HomeMy WebLinkAboutOrdinance - 9225-1988 - Combination Tax And Sewer System Subordinate Lien Revenue Series 1988 - 09/25/1988Ordinance #9225
August 25, 1988 First Reading
August 26, 1988 Second Reading
·AN ORDINANCE authorizing the issuance of "CITY OF
LUBBOCK, TEXAS, COMBINATION TAX AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE REFUNDING BONDS,
SERIES 1988"; pledging an ad valorem tax and the
net revenues of the City' s Sewer System to the
payment of the principal of and interest on said
Bonds; enacting provisions incident and related
to the issuance, payment, security and delivery
of said bonds, including the approval and
execution of a Purchase Contract and a Special
Escrow Agreement and the approval and
distribution of an Official Statement pertaining
thereto; and providing an effective date.
WHEREAS, the City of Lubbock, Texas (the "City") has duly
issued and delivered obligations, which currently are
outstanding in the aggregate principal amount $2,700,000,
payable from an ad valorem tax and secured by a lien on and
pledge of the net revenues of the City's Sewer System
(hereinafter called the "System"), of the following series
(hereinafter referred to as the "Refunded Certificates"):
(1) Ctty of Lubbock, Texas. Comb1natton
Tax and Sewer System Subordtnate L ten
Revenue Cert 11'tcates of Obl 1gat ton,
Sertes 1986, dated July 15, 1986 and
now outstanding tn the prtnctpal
amount or $ 2,700,000
AND WHEREAS, the City Council has determined that in order
to reduce debt service requirements in each of the three Fiscal
Years ending September 30, 1989 through September 30, 1991 on
the Refunded Certificates and, by extension, on the City's
combined . general obligation debt issued for the System
improvements, the orderly and economical financing of capital
improvements for said System, and to accomplish such changes
and modifications, refunding bonds should be issued in an
amount sufficient to discharge and fully pay such obligations;
and
WHEREAS, the City Council hereby finds and determines that
the combination tax and revenue bonds for refunding purposes
should be issued and sold at this time; now, therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK,
TEXAS:
SECTION 1: Authorization-Designation-Principal Amount
-Purpose -Issue Date. Combination tax and revenue bonds of
the City shall be and are hereby authorized to be issued in the
aggregate principal amount of $2,774,682.40 to be designated
and bear the title "CITY OF LUBBOCK, TEXAS, COMBINATION TAX AND
SEWER SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES
1988" (hereinafter referred to as the 11 BOnds"), for the purpose
of refunding certain outstanding obligations which obligations
are identified in the · preamble hereof as the "Refunded
Certificates", and paying the costs of issuance in conformity
with the Constitution and laws of the State of Texas, including
Article 717k, V.A.T.c.s., as amended. The Bonds shall be dated
August 15, 1988 (the "Issue Date .. ).
SECTION 2: Fully Registered Interest Paying/Non-Interest
Paying Obligations -Terms. The Bonds shall be issued as
fully registered obligations, without coupons, and as "Current
Interest Bonds'" (obligations paying accrued interest to the
holders or owners on and at stated intervals prior to maturity
or redemption) totalling $2,100, ooo in principal amount and as
.. Capital Appreciation Bonds" (obligations paying no accrued
interest to the holders or owners prior to maturity) totalling
$674,682.40 in original principal amount.
(a) Current Interest Bonds: The Current Interest Bonds
(other than the Initial Bonds referenced in Section 7 hereof)
shall be in denominations of $5,000 or any integral multiple
(within a Stated Maturity) thereof, shall be lettered "R-.. and
numbered consecutively from One (1) upward and principal shall
become due and payable on February 15 in each of the years and
in amounts (the "Stated Maturities") and bear interest at the
rate(s) per annum in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
1989 220,000 5.75%
1990 220,000 6.00%
1991 235,000 6.25%
1992 250,000 6.50%
1993 265,000 6.60%
1994 285,000 6.75%
1995 305,000 6.90%
1996 320,000 7.00%
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The Current Interest Bonds shall bear interest on the
unpaid principal amounts from the Issue Date at the rate(s) per
annum shown in the above schedule (calculated on the basis of a
360-day year of twelve 30-day months). Interest on the Current
Interest Bonds shall be payable on February 15 and August 15 in
each year, commencing February 15, 1989.
(b) Capital Appreciation Bonds. The Capital Appreciation
Bonds shall each be issued in the Maturity Amount (the
''Accreted Value.. (as hereinafter defined] at maturity), shall
be lettered "CAB-" and numbered consecutively from One ( 1)
upward, and the Capital Appreciation Bonds shall be issued in
the Maturity Amounts of $5,000 or integral multiples thereof,
which shall accrue interest at the interest rate(s) stated in
the table below, and shall become due and payable on February
15 in each of the years (the "Stated Maturities") in the
Maturity Amounts set forth in the following table:
Stated
Stated Original Principal Maturity Stated
Maturity Amount Amount Yield(s)
1997 $189,434.40 $340,000 7.10%
1998 175,076.20 340,000 7.20%
1999 161,493.20 340,000 7.30%
2000 148,678.60 340,000 7.40%
Interest on the Capital Appreciation Bonds shall accrue
from the date of delivery of the Bonds to the initial
purchasers (September 27, 1988), and be compounded semiannually
on February 15 and August 15 in each year, commencing February
15, 1989, until the Stated Maturity therefor. The accrued
interest on Capital Appreciation Bonds shall be payable at
maturity as a portion of the Maturity Amount.
The term .. Accreted Value", as used herein with respect to
Capital Appreciation Bonds, shall mean the original principal
amount of a Capital Appreciation Bond plus the initial premium,
if any, paid therefor with interest thereon compounded
semiannually to February 15 or August 15, as the case may be,
next preceding the date of such calculation (or the date of
calculation, if such calculation is made on February 15 or
August 15), at the respective stated yield(s) stated above
therefor and, with respect to each $5,000 Accreted Value at
maturity, as set forth in the Accreted Value table appearing in
the Official Statement referred to in Section 27 hereof. For
any day other than a February 15 or August 15, the Accreted
Value of a Capital Appreciation Bond shall be determined by a
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straight line interpolation between the
applicable semiannual compounding dates
months).
values for the
(based on 30-day
SECTION 3: Terms of Payment -Paying Agent/Registrar.
The principal of, premium, if any, and the interest on the
Bonds, due and payable by reason of maturity or otherwise,
shall be payable only to the registered owners or holders of
the Bonds (hereinafter called the "Holders") appearing on the
registration and transfer books (the "Security Register")
maintained by the Paying Agent/Registrar and the payment
thereof shall be in any coin or currency of the United States
of America, which at the time of payment is legal tender for
the payment of public and private debts, and shall be without
exchange or collection charges to the Holders.
The selection and appointment of TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, Lubbock, Texas, to serve as Paying
Agent/Registrar for the Bonds is hereby approved and
confirmed. The City covenants to maintain and provide a Paying
Agent/Registrar at all times until the Bonds are paid and
discharged, and any successor Paying Agent/Registrar shall be a
bank, trust company, financial institution or other entity
qualified and authorized to serve in such capacity and perform
the duties and services of Paying Agent/Registrar. Upon any
change in the Paying Agent/Registrar for the Bonds, the City
agrees to promptly cause a written notice thereof to be sent to
each Holder by United States Mail, first class postage prepaid,
which notice shall also give the address of the new Paying
Agent/Registrar. ·
Principal of and premium, if any, on the Bonds shall be
payable at the Stated Maturities or upon the earlier redemption
thereof, only upon presentation and surrender of the Bonds to
the Paying Agent/Registrar at its principal office. Interest
accrued on a Capital Appreciation Bond shall be payable at its
Stated Maturity, as a portion of the Accreted Value or Maturity
Amount. Interest on a Current Interest Bond shall be paid to
the Holders whose names appear in the Security Register at the
close of business on the Record Date (the last business day of
the month next preceding each interest payment date) and shall
be paid by the Paying Agent/Registrar (i) by check sent United
States Mail, first class postage prepaid, to the address of the
Holder recorded in the Security Register or (ii) by such other
method, acceptable to the Paying Agent/Registrar, requested by,
and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall
be a Saturday, Sunday, a legal holiday, or a day on which
banking institutions in the City where the Paying
Agent/Registrar is located are authorized by law or executive
order to close, then the date for such payment shall be the
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) next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized to
close; and payment on such date shall have the same force and
effect as if made on the original date payment was due.
In the event of a non-payment of interest on one or more
maturities on a scheduled payment date on the Current Interest
Bonds, and for thirty (30) days thereafter, a new record date
for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds
for the payment of such interest have been received from the
City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days
after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States
Mail, first class postage prepaid, to the address of each
Holder of the Current Interest Bonds appearing on the Security
Register at the close of business on the last business day next
preceding the date of mailing of such notice.
SECTION 4: No Optional Redemption. The Bonds shall not
be subject to redemption prior to maturity.
SECTION 5: Registration -Transfer -Exchange of Bonds
-Predecessor Bonds. A Security Register relating to the
registration, payment, and transfer or exchange of the Bonds
shall at all times be kept and maintained by the City at the
principal office of the Paying Agent/Registrar, as provided
herein and in accordance with the provisions of an agreement
with the Paying Agent/Registrar and such rules and regulations
as the Paying Agent/Registrar and the City may prescribe. The
Paying Agent/Registrar shall obtain, record, and maintain in
the Security Register the name and address of each registered
owner of the Bonds issued under and pursuant to the provisions
of this Ordinance, or if appropriate, the nominee thereof. Any
Bond may be transferred or exchanged for Bonds of like kind
(CUrrent Interest Bonds or Capital Appreciation Bonds), of
other authorized denominations by the Holder, in person or by
his duly authorized agent, upon surrender of such Bond to
Paying Agent/Registrar for cancellation, accompanied by a
written instrument of transfer or request for exchange duly
executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Bond (other than the Initial Bonds
authorized in section 7 hereof) for transfer at the principal
office of the Paying Agent/Registrar, the Paying
Agent/Registrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Bonds of
authorized denominations, of like Stated Maturity and of a like
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aggregate principal amount (with respect to Current Interest
Bonds) or Maturity Amount (with respect to Capital Appreciation
Bonds) as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds·(other than the In:itial
Bonds authorized in Section 7 hereof) may be exchanged for
other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like
aggregate principal amount (with respect to Current Interest
Bonds) or Maturity Amount (with respect to Capital Appreciation
Bonds) as the Bonds surrendered for exchange, upon surrender of
the Bonds to be exchanged at the principal office of the Paying
Agent/Registrar. Whenever any Bonds are surrendered for
exchange, the Paying Agent/Registrar shall register and deliver
new Bonds of like form and tenor to the Holder requesting the
exchange.
All Bonds issued upon any transfer or exchange of Bonds
shall be delivered to the Holders at the principal office of
the Paying Agent/Registrar, or sent by United States Mail,
first class, postage prepaid to the Holders, and, upon the
registration and delivery thereof, the same shall be valid
obligations of the City, evidencing the same obligation to pay,
and entitled to the same benefits under this Ordinance, as the
Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this
Section shall be made without expense or service charge to the
Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder
requesting such transfer or exchange of any tax or other
governmental charges required to be paid with respect to such
transfer or exchange.
Bonds cancelled by reason of an exchange or transfer
pursuant to the provisions hereof are hereby defined to be
"Predecessor Bonds," evidencing all or a portion, as the case
may be, of the same obligation to pay evidenced by the Bond or
Bonds registered and delivered in the exchange or transfer
therefor. Additionally, the term "Predecessor Bonds" shall
include any mutilated, lost,· destroyed, or stolen Bond for
which a replacement Bond has been issued, registered and
delivered in lieu thereof pursuant to section 24 hereof and
such new replacement Bond shall be deemed to evidence the same
obligation as the mutilated, lost, destroyed, or stolen Bond.
SECTION 6: Execution -Registration. The Bonds shall
be executed on behalf of the City by the Mayor under its seal
reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be
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manual or facsimile. Bonds bearing the manual or facsimile
signatures of individuals who are or were the proper officers
of the City on the Issue Date shall be deemed to be duly
e~e9uted on behalf of the City, notwithstanding that such
individuals or either of them shall cease to hold such offices
at . the time of delivery of the Bonds to the initial
purchaser(s) and with respect to Bonds delivered in subsequent
exchanges and transfers, all as authorized and provided in the
Bond Procedures Act of 1981, as amended.
No Bond shall be entitled to any right or benefit under
this Ordinance, or be valid or obligatory for any purpose,
unless there appears on such Bond either a certificate of
registration substantially in the form provided in Section 8C,
manually executed by the Comptroller of Public Accounts of the
State of Texas or his duly authorized agent, or a certificate
of registration substantially in the form provided in
Section BD, manually executed by an authorized officer,
employee or representative of the Paying Agent/ Registrar, and
either such certificate upon any Bond duly signed shall be
conclusive evidence, and the only evidence, that such Bond has
been duly certified, registered and delivered.
SECTION 7: Initial Bonds. The Bonds herein authorized
shall be initially issued as two (2) fully registered bonds,
being ( i) a single fully registered Current Interest Paying
Bond in the aggregate principal amount of $2,100,000 with
principal installments to become due and payable as provided in
Section 2(a) hereof and numbered TR-1 and (ii) a single fully
registered Capital Appreciation Bond in the aggregate Maturity
Amount of $1,360,000 with installments of such Maturity Amount
to become due and payable as provided in Section 2(b) hereof
and numbered TCAB-1, (hereinafter called the "Initial Bonds")
and the Initial Bonds shall be registered in the name of the
initial purchaser(s) or the designee thereof. The Initial
Bonds shall be the Bonds submitted to the Office of the
Attorney General of the State of Texas for approval, certified
and registered by the Office of the Comptroller of Public
Accounts of the State of Texas and delivered to the initial
purchaser(s). Any time after the delivery of the Initial
Bonds, the Paying Agent/Registrar, pursuant to written
instructions from the initial purchaser{s), or the designee
thereof, shall cancel the Initial Bonds delivered hereunder and
exchange therefor definitive Bonds of authorized denominations,
Stated Maturities, principal amounts {with respect to Current
Interest Paying Bonds) or Maturity Amounts (with respect to the
Capital Appreciation Bonds) and bearing applicable interest
rates for transfer and delivery to the Holders named at the
addresses identified therefor; all pursuant to and in
accordance with such written instructions from the initial
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purchaser(s), or the designee thereof, and such other
information and documentation as the Paying Agent/Registrar may
reasonably require.
SECTION 8: Forms. A. Forms Generally. The Bonds,
the Registration Certificate of the Comptroller of Public
Accounts of the State of Texas, the Registration Certificate of
Paying Agent/Registrar, and the form of Assignment to be
printed on each of the Bonds, shall be substantially in the
forms set forth in this Section with such appropriate
insertions, omissions, substitutions 1 and other variations as
are permitted or required by this Ordinance and may have such
letters, numbers I or other marks of identification (including
identifying numbers and letters of the Committee on Uniform
Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including
insurance legends stating the Bonds were offered and sold with
insurance and any reproduction of an opinion of counsel)
thereon as may, consistently herewith, be established by the
City or determined by the officers executing such Bonds as
evidenced by their execution. Any portion of the text of any
Bonds may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Bond.
The definitive Bonds shall be printed, lithographed, or
engraved or produced in any other similar manner, all as
determined by the officers executing such Bonds as evidenced by
their execution, but the Initial Bonds submitted to the
Attorney General of Texas may be typewritten or photocopied or
otherwise reproduced.
B. Form of Definitive Bonds.
REGISTERED
NO.
[Current Interest Bonds]
UNITED STATES OF AMERICA
STATE OF TEXAS
REGISTERED $ ___ _
CITY OF LUBBOCK, TEXAS, COMBINATION TAX
AND SEWER SYSTEM SUBORDINATE LIEN REVENUE
REFUNDING BOND,
SERIES 1988
Issue Date: Interest Rate: Stated Maturity: CUSIP NO:
August 15, 1988
Registered OWner:
Principal Amount: DOLLARS
The
"City"),
City of Lubbock (hereinafter referred to as the
a body corporate and political subdivision in the
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County of Lubbock, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to
the order of the Registered Owner named above, or the
registered assigns thereof, on the Stated Maturity date
specified above, the Principal Amount stated above and to pay
interest, computed on the basis of a 360-day year of
twelve 30-day months, on the unpaid Principal Amount hereof
from the Issue Date at the per annum rate of interest specified
above; such interest being payable on February 15 and August 15
of each year, commencing February 15, 1989. Principal of this
Bond is payable at its Stated Maturity to the registered owner
hereof, upon presentation and surrender, at the principal
office of the Paying Agent/Registrar executing the registration
certificate appearing hereon, or its successor. Interest is
payable to the registered owner of this Bond (or one or more
Predecessor Bonds, as defined in the Ordinance hereinafter
referenced) whose name appears on the "Security Register"
maintained by the Paying Agent/Registrar at the close of
business on the "Record Date", which is the last business day
of the month next preceding each interest payment date and
interest shall be paid by the Paying Agent/Registrar by check
sent United States Mail, first class postage prepaid, to the
address of the registered owner recorded in the Security
Register on the Record Date or by such other method, acceptable
to the Paying Agent/Registrar, requested by, and at the risk
and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this Bond shall
be in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of
public and private debts.
This Bond is one of the series specified in its title
issued in the aggregate principal amount of $2,774,682.40
(herein referred to as the "Bonds") for the purpose of
refunding certain outstanding obligations of the City
(identified in the Ordinance) and paying costs of issuance
under and in strict conformity with the Constitution and laws
of the State of Texas,· including Article 717k, V.A.T.c.s., as
amended, and pursuant to an Ordinance adopted by the governing
body of the City (herein referred to as the "Ordinance"). The
Bonds are issued in part as "Current Interest Bonds", which
total in principal amount $2,100, ooo and pay accrued interest
at stated intervals to registered owners and in part as
"Capital Appreciation Bonds", which total in original principal
amount of $674,682.40 and pay no accrued interest prior to
their Stated Maturities.
The Bonds are payable from the proceeds of an ad valorem
tax levied, within the limitations prescribed by law, upon all
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taxable property in the City and, together with the oustanding
"City of Lubbock, Combination Tax and Sewer System Subordinate
Lien Revenue Certificates of Obligation, Series 1988" (the
"Certificates"), are additionally payable from and secured by a
lien on and pledge of the Net Revenues (as defined in the
Ordinance) of the City's Sewer System (the "System"), such lien
and pledge being subordinate to the lien and pledge of the Net
Revenues securing the payment of the Prior Lien Revenue
Obligations (as identified in the Ordinance) hereafter issued
by the City. In the Ordinance, the City reserves and retains
the right to issue Prior Lien Revenue Obligations without
limitation as to principal amount but subject to any applicable
terms, conditions or restrictions under law or otherwise as
well as the right to issue additional obligations payable from
the same sources as the Bonds and, together with the Bonds and
the Certificates, equally and ratably secured by a parity lien
on and pledge of the Net Revenues of the System.
Reference is hereby made to the Ordinance, a copy of which
is on file in the principal office of the Paying
Agent/Registrar, and to all of the provisions of which the
owner or holder of this Bond by the acceptance hereof hereby
assents, for definitions of terms; the description of and the
nature and extent of the tax levied for the payment of the
Bonds; the description of and the nature and extent of the
security for the payment of the Bonds; the properties
constituting the System; the Net Revenues pledged to the
payment of the Bonds; the nature and extent and manner of
enforcement of the lien and pledge securing the payment of the
Bonds; the terms and conditions for the issuance of additional
revenue obligations; the terms and conditions relating to the
transfer or exchange of this Bond; the conditions upon which
the Ordinance may be amended or supplemented with or without
the consent of the Holders; the rights, duties, and obligations
of the City and the Paying Agent/Registrar; the terms and
provisions upon which the liens, pledges, charges and covenants
made therein may be discharged at or prior to the maturity of
this Bond, and this Bond deemed to be no longer Outstanding
thereunder; and for the other terms and provisions contained
therein. Capitalized terms used herein have the same meanings
assigned in the Ordinance.
This Bond, subject to certain limitations contained in the
Ordinance, may be transferred on the Security Register only
upon its presentation and surrender at the principal office of
the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Paying Agent/Registrar duly
executed by, the registered owner hereof, or his duly
authorized agent. When a transfer on the Security Register
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occurs, one or more new fully registered Bonds of the same
Stated Maturity, of authorized denominations, bearing the same
rate of interest, and of the same aggregate principal amount
will be issued by the Paying Agent/Registrar to the designated
transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of
either, may treat the registered owner hereof whose name
appears on the Security Register (i) on the Record Date as the
owner entitled to payment of interest hereon, (ii) on the date
of surrender of this Bond as the owner entitled to payment of
principal hereof at its Stated Maturity, in whole or in part,
and (iii) on any other date as the owner for all other
purposes, and neither the City nor the Paying Agent/Registrar,
or any agent of either, shall be affected by notice to the
contrary. In the event of non-payment of interest on a
scheduled payment date and for thirty (30) days thereafter, a
new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if
and when funds for the payment of such interest have been
received from the City. Notice of the Special Record Date and
of the scheduled payment date of the past due interest (which
shall be 1.5 days after the Special Record Date) shall be sent
at least five ( 5) business days prior to the Special Record
Date by United States Mail, first class postage prepaid, to the
address of each Holder appearing on the Security Register at
the close of business on the last business day next preceding
the date of mailing of such notice.
It is hereby certified, recited, represented and
covenanted that the City is a body corporate and political
subdivision duly organized and legally existing under and by
virtue of the Constitution and laws of the State of Texas; that
the issuance of the Bonds is duly authorized by law; that all
acts, conditions and things required to exist and be done
precedent to and in the issuance of the Bonds to render the
same lawful and valid obligations of the City have been
properly done, have happened and have been performed in regular
and due time, form and manner as required by the Constitution
and laws of the State of Texas, and the Ordinance; that the
Bonds do not exceed any constitutional or statutory limitation;
and that due provision has been made for the payment of the
principal of and interest on the Bonds by the levy of an ad
valorem tax and a pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any
application thereof shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of
the remaining provisions and applications shall not in any way
be affected or impaired thereby. The terms and provisions of
this Bond and the Ordinance shall be construed in accordance
with and shall be governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the City Counc i 1 of the City has
caused this Bond to be duly executed under the official seal of
the City as of the Issue Date.
COUNTERSIGNED:
City secretary
(SEAL)
REGISTERED
NO. CAB-_
CITY OF LUBBOCK, TEXAS
Mayor
[Capital Appreciation Bonds)
'UNITED STATES OF AMERICA
STATE OF TEXAS
REGISTERED
MATURITY AMOUNT $ ___ _
AND
CITY OF LUBBOCK, TEXAS, COMBINATION TAX
SEWER SYSTEM SUBORDINATE LIEN REVENUE REFUNDING
SERIES 1988
BOND,
Stated
Issue Date: Yield:
August 15, 1988
Registered OWner:
Maturity Amount:
Stated
Maturity CUSIP NO.:
DOLLARS
The City of Lubbock (hereinafter referred to as the
"City"), a body corporate and political subdivision in the
County of Lubbock, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to
the order of the Registered OWner named above, or the
registered assiqns thereof, on the Stated Maturity date
specified above, the Maturity Amount stated above. The
Maturity Amount of this Bond was initially discounted to
September 27, 1988 at the Stated Yield shown above with
semiannual compounding on February 15 and August 15 in each
year, commencing February 15, 1989 to an amount equal to the
sum of its original principal amount plus the premium paid, if
any, by the initial purchasers. A table of the "Accreted
Values" per $5,000 "Accreted Value" at Stated Maturity is
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printed on the reverse side of this Bond. The term "Accreted
Value", as used herein, means the original principal amount of
this Bond plus the initial premium, if any, paid herefor with
interest thereon compounded semiannually to February 15 or
August 15, as the case may be, next preceding the date of such
calculation (or the date of calculation, if such calculation is
made on February 15 or August 15) at the Stated Yield for the
Stated Maturity shown above and in the Table of Accreted Values
printed hereon. For any date other than February 15 and August
15, the Accreted Value of this Bond shall be determined by a
straight line interpolation between the values for the
applicable semiannual compounding dates (based on 30-day
months).
The Maturity Amount of this Bond is payable at its Stated
Maturity to the registered owner hereof, upon presentation and
surrender, at the principal office of the Paying
Agent/Registrar executing the registration certificate
appearing hereon, or its successor. Payments of principal of
and accrued and compounded interest on this Bond shall be
without exchange or collection charges to the owner hereof and
in any coin or currency of the United States of America which
at the time of payment is legal tender for the payment of
public and private debts.
This Bond is one of the series specified in its title
issued in the aggregate principal amount of $2,774,682.40
(herein referred to as the "Bonds 11
) for the purpose of
refunding certain outstanding obligations of the City
(identified in the Ordinance) and paying costs of issuance
under and in strict conformity with the Constitution and laws
of the State of Texas, including Article 717k, V.A.T.C.S., as
amended, and pursuant to an Ordinance adopted by the governing
body of the City (herein referred to as the "Ordinance"). The
Bonds are issued in part as "Current Interest Bonds .. , which
total in principal amount $2,100,000 and pay accrued interest
at stated intervals to registered owners and in part as
"Capital Appreciation Bonds", which total in original principal
amount of $674,682.40 and pay no accrued interest prior to
their Stated Maturities.
The Bonds are payable from the proceeds of an ad valorem
tax levied, within the limitations prescribed by law, upon all
taxable property in the City and, together with.the outstanding
"City of Lubbock, Texas, Combination Tax and sewer System
Subordinate Lien Revenue Certificates of Obligation, Series
1988" (the "Certificates"), are additionally payable from and
secured by a lien on and pledge of the Net Revenues (as defined
in the Ordinance) of the City' s Sewer System (the II System II ) ,
such 1 ien and pledge being subordinate to the 1 ien and pledge
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32958
of the Net Revenues securing the payment of the Prior Lien
Revenue Obligations identified in the Ordinance hereafter
issued by the City. In the Ordinance, the City reserves and
retains the right to issue Prior Lien Revenue Obligations
without limitation as to principal amount but subject to any
applicable terms, conditions or restrictions under law or
otherwise as well as the right to issue additional obligations
payable from the same sources as the Bonds and, together with
the Bonds and the certificates, equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System.
Reference is hereby made to the Ordinance, a copy of which
is on file in the principal office of the Paying
Agent/Registrar, and to all of the provisions of which the
owner or holder of this Bond by the acceptance hereof hereby
assents, for definitions of terms; the description of and the
nature and extent of the tax levied for the payment of the
Bonds; the description of and the nature and extent of the
security for the payment of the Bonds; the properties
constituting the System; the Net Revenues pledged to the
payment of the Bonds; the nature and extent and manner of
enforcement of the lien and pledge securing the payment of the
Bonds; the terms and conditions for the issuance of additional
revenue obligations; the terms and conditions relating to the
transfer or exchange of this Bond; the conditions upon which
the Ordinance may be amended or supplemented with or without
the consent of the Holders; the rights, duties, and obligations
of the City and the Paying Agent/Registrar; the terms and
provisions upon which the liens, pledges, charges and covenants
made therein may be discharged at or prior to the maturity of
this Bond, and this Bond deemed to be no longer OUtstanding
thereunder; and for the other terms and provisions contained
therein. Capitalized terms used herein have the same meanings
assigned in the Ordinance.
This Bond, subject to certain limitations contained in the
Ordinance, may be transferred on the Security Register only
upon its presentation and surrender at the principal office of
the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Paying Agent/Registrar duly
executed by, the registered owner hereof, or his duly
authorized agent. When a transfer on the Security Register
occurs, one or more new fully registered Bonds of the same
Stated Maturity, of authorized denominations, bearing the same
rate of interest, and of the same aggregate Maturity Amount
will be issued by the Paying Agent/Registrar to the designated
transferee or transferees.
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32958
The City and the Paying Agent/Registrar, and any agent of
either, may treat the registered owner hereof whose name
appears on the Security Register ( i) on the date of surrender
of this Bond as the owner entitled to payment of Maturity
Amount hereof at its Stated Maturity, in whole or in part, and
(ii) on any other date as the owner for all other purposes, and
neither the City nor the Paying Agent/Registrar, or any agent
of either, shall be affected by notice to the contrary.
It is hereby certified, recited, represented and
covenanted that the City is a body corporate and political
subdivision duly organized and legally existing under and by
virtue of the Constitution and laws of the State of Texas; that
the issuance of the Bonds is duly authorized by law; that all
acts, conditions and things required to exist and be done
precedent to and in the issuance of the Bonds to render the
same lawful and valid obligations of the City have been
properly done, have happened and have been performed in regular
and due time, form and manner as required by the Constitution
and laws of the State of Texas, and the Ordinance; that the
Bonds do not exceed any constitutional or statutory limitation;
and that due provision has been made for the payment of the
principal of and interest on the Bonds by the levy of an ad
valorem tax and a pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any
application thereof shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of
the remaining provisions and applications shall not in any way
be affected or impaired thereby. The terms and provisions of
this Bond and the Ordinance shall be construed in accordance
with and shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has
caused this Bond to be duly executed under the official seal of
the City as of the Issue Date.
CITY OF LUBBOCK, TEXAS
COUNTERSIGNED: Mayor
City Secretary
(SEAL)
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32958
---·---· -----------
NOTE TO PRINTER: Print the "Table of Accreted Values 11 on the
reverse side of Bonds as called for in
paragraph one.
C. * Form of Registration Certificate of Comptroller
of Public Accounts to Appear on Initial Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
(
(
(
(
REGISTER NO.
THE STATE OF TEXAS
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 duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office
this
Comptroller of Public Accounts
(SEAL) of the State of Texas
*NOTE TO PRINTER: Do not print on definitive bonds
D. Form of Certificate of Paying Agent/Registrar to
Appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name
of the Registered OWner shown above under the provisions of the
within-mentioned Ordinance; the bonds of the above entitled and
designated series originally delivered having been approved by
the Attorney General of the State of Texas and registered by
the Comptroller of Public Accounts, as shown by the records of
the Paying Agent/Registrar.
Registration Date:
32958
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, Lubbock, Texas
Paying Agent/Registrar
By --~~--~~~~~--------Authorized Signature
-16-
E. Form of Assignment.
ASSIGNMENT
assigns,
address,
FOR VALUE RECEIVED the undersigned hereby sells,
and transfers unto (Print or typewrite name,
and zip code of transferee:) .................... .
I I t I I t I I I I I I I I t I I I I t I I I I I I I I I I I I I I I I I I I I I I I t I I 1 I I I I 1 1 1 1 1 1 1 1 1
I I t I I I I I I I I I I I fi t I I I I I I I t I I I I I I I I t I I I t I t I I I t t I I I I I I I I I I I I I I I I
(Social Security or other identifying number: ............ .
................ ) the within Bond and all rights thereunder,
and hereby irrevocably constitutes and appoints .......... .
I I I I I I I I I I II I I I I I I I t I I I I I I I I I I I I I I I I t I I I I I I I I I I I I t I I t I 1 1 1 1 1 1 t
attorney to transfer the within Bond on the books kept for
registration thereof, with full power of substitution in the
premises.
DATED: I I I I I I I I I I I I I I I I I I I I I I I I I I I I I t I I I I I I I I I I I I I I I I I I t I
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with
I I I I I I I I I I I I t I I I I I If t I t I t I I
the name of the registered owner
as it appears on the face of the
within Bond in every particular.
F. The Initial Bonds for the Current Interest Bonds and the
Capital Appreciation Bonds shall be in the respective
forms set forth therefor in paragraph B of this Section,
except as follows:
(1) (Form of Current Interest Initial Bond]
Heading and paragraph one shall be amended to read as follows:
REGISTERED
NO. TR-1
UNITED STATES OF AMERICA
STATE OF TEXAS
REGISTERED $ ___ _
CITY OF LUBBOCK, TEXAS, COMBINATION TAX
AND SEWER~SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BOND,
SERIES 1988
Issue Date:
August 15, 1988
Registered OWner:
Principal Amount:
The
"City"),
32958
City of Lubbock
a body corporate
DOLLARS
(hereinafter referred to as
and political subdivision in
-17-
the
the
County of Lubbock, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to
the order of the Registered Owner named above, or the
registered assigns thereof, on February 15 in each of the years
and in principal amounts in accordance with the following
schedule:
STATED
MATURITY
PRINCIPAL
INSTALLMENTS
{Information to be inserted from
schedule in Section 2 hereof).
INTEREST
RATE
and to pay interest, computed on the basis of a 360-day year of
twelve 30-day months, on the unpaid principal amounts hereof
from the Issue Date at the per annum rates of interest
specified above; such interest being payable on February 15 and
August 15 of each year, commencing February 15, 1989.
Principal installments of this Bond are payable in the year of
maturity or on a prepayment date to the registered owner
hereof, upon presentation and surrender, at the principal
office of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, Lubbock,
Texas (the "Paying Agent/Registrar"). Interest is payable to
the registered owner of this Bond whose name appears on the
"Security Register" maintained by the Paying Agent/Registrar at
the close of business on the uRecord Date", which is the last
business day of the month next preceding each interest payment
date and interest shall be paid by the Paying Agent/Registrar
by check sent United States Mail, first class postage prepaid,
to the address of registered owner recorded in the Security
Register or by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of,
the registered owner. All payments of principal of, premium,
if any, and interest on this Bond shall be in any coin or
currency of the United States of America which at the time of
payment is legal tender for the payment of public and private
debts.
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32958
(2} [Form of Capital Appreciation Initial Bond]
Heading and first two paragraphs shall be amended to read as
follows:
REGISTERED
NO. TCAB-1
UNITED STATES OF AMERICA
STATE OF TEXAS
MATURITY AMOUNT $ ___ _
CITY OF LUBBOCK, TEXAS, COMBINATION TAX
AND SEWER SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BOND,
SERIES 1988
Issue Date:
August 15, 1988
Registered Owner:
Maturity Amount: DOLLARS
The City of Lubbock (hereinafter referred to as the
"City"}, a body corporate and political subdivision in the
County of Lubbock, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to
the order of the Registered OWner named above, or the
registered assigns thereof, the aggregate Maturity Amount
stated above on February 15 in each of the years and in
installments in accordance with the following schedule:
Stated
Maturity
Original Principal
Amount
Stated
Maturity
Amount
{Information to be inserted from
schedule in section 2 hereof}
Stated
Yield{s)
The Maturity Amount of this Bond was initially discounted to
September 27, 1988 at the respective Stated Yields shown above
with semiannual compounding on February 15 and August 15 in
each year, commencing February 15, 1989 to an amount equal to
the sum of its original principal amount plus the premium paid,
if any, by the initial purchasers. A table of the "Accreted
Values" per $5,000 "Accreted Value~~ at Stated Maturity is
printed on the reverse side of this Bond. The term "Accreted
Value", as used herein, means the original principal amount of
this Bond plus the initial premium, if any, paid herefor with
interest thereon compounded semiannually to February 15 or
August 15, as the case may be, next preceding the date of such
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329SB
calculation {or the date of calculation, if such calculation is
made on February 15 or August 15) at the Stated Yield for the
Stated Maturity shown above and in the Table of Accreted Values
printed hereon. For any date other than February 15 and August
15, the Accreted Value of this Bond shall be determined by a
straight line interpolation between the values for the
applicable semiannual compounding dates (based on 30-day
months).
The installments of Maturity Amounts of this Bond are
payable at the years of maturity to the registered owner
hereof, upon presentation and surrender, at the principal
office of TEXAS COMMERCE BANK NATIONAL ASSOCIATION, Lubbock,
Texas {the "Paying Agent/Registrar"), and shall be payable
without exchange or collection charges to the owner hereof and
in any coin or currency of the United States of America which
at the time of payment is legal tender for the payment of
public and private debts. ·
SECTION 9: Definitions. For all purposes of this
Ordinance and in particular for clarity with respect to the
issuance of the Bonds herein authorized and the pledge and
appropriation of revenues to the payment of the Bonds, the
following definitions are provided:
(a) 11 Addi tional Obligations" shall mean combination tax
and revenue certificates of obligation hereafter issued under
and pursuant to the provisions of Subchapter C of Chapter 271,
Local Government Code, or any similar law hereafter enacted,
and payable from ad valorem taxes and additionally payable from
and secured by a 1 ien on and pledge of the Net Revenues on a
parity with and of equal dignity with the lien and pledge
securing the payment of the Bonds.
{b) "Bonds" shall mean the
Lubbock, Texas, Combination Tax and
Lien Revenue Refunding Bonds, Series
Ordinance.
$2,774,682.40 .. City of
Sewer System Subordinate
1988" authorized by this
{c) "Bond Fund" shall mean the special Fund created and
established under the provisions of Section 10 of this
Ordinance.
{d) "Cityu shall mean the City of Lubbock located in the
County of Lubbock, Texas.
{e) "Collection Date" shall mean, when reference is being
made to the levy and collection of annual ad valorem taxes, the
date the annual ad valorem taxes levied each year by the City
become delinquent.
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329SB
{f) "Fiscal Year" shall mean the annual financial
accounting period used with respect to the System now ending on
September 30th of each year; provided, however, the City
Council may change, by ordinance duly passed, such annual
financial accounting period to end on another date if such
change is found and determined to be necessary for accounting
purposes.
{g) "Maintenance and Operation Expenses" shall mean
all reasonable and necessary expenses directly related and
attributable to the operation and maintenance of the System,
including, but not limited to, the cost of insurance, the
purchase and carrying of stores, materials, and supplies, the
payment of salaries and labor, and other expenses reasonably
and properly charged, under generally accepted accounting
principles, to the operation and maintenance of the System.
Depreciation charges on equipment, machinery, plants, and other
facilities comprising the system and expenditures clas·sed under
generally accepted accounting principles as capital
expenditures shall not be considered as .. Maintenance and
Operation Expenses" for purposes of determining "Net Revenues".
{h) "Net Revenues" shall mean , with respect to any
period, all income, revenues, and receipts received from the
operation and ownership of the System less Maintenance and
Operation expenses of the System during such period.
{i) "Outstanding" when used in this Ordinance with
respect to Bonds means, as of the date of determination, all
Bonds theretofore issued and delivered under this Ordinance,
except:
329SB
{ 1) those Bonds theretofore cancelled by
the Paying Agent/Registrar or delivered to the
Paying Agent/Registrar for cancellation;
{2) those Bonds for which payment has
been duly provided by the City in accordance with
the provisions of Section 22 hereof by the
irrevocable deposit with the Paying Agent/
Registrar, or an authorized escrow agent, of money
or Government Securities, or both, in the amount
necessary to fully pay the principal of, premium,
if any, and interest thereon to maturity; and
(3) those Bonds that have been mutilated,
destroyed, lost, or stolen and for which (i)
replacement Bonds have been registered and
delivered in lieu thereof or {ii) have been paid,
all as provided in Section 24 hereof.
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(j) "Prior Lien Revenue Obligations" shall mean
revenue bonds or other obligations hereafter issued by the City
of Lubbock which, by the ordinance authorizing the issuance
thereof, are payable from and secured by a first lien on and
pledge of the Net Revenues.
(k) "Similarly Secured Obligations.. shall mean
collectively (i) the outstanding "City of Lubbock, Texas,
Combination Tax and Sewer System Subordinate Lien Revenue
Certificates of Obligation, Series 1988", dated August 15,
1988, authorized for issuance concurrently with the Bonds and
( ii) additional combination tax and revenue obligations
hereafter issued under and pursuant to the provisions of
Subchapter C of Chapter 271, Local Government Code, or similar
law hereafter enacted and payable from ad valorem taxes and
additionally payable from and secured by a lien on and pledge
of the Net Revenues of the System on a parity with and of equal
rank and dignity with the lien and pledge securing the payment
of the Bonds.
(1) "System" shall mean the City's sanitary sewer
system, being all sanitary sewage collection system, ground
storage facilities, effluent disposal and treatment facilities
and/or other works and equipment.
SECTION 1 o : Bond Fund. For the purpose of paying the
interest on and to provide a sinking fund for the payment and
retirement of the Bonds, there shall be and is hereby created a
special Fund to be designated "SPECIAL SERIES 1988 TAX AND
SEWER SYSTEM REVENUE FUND, .. which Bond Fund shall be kept and
maintained at the City's depository bank, and moneys deposited
in said Fund shall be used for no other purpose. Authorized
officials of the City are hereby authorized and directed to
make withdrawals from said Fund sufficient to pay the principal
of and interest on the Bonds as the same become due and
payable, and, shall cause to be transferred to the Paying
Agent/Registrar from moneys on deposit in the Bond Fund (on or
prior to a principal and/or interest payment date) an amount
sufficient to pay the amount of principal and/or interest
falling due on the Bonds.
Upon delivery of the Bonds (the effective date of the
Special Escrow Agreement herein approved and authorized to be
executed pursuant to Section 29) all money in the Certificate
Fund heretofore established for the payment of the Refunded
Certificates shall be transferred to the Bond Fund established
by the provisions of this Section. It is hereby found and
determined that such amount, together with the accrued interest
on the current Interest Bonds, will be adequate to pay at least
part of the interest scheduled to become due on the Bonds on
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329SB
February 15, 1989. Such amount upon such transfer, together
with the accrued interest on the Current Interest Bonds, are
hereby appropriated and set aside for such purpose.
Pending the transfer of funds to the Paying Agent/
Registrar, money in the Bond Fund may, at the option of the
City, be placed in time deposits or certificates of deposit
secured by obligations of the type hereinafter described, or be
invested, including investments held in book-entry form, in
direct obligations of the United States of America, obligations
guaranteed or insured by the United States of America, which,
in the opinion of the Attorney General of the United States,
are backed by its full faith and credit or represent its
general obligations, or invested in indirect obligations of the
United States of America, including, but not limited to,
evidences of indebtedness issued, insured, or guaranteed by
such governmental agencies as the Federal Land Banks, Federal
Intermediate Credit Banks, Banks for Cooperatives, Federal Home
Loan Banks, Government National Mortgage Association, Farmers
Home Administration, Federal Home Loan Mortgage Association,
Small Business Administration or Federal Housing Association;
provided that all such deposits and investments shall be made
in such a manner that the money required to be expended from
said Fund will be available at the proper time or times. All
interest and income derived from deposits and investments in
said Bond Fund shall be credited to, and any losses debited to,
the said Bond Fund. All such investments shall be sold
promptly when necessary to prevent any default in connection
with the Bonds.
SECTION 11: Tax Levy. To provide for the payment of
the "Debt Service Requirements" on the Bonds being ( i) the
interest on said Bonds and (ii) a sinking fund for their
redemption at maturity or a sinking fund of 2% (whichever
amount shall be the greater), there shall be and there is
hereby levied for the current year and each succeeding year
thereafter while said Bonds or any interest thereon shall
remain Outstanding, a sufficient tax on each one hundred
dollars' valuation of taxable property in said City, adequate
to pay such Debt Service Requirements, full allowance being
made for delinquencies and costs of collection; said tax shall
be assessed and collected each year and applied to the payment
of the Debt Service Requirements, and the same shall not be
diverted to any other purpose. The taxes so levied and
collected shall be paid into the Bond Fund. The City Council
hereby declares its purpose and intent to provide and levy a
tax legally and fully sufficient to pay the said Debt Service
Requirements, it having been determined that the existing and
available taxing authority of the City for such purpose is
adequate to permit a legally sufficient tax in consideration of
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32958
all other outstanding indebtedness.
The amount of taxes to be provided annually for the
payment of the principal of and interest on the Bonds shall be
determined and accomplished in the following manner:
(a) Prior to the date the City Council establishes
the annual tax rate and passes an ordinance levying ad valorem
taxes each year, the Council shall determine:
(1) The amount on deposit in the Bond
Fund after (a) deducting therefrom the total amount
of Debt Service Requirements to become due on Bonds
prior to the Collection Date for the ad valorem
taxes to be levied and (b) adding thereto the
amount of the Net Revenues of the System
appropriated and allocated to pay such Debt Service
Requirements prior to the Collection Date for the
ad valorem taxes to be levied.
( 2) The amount of Net Revenues of the
System, appropriated and to be set aside for the
payment of the Debt Service Requirements on the
Bonds between the Collection Date for the taxes
then to be levied and the Collection Date for the
taxes to be levied during the next succeeding
calendar year.
(3) The amount of Debt Service Require-
ments to become due and payable on the Bonds
between the Collection Date for the taxes then to
be levied and the Collection Date for the taxes to
be levied during the next succeeding calendar year.
(b) The amount of taxes to be levied annually each
year to pay the Debt Service Requirements on the Bonds shall be
the amount established in paragraph (3) above less the sum
total of the amounts established in paragraphs (1) and (2),
after taking into consideration delinquencies and costs of
collecting such annual taxes.
SECTION 12: Pledge of Revenues. The City hereby
covenants and agrees that, subject to the prior lien on and
pledge of the Net Revenues of the System to the payment and
security of Prior Lien Revenue Obligations, all the Net
Revenues of the System, with the exception of those in excess
of the amounts required to be deposited to the Bond Fund as
hereafter provided, are hereby irrevocably pledged to the
payment of the principal of and interest on the Bonds and
Similarly Secured Obligations, and the pledge of Net Revenues
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32958
herein made for the payment of the Bonds shall constitute a
lien on the Net Revenues in accordance with the terms and
provisions hereof and be valid and binding without any physical
delivery thereof or further act by the City.
SECTION 13: System Fund. The City hereby covenants
and agrees that all revenues derived from the operation of the
System shall be kept separate and apart from all other funds,
accounts, and moneys of the City, and shall be deposited as
collected into the "City of Lubbock Sewer System Fund" hereby
created and established {hereinafter called the "System
Fund"). All moneys deposited in the System Fund shall be
pledged and appropriated to the extent required for the
following purposes and in the order of priority shown, to wit:
First: To the payment of the reasonable and proper
Maintenance and Operation Expenses of the System as
defined herein or required by statute to be a first
charge on and claim against the revenues of the
System.
Second: To the payment of the amounts required to
be deposited in the special Funds created and
established for the payment, security and benefit
of Prior Lien Revenue Obligations in accordance
with the terms and provisions of the Ordinances
authorizing the issuance of Prior Lien Revenue
Obligations.
Third: Equally and ratably, to the payment of the
amounts required to be deposited in the special
funds and accounts created and established for the
payment of the Bonds {the Bond Fund) and Similarly
Secured Obligations.
Any Net Revenues remaining in the System Fund after
satisfying the foregoing payments, or making adequate and
sufficient provision for the payment thereof, may be appropria-
ted and used for any other City purpose now or hereafter
permitted by law.
SECTION 14: Deposits to Bond Fund. The City hereby
covenants and agrees to cause to be deposited in the Bond Fund
prior to each principal and interest payment date for the Bonds
from the pledged Net Revenues of the System in the System Fund,
after deduction of all payments required to be made to the
special Funds or accounts created for the payment and security
of the Prior Lien Revenue Obligations, an amount equal to one
hundred per centum (100%) of the amount required to fully pay
the interest and principal then due and payable on the Bonds,
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32958
such deposits to pay maturing principal and accrued interest on
the Bonds to be made in substantially equal monthly
installments on or before the 15th day of each month beginning
the 15th day of the month first to follow the date of delivery
of the Bonds to the initial purchaser(s).
The deposits to be made to the Bond Fund, as hereinabove
provided, shall be made until such time as such Fund contains
an amount equal to pay the principal of and interest and
premium, if any, on the Bonds to maturity. Accrued interest
and premium, if any, received from the purchaser(s) of the
Bonds shall be deposited to the Bond Fund and ad valorem taxes
levied, collected, and deposited in the Bond Fund for and on
behalf of the Bonds may be taken into consideration and reduce
the amount of the deposits otherwise required to be deposited
in the Bond Fund from the Net Revenues of the System. In
addition, any surplus proceeds from the sale of Bonds not
expended for authorized purposes shall be deposited in the Bond
Fund, and such amounts so deposited shall reduce the sums
otherwise required to be deposited in said Fund from ad valorem
taxes and the Net Revenues of the System.
SECTION 15: Security of Funds. All moneys on deposit
in the Funds for which this Ordinance makes provision (except
any portion thereof as may be at any time properly invested)
shall be secured in the manner and to the fullest extent
required by the laws of Texas for the security of public funds,
and moneys on deposit in such Funds shall be used only for the
purposes permitted by this Ordinance.
SECTION 16: Maintenance of System -Insurance. The
City covenants and agrees that while the Bonds remain
Outstanding, it will maintain and operate the System with all
possible efficiency and maintain casualty and other insurance
on the properties of the System and its operations of a kind
and in such amounts customarily carried by municipal corpora-
tions in the State of Texas engaged in a similar type business
to the extent the City may be subjected to liability; and that
it will faithfully and punctually perform all duties with
reference to the System required by the Constitution and laws
of the State of Texas; provided however, the City may also make
provision for self insurance to cover any liability of the City.
SECTION 17: Rates and Charges. The City hereby
covenants and agrees with the Holders of the Bonds that rates
and charges for the collection and disposal of sewage and other
services afforded by the System will be established and
maintained that are reasonably expected, on the basis of
available information and experience and with due allowance for
contingencies, to provide revenues sufficient to pay:
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32958
(a)
System; and
all Maintenance and Operation Expenses of the
(b) ( i) the interest on and principal of the Prior
Lien Revenue Obligations, if any, as the same becomes due and
payable and the amounts required to be deposited in any special
Fund created and established for the payment and security
thereof and (ii) the amounts, if any, required to be deposited
in the special Funds created and established for the payment of
the Bonds (the Bond Fund) and Similarly Secured Obligations;
(c) Other legally incurred indebtedness payable from
the revenues of the System and/or secured by a lien on the
System or the revenues thereof.
SECTION 18: Records and Accounts -Annual Audit. The
City further covenants and agrees that so long as any of the
Bonds remain Outstanding, it will keep and maintain separate
and complete records and accounts pertaining to the operations
of the System in which complete and correct entries shall be
made of all transactions relating thereto, as provided by law.
The Holders or any duly authorized agent or agents of such
Holders shall have the right to inspect the System and all
properties comprising the same. The City further agrees that
following the close of each Fiscal Year, it will cause an audit
of such books and accounts to be made by an independent firm of
Certified Public Accountants. Copies of each annual audit
shall be furnished to the Executive Director of the Municipal
Advisory Council of Texas at his or her office in Austin,
Texas, and, upon written request, to the original purchaser of
the Bonds and any subsequent Holder.
SECTION 19: Remedies in Event of Default. In
addition to all the rights and remedies provided by the laws of
the State of Texas, the City covenants and agrees particularly
that in the event the City (a) defaults in the payments to be
made to the Bond Fund, or (b) defaults in the observance or
performance of any other of the covenants, conditions, or
obligations set forth in this Ordinance, any Holder shall be
entitled to a writ of mandamus issued by a court of proper
jurisdiction compelling and requiring the governing body of the
City and other officers of the City to observe and perform any
covenant, condition, or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power,
or shall be construed to be a waiver of any such default or
acquiescense therein, and every such right and power may be
exercised from time to time and as often as may be deemed
expedient. The specific remedies herein provided shall be
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cumulative of all other existing remedies and the specification
of such remedies shall not be deemed to be exclusive.
SECTION 20: Special Covenants.
further covenants as follows:
The City hereby
(a) That it has the lawful power to pledge
the Net Revenues supporting this issue of Bonds and
has lawfully exercised said powers under the
Constitution and laws of the State of Texas.
(b) That other than for the payment of
the Bonds and the outstanding Similarly Secured
Obligations identified in Section 9(k)(i) hereof,
the Net Revenues have not in any manner
been pledged to the payment of any debt or
obligation of the City or of the System.
(c) That, as long as any Bonds or any
interest thereon remain Outstanding, the City will
not sell, lease, or encumber the System or any
substantial part thereof, provided that this
covenant shall not be construed to prohibit the
sale of such machinery, or other properties or
equipment which has become obsolete or otherwise
unsuited to the efficient operation of the System.
SECTION 21: Issuance of Prior Lien Revenue Obligations
and Similarly Secured Obligations. That the City hereby
expressly reserves the right to hereafter issue Prior Lien
Revenue Obligations, without limitation as to principal amount
but subject to any terms, conditions or restrictions applicable
thereto under law or otherwise, and, also reserves the right to
issue Similarly Secured Obligations which, together with the
Bonds, shall be equally and ratably secured by a parity lien on
and pledge of the Net Revenues of the System.
SECTION 22: Satisfaction of Obligation of City. If the
City shall pay or cause to be paid, or there shall otherwise be
paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the manner
stipulated in this Ordinance, then the pledge of the Net
Revenues of the System under this Ordinance and all other
obligations of the City to the Holders shall thereupon cease,
terminate, and become void and be di~charged and satisfied.
Bonds or any principal amount(s) (with respect to Current
Interest Bonds) and Maturity Amounts (with respect to Capital
Appreciation Bonds) thereof shall be deemed to have been paid
within the meaning and with the effect expressed above in this
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Section when (i) money sufficient to pay in full such Bonds or
the principal amount(s) thereof at maturity, together with all
interest due thereon, shall have been irrevocably deposited
with and held in trust by the Paying Agent/Registrar, or an
authorized escrow agent, or ( ii) non-callable Government
Obl.igations shall have been irrevocably deposited in trust with
the Paying Agent/Registrar, or an authorized escrow agent,
which Government Obligations have been certified by an
independent accounting firm to mature as to principal and
interest in such amounts and at such times as will insure the
availability, without reinvestment, of sufficient money,
together with any moneys deposited therewith, if any, to pay
when due the principal of and interest on such Bonds, or the
principal amount(s) (with respect to Current Interest Bonds)
and Maturity Amounts (with respect to Capital Appreciation
Bonds) thereof, on the Stated Maturity thereof. The City
covenants that no deposit of moneys or Government Obligations
will be made under this Section and no use made of any such
deposit which would cause the Bonds to be treated as "arbitrage
bonds" within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended, or regulations adopted
pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar,
or an authorized escrow agent, and all income from Government
Obligations held in trust by the Paying Agent/Registrar or an
authorized escrow agent, pursuant to this Section which is not
required for the payment of the Bonds, or any principal
amount(s) (with respect to Current Interest Bonds) and Maturity
Amounts (with respect to Capital Appreciation Bonds) thereof,
or interest thereon with respect to which such moneys have been
so deposited shall be remitted to the City or deposited as
directed by the City. Furthermore, any money held by the
Paying Agent/Registrar for the payment of the principal of and
interest on the Bonds and remaining unclaimed for a period of
four (4) years after the Stated Maturity, or applicable
redemption date, of the Bonds such moneys were deposited and
are held in trust to pay shall, upon the request of the City,
be remitted to the City against a written receipt therefor.
Notwithstanding the above and foregoing, any remittance of
funds from the Paying Agent/Registrar to the City shall be
subject to any applicable unclaimed property laws of the State
of Texas.
SECTION 23: Ordinance a Contract -Amendments. This
Ordinance shall constitute a contract with the Holders from
time to time, be binding on the City, and shall not be amended
or repealed by the City so long as any Bond remains Outstanding
except as permitted in this Section. The City, may, without
the consent of or notice to any Holders, from time to time and
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at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any
ambiguity, inconsistency, or formal defect or omission herein.
In addition, the City may, with the written consent from the
the owners holding a majority in aggregate principal amount of
the Bonds then Outstanding affected thereby, amend, add to, or
rescind any of the provisions of this Ordinance; provided that,
without the written consent of all Holders of Outstanding
Bonds, no such amendment, addition, or rescission shall
( 1) extend the time or times of payment of the principal of,
premium, if any, and interest on the Bonds, reduce the amount
of principal or the Maturity Amount, as the case may be,
thereof, or the rate of interest thereon, or in any other way
modify the terms of payment of the principal of, premium, if
any, or interest on the Bonds, ( 2) give any preference to any
Bond over any other Bond, or (3) reduce the aggregate principal
amount or Maturity Amount, as the case may be, of Bonds
required to be held for consent to any such amendment,
addition, or rescission.
SECTION 24: Mutilated Destroyed -Lost and Stolen
Bonds. In case any Bond shall be mutilated, or destroyed, lost
or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same
denomination and bearing a number not contemporaneously
outstanding, in exchange and substitution for such mutilated
Bond, or in lieu of and in substitution for such destroyed,
lost or stolen Bond, only upon the approval of the City and
after ( i) the f i 1 ing by the Holder thereof with the Paying
Agent/Registrar of evidence satisfactory to the Paying Agent/
Registrar of the destruction, loss or theft of such Bond, and
of the authenticity of the ownership thereof and (ii) the
furnishing to the Paying Agent/Registrar of indemnification in
an amount satisfactory to hold the City and the Paying
Agent/Registrar harmless. All expenses and charges associated
with such indemnity and with the preparation, execution and
delivery of a replacement Bond shall be borne by the Holder of
the Bond mutilated, or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of
any mutilated, destroyed, lost, or stolen Bond shall constitute
a replacement of the prior obligation of the City, whether or
not the mutilated, destroyed, lost, or stolen Bond shall be at
any time enforceable by anyone, and shall be entitled to all
the benefits of this Ordinance equally and ratably with all
other OUtstanding Bonds.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement and payment of mutilated,
destroyed, lost, or stolen Bonds.
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SECTION 25: Notices to Holders-Waiver. Wherever this
Ordinance provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States
Mail, first class postage prepaid, to the address of each
Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail,
neither the failure to mail such notice to any particular
Holders, nor any defect in any notice so mailed, shall affect
the sufficiency of such notice with respect to all other
Bonds. Where this Ordinance provides for notice in any manner,
such notice may be waived in writing by the Holder
entitled to receive such notice, either before or after the
event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon
such waiver.
SECTION 26: Cancellation. All Bonds surrendered for
payment, redemption, transfer or exchange, if surrendered to
the Paying Agent/Registrar, shall be promptly cancelled by it
and, if surrendered to the City, shall be delivered to the
Paying Agent/Registrar and, if not already cancelled, shall be
promptly cancelled by the Paying Agent/Registrar. The City may
at any time deliver to the Paying Agent/Registrar for
cancellation any Bonds previously certified or registered and
delivered which the City may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly
cancelled by the Paying Agent/Registrar. All cancelled Bonds
held by the Paying Agent/Registrar shall be destroyed as
directed by the City.
SECTION 27: Covenants to Maintain Tax-Exempt Status.
The City shall not use, permit the use of, or omit to use Gross
Proceeds or any other amounts (or any property the acquisition,
construction, or improvement of which is to be financed
directly or indirectly with Gross Proceeds) in a manner which,
if made or omitted, respectively, would cause the interest on
any Bond to become includable in the gross income, as defined
in section 61 of the Code, of the owner thereof for federal
income tax purposes. Without limiting the generality of the
foregoing, unless and until the City shall have received a
written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with
such covenant will not adversely affect the exemption from
federal income tax of the interest on any Bond pursuant to
Section 103 of the Code, the City agrees, covenants and
represents that:
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(a) Definitions. When used in this Section, the
following terms have the following meanings:
32958
"Code" means the Internal Revenue Code of 1986,
as amended by all legislation, if any, enacted on or
before the Issue Date.
"Gross Proceeds" when used with respect to the
Bonds or any other issue of obligations of the City,
means original proceeds, amounts received (including
repayments of principal) as a result of investing the
original proceeds of the issue, transferred proceeds,
sinking fund proceeds, amounts invested in a
reasonably required reserve or replacement fund,
securities or obligations pledged by the City as
security for payment of debt service on the Bonds or
such other issue, and any other amounts used to pay
debt service on the Bonds or such other issue,
together with earnings from the investment of the
foregoing.
"Investment" means
(1) a share of stock in a corporation
or a right to subscribe for or to receive
such a share,
(2) any obligation, including United
States Treasury bonds, notes, and bills and
bank deposits, whether or not certified or
interest bearing, but excluding obligations
the interest on which is, in the opinion of
counsel nationally recognized in the field
of municipal bond law, excludable from the
gross income of any owner thereof and is
not included in computing the alternative
minimum taxable income of individuals under
the Code or the Internal Revenue Code of
1954, as amended to the date of issuance of
such obligations,
(3) any annuity contract, or any
other deferred payment contract acquired to
fund an obligation of the City, or
( 4) any other property held for
investment.
"Issue Date" means the date on which the Bonds
are first authenticated and delivered to the initial
purchasers against payment therefor.
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"Issue Price" of the Bonds of each Stated
Maturity means the aggregate initial offering price
of all the Bonds of such Stated Maturity to the
public (exclusive of underwriters, dealers,
bondhouses, brokers, and similar persons or
organizations acting in the c·apacity of underwriters
or wholesalers) at which a substantial number of
Bonds of such Stated Maturity are sold to the public,
including accrued interest to the Issue Date, if any.
"Nonpurpose Investment" means any Investment in
which Gross Proceeds of the Bonds are invested and
which is not acquired to carry out the governmental
purpose of the Bonds. Obligations acquired with
proceeds of the Bonds that are to be used to
discharge the Refunded Bonds are Nonpurpose
Investments.
"Purchase Price" of any Investment means
( 1) if a United States Treasury
obligation acquired directly from the
United States Treasury, the amount paid
therefor,
(2) if a certificate of deposit
issued by a commercial bank, the bona fide
bid price quoted by a dealer who maintains
an active secondary market in such
certificates of deposit, and
(3) otherwise, generally the mean of
the bid price and the offered price
therefor on an established market on the
day on which such Investment is purchased
or contracted for or, if there are no bid
prices and offered prices on such date, on
the first day preceding such date for which
there are bid prices and offered prices.
"Yield" of
(1) any Investment means the discount
factor which, when used in computing the
present value of all scheduled payments of
principal of and interest on such
Investment on the date such Investment is
purchased with Gross Proceeds or otherwise
allocated to Gross Proceeds, results in an
amount equal to the Purchase Price thereof
(but excluding any commissions),
compounding semiannually, and
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(2) the Bonds means the discount
factor which, when used in computing the
present value on the Issue Date of all
scheduled payments of principal of and
interest on the Bonds and on other
obligations which are part of the same
issue of obligations as the Certificates
under Treas. Reg. l.l03-13(b)(lO) (the
"Other Bonds"), results in an amount equal
to aggregate Issue Prices of the Bonds and
the Other Bonds of each Stated Maturity,
compounding semiannually. For purposes of
this clause (2), capitalized terms when
used with respect to any Other Bond have
the same meaning as that set forth in the
Ordinance under which such Other Bond was
issued.
(b) No Private Use or Private Payments. Except as
permitted by section 141 of the Code and the regulations and
rulings thereunder, the City shall, at all times prior to the
last Stated Maturity of Bonds,
(1) exclusively own, operate, and possess the
System and all properties constituting the System and
its components, and all property the acquisition,
construction, or improvement of which is to be
financed directly or indirectly with Gross Proceeds of
the Bonds and not use or permit the use of such Gross
Proceeds or the properties constituting the System or
any property acquired, constructed, or improved with
such Gross Proceeds in any activity carried on by any
person or entity other than a state or local
government, unless such use is solely as a member of
the general public, or
( 2) ~ot directly or indirectly impose or accept
any charge or other payment for use of Gross Proceeds
of the Bonds or any property the acquisition,
construction, or improvement of which is to be
financed directly or indirectly with such Gross
Proceeds, other than taxes of general application
within the City or interest earned on investments
acquired with such Gross Proceeds pending application
for their intended purposes.
(c) No Private Loan. Except to the extent permitted by
section 141 of the Code and the regulations and rulings
thereunder, the City shall not use Gross Proceeds of the Bonds
to make or finance loans to any person or entity other than a
state or local government. For purposes of the foregoing
covenant, such Gross Proceeds are considered to be "loaned" to
a person or entity if (1) property acquired, constructed, or
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improved with such Gross Proceeds is sold or leased to such
person or entity in a transaction which creates a debt for
federal income tax purposes, ( 2) capacity in or service from
such property is committed to such person or entity under a
take-or-pay, output, or similar contract or arrangement, or (3)
indirect benefits, or burdens and benefits of ownership, of
such Gross Proceeds or any property acquired, constructed, or
improved with such Gross Proceeds are otherwise transferred in
a transaction which is the economic equivalent of a loan.
(d) Qualified Advance Refunding. The Bonds are issued
exclusively to refund the Refunded Bonds, and the Bonds will be
issued more than 90 days before the redemption of the Refunded
Bonds. The City represents that:
32958
(1) None of the Refunded Bonds are "private
activity bonds, .. within the meaning of section 141 of
the Code. Specifically, the covenants set forth in
subsections (b) and (c) of this Section 27 are true,
correct, and complete with respect to the Refunded
Bonds, their proceeds, and the facilities financed
therewith.
(2) The Bonds are the first advance refunding
(within the meaning of section 149(d)(5) of the Code)
of the Refunded Bonds.
(3) Except as otherwise provided in Section
149(d)(3)(B) of the Code, the Refunded Bonds are being
called for redemption, and will be redeemed, not later
than the earliest date on which each such issue may be
redeemed at par or at a premium of 3 percent or less.
( 4) The initial temporary period under section
148 (c) of the Code wi 11 end ( i) with respect to the
proceeds of the Bonds not later than 30 days after the
date of issue of such Bonds and ( ii) with respect to
proceeds of the Refunded Bonds on the Issue Date if
not ended prior thereto.
(5) Section 148(e) of the Code did not apply to
the Refunded Bonds. On and after the date of issue of
the Bonds no proceeds of the Refunded Bonds wi 11 be
invested in Nonpurpose Investments having a Yield in
excess of the Yield on the Refunded Bonds to which any
of such proceeds relate.
(6) The Bonds are being issued for the purposes
identified in the preamble hereof. In the issuance of
the Bonds for refunding purposes the City has employed
no "device" to obtain a material financial advantage
(based on arbitrage), within the meaning of section
149(d)(4) of the Code, apart from savings attributable
to lower interest rates.
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(e) Not to Invest at Higher Yield. Except to the extent
permitted by section 148 of the Code and the regulations and
rulings thereunder, the City shall not, at any time prior to
the final Stated Maturity of the Bonds, directly or indirectly
invest Gross Proceeds of the Bonds in any Investment (or use
such Gross Proceeds to replace money so invested), if as a
result of such investment the Yield from the Issue Date of all
Investments acquired with such Gross Proceeds (or with money
replaced thereby) whether then held or previously disposed of,
exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent
permitted by section 149(b) of the Code and the regulations and
rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed
within the meaning of section 149(b) of the Code and the
regulations and rulings thereunder.
(g) Information Report. The City shall timely file with
the Secretary of the Treasury the information required by
section 149(e) of the Code with respect to the Bonds on such
form and in such place as such Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent
otherwise provided in section 148(f) of the Code and the
regulations and rulings thereunder,
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(1) The City shall account for all Gross
Proceeds of the Bonds (including all receipts,
expenditures, and investments thereof) on its books of
account separately and apart from all other funds (and
receipts, expenditures, and investments thereof) and
shall retain all records of such accounting for at
least six years after the day on which the last
outstanding Bond is discharged. The City may,
however, to the extent permitted by law, commingle
Gross Proceeds of the Bonds with other money of the
City, provided that the City separately accounts for
each receipt and expenditure of such Gross Proceeds
and the obligations acquired therewith.
(2) Not less frequently than annually, the City
shall calculate, in accordance with rules set forth in
section 148(f) of the Code and the regulations and
rulings thereunder, the excess of:
( i) the amount earned on all Nonpurpose
Investments (other than Investments
attributable to any excess previously
calculated pursuant to this paragraph (2))
acquired with Gross Proceeds of the Bonds,
over
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(ii) the amount which would have been
earned if such Nonpurpose Investments were
invested at a rate equal to the Yield on the
Bonds,
plus any income attributable to any excess previously
calculated pursuant to this paragraph ( 2). In this
connection, the City hereby makes the election
provided for in section 148(f)(4)(A)( ii) of the Code
and thereby waive the right to exclude from rebate
gross earnings from investment of amounts held in the
Bond Fund.
(3) As additional consideration for the purchase
of the Bonds by the initial purchasers and the loan of
the money represented thereby, and in order to induce
such purchase by measures designed to insure the
excludability of the interest thereon from the gross
income of the owners thereof for federal income tax
purposes, the City shall pay to the United States the
amount described in paragraph (2) above at the times,
in the installments, to the place, in the manner, and
accompanied by such forms or other information as is
or may be required by section 148(f) of the Code and
·the regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence
to assure that no errors are made in the calculations
required by paragraph (2) and, if such error is made,
to discover and promptly to correct such error within
a reasonable amount of time thereafter, including
payment to the United States of any delinquent amounts
owed to it, interest thereon, and any assessed penalty.
(i) Not to Divert Arbitrage Profits. Except to the extent
permitted by section 148 of the Code and the regulations and
rulings thereunder, the City shall not, at any time prior to
the earlier of the Stated Maturity or final payment of the
Bonds enter into any transaction that reduces the amount
required to be paid to the United States pursuant to Subsection
(g) of this Section because such transaction results in a
smaller profit or a larger loss than would have resulted if the
transaction had been at arm • s length and had the Yield of the
Bonds not been relevant to either party.
SECTION 28: Sale of Bonds -Official Statement Approval.
The Bonds authorized by this Ordinance are hereby sold by the
City to Thomson McKinnon Securities, Inc. and others (herein
referred to collectively as the "Purchasers") in accordance
with the Purchase Contract, dated August 26, 1988, attached
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hereto as Exhibit A and incorporated herein by reference as a
part of this Ordinance for all purposes. The Mayor is hereby
authorized and directed to execute said Purchase Contract for
and on behalf of the City and as the act and deed of this
Council, and in regard to the approval and execution of the
Purchase Contract, the Council hereby finds, determines and
declares that the representations, warranties and agreements of
the City (contained in paragraph 6 thereof) are true and
correct in all material respects and shall be honored and
performed by the City.
Furthermore, the use of the Preliminary Official Statement,
dated August 12, 1988, by the Purchasers in connection with the
public offering and sale of the Bonds is hereby ratified,
confirmed and approved in all respects. The final Official
Statement, being a modification and amendment of the
Preliminary Official Statement to reflect the terms of sale,
attached as Exhibit A to the Purchase Contract (together with
such changes approved by the Mayor, City Manager, Assistant
City Manager for Financial Services, or City
Secretary/Treasurer, any one or more of said officials), shall
be and is hereby in all respects approved and the Purchasers
are hereby authorized to use and distribute said final Official
Statement, dated August 26, 1988, in the reoffering, sale and
delivery of the Bonds to the public. The Mayor and City
Secretary are further authorized and directed to manually
execute and deliver for and on behalf of the City copies of
said Preliminary Official Statement and Official Statement in
final form as may be required by the Purchasers, and such final
Official Statement in the form and content manually executed by
said officials shall be deemed to be approved by the City
Council and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 29: Special Escrow Agreement Approval and
Execution. The 11 Special Escrow Agreement11 (the "Agreement") by
and between the City and Texas Commerce Bank National
Association, Lubbock, Texas (the "Escrow Agent"), attached
hereto as Exhibit B and incorporated herein by reference as a
part of this Ordinance for all purposes, is hereby approved as
to form and content, and such Agreement in substantially the
form and substance attached hereto, together with such changes
or revisions as may be necessary to accomplish the refunding or
benefit the City, is hereby authorized to be executed by the
Mayor and City Secretary for and on behalf of the City and as
the act and deed of the City Council; and such Agreement as
executed by said officials shall be deemed approved by the City
Council and constitute the Agreement herein approved.
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32958
Furthermore, the City Manager or Assistant City Manager
for Financial Services and City secretary/Treasurer, either or
both of said officials, in cooperation with the Escrow Agent
are hereby authorized and directed to make the necessary
arrangements for the purchase of the Federal securities
referenced in the Agreement and the delivery thereof to the
Escrow Agent on the day of delivery of the Bonds to the
Purchasers for deposit to the credit of the "SPECIAL CITY OF
LUBBOCK, TEXAS, COMBINATION TAX AND SUBORDINATE LIEN REVENUE
REFUNDING BOND ESCROW FUND" (the "Escrow Fund"), including the
execution of the subscription forms for the purchase and
issuance of the "United States Treasury Securities -State and
Local Government Series"; all as contemplated and provided in
Article 717k, v.A.T.c.s., as amended, this Ordinance and the
Agreement.
SECTION 30: Control and Custody of Bonds. The Mayor
shall be and is hereby authorized to take and have charge of
all necessary orders and records pending investigation by the
Attorney General of the State of Texas, including the printing
and supply of definitive Bonds, and shall take and have charge
and control of the Initial Bond(s) pending the approval thereof
by the Attorney General, the registration thereof by the
Comptroller of Public Accounts and the delivery thereof to the
Purchasers.
Furthermore, the Mayor. City Secretary/Treasurer, City
Manager, and Assistant City Manager for Financial Services, any
one or more of said officials, are hereby authorized and
directed to furnish and execute such documents and
certifications relating to the City and the issuance of the
Bonds, including a certification as to facts, estimates,
circumstances and reasonable expectations pertaining to the use
and expenditure and investment of the proceeds of the Bonds as
may be necessary for the approval of the Attorney General,
registration by the Comptroller of Public Accounts and delivery
of the Bonds to the Purchasers and, together with the City • s
financial advisor, bond counsel and the Paying Agent/
Registrar, make the necessary arrangements for the delivery of
the Initial Bonds(s) to the Purchasers.
SECTION 31: Proceeds of Sale. Immediately following
the delivery of the Bonds, certain proceeds of sale shall be
deposited with the Escrow Agent for application and
disbursement in accordance with the provisions of the
Agreement. The proceeds of sale of the Bonds not so deposited
with the Escrow Agent for the refunding of the Refunded Bonds
shall be disbursed for payment of costs of issuance and
deposited in the Bond Fund, all in accordance with written
instructions to the Escrow Agent from the City Manager.
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32958
SECTION 32: Printed Opinion. The obligation of the
Purchasers to accept delivery of the Bonds is subject to being
furnished a final opinion of Fulbright & Jaworski, Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said
opinion to be dated and delivered as of the date of delivery
and payment for such Bonds. Printing of a true and correct
reproduction of said opinion on the reverse side of each of the
definitive Bonds is hereby approved and authorized.
SECTION 33: CUSIP Numbers. CUSIP numbers may be
printed or typed on the definitive Bonds. It is expressly
provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or
effect as regards the legality thereof and neither the City
nor attorneys approving said Bonds as to legality are to be
held responsible for CUSIP numbers incorrectly printed or typed
on the definitive Bonds.
SECTION 34: Benefits of Ordinance. Nothing in this
Ordinance, expressed or implied, is intended or shall be
construed to confer upon any person other than the City, the
Paying Agent/Registrar and the Holders, any right, remedy, or
claim, legal or equitable, under or by reason of this Ordinance
or any provision hereof, this Ordinance and all its provisions
being intended to be and being for the sole and exclusive
benefit of the City, the Paying Agent/Registrar and the Holders.
SECTION 35: Inconsistent Provisions. All ordinances,
orders or resolutions, or parts thereof, which are in conflict
or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of
this Ordinance shall be and remain controlling as to the
matters contained herein.
SECTION 36: Governing Law. This Ordinance shall be
construed and enforced in accordance with the laws of the State
of Texas and the United States of America.
SECTION 37: Incorporation of Findings and Determinations.
The findings and determinations of the City Council contained
in the preamble hereof are hereby incorporated by reference and
made a part of this Ordinance for all purposes as if the same
were restated in full in this Section.
SECTION 38: Severability. If any provision of this
Ordinance or the application thereof to any circumstance shall
be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless
be valid, and the Council hereby declares that this Ordinance
would have been enacted without such invalid provision.
-40-
3295B
..
SECTION 39: Construction of Terms. If appropriate in
the context of this Ordinance, words of the singular nwnber
shall be considered to include the plural, words of the plural
nwnber shall be considered to include the singular, and words
of the masculine, feminine or neuter gender shall be considered
to include the other genders.
SECTION 40: Public Meeting. It is officially found,
determined, and declared that the meeting at which this
Ordinance is adopted was open to the public and public notice
of the time, place, and subject matter of the public business
to be considered at such meeting, including this Ordinance, was
given, all as required by Article 6252-17, Vernon's Texas Civil
Statutes, as amended.
PASSEp AND APPROVED ON FIRST READING,
~~tl~--a:_,~,.·its ltjtfl'.
PASSED ~ APPROVED ON SECOND AND FINAL
this .d?~d &y f (L_u'f'*4/flf· .
CITY OF LUBBOCK, TEXAS
ayor
ATTEST:·-
~ :CitSec~--
·c City seal)
-41-
32958
this
READING,
$2,774,682.40
Combination Tu and Sewer
System Subordinate Uen
Revenue Refu.Ddillg Bonds
Series 1988
IXHIBtT A
CITY OF LUBBOCK
$5,000,000
Combination To: and Sewer
System Subordinate Uen
Rerenue Certificates of
Obligation, Series 1988
PURCHASE CONTRACf
August 26, 1988
1liE HONORABLE MAYOR AND CITY COUNCIL MEMBERS
City of Lubbock
1625 13th Street
Lubbock, Texas 79457
Dear Mayor and City Council Members:
The undersigned, on behalf of itself and Dean ~itter Reynolds Inc. (the
"Underwriters"), offers to enter into this Purchase Contract with the City of
Lubbock, Texas (the. "City"). This offer is made subject to the City's
acceptance of this Purchase Contract on or before 3:00p.m., Central Daylight
Time on August 26, 1988.
1. Purchase and Sale of the BODds. Upon the terms and conditions and
upon the basis of the representations set forth herein, the Underwriters hereby
jointly and severally agree to purchase from the City, and the City hereby
agrees to sell and deliver to the Underwriters an aggregate of $2,774,682.40
principal amount of City of Lubbock, Texas Combination Tax and Sewer System
Subordinate Lien Revenue Refunding Bonds, Series 1988 (the "Series 1988 Bonds")
and $5,000,000 City of Lubbock, Texas Combination Tax and Sewer System
Subordinate Lien Revenue Certificates of Obligation, Series 1988 (the "Series
1988 Certificates of Obligation"; the Series 1988 Bonds and the Series 1988
Certificates of Obligation shall hereinafter be referred to collectively as the
"Bonds"). The Bonds shall be dated August 15, 1988 and shall have the
maturities and, except for the Series 1988 Bonds maturing in the years 1997
through 2000 (the "Capital Appreciation Bonds"), bear interest from their date
at the rate or rates per annum as shown on the cover page of the Official
Statement (hereinafter defined) , such interest being payable on February 15,
1989, and semi-annually thereafter on August 15 and February 15 in each year.
The Capital Appreciation Bonds shall compound interest from their date of
delivery as of February 15, 1989 and each August 15 and February 15 thereafter.
The purchase price for the Series 1988 Bonds shall be $2,748,322.92
(representing the par amount of the Series 1988 Bonds, other than the Capital
Appreciation Bonds, of $2,100,000, less an underwriter's discount on such
-UHIBIT l
Series 1988 Bonds of $19,950, plus the par amount of the Capital Appreciation
Bonds of $674,682.40, less an underwriter• s discount on the Capital
Appreciation Bonds of $6,409 .48) plus interest accrued on the Series 1988
Bonds, other than the Capital Appreciation Bonds, from their date to the date
of the payment for and delivery of the Bonds (the "Closing"). The purchase
price of the Series 1988 Certificates of Obligation shall be $4,937,500
(representing the par amount of the Series 1988 Certificates of Obligation of
$5,000,000, less an underwriter's discount thereon of $62,500) plus accrued
interest on the Series 1988 Certificates of Obligation from their date to the
date of Closing. Exhibit A hereto is the Official Statement, including the
cover page and Appendices thereto, of the City dated August 26, 1988, with
respect to the Bonds. The Official Statement, including the cover page and
Appendices thereto, as further amended only in the manner hereinafter provided,
is hereinafter called the "Official Statement."
2. Ordinance. The Bonds shall be as described in and shall be issued
and secured under the provisions of separate ordinances adopted by the City on
August 25, 1988 and August 26, 1988 (collectively, the "Ordinance"). The
Series 1988 Certificates of Obligation shall be subject to redemption and
shall be payable as provided in the Ordinance.
3. Public OEEerJ.ng. It shall be a condition of the obligation of the
City to sell and deliver the Bonds to the Underwriters, and of the obligation
of the Underwriters to purchase and accept delivery of the Bonds. that the
entire principal amount of the Bonds authorized by the Ordinance shall be sold
and delivered by the City and accepted and paid for by the Underwriters at the
Closing. The Underwriters agree to make a bona fide public offering of all of
the Bonds, at not in excess of the initial public offering prices, as set forth
on the cover page of the Official Statement, plus interest accrued thereon from
the date of the Bonds (except for the Capital Appreciation Bonds) and confirm
in writing to the City the principal amount (or percentage of principal amount)
of each maturity and the corresponding price for each maturity (or the yield
from each maturity resulting from such price) at which the Bonds sold pursuant
to such bona fide public offering.
4. Security Deposit. Delivered to the City herewith is a corporate
check of Thomson McKinnon Securities, Inc. payable to the order of the City in
the amount of $77,900. The City agrees to hold such check uncashed until the
Closing to ensure the performance by the Underwriters of their obligations to
purchase, accept delivery of and pay for the Bonds at the Closing.
Concurrently with the payment by the Underwriters of the purchase price of the
Bonds, the City shall return such check to Thomson McKinnon Securities, Inc. as
provided in Paragraph 7 hereof. Should the City fail to deliver the Bonds at
the Closing, or should the City be unable to satisfy the conditions of the
obligations of the Underwriters to purchase, accept delivery of and pay for the
Bonds, as set forth in this Purchase Contract (unless waived by the
Underwriters), or should such obligations of the Underwriters be terminated for
any reason permitted by this Purchase Contract, such check shall immediately be
returned to the Thomson McKinnon Securities, Inc. In the event the
Underwriters fail (other than for a reason permitted hereunder) to purchase,
accept delivery of and pay for the Bonds at the Closing as herein provided,
such check shall be retained by the City as and for full liquidated damages for
such failure of the Underwriters and for any defaults hereunder on the part of
the Underwriters. The Underwriters hereby agree not to stop or cause payment
2
on said check to be stopped unless the City has breached any of the terms of
this Purchase Contract.
5. Official Statement. The City hereby authorizes the Escrow Agreement,
hereinafter defined, the Ordinance and the Official Statement and the
information therein contained to be used by the Underwriters in connection with
the public offering and sale of the Bonds. The City confirms its consent to
the use by the Underwriter prior to the date hereof of the Preliminary Official
Statement dated August 12, 1988 (the "Preliminary Official Statement") in
connection with the public offering and sale of the Bonds.
6 . Represents. tiona, Jls.rra:aties a:ad Agreements of City. On the date
hereof, the City represents, warrants and agrees as follows:
(a) The City is a municipal corporation, a political subdivision of
the State of Texas and a body politic and corporate, and has full legal
right, power and authority to enter into this Purchase Contract, and the
Escrow Agreement for the Series 1988 Bonds, between the City and the
Escrow Agent named in the Official Statement (the "Escrow Agreement"), to
adopt the Ordinance, to sell the Bonds. and to issue and deliver the Bonds
to the Underwriters as provided herein and to carry out and consummate all
other transactions contemplated by the Ordinance, the Escrow Agreement and
this Purchase Contract;
(b) By official action of the City prior to or concurrently with the
acceptance hereof, the City has duly adopted the Ordinance, has duly
authorized and approved the execution and delivery of, and the performance
by the City of the obligations contained in the Bonds, the Escrow
Agreement and this Purchase Contract and has duly authorized and approved
the performance by the City of its obligations contained in the Ordinance,
the Escrow Agreement and in this Purchase Contract;
(c) The City is not in breach of or default under any applicable law
or administrative regulation of the State of Texas or the United States or
any applicable judgment or decree or any loan agreement, note, resolution,
agreement or other instrument, except as may be disclosed in the Official
Statement, to which the City is a party or is otherwise subject, which
would have a material and adverse effect upon the business or financial
condition of the City, including the sewer system of the City (the
"System"); and the execution and delivery of the Escrow Agreement and this
Purchase Contract by the City and the execution and delivery of the Bonds
and the adoption of the Ordinance by the City and compliance with the
provisions of each thereof will not violate or constitute a breach of or
default under any existing law, administrative regulation, judgment,
decree or any agreement or other instrument to which the City is a party
or is otherwise subject; ·
(d) All approvals, consents and orders of any governmental authority
or agency having jurisdiction of any matter which would constitute a
condition precedent to the performance by the City of its obligations to
sell and deliver the Bonds hereunder will have been obtained prior to the
Closing;
3
(e) At the time of the City's acceptance hereof and at the time of
the Closing, the Official Statement· does not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(f) Between the date of this Purchase Contract and Closing, the City
will not, without the prior written consent of the Underwriters, issue any
additional bonds, certificates of obligation, notes or other obligations
for borrowed money payable in whole or in part from ad valorem taxes or
revenues of the System, and the City will not incur any material
liabilities, direct or contingent, relating to, nor will there be any
adverse change of a material nature in the financial position of, the City
or the System;
(g) Except as described in the Official Statement, no litigation is
pending or, to the knowledge of the City, threatened in any court
affecting the corporate existence of the City, the title of its officers
to their respective offices, or seeking to restrain or enjoin the issuance
or delivery of the Bonds, or the collection of the ad valorem taxes or the
collection of revenues of the System pledged or to be pledged to pay the
principal of and interest on the Bonds, or in any way contesting or
affecting the issuance, execution, delivery, payment, security or validity
of the Bonds, or in any way contesting or affecting the validity or
enforceability of the Ordinance, the Escrow Agreement or this Purchase
Contract, or contesting the powers of the City, or any authority for the
Bonds, the Ordinance, the Escrow Agreement, or this Purchase Contract or
contesting in any way the completeness, accuracy or fairness of the
Preliminary Official Statement or the Official Statement or materially and
adversely affecting the financial condition of the City or the System;
(h) The City will cooperate with the Underwriters in arranging for
the qualification of the Bonds for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as the
Underwriters designate, and will use their·best efforts to continue such
qualifications in effect so long as required for distribution of the
Bonds; provided, however, that the City will not be required to execute a
general consent to service of process or to qualify to do business in
connection with any such qualification in any jurisdiction;
(i) The descriptions contained in the Official Statement of the
Bonds, the Escrow Agreement and the Ordinance accurately reflect the
provisions of such instruments, and the Bonds, when validly executed,
authenticated and delivered in accordance with the Ordinance and sold to
the Underwriters as provided herein, will be validly issued and
outstanding obligations of the City entitled to the benefits of, and
subject to the limitations contained in, the Ordinance; and
(j) If prior to the Closing an event occurs affecting the City which
is materially adverse for the purpose for which the Official Statement is
to be used and is not disclosed in the Official Statement, the City shall
notify the Underwriters, and if in the opinion of the Underwriters such
event requires a supplement or amendment to the Official Statement, the
4
City will supplemenc or amend che Official Statemenc in a form and in a
manner approved by the Underwricers• Counsel.
7. Closing. At 10:00 A.M. , Central Daylight Time, on September 27,
1988, the City will deliver the initial bond or bonds (as defined in the
Ordinance) to the Underwriters and will have available for immediate exchange
the Bonds in definitive form, duly execuced and auchendcated, together with
the other documents hereinafter mentioned, and the Underwriters will accept
such delivery and pay the respective purchase prices of the Series 1988 Bonds
and che Series 1988 Certificaces of Obligation as set forth in Paragraph 1
hereof in immediately available funds. Concurrently wich such payment by che
Underwriters, the City shall return to Thomson McKinnon Securities, Inc., the
check referred to in Paragraph 4 hereof. Delivery and payment as aforesaid
shall be made at the offices of Fulbright & Jaworski, 2800 Texas Commerce Bank
Tower, 2200 Ross Avenue, Dallas, Texas 75201, or such other place, as shall
have been mutually agreed upon by the City and the Underwriters. The Bonds
shall be princed or lithographed; shall be prepared and delivered as fully
registered bonds in the denomination or maturity amounc of $5,000 or any
multiple thereof; shall be registered in the names as shall be requested by the
Underwriters at lease five days prior to the Closing; and, if the Underwriters
shall so request, shall be made available to the Underwriters at least one
business day before the Closing for purpose of inspection in New York, New
York.
8. Coz:zdJ.tJ.ons. The Underwriters have entered into this Purchase
Contract in reliance upon the representations and warranties of the City
contained herein and to be contained in the documents and instruments to be
delivered at the Closing, and upon the performance by the City of its
obligations hereunder, both as of the date hereof and as of the date of
Closing. Accordingly, the Underwriters' obligations under this Purchase
Contract to purchase and pay for the Bonds shall be subject to the performance
by the City of its obligations to be performed hereunder and under such
documents and instruments at or prior to the Closing, and shall also be subject
to the following conditions:
(a) The representations and warranties of the City contained herein
shall be true, complete and correct in all material respects on the date
hereof and on and as of the date of Closing, as if made on the date of
Closing;
(b) At the time of the Closing, the Ordinance and the Escrow
Agreement shall be in full force and effect, and the Ordinance and the
Escrow Agreement shall not have been amended, or supplemented and the
Official Statement shall not have been amended, modified or supplemented,
except as may have been agreed to by the Underwriters;
(c) At the time of the Closing, all official action of the City
related to the Ordinance and the Escrow Agreement shall be in full force
and effect and shall not have been amended, modified or supplemented;
(d) The City shall not have failed to pay principal or interest when
due on any of its outstanding obligations for borrowed money;
5
(e) The City will purchase the government securities necessary to
provide the funds needed to refund the City's outstanding obligations as
contemplated by the Escrow Agreement;
(f) At or prior to the Closing, the Underwriters shall have received
two copies of each of the following documents:
(l) The Official Statement of the City executed on behalf of
the City by the Mayor and City Secretary of the City;
(2) The Ordinance certified by the City Secretary of the City
under its seal as having been duly adopted by the City and as being
in effect, with such changes or amendments as may have been agreed to
by the Underwriters;
(3) An unqualified opinion, dated the date of Closing, of
Fulbright & Jaworski, Bond Counsel to the City, in substantially the
forms and substance of Appendices E and F to the Official Statement;
(4) An unqualified opinion or certificate, dated on or prior to
the date of Closing, of the Attorney General of Texas, approving the
Bonds as required by law and a certificate of the Comptroller of
Public Accounts of the State of Texas regarding the registration of
the Bonds as required by law;
(5) The supplemental opinion, dated the date of Closing, of
Fulbright & Jaworski, Bond Counsel to the City, addressed to the City
and the Underwriters, to the effect that (A) in its capacity as Bond
Counsel, such firm has reviewed the information in the Official
Statement .under the captions, "Description of the Bonds,"
"Description of the Certificates," "Security for the Bonds and
Certificates11 (except for the subcaptions "Tax Rate Limitation,"
Payment Record," and Bondholder and Certificateholder Remedies), "Tax
Exemption," "Tax Accounting Treatment of Capital Appreciation Bonds,"
and "Legal Investments and Eligibility to Secure Public Funds in
Texas" and such firm is of the opinion that the information relating
to the Bonds and the Ordinance contained under such captions in all
respects accurately and fairly reflects the provisions thereof;
(B) the Bonds are exempt from registration pursuant to the Securities
Act of 1933, as amended, and the Ordinance is exempt from
qualification as an indenture pursuant to the Trust Indenture Act of
1939, as amended; (C) in the performance of their duties as Bond
Counsel for the City, without having undertaken to determine
independently the accuracy and completeness of the statements
contained in the Official Statement, nothing has come to the
attention of such counsel which would lead them to believe that the
Official Statement (excluding the financial and statistical data and
forecasts included therein, all as to which no view need be
expressed) contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
6
(6) The opinion of McCall, Parkhurst & Horton, as Underwriters'
Counsel, dated the date of the Closing addressed to the Underwriters
to the effect that the Bonds are exempt from registration pursuant to
the Securities Act of 1933, as amended, and the Ordinance is exempt
from qualification as an indenture pursuant to the Trust Indenture
Act of 1939, as amended. The opinion of such Counsel shall also
state that, based upon their participation in the preparation of the
Official Statement, such Counsel has no reason to believe that the
Official Statement (except for the financial statements and other
financial and statistical data contained therein, as to which no view
need be expressed), as of the date of the Official Statement,
contained any untrue statement of a material fact or omitted to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(7) A certificate, dated the date of Closing, signed by the
Mayor and the City Attorney of the City, to the effect that (i) the
representations and warranties of the City contained herein are true
and correct in all material respects on and as of the date of Closing
as if made on the date of Closing; (ii) except to the extent
disclosed in the Official Statement, no litigation is pending or, to
the knowledge of such persons, threatened in any court to restrain or
enjoin the issuance or delivery of the Bonds, or the collection of
the ad valorem taxes or the Net Revenues of the System pledged or to
be pledged to pay the principal of and interest on the Bonds, or the
pledge thereof, or in any way contesting or affecting the validity of
the Bonds, the Ordinance, the Escrow Agreement or this Purchase
Contract, or contesting the powers of the City or contesting the
authorization of the Bonds or the Ordinance, or contesting in any way
the accuracy, completeness or fairness of the Preliminary Official
Statement or the Official Statement (but in lieu of or in conjunction
with such certificate the Underwriters may, in their discretion,
accept certificates or opinions of the City Attorney that, in his or
her opinion, the issues raised in any such pending or threatened
litigation are without substance or that the contentions of all
plaintiffs therein are without merit); and (iii) to the best of their
knowledge, no event affecting the City has occurred since the date of
the Official Statement which should be disclosed in the Official
Statement for the purpose for which it is to be used or which it is
necessary to disclose therein in order to make the statements and
information therein not misleading in any respect;
(8) A certificate, dated the date of Closing, of the Assistant
City Manager for Financial Affairs of the City to the effect that
there has not been any material and adverse change in the affairs or
financial condition of the City since September 30, 1987, the latest
date as to which audited financial information is available;
(9) A certificate, dated the date of the Closing, of an
appropriate official of the City to the effect that, on the basis of
the facts, estimates and circumstances in effect on the date of
delivery of the Bonds, it is not expected that the proceeds of the
Bonds will be used in a manner that would cause the Bonds to be
7
arbitrage bonds within the meaning of Section l48(a) of the Internal
Revenue Code of 1986, as amended;
(10) A copy of a special report prepared by the independent
Certified Public Accountants named in the Official Statement,
addressed to the City, Bond Counsel, the Underwriters and
Underwriters' Counsel verifying the arithmetical computations of the
adequacy of the maturing principal and interest on the escrowed
securities and uninvested cash on hand under the Escrow Agreement to
pay, when due, the principal of and interest on the bonds being
refunded by the Series 1988 Bonds and the computation of the yield
with respect to such securities and the Series 1988 Bonds;
(ll) Evidence of the ratings on the Bonds shall be delivered in
a form acceptable to the Underwriters; and
( 12) Such additional legal opinions, certificates, instruments
and other documents as Bond Counsel or the Underwriters may
reasonably request to evidence the truth, accuracy and completeness,
as of the date hereof and as of the date of Closing, of the City's
representations and warranties contained herein and of the statements
and information contained in the Official Statement and the due
performance and satisfaction by the City at or prior to the date of
Closing of all agreements then to be performed and all conditions
then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other
documents mentioned above or elsewhere in this Purchase Contract shall be
deemed to be in compliance with the provisions hereof if, but only if, they are
satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations
of the Underwriters to purchase, to accept delivery of and to pay for the Bonds
as set forth in this Purchase Contract, or if the obligations of the
Underwriters to purchase, to accept delivery of and to pay for the Bonds shall
be terminated for any reason permitted by this Purchase Contract, this Purchase
Contract shall terminate and neither the Underwriters nor the City shall be
under further obligation hereunder, except that: (i) the check referred to in
Paragraph 4 hereof shall be immediately returned to Thomson McKinnon
Securities, Inc. by the City, and (ii) the respective obligations of the City
and the Underwriters set forth in Paragraphs 10 and 12 hereof shall continue in
full force and effect.
9. Te.nrwult:.f.on. The Underwriters may terminate their obligation to
purchase at any time before the Closing if any of t~e following should occur:
(a) (i) Legislation (including any amendment thereto) shall have been
introduced in or adopted by either House of the Congress of the United
States, or recommended to the Congress for passage by the President of the
United States or favorably reported for passage to either House of the
Congress by any Committee of such House, or (ii) a decision shall have
been rendered by a court established under Article Ill of the Constitution
of the United States or by the United States Tax Court, or (iii} an order,
ruling or regulation shall have been issued or proposed by or on behalf of
8
the Treasury Department of the United States or the Internal Revenue
Service or any other agency of the United States, or (iv) a release or
official statement shall have been issued by the President of the United
States or by the Treasury Department of the United States or by the
Internal Revenue Service, the effect of which, in any such ease described
in clause (i). (ii), (iii), or (iv). would be to impose, directly or
indirectly, federal income taxation upon interest received on obligations
of the general character of the Bonds or upon income of the general
character to be derived by the City, other than as imposed on the Bonds
and income therefrom under the federal tax laws in effect on the date
hereof, in such a manner as in the judgment of the Underwriters would
materially impair the marketability or materially reduce the market price
of obligations of the general character of the Bonds.
(b) Any action shall have been taken by the Securities and Exchange
Commission or by a court which would require registration of any security
under the Securities Act of 1933, as amended, or qualification of any
indenture under the Trust Indenture Act of 1939, as amended, in connection
with the public offering of the Bonds, or any action shall have been taken
by any court or by any governmental authority suspending the use of the
Official Statement or any amendment or supplement thereto, or any
proceeding for that purpose shall have been initiated or threatened in any
such court or by any such authority.
(e) (i) The Constitution of the State of Texas shall be amended or
an amendment shall be proposed, or (ii) legislation shall be enacted, or
(iii) a decision shall have been rendered as to matters of Texas law, or
(iv) any order, ruling or regulation shall have been issued or proposed by
or on behalf of the State of Texas by an official, agency or department
thereof, affecting the tax status of the City, its property or income, its
bonds (including the Bonds) or the interest thereon, which in the judgment
of the Underwriters would materially affect the market price of the Bonds.
(d) (i) A general suspension of trading in securities shall have
occurred on the New York Stock Exchange, or (ii) the United States shall
have become engaged in hostilities which have resulted in the declaration,
on or after the date of this Purchase Contract, of a national emergency or
war, the effect of which, in either ease described in clause (i) and (ii),
is, in the judgment of the Underwriters, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Bonds on the terms and in the manner contemplated
in this Purchase Contract and the Official Statement.
(e) An event described in Paragraph 6(j) hereof occurs which, in the
opinion of the Underwriters, requires a supplement or amendment to the
Official Statement.
(f) A general banking moratorium shall have been declared by
authorities of the United States, the State of New York or the State of
Texas.
(g) A lowering of the ratings initially assigned to the Bonds below
"Aa" and "AA" by either Moody's Investors Service, Inc. or Standard &
9
Poor's Corporation, respectively, shall occur prior to Closing or failure
to provide evidence of the confirmation of each rating.
(h) Any event occurs which prevents the United States Treasury
Department from delivering on the Closing Date the State and Local
Government Securities subscribed for by the City in connection with the
issuance of the Series 1988 Bonds.
10. Ezpenses. (a) The Underwriters shall be under no obligation to pay,
and the City shall pay, any expenses incident to the performance of the City's
obligations hereunder, including but not limited to: (i) the cost of the
preparation, printing and distribution of the Official Statement; (ii) the cost
of the preparation and printing of the Bonds; (iii) the fees and expenses of
Bond Counsel to the City; (iv) the fees and disbursements of the City's
accountants, advisors, and of any other experts or consultants retained by the
City; and (v) fees and premiums for bond ratings and bond insurance,
respectively, and any travel or other expenses incurred incident thereto.
(b) The Underwriters shall pay: (i) all advertising expenses of the
Underwriters in connection with the offering of the Bonds; (ii) the cost of the
preparation and printing of all the underwriting documents, including this
Purchase Contract and (iii) all other expenses incurred by them in connection
with their offering and distribution of the Bonds,· including the fees of
Counsel to the Underwriters.
ll. Notices. Any notice or other communication to be given to the City
under this Purchase Contract may be given by delivering the same in writing at
the address for the City set forth above, and any notice or other communication
to be given to the Underwriters under this Purchase Contract may be given by
delivering the same in writing to Thomson McKinnon Securities, Inc., 333 Clay
Street, Suite 1600, Houston, Texas 77002, Attention: Mr. Stephen A. Drury.
12. Parties iD Interest. This Purchase Contract is made solely for the
benefit of the City and the Underwriters (including the successors or assigns
of any Underwriter) and no other person shall acquire or have any right
hereunder or by virtue hereof. The City's representations, warranties and
agreements contained in this Purchase Contract shall remain operative and in
full force and effect, regardless of (i) any investigations made by or on
behalf of the Underwriters and (11) delivery of any payment for the Bonds
hereunder; and the City's representations and warranties contained in Paragraph
6 of this Purchase Contract shall remain operative and in full force and
effect, regardless of any termination of this Purchase Contract.
10
l3. Ulecti:ra D•te• 't'h1a Pw:cbaaa Contract ahall bacoae affective up011
the execution of the acceptance he:eof by the Kayo: of the City and ahall be
valid. anci enforceable u of the time of aucb accapt:ance.
lhia ~6~ day of August. 1988
By: --------------------------Mayor,
Clity of Lubbock, •rexaa
(SIAL)
Altelb
City Sec:etuy,
Ctty of Lubbock, Texas
Very truly you: a,
moMSON MdiNNON SECilB1TIII'S, INC.
DE&N WITiltllllJYN()LDS INC.
~OM.SON McKINNON SECllRlTIES,.lNC.
ay: ~s.-ni~o:~V~1-ce~f~:-ea~i~d~e~-=-----------
EDibit A
OUidal Statement
THE STATE OF TEXAS
COUNTY OF LUBBOCK
~> • IJHIBIT B
SPECIAL ESCROW AGREEMENT
§
§
§
THIS SPECIAL ESCROW AGREEMENT (the "Agreement''), dated and
made effective as of , made by and between the City
of Lubbock, a duly incorporated municipal corporation in
Lubbock County, Texas {the "City") acting by and through the
Mayor and City Secretary, and Texas Commerce Bank National
Association, Lubbock, Texas {the "Bank"), a banking association
organized and existing under the 1 aws of the United States of
America,
W I T N E S S E T H
WHEREAS, the City has heretofore issued and delivered
under and pursuant to an ordinance {the "Refunded Certificate
Ordinanceu), and there is currently outstanding, obligations
totalling in principal amount $2,700,000 (hereinafter called
the "Refunded Certificates") more particularly described as
follows:
City of Lubbock, Texas, ·combination
Tax and Sewer System Subordinate Lien
Revenue Certificates of Obligation,
Series 1986, dated July 15, 1986 (the
"Series 1986 Refunded Certificates")
and. now outstanding in the . principal
amount of $ 2.,700,000
AND WHEREAS, in accordance with the provisions of Article
717k, V.A.T.C.S., as amended (the "Act"), the City is
authorized to sell refunding bonds in an amount sufficient to
provide for the payment of the obligations to be refunded,
deposit the proceeds of such refunding bonds with any place of
payment for the obligations being refunded and enter into an
escrow or similar agreement with such place of payment for the
safekeeping, investment, reinvestment, administration and
disposition of such deposit, upon such terms and conditions as
the parties may agree, provided such deposits may be invested
only in direct obligations of the United States of America,
including obligations the principal of and interest on are
unconditionally guaranteed by the United States of America, and
which may be in book entry form and which shall mature and/or
UHIBlTB
bear interest payable at such times and in such amounts as will
be sufficient to provide for the scheduled payment of such
obligations; and
WHEREAS, the Refunded Certificates are scheduled to
mature, or be redeemed, and interest thereon is payable on the
dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a part of this
Agreement for all purposes; and
WHEREAS, the City on the 26th day of August, 1988,
pursuant to an ordinance (the "Bond Ordinance") duly passed and
adopted by the City Counci 1, authorized the issuance of bonds
known as "City of Lubbock, Texas, Combination Tax and Sewer
System Subordinate Lien Revenue Refunding Bonds, Series 1988 ..
(the uBonds"), and such Bonds are being issued in part to
refund, discharge and make final payment of the principal of
and interest on the Refunded Certificates; and
'tlHEREAS, upon the deli very of the Bonds, the proceeds of
sale and other available funds of the City are to be used to
purchase United States Treasury Securities -State and Local
Government Series (hereinafter called "SLGS" or ·"Federal
Securities"), and such SLGS shall be immediately credited to
and deposited into the "Escrow Fund" to be held by the Bank in
accordance with this Agreement; and
WHEREAS, a list and description
purchased and held for the account of
attached hereto as Exhibit B, which
incorporated by reference and made a part
all purposes; and
of the SLGS to be
the Escrow Fund is
Exhibit is hereby
of this Agreement for
WHEREAS, the SLGS shall mature and the interest thereon
shall be payable at such times to insure the existence of
monies sufficient to pay the principal amount of the Refunded
Certificates and the accrued interest thereon, as the same
shall become due by reason of maturity or redemption in
accordance with the terms of the Refunded Certificate Ordinance
and as set forth in Exhibit A attached hereto; and
WHEREAS, the City has completed all arrangements for the
purchase of the SLGS and the deposit and credit of the same to
the Escrow Fund as provided herein; and
','IHEREAS, the Bank is a banking association organized and
existing under the laws of the United States of America,
possessing trust powers and is fully qualified and empowered to
enter into this Agreement; and
WHEREAS, pursuant to the Bond Ordinance, the City Council
duly approved and authorized the execution of this Agreement;
and
WHEREAS, the City and the Escrow Agent, as the case may
be, shall take all action necessary to call, pay, redeem and
retire said Refunded Certificates in accordance with the
provisions thereof, including, 'ni thout limitation, a 11 actions
required by the Refunded Certificate Ordinance, the Act, the
Bond Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and to secure the payment of the principal of
and the interest on the Refunded Certificates as the same shall
become due, the City and the Bank hereby mutually undertake,
promise and agree as follows:
SECTION 1: Receipt of true and correct copies of the
Refunded Certificate Ordinance and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or
citation herein of any provision of said documents shall be
deemed an incorporation of such provision as a part hereof in
the same manner and with the s arne effect as if it were fully
set forth herein.
SECTION 2: There is hereby created by the City with the
Bank a special segregated and irrevocable trust fund designated
"SPECIAL CITY OF LUBBOCK, TEXAS COMBINATION TAX AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BOND ESCROW FUND"
(hereinafter called the "Escrow Fund") for the benefit of the
holders of the Refunded Certificates, and, immediately
following the delivery of the Bonds, the City agrees and
covenants to cause to be deposited with the Bank the following:
$ ____ _
$ ____ _
$ _____ _
for the purchase of the SLGS listed
in Exhibit B to be held for the
account of the Escrow Fund;
for deposit in the Escrow Fund as
a beginning cash balance; and
to pay fees and charges of the Bank
for the administration of this
Agreement and paying agents
charges for the Refunded
Certificates as provided in
Section 17 hereof.
The Bank hereby accepts the Escrow Fund and further agrees
to receive said moneys, apply the same as set forth herein and
to hold the cash and Federal Securities deposited and credited
to the Escrow Fund for application and disbursement for the
purposes and in the manner provided in this Agreement.
SECTION 3: The City hereby represents that the cash and
SLGS specified in Section 2 hereof, together with the interest
to be earned thereon, deposited to the credit of the Escrow
Fund will be sufficient to pay the principal of and interest on
the Refunded Certificates as the same shall become due and
payable, and such Refunded Certificates, and the interest
thereon, are to mature and be paid at the times and in the
amounts set forth and identified in Exhibit A attached hereto.
SECTION 4: The Bank agrees that all cash and Federal
Securities, together with any income or interest earned
thereon, held in the Escrow Fund shall be and is hereby
irrevocably pledged to the payment of the principal of and
interest on the Refunded Certificates which will mature and
become due on and after the date of this Agreement, and such
funds initially deposited and to be received from maturing
principal and interest on the Federal Securities in the Escrow
Fund shall be applied solely in accordance with the provisions
of this Agreement.
SECTION 5: If, for any reason, the funds on hand in the
Escrow Fund shall be insufficient to make the payments set
forth in Exhibit A attached hereto, as the same becomes due and
payable, the City shall make timely deposits to the Escrow
Fund, from lawfully available funds, of additional funds in the
amounts required to make such payments. Notice of any such
insufficiency shall be immediately given by the Bank to the
City by the fastest means possible, but the Bank shall in no
manner be responsible for the City's failure to make such
deposits.
SECTION 6: The Bank shall hold said Federal Securities
and moneys in the Escrow Fund at all times as a special and
separate trust fund for the benefit of the holders of the
Refunded Certificates, wholly segregated from other moneys and
securities on deposit with the Bank; shall never commingle said
Federal Securities and moneys with other moneys or securities
of the Bank; and shall hold and dispose of the assets therein
only as set forth herein. Nothing herein contained shall be
construed as requiring the Bank to keep the identical moneys,
or any part thereof, in said Escrow Fund, if it is impractical,
but moneys of an equal amount, except to the extent such are
represented by the Federal Securities, shall always be
maintained on deposit in the Escrow Fund by the Bank, as escrow
agent; and a special account evidencing such facts shall at all
times be maintained on the books of the Bank.
SECTION 7: The Bank shall from time to time collect and
receive the principal of and interest on the Federal Securities
as they respectively mature and become due and credit the same
to the Escrow Fund. On, or before the last business day next
preceding, each principal and/or interest payment date for the
Refunded Certificates shown in Exhibit A attached hereto, the
Bank, without further direction from anyone, including the
City, shall cause to be withdrawn from the Escrow Fund the
amount: required to pay in full the required payment on such
payment date, and the amount withdrawn from the Escrow Fund
shall be immediately transmitted and deposited with the paying
agent ~or the Refunded Certificates to be paid with such
amount. As identified in the Refunded Certificate Ordinance,
the Bank is the paying agent for the Refunded Certificates (the
"Paying Agent").
If any Refunded Certificate shall not be presented for
payment when the principal thereof shall have become due, and
if cash shall at such times be held by the Bank in trust for
that purpose sufficient and available to pay the principal of
such Refunded Certificate, it shall be the duty of the Bank to
hold said cash without liability to the holder of such Refunded
Certificate for interest thereon after such maturity, in trust
for the benefit of the holder of such Refunded Certificate, who
shall thereafter be restricted exclusively to said cash for any
claim of whatever nature on his part on or with respect to said
Refunded Certificate, including for any claim for the payment
thereof. All cash required by the provisions hereof to be set
aside or held in trust for the payment of the Refunded
Certificates shall be applied to and used solely for the
payment of the Refunded Certificates with respect to which such
cash has been so set aside in trust.
Subject to the provisions of the last sentence of
Section 26 hereof, cash held by the Bank in trust for the
payment and discharge of any of the Refunded Certificates which
remains unclaimed for a period of four ( 4) years after the
stated maturity dates of such Refunded Certificates shall be
returned to the City. Notwithstanding the above and foregoing,
any remittance of funds from the Bank to the City shall be
subject to any applicable unclaimed property laws of the State
of Texas.
SECTION 8: All Refunded Certificates cancelled on account
of payment by the Bank shall be returned to the City.
SECTION 9: The escrow created hereby shall be irrevocable
and the holders of the Refunded Certificates shall have an
express lien on all moneys and Federal Securities in the Escrow
Fund until paid out, used and applied in accordance with this
Agreement.
SECTION 10: The Bank shall have no 1 ien whatsoever upon
any of the moneys or Federal Securities in the Escrow Fund for
payment of services rendered hereunder, services rendered as
Paying Agent for the Refunded Certificates, or for any costs or
expenses incurred hereunder and reimbursable from the City.
SECTION 11: The Bank shall be authorized to (1) initially
receive substitute securities for a temporary period or (2)
redeem the SLGS and reinvest the proceeds thereof, together
with other moneys held in the Escrow Fund, provided such
-s....___
initial and temporary substitution of securities or early
redemption is necessary to correct a cash flow deficiency with
respect to the payment of the Refunded Certificates in
accordance with Exhibit A or to maintain, if possible, the tax
exempt st:atus of the interest on the Bonds or the Refunded
Certificates pursuant: to section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"), or regulations
thereunder; and provided further that the Bank receives the
following:
(1) an opinion by an independent certified
public accountant to the effect that (i) the initial
and/or temporary substitution of cash and/or
securities for one or more of the SLGS identified in
Exhibit B pending the receipt and delivery thereof to
the Escrow Agent or (ii) the redemption of one or
more of the SLGS and the reinvestment of such funds
in one or more substituted securities (which shall be
noncallable direct obligations of the United States
of America), together 'N"ith the interest thereon and
other available moneys, will, in either case, be
sufficient to pay, as the same become due in
accordance with Exhibit A, the principal of, and
interest on, the Refunded Certificates which have not
previously been paid, and
(2) with respect to an early redemption of SLGS
and the reinvestment of the proceeds thereof, an
unqualified op1n1on of nationally recognized
municipal bond counsel to the effect that (a) such
investment will not cause· the interest on the Bonds
or Refunded Certificates to be included in gross
income for federal income tax purposes, under the
Code, and the regulations thereunder in effect on the
date of such investment, or otherwise make the
interest on the Bonds or the Refunded Certificates
subject to Federal income taxation and (b) such
reinvestment complies with the Constitution and laws
of the State of Texas and with all relevant documents
relating to the issuance of the Refunded Certificates
and the Bonds.
SECTION 12: Except as provided in Section 11 hereof,
moneys in the Escrow Fund will be invested only in the Federal
Securities listed in Exhibit B and neither the City nor the
Bank sha 11 reinvest any moneys deposited in the Escrow Fund
except as specifically provided by this Agreement.
SECTION 13: If at any time through cancellation of the
Refunded Certificates there exists or will exist excesses of
interest on or maturing principal of the Federal Securities in
excess of the amounts necessary hereunder for the Refunded
Certificates, the Bank may transfer such excess amounts to or
on the order of the City, provided that the City delivers to
the Bank the following:
(1) an opinion by an independent certified
public accountant that after the transfer of such
excess, the principal amount of securities in the
Escrow Fund, together with the interest thereon and
other available monies, will be sufficient to pay, as the
same become due, in accordance with Exhibit A, the
principal of, and interest on, the Refunded Certificates
which have not previously been paid, and
(2) an unqualified op1n1on of nationally
recognized municipal bond counsel to the effect that
(a) such transfer will not cause interest on the
Bonds or the Refunded Certificates to be included in
gross income for federal income tax purposes under
the Code and the regulations thereunder in effect on
the date of such transfer, or otherwise make the
interest on the Bonds or the Refunded Certificates
subject to Federal income taxation, and (b) such
transfer complies with the Constitution and laws of
the State of Texas and with a 11 relevant documents
relating to the issuance of the Refunded Certificates
or the Bonds.
SECTION 14: The Bank shall continuously secure the monies
in the Escrow Fund not invested in Federal Securities by a
pledge of direct obligations of the United States of America,
in the par or face amount at least equal to the principal
amount of said uninvested monies to the extent such money is
not insured by the Federal Deposit Insurance Corporation.
SECTION 15: The Bank shall not be liable or responsible
for any loss resulting from any investment made in the Federal
Securities.
SECTION 16: Should the Bank fail to account for any funds
or the Federal Securities received by it for the account of the
City, such funds and Federal Securities shall be and remain the
property of the Escrow Fund and the City and the holders of the
Refunded Certificates shall be entitled to a preferred claim
and shall have a first lien upon such funds and Federal
Securities enjoyed by a trust beneficiary. The funds and
Federal Securities received by the Bank under this Agreement
shall not be considered as a banking deposit by the City and
the Bank and the City shall have no right or title with respect
thereto, except as otherwise provided herein. Such funds and
Federal Securities shall not be subject to checks or drafts
drawn by the City.
SECTION 17: The City agrees
performance of services hereunder
-7-
to pay the Bank for
and as reimbursement
the
for
anticipated expenses to be incurred hereunder the amount of
$ and, except for reimbursement of costs and expenses
incurred by the Bank pursuant to Sections 3, 11, 13 and 20
hereof, the Bank hereby agrees said amount is full and complete
payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the
effective date of this Agreement, the sum of $ which
deposit represents the total charges due for ,the Refunded
Certificates and the Bank acknowledges and agrees that
$ is and represents the total amount of compensation
due the Bank for services rendered as paying agent/registrar
for the Refunded Certificates. The Bank hereby agrees to pay,
assume and be fully responsible for any additional charges that
it may incur in the performance of its duties and
responsibilities as paying agent/registrar for the Refunded
Certificates.
SECTION 18: The Bank shall not be responsible for any
recital herein, except with respect to its organization and its
powers and authority. As to the existence or nonexistence of
any fact relating to the City or as to the sufficiency or
validity of any instrument, paper or proceedings relating to
the City, the Bank shall be entitled to rely upon a certificate
signed on behalf of the City by its City Manager, Assistant
City Manager for Financial Services, or Mayor as sufficient
evidence of the facts therein contained. The Bank may accept a
certificate of the City Secretary under the City's seal, to the
effect that a resolution or other instrument in the form
therein set forth has been adopted by the City Council of the
City, as conclusive evidence that such resolution or other
instrument has been duly adopted and is in full force and
effect.
The duties and obligations of the Bank shall be determined
solely by the express provisions of this Agreement and the Bank
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the
Bank may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the
requirements of this Agreement; but notwithstanding any
provision of this Agreement to the contrary, in the case of any
such certificate or opinion or any evidence which by any
provision hereof is specifically required to be furnished to
the Bank, the Bank shall be under a duty to examine the same to
determine whether it conforms to the requirements of this
Agreement.
-8-. _____ _
The Bank shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the
Bank unless it shall be proved that the Bank was negligent in
ascertaining or acting upon the pertinent facts.
The Bank shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
with ·the direction of the holders of not less than a majority
in aggregate principal amount of all said Refunded Certificates
at the time outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the
Bank not in conflict with the intent and purpose of this
Agreement. For the purposes of determining whether the holders
of the required principal amount of said Refunded Certificates
have concurred in any such direction, Refunded Certificates
owned by any obligor upon the Refunded Certificates, or by any
person directly or indirectly controlling or controlled by or
under direct or indirect common control with such obligor,
shall be disregarded, except that for the purposes of
determining whether the Bank shall be protected in relying on
any such direction only Refunded Certificates which the Bank
knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in
this Agreement, shall mean and include the Chairman of the
Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant
Secretary, the Treasurer and any Assistant Treasurer, and every
other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons
who at the time shall be officers, respectively, or to whom any
corporate trust matter is referred, because of his knowledge of
and familiarity with a particular subject: and the term
.. Responsible Officer" of the Bank, as used in this Agreement,
shall mean and include any of said officers or persons.
SECTION 19: Time shall be of the essence in the
performance of obligations from time to time imposed upon the
Bank by this Agreement.
SECTION 20: In the event of any disagreement or
controversy hereunder or if conflicting demands or notices are
made upon Bank growing out of or relating to this Agreement or
in the event that the Bank in good faith is in doubt as to what
action should be taken hereunder, the City expressly agrees and
consents that the Bank shall have the absolute right at its
election to:
(a) Withhold and stop all further proceedings
in, and performance of, this Agreement with respect
to the issue in question and of all instructions
received hereunder in regard to such issue; and
-9-
(b) File a suit in interpleader and obtain an
order from a court of appropriate jurisdiction
requiring all persons involved to interplead and
litigate in such court their several claims and
rights among themselves.
In the event the Bank becomes involved in litigation in
connection with this Agreement, the City agrees to indemnify
and save the Bank harmless from all loss, cost, damages,
expenses and attorney fees suffered or incurred by the Bank as
a result thereof. The obligations of the Bank under this
Agreement shall be performable at the principal corporate
office of the Bank in the City of Lubbock, Texas.
The Bank may advise with legal counsel in the event of any
dispute or question as to the construction of any of the
provisions hereof or its duties hereunder, and it shall incur
no liability and shall be fully protected in acting in
accordance with the opinion and instructions of such counsel.
SECTION 21: Promptly after September 30th of each year,
commencing with the calendar year 1988, so long as the Escrow
Fund is maintained under this Agreement, the Bank shall forward
to the City, to the attention of the Assistant City Manager for
Financial Services, or other designated official of the City, a
statement in detail of the Federal Securities and monies held,
and the current income and maturities thereof, and the
withdrawals of money from the Escrow Fund for the preceding 12
month period ending September 30th of each year.
SECTION 22: 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 mailed by
registered or certified mail, postage prepaid addressed as
follows:
CITY OF LUBBOCK, TEXAS:
P.O. Box 2000
Lubbock, Texas 79457
Attention: Assistant City Manager for Financial Services
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
P. 0. Box 841
Lubbock, Texas 79408
Attention:
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.
-10-
Any party hereto may change the address to which notices
are to be delivered by giving to the other parties not less
than ten (10) days prior notice thereof.
SECTION 23: Whenever under the terms of this Agreement
the performance date of any provision hereof, including the
date of maturity of interest on or principal of the Refunded
Certificates, shall be a Sunday or a legal holiday or a day on
which the Bank is authorized by law to close, then the
performance thereof, including the payment of principal of and
interest on the Refunded Certificates, need not be made on such
date but may performed or paid, as the case may be, on the next
succeeding business day of the Bank with the same force and
effect: as if made on the date of performance or payment and
with respect to a payment, no interest shall accrue for the
period after such date.
SECTION 24: The City covenants that it will faithfully
perform at all times any and all covenants, undertakings,
stipulations and prov1s1ons contained in this Agreement, in any
and every said Refunded Certificate as executed, authenticated
and delivered and in all proceedings pertaining thereto as said
Refunded Certificates shall have been modified· as provided in
this Agreement. The City covenants that it is duly authorized
under the Constitution and laws of the State of Texas to
execute and deliver this Agreement, that all actions on its
part for the payment of said Refunded Certificates as provided
herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded
Certificates in the hands of the holders and owners thereof are
and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 25: If any one or more of the covenants or
agreements provided in this Agreement on the part of the
parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or
agreement shall be deemed and construed to be severable from
the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions
of this Agreement.
SECTION 26: This Agreement shall terminate when the
Refunded Certificates and interest accrued and payable thereon
to maturity have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Certificates
are not presented for payment when due and payable at maturity,
the :.onpayment thereof shall not prevent the termination of
this Agreement. Funds for the payment of any nonpresented
Refunded Certificates shall upon termination of this Agreement
be held by the Bank for such purpose in accordance with
Section 7 hereof. Any moneys or Federal Securities held in the
Escrow Fund at termination and not needed for the payment of
-11-
the principal of or interest on any of the Refunded
Certificates shall be paid or transferred to the City.
SECTION 27: The Bank shall not be responsible or liable
to any person in any manner whatever for the sufficiency,
correctness, genuineness, effectiveness, or validity of the
deposits made pursuant to this Agreement, or for the form or
execution thereof, or for the identity or authority of any
person making or executing such deposits. This Agreement is
between the City and the Bank only and in connection therewith
the Bank is authorized by the City to rely upon the
representations of the City with respect to this Agreement and
the deposits made pursuant hereto and as to this City• s right
and power to execute and deliver this Agreement, and the Bank
shall not be liable in any manner as a result of such
reliance. The duty of the Bank hereunder shall only be to the
City and the holders of the Refunded Certificates. Neither the
City nor the Bank shall assign or attempt to assign or transfer
any interest hereunder or any portion of any such interest.
Any such assignment or attempted assignment shall be in direct
conflict with this Agreement and be without effect.
SECTION 28: This Agreement shall be binding upon the City
and the Bank and their respective successors and legal
representatives and shall inure solely to the benefit of the
holders of the Refunded Certificates, the City, the Bank and
their respective successors and legal representatives.
Furthermore, no alteration, amendment or modification of any
provision of this Agreement shall be effective unless (i} prior
written consent of such alteration, amendment or modification
shall have .been obtained from the holders of all Refunded
Certificates outstanding at the time of such alteration,
amendment or modification and ( ii) such alteration, amendment
or modification is in writing and signed by the parties hereto:
provided, however, the City and the Bank may, without the
consent of the holders of the Refunded Certificates, amend or
modify the terms and provisions of this Agreement to cure an
ambiguity, formal defect or omission in this Agreement.
SECTION 29: This Agreement may be executed· in several
counterparts, all or any of which shall be regarded for all
purposes as one original and shall constitute and be but one
and the same instrument. This Agreement shall be governed by
the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have each caused
this Agreement to be executed by their duly authorized officers
-12-
and their corporat:e seals ~o be hereunto affixed and attested
as of the date first above written.
A'l'TEST:
City Secretary
(City Seal}
A.'l'TEST:
Authorized Signer
(Bank Seal)
J 2 7 : !l
CITY OF LUBBOCK, 7EXAS
Mayor
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
as Escrow Agem:
Trust: Officer
-13-
•
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
§
§
§
§
§
I, the undersigned, City Secretary of the City of
Lubbock, Texas, DO HEREBY CERTIFY as follows:
1. That on the 25th day of August, 1988, the City
Council of the City of Lubbock, Texas, convened in regular
session as its regular meeting place in the City Hall of said
City; the duly constituted members of the City Council being as
follows:
B. C. MCMINN
T. J. PATTERSON
MAGGIE TREJO
GARY D. PHILLIPS
JOAN BAKER
GEORGE W. CARPENTER
BILL MALOY
)
)
)
)
)
)
)
MAYOR
COUNCILMEMBERS
and all of said persons were present at said meeting except the
following: -~ .
Among other business considered at said meeting, the attached
ordinance entitled:
33068-1
AN ORDINANCE authorizing the issuance of "CITY OF
LUBBOCK, TEXAS, COMBINATION TAX AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE REFUNDING BONDS,
SERIES 1988"; pledging an ad valorem tax and the
net revenues of the City' s Sewer System to the
payment of the principal of and interest ·on said
Bonds; enacting provisions incident and related
to the issuance, payment, security and delivery
of said bonds, including the approval and
execution of a Purchase Contract and a Special
Escrow Agreement and the approval and
distribution of an Official Statement pertaining
thereto; and providing an effective date.
was introduced and submitted to the Council for passage and
adoption. After presentation and due consideration of the
ordinance, a motion was made by Councilmember 'f>?,.t.,.r that
the ordinance be passed and adopted on ~t reading. The
motion was seconded by Councilmember "' .. .,......_, and the
ordinance was passed and adopted on first reading by the City
Council by the following vote:
7 voted "For" ...;.._ __ 0 voted "Against" abstained
all as shown in the official minutes of the Council for the
meeting held on the aforesaid date.
2. That the attached ordinance is a true and correct
copy of the original on file in the official records of the
City; the duly qualified and acting members of the City Council
of said City on the date of the aforesaid meeting are those
persons shown above and, according to the records of my office,
each member of the Council was given advance notice of the
time, place, and purpose of the meeting; and that said meeting,
and deliberation of the aforesaid public business, was open to
the public and written notice of said meeting, including the
subject of the entitled ordinance, was posted and given in
advance thereof in compliance with the provisions of Article
6252-17, Section 3A, V.A.T.c.s.
IN WITNESS WHEREOF, I have hereunto signed my name offi-ci(2r=~ affixed the seal of said City, this the,.tSd day
of , 1988.
~~~ aysecretai'y
City of Lubbock, Texas
/ -
-, -f<;i ty--seal)
33068-2
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
§
COUNTY OF LUBBOCK §
§
CITY OF LUBBOCK §
I, the undersigned, City Secretary of the City of
Lubbock, Texas, DO HEREBY CERTIFY as follows:
1. That on the 26th day of August, 1988, the City
Council of the City of Lubbock, Texas, convened in special
session as its regular meeting place in the City Hall of said
City; the duly constituted members of the City Council being as
follows:
B. C. MCMINN
T. J, PATTERSON
MAGGIE TREJO
GARY D. PHILLIPS
JOAN BAKER
GEORGE W. CARPENTER
BILL MALOY
)
)
)
)
)
)
)
MAYOR
COUNCILMEMBERS
and all of said persons were present at said meeting except the
following: ~ .
Among other business considered at said meeting, the attached
ordinance entitled:
33068-3
AN ORDINANCE authorizing the issuance of "CITY OF
LUBBOCK, TEXAS, COMBINATION TAX AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE REFUNDING BONDS,
SERIES 1988"; pledging an ad valorem tax and the
net revenues of the Ci ty• s Sewer System to the
payment of the principal of and interest on said
Bonds; enacting provisions incident and related
to the issuance, payment, security and delivery
of said bonds, including the approval and
execution of a Purchase Contract and a Special
Escrow Agreement and the approval and
distribution of an Official Statement pertaining
thereto; and providing an effective date.
was introduced and submitted to the Council for passage and
adoption. After presentation and due conside~ation of the
ordinance, a motion was made by Councilmember .{/~;. • ..,.~ that
the ordinance be passed and adopted on second'and final
reading. The motion was seconded by Councilmember 7??~
and the ordinance was finally passed and adopted by theCtY
Council to be effective immediately by the following vote:
7 voted "For .. (2 voted "Against" abstained
all as shown in the official minutes of the Council for the
meeting held on the aforesaid date.
2. That the attached ordinance is a true and correct
copy of the original on file in the official records of the
City; the duly qualified and acting members of the City Council
of said City on the date of the aforesaid meeting are those
persons shown above and, according to the records of my office,
each member of the Council was given advance notice of the
time, place, and purpose of the meeting; and that said meeting,
and deliberation of the aforesaid public business, was open to
the public and written notice of said meeting, including the
subject of the entitled ordinance, was posted and given in
advance thereof in compliance with the provisions of Article
6252-17, section 3A, V.A.T.c.s.
IN WITNESS WHEREOF, I have hereunto signed my name offi-
cially and affixed the seal of said City, this the ~h day of ~~~: __ 1_;8i6iftfP-~4
~-~ry~sz
City of Lubbock, Texas
--:lei ty seal>
..: --
33068-4
THE STATE OF TEXAS
COUNTY OF LUBBOCK
SPECIAL ESCROW AGREEMENT
§
§
§
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), dated and
made effective as of September 27, 1988, made by and between
the City of Lubbock, a duly incorporated municipal corporation
in Lubbock County, Texas (the "City•) acting by and through the
Mayor and City Secretary, and Texas Commerce Bank National
Association, Lubbock, Texas (the "Bank"), a banking association
organized and existing under the laws of the United States of
America,
W I T N E S S E T H :
WHEREAS, the City has heretofore issued and delivered
under and pursuant to an ordinance (the "Refunded Certificate
Ordinance"), and there is currently outstanding, obligations
totalling in principal amount $2,700,000 (hereinafter called
the "Refunded Certificates") more particularly described as
follows:
City of Lubbock, Texas, Combination
Tax and Sewer System Subordinate Lien
Revenue Certificates of Obligation,
Series 1986, dated July 15, 1986 (the
"Series 1986 Refunded Certificates")
and now outstanding in the principal
amount of $ 2,700,000
AND WHEREAS, in accordance with the provisions of Article
717k, V.A.T.C.S., as amended (the "Act"), the City is
authorized to sell refunding bonds in an amount sufficient to
provide for the payment of the obligations to be refunded,
deposit the proceeds of such refunding bonds with any place of
payment for the obligations being refunded and enter into an
escrow or similar agreement with such place of payment for the
safekeeping, investment, reinvestment, administration and
disposition of such deposit, upon such terms and conditions as
the parties may agree, provided such deposits may be invested
only in direct obligations of the United States of America,
including obligations the principal of and interest on are
unconditionally guaranteed by the United States of America, and
which may be in book entry form and which shall mature and/or
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3 Z 1 1 B
bear interest payable at such times and in such amounts as will
be sufficient to provide for the scheduled payment of such
obligations; and
WHEREAS, the Refunded Certificates are scheduled to
mature, or be redeemed, and interest thereon is payable on the
dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a part of this
Agreement for all purposes; and
WHEREAS, the City on the 26th day of August, 1988,
pursuant to an ordinance (the "Bond Ordinance") duly passed and
adopted by the City Counci 1, authorized the issuance of bonds
known as "City of Lubbock, Texas, Combination Tax and Sewer
System Subordinate Lien Revenue Refunding Bonds, Series 1988"
(the "Bonds"), and such Bonds are being issued in part to
refund, discharge and make final payment of the principal of
and interest on the Refunded Certificates; and
WHEREAS, upon the delivery of the Bonds, the proceeds of
sale and other available funds of the City are to be used to
purchase United States Treasury Securities -State and Loca 1
Government Series (hereinafter called "SLGS" or "Federal
Securities"), and such SLGS shall be immediately credited to
and deposited into the "Escrow Fund" to be held by the Bank in
accordance with this Agreement; and
WHEREAS, a list and description
purchased and held for the account of
attached hereto as Exhibit B, which
incorporated by reference and made a part
all purposes; and
of the SLGS to be
the Escrow Fund is
Exhibit is hereby
of this Agreement for
WHEREAS, the SLGS shall mature and the interest thereon
shall be payable at such times to insure the existence of
monies sufficient to pay the principal amount of the Refunded
Certificates and the accrued interest thereon, as the same
shall become due by reason of maturity or redemption in
accordance with the terms of the Refunded Certificate Ordinance
and as set forth in Exhibit A attached hereto; and
WHEREAS, the City has completed all arrangements for the
purchase of the SLGS and the deposit and credit of the same to
the Escrow Fund as provided herein; and
WHEREAS, the Bank is a banking association organized and
existing under the laws of the United States of America,
possessing trust powers and is fully qualified and empowered to
enter into this Agreement; and
WHEREAS, pursuant to the Bond Ordinance, the City Council
duly approved and authorized the execution of this Agreement;
and
-2-
l z 7 1 8
WHEREAS, the City and the Escrow Agent, as the case may
be, shall take all action necessary to call, pay, redeem and
retire said Refunded Certificates in accordance with the
provisions thereof, including, without limitation, all actions
required by the Refunded Certificate Ordinance, the Act, the
Bond Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and to secure the payment of the principal of
and the interest on the Refunded Certificates as the same shall
become due, the City and the Bank hereby mutually undertake,
promise and agree as follows:
SECTION 1: Receipt of true and correct copies of the
Refunded Certificate Ordinance and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or
citation herein of any provision of said documents shall be
deemed an incorporation of such provision as a part hereof in
the same manner and with the same effect as if it were fully
set forth herein.
SECTION 2: There is hereby created by the City with the
Bank a special segregated and irrevocable trust fund designated
"SPECIAL CITY OF LUBBOCK, TEXAS COMBINATION TAX AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE REFUNDING BOND ESCROW FUND"
(hereinafter called the "Escrow Fund") for the benefit of the
holders of the Refunded Certificates, and, immediately
following the delivery of the Bonds, the City agrees and
covenants to cause to be deposited with the Bank the following:
$2,675,200.00
$ o.oo
$ 4,458.22
for the purchase of the SLGS listed
in Exhibit B to be held for the
account of the Escrow Fund;
for deposit in the Escrow Fund as
a beginning cash balance; and
to pay fees and charges of the Bank
for the administration of this
Agreement and paying agents
charges for the Refunded
Certificates as provided in
Section 17 hereof.
The Bank hereby accepts the Escrow Fund and further agrees
to receive said moneys, apply the same as set forth herein and
to hold the cash and Federal Securities deposited and credited
to the Escrow Fund for application and disbursement for the
purposes and in the manner provided in this Agreement.
SECTION 3: The City hereby represents that the cash and
SLGS specified in Section 2 hereof, together with the interest
to be earned thereon, deposited to the credit of the Escrow
-3-32718
Fund will be sufficient to pay the principal of and interest on
the Refunded Certificates as the same shall become due and
payable, and such Refunded Certificates, and the interest
thereon, are to mature and be paid at the times and in the
amounts set forth and identified in Exhibit A attached hereto.
SECTION 4: The Bank agrees that all cash and Federal
Securities, together with any income or interest earned
thereon, held in the Escrow Fund shall be and is hereby
irrevocably pledged to the payment of the principal of and
interest on the Refunded Certificates which will mature and
become due on and after the date of this Agreement, and such
funds initially deposited and to be received from maturing
principal and interest on the Federal Securities in the Escrow
Fund shall be applied solely in accordance with the provisions
of this Agreement.
SECTION 5: If, for any reason, the funds on hand in the
Escrow Fund shall be insufficient to make the payments set
forth in Exhibit A attached hereto, as the same becomes due and
payable, the City shall make timely deposits to the Escrow
Fund, from lawfully available funds, of additional funds in the
amounts required to make such payments. Notice of any such
insufficiency shall be immediately given by the Bank to the
City by the fastest means possible, but the Bank shall in no
manner be responsible for the City•s failure to make such
deposits.
SECTION 6: · The Bank shall hold said Federal Securities
and moneys in the Escrow Fund at all times as a special and
separate trust fund for the benefit of the holders of the
Refunded Certificates, wholly segregated from other moneys and
securities on deposit with the Bank; shall never commingle said
Federal Securities and moneys with other moneys or securities
of the Bank; and shall hold and dispose of the assets therein
only as set forth herein. Nothing herein contained shall be
construed as requiring the Bank to keep the identical moneys,
or any part thereof, in said Escrow Fund, if it is impractical,
but moneys of an equal amount, except to the extent such are
represented by the Federal Securities, shall always be
maintained on deposit in the Escrow Fund by the Bank, as escrow
agent; and a special account evidencing such facts shall at all
times be maintained on the books of the Bank.
SECTION 7: The Bank shall from time to time collect and
receive the principal of and interest on the Federal Securities
as they respectively mature and become due and credit the same
to the Escrow Fund. On, or before the last business day next
preceding, each principal and/or interest payment date for the
Refunded Certificates shown in Exhibit A attached hereto, the
Bank, without further direction from anyone, including the
City, shall cause to be withdrawn from the Escrow Fund the
amount required to pay in full the required payment on such
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payment date, and the amount withdrawn from the Escrow Fund
shall be immediately transmitted and deposited with the paying
agent for the Refunded Certificates to be paid with such
amount. As identified in the Refunded Certificate Ordinance,
the Bank is the paying agent for the Refunded Certificates (the
"Paying Agent").
If any Refunded Certificate shall not be presented for
payment when the principal thereof shall have become due, and
if cash shall at such times be held by the Bank in trust for
that purpose sufficient and available to pay the principal of
such Refunded Certificate, it shall be the duty of the Bank to
hold said cash without liability to the holder of such Refunded
Certificate for interest thereon after such maturity, in trust
for the benefit of the holder of such Refunded Certificate, who
shall thereafter be restricted exclusively to said cash for any
claim of whatever nature on his part on or with respect to said
Refunded Certificate, including for any claim for the payment
thereof. All cash required by the provisions hereof to be set
aside or held in trust for the payment of the Refunded
Certificates shall be applied to and used solely for the
payment of the Refunded Certificates with respect to which such
cash has been so set aside in trust.
Subject to the provisions of the last sentence of
Section 26 hereof, cash held by the Bank in trust for the
payment and discharge of any of the Refunded Certificates which
remains unclaimed for a period of four ( 4) years after the
stated maturity dates of such Refunded Certificates shall be
returned to the City. Notwithstanding the above and foregoing,
any remittance of funds from the Bank to the City shall be
subject to any applicable unclaimed property laws of the State
of Texas.
SECTION 8: All Refunded Certificates cancelled on account
of payment by the Bank shall be returned to the City.
SECTION 9: The escrow created hereby shall be irrevocable
and the holders of the Refunded Certificates shall have an
express lien on all moneys and Federal Securities in the Escrow
Fund until paid out, used and applied in accordance with this
Agreement.
SECTION 10: The Bank shall have no lien whatsoever upon
any of the moneys or Federal Securities in the Escrow Fund for
payment of services rendered hereunder, services rendered as
Paying Agent for the Refunded Certificates, or for any costs or
expenses incurred hereunder and reimbursable from the City.
SECTION 11: The Bank shall be authorized to (1) initially
receive substitute securities for a temporary period or (2)
redeem the SLGS and reinvest the proceeds thereof, together
with other moneys held in the Escrow Fund, provided such
-5-3Z71B
...
initial and temporary substitution of securities or early
redemption is necessary to correct a cash flow deficiency with
respect to the payment of the Refunded Certificates in
accordance with Exhibit A or to maintain, if possible, the tax
exempt status of the interest on the Bonds or the Refunded
Certificates pursuant to section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"), or regulations
thereunder; and provided further that the Bank receives the
following:
(1) an op1n1on by an independent certified
public accountant to the effect that (i) the initial
and/or temporary substitution of cash and/or
securities for one or more of the SLGS identified in
Exhibit B pending the receipt and delivery thereof to
the Escrow Agent or (ii) the redemption of one or
more of the SLGS and the reinvestment of such funds
in one or more substituted securities (which shall be
noncallable direct obligations of the United States
of America), together with the interest thereon and
other available moneys, will, in either case, be
sufficient to pay, as the same become due in
accordance with Exhibit A, the principal of, and
interest on, the Refunded Certificates which have not
previously been paid, and
(2) with respect to an early redemption of SLGS
and the reinvestment of the proceeds thereof, an
unqualified op1n1on of nationally recognized
municipal bond counsel to the effect that (a) such
investment wi 11 not cause the interest on the Bonds
or Refunded Certificates to be included in gross
income for federal income tax purposes, under the
Code, and the regulations thereunder in effect on the
date of such investment, or otherwise make the
interest on the Bonds or the Refunded Certificates
subject to Federal income taxation and (b) such
reinvestment complies with the Constitution and laws
of the State of Texas and with all relevant documents
relating to the issuance of the Refunded Certificates
and the Bonds.
SECTION 12: Except as provided in Section 11 hereof,
moneys in the Escrow Fund will be invested only in the Federal
Securities listed in Exhibit B and neither the City nor the
Bank shall reinvest any moneys deposited in the Escrow Fund
except as specifically provided by this Agreement.
SECTION 13: If at any time through cancellation of the
Refunded Certificates there exists or will exist excesses of
interest on or maturing principal of the Federal Securities in
excess of the amounts necessary hereunder for the Refunded
Certificates, the Bank may transfer such excess amounts to or
-6-
l Z 1 1 B
. "
on the order of the City, provided that the City delivers to
the Bank the following:
{1) an opinion by an independent certified
public accountant that after the transfer of such
excess, the principal amount of securities in the
Escrow Fund, together with the interest thereon and
other available monies, will be sufficient to pay, as the
same become due, in accordance with Exhibit A, the
principal of, and interest on, the Refunded Certificates
which have not previously been paid, and
{2) an unqualified opinion of nationally
recognized municipal bond counsel to the effect that
{a) such transfer will not cause interest on the
Bonds or the Refunded Certificates to be included in
gross income for federal income tax purposes under
the Code and the regulations thereunder in effect on
the date of such transfer, or otherwise make the
interest on the Bonds or the Refunded Certificates
subject to Federal income taxation, and (b) such
transfer complies with the Constitution and laws of
the State of Texas and with all relevant documents
relating to the issuance of the Refunded Certificates
or the Bonds.
SECTION 14: The Bank shall continuously secure the monies
in the Escrow Fund not invested in Federal Securities by a
pledge of direct obligations of the United States of America,
in the par or face amount at least equal to the principal
amount of said uninvested monies to the extent such money is
not insured by the Federal Deposit Insurance Corporation.
SECTION 15: The Bank shall not be liable or responsible
for any loss resulting from any investment made in the Federal
Securities.
SECTION 16: Should the Bank fail to account for any funds
or the Federal Securities received by it for the account of the
City, such funds and Federal Securities shall be and remain the
property of the Escrow Fund and the City and the holders of the
Refunded Certificates shall be entitled to a preferred claim
and shall have a first lien upon such funds and Federal
Securities enjoyed by a trust beneficiary. The funds and
Federal Securities received by the Bank under this Agreement
shall not be considered as a banking deposit by the City and
the Bank and the City shall have no right or title with respect
thereto, except as otherwise provided herein. Such funds. and
Federal Securities shall not be subject to checks or drafts
drawn by the City .
.:.SE:.C::::.T:.;I~O::;.:N~-=1,.:..7 : The City agrees
performance of services hereunder
-7-3 2 7 1 8
to pay the Bank for
and as reimbursement
the
for
anticipated expenses to be incurred . hereunder the amount of
$0.00 and, except for reimbursement of costs and expenses
incurred by the Bank pursuant to Sections 3, 11, 13 and 20
hereof, the Bank hereby agrees said amount is full and complete
payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the
effective date of this Agreement, the sum of $4,458.22 which
deposit represents the total charges due for the Refunded
Certificates and the Bank acknowledges and agrees that
$4,458.22 is and represents the total amount of compensation
due the Bank for services rendered as paying agent/registrar
for the Refunded Certificates. The Bank hereby agrees to pay,
assume and be fully responsible for any additional charges that
it may incur in the performance of its duties and
responsibilities as paying agent/registrar for the Refunded
Certificates.
SECTION 18: The Bank shall not be responsible for any
recital herein, except with respect to its organization and its
powers and authority. As to the existence or nonexistence of
any fact relating to the City or as to the sufficiency or
validity of any instrument, paper or proceedings relating to
the City, the Bank shall be entitled to rely upon a certificate
signed on behalf of the City by its City Manager, Assistant
City Manager for Financial Services, or Mayor as sufficient
evidence of the facts therein contained. The Bank may accept a
certificate of the City Secretary under the City's seal, to the
effect that a resolution or other instrument in the form
therein set forth has been adopted by the City Council of the
City, as conclusive evidence that such resolution or other
instrument has been duly adopted and is in full force and
effect.
The duties and obligations of the Bank shall be determined
solely by the express provisions of this Agreement and the Bank
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the
Bank may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the
requirements of this Agreement; but notwithstanding any
provision of this Agreement to the contrary, in the case of any
such certificate or opinion or any evidence which by any
provision hereof is specifically required to be furnished to
the Bank, the Bank shall be under a duty to examine the same to
determine whether it conforms to the requirements of this
Agreement.
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•.
The Bank shall not be 1 iable for any error of judgment
made in good faith by a Responsible Officer or Officers of the
Bank unless it shall be proved that the Bank was negligent in
ascertaining or acting upon the pertinent facts.
The Bank shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
with the direction of the holders of not less than a majority
in aggregate principal amount of all said Refunded Certificates
at the time outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the
Bank not in conflict with the intent and purpose of this
Agreement. For the purposes of determining whether the holders
of the required principal amount of said Refunded Certificates
have concurred in any such direction, Refunded Certificates
owned by any obligor upon the Refunded Certificates, or by any
person directly or indirectly controlling or controlled by or
under direct or indirect common control with such obligor,
shall be disregarded, except that for the purposes of
determining whether the Bank shall be protected in relying on
any such direction .only Refunded Certificates which the Bank
knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in
this Agreement, shall mean and include the Chairman of the
Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant
Secretary, the Treasurer and any Assistant Treasurer, and every
other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons
who at the time shall be officers, respectively, or to whom any
corporate trust matter is referred, because of his knowledge of
and familiarity with a particular subject; and the term
"Responsible Officer" of the Bank, as used in this Agreement,
shall mean and include any of said officers or persons.
SECTION 19: Time shall be of the essence in the
performance of obligations from time to time imposed upon the
Bank by this Agreement.
SECTION 20: In the event of any disagreement or
controversy hereunder or if conflicting demands or notices are
made upon Bank growing out of or relating to this Agreement or
in the event that the Bank in good faith is in doubt as to what
action should be taken hereunder, the City expressly agrees and
consents that the Bank shall have the absolute right at its
election to:
3 Z 1 I B
(a) Withhold and stop all further proceedings
in, and performance of, this Agreement with respect
to the issue in question and of all instructions
received hereunder in regard to such issue; and
-9-
(b) File a suit in interpleader and obtain an
order from a court of appropriate jurisdiction
requiring all persons involved to interplead and
litigate in such court their several claims and
rights among themselves.
In the event the Bank becomes involved in litigation in
connection with this Agreement, the City agrees to indemnify
and save the Bank harmless from all loss, cost, damages,
expenses and attorney fees suffered or incurred by the Bank as
a result thereof to the extent permitted by law. The
obligations of the Bank under this Agreement shall be
performable at the principal corporate office of the Bank in
the City of Lubbock, Texas.
The Bank may advise with legal counsel in the event of any
dispute or question as to the construction of any of the
provisions hereof or its duties hereunder, and it shall incur
no liability and shall be fully protected in acting in
accordance with the opinion and instructions of such counsel.
SECTION 21: Promptly after September 30th of each year,
commencing with the calendar year 1988, so long as the Escrow
Fund is maintained under this Agreement, the Bank shall forward
to the City, to the attention of the Assistant City Manager for
Financial Services, or other designated official of the City, a
statement in detail of the Federal Securities and monies held,
and the current income and maturities thereof, and the
withdrawals of money from the Escrow Fund for the preceding 12
month period ending September 30th of each year.
SECTION 22: 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 mailed by
registered or certified mail, postage prepaid addressed as
follows:
CITY OF LUBBOCK, TEXAS:
P.O. Box 2000
Lubbock, Texas 79457
Attention: Assistant City Manager for Financial Services
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
P. 0. Box 841
Lubbock, Texas 79408
Attention: Trust Department
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.
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... '
Any party hereto may change the address to which notices
are to be delivered by giving to the other parties not less
than ten (10) days prior notice thereof.
SECTION 23: Whenever under the terms of this Agreement
the performance date of any provision hereof, including the
date of maturity of interest on or principal of the Refunded
Certificates, shall be a Sunday or a legal holiday or a day on
which the Bank is authorized by law to close, then the
performance thereof, including the payment of principal of and
interest on the Refunded Certificates, need not be made on such
date but may performed or paid, as the case may be, on the next
succeeding business day of the Bank with the same force and
effect as if made on the date of performance or payment and
with respect to a payment, no interest shall accrue for the
period after such date.
SECTION 24: The City covenants that it will faithfully
perform at all times any and all covenants, ·undertakings,
stipulations and provisions contained in this Agreement, in any
and every said Refunded Certificate as executed, authenticated
and delivered and in all proceedings pertaining thereto as said
Refunded Certificates shall have been modified as provided in
this Agreement. The City covenants that it is duly authorized
under the Constitution and laws of the State of Texas to
execute and deliver this Agreement, that all actions on its
part for the payment of said Refunded Certificates as provided
herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded
Certificates in the hands of the holders and owners thereof are
and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 25: If any one or more of the covenants or
agreements provided in this Agreement on the part of the
parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or
agreement shall be deemed and construed to be severable from
the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions
of this Agreement.
SECTION 26: This Agreement shall terminate when the
Refunded Certificates and interest accrued and payable thereon
to maturity have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Certificates
are not presented for payment when due and payable at maturity,
the nonpayment thereof shall not prevent the termination of
this Agreement. Funds for the payment of any nonpresented
Refunded Certificates shall upon termination of this Agreement
be held by the Bank for such purpose in accordance with
Section 7 hereof. Any moneys or Federal Securities held in the
Escrow Fund at termination and not needed for the payment of
-11-
3 2 1 1 B
..
the principal of or interest on any of the Refunded
Certificates shall be paid or transferred to the City.
SECTION 27: The Bank shall not be responsible or liable
to any person in any manner whatever for the sufficiency,
correctness, genuineness, effectiveness, or validity of the
deposits made pursuant to this Agreement, or for the form or
execution thereof, or for the identity or authority of any
person making or executing such deposits. This Agreement is
between the City and the Bank only and in connection therewith
the Bank is authorized by the City to rely upon the
representations of the City with respect to this Agreement and
the deposits made pursuant hereto and as to this City • s right
and power to execute and deliver this Agreement, and the Bank
shall not be liable in any manner as a result of such
reliance. The duty of the Bank hereunder shall only be to the
City and the holders of the Refunded Certificates. Neither the
City nor the Bank shall assign or attempt to assign or transfer
any interest hereunder or any portion of any such interest.
Any such assignment or attempted assignment shall be in direct
conflict with this Agreement and be without effect.
SECTION 28: This Agreement shall be binding upon the City
and the Bank and their respective successors and legal
representatives and shall inure solely to the benefit of the
holders of the Refunded Certificates, the City, the Bank and
their respective successors and legal representatives.
Furthermore, no alteration, amendment or modification of any
provision of this Agreement shall be effective unless (i) prior
written consent of such alteration, amendment or modification
shall have been obtained from the holders of all Refunded
Certificates outstanding at the time of such alteration,
amendment or modification and ( ii) such alteration, amendment
or modification is in writing and signed by the parties hereto;
provided, however, the City and the Bank may, without the
consent of the holders of the Refunded Certificates, amend or
modify the terms and provisions of this Agreement to cure an
ambiguity, formal defect or omission in this Agreement.
SECTION 29: This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all
purposes as one original and shall constitute and be but one
and the same instrument. This Agreement shall be governed by
the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have each caused
this Agreement to be executed by their duly authorized officers
-12-
3 z 7 1 s
.. . ..... .
and their corporate seals to be hereunto affixed and attested
as of the date first above written.
ATTEST:
~~~ Cit secreta~
(City Seal)
ATTEST: ~z~
(Bank Seal)
l 2 7 l B
CITY OF LUBBOCK, TEXAS
Mayor
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
as Escrow Agent
T~e?-~
-13-
THE STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
GENERAL CERTIFICATE
§
§
§
§
§
WE, the undersigned, Mayor and City Secretary, respect-
ively, of the City of Lubbock, Texas, DO HEREBY CERTIFY as
follows:
1. Relative to Tax Supported Indebtedness.
That the total principal amount of indebtedness
of the City, including the proposed $2,774,682.40 "CITY OF
LUBBOCK, TEXAS, COMBINATION TAX AND SEWER SYSTEM SUBORDINATE
LIEN REVENUE REFUNDING BONDS, SERIES 1988," dated August 15,
1988, and the proposed $5,000,000.00 "CITY OF LUBBOCK, TEXAS,
COMBINATION TAX AND SEWER SYSTEM SUBORDINATE LIEN REVENUE
CERTIFICATES OF OBLIGATION, SERIES 1988," dated August 15,
1988, payable in whole or in part from ad valorem taxes levied
and collected by the City is as follows:
Outstanding Indebtedness
The Series 1988 Bonds
The Series 1988 Certificates
$75,184,070.00*
$ 2,774,682.40
$ 5,000,000.00
TOTAL INDEBTEDNESS-----------$82,958,752.40
2. Relative to Debt Service Requirements.
That a debt service requirement schedule for the
City's outstanding tax-supported indebtedness, as well as the
proposed "City of Lubbock, Texas, Combination Tax and Sewer
System Subordinate Lien Revenue Refunding Bonds, Series 1988,"
and the proposed "City of Lubbock, Texas, Combination Tax and
sewer System Subordinate Lien Revenue Certificates of
Obligation, Series 1988," is attached hereto as Exhibit A and
made a part of this Certificate for all purposes.
*$2,700,000 of such amount is being refunded by "City of Lubbock,
Texas 1 Combination Tax and Sewer System Subordinate Lien Revenue
Refunding Bonds, Series 1988".
3. Relative to Taxable Values.
That the assessed value of all taxable property
(net of exemptions} in the City, as shown by the tax rolls for
the year 1987, and which have been duly approved and are the
latest official assessment of taxable property in the City, is
as follows:
TOTAL ASSESSED TAXABLE VALUES OF
REAL AND PERSONAL PROPERTY
4. Relative to Nonencumbrance.
$4,572,393,308
That, save and except for the proposed CITY OF
LUBBOCK, TEXAS, COMBINATION TAX AND SEWER SYSTEM SUBORDINATE
LIEN REVENUE REFUNDING BONDS, SERIES 1988, dated August 15,
1988, and the CITY OF LUBBOCK, TEXAS, COMBINATION TAX AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE CERTIFICATES OF OBLIGATION,
SERIES 1988, dated August 15, 1988, the income and revenues of
said System have not been pledged or hypothecated in any other
manner or for any other purpose; and that the above obligations
evidence the only lien, encumbrance, or indebtedness of said
System or against the income and revenues of such System.
5. Relative to Rates and Charges.
That the current monthly rates and charges for
services provided by the City 1 s sewer System are as shown in
Exhibit B attached hereto and made a part hereof for all
purposes.
6. Relative to Sewer system.
That the City has obtained all requisite
licenses, permits, and approvals for the operation of a sewer
system and, as of the date hereof, no question is pending and
no proceedings of any nature have been instituted questioning
the City! s right and title to its utility properties or its
authority to operate same.
7. Relative to Income and Revenues.
That the following is a schedule of the gross
revenues, operating expenses, and net revenues of the City! s
sewer System for the years stated:
3307B -2-
FISCAL YEAR GROSS OPERATING NET
ENDING REVENUES EXPENSES REVENUES
1984 $3,652,528 $2,441,555 $1,210,973
1985 4,173,730 2,482,623 1,691,107
1986 4,194,086 2,085,015 2,109,071
1987 5,001,994 3,248,237 1,753,757
1988* 5,471,500 3,592,923 1,878,577
*Rate increase effective 8-1-88
8. Relative to City Officials.
That certain duly qualified and acting officials
of the City are as follows:
B. C. McMINN
RANETTE BOYD
LARRY J. CUNNINGHAM
J. ROBERT MASSENGALE
MAYOR
CITY SECRETARY
CITY MANAGER
ASSISTANT CITY MANAGER FOR
FINANCIAL SERVICES -TREASURER
9. Relative to Incorporation.
That said City is incorporated under the General
Laws of the State of Texas, and is operating under the Home
Rule Amendment to the Texas Constitution, Section 5, Article
XI, as amended in 1912; the City Charter was originally adopted
at an election held on December 27, 1917, and said Charter has
not been amended in any respect since May 7, 1988, the date of
the last Charter Amendment election.
10. Relative to Refunded Bonds.
That none of the obligations being refunded by
the Series 1988 Bonds, have ever been held in or purchased for
the account of any of the special Funds created and maintained
for the payment and security of such obligations being
refunded, none of the obligations being refunded by the Series
1988 Bonds is currently owned nor has any of the same ever been
purchased or held for any account or fund of the City, and
attached hereto as Exhibit C is a true and correct copy of the
Ordinance authorizing the City of Lubbock, Texas, Combination
Tax and Sewer System Subordinate Lien Revenue Certificates of
Obligation, Series 1986 being refunded by the Series 1988
Bonds."
-3-3307B
WITNESS OUR HAND AND );HE SEAL OF THE CITY OF LUBBOCK,
TEXAS, this thea'&JC'.aL, day of ~, 198£.
Mayor,
City of Lubbock, Texas
~,..c---;s.~ ~Secretary
City of Lubbock, Texas
{City Seal)
3307B -4-
FIRS1 SOUT~ST COMPANY
8/23/1988 PAGE: 1 RECORD NAME • LUBBOCK 88 REFUNDING Exhibit A , ~
.· REFUNDING ISSUE
DATE PRINCIPAL !!!! INTEREST OEBT SERVICE YJELD ~
2/15/1989 220,000.00 5.150 68,480.00 288,480.00 5.150 100.000
8/15/1989 62,155.00 62,155.00
2/15!1990 220,000.00 6.000 62,155.00 282,155.00 6.000 100.000
8!15/1990 55,555.00 55,555.00
2/15/1991 235,000.00 6.250 55,555.00 290,555.00 6.250 100.000
8/15/1991 48,211.25 48,211.25
2/15/1992 250,000.00 6.500 48,211.25 298,211.25 6.500 100.000
8/15/1992 40,086.25 40,086.25
2!15/1993 265,000.00 6.600 40,086.25 305,086.25 6.600 100.000
8/15/1993 31,341.25 31,341.25
2/15!1994 285,000.00 6.150 31,341.25 316,341.25 6.150 100.000
8/1511994 21,722.50 21,722.50
2!15/1995 305,000.00 6.900. 21,722.50 326,722.50 6.900 100.000
8/15/1995 11,200.00 11,200.00
2!15/1996 320,000.00 7.000 11,200.00 331,200.00 7.000 100.000
8/15/1996
2/15!1997 189,434.40 0.000 150,565.60 340,000.00 7.100 55.716
8/15/1997
2/15/1998 115,076.20 0.000 164,923.80 340,000.00 7.200 51.493
8/15/1998
2/15/1999 161,493.20 0.000 178,506.80 340,000.00 7.300 47.498
8/15/1999
2/15/2000 148,678.60 0.000 191,321.40 340,000.00 7.400 43.729
TOTALS 2,774,682.40 1,294,340.10 4,069,022.50
9
Exhibit B
SEWER RATES
(Monthly)
Sewer rates were increased effective August 1, 1988, and an additional rate increase is
planned to become effective during Fiscal Year Ending 9-30-89:
Residential
Present Rates
(Effective 8-1-88)
First 3,000 gallons $4.60 (Minimum)
Next 7,000 gallons 0.33/M gallons
Over 10,000 gallons No additional charge
(Maximum Monthly Charge -$6.91)
Commercial/Industrial*
First 3,000 gallons $4.60 (Minimum)**
Over 3,000 gallons 0.33/M gallons
Previous Rates
(Effective 8-1-86)
First 3,000 gallons · $3.85 {Minimum
Next 7,000 gallons 0.33/M gallons
Over 10,000 gallons No additional charge
(Maximum Monthly Charge -$6.16)
First 3,000 gallons $3.85 (Minimum)**
Over 3,000 gallons 0.33/M gallons
* Industrial waste that exceeds the allowable strength is admitted to the sewer system
only by contract with the City; charges for treating biochemical oxygen demand (8.0.0.)
and suspended solids (S.S.) are:
8.0.0. s.s. $0.0800/lb.
$0.0683/lb.
$0.0545/lb.
$0.0463/lb.
** Based on 5/8" or 3/4" meter; higher minimums for larger meters up to a maximum
charge for a 10" meter of:
$478.36 $392.65
DEBT SERVICE REQUIREMENTS •
1:1scal
Yenr
Ending Outstcindlng Debt The Bonds The Certlflcates
9·30 Prindeal iiiterest Toiii Prindeat Interest UJ Total Prlnd2al Interest Total 19i8 S ),7dJ;ooo s ,,,70,3" s IJ,27!i,36J s $ $ s s s 1789 7,0.,,000 ,,,2,1199 u,n7,499 22S,OOO 111,204 3",204 3",718 36S,788
1990 6,930,000 4,7~6,438 li,726,U8 22S,OOO 117 ·"' 31f2,98j 100,000 362,788 1162,718
1991 6,790,000 4,282,0113 li,072,0U 23S,OOO 10),9SO 331,9!i0 100,000 :U6,688 II"·'" 1992 6,46.5,000 3,782,7U 10,2117,7111 no,ooo 88,6" 338,6" 12,,000 n9,n8 11711,518 1993 S,9IO,OOO 3,)U,321 9,22.5,321 2",000 71,920 336,920 17S,OOO 339,813 sn,813 1994 ,,,0,000 2,878,266 8,1128,266 28S,OOO '-J,48!i :U8,us 2JO,OOO 32.5,,38 S7S,S38 I99S S,06j,000 2,468,49S 7,H3,119S lOS,OOO 33,273 338,273 2SO,OOO 308,1113 .558,413 1996 s,on,ooo 2,072,S07 7,1117,S07 32S,OOO U,l7S 3l6,37S 32S,OOO 288,413 613,413 1997 s,ou,ooo I ,676,3.52 6,691,3.52 189,43, UO,S66 3110,000 l2S,OOO 2U,,OO jgO,SOO
1998 S,OlO,OOO 1,278,9.58 6,308,9.58 l7S,076 1611,9211 340,000 l2S,OOO 2112,263 "7,263 1999 4,930,000 880,930 S,810,910 161,091 171,S07 140,000 32S,OOO 218,700 .SU,700
2000 2,481,307 2,,2,780 S,0211,087 1'48,679 191,321 340,000 32S,OOO 191f,811 S19,8U
2001 2,2Sfi,4U 2,111,299 lf,38.S,7fll 32S,OOO 170,600 fl95,600
2002 1,9S8,639 1,322,766 3,281,40S l2S,OOO '"·063 471,063 2001 1,79,,682 71fi,SS8 2,S36,2110 32S,OOO 121,211 11,6,281
2004 630,000 181,72S 811,72S JSO,OOO 9S,37S IIU,l7S 200S 630,000 13!i,J7S 76S,37S JSO,OOO '8,338 018,338 2006 630,000 91,12S 721,12S HO,OOO U,I2S 391,12S
2007 630,000 46,87S 676,87S 350,000 13,738 J6l,7J8
2008 3.301000 12 1J7S lii2137S
$82,889,070 $4S, 680. 7 66 $128,"9,836 $2,789,682 $1,297,17S $4,086,8S7 $S,OOO,OOO $1f,274,82S $9,274,82'
(I) l11tcrest cakulatcd at estimated rates for purposes ol illu~tration.
Grand Total
Reel! n1, ,36S
l3,2j9,1191
12,'l2,2ll
II ,867,681
11,060,967
I0,077,0SII
9,1'12,289
8,430,181
8,097,29.5
7,621,1'2
7,216,221
6,694,630
5,883,900
11,881,llll
3,7S2,468
2,982,521
I ,2S7, 100
1,183,713
1,112,250
1,040,611
3112ll7S
$141 ,9li.Sl8
.
l!
'J6o
Prlncl
Retir'
39.
72.
92.9
99.6
100.0
Attorney General of Texas
P.O. Box 12548
Capitol Station
Austin, Texas 78711
August 26, 1988
Attention: Public Finance Divisi~n
RE: $2,774,682.40 "City of Lubbock, Texas, Combination Tax
and Sewer System Subordinate Lien Revenue Refunding
Bonds, Series 1988 11
Ladies and Gentlemen:
Enclosed herewith is the filing fee, the Initial Bonds
of the above series and a Signature and No-Litigation
Certificate relating thereto, executed and completed except as
to date.
When the record of proceedings relating to the issuance
of the above referenced series and the Initial Bonds have been
approved by your office, this will be your authority to date
the Signature and No-Litigation Certificate and deliver the
Initial Bonds to the Comptroller of Public Accounts for
registration.
Should any litigation develop affecting the issuance of
the bonds or the security for the payment thereof, the
undersigned or other official of the City will notify you at
once by telephone or other means. You may thus be assured that
the statements appearing in paragraphs 5 and 6 of the Signature
and No-Litigation Certificate are accurate and complete at the
time the bonds are finally approved unless notice to the
contrary has been given in the manner aforementioned.
Very truly yours,
33118-1
August 26, 1988
Ms. Arlene Chisholm
Economic Analysis Center
Comptroller's Department
P. o. Box 13528, Capitol Station
Austin, Texas 78711
RE: $2,774,682.40 "City of Lubbock, Texas, Combination Tax
and Sewer System Subordinate Lien Revenue Refunding
Bonds, Series 1988"
Dear Ms. Chisholm:
When the Initial Bonds of the series described above
have been received from the Attorney General, please register
the same on behalf of the City, and when so registered, forward
them by overnight delivery to the firm of Fulbright & Jaworski,
2200 Ross Avenue, Suite 2800, Dallas, Texas 75201, Attention:
Shelby A. Beer, for further handling under our instructions to
them.
It is further requested that three copies of the
approving opinion of the Attorney General and Comptroller's
Registration Certificate be enclosed with the Initial Bonds
when they are sent to said firm.
Very truly yours,
33116-2
Messrs. Fulbright & Jaworski
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Gentlemen:
August 26, 1988
RE: $2,774,682.40 "City of Lubbock, Texas, Combination Tax
and Sewer System Subordinate Lien Revenue Refunding
Bonds, Series 1988"
Enclosed you will find four Certificates as to Tax
Exemption executed but undated.
At such time as the above described bonds are delivered
to the purchaser, you are authorized to complete and date each
of these certificates.
Very truly yours,
Mayor, City of Lubbock, Texas
33118-3
$2,774,68Z.40
Combination To: and Sewer
System Subordinate Uen
Revenue RefUnding Bonds
Series 1988
CI'lY OF LUBBOCK
$5,000,000
01mbination Tax and Sewer
System Subordinate Uen
Revenue Certificates or
Obligation, Series 1988
PURCHASE CONTRACf
August 26, 1988
1HE HONORABLE MAYOR AND CI'lY COUNCIL MEMBERS
City of Lubbock
1625 13th Street
Lubbock, Texas 79457
Dear Mayor and City Council Members:
The undersigned, on behalf of itself and Dean Witter Reynolds Inc. (the
"Underwriters•), offers to enter into this Purchase Contract with the City of
Lubbock, . Texas (the. "City"). This offer is made subject to the. City's
acceptance of this Purchase Contract on or before 3:00p.m., Central Daylight
Time on August 26, 1988.
1. Purcba.se snd Sale oE tbe Bonds. Upon the terms and conditions and
upon the basis of the representations set forth herein, the Underwriters hereby
jointly and severally agree to purchase from the City, and the City hereby
agrees to sell and deliver to the Underwriters an aggregate of $2,774,682.40
principal amount of City of Lubbock, Texas Combination Tax and Sewer System
Subordinate Lien Revenue Refunding Bonds, Series 1988 (the "Series 1988 Bonds")
and $5,000,000 City of Lubbock, Texas Combination Tax and Sewer System
Subordinate Lien Revenue Certificates of Obligation, Series 1988 (the "Series
1988 Certificates of Obligation"; the Series 1988 Bonds and the Series 1988
Certificates of Obligation shall hereinafter be referred to collectively as the
"Bonds"). The Bonds shall be dated August 15, 1988 and shall have the
maturities and, except for the Series 1988 Bonds maturing in the years 1997
through 2000 (the "Capital Appreciation Bonds"), bear interest from their date
at the rate or rates per annum as shown on the cover page of the Official
Statement (hereinafter defined) , such interest being payable on February 15,
1989, and semi-annually thereafter on August 15 and February 15 in each year.
The Capital Appreciation Bonds shall compound interest from their date of
delivery as of February 15, 1989 and each August 15 and February 15 thereafter.
The purchase price for the Series 1988 Bonds shall be $2,748,322.92
(representing the par amount of the Series 1988 Bonds, other than the Capital
Appreciation Bonds, of $2,100,000, less an underwriter's discount on such
Series 1988 Bonds of $19,950, plus the par amount of the Capital Appreciation
Bonds of $674,682.40, less an underwriter's discount on the Capital
Appreciation Bonds of $6,409.48) plus interest accrued on the Series 1988
Bonds, other than the Capital Appreciation Bonds, from their date to the date
of the payment for and delivery of the Bonds (the "Closing"). The purchase
price of the Series 1988 Certificates of Obligation shall be $4,937,500
(representing the par amount of the Series 1988 Certificates of Obligation of
$5,000,000, less an underwriter's discount thereon of $62, 500) plus accrued
interest on the Series 1988 Certificates of Obligation from their date to the
date of Closing. Exhibit A hereto is the Official Statement, including the
cover page and Appendices thereto, of the City dated August 26, 1988, with
respect to the Bonds. The Official Statement, including the cover page and
Appendices thereto, as further amended only in the manner hereinafter provided,
is hereinafter called the "Official Statement."
2. Ord.lnance. The Bonds shall be as described in and shall be issued
and secured under the provisions of separate ordinances adopted by the City on
August 25, 1988 and August 26, 1988 (collectively, the "Ordinance"). The
Series 1988 Certificates of Obligation shall be subject to redemption and
shall be payable as provided in the Ordinance.
3. Public OfferJ.ng. It shall be a condition of the obligation of the
City to sell and deliver the Bonds to the Underwriters, and of the obligation
of the Underwriters to purchase and accept delivery of the Bonds, that the
entire principal amount of the Bonds authorized by the Ordinance shall be sold
and delivered by the City and accepted and paid for by the Underwriters at the
Closing. The Underwriters agree to make a bona fide public offering of all of
the Bonds, at not in excess of the initial public offering prices, as set forth
on the cover page of the Official Statement, plus interest accrued thereon from
the date of the Bonds (except for the Capital Appreciation Bonds) and confirm
in writing to the City the principal amount (or percentage of principal amount)
of each maturity and th~ corresponding price for each maturity (or the yield
from each maturity resulting from such price) at which the Bonds sold pursuant
to such bona fide public offering.
4. Security Deposit. Delivered to the City herewith is a corporate
check of Thomson McKinnon Securities, Inc. payable to the order of the City in
the amount of $77,900. The City agrees to hold such check uncashed until the
Closing to ensure the performance by the Underwriters of their obligations to
purchase, accept delivery of and pay for the Bonds at the Closing.
Concurrently with the payment by the Underwriters of the purchase price of the
Bonds, the City shall return such check to Thomson McKinnon Securities, Inc. as
provided in Paragraph 7 hereof. Should the City fail to deliver the Bonds at
the Closing, or should the City be unable to satisfy the conditions of the
obligations of the Underwriters to purchase, accept delivery of and pay for the
Bonds, as set forth in this Purchase Contract (unless waived by the
Underwriters), or should such obligations of the Underwriters be terminated for
any reason permitted by this Purchase Contract, such check shall immediately be
returned to the Thomson McKinnon Securities, Inc. In the event the
Underwriters fail (other than for a reason permitted hereunder) to purchase,
accept delivery of and pay for the Bonds at the Closing as herein provided,
such check shall be retained by the City as and for full liquidated damages for
such failure of the Underwriters and for any defaults hereunder on the part of
the Underwriters. The Underwriters hereby agree not to stop or cause payment
2
on said check to be stopped unless the City has breached any of the terms of
this Purchase Contract.
5. Official Statement. The City hereby authorizes the Escrow Agreement,
hereinafter defined, the Ordinance and the Official Statement and the
information therein contained to be used by the Underwriters in connection with
the public offering and sale of the Bonds. The City confirms its consent to
the use by the Underwriter prior to the date hereof of the Preliminary Official
Statement dated August 12, 1988 (the "Preliminary Official Statement") in
connection with the public offering and sale of the Bonds.
6. Representations. flarrsnties and Agreements of City. On the date
hereof, the City represents, warrants and agrees as follows:
(a) The City is a municipal corporation, a political subdivision of
the State of Texas and a body politic and corporate, and has full legal
right, power and authority to enter into this Purchase Contract, and the
Escrow Agreement for the Series 1988 Bonds, between the City and the
Escrow Agent named in the Official Statement (the "Escrow Agreement"), to
adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds
to the Underwriters as provided herein and to carry out and consummate all
other transactions contemplated by the Ordinance, the Escrow Agreement and
this Purchase Contract;
(b) By official action of the City prior to or concurrently with the
acceptance hereof, the City has duly adopted the Ordinance, has duly
authorized and approved the execution and delivery of, and the performance
by the City of the obligations contained in the Bonds, the Escrow
Agreement and this Purchase Contract and has duly authorized and approved
the performance by the City of its obligations contained in the Ordinance,
the Escrow Agreement and in this Purchase Contract;
(c) The City is not in breach of or default under any applicable law
or administrative regulation of the State of Texas or the United States or
any applicable judgment or decree or any loan agreement, note, resolution,
agreement or other instrument, except as may be disclosed in the Official
Statement, to which the City is a party or is otherwise subject, which
would have a material and adverse effect upon the business or financial
condition of the City, including the sewer system of the City (the
"System"); and the execution and delivery of the Escrow Agreement and this
Purchase Contract by the City and the execution and delivery of the Bonds
and the adoption of the Ordinance by the City and compliance with the
provisions of each thereof will not violate or constitute a breach of or
default under any existing law, administrative regulation, judgment,
decree or any agreement or other instrument t~ which the City is a party
or is otherwise subject;
(d) All approvals, consents and orders of any governmental authority
or agency having jurisdiction of any matter which would constitute a
condition precedent to the performance by the City of its obligations to
sell and deliver the Bonds hereunder will have been obtained prior to the
Closing;
3
(e) At the time of the City's acceptance hereof and at the time of
the Closing, the Official Statement does not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(f) Between the date of this Purchase Contract and Closing, the City
will not, without the prior written consent of the Underwriters, issue any
additional bonds, certificates of obligation, notes or other obligations
for borrowed money payable in whole or in part from ad valorem taxes or
revenues of the System, and the City will not incur any material
liabilities. direct or contingent, relating to, nor will there be any
adverse change of a material nature in the financial position of, the City
or the System;
(g) Except as described in the Official Statement, no litigation is
pending or, to the knowledge of the City, threatened in any court
affecting the corporate existence of the City, the title of its officers
to their respective offices, or seeking to restrain or enjoin the issuance
or delivery of the Bonds, or the collection of the ad valorem taxes or the
collection of revenues of the System pledged or to be pledged to pay the
principal of and interest on the Bonds, or in any way contesting or
affecting the issuance, execution, delivery, payment, security or validity
of the Bonds, or in any way contesting or affecting the validity or
enforceability of the Ordinance, the Escrow Agreement or this Purchase
Contract, or contesting the ·powers of the City, or any authority for the
Bonds, the Ordinance, the Escrow Agreement, or this Purchase Contract or
contesting in any way the completeness, accuracy or fairness of the
Preliminary Official Statement or the Official Statement or materially and
adversely affecting the financial condition of the City or the System;
(h) The City will cooperate with the Underwriters in arranging for
the qualification of the Bonds for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as the
Underwriters designate, and will use their best efforts to continue such
qualifications in effect so long as required for distribution of the
Bonds; provided, however, that the City will not be required to execute a
general consent to service of process or to qualify to· do business in
connection with any such qualification in any jurisdiction;
(i) The descriptions contained in the Official Statement of the
Bonds, the Escrow Agreement and the Ordinance accurately reflect the
provisions of such instruments. and the Bonds, when validly executed,
authenticated and delivered in accordance with the Ordinance and sold to
the Underwriters as provided herein, will be validly issued and
outstanding obligations of the City entitled to the benefits of, and
subject to the limitations contained in, the Ordinance: and
(j) If prior to the Closing an event occurs affecting the City which
is materially adverse for the purpose for which the Official Statement is
to be used and is not disclosed in the Official Statement, the City shall
notify the Underwriters, and if in the opinion of the Underwriters such
event requires a supplement or amendment to the Official Statement, the
4
City will supplement or amend the Official Statement in a form and in a
manner approved by the Underwriters' Counsel.
7. C1osJ.ng. At 10:00 A.M., Central Daylight Time, on September 27,
1988, the City will deliver the initial bond or bonds (as defined in the
Ordinance) to the Underwriters and will have available for immediate exchange
the Bonds in definitive form, duly executed and authenticated, together with
the other documents hereinafter mentioned, and the Underwriters will accept
such delivery and pay the respective purchase prices of the Series 1988 Bonds
and the Series 1988 Certificates of Obligation as set forth in Paragraph 1
hereof in immediately available funds. Concurrently with such payment by the
Underwriters, the City shall return to Thomson McKinnon Securities, Inc., the
check referred to in Paragraph 4 hereof. Delivery and payment as aforesaid
shall be made at the offices of Fulbright & Jaworski, 2800 Texas Commerce Bank
Tower, 2200 Ross Avenue, Dallas, Texas 75201, or such other place, as shall
have been mutually agreed upon by the City and the Underwriters. The Bonds
shall be printed or lithographed; shall be prepared and delivered as fully
registered bonds in the denomination. or maturity amount of $5,000 or any
multiple thereof; shall be registered in the names as shall be requested by the
Underwriters at least five days prior to the Closing; and, if the Underwriters
shall so request, shall be made available to the Underwriters at least one
business day before the Closing for purpose of inspection in New York, New
York.
'
8. COnd!e!ons. The Underwriters have entered into this Purchase
Contract in reliance upon the representations and warranties of the City
contained herein and to be contained in the documents and instruments to be
delivered at the Closing, and upon the performance by the City of its
obligations hereunder, both as of the date hereof and as of the date of
Closing. Accordingly, the Underwriters' obligations under this Purchase
Contract to purchase and pay for the Bonds shall be subject to the performance
by the City of its obligations to be performed hereunder and under such
documents and instruments at or prior to the Closing, and shall also be subject
to the following conditions:
(a) The representations and warranties of the City contained herein
shall be true, complete and correct in all material respects on the date
hereof and on and as of the date of Closing, as if made on the date of
Closing;
(b) At the time of the Closing, the Ordinance and the Escrow
Agreement shall be in full force and effect, and the Ordinance and the
Escrow Agreement shall not have been amended, or supplemented and the
Official Statement shall not have been amended, modified or supplemented,
except as may have been agreed to by the Underwriters;
(c) At the time of the Closing, all official action of the City
related to the Ordinance and the Escrow Agreement shall be in full force
and effect and shall not have been amended, modified or supplemented;
(d) The City shall not have failed to pay principal or interest when
due on any of its outstanding obligations for borrowed money;
5
(e) 'lbe City will purchase the government securities necessary to
provide the funds needed to refund the City's outstanding obligations as
contemplated by the Escrow Agreement;
(f) At or prior to the Closing, the Underwriters shall have received
two copies of each of the following documents:
(1) 'lbe Official Statement of the City executed on behalf of
the City by the Mayor and City Secretary of the City;
(2) The Ordinance certified by the City Secretary of the City
under its seal as having been duly adopted by the City and as being
in effect, with such changes or amendments as may have been agreed to
by the Underwriters;
(3) An unqualified opinion, dated the date of Closing, of
Fulbright & Jaworski, Bond Counsel to the City, in substantially the
forms and substance of Appendices E and F to the Official Statement;
(4) An unqualified opinion or certificate, dated on or prior to
the date of Closing, of the Attorney General of Texas, approving the
Bonds as required by law and a certificate of the Comptroller of
Public Accounts of the State of Texas regarding the registration of
the Bonds as required by law;
(5) The supplemental opinion, dated the date of Closing, of
Fulbright & Jaworski, Bond Counsel to the City, addressed to the City
and the Underwriters, to the effect that (A) in its capacity as Bond
Counsel, such firm has reviewed the information in the Official
Statement under the captions, "Description of the Bonds,"
"Description of the Certificates," "Security for the Bonds and
Certificates" (except for the subcaptions "Tax Rate Limitation,"
Payment Record," and Bondholder and Certificateholder Remedies), "Tax
Exemption," •tax Accounting Treatment of Capital Appreciation Bonds,"
and "Legal Investments and Eligibility to Secure Public Funds in
Texas• and such firm is of the opinion that the information relating
to the Bonds and the Ordinance contained under such captions in all
respects accurately and fairly reflects the provisions thereof;
(B) the Bonds are exempt from registration pursuant to the Securities
Act of 1933, as amended, and the Ordinance is exempt from
qualification as an indenture pursuant to the Trust Indenture Act of
1939, as amended; (C) in the performance of their duties as Bond
Counsel for the City, without having undertaken to determine
independently the accuracy and completeness of the statements
contained in the Official Statement, ?othing has come to the
attention of such counsel which would lead them to believe that the
Official Statement (excluding the financial and statistical data and
forecasts included therein, all as to which no view need be
expressed) contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
6
(6) The opinion of McCall, Parkhurst & Horton, as Underwriters'
Counsel, dated the date of the Closing addressed to the Underwriters
to the effect that the Bonds are exempt from registration pursuant to
the Securities Act of 1933, as amended, and the Ordinance is exempt
from qualification as an indenture pursuant to the Trust Indenture
Act of 1939, as amended. The opinion of such Counsel shall also
state that, based upon their participation in the preparation of the
Official Statement, such Counsel has no reason to believe that the
Official Statement (except for the financial statements and other
financial and statistical data contained therein, as to which no view
need be expressed), as of the date of the Official Statement,
contained any untrue statement of a material fact or omitted to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made. not
misleading;
(7) A certificate, dated the date of Closing, signed by the
Mayor and the City Attorney of the City, to the effect that (i) the
representations and warranties of the City contained herein are true
and correct in all material respects on and as of the date of Closing
as if made on the date of Closing; (U) except to the extent
disclosed in the Official Statement, no litigation is pending or, to
the knowledge of such persons, threatened in any court to restrain or
enjoin the issuance or delivery of the Bonds, or the collection of
the ad valorem taxes or the Net Revenues of the System pledged or to
be pledged to pay the principal of and interest on the Bonds, or the
pledge thereof, or in ariy way contesting or affecting the validity of
the Bonds, the Ordinance, the Escrow Agreement or this Purchase
Contract, or contesting the powers of the City or contesting the
authorization of the Bonds or the Ordinance, or contesting in any way
the accuracy. completeness or fairness of the Preliminary Official
Statement or the Official Statement (but in lieu of or in conjunction
with such certificate the Underwriters may, in their discretion,
accept certificates or opinions of the City Attorney that, in his or
her opinion, the issues raised in any such pending or threatened
litigation are without substance or that the contentions of all
plaintiffs therein are without merit); and (iii) to the best of their
knowledge, no event affecting the City has occurred since the date of
the Official Statement which should be disclosed in the Official
Statement for the purpose for which it is to be used or which it is
necessary to disclose therein in order to make the statements and
information therein not misleading in any respect;
(8) A certificate, dated the date of Closing, of the Assistant
City Manager for Financial Affairs of the City to the effect that
there has not been any material and adverse change in the affairs or
financial condition of the City since September 30, 1987, the latest
date as to which audited financial information is available;
(9) A certificate, dated the date of the Closing, of an
appropriate official of the City to the effect that, on the basis of
the facts, estimates and circumstances in effect on the date of
delivery of the Bonds, it is not expected that the proceeds of the
Bonds will be used in a manner that would cause the Bonds to be
7
arbitrage bonds within the meaning of Section 148(a) of the Internal
Revenue Code of 1986, as amended;
(10) A copy of a special report prepared by the independent
Certified Public Accountants named in the Official Statement,
addressed to the City, Bond Counsel, the Underwriters and
Underwriters' Counsel verifying the arithmetical computations of the
adequacy of the maturing principal and interest on the escrowed
securities and uninvested cash on hand under the Escrow Agreement to
pay 1 when due, the principal of and interest on the bonds being
refunded by the Series 1988 Bonds and the computation of the yield
with respect to such securities and the Series 1988 Bonds;
(11) Evidence of the ratings on the Bonds shall be delivered in
a form acceptable to the Underwriters; and
(12) Such additional legal opinions, certificates 1 instruments
and other documents as Bond Counsel or the Underwriters may
reasonably request to evidence the truth, accuracy and completeness,
as of the date hereof and as of the date of Closing, of the City's
representations and warranties contained herein and of the statements
and information contained in the Official Statement and the due
performance and satisfaction by the City at or prior to the date of
Closing of all agreements then to be performed and all conditions
then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other
documents mentioned above or elsewhere in this Purchase Contract shall be
deemed to be in compliance with the provisions hereof if, but only if, they are
satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations
of the Underwriters to purchase, to accept delivery of and to pay for the Bonds
as set forth in this Purchase Contract, or if the obligations of the
Underwriters to purchase, to accept delivery of and to pay for the Bonds shall
be terminated for any reason permitted by this Purchase Contract, this Purchase
Contract shall terminate and neither the Underwriters nor the City shall be
under further obligation hereunder, except that: (i) the check referred to in
Paragraph 4 hereof shall be immediately returned to Thomson McKinnon
Securities, Inc. by the City, and (ii) the respective obligations of the City
and the Underwriters set forth in Paragraphs 10 and 12 hereof shall continue in
full force and effect.
9. Te.rm.fn.at:!on. The Underwriters may terminate their obligation to
purchase at any time before the Closing if any of the following should occur:
(a) (i) Legislation (including any amendment thereto) shall have been
introduced in or adopted by either House of the Congress of the United
States, or recommended to the Congress for passage by the President of the
United States or favorably reported for passage to either House of the
Congress by any Committee of such House, or (ii) a decision shall have
been rendered by a court established under Article III of the Constitution
of the United States or by the United States Tax Court, or (iii) an order,
ruling or regulation shall have been issued or proposed by or on behalf of
8
the Treasury Department of the United States or the Internal Revenue
Service or any other agency of the United States, or (iv) a release or
official statement shall have been issued by the President of the United
States or by the Treasury Department of the United States or by the
Internal Revenue Service, the effect of which, in any such case described
in clause (i), (ii), (iii), or (iv), would be to impose, directly or
indirectly, federal income taxation upon interest received on obligations
of the general character of the Bonds or upon income of the general
character to be derived by the City, other than as imposed on the Bonds
and income therefrom under the federal tax laws in effect on the date
hereof, in such a manner as in the judgment of the Underwriters would
materially impair the marketability or materially reduce the market price
of obligations of the general character of the Bonds.
(b) Any action shall have been taken by the Securities and Exchange
Commission or by a court which would require registration of any security
under the Securities Act of 1933, as amended, or qualification of any
indenture under the Trust Indenture Act of 1939, as amended, in connection
with the public offering of the Bonds, or any action shall have been taken
by any court or by any governmental authority suspending the use of the
Official Statement or any amendment or supplement thereto, or any
proceeding for that purpose shall have been initiated or threatened in any
such court or by any such authority.
(c) (i) The Constitution of the State of Texas shall be amended or
an amendment shall be proposed, or (ii) legislation shall be enacted, or
(iii) a decision shall have been rendered as to matters of Texas law, or
(iv) any order, ruling or regulation shall have been issued or proposed by
or on behalf of the State of Texas by an official, agency or department
thereof, affecting the tax status of the City, its property or income, its
bonds (including the Bonds) or the interest thereon, which in the j·udgment
of the Underwriters would materially affect the market price of the Bonds.
(d) (i) A general suspension of trading in securities shall have
occurred on the New York Stock Exchange, or (ii) the United States shall
have become engaged in hostilities which have resulted in the declaration,
on or after the date of this Purchase Contract, of a national emergency or
war, the effect of which, in either case described in clause (i) and (ii),
is. in the judgment of the Underwriters, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Bonds on the terms and in the manner contemplated
in this Purchase Contract and the Official Statement.
(e) An event described in Paragraph 6(j) hereof occurs which, in the
opinion of the Underwriters, requires a supplement or amendment to the
Official Statement.
(f) A general banking moratorium shall have been declared by
authorities of the United States, the State of New York or the State of
Texas.
(g) A lowering of the ratings initially assigned to the Bonds below
"Aa" and "AA" by either Moody's Investors Service. Inc. or Standard &
9
Poor's Corporation, respectively, shall occur prior to Closing or failure
to provide evidence of the confirmation of each rating.
(h) Any event occurs which prevents the United States Treasury
Department from delivering on the Closing Date the State and Local
Government Securities subscribed for by the City in connection with the
issuance of the Series 1988 Bonds.
10. EXpenses. (a) The Underwriters shall be under no obligation to pay,
and the City shall pay, any expenses incident to the performance of the City's
obligations hereunder, including but not limited to: (i) the cost of the
preparation, printing and distribution of the Official Statement; (ii) the cost
of the preparation and printing of the Bonds; (iii) the fees and expenses of
Bond Counsel to the City; (iv) the fees and disbursements of the City's
accountants, advisors, and of any other experts or consultants retained by the
City; and (v) fees and premiums for bond ratings and bond insurance,
respectively, and any travel or other expenses incurred incident thereto.
(b) The Underwriters shall pay: (i) all advertising expenses of the
Underwriters in connection with the offering of the Bonds; (ii) the cost of the
preparation and printing of all the underwriting documents, including this
Purchase Contract and (iii) all other expenses incurred by them in connection
with their offering and distribution of the Bonds, including the fees of
Counsel to the Underwriters.
11. Noe!ces. Any notice or other communication to be given to the City
under this Purchase Contract may be given by delivering the same in writing at
the address for the City set forth above, and any notice or other communication
to be given to the Underwriters under this Purchase Contract may be given by
delivering the same in writing to Thomson McKinnon Securities, Inc., 333 Clay
Street, Suite 1600, Houston, Texas 77002, Attention: Mr. Stephen A. Drury.
12. Psre!es 1n Ineerese. This Purchase Contract is made solely for the
benefit of the City and the Underwriters (including the successors or assigns
of any Underwriter) and no other person shall acquire or have any right
hereunder or by virtue hereof. The City's representations, warranties and
agreements contained in this Purchase Contract shall remain operative and in
full force and effect, regardless of ( i) any investigations made by or on
behalf of the Underwriters and (11) delivery of any payment for the Bonds
hereunder; and the City's representations and warranties contained in Paragraph
6 of this Purchase Contract shall remain operative and in full force and
effect, regardless of any termination of this Purchase Contract.
10
13. Effective Date. This Purchase Contract shall become effective upon
the execution of the acceptance hereof by the Mayor of the City and shall be
valid and enforceable as of the time of such acceptance.
Accepted:
This 26th day of August, 1988
&y: Mayor,
City of Lubbock, Texas
(SEAL)
Attest:
City ecretary.
City o Lubbock, Texas
11
Very truly yours,
niOMSON McKINNON SECURITIES, INC.
DEAN Wl1*l'ER REYNOLDS INC.
&y
niOMSON McKINNON SECURITIES, INC.
A <
Emibit A
omdal Statement