agent/Registrar for such purpose
as hereinafter provided; and such check or draft shall be sent
by the Paying Agent/Registrar by United States mail, first-
class postage prepaid, on each such 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 preced-
ing each such date (the "Record Date") on the Registration
Books kept by the Paying Agent/Registrar, as hereinafter des-
cribed. Any accrued interest due upon the redemption of this
Bond prior to maturity as provided herein shall be paid to the
registered owner at the principal corporate trust office of the
Paying Agent/Registrar upon presentation and surrender of this
Bond for redemption and payment at the principal corporate
trust office of the Paying Agent/Registrar. The Issuer coven-
ants 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
12
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 the Bonds, when due.
IF THE DATE for the payment of the principal of or inter-
est 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, Sun-
day, 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 is one of an issue of Bonds initially dated
April 1, 1986, authorized in accordance with the Constitution
and laws of the State of Texas in the principal amount of
$7,450,000, for the purpose of improving and extending the
Issuer's combined Waterworks and Sewer System.
ON FEBRUARY 1, 1996, or on any interest payment 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 avail-
able source, as a whole, or in part, and, if in part the Issuer
shall select and designate the maturity or maturities and the
amount that is to be redeemed, and if less than a whole matur-
ity is to be called, the Issuer 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 prepayment or redemption. At
least 30 days prior to the date fixed for any redemption of
Bonds or portions thereof prior to maturity a written notice of
such redemption shall be published once in a financial publica-
tion, journal, or reporter of general circulation among secur-
ities dealers in The City of New York, New York (including, but
not limited to, The Bond Buyer and The Wall 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 mail, first class postage pre-
paid, not less than 30 days prior to the date fixed for any
such redemption, to the registered owner of each Bond to be
redeemed at its address as it appeared on the registration
books kept by the Paying Agent/Registrar at the time such
notice of redemption is mailed; 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 re-
demption 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 there-
of. 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 redemp-
tion, and they shall not be regarded as being outstanding ex-
cept for the right of the registered owner to receive the re-
demption price plus accrued interest from the Paying Agent/
Registrar out of the funds provided for such payment. If a
portion of any Bond shall be redeemed a substitute Bond or
13
n
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 unre-
deemed portion thereof, will be issued to the registered owner
upon the surrender thereof for cancellation, at the expense of
I the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTE-
GRAL MULTIPLE OF $5,000 may be assigned and shall be trans-
ferred 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 satisfac-
tory 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 whose name
or names 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 representa-
tive, 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 assignment
and transfer 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 next
paragraph hereof for the conversion and exchange of other
Bonds. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for making such trans-
fer, 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 this Bond or any portion
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 portion 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 shall not be affected by any notice to the
contrary.
ALL 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 as-
signees hereof, be converted into and exchanged for a like
aggregate principal amount of fully registered bonds, without
interest coupons, payable to the appropriate registered owner,
assignee, or assignees, as the case may be, having the same
maturity date, and bearing interest at the same rate, in any
denomination 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 sur-
render of this Bond to the Paying Agent/Registrar for cancella-
tion, 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
14
portion 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 prece-
dent 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 otherwise ceases to act as
such, the Issuer has covenanted in the Bond Ordinance that it
promptly will appoint a competent and legally qualified substi-
tute therefor, and promptly will cause written notice thereof
to be mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly voted, authorized, issued, sold,
and delivered; 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 have
been performed, existed, and been done in accordance with law;
that this Bond is a special obligation; and that the interest
on and principal of this Bond, together with other revenue
bonds of the Issuer, are payable from, and secured by a first
lien on and pledge of the Pledged Revenues, as defined in the
Ordinance authorizing this Series of Bonds, and which include
the Net Revenues of said Issuer's combined Waterworks and Sewer
System.
SAID ISSUER has reserved the right, subject to the re-
strictions 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 lien on and pledge of the Pledged Revenues.
THE HOLDER HEREOF shall never have the right to demand
payment of this obligation out of any funds raised or to be
raised by taxation.
BY BECOMING the registered owner of this Bond, the regis-
tered owner'thereby acknowledges all of the terms and provi-
sions 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 Ordi-
nance constitute a contract between each registered owner
hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be
signed with the facsimile signature of the Mayor of the Issuer
and countersigned with the 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 facsimile, on
this Bond.
(facsimile signature) (facsimile signature)
City Secretary Mayor
(CITY SEAL)
15
FORM OF PAYING AGENT/REGISTRAR' S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Bond Ordinance described on the
face of this Bond; and that this Bond has been issued in
conversion of and exchange for or replacement of a bond, bonds,
or a portion of a bond or bonds of an issue which originally
was approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State
of Texas.
Dated
Paying Agent/Registrar
By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of
this Bond, or duly authorized representative or attorney
thereof, hereby assigns this Bond to
/ /
(Assignee's Social Security
or Taxpayer Identification
Number)
(print or type Assignee's name
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 guaranteed 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.
Section 8. DEFINITIONS. That as used in this Ordinance
the following terms shall have the meanings set forth below,
unless the text hereof specifically indicates otherwise:
(a) The term "Additional Bonds" shall mean the additional
parity revenue bonds which the Issuer reserves the right to
issue in the future in accordance with Section 22 and Section
23 of this Ordinance.
(b) The term "Bonds" shall mean the City of Round Rock,
Texas Waterworks and Sewer System Revenue Bonds, Series 1986
authorized by this Ordinance.
(c) The term "City Council" or "Council" shall mean the
governing body of the Issuer.
16
(d) The term "Government Obligations" shall mean direct
obligations of the United States of America, including obliga-
tions the principal of and interest on which are uncondition-
ally 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.
(e) The terms "Gross Revenues of the System" and "Gross
Revenues" shall mean all revenues and income of every nature
derived or received by the Issuer from the operation and owner-
ship of the System, including the interest income from the
investment or deposit of money in any Fund created by this
Ordinance.
(f) The term "Issuer" shall mean the City of Round Rock,
in Williamson County, Texas.
(g) The terms "Net Revenues of the System", and "Net
Revenues" shall mean all Gross Revenues after deducting there-
from an amount equal to the current expenses of operation and
maintenance of the System, including all salaries, labor,
materials, repairs, and extensions necessary to render effi-
cient service, provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably
and fairly exercised by the adoption of appropriate resolu-
tions, are necessary to keep the System in operation and render
adequate service to said Issuer and the inhabitants thereof, or
such as might be necessary to meet some physical accident or
condition which would otherwise impair the Bonds or Additional
Bonds, shall be deducted in determining "Net Revenues".
Payments required to be made by the Issuer for water supply or
water facilities, sewer services or sewer facilities, fuel
supply, which payments under law constitute operation and
maintenance expenses of any part of the System, shall consti-
tute and be regarded as expenses of operation and maintenance
of the System under this Ordinance. Depreciation and amortiza-
tion shall not constitute or be regarded as expenses of opera-
tion and maintenance of the System.
(h) The term "Outstanding Bonds" shall mean the presently
outstanding Waterworks and Sewer System Refunding Revenue Bonds
of the Issuer described in the preamble of this Ordinance.
(1) The term "Pledged Revenues" shall mean (1) the Net
Revenues, plus (2) resources which are expected to be available
to the Issuer on a regular periodic basis, including, without
limitation, any grants, donations, or income received or to be
received from the United States Government, or any other public
or private source, whether pursuant to an agreement or other-
wise, which in the future may, at the option of the Issuer, be
pledged to the payment of the Bonds or Additional Bonds.
(j) The term "System" shall mean (1) the Issuer's entire
existing waterworks and sewer system, together with all future
extensions, improvements, enlargements, and additions thereto,
and all replacements thereof, and (2) any other related facili-
ties, all or any part of the revenues or income from which do,
in the future, at the option of the Issuer, and in accordance
with law, become "Pledged Revenues" as hereinafter defined;
provided that, notwithstanding the foregoing, and to the extent
now or hereafter authorized or permitted by law, the term
System shall not mean any water, sewer, or other facilities of
any kind which are declared not to be a part of the System, and
which are acquired or constructed by the Issuer with the
proceeds from the issuance of "Special Facilities Bonds", which
are hereby defined as being special revenue obligations of the
Issuer which are not payable from or secured by any Pledged
Revenues, but which are secured by and payable from liens on
and pledges of any other revenues, sources, or payments,
17
•
including, but not limited to, special contract revenues or
payments received from any other legal entity in connection
with such facilities; and such revenues, sources, or payments
shall not be considered as or constitute Gross Revenues of the
System, unless and to the extent otherwise provided in the
ordinance or ordinances authorizing the issuance of such
"Special Facilities Bonds".
(k) The term "year" or "fiscal year" shall mean the
fiscal year used by the Issuer in connection with the operation
of the System.
Section 9. CUMULATIVE EFFECT OF BOND ORDINANCE. That the
Bonds are Additional Bonds issued pursuant to the terms and
conditions as stated in the ordinances authorizing the issuance
of the Outstanding Bonds and that the following sections of
this Bond Ordinance substantially restate and are supplemental
to and cumulative of the like sections in the ordinances that
authorized the Outstanding Bonds so that Sections 9 through 18
of the Bond Ordinance will be applicable to all of the Out-
standing Bonds, Bonds and any Additional Bonds and that the
payment of the interest thereon, together with other revenue
bonds of the Issuer, are secured by and payable from an irre-
vocable first lien on and pledge of the Pledged Revenues all as
more specifically described in the Bond Ordinance.
Section 10. PLEDGE. The Bonds and any Additional Bonds,
and the interest thereon, are and shall be secured by and pay-
able from a first lien on and pledge of the Pledged Revenues,
and the Pledged Revenues are further pledged to the establish-
ment and maintenance of the Funds created by this Ordinance,
and any Funds created by any ordinance authorizing the issuance
of any Additional Bonds. The Bonds and any Additional Bonds
are not and will not be secured by or payable from a mortgage
or deed of trust on any real, personal, or mixed properties
constituting the System.
Section 11. RATES. The Issuer covenants and agrees with
the holders of the Bonds and Additional Bonds as follows:
(a) That it will at all times fix, maintain, charge, and
collect for services rendered by the System, rates and charges
which will produce Gross Revenues, together with any other
Pledged Revenues, at least sufficient to pay all expenses of
operation and maintenance of the System and to provide an
additional amount of Net Revenues to pay promptly all of the
principal of and interest on the Bonds and Additional Bonds and
to make all deposits now or hereafter required to be made into
the Funds created by this Ordinance in connection with the
Bonds and Additional Bonds with such Net Revenues being at
least equal to 1.25 times the principal and interest require-
ments on the Bonds and Additional Bonds.
(b) If the System should become legally liable for any
other obligations or indebtedness, the Issuer shall fix,
maintain, charge and collect additional rates and charges for
services rendered by the System sufficient to establish and
maintain funds for the payment thereof.
Section 12. SYSTEM FUND. That there is hereby created
and there shall be established and maintained on the books of
the Issuer, and accounted for separate and apart from all other
funds of the Issuer, a special fund to be entitled the "City of
Round Rock Waterworks and Sewer System Fund" (the "System
Fund"). All Gross Revenues shall be credited to the System
Fund immediately upon receipt, unless otherwise provided in
this Ordinance. All current expenses of operation and mainten-
ance of the System shall be paid from such Gross Revenues
credited to the System Fund as a first charge against same.
18
Before making any deposits hereinafter required to be made from
the System Fund, the Issuer shall retain in the System Fund at
all times an amount at least equal to one-sixth of the amount
budgeted for the then current fiscal year for the current
operation and maintenance expenses of the System.
Section 13. INTEREST AND SINKING FUND. That for the
sole purpose of paying the principal of and interest on all
Bonds and Additional Bonds, there is hereby created and there
shall be established and maintained on the books of the Issuer,
and accounted for separate and apart from all other funds of
the Issuer, a separate fund to be entitled the "City of Round
Rock Waterworks and Sewer System Revenue Bonds Interest and
Sinking Fund" (the "Interest and Sinking Fund") .
Section 14. RESERVE FUND. That there is hereby created
and there shall be established and maintained at the Issuer's
depository bank a separate fund to be entitled the "City of
Round Rock Waterworks and Sewer System Bonds and Additional
Bonds Reserve Fund" (the "Reserve Fund"). The Reserve Fund
shall be used to pay the principal of and interest on any Bonds
or Additional Bonds when and to the extent the amounts in the
Interest and Sinking Fund available for such payment are
insufficient for such purpose, and may be used for the purpose
of finally retiring the last of any Bonds or Additional Bonds.
Section 15. DEPOSITS OF PLEDGED REVENUES. That Pledged
Revenues shall be credited to or deposited in the Interest and
Sinking Fund, the Reserve Fund and other funds when and as
required by this Ordinance and any ordinance authorizing the
issuance of Additional Bonds.
Section 16. INVESTMENTS. That money in any Fund estab-
lished pursuant to this Ordinance or any ordinance authorizing
the issuance of Additional Bonds, 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 be
invested in Government Obligations (as defined in Section 6
hereof) or obligations guaranteed or insured by the United
States of America, which, in the opinion of the Attorney
General of the United States, are backed by its full faith and
credit or represent its general obligations, or invested in
obligations of instrumentalities of the United States of
America, including, but not limited to, evidences of indebted-
ness issued, insured, or guaranteed by such governmental
agencies as the Federal Land Banks, Federal Intermediate Credit
Banks, Banks for Cooperatives, Federal Home Loan Banks, Govern-
ment National Mortgage Association, United States Postal
Service, Farmers Home Administration, Federal Home Loan Mort-
gage 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, in the
opinion of the Issuer, permit the money required to be expended
from any Fund to be available at the proper time or times as
expected to be needed. Such investments (except United States
Treasury Obligations --State and Local Government Series invest-
ments held in book entry form, which shall at all times be
valued at cost) shall be valued in terms of current market
value as of the last day of each fiscal year. Unless otherwise
set forth herein, all interest and income derived from such
deposits and investments immediately shall be credited to, and
any losses debited to, the Fund from which the deposit or
investment was made, and surpluses in any Fund shall or may be
disposed of as hereinafter provided. Such investments shall be
sold promptly when necessary to prevent any default in connec-
tion with the Bonds or Additional Bonds consistent with the
ordinances, respectively, authorizing their issuance.
19
Section 17. FUNDS SECURED. That money in all Funds
created by this Ordinance, to the extent not invested, shall be
secured in the manner prescribed by law.
Section 18. PRIORITY OF DEPOSITS AND PAYMENTS FROM SYSTEM
FUND. That the Issuer shall make the deposits and payments
from Pledged Revenues in the System Fund when and as required
by this Ordinance and any ordinance authorizing any Additional
Bonds, and such deposits shall be made in the following manner
and with the following irrevocable priorities, respectively:
First, to the Interest and Sinking Fund, when and in the
amounts required by this Ordinance and any ordinance
authorizing any Additional Bonds;
Second, to the Reserve Fund, when and in the amounts required
by this Ordinance and any ordinance authorizing any
Additional Bonds; and
Section 19. INTEREST AND SINKING FUND REQUIREMENTS. (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 Issuer shall transfer from the Pledged
Revenues and deposit to the credit of the Interest and Sinking
Fund the amounts, at the times, as follows:
(1) such amounts, deposited in approximately equal
monthly installments on or before the 25th 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 25th day thereof, as will be
sufficient, together with other amounts, if any, then on
hand in the Interest and Sinking Fund and available for
such purpose, to pay interest scheduled to accrue and come
due on the Bonds, Outstanding Bonds and Additional Bonds
on the next succeeding interest payment date;
(2) such amounts, deposited in approximately equal
monthly installments on or before the 25th 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 25th day thereof, as will be
sufficient, together with other amounts, if any, then on
hand in the Interest and Sinking Fund and available for
such purpose, to pay principal scheduled to mature and
come due on the Bonds, Outstanding Bonds, and any Addi-
tional Bonds on the next succeeding principal payment
date; and
Section 20. RESERVE FUND REQUIREMENTS. That the Issuer
shall cause to be deposited into the Reserve Fund on the 25th
day of each month hereafter a total deposit of $14,555 until
the Reserve Fund shall contain an aggregate amount of
$1,503,748. The Issuer shall maintain in the Reserve Fund an
amount of money and investments equal to the average annual
principal and interest requirements of the Bonds (the "Required
Reserve Amount"). Following the issuance of Additional Bonds,
the Required Reserve Amount shall be equal to the average
annual principal and interest requirements of all Bonds and
Additional Bonds then outstanding. After the delivery of any
Additional Bonds the Issuer shall cause the Reserve Fund to be
increased, if and to the extent necessary, so that such fund
will contain an amount of money and investments equal to the
Required Reserve Amount. Any increase in the Required Reserve
Amount may be funded from Pledged Revenues or from proceeds
20
from the sale of any Additional Bonds, or any other available
source or combination of sources. All or any part of the Re-
quired Reserve Amount not funded initially and immediately
after the delivery of any installment or issue of Additional
Bonds shall be funded, within not more than five years from the
date of such delivery, by deposits of Pledged Revenues in
approximately equal monthly installments on or before the 25th
day of each month. Principal amounts of the Bonds and any
Additional Bonds which must be redeemed pursuant to any applic-
able mandatory redemption requirements shall be deemed to be
maturing amounts of principal for the purpose of calculating
principal and interest requirements on such bonds. When and so
long as the amount in the Reserve Fund is not less than the
Required Reserve Amount no deposits shall be made to the credit
of the Reserve Fund; but when and if the Reserve Fund at any
time contains less than the Required Reserve Amount, then the
Issuer shall transfer from Pledged Revenues in the System Fund,
and deposit to the credit of the Reserve Fund, monthly on or
before the 25th day of each month, a sum equal to 1/60th of the
Required Reserve Amount, until the Reserve Fund is restored to
the Required Reserve Amount. The Issuer specifically covenants
that when and so long as the Reserve Fund contains the Required
Reserve Amount, the Issuer shall cause all interest and income
derived from the deposit or investment of the Reserve Fund to
be deposited to the credit of the System Fund.
Section 21. DEFICIENCIES; EXCESS PLEDGED REVENUES. (a)
That if on any occasion there shall not be sufficient Pledged
Revenues to make the required deposits into the Interest and
Sinking Fund or the Reserve Fund, such deficiency shall be made
up as soon as possible from the next available Pledged Rev-
enues.
(b) That, subject to making the required deposits to the
credit of the various Funds when and as required by this
Ordinance or any ordinance authorizing the issuance of Addi-
tional Bonds, any surplus Pledged Revenues may be used by the
Issuer for any lawful purpose.
Section 22. PAYMENT OF BONDS AND ADDITIONAL BONDS. On or
before January 25, 1987, and semiannually on or before each
July 25 and January 25 thereafter while any of the Bonds,
Outstanding Bonds or Additional Bonds are outstanding and un-
paid the Issuer shall make available to the Paying Agent/Regis-
trar therefor, out of the Interest and Sinking Fund, or if
necessary, out of the Reserve Fund, money sufficient to pay, on
each of such dates, the principal of and interest on the Bonds,
Outstanding Bonds and Additional Bonds as the same matures and
comes due, or to redeem the Bonds, Outstanding Bonds or Addi-
tional Bonds prior to maturity, either upon mandatory redemp-
tion or at the option of the Issuer. At the direction of the
Issuer the Paying Agent/Registrar shall either deliver paid
Bonds, Outstanding Bonds and Additional Bonds to the Issuer or
destroy all paid Bonds, Outstanding Bonds and Additional Bonds,
and furnish the Issuer with an appropriate certificate of can-
cellation or destruction.
Section 23. ADDITIONAL BONDS. (a) That the Issuer shall
have the right and power at any time and from time to time, and
in one or more series or issues, to authorize, issue, and de-
liver additional parity revenue bonds (herein called "Addition-
al Bonds"), in accordance with law, in any amounts, for any
lawful purpose, including the refunding of any Bonds or Addi-
tional Bonds, or other obligations. Such Additional Bonds, if
and when authorized, issued, and delivered in accordance with
this Ordinance, shall be payable from and secured by an irrev-
ocable first lien on and pledge of the Pledged Revenues,
equally and ratably on a parity in all respects with the Bonds
and any other outstanding Additional Bonds.
21
ci
(b) That the principal of all Additional Bonds must be
scheduled to be paid or mature on February 1 or August 1 (or
both) of the years in which such principal is scheduled to be
paid or mature.
Section 24. FURTHER REQUIREMENTS FOR ADDITIONAL BONDS.
That Additional Bonds shall be issued only in accordance with
this Ordinance, and no installment, Series, or issue of Addi-
tional Bonds shall be issued or delivered unless:
(a) The Mayor of the Issuer and the City Secretary sign a
written certificate to the effect that the Issuer is not in
default as to any covenant, condition, or obligation in connec-
tion with all then outstanding Bonds and Additional Bonds, and
the ordinances authorizing same, and that the Interest and
Sinking Fund and the Reserve Fund each contains the amount then
required to be therein.
(b) An independent certified public accountant, or in-
dependent firm of certified public accountants, acting by and
through a certified public accountant, signs a written certifi-
cate to the effect that, in his or its opinion, during either
the next preceding fiscal year, or any twelve consecutive
calendar month period out of the 18 -month period immediately
preceding the month in which the ordinance authorizing the
issuance of the then proposed Additional Bonds is passed, the
Pledged Revenues were at least 1.25 times an amount equal to
the average annual principal and interest requirements and 1.10
times the maximum annual principal and interest requirements of
all Bonds and Additional Bonds which are scheduled to be
outstanding after the delivery of the then proposed Additional
Bonds. It is specifically provided, however, that in calculat-
ing the amount of Pledged Revenues for the purposes of this
subsection (b), if there has been any increase in the rates or
charges for services of the System which is then in effect, but
which was not in effect during all or any part of the entire
period for which the Pledged Revenues are being calculated
(hereinafter referred to as the "entire period") then the
certified public accountant, or in lieu of the certified public
accountant a firm of consulting engineers, shall determine and
certify the amount of Pledged Revenues as being the total of
(i) the actual Pledged Revenues for the entire period, plus
(ii) a sum equal to the aggregate amount by which the actual
billings to customers of the System during the entire period
would have been increased if such increased rates or charges
had been in effect during the entire period.
(c) Provision shall be made in the ordinance authorizing
their issuance for increasing the Reserve Fund to the Required
Reserve Amount as required by Section 17 hereof with proceeds
of the Additional Bonds, or other available source or combina-
tion of sources including Pledged Revenues, or both.
(e) That all calculations of average annual principal and
interest requirements of any bonds made in connection with the
issuance of any then proposed Additional Bonds shall be made as
of the date of such Additional Bonds; and also in making
calculations for such purpose, and for any other purpose under
this Ordinance, principal amounts of any bonds which must be
redeemed prior to maturity pursuant to any applicable mandatory
redemption requirements shall be deemed to be maturing amounts
of principal of such bonds.
Section 25. GENERAL COVENANTS. The Issuer further cove-
nants and agrees that in accordance with and to the extent
required or permitted by law:
(a) Performance. It will faithfully perform at all times
any and all covenants, undertakings, stipulations, and
22
provisions contained in this Ordinance, and each ordinance
authorizing the issuance of Additional Bonds, and in each and
every Bond and Additional Bond; that it will promptly pay or
cause to be paid the principal of and interest on every Bond
and Additional Bond, on the dates and in the places and manner
prescribed in such ordinances and Bonds or Additional Bonds;
and that it will, at the times and in the manner prescribed,
deposit or cause to be deposited the amounts required to be
deposited into the Interest and Sinking Fund and the Reserve
Fund; and any holder of the Bonds or Additional Bonds may
require the Issuer, its officials, and employees, to carry out,
respect, or enforce the covenants and obligations of this
Ordinance, or any ordinance authorizing the issuance of Addi-
tional Bonds, by all legal and equitable means, including
specifically, but without limitation, the use and filing of
mandamus proceedings, in any court of competent jurisdiction,
against the Issuer, its officials, and employees.
(b) Issuer's Legal Authority. The Issuer is a duly
created and existing home rule city of the State of Texas, and
is duly authorized under the laws of the State of Texas to
create and issue the Bonds and Additional Bonds; that all
action on its part for the creation and issuance of the said
obligations has been or will be duly and effectively taken, and
that said obligations in the hands of the holders and owners
thereof are and will be valid and enforceable special obliga-
tions of the Issuer in accordance with their terms.
(c) Title. The Issuer has or will obtain lawful title to
the lands, buildings, structures, and facilities constituting
the System, that it warrants that it will defend the title to
all the aforesaid lands, buildings, structures, and facilities,
and every part thereof, for the benefit of the holders and
owners of the Bonds and Additional Bonds, against the claims
and demands of all persons whomsoever, that it is lawfully
qualified to pledge the Pledged Revenues to the payment of the
Bonds and Additional Bonds in the manner prescribed herein, and
has lawfully exercised such rights.
(d) Liens. The Issuer will from time to time and before
the same become delinquent pay and discharge all taxes, assess-
ments, and governmental charges, if any, which shall be law-
fully imposed upon it, or the System, that it will pay all
lawful claims for rents, royalties, labor, materials, and
supplies which if unpaid might by law become a lien or charge
thereon, the lien of which would be prior to or interfere with
the liens hereof, so that the priority of the liens granted
hereunder shall be fully preserved in the manner provided
herein, and that it will not create or suffer to be created any
mechanic's, laborer's, materialman's, or other lien or charge
which might or could be prior to the liens hereof, or do or
suffer any matter or thing whereby the liens hereof might or
could be impaired; provided, however, that no such tax, assess-
ment, or charge, and that no such claims which might be used as
the basis of a mechanic's, laborer's, materialman's, or other
lien or charge, shall be required to be paid so long as the
validity of the same shall be contested in good faith by the
Issuer.
(e) Operation of System; No Free Service. While the
Bonds or any Additional Bonds are outstanding and unpaid the
Issuer shall continuously and efficiently operate the System,
and shall maintain the System, or cause the System to be opera-
ted and maintained in good condition, repair, and working
order, all at reasonable cost. No free service of the System
shall be allowed, and should the Issuer or any of its agencies,
instrumentalities, lessors, or concessionaires make use of the
services and facilities of the System, payment monthly of the
standard retail price of the services provided shall be made by
23
the Issuer or any of its agencies, instrumentalities, lessors,
or concessionaires out of funds from sources other than the
revenues of the System, unless made from surplus Pledged
Revenues as permitted by Section 18(b) hereof.
(f) Further Encumbrance. While the Bonds or any Addi-
tional Bonds are outstanding and unpaid, the Issuer shall not
additionally encumber the Pledged Revenues in any manner,
except as permitted in this Ordinance in connection with
Additional Bonds, unless said encumbrance is made junior and
subordinate in all respects to the liens, pledges, covenants,
and agreements of this Ordinance and any ordinance authorizing
the issuance of Additional Bonds; but the right of the Issuer
to issue revenue bonds payable from a subordinate lien on
surplus Pledged Revenues is specifically recognized and
retained.
(g) Sale or Disposal of Property. While the Bonds or any
Additional Bonds are outstanding and unpaid, the Issuer shall
not sell, convey, mortgage, encumber, lease, or in any manner
transfer title to, or dedicate to other use, or otherwise
dispose of, the System, (except as permitted in paragrah (n)
hereof) or any significant or substantial part thereof;
provided that whenever the Issuer deems it necessary to dispose
of any property, machinery, fixtures, or equipment, or dedicate
such property to other use, it may do so either when it has
made arrangements to replace the same or provide substitutes
therefor, or it is determined by resolution of the City Council
that no such replacement or substitute is necessary.
(h) Insurance. (1) The Issuer shall cause to be insured
such parts of the System as would usually be insured by corpor-
ations operating like properties, with a responsible insurance
company or companies, against risks, accidents, or casualties
against which and to the extent insurance is usually carried by
corporations operating like properties, including, to the
extent reasonably obtainable, fire and extended coverage
insurance, insurance against damage by floods, and use and
occupancy insurance. Public liability and property damage
insurance also shall be carried unless the City Attorney gives
a written opinion to the effect that the Issuer is not liable
for claims which would be protected by such insurance. All
insurance premiums shall be paid as an expense of operation of
the System. At any time while any contractor engaged in
construction work shall be fully responsible therefor, the
Issuer shall not be required to carry insurance on the work
being constructed if the contractor is required to carry
appropriate insurance. All such policies shall be open to the
inspection of the Bondholders and their representatives at all
reasonable times. Upon the happening of any loss or damage
covered by insurance from one or more of said causes, the
Issuer shall make due proof of loss and shall do all things
necessary or desirable to cause the insuring companies to make
payment in full directly to the Issuer. The proceeds of
insurance covering such property, together with any other funds
necessary and available for such purpose, shall be used forth-
with by the Issuer for repairing the property damaged or
replacing the property destroyed; provided, however, that if
said insurance proceeds and other funds are insufficient for
such purpose, then said insurance proceeds pertaining to the
System shall be deposited in a special and separate trust fund,
at an official depository of the Issuer, to be designated the
Insurance Account. The Insurance Account shall be held until
such time as other funds become available which, together with
the Insurance Account, will be sufficient to make the repairs
or replacements originally required.
(2) The annual audit hereinafter required may contain a
section commenting on whether or not the Issuer has complied
24
11
with the requirements of this Section with respect to the
maintenance of insurance, and shall state whether or not all
insurance premiums upon the insurance policies to which refer-
ence is made have been paid.
(i) Annual Budget and Rate Covenant. The Issuer shall
prepare, prior to the beginning of each fiscal year, an annual
budget, in accordance with law, reflecting an estimate of cash
receipts and disbursements for the ensuing fiscal year in
sufficient detail to indicate the probable Gross Revenues and
Pledged Revenues for such fiscal year. The Issuer shall fix,
establish, maintain, and collect, such rates, charges, and fees
for the use and availability of the System at all times as are
necessary (1) to produce Gross Revenues sufficient, together
with any other Pledged Revenues, to pay all current operation
and maintenance expenses of the System, and (2) to produce an
amount of Pledged Revenues during each fiscal year at least
1.25 times the annual principal and interest requirements of
all then outstanding Bonds and Additional Bonds.
(j) Records. The Issuer shall keep proper books of
record and account in which full, true, proper, and correct
entries will be made of all dealings, activities, and trans-
actions relating to the System, the Pledged Revenues, and the
Funds created pursuant to this Ordinance, and all books,
documents, and vouchers relating thereto shall at all reason-
able times be made available for inspection upon request of any
Bondholder or citizen of the Issuer. To the extent consistent
with the provisions of this Ordinance, the Issuer shall keep
its books and records in a manner conforming to standard
accounting practices as usually would be followed by private
corporations owning and operating a similar System, with
appropriate recognition being given to essential differences
between municipal and corporate accounting practices.
(k) Audits. After the close of each fiscal year while
any of the Bonds or any Additional Bonds are outstanding, an
audit will be made of the books and accounts relating to the
System and the Pledged Revenues by an independent certified
public accountant or an independent firm of certified public
accountants. As soon as practicable after the close of each
such year, and when said audit has been completed and made
available to the Issuer, a copy of such audit for the preceding
year shall be mailed to the Municipal Advisory Council of
Texas, to each paying agent for any bonds payable from Pledged
Revenues, to any Bondholders who shall so request in writing,
and to First Southwest Company. The annual audit reports shall
be open to the inspection of the Bondholders and their agents
and representatives at all reasonable times.
(1) Governmental Agencies. 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 Issuer has or will obtain and keep in full
force and effect all franchises, permits, authorization, and
other requirements applicable to or necessary with respect to
the acquisition, construction, equipment, operation, and
maintenance of the System.
(m) No Competition. It will not operate, or grant any
franchise or, to the extent it legally may, permit the acquisi-
tion, construction, or operation of, any facilities which would
be in competition with the System, and to the extent that it
legally may, the Issuer will prohibit any such competing
facilities.
(n) District or River Authority Contract. Nothing herein
shall be construed to prevent the Issuer from making contracts
25
fi
with a district or river authority operating pursuant to
Article 16, Section 59 of the Texas Constitution, as authorized
by Chapter 30, Texas Water Code, or Article 4413 (32c),
V.A.T.C.S., under which a district or river authority will make
a sewer system or water system or portions thereof available to
the Issuer, and will furnish waste water collection,
transportation, treatment, disposal services or water treatment
or water transportation facilities to the Issuer, through the
district's or river authority's sewer system or water system or
in such other manner as deemed appropriate by the Issuer. Such
contracts may provide for the operation, or the acquisition by
purchase or lease, of the Issuer's waste water treatment and
disposal facilities or water treatment or water transportation
facilities, in whole or in part, by the district or river
authority.
Section 26. DEFEASANCE OF THE 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 26, 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 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 have been provided for on
or before such due date by irrevocably depositing with or
making 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 reinvestment, of suffi-
cient money to provide for such payment, and when proper
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 revenue 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/Regis-
trar may at the written direction of the Issuer also be in-
vested 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 depos-
ited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this
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 States Treasury obligations such
as its State and Local Government Series, which may be in
book -entry form.
(d) Until all Defeased 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
if they had not been defeased, and the Issuer shall make proper
arrangements to provide and pay for such services as required
by this Ordinance.
26
Section 27. DAMAGED, MUTILATED, LOST, STOLEN, OR DE-
STROYED 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 print-
ed, executed, and delivered, a new bond of the same principal
amount, 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 loss, 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 muti-
lated.
(c) No Default Occurred. Notwithstanding the foregoing
provisions of this Section, in the event any such Bond shall
have matured, and no default has occurred which is then con-
tinuing 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 Issuing Replacement Bonds. Prior to the
issuance of any replacement bond, the Paying Agent/Registrar
shall charge the registered owner of such Bond with all legal,
printing, and other expenses 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 atsany time, or be enforceable by anyone, and shall 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 accor-
dance with Section 6 of Vernon's Ann. Tex. Civ. St. Art.
717k-6, this Section 25 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 authen-
ticate 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 28. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS;
BOND COUNSEL'S OPINION, AND CUSIP NUMBERS. The Mayor of the
Issuer is hereby authorized to have control of the Initial
Bonds issued hereunder and all necessary records and pro-
ceedings pertaining to the Initial Bonds pending their delivery
and their 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
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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
Certificate on each Initial Bond, and the seal of said Comp-
troller shall be impressed, or placed in facsimile, on each
Initial Bond. The approving legal opinion of the Issuer's Bond
Counsel and the assigned CUSIP numbers may, at the option of
the Issuer, be printed on each Initial Bond or on any Bonds
issued and delivered in conversion of and exchange or replace-
ment of any Bond, but neither shall have any legal effect, and
shall be solely for the convenience and information of the
registered owners of the Bonds.
Section 29. NO ARBITRAGE. The Issuer covenants to and
with the registered owners of the Bonds that it will make no
use of the proceeds of the Bonds at any time throughout the
term of this issue of Bonds which, if such use had been reason-
ably expected on the date of delivery of the Bonds to and
payment for the Bonds by the purchasers, would have caused the
Bonds to be arbitrage bonds within the meaning of Section
103(c) of the Internal Revenue Code of 1954, as amended, or any
regulations or rulings pertaining thereto; and by this covenant
the Issuer is obligated to comply with the requirements of the
aforesaid Section 103(c) and all applicable and pertinent
Department of the Treasury regulations relating to arbitrage
bonds. The Issuer further covenants that the proceeds of the
Bonds will not otherwise be used directly or indirectly so as
to cause all or any part of the Bonds to be or become arbitrage
bonds within the meaning of the aforesaid Section 103(c), or
any regulations or rulings pertaining thereto.
Section 30. SALE OF INITIAL BOND. The Initial Bond is
hereby sold and shall be delivered to R v1.-)
for cash for the par value thereof and accrued interest thereon
to date of delivery, plus a premium of $ 0 . It is hereby
officially found, determined, and declared that the Initial
Bond has been sold at public sale to the bidder offering the
lowest interest cost, after receiving sealed bids pursuant to
an Official Notice of Sale and Bidding Instructions and Offi-
cial Statement dated February 27, 1986, prepared and
distributed in connection with the sale of the Initial Bond.
Said Official Notice of Sale and Bidding Instructions and
Official Statement, and any addenda, supplement, or amendment
thereto have been and are hereby approved by the governing body
of the Issuer, and their use in the offer and sale of the Bonds
is hereby approved. It is further officially found,
determined, and declared that the statements and repre-
sentations contained in said Official Notice of Sale and
Official Statement are true and correct in all material re-
spects, to the best knowledge and belief of the governing body
of the Issuer.
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