HomeMy WebLinkAboutORD 98-19 /S_ /91 No. 4
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $15, 000, 000
THE CITY OF BEAUMONT, TEXAS, COMBINATION TAX AND
REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998;
LEVYING TAXES TO PROVIDE FOR PAYMENT THEREOF;
AND CONTAINING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
THE CITY OF BEAUMONT
WHEREAS, the City Council of The City of Beaumont, Texas (the
"City") , has heretofore authorized the publication of a notice of
intention to issue certificates of obligation to the effect that
the City Council would meet on March 24, 1998, the date
tentatively set for passage of an ordinance and such other action
as may be deemed necessary to authorize the issuance of
certificates of obligation payable from City ad valorem taxes and
a pledge of certain revenues of the City' s waterworks and sewer
system, or as soon thereafter as may be practicable, for the
purpose of evidencing the indebtedness of the City for the cost of
construction of authorized street and drainage improvements,
equipment purchases, park expansions, and building renovations and
improvements in the City, the cost of professional services
incurred in connection therewith and the cost of issuance of such
certificates of obligation; and
WHEREAS, such notice was published at the times and in the
manner required by the Constitution and the laws of the State of
Texas and the United States of America, respectively, particularly
Chapter 271, Texas Local Government Code, as amended; and
WHEREAS, no petition or other request has been filed with or
presented to any official of the City requesting that any of the
proceedings authorizing such certificates of obligation be
submitted to a referendum or other election; and
WHEREAS, the City Council of the City has determined to
authorize such certificates of obligation for the purposes set out
in this Ordinance;
NOW, THEREFORE, BE IT ORDERED BY THE CITY OF BEAUMONT, TEXAS:
1. Preamble. The matters and facts contained in the
preamble to this Ordinance are hereby found to be true and
correct.
2 . Definitions. Throughout this Ordinance, the following
terms and expressions as used herein shall have the meanings set
forth below:
The term "Business Day" shall mean any day which is not a
Saturday, Sunday, a legal holiday, or a day on which the Registrar
is authorized by law or executive order to close.
The term "Certificates" or "Series 1998 Certificates" shall
mean the Certificates of Obligation, Series 1998, authorized in
this Ordinance, unless the context clearly indicates otherwise.
The term "Certificates Insurance Policy" shall mean the
municipal bond guaranty insurance policy issued by the Insurer
insuring the payment when due of the principal of and interest on
the Certificates as provided therein.
The term "City" shall mean The City of Beaumont, Texas.
The term "Code" shall mean the Internal Revenue Code of 1986,
as amended.
The term "Comptroller" shall mean the Comptroller of Public
Accounts of the State of Texas.
The term "Construction Fund" shall mean the construction fund
established by the City pursuant to Section 20 of this Ordinance.
The term "DTC" shall mean The Depository Trust Company of New
York, New York, or any successor securities depository.
The term "DTC Participant" shall mean brokers and dealers,
banks, trust companies, clearing corporations, and certain other
organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities
transactions among the DTC Participants.
The term "Insurer" shall mean the
issuer of the Certificates Insurance Policy.
The term "Interest and Sinking Fund" shall mean the interest
and sinking fund established by the City pursuant to Section 20 of
this Ordinance.
The term "Interest Payment Date" , when used in connection
with any Certificate, shall mean March 1, 1999, and each March 1
and September 1 thereafter until maturity or earlier redemption.
The term "Letter of Representation" shall mean the Letter of
Representation delivered by the City to DTC.
The term "Net Revenues" shall mean the revenues of the System
remaining after deduction of the reasonable and necessary expenses
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of operation and maintenance of the System.
The term "Ordinance" as used herein and in the Certificates
shall mean this Ordinance authorizing the Certificates.
The term "Owner" or "Registered Owner" , when used with
respect to any Certificate, shall mean the person or entity in
whose name such Certificate is registered in the Register.
The term "Paying Agent" shall mean the Registrar.
The term "Record Date" shall mean, for any Interest Payment
Date, the 15th day of the month next preceding such Interest
Payment Date.
The term "Register" shall mean the books of registration kept
by the Registrar in which are maintained the names and addresses
of and the principal amounts registered to each Owner.
The term "Registrar" shall mean Chase Bank of Texas, National
Association, Houston, Texas, and its successors in that capacity.
The term "SEC" shall mean the United States Securities and
Exchange Commission and its successors.
The term "System" shall mean the City' s waterworks and sewer
system.
The term "Underwriters" shall mean
3 . Authorization. The Certificates shall be issued in fully
registered form, without coupons, in the total authorized
aggregate amount of Fifteen Million Dollars ($15, 000, 000) , for the
purpose of evidencing the indebtedness of the City for the cost of
construction of authorized street and drainage improvements,
equipment purchases, park expansions, and building renovations and
improvements in the City, the cost of professional services
incurred in connection therewith and the cost of issuance of such
certificates of obligation.
4 . Designation, Date, and Interest Payment Dates. The
Certificates shall be designated as the "THE CITY OF BEAUMONT,
TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 199811 , and shall be dated April 1, 1998 . The Certificates
shall bear interest from the later of April 1, 1998, or the most
recent Interest Payment Date to which interest has been paid or
duly provided for, calculated on the basis of a 360-day year of
twelve 30-day months, interest payable on March 1, 1999, and
semiannually thereafter on March 1 and September 1 of each year
until maturity or earlier redemption.
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5. Certificates_ , Numbers and Denominations. The
Certificates shall be 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 Certificates shall mature, subject to
prior redemption in accordance with this Ordinance, on March 1 in
each of the years and in the amounts set out in such schedule.
Certificates delivered upon transfer of or in exchange for other
Certificates shall be numbered 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 Certificate or Certificates in
lieu of which they are delivered.
Certificate Year Principal Interest
Number of Maturity Amount Rate
CR-1 2000 $300, 000
0
CR-2 2001 $900, 000
0
CR-3 2002 $300, 000
0
CR-4 2003 $300, 000
0
CR-5 2004 $300, 000
0
CR-6 2005 $300, 000
0
CR-7 2006 $500, 000
0
CR-8 2007 $500, 000
0
CR-9 2008 $500, 000
CR-10 2009 $500, 000
CR-11 2010 $500, 000
CR-12 2011 $500, 000
0
CR-13 2012 $500, 000
0
CR-14 2013 $500, 000
CR-15 2014 $360, 000
0
CR-16 2015 $1, 900, 000
a
CR-17 2016 $ 1 1 ',000
C 18 2017 $6- s- 0 E) 2 , I 1 Di aaD o
Ck - 11 z0J ,b 2) -z,7S;-'000
6 . Execution of Certificates: Seal . The Certificates
shall be signed by the Mayor of the City and countersigned by the
City Clerk of the City, 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 Certificates shall have the same effect as if
each of the Certificates had been signed manually and in person by
each of said officers, and such facsimile seal on the Certificates
shall have the same effect as if the official seal of the City had
been manually impressed upon each of the Certificates. If any
officer of the City whose manual or facsimile signature shall
appear on the Certificates shall cease to be such officer before
the authentication of such Certificates or before the delivery of
such Certificates, such manual or facsimile signature shall
nevertheless be valid and sufficient for all purposes as if such
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officer had remained in such office.
7. Approval by Attorney General; Registration by
Comptroller. The Certificates to be initially issued shall be
delivered to the Attorney General of the State 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 initial Certificates.
8 . Authentication. Except for the Certificates to be
initially issued, which need not be authenticated by the
Registrar, only Certificates 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 Certificates 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 Certificates. The
principal of the Certificates 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 become due and payable,
at the designated corporate trust office of the Registrar. The
interest on each Certificate shall be payable by check payable 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 Register. At
the request of the registered Owner of $1, 000, 000 or more in
aggregate principal amount of Certificates, the Registrar shall
pay interest thereon by wire transfer in immediately available
funds to the account designated by such Owner to the Registrar in
writing at least five (5) days before the Record Date for such
payment .
If the date for payment of the principal of or interest on
any Certificate is not a Business Day, then the date for such
payment shall be the next succeeding Business Day, and payment on
such date shall have the same force and effect as if made on the
original date payment was due.
10 . Successor Registrars. The City covenants that at all
times while any Certificates are outstanding it will provide a
bank, trust company, financial institution or other entity duly
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qualified and duly authorized to act as Registrar for the
Certificates. The City reserves the right to change the Registrar
on not less than sixty (60) days ' written notice to the Registrar,
so long as any such notice is effective not less than sixty (60)
days prior to the next succeeding principal or interest payment
date on the Certificates . Promptly upon the appointment of any
successor Registrar, the previous Registrar shall deliver the
Register or copies thereof to the new Registrar, and the new
Registrar shall notify each Owner, by United 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 Certificate 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) business 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 Certificate is registered as the absolute Owner of such
Certificate for the purpose of making payment of principal or
interest on such Certificate, and for all other purposes, whether
or not such Certificate 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 Certificate in accordance with this Section 12 shall be
valid and effectual and shall discharge the liability of the City
and the Registrar upon such Certificate to the extent of the sums
paid.
Amounts held by the Registrar which represent principal of
and interest on the Certificates remaining unclaimed by the Owner
after the expiration of three (3) years from the date such amounts
have become due and payable shall be reported and disposed of by
the Registrar in accordance with the provisions of Texas law,
including to the extent applicable, Title 6 of the Texas Property
Code, as amended.
13 . Registration, Transfer, and Exchange; Special Election
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for Uncertificated Certificates. So long as any Certificates
remain outstanding, the Registrar shall keep the 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 Certificates in accordance with
the terms of this Ordinance.
Each Certificate 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 Certificate for transfer,
the Registrar shall authenticate and deliver in exchange therefor,
within three (3) Business Days after such presentation, a new
Certificate or Certificates, 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 Certificate or Certificates so presented.
All Certificates shall be exchangeable upon presentation and
surrender thereof at the principal corporate trust office of the
Registrar for a Certificate or Certificates of the same maturity
and interest rate in any authorized denomination, in an aggregate
principal amount equal to the unpaid principal amount of the
Certificate or Certificates presented for exchange. The Registrar
shall be and is hereby authorized to authenticate and deliver
exchange Certificates in accordance with the provisions of this
Section 13 . Each Certificate delivered in accordance with this
Section 13 shall be entitled to the benefits and security of this
Ordinance to the same extent as the Certificate or Certificates in
lieu of which such Certificate is delivered.
The City or the Registrar may require the Owner of any
Certificate 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 Certificate. Any fee or charge of
the Registrar for such transfer or exchange shall be paid by the
City.
Neither the City nor the Registrar shall be required to
transfer or exchange any Certificate called for redemption, in
whole or in part, within forty-five (45) days of the date fixed
for redemption; provided, however, such limitation on transfer
shall not be applicable to an exchange by the Owner of the
unredeemed balance of a Certificate called for redemption in part.
Notwithstanding any other provision hereof, upon initial
issuance of the Certificates but at the sole election of the
Underwriters, the ownership of the Certificates shall be
registered in the name of Cede & Co. , as nominee of DTC, and
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except as otherwise provided in this Section, all of the
outstanding Certificates shall be registered in the name of Cede &
Co. , as nominee of DTC. The definitive Certificates shall be
initially issued in the form of a single separate certificate for
each of the maturities thereof . If the Underwriters shall elect
to invoke the provisions of this Section, then the following
provisions shall take effect with respect to the Certificates.
With respect to Certificates registered in the name of Cede &
Co. , as nominee of DTC, the City and the Registrar shall have no
responsibility or obligation to any DTC Participant or to any
person on behalf of whom such a DTC Participant holds an interest
in the Certificates. Without limiting the immediately preceding
sentence, the City and the Registrar shall have no responsibility
or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co. or any DTC Participant with respect to any
ownership interest in the Certificates, (ii) the delivery to any
DTC Participant or any other person, other than an Owner of a
Certificate, as shown on the Register, of any notice with respect
to the Certificates, including any notice of redemption, or (iii)
the payment to any DTC Participant or any other person, other than
an Owner of a Certificate, as shown in the Register, of any amount
with respect to principal of, premium, if any, or interest on the
Certificates. Notwithstanding any other provision of this
Ordinance to the contrary, the City and the Registrar shall be
entitled to treat and consider the person in whose name each
Certificate is registered in the Register as the absolute Owner of
such Certificate for the purpose of payment of principal of,
premium, if any, and interest on the Certificates, for the purpose
of all matters with respect to such Certificates, for the purpose
of registering transfers with respect to such Certificates, and
for all other purposes whatsoever. The Registrar shall pay all
principal of, premium, if any, and interest on the Certificates
only to or upon the order of the respective Owners, as shown in
the Register as provided in this Ordinance, or their respective
attorneys duly authorized in writing, and all such payments shall
be valid and effective to fully satisfy and discharge the City' s
obligations with respect to payment of principal of, premium, if
any, and interest on the Certificates to the extent of the sum or
sums so paid. No person other than an Owner as shown in the
Register, shall receive a certificate for a Certificate evidencing
the obligation of the City to make payments of amounts due
pursuant to this Ordinance. Upon delivery by DTC to the Registrar
of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co. , the word "Cede &
Co. " in this Ordinance shall refer to such new nominee of DTC.
In the event that the City or the Registrar determines that
DTC is incapable of discharging its responsibilities described
herein and in the Letter of Representation and that it is in the
best interest of the beneficial Owners of the Certificates that
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they be able to obtain certificated Certificates, or if DTC
Participants owning at least 500 of the Certificates outstanding
based on current records of the DTC determine that continuation of
the system of book-entry transfers through the DTC (or a successor
securities depository) is not in the best interest of such
beneficial Owners of the Certificates, or in the event DTC
discontinues the services described herein, the City or the
Registrar shall (i) appoint a successor securities depository,
qualified to act as such under Section 17 (a) of the Securities and
Exchange Act of 1934, as amended, and notify DTC of the
appointment of such successor securities depository and transfer
one or more separate Certificates to such successor securities
depository or (ii) notify DTC of the availability through DTC of
Certificates and transfer one or more separate Certificates to DTC
Participants having Certificates credited to their DTC accounts.
In such event, the Certificates shall no longer be restricted to
being registered in the Register in the name of Cede & Co. , as
nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or
names Owners transferring or exchanging Certificates shall
designate, in accordance with the provisions of this Ordinance.
Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Certificates are registered in the name
of Cede & Co. , as nominee of DTC, all payments with respect to
principal of, premium, if any, and interest on the Certificates,
and all notices with respect thereto, shall be made and given in
the manner provided in the Letter of Representation.
14 . Mutilated, Lost, or Stolen Certificates. Upon the
presentation and surrender to the Registrar of a mutilated
Certificate, the Registrar shall authenticate and deliver in
exchange therefor a replacement Certificate of like maturity,
interest rate and principal amount, bearing a number not
contemporaneously outstanding. If any Certificate 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 Certificate has been acquired by a
bona fide purchaser, shall execute and the Registrar shall
authenticate and deliver a replacement Certificate of like amount,
bearing a number not contemporaneously outstanding.
The City or the Registrar may require the Owner of a
mutilated Certificate to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
therewith and any other associated expenses, 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 Certificate, before any
replacement Certificate is issued, to:
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(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 Certificate;
(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 Certificate, a
bona fide purchaser of the original Certificate in lieu of which
such replacement Certificate was issued presents for payment such
original Certificate, the City and the Registrar shall be entitled
to recover such replacement Certificate 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
wrongfully taken Certificate has become or is about to become due
and payable, the City in its discretion may, instead of issuing a
replacement Certificate, authorize the Registrar to pay such
Certificate.
Each replacement Certificate delivered in accordance with
this Section 14 shall be entitled to the benefits and security of
this Ordinance to the same extent as the Certificate or
Certificates in lieu of which such replacement Certificate is
delivered.
15 . Cancellation of Certificates. All Certificates paid in
accordance with this Ordinance, and all Certificates in lieu of
which exchange Certificates or replacement Certificates 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 Certificates.
16 . Optional Redemption. The City reserves the right, at
its option, to redeem Certificates having stated maturities on and
after March 1, 2009, in whole or in part, on March 1, 2008, or any
date thereafter, at a price of par plus accrued interest to the
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date fixed for redemption. If less than all of the Certificates
are to be redeemed, the City shall determine the Certificates, or
portions thereof, to be redeemed.
Certificates may be redeemed only in integral multiples of
$5, 000 . If a Certificate subject to redemption is in a
denomination larger that $5, 000, a portion of such Certificate may
be redeemed, but only in integral multiples of $5, 000 . Upon
surrender of any Certificate for redemption in part, the
Registrar, in accordance with Section 13 hereof, shall
authenticate and deliver in exchange therefor a Certificate or
Certificates of like maturity and interest rate in an aggregate
principal amount equal to the unredeemed portion of the
Certificate so surrendered.
Not less than thirty (30) days prior to a redemption date for
the Certificates, the City shall cause a notice of redemption to
be sent by United States mail, first class, postage prepaid, to
each Owner of each Certificate to be redeemed in whole or in part,
at the address of the Owner appearing on the Register at the close
of business on the Business Day next preceding the date of the
mailing of such notice. Such notice shall state the redemption
date, the redemption price, the place at which Certificates are to
be surrendered for payment and, if less than all the Certificates
are to be redeemed, the numbers of the Certificates or portions
thereof to be redeemed. Any notice of redemption so mailed 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 Certificates or portions thereof to be
redeemed. When Certificates have been called for redemption in
whole or in part and due provision made to redeem the same as
herein provided, the Certificates or portions thereof so redeemed
shall no longer be regarded as outstanding except for the purpose
of being paid 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 Certificate or
portion thereof called for redemption shall terminate on the date
fixed for redemption.
17. Forms. The form of the Certificates, including the
form of the Registrar' s Authentication Certificate, the form of
Assignment, 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 Certificates 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:
(Face of Certificate)
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UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF JEFFERSON
NUMBER DENOMINATION
CR- $
REGISTERED REGISTERED
THE CITY OF BEAUMONT, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION
SERIES 1998
INTEREST RATE: MATURITY DATE: DATED DATE:
April 1, 1998
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
certificate at the designated corporate trust office of Chase Bank
of Texas, National Association, in Houston, Texas (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 the Dated Date
specified above, or the most recent interest payment date to which
interest has been paid or duly provided for. Interest on this
Certificate is payable by check on March 1, 1998, and semiannually
thereafter on each March 1 and September 1, mailed to the
registered owner as shown on the books of registration kept by the
Registrar as of the 15th day of the month next preceding each
interest payment date. At the request of the registered owner of
$1, 000, 000 or more in aggregate principal amount of Certificates,
the Registrar shall pay interest on such Certificates by wire
transfer in immediately available funds to the account designated
by such owner to the Registrar in writing at least five (5) days
before the Record Date for such payment .
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
CERTIFICATE SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS
SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS
PLACE.
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IN WITNESS WHEREOF, this Certificate has been signed with the
manual or facsimile signature of the Mayor of the City and
countersigned with the manual or facsimile signature of the City
Clerk of the City and the official seal of the City has been duly
impressed, or placed in facsimile, on this Certificate.
(AUTHENTICATION CERTIFICATE) THE CITY OF BEAUMONT,
TEXAS
Mayor
(SEAL)
City Clerk
(Back Panel of Certificate)
THIS CERTIFICATE is one of a duly authorized issue of
Combination Tax and Revenue Certificates of Obligation,
aggregating $15, 000, 000 (the "Certificates") , issued in accordance
with the Constitution and the laws of the State of Texas,
particularly Chapter 271, Texas Local Government Code, as amended,
for the cost of construction of authorized street and drainage
improvements, equipment purchases, park expansions, and building
renovations and improvements in the City, the cost of professional
services incurred in connection therewith and the cost of issuance
of the Certificates, pursuant to an ordinance duly adopted by the
City Council of the City (the "Ordinance") , which Ordinance is of
record in the official minutes of the City Council.
THE CITY RESERVES THE RIGHT, at its option, to redeem the
Certificates having stated maturities on or after March 1, 2009,
in whole or in part, on March 1, 2008, or any date thereafter, in
integral multiples of $5, 000, at a price of par plus accrued
interest to the date fixed for redemption. Reference is made to
the Ordinance for complete details concerning the manner of
redeeming the Certificates.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30)
days prior the date fixed for redemption by first class mail,
addressed to the registered owner of each Certificate to be
redeemed in whole or in part at the address shown on the books of
registration kept by the Registrar. When Certificates 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 CERTIFICATE is transferable only upon presentation and
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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 CERTIFICATES are exchangeable at the principal corporate
trust office of the Registrar for Certificates in the principal
amount of $5, 000 or any integral multiple thereof, subject to the
terms and conditions of this Ordinance.
NEITHER THE CITY NOR THE REGISTRAR shall be required to
transfer or exchange any Certificate called for redemption, in
whole or in part, within forty-five (45) days of the date fixed
for redemption; provided, however, such limitation on transfer
shall not be applicable to an exchange by the Owner of the
unredeemed balance of a Certificate called for redemption in part.
THIS CERTIFICATE shall not be valid or obligatory for any
purpose or be entitled to any benefit under the Ordinance unless
this Certificate either (i) is registered by the Comptroller of
Public Accounts of the State of Texas by registration certificate
attached or affixed hereto or (ii) authenticated by the Registrar
by due execution of the authentication certificate endorsed
hereon.
THE REGISTERED OWNER of this Certificate, 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 Certificates
and will cause notice of any change of registrar to be mailed to
each registered owner.
IT IS HEREBY certified, recited and covenanted that this
Certificate 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 Certificate have been performed, exist and
have been done in accordance with law; and that annual ad valorem
taxes sufficient to provide for the payment of the interest on and
principal of this Certificate, as such interest comes due and such
principal matures, have been levied, within the limits prescribed
by law, against all taxable property in the City, and have been
pledged irrevocably for such payment.
IT IS FURTHER certified, recited and represented that the net
revenues (the "Net Revenues") to be derived from the operation of
the City' s waterworks and sewer system (the "System") , but only to
the extent of and in an amount not to exceed Ten Thousand Dollars
-14-
($10, 000 . 00) in the aggregate, are also pledged to the payment of
the principal of and interest on this Certificate and the series
of Certificates of which it is a part to the extent that taxes may
ever be insufficient or unavailable for said purpose, all as set
forth in the Ordinance to which reference is made for all
particulars; provided, how-ever, that such pledge of Net Revenues
is and shall be junior and subordinate in all respects to the
pledge of such Net Revenues to the payment of any obligation of
the City, whether authorized heretofore or hereafter, which the
City designates as having a pledge senior to the pledge of such
Net Revenues to the payment of this Certificate and that series of
Certificates of which it is a part, and the City also reserves the
right to issue, for any lawful purpose at any time, in one or more
installments, bonds, certificates of obligation and other
obligations of any kind payable in whole or in part from the Net
Revenues of the System, secured by a pledge of the Net Revenues of
the System that may be prior and superior in right to, on a parity
with, or junior and subordinate to the pledge of Net Revenues
securing this Certificate and the series of Certificates of which
it is a part.
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER' S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this certificate has been examined,
certified as to validity, and approved by the Attorney General of
the State of Texas, and that this certificate has been registered
by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this day of ,
1998 .
xxxxxxxxx
Comptroller of Public Accounts
(Seal) of the State of Texas
Form of Registrar' s Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this
Certificate has been delivered
pursuant to the Ordinance described
in the text of this Certificate.
Chase Bank of Texas, National Association,
Houston, Texas
-15-
By:
Authorized Signature
Date of Authentication
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 certificate and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to transfer said certificate 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
NOTICE: Signature must be owner as shown on the face
guaranteed by a member firm of this Certificate in
of the New York Stock Exchange every particular, without
or a commercial bank or trust any alteration, enlargement
company. } ory change whatsoever.
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AC"MIN
19 . Leaal Opinion; Cusip Numbers. The approving opinions of
Orgain, Bell & Tucker, L.L.P. , Beaumont, Texas, Bond Counsel, and
Linebarger Heard Goggan Blair Graham Pena & Sampson, LLP,
Beaumont, Texas, Co-Bond Counsel and CUSIP Numbers may be printed
on the Certificates, but errors or omissions in the printing of
such opinion or such numbers shall have no effect on the validity
of the Certificates.
20 . Interest and Sinking Fund; Tax Levy; Pledge of Revenues,
Construction Fund. The proceeds from all taxes levied, assessed
and collected for and on account of the Certificates authorized by
this Ordinance are hereby irrevocably pledged and shall be
deposited, as collected, in a special fund to be designated "City
of Beaumont, Texas, Combination Tax and Revenue Certificates of
Obligation, Series 1998, Interest and Sinking Fund" . While the
Certificates or any part of the principal thereof or interest
thereon remain outstanding and unpaid, there is hereby levied and
there shall be annually levied, assessed and collected in due
time, form and manner within the limits prescribed by law, and at
-18-
the same time other City taxes are levied, assessed and collected,
in each year, beginning with the current year, a continuing direct
annual ad valorem tax upon all taxable property in the City
sufficient to pay the current interest on the Certificates as the
same becomes due, and to provide and maintain a sinking fund
adequate to pay the principal of the Certificates as such
principal matures but in each year never less than 2% of the
original principal amount of the Certificates, full allowance
being made for delinquencies and costs of collection, and said
taxes when collected shall be applied to the payment of the
interest on and principal of the Certificates and to no other
purpose.
The Net Revenues of the System, but only to the extent of and
in an amount not to exceed $10, 000 in the aggregate, are hereby
irrevocably pledged to the payment of the principal of and
interest on the Certificates as the same come due, to the extent
that the taxes described in this Section of the Ordinance may ever
be insufficient or unavailable for said purpose; provided,
however, that such pledge of Net Revenues is and shall be junior
and subordinate in all respects to the pledge of the Net Revenues
to the payment of any obligation of the City, whether authorized
heretofore or hereafter, which the City designates as having a
pledge senior to the pledge of such Net Revenues to the payment of
the Certificates; and the City also reserves the right to issue,
for any lawful purpose at any time, in one or more installments,
bonds, certificates of obligation and other obligations of any
kind payable in whole or in part from the Net Revenues of the
System that may be prior and superior in right to, on a parity
with, or junior and subordinate to the pledge of Net Revenues
securing this series of Certificates.
There is hereby created and there shall be established on the
books of the City a separate account to be entitled the "City of
Beaumont, Texas, Combination Tax and Revenue Certificates of
Obligation, Series 1998, Construction Fund" . Immediately after
the sale and delivery of the Certificates, that portion of the
proceeds of the Certificates to be used for the cost of
construction of authorized street and drainage improvements,
equipment purchases, park expansions, and building renovations and
improvements in the City, the cost of professional services
incurred in connection therewith and the cost of issuance of the
Certificates shall be deposited into the Construction Fund and
disbursed for such purposes. Pending completion of construction of
such projects, interest earned on such proceeds may be used, at
the City' s discretion, for such projects and shall be accounted
for, maintained, deposited and expended as permitted by the
provisions of Texas Revised Civil Statutes article 717k-9, as from
time to time in effect, or as otherwise required by applicable
law. Thereafter, such interest shall be deposited in the Debt
Service Fund. Upon completion of such street and drainage
-19-
improvements, equipment purchases, park expansions, and building
renovations and improvements, the monies, if any, remaining in the
Construction Fund shall be transferred and deposited by the City
into the Interest and Sinking Fund.
21. Further Proceedings. After the Certificates shall have
been executed, it shall be the duty of the Mayor of the City to
deliver the Certificates 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 Certificates to be
initially issued shall have been approved by the Attorney General
of the State of Texas, the Certificates shall be delivered to the
Comptroller of Public Accounts of the State of Texas for
registration. Upon registration of the Certificates to be
initially issued, the Comptroller of Public Accounts (or a deputy
lawfully designated in writing to act for the Comptroller) shall
manually sign the Comptroller' s Registration Certificate
prescribed herein to be affixed or attached to the Certificates to
be initially issued, and the seal of the Comptroller shall be
impressed, or placed in facsimile, thereon. In addition, the
Mayor, the City Clerk and other appropriate officials of the City
are hereby authorized and directed to do any and all things
necessary or convenient to carry out the purposes of this
Ordinance.
22 . Sale of Certificates; Certificates Insurance Policv.
The Certificates are hereby sold and, shall be delivered to the
Underwriters at the price of $ a )0/ ��� representing
the principal amount of Certificat s, plus a net premium of
$ -- r2 less an underwriters ' discount of
$ C) The purchase price of the Certificates will
also include accrued interest to the date of delivery. The
purchase 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 do any and all things necessary or desire able to
satisfy the conditions set out herein and to provide for the
issuance and delivery of the Certificates Thy ehas cif d
e p C fates ' 3e �a
iuRUM
a"77N
krty a, �kau �� All official"s and representatives
of tie" °Gity are authorized""and` directed to execute such documents
and to do any and all things necessary, desirable or appropriate
to obtain the Certificate Insurance Policy, and the printing on
the Certificates covered by the Certificate Insurance Policy of an
appropriate legend regarding such insurance is hereby approved and
authorized.
23 . Tax Exemption. (a) The City intends that the interest
on the Certificates shall be excludable from gross income for
-20-
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 Certificates 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 23 ; provided, however, that the City
shall not be required to comply with any particular requirement of
this Section 23 if the City has received an opinion of nationally
recognized bond counsel (a "Counsel ' s Opinion") that such
noncompliance will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the
Certificates or if the City has received a Counsel ' s Opinion to
the effect that compliance with some other requirement set forth
in this Section 23 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 23 .
(b) The City covenants and agrees that its use of Net
Proceeds of the Certificates will at all times satisfy the
following requirements:
(i) The City will use all of the Net Proceeds of the
Certificates for the cost of construction of authorized
street and drainage improvements, equipment purchases, park
expansions, and building renovations and improvements in the
City, the cost of professional services incurred in
connection therewith and the cost of issuance of the
Certificates. The City has limited and will limit with
respect to the Certificates the amount of original or
investment proceeds thereof 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 10% of the Net Proceeds of the
Certificates ("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 Certificates in any manner
contrary to the guidelines set forth in Revenue Procedure 93-
19, 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;
-21-
(ii) The City has not permitted and will not permit
more than 50 of the Net Proceeds of the Certificates to be
used in the trade or business of any person other than a
governmental unit if such use is unrelated to the
governmental purpose of the Certificates. Further, the
amount of private-use proceeds of the Certificates in excess
of 50 of the Net Proceeds thereof ( "excess private-use
proceeds" ) did not and will not exceed the proceeds of the
Certificates expended for the governmental purpose of the
Certificates to which such excess private-use proceeds
relate;
(iii) Principal of and interest on the Certificates
shall be paid solely from ad valorem tax receipts collected
by the City and from the Net Revenues of the System to the
extent pledged hereunder. Further, no person using more than
100 of the Net Proceeds of the Certificates in a trade or
business, other than a governmental unit, has made or shall
make payments (other than as a member of the general public) ,
directly or indirectly, accounting for more than loo of such
receipts;
(iv) The City has not permitted and will not
permit with respect to the Certificates an amount of proceeds
thereof exceeding the lesser of (a) $5, 000, 000 or (b) 50 of
the Net Proceeds of the Certificates to be used, directly or
indirectly, to finance loans to persons other than a
governmental unit; and
(v) The City will use $109, 500 . 00 of the Net Proceeds
of the Certificates to pay the costs of issuance of the
Certificates.
When used in this Section 23 , the term "Net Proceeds" of the
Certificates shall mean the proceeds from the sale thereof to the
Underwriters, including investment earnings on such proceeds, less
accrued interest with respect to such issue.
(c) 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 Certificates 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) 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
Certificates are delivered, the City will reasonably expect that
the proceeds of the Certificates will not be used in a manner that
would cause the Certificates to be "arbitrage bonds" within the
-22-
meaning of Section 148 (a) of the Code and applicable regulations
thereunder. Moreover, the City covenants and agrees that it will
make such use of the proceeds of the Certificates, including
interest or other investment income derived from the proceeds of
the Certificates, regulate investments of such proceeds and
amounts, and take such other and further action as may be required
so that the Certificates will not be "arbitrage bonds" within the
meaning of Section 148 (a) of the Code and applicable regulations
thereunder.
(e) 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 Certificates (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
Certificates as may be required to calculate the amount earned on
the investment of the gross proceeds of the Certificates
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 Certificates which is required to be rebated to
the federal government, and (iii) pay, not less often than every
5th anniversary date of the delivery of the Certificates, and
within sixty (60) days after retirement of the Certificates, 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 any investment arrangement with respect to the gross
proceeds of the Certificates that might result in a reduction in
the amount required to be paid to the federal government because
such arrangement results in a smaller profit or larger loss than
would have resulted if the arrangement had been at arm' s length
and had the yield on the issue not been relevant to either party.
(f) 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 Certificates are issued, an information
statement concerning the Certificates, all under and in accordance
with Section 149 (e) of the Code and applicable regulations
thereunder.
Section 24 . Application of Proceeds. Proceeds from the
sale of the Certificates shall, promptly upon receipt by the City,
be applied as follows :
-23-
(a) Accrued interest and premium shall be deposited into
the Series 1998 Certificates of Obligation Interest and
Sinking Fund;
(b) $ from the sale of the Certificates
shall be used to pay the costs of issuing the
Certificates not later than 90 days after such
issuance; and
(c) The remaining proceeds from the sale of the
Certificates, together with investment earnings
thereof, shall be deposited into the Series 1998
Certificates of Obligation Construction Fund and used
for the purposes set out in Section 3 of this
Ordinance, with any remainder constituting a reserve to
be deposited into the Series 1998 Certificates of
Obligation Interest and Sinking Fund.
25. Open Meeting. 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
Chapter 551 of the Texas Government Code Annotated, Vernon' s 1994,
as amended, and such notice as given is hereby authorized,
approved, adopted and ratified.
26 . 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.
27. Official Statement. The Official Notice of Sale, the
Preliminary Official Statement and the Official Statement prepared
in the initial offering and sale of the Certificates have been and
are hereby authorized, approved and ratified as to form and
content . The use of the Preliminary Official Statement and the
Official Statement in the reoffering of the Certificates by the
Underwriters is hereby approved, authorized and ratified. The
proper officials of the City are hereby authorized to execute and
deliver a certificate pertaining to the Preliminary Official
Statement and the Official Statement as prescribed therein, dated
as of the date of payment for and delivery of the Certificates.
28 . Partial Invalidity. If any Section, paragraph, clause
or provision of this Ordinance shall for any reason be held to be
invalid or unenforceable, the invalidity or unenforceability of
such Section, paragraph, clause or provision shall not affect any
of the remaining provisions of this Ordinance.
29. Related Matters. To satisfy in a timely manner all of
the City' s obligations under this Ordinance, the Mayor, the City
Clerk, the City Treasurer, and all other appropriate officers and
-24-
agents of the City are hereby authorized and directed to take all
other actions that are reasonably necessary to provide for
issuance of the Certificates, 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 this
Ordinance and to direct the application of funds of the City
consistent with the provisions hereof.
30. No Personal Liability. No recourse shall be had for
payment of the principal of or premium, if any, or interest on
Certificate, or for any claim based thereon, or under this
Ordinance, against any official or employee of the City or any
person executing any Certificate.
31. Payments Pursuant to Certificates Insurance Policy. As
long as the Certificates Insurance Policy shall be in full force
and effect, the City and the Registrar shall agree to comply with
the following provisions:
(a) In the event that, on the second Business Day, and
again on the Business Day, prior to the payment date on the
Obligations, the Paying Agent has not received sufficient moneys
to pay all principal of and interest on the Obligations due on the
second following or following, as the case may be, Business Day,
the Paying Agent shall immediately notify the Insurer or its
designee on the same Business Day by telephone or telegraph,
confirmed in writing by registered or certified mail, of the
amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior
to or on the payment date, the Paying Agent shall so notify the
Insurer or its designee.
(c) In addition, if the Paying Agent has notice that any
Certificateholder has been required to disgorge payments of
principal or interest on the Obligation to a trustee in Bankruptcy
or creditors or others pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes a voidable
preference to such Certificateholder within the meaning of any
applicable bankruptcy laws, then the Paying Agent shall notify the
Insurer or its designee of such fact by telephone or telegraphic
notice, confirmed in writing by registered or certified mail.
(d) The Paying agent is hereby irrevocably designated,
appointed, directed and authorized to act as attorney-in-fact for
Holders of the Obligations as follows:
1 . If and to the extent there is a deficiency in amounts
required to pay interest on the Obligations, the Paying
Agent shall (a) execute and deliver to State Street
-25-
Bank and Trust Company, N.A. , or its successors under
the Policy (the "Insurance Paying Agent") , in form
satisfactory to the Insurance Paying Agent, an
instrument appointing the Insurer as agent for such
Holders in any legal proceeding related to the payment
of such interest and an assignment to the Insurer of
the claims for interest to which such deficiency
relates and which are paid by the Insurer, (b) receive
as designee of the respective Holders (and not as
Paying Agent) in accordance with the tenor of the
Policy payment from the Insurance Paying Agent with
respect to the claims for interest so assigned, and (c)
disburse the same to such respective Holders; and
2 . If and to the extent of a deficiency in amounts
required to pay principal of the Obligations, the
Paying Agent shall (a) execute and deliver to the
Insurance Paying Agent in the form satisfactory to the
Insurance Paying Agent an instrument appointing the
Insurer as agent for such Holder in any legal
proceeding relating to the payment of such principal
and an assignment to the Insurer of any of the
Obligation surrendered to the Insurance Paying agent of
so much of the principal amount thereof as has not
previously been paid or for which moneys are not held
by the Paying Agent and available for such payment (but
such assignment shall be delivered only if payment from
the Insurance Paying Agent is received) , (b) receive as
designee of the respective Holders (and not as Paying
Agent) in accordance with the tenor of the Policy
payment therefor from the Insurance Paying Agent, and
(c) disburse the same to such Holders.
(e) Payments with respect to claims for interest on and
principal of Obligations disbursed by the Paying Agent from
proceeds of the Policy shall not be considered to discharge the
obligation of the Issuer with respect to such Obligations, and the
Insurer shall become the owner of such unpaid Obligation and
claims for the interest in accordance with the tenor of the
assignment made to it under the provisions of this subsection or
otherwise.
(f) Irrespective of whether any such assignment is executed
and delivered, the Issuer and the Paying Agent hereby agree for
the benefit of the Insurer that :
1. They recognize that to the extent the Insurer makes
payments, directly or indirectly (as by paying through
the Paying Agent) , on account of principal of or
interest on the Obligations, the Insurer will be
subrogated to the rights of such Holders to receive the
-26-
amount of such principal and interest from the Insurer,
with interest thereon as provided and solely from the
sources stated in this Ordinance and the Obligations;
and
2 . They will accordingly pay to the Insurer the amount of
such principal and interest (including principal and
interest recovered under subparagraph (ii) of the first
paragraph of the Policy, which principal and interest
shall be deemed past due and not to have been paid) ,
with interest thereon as provided in this Ordinance and
the Obligation, but only from the sources and in the
manner provided herein for the payment of principal of
and interest on the Obligations to Holders, and will
otherwise treat the Insurer as the owner of such rights
to the amount of such principal and interest.
(g) In connection with the issuance of additional
Obligations, the Issuer shall deliver to the Insurer a copy of the
disclosure document, if any, circulated with respect to such
additional Obligations.
(h) Copies of any amendments made to the documents executed
in connection with the issuance of the Obligations which are
consented to by the Insurer shall be sent to Standard & Poor' s
Corporation.
(i) The Insurer shall receive notice of the resignation or
removal of the Paying Agent and the appointment of a successor
thereto.
(j ) The Insurer shall receive copies of all notices
required to be delivered to Certificateholders and, on an annual
basis, copies of the Insurer' s audited financial statements and
Annual Budget.
(k) Any notice that is required to be given to a holder of
the Obligation or to the Paying Agent pursuant to the Ordinance
shall also be provided to the Insurer. All notices required to be
given to the Insurer under the Ordinance shall be in writing and
shall be sent by registered or certified mail addressed to MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504
Attention: Surveillance.
(1) All capitalized terms used in this Section 31 and not
otherwise defined in this Ordinance shall have the meanings set
forth in the Municipal Bond Guaranty Insurance Policy.
32 . Additional Obligations. The City undertakes and
agrees for the benefit of the holders of the Certificates to
provide directly, on or before six months after the end of the
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City' s fiscal year, which fiscal year presently ends on September
30,
a. to each nationally recognized municipal securities
information repository and to the appropriate state
information depository, if any, annual financial
information (which may be unaudited) and operating data
regarding the City for fiscal years ending on or after
January 1, 1996 which annual financial information and
operating data shall be of the type included in the
following listed sections contained in the Final
Official Statement :
SELECTED FINANCIAL INFORMATION
DEBT STATEMENT
TAX DATA
SELECTED FINANCIAL DATA
ADMINISTRATION OF THE CITY -
b. to each nationally recognized municipal securities
information repository and to the appropriate state
information depository, if any, audited financial
statements for the County for fiscal years ending on or
after January 1, 1996, when available, if the City
commissions an audit and it is completed by the
required time; provided that if audited statements are
not commissioned or are not available by the required
time, the City will provide unaudited statements when
and if they become available.
C. in a timely manner, to each nationally recognized
municipal securities information repository or to the
Municipal Securities Rulemaking Board, and to the
appropriate state information depository, if any,
notice of any of the following events with respect to
the Certificates, if material within the meaning of the
federal security laws to a decision to purchase or sell
Certificates:
i. Principal and interest payment delinquencies;
ii. Non-payment related defaults;
iii. Unscheduled draws on debt service reserves
reflecting financial difficulties;
iv. Unscheduled draws on credit enhancements
reflecting financial difficulties;
V. Substitution of credit or liquidity
providers, or their failure to perform;
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vi. Adverse tax opinions or events affecting the
tax-exempt status of the Certificates;
vii . Modifications to rights of Certificate
holders;
viii . Calls;
ix. Defeasances;
X. Release, substitution or sale of property
securing repayment of the Certificates; and
xi. Rating changes.
d. in a timely manner, to each nationally recognized
municipal securities information repository or to the
Municipal Securities Rulemaking Board, and to the
appropriate state information depository, if any,
notice of a failure of the City to provide required
annual financial information and operating data, on or
before six months after the end of the City' s fiscal
year.
These undertakings and agreements are subject to
appropriation of necessary funds and to applicable legal
restrictions, if any.
The accounting principles pursuant to which the City' s
financial statements are currently prepared are generally accepted
accounting principles set out by the Government Accounting
Standards Board, and, subject to changes in applicable law or
regulations, such principles will be applied in the future.
If the City changes its fiscal year, it will notify each
nationally recognized municipal securities information repository
and the appropriate state information depository of the change
(and of the new fiscal year end) prior to the next date by which
the City otherwise would be required to provide annual financial
information.
The City' s obligation to update information and to provide
notices of material events shall be limited to the agreements
herein. The City shall not be obligated to provide other
information that may be relevant or material to a complete
presentation of its financial results of operations, condition, or
prospects and shall not be obligated to update any information
that is provided, except as described herein. The City makes no
representation or warranty concerning such information or
concerning its usefulness to a decision to invest in or sell
Certificates at any future date. THE CITY DISCLAIMS ANY
CONTRACTUAL OR TORT LIABILITY FOR DAMAGES RESULTING IN WHOLE OR IN
PART FROM ANY BREACH, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ITS CONTINUING DISCLOSURE AGREEMENT OR FROM ANY STATEMENT
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MADE PURSUANT TO ITS AGREEMENT. HOLDERS OR BENEFICIAL OWNERS OF
CERTIFICATES MAY SEEK AS THEIR SOLE REMEDY A WRIT OF MANDAMUS TO
COMPEL THE CITY TO COMPLY WITH THIS AGREEMENT. No default by the
City with respect to its continuing disclosure agreement shall
constitute a breach of or default under this Ordinance for
purposes of any other provision of this Ordinance. Nothing in
this paragraph is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state
securities laws.
The City may amend its continuing disclosure obligations and
agreement in this Section 32 to adapt to changed circumstances
that arise from a change in legal requirements, a change in law,
or a change in the identity, nature, status or type of operations
of the City, if the agreement, as amended, would have permitted
the Underwriter to purchase or sell the Certificates in compliance
with SEC Rule 15c2-12, taking into account any amendments or
interpretations of such Rule to the date of such amendment, as
well as such changed circumstances, and either the holders of a
majority in aggregate principal amount of the outstanding
Certificates consent or any person unaffiliated with the City
(such as nationally recognized bond counsel) determines the
amendment will not materially impair the interests of the holders
and beneficial owners of the Certificates . The City may also
amend or repeal the obligations and agreement in this Section 35
if the SEC amends or repeals the applicable provisions of Rule
15c2-12 or a court of final jurisdiction determines that such
provisions are invalid, and the City may amend the agreement in
its discretion in any other circumstance or manner, but in either
case only to the extent that its right to do so would not prevent
the Underwriters from lawfully purchasing or reselling the
Certificates in the primary offering of the Certificates in
compliance with Rule 15c2-12 . If the City amends its agreement,
it must include with the next financial information and operating
data provided in accordance with its agreement an explanation, in
narrative form, of the reasons for the amendment and of the impact
of any change in the type of information and operating data so
provided.
The City' s continuing obligation to provide annual financial
information and operating data and notices of events will
terminate if and when the City no longer remains an "obligated
person" (as such term is defined in SEC Rule 15C2-12) with respect
to the Certificates.
33 . Repealer. All orders, resolutions, and ordinances, and
parts thereof inconsistent herewith are hereby repealed to the
extent of such inconsistency.
34 . Effective Date. This Ordinance shall be in force and
effect from and after its final passage, and it is so ordered.
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[The remainder of this page has intentionally been left blank] .
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PASSED AND APPROVED this 24th day of March, 1998 .
Mayor, The City of
Beaumont, Texas
ATTEST:
City Clerk,
The City of Beaumont, Texas
(SEAL)
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