HomeMy WebLinkAboutORD 89-59 e _ 69
ORDINANCE AUTHORIZING THE ISSUANCE OF
THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE AND REFUNDING BONDS, SERIES 1989;
AUTHORIZING THE ADVANCE REFUNDING AND
REDEMPTION PRIOR TO MATURITY OF
THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE REFUNDING BONDS,
SERIES 1983; AU'T'HORIZING THE EXECUTION AND
DELIVERY OF AN ESCROW AGREEMENT AND
THE SUBSCRIPTION FOR AND PURCHASE OF
CERTAIN ESCROWED SECURITIES; AND
CONTAINING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
THE CITY OF BEAUMONT §
WHEREAS, the City of Beaumont, Texas (the "City" ) is
authorized, pursuant to Articles 1111 et seq. , Vernon' s
Texas Civil Statutes, as amended, to issue bonds payable
from the net revenues of its waterworks and sewer system and
to issue such bonds, without an election, for money for
acquisitions, extensions, construction, improvement or
repair of such system; and
WHEREAS, the City now desires to issue bonds in order
to provide for certain acquisitions, extensions,
construction, improvement or repair of its waterworks and
sewer system and has given notice as required by Section
252.041 of V.T.C.A. , Local Government Code, as amended, and
Article 2368a, Vernon' s Texas Civil Statutes, as amended, of
its intention to issue such bonds as hereinafter authorized
and has not received any petitions for a referendum
concerning issuance of such bonds; and
WHEREAS, the City has heretofore issued its City of
Beaumont, Texas, Waterworks and Sewer System Revenue
Refunding Bonds, Series 1983 (the "Refunded Bonds" ) and now
desires to refund the Refunded Bonds in advance of their
maturities; and
WHEREAS, Article 717k and Articles 1111 et seq. ,
Vernon's Texas Civil Statutes, as amended, authorize the
City to issue refunding bonds for the purpose of refunding
the Refunded Bonds in advance of their maturities, and to
accomplish such refunding by depositing directly with any
paying agent for the Refunded Bonds the proceeds of such
refunding bonds, together with other available funds, in an
amount sufficient to provide for the payment or redemption
of the Refunded Bonds, and provides that such deposit shall
constitute the making of firm banking and financial
arrangements for the discharge and final payment or
redemption of the Refunded Bonds; and
WHEREAS, the City desires to call certain of the
Refunded Bonds for redemption prior to their maturities; and
WHEREAS, the City desires to authorize the execution of
an escrow agreement and provide for the deposit of proceeds
of the refunding bonds to pay and redeem the Refunded Bonds;
and
WHEREAS, upon the issuance of the refunding bonds
herein authorized and the deposit of funds referred to
above, the Refunded Bonds shall no longer be regarded as
being outstanding, except for the purpose of being paid
pursuant to such deposit, and the pledges, liens, trusts and
all other covenants, provisions, terms and conditions of the
ordinance authorizing the issuance of the Refunded Bonds
shall be discharged, terminated and defeased; Now, Therefore
BE IT ORDAINED BY THE CITY OF BEAUMONT:
1. Consideration. It is hereby found and determined
that the transactions contemplated in this Ordinance will
benefit the City by providing a savings in debt service, and
that such benefit is sufficient consideration for the
refunding of the Refunded Bonds.
2 . Definitions. Throughout this ordinance the
following terms and expressions as used herein shall have
the meanings set forth below
The term "Additional Parity Bonds" shall mean the
additional parity revenue bonds permitted to be issued by
the City pursuant to Section 20 of this Ordinance.
The term "Annual Principal and Interest Requirements"
shall mean, with respect to Parity Bonds, Junior Lien Bonds,
or any one or more series thereof, and with respect to any
Fiscal Year, all payments of principal and interest
scheduled to become due during such Fiscal Year by reason of
an interest payment date or a maturity or mandatory
redemption date occurring after the date of calculation.
The term "Average Annual Principal and Interest
Requirements" shall mean, with respect to any series of
Parity Bonds and/or Junior Lien Bonds, an amount calculated
by dividing the total Annual Principal and Interest
Requirements on such bonds by the number of Fiscal Years
remaining until the last maturity of such bonds.
-2-
The term "Bond Register" shall mean the books of
registration kept by the Registrar in which are maintained
the names and addresses of, and the principal amounts of the
Bonds registered to, each Owner.
The term "Bonds" shall mean the $16,840, 000 The City of
Beaumont, Texas, Waterworks and Sewer System Revenue and
Refunding Bonds, Series 1989 authorized in this Ordinance,
unless the context clearly indicates otherwise.
The term "City" shall mean The City of Beaumont, Texas.
The term "Financial Guaranty Agreement" shall mean a
financial guaranty agreement between the City and an Insurer
providing for issuance of a Qualified Surety Bond, payment
of any premiums therefor, and reimbursement of any amounts
advanced thereunder.
The term "Fiscal Year" shall mean the City' s fiscal
year which currently runs from October 1 to September 30,
brut which may be changed from time to time by the City.
The term "Gross Revenues" shall mean all revenues,
income and receipts of every nature derived or received by
the City from the operation and ownership of the System (but
excluding any utility deposits) , the interest income from
the investment or deposit of money in the Revenue Fund, the
Interest and Sinking Fund, the Reserve Fund, the Junior Lien
Bond Interest and Sinking Fund, the Junior Lien Bond Reserve
Fund and any other revenues hereafter pledged to the payment
of all Parity Bonds.
The term "Holder" or "holders" shall mean the owner or
owners, as the case may be, of one or more Bonds.
The term "Insurer" shall mean MBIA and any other
insurance company which issues a Qualified Surety Bond and
which has been rated in the highest rating category by A. M.
Best & Company, Standard & Poor' s Corporation or Moody' s
Investors Services, Inc.
The term "Interest Payment Date" , when used in
connection with any Bond, shall mean March 1, 1990, and each
September 1 and March 1 thereafter until maturity or earlier
redemption of such Bond.
The term "Issuance Date" shall mean the date on which
the Bonds are delivered to and paid for by the Underwriters.
The term "Junior Lien Bonds" shall mean the City of
Beaumont, Texas, Waterworks and Sewer System Revenue
-3-
Refunding Bonds, Series 1981 , issued in the original
principal amount of $3 , 740,000 and all additional junior
lien bonds which may be hereafter issued.
The term "MBIA" shall mean The Municipal Bond Investors
Assurance Corporation and its successors.
The term "MBIA Financial Guaranty Agreement" shall mean
the Financial Guaranty Agreement between the City and MBIA
pursuant to which MBIA has issued the MBIA Reserve Fund
Surety Bond.
The term "MBIA Reserve Fund Surety Bond" shall mean the
Qualified Surety Bond issued by MBIA contemporaneously with
sale and delivery of the Bonds.
The term "Maintenance and Operation Expenses" shall
mean the reasonable and necessary expenses of operation and
maintenance of the System, including all salaries, labor,
materials, repairs and extensions necessary to render
efficient service (but only such repairs and extensions as,
in the judgment of the governing body of the City, are
necessary to keep the System in operation and render
adequate service to the City and the inhabitants thereof, or
such as might be necessary to meet some physical accident or
conditions which would otherwise impair the Parity Bonds or
Junior Lien Bonds) , and all payments under contracts now or
hereafter defined as operating expenses by the Legislature
of the State of Texas. Depreciation shall never be
considered as a Maintenance and Operation Expense.
The term "Municipal Bond Guaranty Insurance Policy"
shall mean the municipal bond guaranty insurance policy
issued by MBIA insuring the payment when due of the
principal of and interest on the Bonds as provided therein.
The term "Net Revenues" shall mean all Gross Revenues
remaining after deducting the Maintenance and Operation
Expenses.
The term "Ordinance" as used herein and in the Bonds
shall mean this ordinance authorizing the Bonds.
The term "Owner" shall mean any person who shall be the
registered owner of any outstanding Bonds.
The term "Parity Bonds" shall mean the Bonds and each
series of Additional Parity Bonds from time to time
hereafter issued, but only to the extent such Parity Bonds
remain outstanding within the meaning of this Ordinance.
-4-
The term "Paying Agent" shall mean the Registrar.
The term "Qualified Surety Bond" shall mean the MBIA
Reserve Fund Surety Bond and any other surety bond which is
issued by an Insurer and which provides that if insufficient
amounts are on deposit in the Reserve Fund for transfer to
the Interest and Sinking Fund in order to pay when due
principal of and interest on the Bonds with respect to which
the surety bond has been issued, the Insurer shall deposit
in the Reserve Fund an amount equal to the face amount of
the surety bond less any unreimbursed deposits previously
made by the Insurer thereunder.
The term "Record Date" shall mean the fifteenth ( 15th)
calendar day of the month next preceding each Interest
Payment Date.
The term "Refunded Bonds" shall mean the City' s
Waterworks and Sewer System Revenue Refunding Bonds, Series
1983, maturing on September 1 in the years 1990 through 1998
in the aggregate principal amounts of $865, 000, $885, 000,
$950,000, $1,030,000, $1 , 750,000, $1, 700,000, $1, 645, 000,
$1, 585, 000, and $1, 535,000, respectively.
The term "Registrar" shall mean Citibank, N.A. , New
York, New York, and its successors in that capacity.
The term "Reserve Fund Requirement" shall mean, with
respect to any series of Parity Bonds and/or Junior Lien
Bonds, an amount equal to the Average Annual Principal and
Interest Requirement on the respective series.
The term "Special Project" shall mean, to the extent
permitted by law, any property, improvement or facility
declared by the City not to be part of the System and
substantially all of the costs of the acquisition,
construction and installation of which is paid from proceeds
of a financing transaction other than the issuance of Parity
Bonds or other bonds payable from ad valorem taxes or
revenues of the System and for which all maintenance and
operation expenses are payable from sources other than ad
valorem taxes or revenues of the System, but only to the
extent that and for so long as all or any part of the
revenues or proceeds of which are or will be pledged to
secure the payment or repayment of such costs of
acquisition, construction and installation under such
financing transaction.
The term "System" shall mean all properties,
facilities, improvements, equipment, interest, rights and
powers constituting the waterworks and sewer system of the
-5-
City, including all future extensions, replacements,
betterments, additions, improvements, enlargements,
acquisitions, purchases and repairs to the System, but
excluding all Special Projects.
The term "Underwriters" shall mean Rauscher Pierce
Refsnes, Inc. , Dean Witter Reynolds, Inc. , First Southwest
Company, Lovett Mitchell Webb & Garrison, Crews &
Associates, Inc. , and Cowen & Company in association with
Prudential-Bache Securities and Kidder Peabody & Co. , Inc.
3 . Authorization. The Bonds shall be issued in fully
registered form in the total authorized aggregate amount of
SIXTEEN MILLION EIGHT HUNDRED FORTY THOUSAND AND NO 1100
DOLLARS ($16,840, 000.00) for the purpose of (i) advance
refunding all of the outstanding Refunded Bonds,
(ii ) providing money for acquisitions, extensions,
construction, improvement, or repair of the System, and
(iii ) paying all costs of issuance of the Bonds.
4. Designation, Date, and Interest Payment Dates.
The Bonds shall be designated as "THE CITY OF BEAUMONT,
TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE AND REFUNDING
BONDS, SERIES 1989" and shall be dated September 1, 1989 .
The Bonds shall bear interest at the rates set forth in
Section 5 below from the later of September 1, 1989, or the
most recent Interest Payment Date to which such interest has
been paid or duly provided for, calculated on the basis of a
360 day year of twelve 30 day months, payable on March 1,
1990, and semiannually thereafter on September 1 and March 1
of each year until maturity or prior redemption.
5. Initial Bonds; Numbers and Denominations. The
Bonds shall be initially issued bearing the numbers, in the
principal amounts, and bearing interest at the rates set
forth in the following schedule, and may be transferred and
exchanged as set out in this Ordinance. The Bonds shall
mature, in accordance with this Ordinance, on September 1 in
each of the years and in the amounts set out in such
schedule. Bonds delivered on transfer of or in exchange for
other Bonds shall be numbered (with appropriate prefix) in
order of their authentication by the Registrar, shall be in
the denomination of $5,000 or integral multiples thereof,
and shall mature on the same date and bear interest at the
same rate as the Bond or Bonds in lieu of which they are
delivered.
-6-
BONDS
Bond Principal Interest
Number Year Amount Rate
R- 1 1990 $ 335,000 6. 00%
R- 2 1991 $ 350,000 6. 15%
R- 3 1992 $ 375,000 6. 30%
R- 4 1993 $ 395,000 6. 40%
R- 5 1994 $ 990,000 6. 50%
R- 6 1995 $1,055,000 6. 60%
R- 7 1996 $1, 125,000 6. 60%
R- 8 1997 $1,200,000 6. 70%
R- 9 1998 $1, 290,000 6. 70%
R-10 1999 $1, 365,000 6. 80%
R-11 2000 $1, 455,000 6. 807.
R-12 2001 $1, 555,000 6.90%
R-13 2002 $1, 665,000 7 .00%
R-14 2003 $1, 780,000 7.00%
R-15 2004 $1,905,000 7.00%
6. Execution of Bonds; Seal. The Bonds shall be
signed by the Mayor and countersigned by the City Clerk, by
their manual, lithographed, or facsimile signatures, and the
official seal of the City shall be impressed or placed in
facsimile thereon. Such facsimile signatures on the Bonds
shall have the same effect as if each of the Bonds had been
signed manually and in person by each of said officers, and
such facsimile seal on the Bonds shall have the same effect
as if the official seal of the City had been manually
impressed upon each of the Bonds. If any officer of the
City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the
authentication of such Bonds or before the delivery of such
Bonds, such manual or facsimile signature shall nevertheless
he valid and sufficient for all purposes as if such officer
had remained in such office.
7. Approval by Attorney General; Registration by
Comptroller. The Bonds to be initially issued shall be
delivered to the Attorney General of Texas for approval and
shall be registered by the Comptroller of Public Accounts of
the State of Texas. The manually executed registration
certificate of the Comptroller of Public Accounts
substantially in the form provided in Section 17 of this
Ordinance shall be attached or affixed to the Bonds to be
initially issued.
S. Authentication. Except for the Bonds to be
initially issued, which need not be authenticated by the
-7-
Registrar, only such Bonds which bear thereon a certificate
of authentication, substantially in the form provided in
Section 17 of this Ordinance, manually executed by an
authorized representative of the Registrar, shall be
entitled to the benefits of this Ordinance or shall be valid
or obligatory for any purpose. Such duly executed
certificate of authentication shall be conclusive evidence
that the Bonds so authenticated were delivered by the
Registrar hereunder.
9. Payment of Principal and Interest. The Registrar
is hereby appointed as the paying agent for the Bonds. The
principal of and premium, if any, on the Bonds shall be
payable, without exchange or collection charges, in any coin
or currency of the United States of America which, on the
date of payment, is legal tender for the payment of debts
due the United States of America, upon their presentation
and surrender as they respectively become due and payable,
whether at maturity or by prior redemption, at the principal
corporate trust office of the Registrar. The interest on
each Bond shall be payable by check on the Interest Payment
Date, mailed by the Registrar on or before each Interest
Payment Date to the Owner of record as of the Record Date,
to the address of such Owner as shown on the Bond Register.
Any accrued interest payable at maturity on a Bond shall be
paid upon presentation and surrender of such Bond at the
principal corporate trust office of the Registrar.
If the date for payment of the principal of or interest
on any Bond is a Saturday, Sunday, or a day on which banking
institutions in the city where the principal corporate trust
office of the Registrar is located are authorized by law or
executive order to close, or a legal holiday, then the date
for such payment shall be the next succeeding day which is
not a Saturday, Sunday, or a day on which banking
institutions in the city where the principal corporate trust
office of the Registrar is located are authorized by law or
executive order to close, or a legal holiday.
10. Successor Registrars. The City covenants that at
all times while any Bonds are outstanding it will provide a
legally qualified bank, trust company, financial institution
or other agency to act as Registrar for the Bonds. The City
reserves the right to change the Registrar for the Bonds on
not less than 60 days written notice to the Registrar, so
long as any such notice is effective not less than 60 days
prior to the next succeeding principal or interest payment
date on the Bonds. Promptly upon the appointment of any
successor Registrar, the previous Registrar shall deliver
the Bond Register or copies thereof to the new Registrar,
and the new Registrar shall notify each Owner, by United
-8-
States mail, first class postage prepaid, of such change and
of the address of the new Registrar. Each Registrar
hereunder, by acting in that capacity, shall be deemed to
have agreed to the provisions of this Section.
11. Special Record Date. If interest on any Bond is
not paid on any Interest Payment Date and continues unpaid
for thirty (30) days thereafter, the Registrar shall
establish a new record date for the payment of such
interest, to be known as a Special Record Date. The
Registrar shall establish a Special Record Date when funds
to make such interest payment are received from or on behalf
of the City. Such Special Record Date shall be fifteen (15)
days prior to the date fixed for payment of such past due
interest, and notice of the date of payment and the Special .
Record Date shall be sent by United States mail, first
class, postage prepaid, not later than five (5) days prior
to the Special Record Date, to each affected Owner of record
as of the close of business on the day prior to the mailing
of such notice.
12. Ownership; Unclaimed Principal and Interest. The
City, the Registrar and any other person may treat the
person in whose name any Bond is registered as the absolute
owner of such Bond for the purpose of making and receiving
payment of principal of and premium, if any, or interest on
such Bond, and for all other purposes, whether or not such
Bond is overdue, and neither the City nor the Registrar
shall be bound by any notice or knowledge to the contrary.
All payments made to the person deemed to be the owner of
any Bond in accordance with this Section 12 shall be valid
and effectual and shall discharge the liability of the City
and the Registrar upon such Bond to the extent of the sums
paid.
Amounts held by the Registrar which represent principal
of and interest on the Bonds remaining unclaimed by the
Owner after the expiration of three years from the date such
amounts have become due and payable shall be reported and
disposed of by the Registrar in accordance with the
applicable provisions of Texas law, including Title 6 of the
Texas Property Code, as amended.
13 . Registration, Transfer, and Exchange. So long as
any Bonds remain outstanding, the Registrar shall keep the
Bond Register at its principal corporate trust office and,
subject to such reasonable regulations as it may prescribe,
the Registrar shall provide for the registration and
transfer of Bonds in accordance with the terms of this
Ordinance. If the Registrar does not maintain its principal
offices in the State of Texas, the City agrees to keep a
-9-
Bond Register at its offices which is identical to the Bond
Register maintained by the Registrar and the Registrar will
notify the City as to any changes in the Bond Register
within 1 business day.
Each Bond shall be transferable only upon the
presentation and surrender thereof at the principal
corporate trust office of the Registrar, duly endorsed for
transfer, or accompanied by an assignment duly executed by
the registered Owner or his authorized representative in
form satisfactory to the Registrar. Upon due presentation
of any Bond in proper form for transfer, the Registrar shall
authenticate and deliver in exchange therefor, within 72
hours after such presentation, a new Bond or Bonds,
registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity and
aggregate principal amount and bearing interest at the same
rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and
surrender thereof at the principal corporate trust office of
the Registrar for a Bond or Bonds of the same type, maturity
and interest rate and in any authorized denomination, in an
aggregate amount equal to the unpaid principal amount of the
Bond or Bonds presented for exchange. The Registrar shall
be and is hereby authorized to authenticate and deliver
exchange Bonds in accordance with the provisions of this
Section 13. Each Bond delivered in accordance with this
Section 13 shall be entitled to the benefits and security of
this Ordinance to the same extent as the Bond or Bonds in
lieu of which such Bond is delivered.
The City or the Registrar may require the Owner of any
Bond to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with
the transfer or exchange of such Bond. Any fee or charge of
the Registrar for such transfer or exchange shall be paid by
the City.
14. Mutilated, Lost, or Stolen Bonds. Upon the
presentation and surrender to the Registrar of a mutilated
Bond, the Registrar shall authenticate and deliver in
exchange therefor a replacement Bond of like maturity,
interest rate, and principal amount, bearing a number not
contemporaneously outstanding. If any Bond is lost,
apparently destroyed, or wrongfully taken, the City,
pursuant to the applicable laws of the State of Texas and in
the absence of notice or knowledge that such Bond has been
acquired by a bona fide purchaser, shall execute and the
Registrar shall authenticate and deliver a replacement Bond
of like maturity, interest rate and principal amount or
-10-
Maturity Amount, bearing a number not contemporaneously
outstanding.
The City or the Registrar may require the Owner of a
mutilated Bond to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
therewith and any other expenses connected therewith,
including the fees and expenses of the Registrar. The City
or the Registrar may require the Owner of a lost, apparently
destroyed or wrongfully taken Bond, before any replacement
Bond is issued, to:
(1) furnish to the City and the Registrar
satisfactory evidence of the ownership of and the
circumstances of the loss, destruction or theft of such
Bond;
(2) furnish such security or indemnity as may be
required by the Registrar and the City to save them
harmless;
(3 ) pay all expenses and charges in connection
therewith, including, but not limited to, printing
costs, legal fees, fees of the Registrar and any tax or
other governmental charge that may be imposed; and
(4) meet any other reasonable requirements of the
City and the Registrar.
If, after the delivery of such replacement Bond, a bona fide
purchaser of the original Bond in lieu of which such
replacement Bond was issued presents for payment such
original Bond, the City and the Registrar shall be entitled
to recover such replacement Bond from the person to whom it
was delivered or any person taking therefrom, except a bona
fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the City or the
Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or
w-rongfully taken Bond has become or is about to become due
and payable, the City in its discretion may, instead of
issuing a replacement Bond, authorize the Registrar to pay
such Bond.
Each replacement Bond delivered in accordance with this
Section 14 shall be entitled to the benefits and security of
this Ordinance to the same extent as the Bond or Bonds in
lieu of which such replacement Bond is delivered.
-11-
15. Cancellation of Bonds. All Bonds paid in
accordance with this Ordinance, and all Bonds in lieu of
which exchange Bonds or replacement Bonds are authenticated
and delivered in accordance herewith, shall be cancelled and
destroyed upon the making of proper records regarding such
payment. The Registrar shall furnish the City with
appropriate certificates of destruction of such Bonds.
16. Optional Redemption. The City reserves the right,
at its option, to redeem Bonds maturing September 1, 2000,
and thereafter prior to maturity, in whole or in part, in
such manner as the City may select, on September 1, 1999, or
on any date thereafter, at a price of par plus accrued
interest on the amounts called for redemption to the date
fixed for redemption.
Principal amounts may be redeemed only in integral
multiples of $5,000. If a Bond subject to redemption is in
a denomination larger than $5,000, a portion of such Bond
may be redeemed, but only in integral multiples of $5,000.
Upon surrender of any Bond for redemption in part, the
Registrar, in accordance with Section 13 hereof, shall
authenticate and deliver in exchange therefor a Bond or
Bonds of like maturity and interest rate in an aggregate
principal amount equal to the unredeemed portion of the Bond
so surrendered.
Notice of any redemption identifying the Bonds to be
redeemed in whole or in part shall be given by the Registrar
at least thirty days prior to the date fixed for redemption
by sending written notice by first class mail to the Owner
of each Bond to be redeemed in whole or in part at the
address shown on the Register. Such notices shall state the
redemption date, the redemption price, the place at which
Bonds are to be surrendered for payment and, if less than
all Bonds outstanding are to be redeemed, the numbers of the
Bonds or portions thereof to be redeemed. Any notice given
as provided in this Section 16 shall be conclusively
presumed to have been duly given, whether or not the Owner
receives such notice. By the date fixed for redemption, due
provision shall be made with the Registrar for payment of
the redemption price of the Bonds or portions thereof to be
redeemed, plus accrued interest to the date fixed for
redemption. When the Bonds have been called for redemption
in whole or in part and due provision has been made to
redeem the same as herein provided, the Bonds or portions
thereof so redeemed shall no longer be regarded as
outstanding except for the purpose of receiving payment
solely from the funds so provided for redemption, and the
rights of the Owners to collect interest which would
otherwise accrue after the redemption date on any Bond or
-12-
portion thereof called for redemption shall terminate on the
date fixed for redemption.
17. Form. The form of the Bonds, including the form
of the Registrar' s Authentication Certificate, the form of
Assignment, the form of Statement of Insurance, and the form
of Registration Certificate of the Comptroller of Public
Accounts of the State of Texas which shall be attached or
affixed to the Bonds initially issued shall be,
respectively, substantially as follows, with such additions,
deletions and variations as may be necessary or desirable
and not prohibited by this Ordinance:
FORM OF BOND
(Face of Bond)
United States of America
State of Texas
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
THE CITY OF BEAUMONT, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE AND REFUNDING BONDS, SERIES 1989
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:
September 1, 1989
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The City of Beaumont, Texas (the "City") promises to
pay to the Registered Owner identified above, or registered
assigns, on the date specified above, upon presentation and
surrender of this bond at the principal corporate trust
office of Citibank, N.A. , New York, New York (the
"Registrar" ) , the principal amount identified above, payable
in any coin or currency of the United States of America
which on the date of payment of such principal is legal
tender for the payment of debts due the United States of
America, and to pay interest thereon at the rate shown
above, calculated on the basis of a 360 day year of twelve
30 day months, from the later of September 1, 1989, or the
most recent interest payment date to which interest has been
paid or duly provided for. Interest on this bond is payable
by check on March 1 and September 1, beginning on March 1,
1990, mailed to the registered owner of record as of the
previous February 15 and August 15 as shown on the books of
-13-
registration kept by the Registrar. Any accrued interest
due at maturity shall be paid upon presentation and
surrender of this Bond at the principal corporate trust
office of the Registrar.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS
SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS
PLACE.
IN WITNESS WHEREOF, this bond has been signed with the
manual or facsimile signature of the Mayor and countersigned
with the manual or facsimile signature of the City Clerk,
and the official seal of the City has been duly impressed,
or placed in facsimile, on this bond.
(AUTHENTICATION CERTIFICATE) THE CITY OF BEAUMONT
(SEAL)
Mayor
City Clerk
(Back Panel of Bond)
THIS BOND is one of a duly authorized issue of Bonds,
aggregating $16,840,000 (the "Bonds" ) , issued for the
purpose of (i ) refunding prior to maturity all of the City's
outstanding Waterworks and Sewer System Revenue Refunding
Bonds, Series 1983, and (ii ) providing money for
acquisitions, extensions, construction, improvement, or
repair of its Waterworks and Sewer System, pursuant to an
ordinance adopted by the City Council on August 22, 1989
(the "Ordinance" ) , and in accordance with the authority of
Article 717k and Articles 1111 et seq. , Vernon' s Texas Civil
Statutes, as amended, and all other applicable law,
including Section 252 .041 of V.T.C.A. , Local Government
Code, as amended.
THIS BOND AND ALL OF THE BONDS OF THIS SERIES are
special obligations of the City that are equally and ratably
payable from and secured by a first lien on the "Net
Revenues" collected and received by the City from the
operation and ownership of those properties, facilities,
improvements, equipment, interests, rights and powers
constituting the waterworks and sewer system of the City
which are defined in the Ordinance as the "System", which
Net Revenues are required to be set aside for and pledged to
-14-
the payment of this series of bonds, and all additional
bonds issued on a parity therewith, in the Interest and
Sinking Fund and the Reserve Fund required to be maintained
for the payment of all such bonds, all as more fully
described and provided for in and subject to the
restrictions and limitations imposed by the Ordinance. This
Bond and the series of which it is a part, together with the
interest thereon, are payable solely from such Net Revenues
and do not constitute an indebtedness or general obligation
of the City.
THE CITY RESERVES THE RIGHT, at its option, to redeem
Bonds maturing September 1, 2000, and thereafter prior to
their scheduled maturities, in whole or from time to time in
part, in integral multiples of $5,000, on September 1, 1999,
or on any date thereafter, at a price equal to par plus
accrued interest on the principal amounts called for
?redemption to the date fixed for redemption. Reference is
made to the Ordinance for complete details concerning the
manner of redeeming Bonds.
NOTICE OF ANY REDEMPTION shall be given at least thirty
(30) days prior to the date fixed for redemption by first
class mail, addressed to the registered owners of each Bond
to be redeemed in whole or in part at the address shown on
the books of registration kept by the Registrar. When Bonds
or portions thereof have been called for redemption, and due
provision has been made to redeem the same, the principal
amounts so redeemed shall be payable solely from the funds
provided for redemption, and interest which would otherwise
accrue on the amounts called for redemption shall terminate
on the date fixed for redemption.
THIS BOND IS TRANSFERABLE only upon presentation and
surrender at the principal corporate trust office of the
Registrar, duly endorsed for transfer or accompanied by an
assignment duly executed by the registered owner or his
authorized representative, subject to the terms and
conditions of the Ordinance.
THE BONDS ARE EXCHANGEABLE at the principal corporate
trust office of the Registrar for bonds in the principal
amount of $5,000 or any integral multiple thereof, subject
to the terms and conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any
purpose or be entitled to any benefit under the Ordinance
unless this Bond either (i) is registered by the Comptroller
of Public Accounts of the State of Texas by registration
certificate attached or affixed hereto or (ii ) is
authenticated by the Registrar by due execution of the
authentication certificate endorsed hereon.
-15-
THE REGISTERED OWNER of this Bond, by acceptance
hereof, acknowledges and agrees to be bound by all the terms
and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will
at all times provide a legally qualified registrar for the
Bonds and will cause notice of any change of registrar to be
mailed to each registered owner.
THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL
PARITY REVENUES BONDS, subject to the restrictions and
limitations contained in the Ordinance, which shall be
equally and ratably payable from, and secured by a first
lien on and pledge of, the aforesaid Net Revenues in the
same manner and to the same extent as this Bond and the
series of which it is a part.
THE OWNER HEREOF shall never have the right to demand
payment of this obligation out of any funds raised or to be
raised by taxation.
IT IS HEREBY certified, recited and covenanted that
this Bond has been duly and validly issued and delivered;
that all acts, conditions and things required or proper to
be performed, to exist and to be done precedent to or in the
issuance and delivery of this Bond have been performed,
exist and have been done in accordance with law; that the
bonds of this series do not exceed any statutory limitation;
and that provision has been made for the payment of
principal and interest on this bond and all of the bonds of
this series by the aforesaid lien on and pledge of the Net
Revenues of the System.
The following form of Statement of Insurance shall be
printed on the back of each Bond:
Statement of Insurance
The Municipal Bond Investors Assurance Corporation (the
"Insurer" ) has issued a policy containing the following
provisions, such policy being on file at the principal cor-
porate trust office of Citibank, N.A. , New York, New York.
The Insurer, in consideration of the payment of the
premium and subject to the terms of this policy, hereby
unconditionally and irrevocably guarantees to any owner, as
hereinafter defined, of the following described obligations,
the full and complete payment required to be made by or on
behalf of the Issuer to Citibank, N.A. , New York, New York,
or its successor (the "Paying Agent" ) of an amount equal to
(i) the principal of (either at the stated maturity or by an
advancement of maturity pursuant to a mandatory sinking fund
-16-
payment) and interest on, the Obligations (as that term is
defined below) as such payments shall become due but shall
not be so paid (except that in the event of any acceleration
of the due date of such principal by reason of mandatory or
optional redemption or acceleration resulting from default
or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments
guaranteed hereby shall be made in such amounts and at such
times as such payments of principal would have been due had
there not been any such acceleration) ; and (ii) the
reimbursement of any such payment which is subsequently
recovered from any owner pursuant to a final judgment by a
court of competent jurisdiction that such payment
constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amount
referred to in clauses (i ) and (ii ) of the preceding
sentence shall be referred to herein collectively as the
"Insured Amounts" . "Obligations" shall mean:
$16,840,000
City of Beaumont, Texas
Waterworks and Sewer System
Revenue and Refunding Bonds, Series 1989
Upon receipt of telephonic or telegraphic notice, such
notice subsequently confirmed in writing by registered or
certified mail, or upon receipt of written notice by
registered or certified mail, by the Insurer from the Paying
Agent or any owner of an Obligation the payment of an
Insured Amount for which is then due, that such required
payment has not been made, the Insurer on the due date of
such payment or within one business day after receipt of
notice of such nonpayment, whichever is later, will make a
deposit of funds, in an account with Citibank, N.A. , in New
York, New York, or its successor, sufficient for the payment
of any such Insured Amounts which are then due. Upon
presentment and surrender of such Obligations or presentment
of such other proof of ownership of the Obligations,
together with any appropriate instruments of assignment to
evidence the assignment of the Insured Amounts due on the
Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as
agent for such owners of the Obligations in any legal
proceeding related to payment of Insured Amounts on the
Obligations, such instruments being in a form satisfactory
to Citibank, N.A. , Citibank, N.A. shall disburse to such
owners or the Paying Agent payment of the Insured Amounts
due on such Obligations, less any amount held by the Paying
Agent for the payment of such Insured Amounts and legally
available therefor. This policy does not insure against
loss of any prepayment premium which may at any time be
payable with respect to any Obligation.
-17-
As used herein, the term "owner" shall mean the
registered owner of any Obligation as indicated in the books
maintained by the Paying Agent, the Issuer, or any designee
of the Issuer for such purpose. The term owner shall not
include the Issuer or any party whose agreement with the Is-
suer constitutes the underlying security for the Obligation.
Any service of process on the Insurer may be made to
the Insurer at its offices located at 113 King Street,
Armonk, New York 10504.
This policy is non-cancellable for any reason. The
premium on this policy is not refundable for any reason
including the payment prior to maturity of the Obligations.
MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this bond has been examined,
certified as to validity, and approved by the Attorney
General of the State of Texas, and that this bond has been
registered by the Comptroller of Public Accounts of the
State of Texas.
WITNESS MY SIGNATURE AND SEAL this
xxxxxxxxxx
Comptroller of Public Accounts
(SEAL) of the State of Texas
Form of Registrar' s Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this bond has been
delivered pursuant to the Bond Ordinance described in the
text of this Bond, in exchange for or in replacement of a
bond, bonds or a portion of a bond or bonds of a Series
which was originally approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas.
Citibank, N.A. , New York, New
York
By:
Authorized Signature
Date of Authentication:
-18-
Form of Assignment
ASSIGNMENT
For value received, the undersigned hereby sells,
assigns, and transfers unto
(Please print or type name, address, and zip code of
Transferee)
(Please insert Social Security or Taxpayer Identification
Number of Transferee)
the within bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to transfer said bond on
the books kept for registration thereof, with full power of
substitution in the premises.
DATED
Signature Guaranteed:
Registered Owner
NOTICE: The signature above
must correspond to the name of
the registered owner as shown
NOTICE: Signature must be on the face of this bond in
guaranteed by a member firm every particular, without
of the New York Stock any alteration, enlargement
Exchange or a commercial or change whatsoever.
bank or trust company.
18. Legal Opinion; Cusip. The approving opinion of
Orgain, Bell& Tucker, Beaumont, Texas, and CUSIP Numbers
may be printed on the Bonds, but errors or omissions in the
printing of such opinion or such numbers shall have no
effect on the validity of the Bonds.
19. (a) Pledge and Source of Payment_ The City
hereby covenants and agrees that all Gross Revenues of the
System shall, as collected and received by the City, be
deposited and paid into the special funds hereinbelow
provided, and shall be applied in the manner hereinafter set
forth, in order to provide for the payment of all
Maintenance and Operation Expenses and to provide for the
payment of principal, interest and any redemption premiums
on the Parity Bonds, and all expenses of paying same
(including premiums for any Qualified Surety Bond and any
amounts to be reimbursed under a Financial Guaranty
Agreement in respect thereof) . The Parity Bonds shall
constitute special obligations of the City that shall be
payable solely from, and shall be equally and ratably
-19-
secured by a first lien on, the Net Revenues, as collected
and received by the City from the operation and ownership of
the System, which Net Revenues shall, in the manner
hereinafter provided, be set aside for and pledged to the
payment of the Parity Bonds in the Interest and Sinking Fund
and the Reserve Fund as hereinafter provided, and except as
otherwise expressly provided herein, the Parity Bonds shall
be in all respects on a parity with and of equal dignity
with one another. The holders of the Parity Bonds shall
never have the right to demand payment of either the
principal of or interest on the Parity Bonds out of any
funds raised or to be raised by taxation.
(b) Rates and Charges. So long as any Parity
Bonds remain outstanding, there shall be fixed, charged and
collected rates and charges for the use and services of the
System, which may be fully sufficient at all times:
(i ) to pay all Maintenance and Operation
Expenses; and
(ii ) to produce Net Revenues in each fiscal year
at least equal to 125 percent of the Average
Annual Principal and Interest Requirements on
all Parity Bonds and Junior Lien Bonds, but
in no event less than the amount required to
establish and maintain the Interest and
Sinking Fund, the Reserve Fund as hereinafter
provided, the Junior Lien Bond Interest and
Sinking Fund and the Junior Lien Bond Reserve
Fund for the Junior Lien Bonds, and to pay
all outstanding obligations payable from the
Net Revenues of the System, other than Parity
Bonds and Junior Lien Bonds, as and when the
same become due, and to pay all premiums for
any Qualified Surety Bonds and any amounts to
be reimbursed under a Financial Guaranty
Agreement in respect thereof.
The City covenants that it will not grant or permit any
free service from the System except for public buildings and
institutions operated by the City.
(c) Special Funds. The following special funds
shall be maintained and accounted for as hereinafter
provided so long as any of the Parity Bonds remain
outstanding:
(i ) Waterworks and Sewer System Revenue Fund (the
"Revenue Fund" ) ;
-20-
(ii) Waterworks and Sewer System Revenue Bond
Interest and Sinking Fund (the "Interest and
Sinking Fund" ) ; and
(iii ) Waterworks and Sewer System Revenue Bond
Reserve Fund (the "Reserve Fund" ) .
The Revenue Fund shall be maintained as a separate account
on the books of the City. The Interest and Sinking Fund and
the Reserve Fund shall be maintained at an official
depository bank of the City, separate and apart from all
other funds and accounts of the City, and shall constitute
trust funds which shall be held in trust for the benefit of
the holders of the Parity Bonds, and the proceeds of which
(except for interest income, which shall be transferred to
the Revenue Fund) shall be and are hereby pledged to the
payment of the Parity Bonds. Notwithstanding the foregoing,
it is expressly stipulated that a separate subaccount shall
be established and maintained in the Reserve Fund for each
series of Parity Bonds pursuant to Subsection (f) below, and
each subaccount shall provide a separate source of payment
solely for the respective series of Parity Bonds as to which
the subaccount has been established and maintained. All of
the Funds named above shall be used solely as provided in
this Ordinance so long as any Parity Bonds remain
outstanding.
(d) Flow of Funds. All Gross Revenues of the
System shall be deposited as collected into the Revenue
Fund. Moneys from time to time on deposit to the credit of
the Revenue Fund shall be applied as follows in the
following order of priority:
(i) First, to pay Maintenance and Operation
Expenses and to provide by encumbrance for
the payment of all obligations incurred by
the City for Maintenance and Operation
Expenses which may include an operating
reserve equal to one month' s estimated
Maintenance and Operation Expenses.
(ii) Second, to make all deposits into the
Interest and Sinking Fund required by this
Ordinance and any ordinance authorizing the
issuance of Additional Parity Bonds.
( iii ) Third, to reimburse Insurers for any amounts
advanced from time to time under any
-21-
Qualified Surety Bonds and any accompanying
Financial Guaranty Agreements.
(iv) Fourth, to make all deposits into the Reserve
Fund required by this Ordinance and any
ordinance authorizing the issuance of
Additional Parity Bonds as provided in
Subsection ( f) hereof.
(v) Fifth, to pay Insurers interest on amounts
advanced from time to time under any
Qualified Surety Bonds and any accompanying
Financial Guaranty Agreements.
(vi) Sixth, to make all deposits required by any
ordinances authorizing the issuance of Junior
Lien Bonds and subordinate lien obligations.
(vii) Seventh, for any lawful purpose.
Whenever the total amounts on deposit to the credit of the
Interest and Sinking Fund and the Reserve Fund shall be
equivalent to the sum of the aggregate principal amount of
all outstanding Parity Bonds plus the aggregate amount of
all interest accrued and to accrue thereon, no further
payments need be made into the Interest and Sinking Fund or
the Reserve Fund, and such Parity Bonds shall not be
regarded as being outstanding except for the purpose of
being paid with the moneys on deposit in such Funds.
(e) Interest and Sinking Fund. On or before the
last business day of each month so long as any Parity Bonds
remain outstanding, there shall be transferred into the
Interest and Sinking Fund from the Revenue Fund the
following amounts:
(i) Such amounts, in approximately equal monthly
installments, as will be sufficient to pay
the interest scheduled to become due on the
Parity Bonds on the next interest payment
date; and
(ii) Such amounts, in approximately equal monthly
installments, as will be sufficient to pay
the next maturing principal of the Parity
Bonds, including the principal amounts of,
and any redemption premiums on, any Parity
Bonds payable as a result of the exercise or
operation of any redemption provision
contained in this Ordinance or in any
-22-
ordinance authorizing the issuance of
Additional Parity Bonds.
Moneys deposited to the credit of the Interest and Sinking
Fund (except for interest income, which shall be transferred
to the Revenue Fund) shall be used solely for the purpose of
paying principal (either at maturity or prior redemption or
to purchase Parity Bonds in the open market to be credited
against mandatory redemption requirements) , interest and
redemption premiums on the Parity Bonds, plus all bank
charges and other costs and expenses relating to such
payment, on a pro rata basis among all series of Parity
Bonds. On or before each principal and/or interest payment
date for the Parity Bonds, the City shall transfer from the
Interest and Sinking Fund to the paying agents for the
Parity Bonds an amount equal to the principal, interest and
redemption premiums payable on the Parity Bonds on such
date, together with an amount equal to all bank charges and
other costs and expenses relating to such payment. The
paying agents for the Parity Bonds shall totally destroy all
paid Parity Bonds and coupons (if any) and shall provide the
City with an appropriate certificate of destruction.
(f) Reserve Fund. After making the transfers
into the Interest and Sinking Fund required in the preceding
Subsection (e) , the City shall deposit and maintain, or
cause to be deposited and maintained, in a separate
subaccount of the Reserve Fund established for each
respective series of Parity Bonds either (i ) an amount equal
to the Reserve Fund Requirement for that respective series
or (ii) a Qualified Surety Bond issued by an Insurer in an
amount which, when added to the sums on deposit pursuant to
clause (i ) above, equals the Reserve Fund Requirement for
that respective series. After the Reserve Fund Requirement
has been satisfied in the Reserve Fund as provided in the
immediately preceding sentence for a series of Parity Bonds,
and so long thereafter as such requirement remains
satisfied, no further deposits into the subaccount of the
Reserve Fund for that series shall be required, either in
the form of cash, a Qualified Surety Bond, or any
combination thereof for that series; but if and whenever the
Reserve Fund Requirement is not satisfied for any reason
with respect to that series, then the City shall deposit or
cause to be deposited into the subaccount of the Reserve
Fund for that series either (i ) amounts on a monthly basis
at least equal to one-sixtieth (1/60th) of the Reserve Fund
Requirement for that series until such requirement is
satisfied or (ii) a Qualified Surety Bond issued by an
Insurer in an amount which, when added to the sums on
deposit in the subaccount of the Reserve Fund for that
series, equals the Reserve Fund Requirement for that series.
-23-
Whenever the subaccount of the Reserve Fund for a series of
Parity Bonds contains more than the Reserve Fund
Requirement, the City may transfer any excess cash amounts
to the Interest and Sinking Fund for payment of that series
of Parity Bonds and all other series of Parity Bonds on a
pro rata basis. The subaccount of the Reserve Fund for a
series of Parity Bonds shall be used to pay the principal of
and interest on that series at any time when there is not
sufficient money available in the Interest and Sinking Fund
for such purpose and it may be used finally to pay and
retire the last Parity Bonds of that series to mature or be
redeemed; provided that all cash and other amounts on
deposit in the Reserve Fund for that series shall first be
transferred to the Interest and Sinking Fund for the purpose
of making such payments prior to making any demand for
payment under any Qualified Surety Bond.
(g) Deficiencies in Funds. If there shall not be
deposited into the Interest and Sinking Fund and the Reserve
Fund the full amounts required herein, amounts equivalent to
such deficiency shall be set apart and paid into such Fund
or Funds on a pro rata basis for each series of Parity Bonds
from the first available and unallocated moneys in the
Revenue Fund, and such payment shall be in addition to the
amounts otherwise required to be paid into such Funds. To
the extent necessary, the rates and charges for the System
shall be increased to make up for any such deficiencies.
(h) Investment of Funds; Transfer of Investment
Income. Money in each Fund maintained pursuant to this
Section of this Ordinance may, at the option of the City, be
invested in time deposits or certificates of deposit secured
in the manner required by law for public funds, or be
invested in direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America or any of its
agencies or instrumentalities, or in any other obligations
permitted by law provided that such obligations are rated
"AA" or better by Moody' s or Standard & Poor' s rating
agencies; provided that all such deposits and investments
shall be made in such manner that the money required to be
expended from any such Fund will be available at the proper
time or times, and provided further that in no event shall
such deposits or investments of moneys in the Reserve Fund
mature later than the final maturity date of the Parity
Bonds. All such investments shall be valued in terms of
current market value no less frequently than the last
business day of the Fiscal Year, except that any direct
obligations of the United States of America-State and Local
Government Series shall be continuously valued at their par
value or principal face amount. Any obligation in which
money is so invested shall be kept and held in the official
depository bank of the City at which the Fund is maintained
-24-
from which such investment was made . All such investments
shall be promptly sold when necessary to prevent any default
in connection with the Parity Bonds. All interest and
income derived from such deposits and investments shall be
transferred or credited as received to the Revenue Fund, and
shall constitute the Gross Revenues of the System.
(i ) Security for Uninvested Funds. So long as
any Parity Bonds remain outstanding, all uninvested moneys
on deposit in, or credited to, Funds maintained pursuant to
this Section shall be secured by a pledge of security, as
provided by law in the State of Texas, in a principal amount
not less than the amount of such uninvested funds.
20. Additional Bonds.
(a) Additional Parity Bonds. The City reserves
the right to issue, for any lawful purpose, including the
refunding of any previously issued Parity Bonds or any other
bonds or obligations of the City issued in connection with
the System, one or more series of Additional Parity Bonds
payable from, and secured by a first lien on and pledge of,
the Net Revenues of the System, on a parity with the Series
1989 Bonds and any other Additional Parity Bonds then
outstanding; provided, however, that no Additional Parity
Bonds may be issued unless:
(i ) The Additional Parity Bonds mature on
September 1, and interest is payable on
March 1 and September 1 ;
(ii ) The Interest and Sinking Fund and the Reserve
Fund each contain the amount of money then
required to be on deposit therein;
(iii ) For either the preceding Fiscal Year or any
consecutive 12-month period out of the
18-month period immediately preceding the
month in which the ordinance authorizing such
Additional Parity Bonds is adopted (the "Base
Period" ) , either:
( 1) Net Earnings (as defined below) are
certified by the Finance Officer of the
City to have been equal to at least
(a) 140% of the Average Annual Principal
and Interest Requirements on all Parity
Bonds, and (b) 125% of the Average
Annual Principal and Interest
Requirements on all Parity Bonds and
Junior Lien Bonds, in each case after
-25-
giving effect to the issuance of the
Additional Parity Bonds to be issued; or
(2 ) Net Earnings, adjusted to give effect to
any rate increase placed into effect at
least 60 days prior to the adoption of
the ordinance authorizing the Additional
Parity Bonds, as if such rate increase
had been placed into effect prior to the
commencement of the Base Period, would
have been equal to at least the amounts
required in paragraph (1) above, as
certified by an independent firm of
consulting engineers or independent firm
of certified public accountants;
provided, however, that the foregoing
requirements shall not apply to the
issuance of any series of refunding
bonds that will not have the result of
increasing the average Annual Principal
and Interest Requirements on the Parity
Bonds; and
(iv) Provision is made in the ordinance
authorizing the Additional Parity Bonds then
proposed to be issued for additional payments
into the Interest and Sinking Fund sufficient
to provide for the payment of principal of
and interest on such Additional Parity Bonds
and additional payments into a subaccount of
the Reserve Fund for such Additional Parity
Bonds so that the subaccount will in not
later than 5 years from the date of issuance
of such Additional Parity Bonds contain a
balance of not less than the Reserve Fund
Requirement for such Additional Parity Bonds.
For purposes hereof, the term "Net Earnings" shall mean
all of the Net Revenues, except that in calculating Net
Revenues there shall not be deducted as Maintenance and
Operation Expenses any charge, disbursement or expenditure
for repairs, extensions or otherwise which, under standard
accounting practice, should be charged to capital
expenditures.
(b) Subordinate Lien Obligations. The City
reserves the right to issue, for any lawful purpose, bonds,
notes or other obligations secured in whole or in part by
liens on and pledges of the Net Revenues that are junior and
subordinate to the lien on and pledge of Net Revenues
securing payment of the Parity Bonds. Such subordinate lien
-26-
obligations may be further secured by any other source of
payment lawfully available for such purposes.
(c) Special Project Bonds. The City reserves the
right to issue revenue bonds secured by liens on and pledges
of revenues and proceeds derived from Special Projects.
21 . Covenants and Provisions Relating to all Parity
Bonds.
(a) Punctual Payment of Parity Bonds. The City
will punctually pay or cause to be paid the interest on and
principal of all Parity Bonds according to the terms thereof
and will faithfully do and perform, and at all times fully
observe, any and all covenants, undertakings, stipulations
and provisions contained in this Ordinance and in any
ordinance authorizing the issuance of Additional Parity
Bonds.
(b) Maintenance of System. So long as any Parity
Bonds remain outstanding, the City covenants that it will at
all times maintain the System, or within the limits of its
authority cause the same to be maintained, in good condition
and working order and will operate the same, or cause the
same to be operated, in an efficient and economical manner
at a reasonable cost and in accordance with sound business
principles. In operating and maintaining the System, the
City will comply with all contractual provisions and
agreements entered into by it and with all valid rules,
regulations, directions or order of any governmental,
administrative or judicial body promulgating same.
(c) Sale or Encumbrance of System. So long as
any Parity Bond remain outstanding, the City will not sell ,
dispose of or, except as permitted in this Ordinance,
further encumber the System; provided, however, that this
provision shall not prevent the City from disposing of any
portion of the System which has been declared surplus or is
no longer needed for the proper operation of the System.
Any agreement pursuant to which the City contracts with a
person, corporation, municipal corporation or political
subdivision to operate the System or to lease and/or operate
all or part of the System shall not be considered as an
encumbrance of the System.
(d) Insurance. The City further covenants and
agrees that it will keep the System insured with insurers of
good standing against risks, accidents or casualties against
which and to the extent insurance is customarily carried by
political subdivisions of the State of Texas operating
similar properties, to the extent that such insurance is
-27-
available. The cost of all such insurance, together with
any additional insurance, shall be a part of the Maintenance
and Operation Expenses, and such insurance shall be carried
for the benefit of the holders of the Parity Bonds and the
City, as their interests may appear.
(e) Accounts, Records and Audits. So long as any
Parity Bonds remain outstanding, the City covenants and
agrees that it will maintain a proper and complete system of
records and accounts pertaining to the operation of the
System in which full , true and proper entries will be made
of all dealings, transactions, business and affairs which in
any way affect or pertain to the System or the Gross
Revenues or the Net Revenues thereof. The City shall after
the close of each of its Fiscal Years cause an audit report
of such records and accounts to be prepared by an
independent certified public accountant or independent firm
of certified public accountants . Each year promptly after
such audit report is prepared, the City shall furnish a copy
thereof without cost to the Municipal Advisory Council of
Texas, the major municipal rating agencies and any holders
of Parity Bonds who shall request same. All expenses
incurred in preparing such audits shall be Maintenance and
Operation Expenses.
(f) Competition. To the extent it legally may,
the City will not grant any franchise or allow for the
acquisition, construction or operation of any competing
facilities which might be used as a substitute for the
System and will prohibit the operation of any such competing
facilities.
(g) Pledge and Encumbrance of Net Revenues. The
City covenants and represents that it has the lawful power
to pledge the Net Revenues to the payment of the Parity
Bonds and has lawfully exercised such power under the
Constitution and laws of the State of Texas. The City
further covenants and represents that, other than to the
payment of the Parity Bonds and the Junior Lien Bonds, the
Net Revenues are not and will not be pledged to the payment
of any debt or obligation of the City, or in any other
manner encumbered unless such pledge or encumbrance is
junior and subordinate to the lien and pledge securing
payment of the Parity Bonds and the Junior Lien Bonds.
(h) Remedies. This Ordinance shall constitute a
contract between the City, the holders of the Parity Bonds
from time to time outstanding, and the Insurers, and this
Ordinance shall be and remain irrepealable until the Parity
Bonds and the interest thereon and all amounts owing to the
Insurers under any Financial Guaranty Agreements shall be
-28-
fully paid or discharged or provision therefor shall have
been made as provided herein. In the event of a default in
the payment of the principal of or interest on any of the
Parity Bonds or a default in the performance of any duty or
covenant provided by law or in this Ordinance or a default
in respect of any Financial Guaranty Agreement in effect
from time to time, the holder or holders of any of the
Parity Bonds or any Insurer, as appropriate, may pursue all
legal remedies afforded by the Constitution and laws of the
State of Texas to compel the City to remedy such default and
to prevent further default or defaults. Without in any way
limiting the generality of the foregoing, it is expressly
provided that any holder of any of the Parity Bonds or any
Insurer, as appropriate, may at law or in equity, by suit,
action, mandamus, or other proceedings, enforce and compel
performance of all duties required to be performed by the
City under this Ordinance, including the Waking and
collection of reasonable and sufficient rates and charges
for the use and services of the System, the deposit of the
Gross Revenues thereof into the special funds as herein
provided, and the application of such Gross Revenues and Net
Revenues in the manner required in this Ordinance.
(i ) Defeasance. The City may defease the
provisions of this Ordinance and discharge its obligation to
the holders of any or all of the Parity Bonds to pay
principal, interest and redemption premium (if any) thereon
in any manner permitted by law, including, without
limitation, by depositing with any paying agent for such
Parity Bonds or with the State Treasurer of the State of
Texas either: (i) cash in an amount equal to the principal
amount and redemption premium, if any, of such Parity Bonds
plus interest thereon to the date of maturity or redemption,
or (ii ) pursuant to an escrow or trust agreement, direct
obligations of, or obligations the principal and interest of
which are guaranteed by, the United States of America, in
principal amounts and maturities and bearing interest at
rates sufficient to provide for the timely payment of the
principal amount and redemption premium, if any, of such
Parity Bonds plus interest thereon to the date of maturity
or redemption; provided, however, that if any of such Parity
Bonds are to be redeemed prior to their respective dates of
maturity, provision shall have been made for giving notice
of redemption as provided in the ordinance authorizing such
Parity Bonds. Upon such deposit, such Parity Bonds and
coupons appertaining thereto shall no longer be regarded to
be outstanding or unpaid, and the lien on and pledge of Net
Revenues securing such Parity Bonds shall thereupon cease
and terminate.
-29-
(j ) Legal Holidays. In any case where the date
fixed for payment of interest on or principal of the Parity
Bonds or the date fixed for redemption of any Parity Bonds
shall be a legal holiday or a day on which a paying agent
for the Parity Bonds is authorized by law to close, then
payment of interest or principal by such paying agent need
not be made on such date but may be made on the next
succeeding business day with the same force and effect as if
made on the date fixed for such payment and no interest
shall accrue for the period from such date to the date of
actual payment.
(k) Unavailability of Authorized Publication.
If, because of the temporary or permanent suspension of any
newspaper, journal or other publication, or, for any reason,
publication of notice cannot be made meeting any
requirements herein established, any notice required to be
published by the provisions of this Ordinance shall be given
in such other manner and at such time or times as in the
judgment of the City shall most effectively approximate such
required publication and the giving of such notice in such
manner shall for all purposes of this Ordinance be deemed to
be in compliance with the requirements for publication
thereof.
( l) Obligations Owing to Insurers. The City
stipulates and agrees that it shall make full and timely
payment of all amounts owing to any Insurer under any
Financial Guaranty Agreements and there shall be no
termination of this Ordinance or redemption, refunding or
defeasance of the Parity Bonds unless and until all of such
amounts owing under the Financial Guaranty Agreement in
respect of those Bonds shall have been paid in full .
22 . Further_ Proceedings. After the Bonds to be
initially issued shall have been executed, it shall be the
duty of the Mayor and other appropriate officials and agents
of the City to deliver the Bonds to be initially issued and
all pertinent records and proceedings to the Attorney
General of the State of Texas, for examination and approval.
After the Bonds to be initially issued shall have been
approved by the Attorney General, they shall be delivered to
the Comptroller of Public Accounts of the State of Texas for
registration. Upon registration of the Bonds to be
initially issued, the Comptroller of Public Accounts (or the
Comptroller' s bond clerk or an assistant bond clerk lawfully
designated in writing to act for the Comptroller) shall
manually sign the Comptroller' s Registration Certificate
prescribed herein and the seal of said Comptroller shall be
impressed or placed in facsimile, thereon.
-30-
23 . Sale; Bond Purchase Agreement. The Bonds are
hereby sold and shall be delivered to the Underwriters at a
price of $16, 789, 525 . 30 plus accrued interest to the date of
delivery, in accordance with the terms of a bond purchase
agreement of even date herewith, presented to and hereby
approved by the City Council, which price and terms are
hereby found and determined to be the most advantageous
reasonably obtainable by the City. The Mayor and other
appropriate officials of the City are hereby authorized and
directed to execute such bond purchase agreement on behalf
of the City, and the Mayor and all other officers, agents
and representatives of the City are hereby authorized to do
any and all things necessary or desirable to satisfy the
conditions set out therein and to provide for the issuance
and delivery of the Bonds.
24. Tax Exemption.
(a) General Tax Covenant. The City intends that
the interest on the Bonds shall be excludable from gross
income for purposes of federal income taxation pursuant to
Sections 103 and 141 through 150 of the Code, and applicable
regulations. The City covenants and agrees not to take any
action, or knowingly omit to take any action within its
control, that if taken or omitted, respectively, would cause
the interest on the Bonds to be includable in gross income,
as defined in Section 61 of the Code, of the holders thereof
for purposes of federal income taxation. In particular, the
City covenants and agrees to comply with each requirement of
this Section 24; provided, however, that the City shall not
be required to comply with any particular requirement of
this Section 24 if the City has received an opinion of
nationally recognized bond counsel ( "Counsel' s Opinion" )
that such noncompliance will not adversely affect the
exclusion from gross income for federal income tax purposes
of interest on the Bonds or if the City has received
Counsel 's Opinion to the effect that compliance with some
other requirement set forth in this Section 24 will satisfy
the applicable requirements of the Code, in which case
compliance with such other requirement specified in such
Counsel 's Opinion shall constitute compliance with the
corresponding requirement specified in this Section 24. The
City represents and warrants that the City shall realize
present value debt service savings (determined without
regard to administrative expenses) in connection with
issuance of the Bonds to the extent that the proceeds
thereof are used to refund the Refunded Bonds.
(b) Use of Proceeds. The City covenants and
agrees that its use of the Net Proceeds of the Bonds and the
-31-
Refunded Bonds will at all times satisfy the following
requirements:
(i ) The City will use $12, 352 , 284.83 of the
Net Proceeds of the Bonds to acquire Escrowed
Securities (as hereinafter defined) sufficient to
pay the principal of or interest and premium, if
any, on the Refunded Bonds except for amounts, if
any, described in the Report as the rounding
amount and the ending cash balance in the Escrow
Fund (as hereinafter defined) . The City has
limited, with respect to the Refunded Bonds, and
will limit the amount of original or investment
proceeds of the Refunded Bonds to be used (other
than use as a member of the general public) in the
trade or business of any person other than a
governmental unit to an amount aggregating no more
than ten percent of the Net Proceeds of the
Refunded Bonds ( "private-use proceeds" ) . For
purposes of this Section, the term "person"
includes any individual, corporation, partnership,
unincorporated association, or any other entity
capable of carrying on a trade or business; and
the term "trade or business" means, with respect
to any natural person, any activity regularly
carried on for profit and, with respect to persons
other than natural persons, any activity other
than an activity carried on by a governmental
unit. Any use of proceeds of the Refunded Bonds
or the Bonds in any manner contrary to the
guidelines set forth in Revenue Procedures 82-14,
1982-1 C.B. 459, and 82-15, 1982-1 C.B. 460,
including any revisions or amendments thereto,
shall constitute the use of such proceeds in the
trade or business of one who is not a governmental
unit;
(ii) The City has not permitted with respect
to the Bonds and the Refunded Bonds, and will not
permit more than five percent of the Net Proceeds
of the Bonds and the Refunded Bonds, to be used in
the trade or business of any person other than a
governmental unit if such use is unrelated to the
governmental purposes of such Refunded Bonds.
Further, the amount of private-use proceeds of the
Bonds and the Refunded Bonds in excess of five
percent of the Net Proceeds thereof ( "excess
private-use proceeds" ) did not and will not exceed
the proceeds of the Bonds and the Refunded Bonds
expended for the governmental purpose of the Bonds
-32-
and the Refunded Bonds to which such excess
private-use proceeds relate;
(iii ) The City has not permitted with respect
to the Bonds and the Refunded Bonds, and will not
permit an amount of proceeds of the Bonds and the
Refunded Bonds, exceeding the lesser of
(a) $5,000,000 or (b) five percent of the Net
Proceeds of the Bonds and the Refunded Bonds, to
be used, directly or indirectly, to finance loans
to persons other than governmental units;
(iv) The City will use $4,437,240. 47 of the
Net Proceeds to pay the cost of issuance of the
Bonds not otherwise paid pursuant to clause (i )
above and to provide for acquisitions, extensions,
construction, improvement, or repair of the System
and all of such proceeds shall be expended for
such purpose no later than December 31, 1991 ; and
(v) The City covenants and agrees that the
monies on deposit in the Reserve Fund and the
Interest and Sinking Fund for the Refunded Bonds
shall be transferred and applied as provided in
Section 26 of this Ordinance.
When used in this Section 24, the term "Net Proceeds" of the
Bonds and the Refunded Bonds shall mean the proceeds from
the sale of each issue of the Bonds and the Refunded Bonds,
respectively, including investment earnings on the proceeds
of such issue, less accrued interest with respect to such
issue.
(c) No Federal Guaranty. The City covenants and
agrees not to take any action, or knowingly omit to take any
action within its control , that, if taken or omitted,
respectively, would cause the Bonds to be "federally
guaranteed" within the meaning of Section 149(b) of the Code
and applicable regulations thereunder, except as permitted
by Section 149(b) (3) of the Code and such regulations.
(d) No-Arbitrage Covenant. The City shall
certify, through an authorized officer, employee or agent,
that based upon all facts and estimates known or reasonably
expected to be in existence on the date the Bonds are
delivered, the City will reasonably expect that the proceeds
of the Bonds and the amounts transferred from the Reserve
Fund for the Refunded Bonds pursuant to Section 26 of this
Ordinance will not be used in a manner that would cause the
Bonds to be "arbitrage bonds" within the meaning of Section
148(a) of the Code and applicable regulations thereunder.
-33-
Moreover, the City covenants and agrees that it will make
such use of the proceeds of the Bonds and the amounts so
transferred from said Reserve Fund (including interest or
other investment income derived therefrom) , regulate
investments of such proceeds and amounts, and take such
other and further action as may be required so that the
Bonds will not be "arbitrage bonds" within the meaning of
Section 148(a) of the Code and applicable regulations
thereunder.
(e) Arbitrage }debate. The City will take all
necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the "gross
proceeds" of the Bonds (within the meaning of Section
148(f) (6) (B) of the Code) , be rebated to the federal
government:. Specifically, the City will (i ) maintain
records regarding the investment of the gross proceeds of
the Bonds as may be required to calculate the amount earned
on the investment of the gross proceeds of the Bonds
separately from records of amounts on deposit in the funds
and accounts of the City allocable to other bond issues of
the City or moneys which do not represent gross proceeds of
any bonds of the City, (ii) calculate at such times as are
required by applicable regulations, the amount earned from
the investment of the gross proceeds of the Bonds which is
required to be rebated to the federal government, and
(iii) pay, not less often than every fifth anniversary date
of the delivery of the Bonds, and within sixty days after
the retirement of the Bonds, or on such other date as may be
permitted under applicable regulations with respect to
"gross proceeds" in the Escrow Fund, all amounts required to
be rebated to the federal government. Further, the City
will not indirectly pay any amount otherwise payable to the
federal government pursuant to the foregoing requirements to
any person other than the federal government by entering
into an arrangement with respect to the gross proceeds of
the Bonds that might result in a "prohibited payment" within
the meaning of Temp. Treas. Reg. § 1 . 103-15AT.
( f) Information Reporting. The City covenants
and agrees to file or cause to be filed with the Secretary
of the Treasury, not later than the 15th day of the second
calendar month after the close of the calendar quarter in
which the Bonds are issued, an information statement
concerning the Bonds, all under and in accordance with
Section 149(e) of the Code and applicable regulations
thereunder.
25. Application of Proceeds. Proceeds from the sale
of the Bonds shall, promptly upon receipt by the City, be
applied as follows:
-34-
(a) Accrued interest shall be deposited into the
Interest and Sinking Fund;
(b) $12,352 ,284. 83 from the sale of the Bonds shall be
applied to establish an escrow fund to refund the Refunded
Bonds, as more fully provided below, and, to the extent not
otherwise provided for, to pay all expenses arising in
connection with the establishment of such escrow fund and
the refunding of the Refunded Bonds;
(c) $4, 437,240. 47 from the sale of the Bonds shall be
deposited in the Series 1989 Waterworks and Sewer System
Construction Fund (the "Construction Fund" ) which is hereby
created and established as a special fund of the City and
shall be kept at a depository bank of the City separate and
apart from all other funds of the City; and all amounts in
the Construction Fund shall be used solely to provide for
acquisitions, extensions, construction, improvement or
repair of the System as described in Section 3 of this
Ordinance on or prior to December 31, 1991, and to pay the
costs of issuing the Bonds not otherwise paid pursuant to
clause (b) above; and
(d) Any remaining investment earnings from the Bonds
shall be deposited into the Interest and Sinking Fund.
26. Transfer of Money in Reserve Fund and Interest and
Sinking Fund Maintained for Refunded Bonds. On the date of
issuance and delivery of the Bonds, amounts contained in the
Reserve Fund for the Refunded Bonds shall be transferred to
the Water Utilities Improvement Fund and the City shall use
such amounts in order to provide for acquisitions,
extensions, construction, improvement or repair of the
System no later than December 31, 1989. On the date of
issuance and delivery of the Bonds, amounts contained in the
Interest and Sinking Fund for the Refunded Bonds shall be
transferred to the Interest and Sinking Fund for the Bonds
and shall be applied as herein provided.
27. Redemption of Refunded Bonds. The City hereby
irrevocably calls the following bonds of the City for
redemption prior to maturity on the date set forth below,
and authorizes and directs notice of such redemption to be
given as provided in the form attached hereto as Exhibit
A" :
-35-
Bonds To Be Redeemed Redemption Date
City of Beaumont, Texas,
Waterworks and Sewer System
Revenue Refunding Bonds,
Series 1983, Maturities
1992 through 1998 September 1, 1991
28. Escrow Agreement. The discharge and defeasance of
the Refunded Bonds shall be effectuated pursuant to the
terms and provisions of an Escrow Agreement to be entered
into by and between the City and Citibank, N.A. , New York,
New York, as Escrow Agent, which shall be substantially in
the form attached hereto as Exhibit "B" , the terms and
provisions of which are hereby approved, subject to such
insertions, additions and modifications as shall be
necessary (a) to carry out the program designed for the City
by Underwood, Neuhaus & Co. , Inc. , and which shall be
certified as to mathematical accuracy by Peat, Marwick,
Main & Co. , Certified Public Accountants, whose Report shall
be attached to the Escrow Agreement, (b) to maximize the
City' s present value savings and/or to minimize the City' s
costs of refunding, (c) to comply with all applicable laws
and regulations relating to the refunding of the Refunded
Bonds and (d) to carry out the other intents and purposes of
this Ordinance, and the Mayor or Mayor Pro Tem is hereby
authorized to execute and deliver such Escrow Agreement on
behalf of the City in multiple counterparts and the City
Clerk or an Assistant City Clerk is hereby authorized to
attest thereto and affix the City' s seal .
29. Source of City Funds Used in Refunding. No money
of the City other than proceeds of the Bonds shall be used
to refund the Refunded Bonds.
30. Purchase of United States Treasury Obligations.
To assure the purchase of the Escrowed Securities referred
to in the Escrow Agreement, the Mayor or Mayor Pro Tem, the
City' s Chief Financial Officer, and the Escrow Agent are
hereby authorized to subscribe for, agree to purchase, and
purchase non-callable obligations of the United States of
America, in such amounts and maturities and bearing interest
at such rates as may be provided for in the Report, and to
execute any and all subscriptions, purchase agreements,
commitments, letters of authorization and other' documents
necessary to effectuate the foregoing, and any actions
heretofore taken for such purpose are hereby ratified and
approved.
-36-
31 . Related Matters. To satisfy in a timely manner
all of the City' s obligations under this Ordinance and the
Escrow Agreement, the Mayor or Mayor Pro Tem, the City Clerk
or an Assistant City Clerk, and all other appropriate
officers and agents of the City are hereby authorized and
directed to take all other actions that are reasonably
necessary to provide for the refunding of the Refunded
Bonds, including without limitation, executing and
delivering on behalf of the City all certificates, consents,
receipts, requests, and other documents as may be reasonably
necessary to satisfy the City' s obligations under the Escrow
Agreement and this Ordinance and to direct the application
of funds of the City consistent with the provisions of such
Escrow Agreement and this Ordinance.
32 . Registrar. The form of agreement setting forth
the duties of the Registrar is hereby approved, and the
appropriate officials of the City are hereby authorized to
execute such agreement for and on behalf of the City.
33 . Official Statement. The City Council of the City
hereby ratifies, authorizes and approves, in connection with
the sale of the Bonds, the preparation and distribution of
the Preliminary Official Statement dated August 1, 1989, and
an Official Statement dated August 22, 1989, containing such
information as may be necessary to conform to the terms of
the Bonds, this Ordinance, and the purchase contract for the
Bonds. The appropriate officials of the City are hereby
authorized to sign such Official Statement and/or to deliver
a certificate pertaining to such Official Statement as
prescribed therein, dated as of the date of payment for and
delivery of the Bonds.
34. No Personal Liability. No recourse shall be had
for payment of the principal of or interest on any Bonds or
for any claim based thereon, or on this Ordinance, against
any official or employee of the City or any person executing
any Bonds.
35 . Payment Pursuant to Municipal Bond Guaranty
Insurance Policy. As long as the Municipal Bond Guaranty
Insurance Policy shall be in full force and effect, the City
and the Registrar agree to comply with the following
provisions:
(a) If payment of principal or interest due on
the Bonds has not been made to the Registrar, the
Registrar or any Owner to whom such payment is due,
shall so notify MBIA by telephonic or telegraphic
notice, subsequently confirmed in writing, or written
notice by registered or certified mail. Such notice
-37-
shall specify the amount of the anticipated deficiency,
the Bonds to which such deficiency is applicable and
whether such Bonds will be deficient as to principal or
interest, or both. MBIA, on the later of the date due
for payment or within one Business Day after receipt of
notice of nonpayment, will deposit sufficient moneys
with Citibank, N.A. , as insurance trustee for MBIA or
any successor insurance trustee (the "Insurance
Trustee" ) .
(b) The Registrar shall, after giving notice to
MBIA as provided in (a) above, make available to MBIA
and, at MBIA" s direction, to the Insurance Trustee, the
Bond Register and all records relating to the funds and
maintained under this Ordinance.
(c) The Registrar shall provide MBIA and the
Insurance Trustee with a list of registered Owners of
Bonds entitled to receive principal or interest
payments from MBIA under the terms of the Municipal
Bond Guaranty Insurance Policy, and shall make
arrangements with the Insurance Trustee (i) to mail
checks or drafts to the registered Owners of Bonds
entitled to receive full or partial interest payments
from MBIA and (ii) to pay principal upon Bonds
surrendered to the Insurance Trustee by the registered
Owners of Bonds entitled to receive full or partial
principal payments from MBIA.
(d) The Registrar shall, at the time it provides
notice to MBIA pursuant to (a) above, notify registered
Owners of Bonds entitled to receive the payment of
principal or interest thereon from MBIA (i ) as to the
fact of such entitlement, (ii ) that MBIA will remit to
them all or a part of the interest payments next coming
due, (iii ) that should they be entitled to receive full
payment of principal from MBIA, they must present and
surrender their Bonds together with any appropriate
instrument of assignment for payment to the Insurance
Trustee, and not the Registrar and (iv) that should
they be entitled to receive partial payment of
principal from MBIA, they must present and surrender
their Bonds for payment thereon first to the Registrar,
who shall note on such Bonds the portion of the
principal paid by the Registrar, and then, along with
an appropriate instrument of assignment, to the
Insurance Trustee, which will then pay the unpaid
portion of principal . The Insurance Trustee shall
disburse to registered Owners of Bonds or the
Registrar, the payment due less any amount held by the
-38-
Registrar for payment of principal of or interest on
Bonds and legally available therefor.
(e) In the event that the Registrar has notice
that any payment of principal of or interest on a Bond
which has become due for payment and which is made to
an Owner by and on behalf of the City has been deemed a
preferential transfer and theretofore recovered from
its registered Owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a
court having competent jurisdiction, the Registrar
shall, at the time MBIA is notified pursuant to (a)
above, notify all registered Owners that in the event
that any registered Owner' s payment is so recovered,
such registered Owner will be entitled to payment from
MBIA to the extent of such recovery if sufficient funds
are not otherwise available, and the Registrar shall
furnish to MBIA its records evidencing the payments of
principal of and interest on the Bonds which have been
made by the Registrar and subsequently recovered from
registered Owners and the dates on which such payments
were made.
(f) In addition to those rights granted MBIA
under this Ordinance, MBIA shall, upon remittance and
transfer of Bonds and appropriate instruments of
assignment, become the Owner thereof, and to evidence
such ownership (i ) in the case of claims for past due
interest, the Registrar shall note MBIA' s right as
Owner on the Register upon receipt from MBIA of proof
of the payment of interest thereon to the registered
Owners of the Bonds and (ii ) in the case of claims for
past due principal, the Registrar shall note MBIA' s
rights as Owner on the Register upon surrender of the
Bonds by the registered Owners thereof together with
proof of the payment of principal thereof.
36. MBIA Consent. Any provision of this Ordinance
expressly recognizing or granting rights in or to MBIA may
not be amended in any manner which affects the rights of
MBIA hereunder without the prior written consent of MBIA
(which shall not be unreasonably withheld) .
37. MBIA Subrogation. In the event that the principal
and/or interest due on the Bonds shall be paid by MBIA
pursuant to the Municipal Bond Guaranty Insurance Policy,
the Bonds shall remain outstanding for all purposes, not be
defeased or otherwise satisfied and not be considered paid
by the City and all covenants, agreements and other
obligations of the City to the Owners shall continue to
-39-
exist and shall run to the benefit of MBIA, and MBIA shall
be subrogated to the rights of such Owners.
38. MBIA Reserve Fund Surety Bond. In order to
satisfy the Reserve Fund Requirement with respect to the
Bonds, the City hereby approves the purchase of the MBIA
Reserve Fund Surety Bond for deposit with the Registrar in
the Reserve Fund and hereby authorizes the execution,
delivery and performance of the MBIA Financial Guaranty
Agreement with respect thereto. So long as the MBIA Reserve
Fund Surety Bond remains in effect, the City and the
Registrar agree that all demands for payment thereunder
shall be made at least 3 days prior to the date on which the
funds are required to be delivered and that the Registrar
shall maintain adequate records as to the amount available
to be drawn from time to time under the MBIA Reserve Fund
Surety Bond and as to the amounts owing from the City to
MBIA under the MBIA Financial Guaranty Agreement.
39. Notices and Reports. The City covenants that it
will provide MBIA and each Insurer with
(a) a copy of the City' s annual audited financial
statement for each fiscal year and the City' s budget
for the following fiscal year, within 120 days of the
end of each of the City' s fiscal years;
(b) notice of any issue of debt obligations by
the City and a copy of any disclosure document prepared
in connection therewith, within 30 days after the
issuance of such obligations;
(c) such other information as MBIA or each
Insurer may reasonably request; and
(d) copies of all notices which the City provides
or is obligated to provide hereunder at the same time
and in the same manner as each such notice is given
hereunder.
In addition, the City agrees that any amendment of or
modification to this Ordinance shall be sent to Standard &
Poor' s Corporation, Inc. , and any other rating agency
reasonably designated by MBIA and each Insurer.
For purposes of this Ordinance, the City shall provide
MBIA with all notices and reports required hereunder at the
following address unless and until MBIA notifies the City in
writing as to a different address:
-40-
The Municipal Bond Investors
Assurance Corporation
113 King Street
Armonk, NY 10504
Attention: Surveillance Department
40. Open Meeting. It is hereby officially found and
determined that the meeting at which this Ordinance was
adopted was open to the public, and public notice of the
time, place and purpose of said meeting was given, all as
required by Article 6252-17, Vernon' s Texas Civil Statutes.
PASSED AND APPROVED this 22nd day of August, 1989 .
'Mayor
The City of Beaumont
AT'iE'ST
Deputy City Clei-
Tr1e CY tyy- of Beaumont
(SEAL}
-41-
EXHIBIT "A"
NOTICE OF PRIOR REDEMPTION
CITY OF BEAUMONT, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 1983 , maturing on
September 1 in each of the years 1992 through 1998 in
the aggregate principal amount of $10, 195, 000.
NOTICE IS HEREBY GIVEN that the City of Beaumont,
Texas, has called the above bonds for redemption on
September 1, 1991 . Such bonds will be redeemed at Citibank,
N.A. , New York, New York, where due provision shall be made
to pay the redemption price of the principal amount of such
bonds plus accrued interest to the date fixed for
redemption. Such bonds shall not bear interest after
September 1, 1991 .
BY ORDINANCE of the City of Beaumont, Texas, adopted
August 22, 1989.
MAURICE E. MEYERS, Mayor
City of Beaumont, Texas
EXHIBIT "B"
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement" ) dated
for convenience August 22 , 1989, but effective on the Escrow
Funding Date described herein, is made and entered into by
and between The City of Beaumont, Texas, a Home Rule City
organized and existing under the Constitution and laws of
the State of Texas (together with any successor to its
duties and functions, the "City" ) , and Citibank, N.A. , New
York, New York, a national banking association having its
principal corporate trust office in New York, New York, as
escrow agent (together with any successor or assign in such
capacity, the "Escrow Agent" ) .
WHEREAS, the City has heretofore issued and there
remain outstanding the City' s Waterworks and Sewer System
Revenue Refunding Bonds, Series 1983, and the City desires
to provide for the refunding prior to maturity of such bonds
(the "Refunded Bonds" ) ; and
WHEREAS, Article 717k, Vernon' s Texas Civil Statues, as
amended, authorizes and empowers the City to issue, sell and
deliver revenue refunding bonds and to deposit the proceeds
of such bonds, together with other available funds or
resources, with any place of payment for the Refunded Bonds
in an amount which is sufficient to provide for the payment
or redemption of the principal of and interest on the
Refunded Bonds; and
WHEREAS, the City Council of the City has adopted an
ordinance authorizing the issuance of the City' s Waterworks
and Sewer System Revenue and Refunding Bonds, Series 1989,
in the aggregate principal amount of $16, 840,000 (the
"Refunding Bonds" ) , for the purpose, among other things, of
providing the funds necessary to pay and refund the Refunded
Bonds and to thereby provide a savings in debt service; and
WHEREAS, the City has provided pursuant to this Escrow
Agreement for the application of the proceeds of the
Refunding Bonds to provide for the payment and redemption of
the Refunded Bonds; and
WHEREAS, the City Council of the City has further
determined to effectuate the advance refunding of the
Refunded Bonds pursuant to this Escrow Agreement, under
which provision is made for the safekeeping, investment,
reinvestment, administration and disposition of the proceeds
of the Refunding Bonds, so as to provide firm banking and
financial arrangements for the discharge and final payment
or redemption of the Refunded Bonds;
NOW, THEREFORE, in consideration of the mutual
-undertakings, promises and agreements herein contained, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order
to secure the full and timely payment of the principal of
and the interest on the Refunded Bonds, the City and the
Escrow Agent contract and agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1 . 01 Definitions. Unless otherwise expressly provided
or unless the context clearly requires otherwise, the
following terms shall have the respective meanings specified
below for all purposes of this Escrow Agreement:
"Book Entry Securities" shall mean the United States
Treasury Obligations, State and Local Government Series,
initially purchased with the proceeds of the Refunding
Bonds, all as more fully described in the Report.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the applicable regulations thereunder and under
the Internal Revenue Code of 1954.
"City" shall mean The City of Beaumont, Texas, and any
successor to its duties and functions.
"Escrow Agent" shall mean Citibank, N.A. , New York, New
-fork, in its capacity as escrow agent hereunder, and any
successor or assign in such capacity.
"Escrow Agreement" shall mean this escrow agreement by
and between the City and the Escrow Agent, as it may be
amended or supplemented from time to time.
"Escrow Fund" shall mean the fund created in Section
3 . 01 of this Escrow Agreement to be administered by the
Escrow Agent pursuant to the provisions of this Escrow
Agreement.
"Escrow Funding Date" shall mean the date on which the
City deposits with the Escrow Agent the cash and Escrowed
Securities described in Section 2 . 01 .
"Escrowed Securities" shall mean the Book Entry
Securities.
-2-
"Paying Agent for the Refunded Bonds" shall mean
Citibank, N.A. , New York, New York.
"Refunded Bond Ordinance" shall mean the City' s
ordinance authorizing the issuance, sale and delivery of the
Refunded Bonds .
"Refunded Bonds" shall mean the City' s Waterworks and
Sewer System Revenue Refunding Bonds, Series 1983 , in the
aggregate principal amount of $11, 945, 000.
"Refunding Bonds" shall mean the City' s Waterworks and
Sewer System Revenue and Refunding Bonds, Series 1989, dated
September 1, 1989, in the outstanding aggregate principal
amount of $16, 840, 000.
"Refunding Bond Ordinance" shall mean the City' s
Ordinance adopted August 22 , 1989, authorizing the issuance,
sale and delivery of the Refunding Bonds.
"Report" shall mean the verification report prepared by
Peat, Marwick, Main & Co. relating to the advance refunding
of the Refunded Bonds, a copy of which is attached hereto as
Exhibit "A" .
1.02 Interpretations. The titles and headings of the
articles and sections of this Escrow Agreement have been
inserted for convenience of reference only and are not to be
considered a part hereof and shall not in any way modify or
restrict the terms hereof. This Escrow Agreement and all of
the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein and to achieve
the intended purpose of providing for the refunding of the
Refunded Bonds in accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS AND ESCROWED SECURITIES
2 .01 Deposits with Escrow Agent; Acquisition of
Escrowed Securities. On the Escrow Funding Date, the City
will deposit, or cause to be deposited, with the Escrow
Agent the following:
(a) Book Entry Securities in the principal amount of
$12,352,200.00, purchased with a portion of the proceeds of
the Refunding Bonds; and
(b) A beginning cash balance of $84. 83 .
-3-
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
3 .01 Escrow Fund. On the Escrow Funding Date, the
Escrow Agent will create on its books a special fund and
irrevocable escrow to be known as The City of Beaumont
Waterworks and Sewer System Revenue Refunding Bonds Escrow
Fund, into which will be deposited the cash and Escrowed
Securities described in Section 2 .01 . The Escrowed
Securities, all proceeds therefrom and all cash balances
from time to time on deposit in the Escrow Fund shall be the
property of the Escrow Fund, and shall be applied only in
strict conformity with the terms and conditions hereof. The
Escrowed Securities, all proceeds therefrom and all cash
balances from time to time on deposit in the Escrow Fund are
hereby irrevocably pledged to the payment of the principal
of and interest on the Refunded Bonds, which payment shall
be made by timely transfers to the Paying Agent for the
Refunded Bonds of such amounts at such times as are provided
in Section 3 .02 hereof. When the final transfers have been
made to the Paying Agent for the Refunded Bonds for the
payment of such principal of and interest on the Refunded
Bonds, any balance then remaining in the Escrow Fund shall
be transferred to the City, and the Escrow Agent shall
thereupon be discharged from any further duties hereunder.
3.02 Payment of Principal of and Interest on Refunded
Bonds.
(a) The Escrow Agent is hereby irrevocably
instructed to transfer to the Paying Agent for the Refunded
Bonds from the cash balance from time to time on deposit in
the Escrow Fund the amounts required to pay the principal of
and interest on the Refunded Bonds as the same become due
and payable, all as provided in the Report.
(b) Money transferred to and held by the Paying
Agent for the Refunded Bonds in accordance with the
provisions hereof shall be held by the Paying Agent for the
Refunded Bonds as a separate trust fund for the account of
the respective holders of the Refunded Bonds in connection
with which such money is held; provided, however, subject to
the provisions of Title 6 of the Texas Property Code
regarding Unclaimed Property, that money so held remaining
unclaimed by the owners of such Refunded Bonds for three (3)
years after the dates on which payment thereon was due,
payable and available for payment shall be paid to the City
to be used for any lawful purpose. Thereafter, neither the
City, the Escrow Agent, the Paying Agent for the Refunded
Bonds nor any other person shall be liable or responsible to
-4-
any holders of such Refunded Bonds for any further payment
of such unclaimed money or on account of any such Refunded
Bonds.
(c) Except as provided in Article IV hereof, the
City hereby covenants and agrees that it will not exercise
any right that it may have to redeem any of the Refunded
Bonds prior to their scheduled maturities.
3.03 Sufficiency of Escrow Fund. The City represents
(based solely upon the Report) that the successive receipts
of the principal of and interest on the Escrowed Securities
will assure that the cash balance on deposit from time to
time in the Escrow Fund will be at all times sufficient to
provide money for transfer to the Paying Agent for the
Refunded Bonds at the times and in the amounts required to
pay the interest on the Refunded Bonds as such interest
comes due and to pay the principal of the Refunded Bonds as
the Refunded Bonds mature or are redeemed.
3.04 Escrow Fund. The Escrow Agent at all times shall
hold the Escrow Fund, the Escrowed Securities and all other
assets of the Escrow Fund wholly segregated from all other
funds and securities on deposit with the Escrow Agent; it
shall never allow the Escrowed Securities or any other
assets of the Escrow Fund to be commingled with any other
funds or securities of the Escrow Agent; and it shall hold
and dispose of the assets of the Escrow Fund only as set
forth herein. The Escrowed Securities and other assets of
the Escrow Fund always shall be maintained by the Escrow
Agent for the benefit of the holders of the Refunded Bonds;
and a special account therefor evidencing such fact shall be
maintained at all times on the books of the Escrow Agent.
The holders of the Refunded Bonds shall be entitled to the
same preferred claim and first lien upon the Escrowed
Securities, the proceeds thereof and all other assets of the
Escrow Fund as are enjoyed by other beneficiaries of similar
accounts. The amounts received by the Escrow Agent under
this Escrow Agreement shall not be considered as a banking
deposit by the City, and the Escrow Agent shall have no
right or title with respect thereto except as escrow agent
under the terms hereof. The amounts received by the Escrow
Agent hereunder shall not be subject to warrants, drafts or
checks drawn by the City.
3.05 Security for Cash Balances. Cash balances from
time to time on deposit in the Escrow Fund, to the extent
not insured by the Federal Deposit Insurance Corporation or
its successor, shall be continuously secured by a pledge of
direct obligations of, or obligations unconditionally
guaranteed by, the United States of America, held by an
-5-
independent third party, and having a market value at least
equal to such cash balances.
ARTICLE IV
REDEMPTION OF CERTAIN REFUNDED BONDS PRIOR TO MATURITY
4.01 Optional Redemption of Certain Refunded Bonds.
The City has irrevocably exercised its option to call for
redemption prior to maturity the Refunded Bonds as set forth
below. Such optional redemption shall be carried out in
accordance with the Ordinance authorizing the issuance of
such Bonds. The Escrow Agent is hereby authorized to
provide funds therefor as set forth in Section 3 .02(a)
hereof.
Bonds To Be Redeemed Redemption Date
City of Beaumont, Texas,
Waterworks and Sewer System
Revenue Refunding Bonds,
Series 1983 , Maturities
1992 through 1998 September 1, 1991
ARTICLE V
LIMITATION ON INVESTMENTS
5 .01 General . Except as herein otherwise expressly
provided, the Escrow Agent shall not have any power or duty
to invest any money held hereunder; or to make substitutions
of the Escrowed Securities; or to sell, transfer or
otherwise dispose of the Escrowed Securities.
5.02 Substitution of Securities. At the written
request of the City, and upon compliance with the conditions
hereinafter stated. the Escrow Agent shall sell . transfer,
otherwise dispose of or request the redemption of all or any
portion of the Escrowed Securities and apply the proceeds
therefrom to purchase Refunded Bonds or direct obligations
of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of
America and which do not permit the redemption thereof at
the option of the obligor. Any such transaction may be
effected by the Escrow Agent only if (1) the Escrow Agent
shall have received a written opinion from a nationally
recognized firm of certified public accountants acceptable
to the City and the Escrow Agent that such transaction will
not cause the amount of money and securities in the Escrow
Fund to be reduced below an amount which will be sufficient,
when added to the interest to accrue thereon, to provide for
-6-
the payment of principal and interest on the remaining
Refunded Bonds as they become due, and (2 ) the Escrow Agent
shall have received the unqualified written legal opinion of
nationally recognized bond counsel or tax counsel acceptable
to the City and the Escrow Agent to the effect that such
transaction will not cause any of the Refunding Bonds to be
an "arbitrage bond" within the meaning of the Code, and that
such transaction will not result in a violation of the laws
of the State of Texas.
ARTICLE VI
RECORDS AND REPORTS
6. 01 Records. The Escrow Agent shall keep books of
record and account in which complete and correct entries
shall be made of all transactions relating to the receipts,
disbursements, allocations and application of the money and
Escrowed Securities deposited to the Escrow Fund and all
proceeds thereof, and such books shall be available for
inspection at reasonable hours and under reasonable
conditions by the City and the holders of the Refunded
Bonds.
6.02 Reports. For the period beginning on the Escrow
Funding Date and ending on March 1, 1990, and for each
twelve ( 12 ) month period thereafter while this Agreement
remains in effect, the Escrow Agent shall prepare and send
to the City, at the City' s request, within thirty (30) days
following the end of such period a written report
summarizing all transactions relating to the Escrow Fund
during such period, including, without limitation, credits
to the Escrow Fund as a result of interest payments on or
maturities of the Escrowed Securities and transfers from the
Escrow Fund to the Paying Agent for the Refunded Bonds or
otherwise, together with a detailed statement of all
Escrowed Securities and the cash balance on deposit in the
Escrow Fund as of the end of such period.
6. 03 Notification. The Escrow Agent shall notify the
City immediately if at any time during the term of this
agreement it determines that there is insufficient cash and
Escrowed Securities in the Escrow Fund to provide for the
transfer to the Paying Agent for the Refunded Bonds for
timely payment of all interest on and principal of the
Refunded Bonds.
-7-
ARTICLE VII
CONCERNING THE ESCROW AGENT
7 .01 Representations. The Escrow Agent hereby
represents that it has all necessary power and authority to
enter into this Escrow Agreement and undertake the
obligations and responsibilities imposed upon it herein, and
that it will carry out all of its obligations hereunder.
7.02 Limitation on Liability. The Escrow Agent shall
not be liable for any action taken or neglected to be taken
in good faith in the exercise of reasonable care and
believed to be within the discretion or power conferred by
this Escrow Agreement, nor shall it be responsible for the
consequences of any error of judgment; and it shall not be
answerable except for its own neglect or default, nor for
any loss unless the same shall have been through their
negligence or want of good faith.
The liability of the Escrow Agent to transfer funds to
the Paying Agent for the Refunded Bonds for the payments of
the principal of and interest on the Refunded Bonds shall be
limited to the proceeds of the Escrowed Securities and the
cash balances from time to time on deposit in the Escrow
Fund. Notwithstanding any provision contained herein to the
contrary, the Escrow Agent shall have no liability
whatsoever for the insufficiency of funds from time to time
in the Escrow Fund or any failure of the obligor of the
Escrowed Securities to make timely payment thereon, except
for the obligation to notify the City promptly of any such
occurrence.
The recitals herein and in the proceedings authorizing
the Refunding Bonds shall be taken as the statements of the
City and shall not be considered as made by, or imposing any
obligation or liability upon, the Escrow Agent. In its
capacity as Escrow Agent, it is agreed that the Escrow Agent
need look only to the terms and provisions of this Escrow
Agreement.
The Escrow Agent makes no representation as to the
value, condition or sufficiency of the Escrow Fund, or any
part thereof, or as to the title of the City thereto, or as
to the security afforded thereby or hereby, and the Escrow
Agent shall incur no liability or responsibility with
respect to any of such matters.
It is the intention of the City and the Escrow Agent
that the Escrow Agent shall never be required to use or
advance its own funds or otherwise incur personal financial
-8-
liability in the performance of any of its duties or the
exercise of any of its rights and powers hereunder.
Unless it is specifically provided otherwise herein,
the Escrow Agent has no duty to determine or inquire into
the happening or occurrence of any event or contingency or
the performance or failure of performance of the City with
respect to arrangements or contracts with others, with the
Escrow Agent' s sole duty hereunder being to safeguard the
Escrow Fund and to dispose of and deliver the same in
accordance with this Escrow Agreement. If, however, the
Escrow Agent is called upon by the terms of this Escrow
Agreement to determine the occurrence of any event or
contingency, the Escrow Agent shall be obligated, in making
such determination, only to exercise reasonable care and
diligence, and in event of error in making such
determination the Escrow Agent shall be liable only for its
own misconduct or its negligence. In determining the
occurrence of any such event or contingency the Escrow Agent
may request from the City or any other person such
reasonable additional evidence as the Escrow Agent in its
discretion may deem necessary to determine any fact relating
to the occurrence of such event or contingency, and in this
connection may make inquiries of, and consult with the City,
among others, at any time.
7. 03 Compensation.
(a) On the Escrow Funding Date the City will pay
the Escrow Agent, as a fee for performing the services
hereunder and for all expenses incurred or to be incurred by
the Escrow Agent in the administration of this Escrow
Agreement, and for its services in its capacity as Paying
Agent for the Refunded Bonds, the sum of $7 , 000. If the
Escrow Agent is requested to perform any extraordinary
services hereunder, the City hereby agrees to pay reasonable
fees to the Escrow Agent for such extraordinary services and
to reimburse the Escrow Agent for all expenses incurred by
the Escrow Agent in performing such extraordinary services.
It is expressly provided that the Escrow Agent shall look
only to the City for the payment of such additional fees and
reimbursement of such additional expenses . The Escrow Agent
hereby agrees that in no event shall it ever assert any
claim or lien against the Escrow Fund for any fees for its
services, whether regular, additional or extraordinary, as
Escrow Agent, or in any other capacity, or for reimbursement
for any of its expenses.
7.04 Successor Escrow Agents. If at any time the
Escrow Agent or its legal successor or successors should
cease to be the Escrow Agent hereunder, a vacancy shall
-9-
forthwith exist hereunder in the office of the Escrow Agent.
kny successor Escrow Agent appointed by the City shall
succeed, without further act, to all the rights, immunities,
powers and trusts of the predecessor Escrow Agent hereunder.
Upon the request of any such successor Escrow Agent, the
City shall execute any and all instruments in writing for
gore fully and certainly vesting in and confirming to such
successor Escrow Agent all such immunities, rights, powers
and duties. The Escrow Agent shall pay over to its
successor Escrow Agent a proportional part of the Escrow
Agent's fee hereunder equal to the portion of such fee
attributable to duties to be performed after the date of
succession.
ARTICLE VIII
MISCELLANEOUS
8.01 Notices. Any notice, authorization, request, or
demand required or permitted to be given hereunder shall be
in writing and shall be deemed to have been duly given when
Trailed by registered or certified mail, postage prepaid
addressed as follows:
To the Escrow Agent:
Citibank, N.A. , New York, New York
20 Exchange Place
Sort 3685
New York, New York 10043
Attention: Corporate Trust Department
To the Cif:
The City of Beaumont, Texas
P. 0. Box 3827
Beaumont, Texas 77704
Attention: Mayor
The United States Post Office registered or certified
mail receipt showing delivery of the aforesaid shall be
conclusive evidence of the date and fact of delivery. Any
party hereto may change the address to which notices are to
be delivered by giving to the other parties not less than
ten days prior notice thereof.
8.02 Termination of Escrow Agent' s Obligations. Upon
the taking by the Escrow Agent of all the actions as
described herein, the Escrow Agent shall have no further
obligations or responsibilities hereunder to the City, the
holders of the Refunded Bonds or to any other person or
persons in connection with this Escrow Agreement.
-10-
8. 03 Binding Aqreement. This Escrow Agreement shall be
binding upon the City, and the Escrow Agent and their
respective successors and legal representatives, and shall
inure solely to the benefit of the holders of the Refunded
Bonds, the City, the Escrow Agent and their respective
successors and legal representatives .
8.04 Severability. In case any one or more of the
provisions contained in this Escrow Agreement shall for any
reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Escrow
Agreement, but this Escrow Agreement shall be construed as
if such invalid or illegal or unenforceable provision had
never been contained herein.
8. 05 Governing Law. This Escrow Agreement shall be
governed exclusively by the provisions hereof and by the
applicable laws of the State of Texas.
8.06 Time of Essence. Time shall be of the essence in
the performance of obligations from time to time imposed
upon the Escrow Agent by this Escrow Agreement.
Executed as of August 22, 1989, but effective as set
forth herein.
THE CITY OF BEAUMONT, TEXAS
By:
ATTEST: Mayor
City Clerk
(SEAL)
CITIBANK, N.A. , NEW YORK, NEW
YORK, as Escrow Agent
By:
Vice President and
ATTEST Trust Officer
Assistant Cashier
(SEAL)
-11-