HomeMy WebLinkAbout03648 ORD - 02/03/1954ORDINANCE NO.
AUTHORIZING THE ISSUANCE OF $3,831,000.00 CITY OF CORPUS
CHRISTI TEXAS,, FIRST =TTGAGE WATERWORKS RMENUE RFFIRM NG
BONDS'. FOR THE PURPOSE OF REFUNDING A LIKE PAR AMOUNT OF
OUTSTANDING WATERWORKS REVENUE BONDS OF THE CITY; PLEDGaNG
THE NET REVENUES OF THE CITY'S WATERWORKS SYSTEM AND AUTHORIZjNG
THE EXECUTION AND DFT— Tvgpv_4E A..AEED S _.T$u9T SAY .PHYSICAL
PROPERTIES _a S�_SYSTEM. AS DEFINED IN TFE ORDINANCE, INCLUDING
THE GRANT OF A FRANCHISE FOR THE OPERATION TIEREOF IN THE EVENT
OF DEFAULT AND SALE UNDER SUCH DEED OF TRUST; PRE�r.RTBI„W NG THE
LIMITATIONS UNDER WHICH ADDITIONAL W TER ORK5 M LJO—N—DLAT -
BE ISSUED; PROVIDING FOR CATER COMB Ni}TION OF THE CITY`S WATER-
WORKS AND SANITARY SEWER SYS ", I AND ISSUANCE OF REVI -IU HOND.S...
OR WATERWORKS OR SANITARY SEWER S "'STEM BONDS SUB.TECT TO
CONDITIONS AND LIMITATIONS PRESCRIBED IN SAID DEED OF TRUST;
ORDAINIEG OTHER MATT R4 HEL TIN , TO IM aM,=; AND DECLARING
AN EMERGENCY.
WHEREAS, the City Council by ordinance duly passed April 27, 1948,
and as amended June 15, 1948, authorized the issuance of $2,171,000.00 Waterworks
Revenue Bonds, Series 1948, (hereinafter called "Series 1948 Bonds "), dated
June 1, 1948, numbered consecutively from One (1) to Two Thousand One Hundred
Seventy One (2,171), in the denomination of One Thousand (`1,000.00) Dollars
each, maturing serially 1949 to 1978; both inclusive, bearing interest at
4 %, 2 -3/4% and 3 -1/4 %, secured by a pledge of net revenues and by a Deed of
Trust upon the physical properties, said Deed of Trust dated June 1, 1948
by and between the City and the Mercantile National Bank at Dallas, Dallas,
Texas, Trustee, being duly recorded in the Deed of Trust records of Nueces,
San Patricio, Jim Wells and Live Oak Counties, Texas; and
WHEREAS, the City Council by ordinance passed on June 15, 1948,
resolution adopted July 6, 1948, and ordinances passed July 27th and July 29th,
1948, authorized the issuance of $2,550,000.00 Waterworks Revenue Bonds,
Series 1948 -A, (hereinafter called "Series 1948 -A Bonds "), dated June 1, 1948,
numbered consecutively from One (1) t Two Thousand Five Hundred Fifty (2,550),
in the denomination of One Thousan1,000.00) Dollars each, maturing
serially from 1949 to 1978, both inclusive, bearing interest at 4 -1/4%,
3 -1/8%, secured by a pledge of net revenues and a lien on the phyt�iLal
properties of said System on a parity with the Series 1948 Bonds as provided
by Supplement to the Deed of Trust securing said Series 1948 Bonds, said
Supplement being duly recorded in the Deed of Trust Records of Nueces, San
Patricio, Jim Wells and Live Oak Counties, Texas; and
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WHEREAS, both series of bonds were approved by the Attorney
General of Texas, registered by the Comptroller of Public Accounts of Texas,
authenticated by the Trustee and were sold and delivered in accordance with
law; and
WHEREAS, bonds Nos. 1/210, both inclusive, in the amount of
$210,000.00 of the Series 1948 Bonds have heretofore matured and have been
paid and bonds Nos. 1/250, both inclusive, in the amount of $250,000.00 of
the Series 1948 -A Bonds have matured and have been paid; and
WHEREAS, through the operation of the Redemption Fund created
under the Deed of Trust the City has heretofore called and redeemed bonds
Nos. 1967, 1981, 1994, 2023, 2o44, 2054, 2057; 2o62, 2075, 2081/2171 in
the amount of $100,000.00 of the Series 1948 Bonds and bonds Nos. 2268, 2273,
2275, 2280, 22853 2286, 2293, 2300, 2301, 2306, 2309, 2316/2318, 2324, 2325,
2327, 2328, 2330, 2333, 2336, 2337, 2339, 234o, 2341, 2343/2346, 2349, 2351,
2355/2357, 2359, 2361, 2363, 2365/2369, 2370, 2372, 2373, 2379, 2381, 2382,
2384, 2387, 2393, 2395, 2396, 2401, 2404, 2406/2550, in the amount of
$200,000.00 of the Series 1948 -A Bonds; and
WHEREAS, the following bonds of said Series 1948 Bonds above
described, in the amount of $120,000,00 have been paid and cancelled, to -wit:
Nos. 231/260, both inclusive, 266/305, both inclusive, 341/360, both inclusive,
366/380, both inclusive, 736/740, both inclusive, and 1701/17102 both inclusive;
and
WHEREAS, bonds Nos. 726/735, both inclusive, of said Series 1948
Bonds in the amount of $10,000.00, scheduled to mature June 1, 1963, have been
called for prior redemption on June 1, 19542 and funds sufficient to pay
the principal sum together with a premium of 4% of the principal, plus interest
to June 1, 1954 have been placed with the Mercantile National Bank at Dallas,
the paying agent, for the purpose of retiring said bonds; and
WHEREAS, the status of each issue outstanding after all such
payments, redemptions and retirements is recapitulated, as follows:
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Series 1948 Bonds - originally issued $2,171,000,QO
Matured and paid $210,000.00
Called and redeemed 100,000.00
Called for redemption 10,000.00
Purchased and retired 120,000.00 ___440
,000.00
Total Series 1948 Bonds outstanding - $1,731,000.00
Series 1948 -A Bonds originally issued $2,550,000.00
Matured and paid $250,000.00
Called and redeemed 2001000.00 450,000.00
Total Series 1948 -A Bonds outstanding - 22100,000.00
Total outstanding bonds of both Series - $3,831,000.00
and
WHEREAS, all of said outstanding bonds were authorized and
issued in accordance with the provisions of the Constitution and laws of
the State of Texas and the Charter of the City, including but without
limitation Chapter 349, Acts 49th Legislature, R @qular Session,1945, and
the City has the authority generally under the Constitution and laws of the
State of Texas and the Charter of the City, including, but without limitation
Chapter 250, Acts 51st Legislature, Regular Session 1949, as amended by
Chapter 23, Acts 52nd Legislature, Regular Session, 1951, to refund all
such outstanding indebtedness by the issuance of its revenue refunding
bonds payable from and secured by a lien on the revenues of the Waterworks
System and further secured by a lien on the physical properties thereof; slid
WHEREAS, the holders of said above described outstanding
bonds have agreed to accept the hereinafter authorized bonds in lieu of and
in exchange for the bonds now held by them; and
WHEREAS, the City Council deems it advisable and to the best
interests of the City that the refunding bonds of the City be issued for
such purpose;
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS
CHRISTI, TEXAS-
1. That the findings and statements contained in the preamble
to this ordinance are true and correct.
2. That for the purpose hereinabove described in this
ordinance, there shall be issued the First Mortgage Waterworks Revenue
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Refunding Bonds of the City of Corpus Christi, Texas, in the amount of
Three Million Eight Hundred Thirty One Thousand Dollars ($3,831,000.00),
under authority of the Constitution and laws of the State of Texas and the
Charter of the City, which bonds and the interest thereon shall be payable
from the revenues from said Waterworks System and secured by a deed of
trust on said System, all as more specifically hereinafter provided.
3. That said bonds shall be called "City of Corpus Christi
First Mortgage Waterworks Revenue Refunding Bonds," shall be dated
December 1, 1953, shall be in denomination of One Thousand ($1,000.00)
Dollars each, and shall be numbered One (1) to Three Thousand Eight Hundred
Thirty One (3,831), both inclusive.
4. That said bonds shall be registerable as to principal at
the option of the holder on the books of the Registrar upon presentation
of the bonds to such Registrar. The Trustee is hereby appointed Bond
Registrar. Such registration shall not only be noted on the books of such
Registrar kept for such purpose, but shall be noted by such Registrar on the
bonds so registered, and after such registration no transfer of a bond so
registered shall be valid valess made on the books of such Registrar by the
registered holder or his legal representative, thereunto duly authorized,
and similarly noted on the bonds. Bonds registered as to principal may be
discharged from registration by being transferred to bearer after which they
shall be transferable by delivery, but may be again registered as to
principal as before. Bonds not so registered, or which have been so
transferred to bearer, shall be in all respects negotiable. The registration
of bonds as to principal shall not restrain the negotiability by delivery
of the coupons attached thereto.
5. That the bonds shall bear interest at the rate of 3 -1/2%
per annum, payable on June 1, 1954, and thereafter semi - annually on December 1
and June 1 of each year until the principal amount thereof has been paid.
Each of the bonds of this issue maturing on and after June 1, 1956;
is to be subject to redemption prior to maturity on December 1, 1955, and on
any interest payment date thereafter, at a price of par and accrued interest
to the date so fixed for redemption plus a premium of 3 -1/2% of the principal.
109
Notice of intention to redeem bonds is to be .published in a financial
publication in the City of New York, New York, and in the official newspaper
of the City of Corpus Christi, at least once, not less than thirty (30) days
before the date fixed for redemption, and thirty (30) days' notice in
writing prior to the date fixed for redemption is to be given to the banks
of payment. If, by the date fixed for redemption, funds shall have been
made available sufficient to pay any bond so called for redemption and
accrued interest thereon plus the premium specified, it shall not thereafter
bear interest. In the event less than all of the bonds outstanding then
eligible for prior redemption shall be thus called the bonds then proposed
to be redeemed shall be called in the inverse order of their maturities,
and if less than all outstanding bonds of a maturity are called the bonds
of such maturity shall be called by lot.
6. Both principal and interest shall be payable in lawful
money of the United States of America at Mercantile National Bank at Dallas,
Dallas, Texas, or at the option of the holder at Chemical Bank & Trust
Company, New York, New York, upon the presentation and surrender of proper
bonds and coupons.
7. Such bonds shall mature serially as follows:
BONDS NUMBERS MATURITY DATES AMOUNTS
I to 198, both Incl. June 1, 1954, $198,000.o0
199 to 481, June 1, 1955, 283,000.00
482 to 790, Juns 1, 1956, 309,000.00
791 to 1100, June 1, 1957, 310,000.00
1101 to 1430, June 15 1958, 330,000.00
1431 to 1772, June 1, 1959, 342,000.00
1773 to 2126, " Tune 1, 1960, 354,000.00
2127 to 2493, " June 1, 1961, 367,000.00
2494 to 2873, June 1, 1962, 380,000.00
2874 to 3256, June 1, 1963, 383,000.00
3257 to 3663, " June 1, 1964, 407,000.00
3664 to 3831, June 1, 1965, 168,000.00
8. That each of such bonds shall be signed by the Mayor of
Corpus Christi, shall be attested by the City Secretary, shall have the
corporate seal of the City impressed thereon, and shall be authenticated by
the Trustee in the manner provided in the Deed of Trust for which provision
is hereinafter made. Interest falling due on and prior to maturity shall be
represented by appropriate interest coupons to be attached to such bonds,
which coupons shall bear the facsimile signatures of said Mayor and City
Secretary and said officials, by the execution of such bonds, shall adopt
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as and for their own proper signatures their respective facsimile signatures
appearing on said coupons.
9. That such bonds, the coupons to be thereto attached and the
endorsements to appear thereon, shall be in substantially the form shown
in the Deed of Trust hereinafter in this ordinance authorized.
10. That the Waterworks System of the City of Corpus Christi
shall be operated by the City and the revenues shall be applied and the
bonds herein authorized shall be paid in the manner set out and provided
in the Deed of Trust which is hereinafter in this ordinance set out in full,
and all of the provisions of said Deed of Trust shall be effective and shall
be applicable to the authorization, issuance and payment of the bonds herein
authorized and to the operation of such System with like force and effect
as though all of said provisions were otherwise than in the Deed of Trust
separately set out in this ordinance.
11. That for the purpose of securing the payment of the bonds
herein authorized, and for the purpose of providing for and fixing in more
detail the rights of the holders thereof, and of the City and of the
Trustee, and for the purpose of making an effective Deed of Trust lien on
the System and the lien of said bonds on the revenues of the System, a Deed
of Trust in substantially the following form and language is hereby authorized
to be executed and delivered on behalf of the City of Corpus Christi:
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DEED OF TRUST
THE STATE OF TEXAS
COUNTY OF NUECES
THIS DEED OF TRUST dated as of December 1, 1953, by and
between the City of Corpus Christi, a municipal corporation duly organized
and existing under and by virtue of the laws of the State of Texas, situated
in Nueces County, Texas (for brevity hereinafter called "CITY "), acting through
its Mayor and City Secretary, duly authorized by an ordinance (hereinafter
sometimes called the "BOND ORDINANCE ") passed Finally by the City Council on
CZEI 1 , 1954, PARTY OF THE FIRST PART, and MERCANTILE NATIONAL BANK
AT DALLAS, DALLAS, TEXAS, a national banking association duly organized and
existing under and by virtue of the Banking Laws of the United States (for
brevity hereinafter called "TRUSTEE "), PARTY OF THE SECOND PART:
W I T N E S S E T H:
WHEREAS, the City Council of the City of Corpus Christi,
by ordinance duly passed on the date above mentioned, has provided for the
issuance of bonds in the total amount of Three Million Eight Hundred Thirty One
Thousand ($3,831,000.00) Dollars, which bonds are designated as "CITY OF
CORPUS CHRISTI FIRST MORTGAGE WATERWORKS REVENUE REFUNDIEG BONDS, SERIES 1953"
(hereinafter sometimes called the "BONDS ") for the purpose of refunding a like
amount of bonded indebtedness of the City's Waterworks System, are dated
Dgcomber 1, 1953, in the denomination of One Thousand ($1,000,00) Dollars each,
numbered One (1) to Three Thousand Eight Hundred Thirty One (3,631), both in-
clusive, and are to bear interest payable June 1, 1954, and semi - annually
thereafter on December 1 and June 1 of each year, at the rate of Three and one -
half (3 W per cent per annum and to mature as shown in the following tabulation,
WHEREAS, said Bonds are payable as to both principal and
interest, in lawful money of the United States of America, at Mercantile
Pia+`.oaal. Bank at Dallas, Dallas, Texas, or at the option of the holder at
Chami,cal Bank & Trust Company, New York, New York, and mature serially as
follows:
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BONDS NUMBERS
MATURITY DATES
AMOUNTS
1
to
198, both incl.,
June
1,
1954,
$198,000.00
199
to
481, IT 11
Jz�e
1,
1855,
283,000,00
482
to
790, " "
June
1,
1955,
309,000.00
791
to
1100, IT "
One
1,
1957,
310,000-00
1101
to
1430, IT "
June
1,
1958,
330,000.00
1431
to
1772, IT "
June
1,
1959,
342,000.00
1773
to
2126, "
oune
11
1960,
354,000.00
2127
to
2493, "
June
1,
1961,
367,000.00
2494
to
2873, "
June
1,
1952,
380,000-00
2874
to
3256,
dune
1,
1963,
383,000.00
3257
to
3563, " "
June
1,
1954,
407,000.00
3664
to
3831,
June
1,
1965,
165,000.00
Opti.o_al for prior redemption on any interest payment date on and after
December 1, 1955, at per and accrued interest to the date fixed for redemption,
plus a premium of 3 -1/2% of the principal amount.
WHEREAS, the Bonds and the interest coupons and certificates
to appertain thereto, and the form for registration of the Bonds as to
principal, and the Comptroller's certificate, and the Trustee's certificate, to
be endorsed`�hereon, are to be in substantially the following forms, respect-
ively, withhaappropriate insertions, omissions and variations as in this Deed
of Trust provided:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF N'JECES
CITY OF CORPUS CHRISTI
FIRST MORTGAGE WATERWORKS REVENUE
REFJNDING BOND
SERI'S 1953
N0. $1,000.00
THE CITY OF CORPUS CHRISTI, a lawfully created and existing
municipal corporation in NUECES COUNTY, TEXAS, out of revenues hereinafter
specified, and from no other source, FOR VALUE RECEIVED, hereby promises to
pay to bearer, or, if this Bond be registered as to principal, to the register-
ed 1,older thereof, on June 1, 19 , the principal sum of
ONE THOUSAND DOLLARS
and, from said revenues to pay interest thereon from the date
he ^eo.', at the rate of three and one -half (3 -1/2 %) per centum per annum, on Jtrae
1, 1954, and thereafter semi - annually on December 1 and June 1 of each yea_--,
until the principal amount of this Bond shall have been paid. Both principal
of and interest on this Bond are payable in lawful money of the United States
of America, at Mercantile National Bank at Dallas, Dallas, Texas, or at tile
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option of the holder at Chemical Bank & Trust Company, New York, New York.
Interest falling due on and prior to maturity is payable only upon presen-
tation and surrender of the interest coupons hereto attached as they severally
become due.
(THIS BOND is one of a duly authenticated issue of Bonds of
like date and tenor, except as to serial number, option of prior redemption,
and maturity, aggregating Three Mi.=lirn Eight Hundred Tbirty One Thousand
($1,831,000.00) Dollars, issued for the purpose of refunding a like amount of
bonded indebtedness of the City's Waterworks System, pursuant to ordinance
passed by the City Council of the City of Corpus Christi, and pursuant to a
Deed of Trust of even date herewith by and between the CITY OF CORPUS CHRISTI
and MERCANTILE NATIONAL BANK AT DALLAS, DALLAS, TEXAS, (hereinafter referred
to as the "TRUSTEE "), as Trustee, an original counterpart of which Deed of
Trust is on file in the office of said Trustee in the City of Dallas, Texas,
reference to which ordinance and Deed of Trust is hereby made for a description
of the funds charged with and pledged to the payment of the interest on and the
principal of the Bonds, the nature and extent of the security thereof, and a
statement of the rights, duties, and obligations of the City and the Trustee
and the rights of the holders of the Bond:, to ell the provisions of which Deed
of Trust the holder hereof by the acceptance of this Bond assents.
THIS BOND shall not be deemed to constitute a debt of the
City of Corpus Christi or a pledge of its faith and credit, but shall be pay-
able as to principal and interest solely from the net revenues derived from the
operation of the Waterworks System, including all additions, extensions and im-
provements thereto which may hereafter be made, hereinafter referred to as the
"System ", and the holder hereof shall never have the right to demand payment of
this obligation out of any funds raised or to be raised by taxation. This issu
of Bonds is further secured by a lien upon the properties comprising the System
ard., in the event of default and the sale of such properties under provisions
of said Deed of Trust, by a franchise to the purchaser to operate such proper-
ties for a period of twenty years. The City hereby covenants and agrees that
it will fix and maintain rates and charges for services to be rendered by the
System sufficient to pay all operating, maintenance, depreciation, replacamcnt,
betterment and interest charges, and for an Interest and Sinking rand
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sufficient to pay the principal of and interest on the issue of Bonds of which
this is one as such principal and interest matures, all in accordance with
Article 1113 of the Revised Civil Statutes of Texas of 1925 as amended, and to
create and maintain the several funds as prescribed in the Deed of Trust.
Each of the Bonds of this issue maturing on and after June
1, 1956, is subject to redemption prior to maturity on December 1, 1955, and
on any interest payment date thereafter, at a price of par and accrued interest
to the date so fixed for redemption plus a premium of 3-,% of the principal.
Notice of intention to redeem Bonds is to be published in a financial publi-
cation in the City of New York, New York, and in the official newspaper of the
City of Corpus Christi, at least once, not less than thirty (30) days before
the date fixed for redemption, and thirty (30) days' notice in writing prior
to the date fixed for redemption is to be given to the bank of payment. If,
by the date fixed for redemption, funds shall have been made available suffi-
cient to pay any bond so called for redemption and accrued interest thereon
plus the premium specified, it shall not thereafter bear interest. In the
event less than all of the bonds outstanding then eligible for prior redemption
shall be thus called the bonds then proposed to be redeemed shall be called in
the inverse order of their maturities, and if less than all outstanding bonds
of a maturity are called the bonds of such maturity shall be called by lot.
THIS BOND is issued and the above mentioned Deed of Trust
was made and entered into under and pursuant to the Constitution and Laws of the
State of Texas.
THIS BOND may be registered as to principal only in accor-
dance with the provisions endorsed hereon.
EACH SUCCESSIVE holder of this bond during such time as it
is payable to bearer, and each successive holder of each of the coupons hereto
attached, is conclusively presumed to forego and renounce his equities in favor
of 91?l-,8equent holders for value without notice, and to agree that this bond
whiln so payable to bearer, and each of the coupons hereto attach =d,may be
negotiated by delivery by any person having possession hereof, howsoever such
possession may have been acquired, and that any holder who shall have taken t;h_s
bond or any of the coupons from any person for value and without notice, ther,',
has acquired absolute title thereto, free from any defenses enforceable agai.ns';
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any prior holder and free from all equities and claims of ownership of am ec :.
prior holder. Neither the City of Corpus Christi nor its officials nor t:7e
Paying agent hereinabove named shall be affected by any notice to the contra :ry.
TO THE EXTENT permitted by law and by the aforesaid Deed
of Trust, modifications or alterations of the Deed of Trust and any Deed of
Trust supplemental thereto may be made, with the consent of the City Council
of tha City of Corpus Christi and the holders of at least seventy -five per cent
in principal amount of the Bonds then outstanding, but such modification or
alteration is not permitted to affect the maturity, amount or rate of interest
of any such outstanding Bonds. The Deed of Trust provides for acceleration of
the maturities of all of the Bonds then outstanding in the event of a default,
The City reserves the right to issue additional parity
revenue bonds to the extent and under the conditions stated and subject to the
limitations prescribed in Section 2.05 or Section 2.07 of the Deed of Trust.
Such additional Bonds shall be payable from the same source and secured by the
same revenues, Deed of Trust and as later supplemented, the properties, and
pledged franchise, and shall be on a parity with this issue of Bonds.
In the event the City later exercises the right to combine
the operations of its waterworks and sanitary sewer systems reserved to it in
Section 2.06 of said Deed of Trust, the Bonds of this issue, together with any
additional waterworks revenue bonds subsequently issued and any revenue bonds
theretofore or thereafter issued for sanitary sewer purposes, to the extent
s
and in the manner permitted by law at such time will =payable from the
revenues of the combined systems, including all additions, extensions and im-
provements thereafter made to said combined systems, and, if so authorized by
law and prescribed by the City, may further be secured by a mortgage on the
sanitary sewer system.
IT IS HEREBY CERTIFIED AND RECITED that all acts and
thi.rgs required by the Constitution and Laws of the State of Texas, and the
cha -ter of the City, to happen, exist and be performed precedent to and in the
issuance of this Bond and the passage of said ordinance and the execution of
scid Deed of Trust, have happened, exist and have been performed as so requir-
ed.
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THIS BOND shall not be entitled to any benefit under sa-c
Deed of Trust or become valid or obligatory for any parpoae until it sti.al.
have been authenticated by the execution by the Trustee of the certificate
hereon endorsed.
IN WITNESS WHEREOF, the CITX OF CORPUS CHRISTI has caused
this Bond to be signed by its Mayor and attested by its City Secretary, and
the corporate seal of said City to be impressed hereon, and has caused the
coupons hereto attached to be executed with the facsimile signatures of seid
officials, all as of December 1, 1953, the date of this bond.
Mayor, City o Corpus Christi, Texas.
ATTEST:
City Secretary, City of oorrpus Christi,
Texas.
(CITY SEAL)
(FORM OF COUPON)
N0. _ $-
On the let day of �, 19,, the City of
Corpus Christi, Texas, Nueces County, Texas, will pay to bearer at the
Mercantile National Bank at Dallas, Dallas, Texas, or at the option of the
holder at Chemical Bank & Trust Company, New York, New York, the sum of
($ ) Dollars, in lawful money
of the United States of America (unless the Bond to which this coupon is
attached is previously called for redemption as therein provided and provision
for the redemption thereof made)* payable out of the revenues specified in the
Bond to which this coupon is attached, for the semi - annual interest in that
amount then due on its First Mortgage Waterworks Revenue Refunding Bond, Series
1953, dated December 1, 1953, and numbered Tha holder of this coupon
shall never have the right to demand payment thereof out of any funds raised or
to ba raised by taxation.
Mayor, City of Corpus Christi, Texas.
AT' EST:
City Secretary.
*This parenthetical provision shall be inserted only in coupons which
on and after June 1, 1956.
(TRUSTEE'S C —"T13ICATE)
This Bond is one of the Bonds described in the within
mentioned Deed of Trust.
MERCANTILE NATIONAL BANK AT DALLAS,
DALLAS, TEXAS,. Trustee
BY
Authorized Officer.'
(FORM OF COMPTROLLER'S CERTIFICATE)
OFFICE OF COMPTROISM
REGISTRATION NO.
STATE OF TEXAS .
I HEREBY CERTIFY that there is on file and of record in my
office a certificate of the Attorney General of the State of Texas, to the
effect that this Bond has been examined by him as required by law, and that he
finds that it has been issued in conformity with the Constitution and laws of
the State of Texas, and that it is a valid and binding special obligation of the
City of Corpus Christi, Texas, payable from the revenues pledged to its payment
by and in the ordinance authorizing same, and said Bond has this day been
registered by me.
(SEAL)
WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas,
Comptroller of Public Accounts of the
State of Texas.
(NO WRITING TO BE MADE HEREON EXCEPT
BY THE BOND REGISTRAR OF THE CITY)
CERTIFICATE OF REGISTRATION
It is hereby certified that, at the request of the holder
of the within bond, I have this day registered it as to principal in the name
Of such holder as indicated in the registration blank below and on the books
kept by me for such purpose. The principal of this bond shall be payable only
to the registered holder hereof named in the below registration blank or his
legal representative, and this bond shall be transferable only on the hooks of
the Bond Registrar and by an appropriate notation in such registration blank.
If the last transfer recorded on the books of the Bond Registrar and in the
below registration blank shall be to bearer, the principal of this bond shall
be payable to bearer and it shall be in all respects negotiable. In no case,
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shall negotiability of the coupons attached hereto be affected by any rogie•-
tration as to principal.
NAME OF REGISTERED HOLDER DATE OF REGISTRATION SIGNATURE OF REGISTE;.
(Trustee)
AND WHEREAS, the execution and delivery of this Deed of
Trust have been duly authorized by the City Council of the City of Corpus
Christi and all acts and things required to be done precedent to and in the
execution of this Deed of Trust and precedent to and in the execution of said
Bonds, have been done and performed in regular and due time, form and manner
as required by the Constitution and Laws of the State of Texas, and the or-
dinance hereinbefore mentioned;
NOW THEREFORE, in order to secure the payment of principal
of and interest on the Bonds according to their tenor and effect and the terms
of this Deed of Trust, and to secure the performance of the covenants and obli-
gations herein contained, and in consideration of the acceptance by the Trustee
of the -crust hereby created, of the purchase and acceptance of the said Bonds
by the holders thereof, and of one dollar ($1.00) in hand paid by the Trustee
to the City upon the execution and delivery of this Deed of Trust, the receipt
whereof is hereby acknowledged, the City has executed and delivered this Deed
of Trust and has granted, bargained, sold, conveyed, assigned, transferred,
warranted, mortgaged, pledged and set over, and by these presents does grant,
bargain, sell, convey, assign, transfer, warrant, mortgage, pledge and set
over unto the Trustee and its successors in trust forever., subject to the
terms of this Deed of Trust, the following property: All of the wate-rwcrks
system of the City including all properties, real and personal, and everything
pertaining thereto now owned or hereafter acquired, used or useful in ccrmcti.on
with the storing, protection, production, filtration, purification, trans-
mission, supply, and distribution of water by and for the City, together wi.t%
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the revenues to be realized from the operation of such properties, after pay-
ment of the expenses of maintenance and operation as hereinafter in this Deed
of Trust provided, hereinafter sometimes called the "System," together with an
operating franchise for the benefit of a prrchaser of the System if sold under
this Deed of Trust after default as hereinafter provided., the properties and
rights comprising the System and such pledged franchise, hereinafter sometimes
called the "Trust Estate," Included among the properties thus conveyed in trust,
the following are described for greater certainty, but withou he intention of
limiting the general description hereinabove given, to -wit:
A. LATE CORPUS CHRISTI
The reservoir constituting the primary water supply of the
City, situated on the Fueces River approximately 30 miles Plor :a,est of the City,
in the Counties of San Patricio, Jim Wells, and Live Oak, Texas, on lands, to
which the City owns necessary easements and flowage rights and in certain in-
stances the fee simple title, described in conveyances listed briefly as follows:
1217.7 acres of land out of the S. G. Miller Ranch,
(Patrick Idevan and Ed J. McGloin Grants), being the same land described in
easr_,aent deed dated July 31, 1929, from Natalie M. Collins, joiaed.bil her
husband, B. F. Collins, to the City of Corpus Christi, Texas, and which said
deed is recorded in Volume 93, pages 223 -226, Deed Records of San Patr ±cio
County, Texas.
925.86 acres of land out of the S. G. Miller .Ranch,
(Patrick Nevan and Ed. J. McGloin Grants), being the same land described in
easement deed dated July 31, 1929, from D. B. Miller, joined by his wife,
Zepha L. Miller, to the City of Corpus Christi, Texas, and which said deed
is recorded in Volume 33, page 319, Deed Records of Live Oak County, Texas.
902.53 acres of land out of the s. G. Miller Ranch,
(Patrick Nevan and Ed J. McGloin Grants), being the same land described in
easement deed dated July 31, 1929, from R. D. Miller, joined by his wife,
Bonita G. Miller, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 33, page 327, Deed Records of Live Oak County; Texas.
73.85 acres of land out of the John McMullen Grant being
the same land described in easement deed dated July 3, 1928, from T. G. Parr
to the City of Corpus Christi, Texas, and which said deed is recorded in Volume
30, page 613, Deed Records of Live Oak County, Texas.
49.37 acres of land out of the James McGloin Grant, being
the same land described in easement deed dated October 4, 1928, from V. B.
Powers to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 30, page 618, Deed Records of Live Oak County, Texas.
141.62 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated April 5, 1928, from R. Roos
and R. C. Roos, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 29, page 41, Deed Records of Live Oak County, Texas.
77.27 acres of land out of the James McGloin Tract, being
the same land described in easement deed dated February 11, 1928, from Mary B.
McGuffin, at al., to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 34, page 149, Deed Records of Live Oak Count-, Texas.
88.06 acres of lard out of the Maria Bridget Ki:rr].in Grant,
being the same land described in easement deed dated August 3, 1928, from Joe
Ramage and wife, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 31, page 7, Deed Records of Live Oak County, Texas.
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36,18 acres of land out of the Maria Bridget Kivlin Grant,
being the same land described in easement deed dated September 19, 1928, from
Mrs. J. B. Dunning, to the City of Corpus Christi, Texas, and which said deed
is recorded in Volume 3q, page 636, Deed Records of Live Oak County, Texas.
385.56 acres of land out of the George W. Lewis Survey,
being the same land described in easement deed dated January 31, 1928, from
A. M. Erskine, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 28, page 260, Deed Records of Live Oak County, Texas.
1805.60 acres of land out of the Casa Blanca Grant to
Juan de Is Garza Montemayor in Jim Wells County and Delgado Original Survey
in San Patricio County, being the same land described in easement deed dated
October 3, 1927, from Wallis D. Wade, to the City of Corpus Christi, Texas,
and which said deed is recorded in Volume 32, page 184, Deed Records of Jim
Wells County, Texas, and Volume 88, page 151, Deed Records of San Patricio
County, Texas.
53.00 acres of land out of the Patrick Nevan Grant, being
the same land described in easement deed dated January 16, 1928, from H. M.
Wurzbach, to the City of Corpus Christi„ Texas, and which said deed is recorded
in Volume 28, page 257, Deed Records of Live Oak County, Texas.
220.79 acres of land out of the Ed J. McGloin Grant being
the same land described in easement deed dated November 2, 1927, from T. M.
Luther to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 88, pages 140 -143, Deed Records of San Patricio County, Texas.
84.75 acres of land out of the Ed J. McGloin Grant, being
the same land described in easement deed dated January 17, 1928, from A. P.
Brown, to the City of Corpus Christi, Texas,asmd which said deed is recorded in
Volume 88, pages 346 -349, Deed Records of San Patricio County, Texas.
650.00 acres of land out of the Ed J. McGloin Grant, being
the same land described in easement deed dated December 1, 1927, from V. G.
Miller, at al., to the City of Corpus Christi, Texas, and which said dead is
recorded in Volume 88, pages 143 -147, Deed Records of San Patricio County,Texas.
83.01 acres of land out of the William J. Cannon Grant, be-
ing the same land described in easement dead dated December 22, 1927, from
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W. F. McWhorter, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 28, page 123, Deed Records of San Patricio County, Texas.
922.03 acres of land out of part of the S. G. Miller Ranch,
(Ed J. McGloin and Patrick Nevan Grants) being the same land described in ease-
ment deed dated April 29, 1929, from Callie Miller Freeman and husband D. L.
Freeman, to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 32, page 66, Deed Records of Live Oak County, Texas, and in Volume
92, pages 207 -211, Deed Records of San Patricio County, Texas.
918.00 acres of land out of the Ed J. McGloin Grant, being
the same land described in easement deed dated October 4, 1927, from Zenna H.
Coffin, joined by her husband, A. B. Coffin, and Mrs. S. G. Miller, to the City
of Corpus Christi, Texas, and which said deed is recorded in Volume 88, pages
137 -140, Deed Records of San Patricio County, Texas.
164.89 acres of land out of the Ed J. McGloin Grant, being
the same land described in easement deed dated October 19, 1927, from J. A.
Y
Henderson, to the City of Corpus Christi, Texas, and which said deed is record-
ed in Volume 93, pages 77 -78, Deed Records of San Patricio County, Texas.
55.00 acres of land out of the Patrick Nevan Grant, being
the same land described in easement deed dated October 20, 1928, from J. H.
Hinnant at al., to the City of Corpus Chriati, Texas, and which said deed is
recorded in Volume 31, page 417, Deed Records of Live Oak County, Texas.
29.49 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated May 4, 1928, from William Whalen,
et al., to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 29, page 4451 Deed Records of Live Oak County, Texas.
131.74 acres of land out of the George W. Lewis Grant or
Survey, being the same land described in easement deed dated June 16, 1928, from
A. C. Erskine, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 30, page 20, Deed Records of Live Oak County, Texas.
282.58 acres of land out of the Maria Bridget Kivlin Grant
or Survey, being the same land described in easement deed dated November 10,
1928, from Boothe, Hampton and Boothe, to the City of Corpus Christi, Texas,
and which said deed is recorded in Volume 30, page 629, Deed Records of Live
Oak County, Texas.
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50,35 acres of land out of the Browne and Kivlin Grant,
being the came land described in easement deed dated September 22, 1928, from
Josephine Peck, to the City of Corpus Christi, Texas, and which said deed is
recorded in Volume 30, page 608, Deed Records of Live Oak County, Texas.
30.00 acres of land out of the Maria Bridget Kivlin Grant,
being the same land described in easement deed dated November 10, 1928, from
Ross Boothe, to the City of Corpus Christi, Texas, and which said deed is re-
corded in Volume 30, page 624, Deed Records of Live Oak County, Texas.
43.77 acres of land out of the Maria Bridget Kivlin Grant,
being the same land described in easement dead dated July 11, 1928, from John
Nesleney and wife, to the City of Corpus Christi, Texas, and which said deed
is recorded in Volume 31, page 13, Deed Records of Live Oak County, Texas.
90.06 acres of land out of the Maria Bridget Kivlin Grant,
being the same land described in easement deed dated July 17, 1928, from A. B,
Cobb, to the City of Corpus Christi, Texas, and which said deed is recorded in
Volume 31, page 1, Deed Records of Live Oak County, Texas.
15.26 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated January 31, 1928, from Tom L.
Webb, to the City of Corpus Christi, Texas, and which said deed is recorded in
Volume 28, page 420, Deed Records of Live Oak County, Texas.
158.58 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated November 24, 1927, from R. J.
Sellers, to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 28, page 116, Deed Records of Live Oak County, Texas.
50.00 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated August 7, 1929, from N. A. Brown
and wife, Rona Brown, to the City of Corpus Christi, Texas, and which said deed
is recorded in Volume 33, page 189, Deed Records of Live Oak County, Texas.
42.86 acres of land out of the Delgado Grant, being the
same land described in easement deed dated December 24, 1927, from Minnie K,
Beall, to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 30, page 462, Deed Records of Live Oak County, Texas, and in Volume
93, pages 579 -582, Deed Records of San Patricio County, Texas.
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20,79 acres of land out of the Delgado Grant, being the
same land described in easement deed dated October 20, 1928, from Kate Grimes
Jones, to the City of Corpus Christi, Texas, and which said deed is recorded in
Volume 31, page 17, Deed Records of Live Oak County, Texas.
37.30 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated February 25, 1928, from F. S.
Sellers, to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 29, page 46, Deed Records of Live Oak County, Texas.
51.96 acres of land out of the James McGloin Grant, being
the same land described in easement deed dated January 30, 1928, from E. S.
Adair and wife, W. A. Adair, to the City of Corpus Christi, Texas, and which
said Deed is recorded in Volume 28, page 417, Deed Records of Live Oak County,
Texas.
23.29 acres of land out of the J. R. Simmons Grant, being
the same land described in easement deed dated September 12, 1929, from B. H.
McCarley and wife, Mary Alice McCarley, to the City of Corpus Christi, Texas,
and which said deed is recorded in Volume 93, pages 471 -474, Deed Records of
San Patricio County, Texas.
211.00 acres of land out of the John McMullen Grant, being
the same land described in easement deed dated February 25, 1928, from R. F.
Sellers to the City of Corpus Christi, Texas, and which said deed is recorded
in Volume 29, page 42, Deed Records of Live Oak County, Texas.
717.81 acres of land out of the Ed J. McGloin Grant, John
McMullen Grant and Patrick Nevan Grant, being the same land described in ease-
ment deed dated November 24, 1927, from Reeves Brown, to the City of Corpus
Christi, Texas, and which said deed is recorded in Volume 28, page 413, Deed
Records of Live Oak County, Texas.
62.42 acres of land out of the Patrick Nevan Grant, being
the same land described in easement deed dated March 19, 1928, from Fannie
Braun, to the City of Corpus Christi, Texas, and which seid deed is recorded
in Volume 29, page 311, Deed Records of Live Oak County, Texas.
118.06 acres of land out of the Wm. S. Cameron Grant, being
the same land described in easement dead dated February 7, 1928, from J. A.
Stewart, to the City of Corpus Christi, Texas, and which deed is recorded in
Volume 28, page 422, Deed Records of Live Oak County, Texas.
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2450.10 acres of land out of the Jose Maria Colenado Grant
and Jane Curry Grant, being the same land described in easement deed dated
December 23, 1927, from Holtwn Cartwright, to the City of Corpus Christi,
Texas, and which said deed is recorded in Volume 28, page 246, Deed Records
of Live Oak County, Texas.
45.3 acres of land, being the same land described in the
Deed dated October 18, 1951, from New Noakes, at al., to the City of Corpus
Christi, Texas, and which said deed is recorded in Volume 533, page 4, Deed
Records of Nueces County, Texas.
1.84 acres of land, being the same land described in the
Deed dated September 14, 1949, from Guaranty Title and Trust Company, Trustee,
to the City of Corpus Christi, Texas, and which said deed is recorded in
Volume 422, page 400, Deed Records of Nueces County, Texas.
1.01 acres of land, being the same land described in the
Deed dated October 5, 1949, from Elise K. A. Behmann, to the City of Corpus
Christi, Texas, and which said deed is recorded in Volume 444, page 201, Deed
Records of Nueces County, Texas.
All of which lands are more fully described by metes and
bounds in such several conveyances, each of which is duly recorded in the County
in which the land affected is situated, all of which conveyances and the record
thereof are hereby incorporated by reference in aid of and for more particular
description.
The impounding dam at such reservoir and all works,
appliances, equipment, buildings, and machinery used in connectionitherewith
to facilitate the use of the reservoir as a water supply for the City.
B. RIGHT OF WAY
All of the rights and easements held or used by the City
on lands, roads, highways and streets traversed by the water supply lines of
the City from Lake Corpus Christi via the City's Filtration Plant at Calallen,
thence to the connections of the City's distribution system, and to any and all
other points reached by such supply line or lines;
All rights and easements held or used by the City in
connection with the use of all other water supply and all of its water dis-
tribution and service lines.
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C. SPECIFIC PLANTS AND STORAGE TANKS
The filtration plant, storage tanks and reservoirs and
pump stations briefly described and situated on City -owned lots, tracts, or
parcels of land as follows:
(1) SAM RANKIN STREET STORAGE TANK, 250,000 gallons,
Being all of Lots 8 and 9, Block 61, Bluff Portion, situated in the City of
Corpus Christi, Nueces County, Texas.
(2) CALALLEN FILTRATION PLANT, Being a tract of land ly-
ing between the North bank of the Nieces River and Texas State Highway No. 9
and North of Calalien, in Nueces County, Texas, Beginning at the southeast
corner of the City of Corpus Christi, Calallan Filtration Plant Property, said
point being in the west right -of -way line of State Highway No. 9; thence N.
740 49' W. a distance of 567.47' to a point for a corner of this description;
Thence N. 160 21' E. a distance of 375.5' to a point for a Corner of this
description; Thence S. 890 15' W. a distance of 375' to a point on the east
bank of the Nueces River for a corner of this description; Thence in a north-
easterly direction with the meanders of the Nueces River a distance of
1,855.88' to a point for the northwest corner of this description; Thence N.
740 53' W. a distance of 414' to a point in the west right -of -way line of
State Highway No. 9 for the northeast corner of this description; Thence in
a southerly direction with the west right -of -way line of State Highway No. 9
a distance of 1,230.82' to a point for corner of this description; Thence N.
890 15' E. a distance of 35' to a point for a corner of this description;
Thence S. 10 08' W. with the west right -of -way line of said State Highway No. 9
a distance of 800.81' to an angle point in the west right -of -way line of State
Highway No. 9; Thence S. 30 50' E. with the west right -of -way line of State
Highway No. 9 a distance of 376.06' to the place of beginning, containing
29.633 acres of land.
(3) SAVAGE LAidE Rmrrvom AND PULL° STATION, Being located
In Nueces County, m:aas, and being part of Block 19, Rus8ell Farm Blocks,
Beginning at the southwest corner of the City of Corpus Christi, Savage Lane
Reservoir and Pumping Station property, said point being in the east boundary
line of Savage Lane; Thence N. 20 18' E. a. distance of 361.6' to a paint for
the north corner of this description; Thence due west a distance of 417.8'
- :.6 -
to a point for the northeast corner of this description; Thence S. 20 18' W.
a distance of 521.3' to a point for the Southeast corner of this description;
Thence due east 417.8' to a point in the east boundary line of Savage Lane to
the southwest corner and beginning of this description.
(4) BEN GARZA PARK RESERVOIR AND POMP STATION, The be-
ginning point is located by starting at the northeast corner of the tract of
land conveyed to William J. Robertson by Thisbe Kinney and Marion F. Kinney by
deed, dated August 20, 1885, of.record in Volume Q, page 539, Deed Records of
Nueces County, Texas; Thence with the eastern boundary of the said Robertson
tracts S. 20 0' E. a distance of 400' to a point for the beginning of this
description; Thence S. 880 0' W. a distance of 435.6' to a point for the north-
west corner of this description; Thence S. 20 0' E. a distance of 400' to a
point for the southwest corner of this description; Thence N. 880 0' E. a
distance of 435.6' to a point for the southeast corner of this description;
Thence N. 20 0' W. a distance of 400' to the northeast corner and beginning of
this description, all lying within the incorporated limits of the City of
Corpus Christi, Texas.
(5) 500,000 GALLON OVERHEAD STEEL STORAGE TANK, The be-
ginning point is located by starting at the northeast corner of fractional
Block 901, Bay Terrace No. 2, and following the east line of said Block 901
in a southerly direction a distance of 220' for the northeast corner and be-
ginning of this description; Thence at right angles in a westerly direction to
its intersection with the west boundary line of said Block 901 for the north-
west corner of this description; Thence with the west boundary line of said
Block 901 in a southeasterly direction a distance of 62.96' to a point for the
southwest corner of this description; Thence in an easterly direction parallel
with the north line of this description a distance of 80.19' to a point in the
east boundary line of said Block 901 for the southwest corner of this
description; Thence In a norther. ]_l direction with the east boundary line of
said Block 901 a distance of 60' to a place of beginning, being located in the
corporate limits of the City of Corpus Christi, Texas.
D. All other property, real and personal, now owned or
hereafter acquired while any of the Bonds or any Additional Bonds permitted
under Article II hereof are outstanding, for or used in connection with tha
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operation of the System, together with all and singular the tenements, heredi-
taments and appurtenances belonging or in any wise appertaining to the afore-
said properties or any part thereof, and with the reversion or reversions, re-
mainder or remainders, rents, income and profits of all such properties, and all
of the estate, right, title, interest and claim theretofore whatsoever at law
as well as in equity.
E. All of the income from the System after deduction of
the expense properly chargeable to maintaining and operating the System as pro-
vided in Article 1113 of the Revised Civil Statutes of Texas (1925) as amended
and under Article V of this Deed of Trust.
F. A franchise to operate such System for a period of
twenty years as set forth more particularly in Article X of this Deed of Trust;
TO HAVE AND TO HOLD all and singular the said premises and
property, real, personal and mixed, with all and singular their revenues, rents,
issues, profits, privileges and appurtenances, and all the estate, right, title
and interest of the City therein and thereto, unto the Trustee and its success-
ors in trust forever;
IN TRUST NEVERTHELESS, subject to the provisions of this
Deed of Trust, for the equal and proportionate benefit, security and protection
of all holders of the Bonds and interest coupons issued, or bonds and interest
coupons hereafter to be issued under and secured by this Deed of Trust, and
within the amounts and under the conditions expressly permitted by this Deed of
Trust without preference, priority or distinction as to lien or otherwise of any
Bond over any other Bond by reason of priority in the isauance or negotiation
thereof or by reason of the date or dates of maturity thereof, or for any other
reason whatsoever, so that each and all of said Bonds and bonds hereafter to be
issued as aforesaid shall have the same rights, lien and privileges under this
Deed of Trust; PROVIDED, HOWEVER, and these presents are upon the express con-
dition, that if tha City, its cuccesso:cs and assigns shall well and truly pay
or cause to be paid all bonds a;nd rote. eat crn -)pons now or hereafter secured by
this Deed of Trust at the times and in the manner stipulated therein and shall
well and truly keep, perform and observe all the covenants and conditions of
said bonds and in this Deed of Trust expressed to be kept, performed avid
observed by the City and shall pay to the Trustee all sums of money due n:-
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become due to it in accordance with the terms and provisions hereof, then this
Deed of Trust and the rights and estate hereby granted shall cease, determine
and be void, and the Trustee in such case on demand of the City, upon payment
by the City to the Trustee of its reasonable Pees, costs and expenses, shall
execute and deliver to the City such release as shall be requisite to discharge
the lien hereof and to reconvey or revest in the City the properties hereby
conveyed or intended to be conveyed; OTHERWISE, this Deed of Trust is to be
and shall remain in full force and effect.
THIS DEED OF TRUST, FURTHER WITNESSETH, that the City has
agreed and covenanted and does hereby agree and covenant with the Trustee and
respective holders from time to time of such Bonds and coupons as follows:
ARTICLE I.
FORM, AUTHENTICATION, REGISTRATION AND ISSUANCE OF BONDS
SECTION 1.01. The Bonds and the coupons attached thereto
shall be in substantially the forms hereinbefore recited, and shall be issued
in the aggregate principal amount of not to exceed Three Million Eight Hundred
Thirty One Thousand Dollars ($3,831,000.00). All Bonds to be secured hereby
shall be signed by the Mayor of the City, shall be attested by the City
Secretary, shall have the corporate seal of the City impressed thereon, and
when so signed and sealed, the Bonds shall be submitted to the Attorney
General of the State of Texas for approval and to the State Comptroller for
registration. After the said Bonds have been approved by the Attorney General
and authenticated by the Trustee they shall be registered by the State
Comptroller and exchanged for not leas than a like principal amount of the
bonds being refunded.
In case any officer or officers who shall have signed any
of the Bonds shall cease to be such officer or officers of the City before the
Bonds so signed shall have been actually authenticated and delivered, such
Bonds may nevertheless be authenticated and delivered as though the person or
persons who signed and sealed such Bonds had not ceased to be such officer or
officers of the City.
The coupons to be attached to the Bonds shall be signed by
the facsimile signatures of the Mayor and City Secretary in office at the time
of the signing of the Bonds, and delivery of such Bonds thercafter shall. be
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valid for all purposes even though one or both of said officials shall have
ceased to hold office at the time of delivery.
Prior to the authentication of Bonds under this Deed of
Trust all matured coupons thereto attached shall be detached and cancelled
and such cancelled coupons shall be delivered to the City Secretary.
SECTION 1.02. Only such of the Bonds as shall have en-
dorsed thereon the duly executed certificate of the Trustee substantially in
the form hereinabove set forth shall be entitled to any lien or benefit how-
ever, but such certificate of the Trustee upon any Bond shall be conclusive
evidence that such Bond has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefit of the trust hereby created.
SECTION 1.03. In case any Bond issued hereunder with the
coupons appertaining shall become mutilated or be lost, stolen or destroyed
prior to the payment thereof a new Bond, including coupons, of like tenor and
date and bearing the same number may, if authorized by law, at the direction o]
the City and the Trustee, be executed, certified and delivered either in ex-
change for and upon cancellation of the mutilated Bond and its coupons, or in
substitution for the Bond or coupons lost, stolen or destroyed, but such ex-
change or substitution shall be made only upon receipt of satisfactory evidence
of lose, theft, or destruction of such Bond and its coupons, proof of ownershil
thereof, satisfactory indemnity to the Trustee and the City, and payment of the
cost of preparing such bond and coupons.
ARTICLE II.
SPECIAL COVENANTS
THE CITY HEREBY COVENANTS AS FOLLOWS:
SECTION 2.01. The City is duly authorized under the laws
of the State of Texas to issue the Bonds and to execute and deliver this Deed
of Trust and to pledge the revenues pledged hereunder, and that all necessary
action on the part of the City and its City Council for the issuance of the
Bonds and the execution and delivery of this Deed of Trust has been duly and
effectively taken, and that the Bonds in the hands of the holders thereof are
and will be valid and enforceable obligations of the City in accordance with
their terms.
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SECTION 2,02. The City is lawfully seized and possessed of
the Trust Estate, free and clear of all liens or encumbrances; it has good right;
and lawful authority to mortgage and pledge the Trust Estate as provided in
this Deed of Trust; and it will warrant and defend unto the Trustee, its
su6cessors and assigns, for the benefit of the holders and the Trustee under
this Deed of Trust, such authoAty and title against all claims and demands of
any person whomsoever.
SECTION 2.03. At any and all times the City will duly
i
execute, acknowledge and deliver, or will cause tb be dons, executed and de-
livered, all and every such eu�ther acts, deeds, conveyances, mortgages,
tidnafers and assurances in law as the Trustee shall reasonably require for
the better conveying, transferring, mortgaging, and pledging and confirming
unto the Trustee, all and singular the hereditements, premises, estates, and
property hereby conveyed, transferred, mortgaged, pledged or assigned, or in-
tended so to be.
SECTION 2.04. Except to the extent otherwise provided in
this Article II hereof, the City will not create or voluntarily permit to be
created any debt, lien or charge which would be on a parity with or prior to
the lien of this Deed of Trust on the Trust Estate or any part thereof; and
will not do or omit to do or suffer to be done or omitted to be done any
matter or thing whatsoever whereby the lien of this Deed of Trust or the
Priority of such lien as to the bonds hereby secured might or could be lost
or impaired; and that it will pay or cause to be paid or will make adequate
provision for the satisfaction and discharge of all lawful claims and demands
for labor, materials, supplies or other obligations which if unpaid might
by law be given precedence to or an equality with this Deed of Trust as a lien
or charge upon the Trust Estate or any part thereof, provided, that nothing in
this section shall rer ^ir^ the City to pay, discharge or make provision for any
such limn, c're. -ge, c'a : :i:1 or oe=nd so long as the validity thereof shall be by
it in good feith contj,ted, unless ther.nby, in the opinion of the Trustee, the
Trust Estate or semc^ mate;;.al part thereof trill be lost, forfeited or materially
endangered (asp to any t .h i.tfim it bei:ag the duty cf the Ci'cy to ad?ise trtth
the Trustee as i.o such act :.
:)n).
- 21 -
The requirements hereof for the payment and discharge of
liens, charges, claims or demands shall be inapplicable to any subordinate lien
obligations that the City,under authority of law, may incur against the
revenues of the System not required for full compliance with the provisions of
this Deed of Trust.
If at any time while any bonds issued under this Deed of
Trust are outstanding, it shall be found desirable to refund part of said bonds
under the provisions of any law then applicable, said bonds may be refunded
with the consent of the holders thereof, and the refunding bonds so issued
shall enjoy complete equality of lien with the portion of the bonds which is
not refunded, and the refunding bonds in like principal amount shall continue
to enjoy in all respects the lien and right to security under this Deed of
Trust enjoyed by the bonds refunded thereby, including the priorities enjoyed
by such refunded bonds; provided, however, that if any refunding bond is to
bear a higher rate of interest than the bond to be refunded, or if any refund-
ing bond is to mature at a date earlier or later than the maturity date of the
outstanding bond thereby refunded, then such refunding bond may not be issued
without the consent of the holders of the unrefunded portion of the Bonds, un-
less it is shown that the net revenues of the System for the twelve months
period next preceding the date of any such refunding bonds is equal to at least
one and three - fourths times the highest total amount of principal and interest
to become due in any future twelve months period on the bonds not so refunded
and on the refunding bonds then proposed to be issued and the showing thus to
be made as a condition precedent to the issuance of such refunding bonds shall
be evidenced in the manner required for the issuance of Additional Bonds, as
provided by Section 2.05 hereof. The Trustee shall, subject to the provisions
of this section, authenticate and deliver any refunding bonds so authorized,
upon the written order of the Mayor of the City and upon receipt by the Trustee
of:
(a) A certified copy of the ordinance of the City
Council of the City of Corpus Christi authorizing the issuance
of such refunding bonds;
(b) A copy of an opinion of the Attorney General of
the State of Texas approving the validity of such refunding
bonds, if such opinion shall then be authorized by the laws of
Texas;
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(c) A certificate of the State Comptroller evidenc-
ing registration of such refunding bonds in his office, if such
registration shall then be authorized by the laws of Texas;
(d) bonds duly cancelled, in principal amount not
less then the principal amount of the refunding bonds, together
with a certificate executed by the Comptroller of Public Accounts
of the State of Texas to the effect that said bonds have been
surrendered to and cancelled by him and that the refunding bonds
offered to the Trustee have been registered by him in lieu of
such bonds. In lieu of the showings in this suosection (d) here -
inabove prescribed, the following procedure shall be sufficient
if authorized by laws then in effect: When it is p: ^oposed to
refund bonds which are unmatured but which have been tailed for
redemption in accordance with their tenor and effect. and appli-
cable provisions of this Deed of Trust, if the proceeds from the
sale of the refunding bonds together with othrr money available
for the purpose, in an amount sufficient to redeem such called
bonds according to their tenor and effect, shall beve been de-
posited with the Trustee to be held by the Trustee for the sole
purpose of redeeming such called bonds; and in the event that
such procedure is followed if, as and when the called bonds
shall be presented for redemption they shall be paid by the
Trustee in accordance with the call for redemption, shall be
cancelled by the Trustee and shall not be reissued nor shall
they be the basis thereafter of additional refunding bonds.
(e) If required by the Trustee, an opinion by counsel
acceptable to the Trustee that such refunding bonds have been
legally authorized and, upon delivery thereof pursuant to the
terms of this section, will have become effectively subrogated
to the rights of the bonds refunded thereby and entitled to be
secured by the lien of this Deed of Trust.
All bonds received by the Trustee in exchange for refunding
bonds and all bonds redeemed and paid under the provisions of this section
shall be by the Trustee cancelled and delivered to the City Secretary of said
City.
To accomplish the issuance of refunding bonds, as permitted
by this Section 2.04, an extension of this Deed of Trust, or an emendatory or
supplemental Deed of Trust may be executed by the City and the Trustee without
the procedure required by Article XI hereof.
SECTION 2.05. ADDITIONAL BONDS. Until such time as the
City shall exercise the right to combine its waterworks and sanitary sewer
systems, reserved to it in Section 2.06 hereof, additional bonds (hereinafter
called "Additional Bonds ") shall be issued under the provisions of this Section
2.05, and thereafter the right to issue Additional Bonds and the conditions
under which they may be issued shall, to the extent therein provided, be govern-
ed by the provisions of Section 2.07 of this Deed of Trust. The City reserves
the right to issue Additional Bonds which, together with the Bonds shall, when
issued, be secured ratably by a first lien on the Trust Estate (including the
-23 -
pledged revenues). Additional Bonds may be issued for improvements or ex-
tensions or repairs or replacements of and to the Waterworks System or for
any one or more or all of such purposes. Additional Bonds may be issued from
time to time. The right to issue Additional Bonds at any time is subject to
the following limitations and conditions:
(1) Any such Additional Bonds shall be issued pursuant to
an authorizing ordinance duly passed by the City Council which shall prescribe
the date, interest rate or rates, maturity dates and other details necessary
to identify the bonds and the purpose for which the proceeds of such bonds are
to be used. The ordinance authorizing Additional Bonds, or the supplement to
or amendment of the Deed of Trust, executed pursuant to such ordinance shall
contain adequate and appropriate provisions assuring the application and use
of the proceeds thereof for the specific purposes set forth in such ordinance,
or supplement to or amendment of the Deed of Trust, and for safeguarding said
funds during the period of construction, or of their use, including the escrow
of construction funds.
(2) on each occasion before any such Additional Bonds are
issued an appropriate supplement to this Deed of Trust shall be executed,
describing such bonds and by reference making the provisions of this Deed of
Trust applicable thereto. None of the Additional Bonds shall be issued and
sold until they shall have been authenticated by the Trustee.
(3) The City agrees that it will not seek to have the
Trustee authenticate any Additional Bonds until it shall have filed or caused
to be filed with the Trustee:
(a) A certified copy of the ordinance authorizing the
issuance of such Additional Bonds;
(b) A certificate by the Mayor and City Secretary showing
the Net Revenues of the System for the twelve months period next preceding the
date of such bonds;
(c) A certificate by a Certified Public Accountant attesting
to the correctness of the figures contained in the certificate by the Mayor and
City Secretary prescribed in paragraph (b) of this subsection (3);
(d) A balance sheet and such additional data as may be
necessary to show the status of each of the Funds created under this Deed of
- 24 -
Trust, certified by said Certified Public Accountant, effective at a time not
more than 30 days prior to the date of such certificate required under para-
graph (b) of this subsection (3);
(e) An estimate by an independent engineer or engineering
firm employed by the City and acceptable to the Trustee, of the Net Revenues
which will be received from the operation of the System (for the remainder of
the then current calendar year and for each year thereafter) from the date of
said certificate unti'_ the final maturity date of the last maturing bond
either of this isiue as originally issued or as subsequently refunded, or of
the Additional Bonds which ever date is the later,
(4) The Trustee shall not authenticate any Additional
Bonds authorized in such ordinance if within the knowledge of the Trustee the
City shall be in default in any of its obligations under the Deed of Trust or
if the Balance Sheet or other instruments filed by such Certified Public
Accountant shows that any of the Funds required under the Deed of Trust, in-
cluding the Reserve are not current or intact according to the standards pre-
scribed in this Deed of Trust, and to determine such facts the Trustee is
authorized to require of the City any additional showings considered by it as
necessary.
(5) After having been furnished the evidence required
under this Article the Trustee shall authenticate such Additional Bonds, if,
but only if:
(a) The certificate of the Mayor and City Secretary under
paragraph (b) and by the auditor under paragraph (c) of subsection 3 of this
Section 2.05, show that the Net Revenues of the System for the twelve months
period next preceding the date of such bonds were equal to at least one and
three - fourths times the highest total amount of principal and interest to be-
come due in any future twelve -month period on all obligations then outstanding
and then to be isa+aed.
(b) The certificate by such engineer or engineering firm
shows that, in his or their opinion, the average annual Net Revenues of the
System from the date of such certificate until the final meturity date of the
last maturing bond will beequa.l to at least one and three - fourths times the
maximum amount required in any year to pay principal of and interest on all of
- 25 -
the Bonds of this issue as originally issued or as subsequently refunded, and
such Additional Bonds.
(c) Payments have been made into the various Funds as re-
quired by Article V of this Deed of Trust, even though the Reserve has not
reached the total required amount.
(d) The principal of any such Additional Bonds is pro-
vided to mature annually on June 1 in each of the years during the term
thereof.
(6) The provisions of Article XI for consent by the
holders of the Bonds shall be inapi4icable to the exercise of the rights
reserved by the City in this Section 2.05. The exercise of such rights does
not require consent by the holders of the Bonds.
SECTION 2.06. (a) It is expressly provided that its the
event the City later obtains necessary authority it may combine the operation
of its water and sanitary sewer systems. If and when such event occurs the
Bonds of this issue, together with revenue bonds issued for sanitary sewer
purposes, then outstanding and any additional revenue bonds theretofore or
thereafter issued for waterworks or sanitary sewer purposes, will be payable
from and secured by a pledge of and lien on the revenues of such combined
systems, and a mortgage on the waterworks system, and if so prescribed by the
City, may be further secured by a mortgage on the sanitary sewer system in
the manner and to the extent permitted by law at such time. It is provided
however that the systems will not be thus combined unless it is shown at the
time of such action that the aggregate net earnings of the waterworks and
sanitary sewer systems for the preceding twelve months period have been in an
amount at least one and three- fourths times the maximum aggregate total amount
of principal and interest to become due in any future year on all revenue
obligations then outstanding which were issued either for waterworks or for
sanitary sewer purposes, or for both such purposes.
(b) The showings thus to be made shall be evidenced as
provided in Section 2.05, paragraphs (b), (c) and (d) subsection (3) hereof
and shall be filed with the Trustee at least ten (10) days prior to the date
on which the City shall by ordinance duly passed by the City Council authorize
the execution of an appropriate supplement to this Deed of Trust, provided that
- 26 .
such supplemental Deed of Trust may be executed when the Trustee, in its ex-
clusive judgment, is satisfied that the showings evidence compliance with the
provisions of this Section 2.06. To determine such facts the Trustee is
authorized to require of the City any additional showing considered by it as
necessary. When the Trustee shall have determined that the requirements of
this section have been complied with it shall so certify to the City Council
and the City and the Trustee may then execute said supplemental Deed of Trust
and the City may proceed to effect the combination of said systems.
(c) The supplemental Deed of Trust executed to give effect
to this provision shall fully describe each and every issue of sanitary sewer
revenue bonds of the City outstanding at such time and shall by reference make
the provisions of this Deed of Trust applicable thereto and thereafter the
term "System" as used in this Deed of Trust shall be deemed to include the
sanitary sewer system as it exists at such time and any improvements and ex-
tensions subsequently made thereto, provided that neither this Deed of Trust
nor said supplemental Deed of Trust shall constitute a mortgage upon the
physical properties of said sanitary sewer system unless it is expressly so
provided in said supplemental Deed of Trust. The City will cause such supple-
mental Deed of Trust to be recorded in the Deed of Trust records of Nueces
County.
(d) On and after the date of the combination of such
systems, as herein provided, the gross revenues received from the operation
of the sanitary sewer system along with the revenues received from the water-
works system shall be deposited in the system Fund and shall be disbursed in
accordance with the provisions and requirements of Article V of this Deed of
Trust. For greater certainty it is expressly provided that:
(1) The payments thereafter to be made each month into
the Maintenance and Operation Fund shall be an amount of money estimated by
the City to be sufficient to pay the reasonable expenses of operation and
maintenance of the combined systems for the next succeeding calendar month;
(2) The payments thereafter to be made each month into
the Interest and Sinking Fund shall be an amount not less than the total of:
112th of the next maturing installment or installments of principal of any
and all bonds then outstanding against the combined systems; 16th of the
- 27 -
next semi - annual installment of interest on all such bonds then outstanding;
and an additional amount equal to 250 of both such items (provided that this
25% margin requirement may be omitted whenever and so long as the Reserve is
intact as contemplated by paragraphs (a), (b) and (c) of Section 5.03, Article
V of this Deed of Trust);
(3) The payments thereafter to be made each month into the
Extension and Improvement Fund shall be an amount not less than $6,000.00
until there shall be accumalated in said fund the amount of $120,000.00. When-
ever said fund shall be diminished below such amount said payments shall be
resumed and continued until said Fund has been restored to $120,000.00.
(4) The payments thereafter to be made each month into the
Redemption Fund shall be not less than 50% of the amount remaining in the
System Fund subject to the conditions set forth in paragraph (a) of Section
5.06 of Article V of this Deed of Trust.
The provisions of Article XI for consent by the holders of
the Bonds, or any Additional Bonds, shall be inapplicable to the exercise of
the rights reserved by the City in this Section 2.06. The exercise of such
rights does not require consent by the holders of the Bonds or of any Addition-
al Bonds.
SECTION 2.07. From and after the time the City shall have
exercised the right to combine its waterworks and sanitary sewer systems
reserved to it in the foregoing section, the City shall have the right to issue
additional revenue bonds (hereinafter called "Additional Bonds ") for improve-
ments and extensions of the combined waterworks and sanitary sewer systems
which, when issued, shall be on a parity in all respects with any and all
bonds theretofore issued for either or both of such purposes and shall be pay-
able from and secured by a pledge of and lien on the revenues of the combined
systems (and to the extent authorized under Section 2.06 further may be secured
by a mortgage on the sanitary sewer system) provided that the right to issue
such additional bonds at any time shall be subject to the following limitations
and conditions:
(1) Any such Additional Bonds shall be issued pursuant to
an authorizing ordinance duly passed by the City Council which shall prescribe
the date, interest rate or rates, maturity dates and other details necessary
-2g-
to identify the bonds and the purpose for which the proceeds of such bonds are
to be used. The ordinance authorizing Additional Bonds, or the supplement to
or amendment of the Deed of Trust, executed pursuant to such ordinance shall
contain adequate and appropriate provisions assuring the application and use
of the proceeds thereof for the specific purposes set forth in such ordinance,
or supplement to or amendment of the Deed of Trust, and for safeguarding said
funds during the period of construction, or of their use, including the escrow
Of construction funds.
(2) On each occasion before any such Additional Bonds are
issued an appropriate supplement to this Deed of Trust shall be executed,
describing such bonds and by reference making the provisions of this Deed of
Trust applicable thereto. None of the Additional Bonds shall be issued and
sold until they shall have been authenticated by the Trustee.
(3) The City agrees that it will not seek to have the
Trustee authenticate any Additional Bonds until it shall have filed or caused
to be filed with the Trustee;
(a) A certified copy of the ordinance authorizing the
issuance of such Additional Bonds;
(b) A certificate by the Mayor and City Secretary showing
the aggregate Net Revenues of the combined System for the twelve months period
next preceding the date of such bonds;
(c) A certificate by a Certified Public Accountant attest-
ing to the correctness of the figures contained in the certificate by the Mayor
and City Secretary prescribed in paragraph (b) of this subsection (3);
(d) A balance sheet and such additional data as may be
necessary to show the status of each of the Funds created under this Deed of
Trust, certified by said Certified Public Accountant, effective at a time not
more than 30 days prior to the date of such certificate required under paragraph
(b) of this subsection (3);
(e) An estimate by an independent engineer or engineering
firm employed by the City and acceptable to the Trustee, of the Net Revenues
which will be received from the operation of the combined System (for the re-
mainder of the then current calendar year and for each yearthereafter) from the
date of said certificate until the final maturity date of the last maturing Bond
- 29 -
either of this issue as originally issued or as subsequently refunded, or of
the Additional Bonds whichever date is the later.
(4) The Trustee shall not authenticate any Additional
Bonds authorized in such ordinance if within the knowledge of the Trustee the
City shall be in default in any of its obligations under the Deed of Trust or
if the Balance Sheet or other instruments filed by such Certified Public
Accountant shows that any of the Funds required under the Deed of Trust, in-
cluding the Reserve are not current or intact according to the standards pre-
scribed in this Deed of Trust, and to determine such facts the Trustee is
authorized to require of the City any additional showing considered by it
necessary.
(5) After having been furnished the evidence required
under this Article the Trustee shall authenticate such Additional Bonds, if,
but only if:
(a) The certificate of the Mayor and City Secretary under
paragraph (b) and by the auditor under paragraph (c) of subsection 3 of this
Section 2.07, show that the aggregate Net Revenues of the combined System for
the twelve months period next preceding the date of such bonds were equal to at
least one and three - fourths times the highest total amount of principal and
interest to become due in any future twelve -month period on all revenue obli-
gations then outstanding theretofore issued for waterworks and sanitary sewer
purposes or for either of such purposes and the bonds then to be issued.
(b) The certificate by such engineer or engineering firm
shows that, in his or their opinion, the average annual Net Revenues of the
combined System from the date of such certificate until the final maturity
date of the last maturing bond will be equal to at least one and three - fourths
times the maximum amount required in any year to pay principal of and interest
on all waterworks and sewer revenue obligations then outstanding and then
proposed to be issued.
(c) Payments have been made into the various Funds as
required by Article V of this Deed of Trust, even though the Reserve has not
reached the total required amount.
-3C-
(d) The principal of any such Additional Bonds is pro-
vided to mature annually on June 1 in each of the years during the term
thereof.
(6) The provisions of Article XI for consent by the
holders of the Bonds shall be inapplicable to the exercise of the rights
reserved by the City in this Section 2.07. The exercise of such rights does
not require consent by the holders of the Bonds.
SECTION 2.08. The City will cause this Deed of Trust, and
any and all supplemental Deeds of Trust and instruments of further assurance
at all times to be recorded and filed in the office of the County Clerk of
Nueces County, Texas, and in such other places as may in the opinion of counsel
for the Trustee be required by law in order fully to preserve and protect the
rights of the bondholders and the Trustee hereunder, and upon the request'of
the Trustee it will furnish to the Trustee promptly after the execution and de-
livery of this Deed of Trust an opinion of counsel satisfactory to the Trustee
stating that in the opinion ofsuch counsel this Deed of Trust has been properly
recorded and filed so as to make effective the lien intended to be created
thereby, and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to make such lien effective.
SECTION 2.09. The City will from time to time promptly pay
and discharge all taxes, assessments and other governmental charges, the lien
of which would be prior to the lien hereof, lawfully imposed upon the Trust
Estate or any part thereof or upon the income and proceeds thereof, so that
the lien of this Deed of Trust and the priority of such lien shall at all times
be wholly preserved at the cost of the City and without expense to the Trustee
or the holders of the Bonds, provided, however, that nothing in this section
contained shall require the City to pay or discharge any such tax assessment
or governmental charge so long as the validity thereof be by it in good faith
contested, unless thereby in the opinion of the Trustee or its counsel the
Trust Estate or some material part thereof will be lost, forfeited or materially
endangered.
SECTION 2.10. The City will maintain, preserve and keep
the Trust Estate in a state of good repair, working order and condition and
- 31 -
will not dispose of the Trust Estate in whole or in part except in the manner
and upon the term's provided in Section 7.02 of Article VII hereof.
SECTION 2.11. The City will duly and punctually keep,
observe and perform each and every term, covenant and condition on its part
to be kept, observed and performed, contained in this Deed of Trust, and will
punctually perform all duties with reference to the Trust Estate required by
the Constitution and Laws of the State of Texas, and the City will make and
collect such reasonable and sufficient rates and charges for services supplied
by the System to the City and to all other consumers, as will be fully suffi-
cient to meet all the requirements of this Deed of Trust and the proper segre-
gation and application of the revenues of said System.
SECTION 2.12. To the extent permitted by law the City
will not grant a franchise for the operation of any competing Waterworks System
in the City of Corpus Christi until all Bonds issued hereunder (including the
Additional Bonds permitted hereby and bonds to refund the Bonds) shall have
been retired.
SECTION 2.13. The City will enforce the provisions of its
applicable ordinances requiring meter deposits by its water customers. The
money derived from such deposits will be maintained in a special fund to the
end that each such meter deposit shall serve as security for the payment of such
customer's indebtedness to the City for any service rendered to such customer.
Within its discretion the City red' invest all or any part of such moneys in
accordance with applicable law.
ARTICLE III
ACCOUNTS AND RECORDS
SECTION 3.01. (a) The City shall keep full and proper
books of records and account, in which full, true and proper entries will be
made of all dealings, business and affairs of the City which in any way affect
or pertain to the operation of the Trust Estate, and will furnish to the
Trustee each month a statement in reasonable detail showing the earnings and
expenditures of the System, and the application of funds in the System Fund
hereinafter established, for the preceding month. The City shall also furnish
to the Trustee from time to time such other data as to the plant, properties
and equipment comprising a part of the Trust Estate, as the Trustee shall
reasonably request.
- 32 -
As soon after the close of each operating year as may
reasonably be done, the City will furnish to the Trustee and to all bondholders
who may so request, full audits and reports made by a qualified Certified
Public Accountant or a Public Accountant registered as provided by Chapter 315,
Acts of the 49th Legislature of Texas, 1945, known as "PUBLIC ACCOUNTANCY ACT
OF 1945 ", covering the operations of the System, for the preceding operating
year, and showing the earnings and expenses of the properties and the dis-
position made of all revenues for said operating year, the amounts available
for the purposes set forth in Article V hereof, and, in such detail as the
Trustees may request, the assets, liabilities and financial condition of the
System at the close of such operating year. The City at the same time shall
furnish to the Trustee an estimate of cash receipts and disbursements for the
ensuing year in sufficient detail to indicate the probable total net income
from operations and amounts available for the several fund accounts establish-
ed herein. If any such audit discloses any discrepancies or misapplication of
funds, the City shall be charged with the duty of rectifying such misappli-
cations as far as possible and of remedying any deficiencies in payments here-
under from the first available funds for such purpose.
The City will at its expense, upon written request of the
Trustee, permit the Trustee at all reasonable times, acting by Trustee's
agents, engineers, accountants and attorneys, to examine and inspect the System,
property, books of accounts, records, reports and other date relating to the
Trust Estate and to take copies and extracts therefrom, and will afford a
reasonable oppertunity to make any such examination and inspection and will
furnish the Trustee any and all such other information as it may reasonably
request. The Trustee shall be under no duty to make any such examination
unless requested so to do by the holders of twenty -five per cent in principal
amount of the bonds at the time outstanding and unless such holders shall have
offered the Trustee security and indemnity satisfactory to it against any cost,
expenses and liabilities which might be incurred thereby.
The City shall keep its books and records in the manner
conforming to standard accounting practices as usually followed by private
corporations owning and operating such Systems.
- 33 -
ARTICLE IV.
Insurance
SECTION 4.01, The City covenants and agrees that at all
times it will insure and keep insured all properties subject to the lien hereof
which are of a character usually insured by companies operating like properties,
in good and responsible insurance companies, against risks customarily insured
against by companies engaged in a similar business, and in the same manner and
to the same extent, all lose therefrom (except any single lose which does not
exceed $50,000.00) being payable to the Trustee as its interest shall appear,
by the customary mortgage or trustee clause to be attached to or inserted in
the policies. The City shall furnish to the Trustee a list of such policies,
showing the character of the insurance, the property and risk covered, the
name of the insurance company, and other pertinent details and shall keep the
Trustee fully informed of any change in or addition to such list. Upon the
written request of the Trustee such policies will be deposited with it. The
Trustee, subject to the provisions of Article IX hereof, shall be under no
obligation or duty to obtain any such schedule and shall have no duty or
responsibility with respect to the sufficiency or effect of any of such
policies of insurance, the renewal thereof, or the responsibility of the in-
surers, or with respect to any such schedule or the matters shown therein, ex-
cept to display any such schedule to any holder of bonds desiring to inspect
the same.
In case of loss or damage to any of the insured property,
the proceeds of any such insurance or any one lose amounting to not more than
$50,000.00 shall either be promptly applied by the City to the repair or re-
placement of the property destroyed or damaged, or otherwise to the improve-
ment of the Trust Estate if not so applied within one year of the date of
receipt thereof by the City, such proceeds shall be deposited in the Reserve
created by Article V hereof. In any case where the proceeds of any such in-
surance shall amount to a sum in excess of $50,000.00 on account of any one
loss, all such moneys shall be promptly deposited with the Trustee and shall
be paid out from time to time to the City upon its written request signed by
the Mayor and City Secretary, and accompanied by a certified copy of the
resolution of the City Council directing such request, and specifying that
- 34 -
certain expenditures have been made or incurred in repairing or replacing the
property so impaired or destroyed, and the amount thereof, and requesting the
payment by the Trustee to the City of an amount not in excess of the amount
of such expenditure. If in the judgment of the City Council and of a recogniz-
ed public utility engineer selected by the Council and approved by the Trustee,
the interest of the City and the bondholders will be best served through the
application of all or part of such insurance proceeds to improvements to the
mortgaged property which do not constitute the repair or replacement of the
property for the destruction or impairment of which the insurance proceeds
are so paid, the amount of such proceeds may be applied by the city to the
making of such improvements, and payment thereof shall be made to the City by
the Trustee and expended in the manner provided in the last preceding sentence
hereof. The Trustee may in its discretion require such additional proof of
the matters certified in such resolution as it may consider necessary or de-
sirable. Any insurance proceeds not so paid out by the Trustee within a
period of two years from the date of receipt thereof may be used for the re-
tirement of bonds purchased in the open market at prices of not more than
the par amount thereof. In the event the monies thus available are to be
used to purchase bonds in the open market, the City shall exert its best
efforts to use the monies so available to purchase bonds at the lowest price
possible in the then existing open market, and any bonds so contracted to be
purchased shall be presented to the Trustee for payment with such monies and
when paid shall be cancelled and shall not be reissued or refunded.
Any adjustment of any loss under any policy of insurance
made by the City may be consented to by the Trustee without investigation as
to the fairness thereof. The payments of premium for all insurance policies
required under the provisions of this Section and the payment of premiums for
all types of insurance customarily carried by a private utility company
operating a waterworks system shall be considered to be a maintenance and
operation expense within the provisions of Article V hereof.
SECTION 4.02. The City shall obtain and keep continually
in force such employee fidelity and indemnity insurance and bonds as would
ordinarily be maintained by a private utility company operating a similar
system.
35 -
ARTICLE V.
Application of Revenues
SECTION 5.01. SYSTEM FUND. There is hereby created and
ordered to be established in the bank, duly selected by the City in accordance
with the laws of Texas and its Charter, as the depository of the City, herein-
after called the 'City Depository ", a fund to be designated the "System Fund ".
There shall be deposited in the System Fund as collected, all revenues derived
from the operation of the System.
SECTION 5.02. MAINTENANCE AND OPERATION FUND. There is
hereby created and ordered to be established in the City Depository a fund to
be designated the "Maintenance and Operation Fund ". On or before the 10th day
of each month while any of the Bonds or any Additional Bonds are outstanding
there shall be withdrawn from the System Fund and deposited in the Maintenance
and Operation Fund an amount of money estimated by the City to be sufficient to
pay the reasonable expenses of operation and maintenance of the System for the
next succeeding calendar month.
SECTION 5.03. There is hereby created and ordered to be
established with the Trustee the City of Corpus Christi Waterworks Revenue Re-
funding Bonds Interest and Sinking Fund, hereinafter called "The Interest and
Sinking Fund ". On or before February 10, 1954 and on or before the 10th day
of each month thereafter to and including May 10, 1954, the City shall with-
draw from the System Fund and deposit in the Interest and Sinking Fund an
amount of money not less than the total of: 1 /4th of the next installment of
principal of the Bonds then outstanding scheduled to mature; 1 /4th of the next
semi - annual interest on the Bonds then outstanding; and an additional amount
equal to 25% of both such items. Beginning on June 10, 1954 and on or before
the 10th day of each month thereafter the City shall withdraw from the System
Fund and deposit in the Interest and Sinking Fund an amount of money not less
than the total of: 1 /12th of the next maturing installment of principal of
the Bonds and of any Additional Bonds then outstanding payable from the
revenues of the System; 1 /6th of the next semi - annual installment of interest
on the Bonds and on any Additional Bonds then outstanding; and an additional
amount equal to 25% of both such items, provided, however, that it shall not
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longer be necessary to remit such additional amount of 25% whenever and so long
as the following conditions exist;
(a) There shall have been no default in the payment of
any Bonds or Additional Bonds or interest thereon;
(b) All of the payments required by this Section 5.03
to have been made into the Interest and Sinking Fund prior to and on such
date, shall have been made;
(c) There shall have been accumulated and shall exist in
the Interest and Sinking Fund an amount of money equivalent to all monthly in-
stallments of interest, and all monthly installments of principal required by
this Section 5.03 to have been paid into the Interest and Sinking Fund subse-
quent to the last preceding maturity of interest, and subsequent to the last
preceding maturity of principal, plus an additional amount (herein called the
"Reserve "), which shall be an amount of money equivalent to the highest total
amount of principal and interest to become due in any future twelve month
period on all Bonds (end any Additional Bonds) then outstanding.
So long as the Reserve contains the amount of money
stipulated in subsection (c) of this section it will be considered to be intact
and while the Reserve is intact the monthly payments to the Interest and Sink-
ing Fund may be made without the 25% margin requirement; but if at any time it
becomes necessary to use temporarily any part of such Reserve for the payment
of principal or interest, or such Reserve is otherwise depleted, then to the
extent of such use or depletion such money shall be restored by the immediate
resumption of such margined payments until the Reserve is again intact.
The moneys in the Interest and Sinking Fund shall be used
solely for the purpose of paying interest on and principal of the Bonds, and any
Additional Bonds issued pursuant to Article II hereof; provided, that, when the
total amount of money in the Interest and Sinking Fund (including the Reserve)
is equal to the aggregate principal amount of the Bonds (and Additional Bonds,
if any) outstanding plus all unpaid coupons thereto appertaining unmatured and
matured, no further payments need be made into the Interest and Sinking Fund.
SECTION 5.04. The moneys paid into the Interest and Sink-
ing Fund shall be continuously secured by a valid pledge of direct obligations
of, or obligations unconditionally guaranteed by the United States of America,
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having a per value or market value when less than par, exclusive of accrued
interest, at all times at least equal to the money deposited in the Interest
and Sinking Fund. The Reserve, at the option of the City, may be invested in
direct obligations of, or unconditionally guaranteed by, the United States of
America, and deposited in escrow under an escrow agreement, or deposited in
the trust department of the Trustee. If such money is so invested and the
bonds deposited in escrow or in the trust department of the Trustee Bank, the
City shall have the right to have sold through the escrow agent or through the
said trust department on the open market a sufficient amount of said securities
in order to meet its obligations of principal and interest in event it does
not have sufficient funds uninvested on hand for such purpose. Under such cir-
cumstances, the Mayor is hereby authorized, ordered and directed to give
written notice to such escrow agent, or the Trustee of the necessity to sell
said securities on the open market. After such sale, the monies resulting
therefrom shall belong to the Interest and Sinking Fund and shall be available
to pay such obligation of principal or interest or both principal and interest.
In the event the Reserve is depleted in instances as provided in this section,
it shall be the duty of the City to restore such monies by resuming the monthly
deposit of funds margined by 25% in excess of the actual requirements for pay-
ment of principal and interest as hereinabove in this section provided.
SECTION 5.05. There is hereby created and ordered to be
established in the City Depository a fund to be designated as the "Extension
and Improvement Fund." Money in such fund shall be used only for such extensiors
of, improvements to, or renewals or replacements of the System, or for any one
or more of said purposes, except as hereinafter in this Section provided, such
as are not ordinarily considered payable as maintenance and operation expendi-
tures. Payments into such fund shall be made and the money in the Fund shall
be used in the following manner:
(a) At all times money in such Fund which shall not actu-
ally be committed under construction contracts shall remain available and shall
be used by the City to prevent or relieve any default in the payment of the
principal of or interest on the Bonds;
(b) At any time when the Extension and Improvement Fund
shall contain not less than $100,000.00, not committed under construction
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contracts, any money in excess thereof may, within the discretion of the City
Council, be withdrawn and used for the purpose of redeeming Bonds prior to
their maturity in accordance with the redemption provisions contained in this
Deed of Trust and in the Bonds and any additional Bonds;
(c) On the 10th day of March, 1954, and on the 10th day
of each month thereafter, after the monthly payments required to be made into
the Interest and Sinking Fund have been made, the City shall transfer from the
System Fund to said Extension and Improvement Fund not less than Five Thousand
($5,000.00) Dollars until there shall be accumulated in said fund the amount of
$100,000.00. Whenever said fund shall be diminished below that amount, said
payments shall be resumed.
The election of the City to apply such portion of the
revenues of the System to the special purpose contemplated by this Section
5.05 is made under and by virtue of Chapter 122, Acts 53rd Legislature,
Regular Session, 1953.
SECTION 5.06. REDEMPTION FUND. There is hereby created
and ordered to be established in the City Depository a fund to be designated
the "Redemption Fund ". Said Fund shall be used only for the purpose of re-
deeming bonds prior to their respective maturities, except that if, at any
time, money in the Interest and Sinking Fund is insufficient to pay an install-
ment of principal or interest which is about to mature or has matured, to the
extent necessary to supply the deficiency money in the Redemption Fund shall be
transferred to the Interest and Sinking Fund.
(a) On the 10th day of March, 1954, and on or before the
10th day of each month thereafter while any bonds issued hereunder are out-
standing and after all payments have been made respectively to the Maintenance
and Operation Fund, the Interest and Sinking Fund, and the Extension and Im-
provement Fund, as required by this Article V, and after the payment of all
other obligations legally chargeable to the System Fund, the City shall
transfer to the Redemption Fund from the amount remaining in said System Fund
not less than 50% of the amount thus remaining. If in any month the con-
dition of the System Fund is such that said transfer to the Redemption Fund
cannot be made as herein provided such payment shall be made during the first
month thereafter when possible under the provisions of this Section,
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(b) Money in the Redemption Fund shell be used solely by
the City to retire or redeem prior to their respective scheduled maturity dates
the Bonds and any Additional Bonds issued under this Deed of Trust or any Deed
of Trust supplemental thereto, provided that said money shall be used as
follows:
First, the money may be used in buying bonds after
customary advertisement to assure opportunity for competitive offers
of such bonds. The procedure to be followed in obtaining and accept-
ing offers of such bonds shall be as follows: (1) On or about the
first day of April or the first day of October each year the City
shall determine the amount of money on hand in said Fund and (2) if,
in the discretion of the City Council it is determined that it would
be to the advantage and best interests of the City to seek competitive
offers of bonds for the purpose of retiring bonds to the extent of
funds on hand, or in a lesser amount, it shall direct the City
Secretary to publish in a financial publication having general cir-
culation in the United States and published in the City of New York,
approximately fifteen days' notice of its intention to receive
offers or tenders of bonds to be purchased, such notice shall state
the amount of money available for such purpose and the date on which
such offers or tenders will be received and considered. The City
shall reserve the right to reject any and all offers but it will en-
deavor to use the money available therefor in such way that as many
of said bonds as advisable may be retired, provided that no bonds
shall be so purchased under this bid and tender plan except at a
price less then the total of the par amount and accrued interest
together with the then effective redemption premium, if any, of the
bonds so offered. Bonds so purchased hereunder shall be retired
and not refunded.
Second, in the event the money on hand is not exhaust-
ed under the above procedure or if the City Council determines that
such procedure would not be to the advantage and best interests of
the City, or that bonds were not offered under the bid end tender
plan at prices acceptable to the City, then the City Council may
call for redemption prior to their scheduled maturity dates such
bonds as may then be eligible for prior redemption and in such amount
as in the discretion of said Council it may determine advisable. Such
bonds may be redeemed in whole, or in part in the inverse order of
their maturity and if less than an entire maturity shall thus be
called the bonds to be redeemed shall be selected by lot. Notice of
intention to redeem bonds shall be given not less than thirty (30)
days prior to the date fixed for redemption by at least one publi-
cation in a financial publication published in the City of New York
and in the official newspaper of the City of Corpus Christi, and
thirty (30) days' notice in writing prior to the date of redemption
is to be given to the banks of payment. If, by the date fixed for
redemption, funds shall have been made available sufficient to pay
any bond so called and accrued interest thereon, plus the specified
premium, it shall not thereafter bear interest.
(c) On or before the 10th day of March, 1954, and on or
before the 10th day of each month thereafter when the City shall have trans-
ferred into the Redemption Fund the money required to be transferred under sub-
section (a) of this Section it may within its discretion transfer to the Re-
demption Fund any sum of money in addition thereto then remaining in the System
Fund.
-4o-
SECTION 5.07. All moneys which are to be paid into the
City Depository under the provisions of this Article V shall be secured in
accordance with the laws of the State of Texas applicable thereto, and the
City covenants especially that such money shall be continuously - secured by a
valid pledge of direct obligations of, or obligations unconditionally guaran-
teed by the United States of America, having a par value or market value when
less than par, exclusive of accrued interest, at all times at least equal to
the total amount of money on deposit in said several Funds in the City De-
pository.
SECTION 5.08• If and when the City from time to time
shall issue Additional Bonds the oridinance authorizing such bonds, or the
supplement or amendment to the Deed of Trust securing such bonds shall contain
adequate and appropriate provisions for payments into the several Funds creat-
ed by this Article V so that the security of the Bonds will not be impaired.
SECTION 5.09. In the event that a paying agent for the
Bonds or any Additional Bonds, other than the Trustee, should be or shall have
been designated in any ordinance or resolution, or in any supplement to the
Deed of Trust, and if certified copies or original executed counterparts
thereof are filed with the Trustee it shall be the duty of the Trustee not
less than ten (10) days prior to the date fixed for payment of interest or
payment of principal and interest, to make available to such additional pay-
ing agent or agents money necessary for the payment of the coupons or the
bonds and coupons scheduled to mature on such date.
ARTICLE VI.
Covenants
SECTION 6.01. The City Council hereby covenants and agrees
that it will, at all times while any of the Bonds or Additional Bonds or any
interest thereon, are outstanding and unpaid, charge and collect for services
rendered by Bald System rates sufficient to pay all maintenance, depreciation,
replacement, betterment, and interest charges and to provide an Interest and
Sinking Fund sufficient to pay the interest and principal of the bonds as such
interest and principal mature and any outstanding indebtedness against the
System, as is required by Article 1113, Revised Civil Statutes of Texas, as
amended. For the benefit of the original purchaser, and for the benefit of
- 41 -
any and all subsequent holders of said Bonds, Additional Bonds, coupons, or
any part thereof, and in addition to all other provisions and covenants in the
laws of the State of Texas and in this ordinance, it is expressly covenanted
that the City shall fix and maintain rates and collect charges for the facili-
ties and services afforded by the System, which will provide revenues suffi-
cient at all times:
(a) To pay all operating, maintenance, depreciation,
replacement and betterment charges of the System, as required under Article
1113, Revised Statutes of Texas, as amended;
(b) To establish and maintain the Interest and Sinking
Fund (including the Reserve Account) for the Bonds and for any Additional
Bonds;
(c) To establish and maintain the Extension and Improve-
meat Fund;
(d) To establish and maintain the Redemption Fund;
(e) To pay all outstanding indebtedness against the
System other than the Bonds, or any Additional Bonds as and when the same
becomes due,
SECTION 6.02. No free service shall be rendered by the
City for any purpose. No such free service shall be rendered to the County,
the School District or any other public agency.
ARTICLE VII.
Possession of Mortgaged Property
SECTION 7.01. While not in default in the payment of
principal of or interest on any of the Bonds or any Additional Bonds "cured
hereby or in respect to any of the covenants, agreements or conditions in this
Deed of Trust contained, or any supplement thereto, the City shall be permitted
and suffered to possess, use and enjoy the Trust Estate and all property and
appurtenances, franchises and rights conveyed by this Deed of Trust or any
supplement thereto (except money or property, if any, expressly required to be
deposited with the Trustee) and to receive and use the revenues, rents, issues,
income, produce and profits thereof with power in the ordinary course of
business freely and without let or hindrance on the part of the Trustee or
of the holders of the Bonds, or any Additional Bonds, to use and consume
- 42 -
supplies; to alter, repair, dismantle and change the position of any of its
buildings and structures, plants, mains, pipe lines or other property whatso-
ever (provided that no such change shall impair the lien of this Deed of Trust,
or any supplement thereto, upon any such building, structure, plant, main,
pipe line, or other property); to replace and renew any of its equipment,
machinery or other property; and to acquire any and all rights under chosen
in action and contracts.
SECTION 7.02. The City covenants that so long as the
Bonds or any Additional Bonds, or any of them shall be outstanding and except
as in this Article otherwise permitted, it will not sell, lease or otherwise
dispose of any part of the System. The City may, however, from time to time
sell any machinery, fixtures, apparatus, tools, instruments, or other movable
property and any materials used in connection therewith, if the City Council
shall determine that such articles are no longer needed or are no longer useful
in connection with the operation and maintenance of the System and if the
proceeds thereof shall be applied to the replacement of the properties so
sold or disposed of, or shall be placed in the Interest and Sinking Fund or
the Redemption Fund. The City may from time to time sell such real estate as
it shall declare by resolution is not needed or serves no useful purpose in
connection with the maintenance and operation of the System. The proceeds of
any sale of real estate shall be disposed of as hereinabove provided for the
proceeds of the sale or disposal of movable property.
It is provided, however, (except as permitted by Section
7.03 hereof) that not more then $15,000.00 in value of property, real or per-
sonal, shall be sold during any twelve months' period without the consent of
the Trustee evidenced by a release signed by the Trustee. The sale price of
such property shall be presumed to be the value thereof for the purpose of
this Section 7.02. In executing such release the Trustee may rely upon a
certified copy of a resolution by the City. Council of the City declaring that
the properties released are no longer needed or are no longer useful in
connection with the operation and maintenance of the System, but the Trustee
may require a certificate of such facts by an engineer acceptable to it. The
Trustee shall incur no liability, if in any instance, it does not rrc?7.24. ^a such
certificate.
- 43 -
SECTION 7.03. The provisions and restrictions of this
Article VII, and any other provision of this Deed of Trust, which relate to
the sale, lease or other disposition of any part of the System shall not be
applicable to the property included as a part of the Trust Estate in this Deed
of Trust and described under the caption as A. Lake Corpus Christi, and the
City may sell all or any part of such property (known as Lake Corpus Christi
and the impounding dam thereof together with pertinent easements, flowage
rights and facilities used in connection therewith, situated on the Nueces
River approximately 30 miles northwest of the City end situated in the Counties
of San Patricio, Jim Wells and Live Oak) under applicable provisions of the
law, provided that the proceeds of the sale of such property shall be placed in
the Redemption Fund created under Article V of this Deed of Trust and applied
only to the purposes of said Fund, it is further expressly provided that no
mineral rights of any character pertaining to any of the lands herein authoriz-
ed to be sold shall be released or sold and any minerals in or under or that
may be produced from such lend shall remain subject to the lien and encum-
brance of this Deed of Trust. In the event a sale of such properties shall
be effected by the City, the Trustee shall execute such instruments as may be
required to reconvey, reassign, set over and release such property free and
clear from the encumbrance of this Deed of Trust to the City for such purpose.
The Trustee may require such proof of compliance with the terms of this Section
as it may deem necessary.
SECTION 7.04. The City may, notwithstanding any other pro-
visions of this Deed of Trust, if then authorized by law, lease any of its
lands not necessary to the operation and maintenance of the Systems for any
purpose which will not result in any damage to or diminution of the value of
the property leased or of any other property of the City and will not in any
manner divert, endanger or contaminate the City's water supply or water trans-
portation facilities. The rental to be charged under all such leases shall be
not less than the fair and reasonable r.:n al in relation to the character and
value of the property leased. The Trustee may rely upon ieclarstions contained
in a resolution adopted by the City Council as to the fairness and reasonable-
ness of such rental consideration. All rentals, revenues, and receipts derived
by the City from any and all leases so made shell upon the receipt thereof be
- 44 -
deposited with the Trustee for the credit of the Interest and Sinking Fund or
the Redemption Fund.
ARTICLE VIII.
Defaults and Remedies
SECTION 8.01. For the purpose of this Deed of Trust, the
following events are hereby defined as and are declared to be events of default:
(a) Default in the due and punctual payment of any in-
terest on any of the bonds and the continuance thereof for a period
of ninety (90) days after written notice the ,_^eof by the Trustee to
each member of the City Council of the City of Corpus Christi stat-
ing that payment has been demanded and default made;
(b) Default in the due and punctual payment of the
principal of any of the bonds at maturity thereof and the contin-
uance thereof for a period of ninety (90) days after written notice
thereof by the Trustee to each member of the City Council of the
City of Corpus Christi stating that payment has been demanded and
default made;
(c) Default in the performance or observance of any
other of the covenants, agreements or conditions on the part of the
City to be kept, observed and performed contained in this Deed of
Trust or in the bonds, and continuation of such default for a period
of ninety (90) days after written notice thereof by the Trustee to
each member of the City Council of the City of Corpus Christi;
(d) The institution of bankruptcy proceedings, either
voluntary or involuntary, under any state or federal statute, whereby
the City's duty to carry out all of the covenants and agreements in
this Deed of Trust contained might be in any wise affected.
Any notice herein provided to be given to a member of the
City Council and the City Secretary shall be deemed sufficiently given if sent
by registered mail with postage prepaid to the person to be notified, addressed
to him at the post office in the City of Corpus Christi. The Trustee may give
any such notice in its discretion and shall give such notice if requested so to
do by the holders of not less than twenty per cent (20%) in principal amount of
the bonds at the time outstanding.
Whenever Bonds are referred to in this article and in
Article XI hereof, the term shall be understood to mean not only all outstand-
ing Bonds of the issue originally secured hereby, but also any Additional Bonds
issued as authorised by this Deed of Trust, or i ?'nich by the terms thereof later
may become subject to its provisions, and all ot.te;Gand.ing refunding bonds which
may be issued under the provisions of this Deed of Trust in such manner as to
be entitled to the security of this Deed of Trust on an equality with the Bonds
of said original issue.
- 45 -
SECTION 8.02. Upon the happening of any event of default
0 dg�ined in Section 8.01 of this Article, the trustee shall, but only upon
the written request of the holders of not less than sixty per cent (60%) in
principal amount of the bonds then outstanding hereunder, and upon being in-
demnified to its satisfaction, by notice in writing to the City Secretary to be
sent as provided in Section 8.01 hereof, declare the principal of all bonds
then outstanding hereunder to be due and payable immediately, and upon any
such declaration the said principal shall become and be due and payable
immediately, anything in this Deed of Trust or in the bonds to the contrary
notwithstanding. This provision, however, is subject to the condition that if
any time after the principal of said bonds shall have been declared due and
payable and before any sale of the Trust Estate shall have been made, all
arrears of interest upon all such bonds, with interest upon all past due in-
stallments of interest at the rate borne by the bonds, and all past due prin-
cipal of the bonds, together with the reasonable charges and expenses of the
Trustee, its agents, attorneys and counsel, shall be paid by the City and after
all other defaults which may have occurred shall have been remedied or cured
to the satisfaction of the Trustee, then and in every such case the holders of
sixty per cent (60%) in principal amount of the bonds then outstanding may, by
notice in writing given to the Trustee, and to the City Secretary in the manner
provided in Section 8.01 of this Article, waive such default and its consequen-
ces, and rescind such declaration, but no such waiver or rescission shall ex-
tend to or affect any subsequent default or impair or exhaust any right or
power consequent thereon.
SECTION 8.03. Upon the happening of any event of default
as defined in Section 8.01 of this Article, the Trustee, personally or by its
attorneys or agents, may to the extent not prohibited by law enter into and
upon and take possession of all the Trust Estate and each and every part there-
of and exclude the City and its agents, servants and emrloyees wholly therefrom,
and have, hold, use, operate, manage and control the sam- and each and every
part thereof, and in the name of the City or otherwise, as it shall deem beat,
conduct the business thereof and exercise the franchises pertaining thereto
and all the rights and powers of the City and use all of the then existing
property, materials, current supplies, stores, and other assets for that
- 46 -
purpose, and at the expense of the Trust Estate from time to time maintain,
restore, insure and keep insured, the properties, plants, equipment and
apparatus provided or required for use in connection with such business, and
likewise from time to time, at the expense of the Trust Estate, make all such
necessary or proper repairs, renewals and replacements and all such useful
alterations, additions, betterments and improvements as to it may seem judi-
cious, and collect and receive all tolls, earnings, income, rents, issues,
profits and revenues of the same and of every part thereof, and after deduct-
ing therefrom the expenses of operation and all other proper outlays herein
authorized, and all payments of just and reasonable compensation for its own
services, and for the services of its attorneys, agents and assistants, the
Trustee shall apply the residue of the moneys received by the Trustee as
follows;
(a) In case the principal of none of the bonds shall have
become due, /o the payment of the interest in default, in order of the maturity
of the installments of such interest, with interest on the overdue install-
ments thereof at the coupon rates, respectively, borne by the bonds on which
such interest shall be in default, such payments to be made ratably to the
persons entitled thereto without discrimination or preference;
(b) In case the principal of any of the bonds shall have
become due by declaration or otherwise, first to the payment of the interest in
default, in the order of the maturity of the installments thereof, with inter-
est on overdue installments thereof at the coupon rates, respectively, borne
by the bonds on which such interest shall be in default, and next to the pay-
ment of the principal of all bonds then due, such payment to be made ratably
to the persons entitled thereto without discrimination or preference.
When such payments and such other payments required by any
provision of this Deed of Trust, shall have been made in full and if no suit
to enforce this Deed of Trust shall have been begun or sale made as hereinafter
provided and if the City shall have complied with all other provisions of this
Deed of Trust as to which the City shall be in default, the Trustee after mak-
ing such provision as to it may seem advisable for the payment of the next
maturing installment of interest to fall due upon the Bonds, shall restore
- 47 -
the possession of the Trust Estate (other than any cash at the time required
to be held by the Trustee hereunder) to the City.
SECTION 8.04. Upon the happening of any event of default
as defined in Section 8.01 of this Article, if the principal of all of the
bonds outstanding hereunder shall have been declared due and payable as pro-
vided in Section 8.02 of this Article, and whether or not remedies authorized
by Section 8.03 of this Article shall have been pursued in whole or in part,
the Trustee may cause the Trust Estate to be sold, and may proceed to protect
and enforce the rights of the Trustee and the bondholders hereunder in such
manners counsel for the Trustee shall advise, whether for the specific per -
formance of any covenant, condition, agreement or undertaking herein contained,
or in aid of the execution of any power herein granted, or for the enforcement
of such other appropriate, legal or equitable remedies as may in the opinion
of such counsel be more effectual to protect and enforce the rights aforesaid.
The Trustee shall take any such action or actions if requested so to do by the
holders of at least sixty per cent (60%) in principal amount of the bonds then
outstanding hereunder, or any supplement hereto.
SECTION 8.05. Upon the happening of any event of default
as defined in Section 8.01 of this Article, and if the principal of all of the
outstanding bonds shall have been declared due and payable as provided in
Section 8.02 of this Article, then and in every such case, and whether or not
the remedies authorized by Section 8.03 of this Article shall have been pur-
chased in whole or in part, the Trustee shall, but only upon the written re-
quest of the holders of not less than sixty per cent (60%) in principal amount
of the bonds then outstanding hereunder or any supplement hereto, with or with-
out entry, sell to the highest bidder the Trust Estate and all right, title,
interest, claim and demand thereto and the right of redemption thereof, at any
such place or places, and at such time or times and upon such notice and terms
as the Trustee may fix and specify and as may be required by law. In case of
such sale of any of the property subject to this Deed of Trust, notice of such
sale shall first be given by publication in at least one newspaper published in
Nueces County, at least once a week for four successive weeks next preceding
such sale, and by like publication in at least one daily newspaper published
in the City of New York, New York, and by the giving of any other notices which
- 48 -
may be required by law, and upon such sale the Trustee may make and deliv, =r to
the purchaser or purchasers a good and sufficient deed or deeds for the same,
which sale shall be perpetual bar both at law and in equity against the City
and all persons and corporations claiming or to claim such properties. No
purchaser at any sale shall be bound to see to the application of the purchase
money or to inquire as to the authorization, necessity, expediency or regular-
ity of any such sale. Nevertheless, the City if so requested by the Trustee,
shall ratify and confirm any sale or sales by executing and delivering to the
Trustee or to such purchaser or purchasers all such instruments as may be
necessary or it the judgment of the Trustee proper for the purpose which may
be designated in such request.
Such notice of sale shall state that the City has granted
to the purchaser of the mortgaged property a franchise for the operation
thereof for a period of twenty (20) years dating from such purchase.
SECTION 8.06. In the event of any sale, whether made under
the power of sale, hereby granted and conferred or under or by virtue of
judicial proceedings, the whole of the Trust Estate shall be sold in one lot
and as an entirety, unless such sale as an entirety is impossible or impracti-
cable by reason of some statute or otherwise.
SECTION 8.07. The Trustee may from time to time adjourn
any sale to be made by it hereunder by announcement at the time and place of
such adjourned sale, and without further notice or publication except as other-
wise required by law may make such sale at the time and place to which the same
may be so adjourned.
SECTION 8.08. In case an event of default as defined in
Section 8.01 of this Article occurs, and if all of the bonds outstanding here-
under shall have been declared due and payable as provided in Section 8.02
hereof, and in case any judicial proceedings are commenced to enforce any right
of the Trustee or of the bondholders under this Deed of Trust or otherwise, then
as a matter of right, the Trustee shall be entitled to the appointment of a
receiver of the Trust Estate and of the earnings, income or revenues, rents,
issues and profits thereof with such powers as the Court making such appoint-
ments may confer.
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SECTION 8.09. In Casa the Trustee shall have proceeded to
enforce any rights under this Deed of Trust by sale or otherwise, and such pro-
ceedings shall have been discontinued, or shall have been determined adversely
to the Trustee, then and in every such case to the extent not inconsistent
with such adverse decree, the City and the Trustee shall be restored to their
former respective positions and the rights hereunder in respect to the Trust
Estate, and all rights, remedies and powers of the Trustee and in the bond -
hold: -cs shall continue as though no such proceedings had been taken.
SECTION 8.10. In case of any such sale of the Trust
Estate, any bondholder or bondholders or committee of bondholders, or Trustee,
may bid for and purchase such property and upon compliance with the terms of
sale may hold, retain possession and dispose of such property as the absolute
right of the purchaser or purchasers without further accountability and shall
be entitled, for the purpose of making any settlement or payment for the
property purchased, to use and apply any bonds hereby secured and any interest
thereon due and unpaid, whether or not such interest be evidenced by coupons,
by presenting such bonds and coupons in order that there may be credited
thereon the sum apportionable and applicable thereto out of the net proceeds
of such sale, and thereupon such purchaser or purchasdrs shall be credited on
account of such purchase price payable by him or them with the sum apportion-
able and applicable out of such net proceeds to the payment of or as credit on
the bonds and coupons so presented.
SECTION 8.11. The proceeds of any sale of the Trust Estate,
together with any funds at the time held by the Trustee and not otherwise
appropriated, shall be applied by the Trustee as follows:
First: To the payment of the costs, expenses, fees
and other charges of such sale and a reasonable compensation
to the Trustee, its agents and attorneys, and to the discharge
of all expenses and liabilities incurred and advances or dis-
bursements made by the Trustee hereunder.
Second: Any surplus then remaining to the payment of
the whole amount then due or unpaid upon the bonds issued here-
under or any supplement thereto, and then outstanding for prin-
cipal and interest, with interest on overdue principal and over-
due installments of interest at the same rates, respectively,
as were borne by the bonds whereof the principal or install-
ments of interest may be overdue, and in case such proceeds
shall be insufficient to pay in full the whole amount so due
and unpaid, then to the payment of such principal and interest
ratably according to the aggregate amount owing on all bonds
then outstanding without preference or priority of principal
over interest or of interest over principal.
50 -
Third: Any Surplus then remaining to the City or
whomsoever shall be lawfully entitled thereto.
SECTION 8.12. In case of a sale under any of the fore-
going provisions of this Article, whether made under the power of sale herein
granted, or under or by virtue of judicial proceedings,the principal of all
bonds issued hereunder, or any supplement hereto, and then outstanding, if not
previously due, shall immediately thereupon become due and payable, anything
in said bonds or in this Deed of Trust to the contrary notwithstanding.
SECTION 8.13. The remedies herein conferred upon or
reserved to the Trustee or to the holders of bonds hereby secured are not in-
tended to be exclusive of any other remedy, but each remedy herein provided
shall be cumulative and shall be in addition to every other remedy given here-
under or now or hereafter existing, and every power and remedy hereby given to
the Trustee or to the holders of bonds issued hereunder, or any supplement
hereto, may be exercised from time to time as often as may be deemed expedient.
No delay or omission of the Trustee or of any holder of bonds to exercise any
power or right arising from any default hereunder shall impair any such right
or power or shall be construed to be a waiver of any such default or to be
acquiescence therein.
SECTION 8.14. Anything in this Deed of Trust contained
notwithstanding, the holders of sixty per cent (60%) in principal amount of
the bonds hereby secured and then outstanding, shall have the right by an in-
strument or instruments in writing delivered to the Trustee to direct and
control the Trustee as to the method of taking any and all proceedings for
any sale of any or all of the Trust Estate, or for the appointment of a re-
ceiver, if permitted by law, and may at any time cause any proceedings
authorized by the terms hereof to be so taken or to be discontinued or de-
layed, provided however, that such holders shall not be entitled to cause the
Trustee to take any proceedings which in its opinion would be unjustly pre-
judicial to non - assenting bondholders, but the Trustee shall be entitled to
assume that the action requested by the holders of 60% of the then outstanding
bonds will not be prejudicial to non - assenting bondholders un'_ess such non-
assenting bondholders, in writing, show the Trustee how they will be prejudic-
ed.
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SECTION 8.15, No holder of any bond or coupon EMU have
any right as such holder to institute any suit, action or proceedings for the
enforcement of the provisions of this Deed of Trust or for the execution of
any trust hereunder or for the appointment of a receiver or for any other
remedy, hereunder, all rights of action hereunder being vested exclusively in
the Trustee, unless and until such holder shall have previously given to the
Trustee written notice of a default hereunder, and of the continuance there-
of, end also unless the holders of the requisite principal amount of the bonds
then outstanding shall have made written request upon the Trustee and shall
have afforded reasonable opportunity to institute such action, suit or pro-
ceeding in its own name, and unless the Trustee shall have been offered
reasonable indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for thirty
(30) days after receipt of such notification, request or offer of indemnity
shall have failed to institute any such action, suit or proceeding, it being
understood and intended that no one or more holders of the bonds shall have the
right in any manner whatever by his or their action to affect, disturb or
prejudice the lien of this Deed of Trust or to enforce any right hereunder
except in the manner herein provided and for the equal benefit of all holders,
of such outstanding bonds. However, it is further provided that notwithstand-
ing any other provision contained in this Article or elsewhere in this Deed of
Trust, the holders of not less than sixty per cent (60 %) in principal amount
of the bonds then outstanding, without previous notice to or consent by the
Trustee, and without joinder by the Trustee, shall have the right to institute,
intervene in or defend any litigation affecting the bonds.
SECTION 8.16. In any suit or action by the Trustee, aris-
ing under this Deed of Trust or on all or any of the bonds or coupons issued
hereunder, or any supplement hereto, the Trustee shall not be required to
produce such bonds or coupons, but shall be entitled in all things to main-
tain any such suit or action without their production.
SECTION 8.17. If any covenant, agreement, waiver or part
thereof in this Article or elsewhere in this Deed of Trust contained be for-
bidden by any pertinent law, or under any pertinent law be effective to reiieer
this Deed of Trust invalid or unenforceable or to impair the lien hereof, then
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each such covenant, agreement, waiver or part thereof shall itself be and is
hereby declared to be wholly ineffective and this Deed of Trust shall be con-
strued as if the same were not included herein.
ARTICLE IX.
The Trustee
SECTION 9.01. The Trustee accepts the trusts herein
created, but only upon the terms and conditions set forth in this Article IX.
SECTION 9.02. The recitals of fact herein and in said
Bonds contained shall be taken as the statements of the City and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes
no representations as to the value of the mortgaged and pledged property, or
any part thereof, or as to the title of the City thereto, or as to the
security afforded thereby and hereby, or as to the validity of this Deed of
Trust or of the bonds or coupons issued hereunder, and the Trustee shall incur
no responsibility in respect of such matters.
SECTION 9.03. The Trustee shall be under no duty to file
or record or cause to be filed or recorded this Deed of Trust or any instrument
supplemental thereto as a deed of trust, conveyance or transfer of real or
personal property or otherwise, or to re -file or re- record or renew the same,
or to procure any further, other or additional instruments of further assur-
ance, or to see to the delivery to it of any property intended to be subjected
to the terms hereof or pledged hereunder, or to do any act which may be suit-
able to be done for the better maintenance or continuance of the lien cr
security hereof, or for giving notice of the existence of such lien, or for
extending or supplementing the same or to see that any property intended now
or hereafter to be conveyed in trust hereunder is subjected to the lien hereof.
The Trustee shall not be liable for failure of the City to insure or renew
insurance or for responsibility of insurers, or for the amount of insurance
carried by the City on any part of the Trust Estate, or for the failure of the
City to pay any tax or taxes in respect of the mortgaged and pledged property,
or any part thereof, or the income therefrom or otherwise, nor shall the
Trustee be under any duty in respect of any tax which may be assessed against
it or the owners of the bonds in respect of the said property.
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SECTION 9.04. The Trustee may execute any of the trusts
or powers hereof and perform any duty hereunder, either by itself or by or
through its attorneys, agents, or employees, and they shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys, agents, or employees, if reasonable care has been exercised in the
appointment and retention thereof, nor shall the Trustee be otherwise answer-
able or accountable under any circumstances whatsoever, except for its own
negligence or bad faith.
SECTION 9.05• The Trustee shall be under no obligation or
duty to perform any act hereunder or to institute or defend any suit in
respect hereof, unless properly indemnified to its satisfaction. The Trustee
shall not be required to take notice, or be deemed to have knowledge of any
default of the City hereunder, (except as to the performance of obligations of
which the Trustee has primary knowledge such as those under Section 5.03 and
Section 5.04) and may conclusively assume that there has been no such default
unless and until it shall have been specifically notified in writing of such
default by the holders of the percentage in principal amount of the bonds then
outstanding hereinabove specified.
SECTION 9.06. The Trustee shall not be bound to recognize
any person as the holder of a bond unless and until his bond is submitted to
such Trustee for inspection, if required, and his title thereto satisfactorily
established, if disputed.
SECTION 9.07. The Trustee shall be protected in acting
upon any notice, resolution, request, consent, order, certificate, report,
appraisal, opinion, bond, or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties.
The Trustee may consult with counsel (who may be of counsel for the City or
for a bondholder), and with other experts, and the opinion of such counsel or
other experts shall be full and complete authorization and protection in
respect of any action taken or suffered and in respect of any determination
made by it hereunder in good faith and in accordance with the opinion of such
counsel.
SECTION 9.08. The Trustee shall not be obligated or liable
to allow to the City interest on any moneys received by it hereunder, except
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that the Trustee shall pay the City interest on money in the Reserve Account
at the rate or rates it is currently paying its depositors on checking accounts,
balances of similar accounts, if interest on balances is then being so paid.
SECTION 9.09. The City shall pay to the Trustee from time
to time a reasonable compensation for all services rendered by it hereunder and
shall reimburse all of its reasonable expenses, charges and other disbursements
and those of its attorneys, agents and employees, incurred in and about the
administration and execution of the trusts hereby created. All payments so
made to the Trustee by way of compensation, and for reimbursement of expenses,
charges and other disbursements shall be regarded as a maintenance and
operation expense and paid from the System Fund accordingly. In default of
such payments by the City, and as security for such payment the Trustee shall
have a lien therefor on the Trust Estate and the proceeds thereof prior to any
rights of the holders of the bonds and coupons.
SECTION 9.10. The Trustee hereunder or any successor
Trustee may become the owner of bonds and coupon$ with the same rights it would
have it not a Trustee. The Trustee may act as depository for, and permit any
of its officers or directors to act as a member of, or in any other capacity
in respect of any committee formed to protect the rights of the holders of
bonds or to effect or aid in any reorganization growing out of the enforcement
of the said bonds or of this Deed of Trust, whether or not any such committee
shall represent the holders of more than fifty per cent (50%) in principal
amount of the Bonds.
SECTION 9.11. The Trustee and any successor to the
Trustee may resign and be dischaged from the trust created by this Deed of
Trust by giving to the City Secretary notice in writing and by giving the
bondholders notice through publication thereof at least once a week for three
successive calendar weeks, the first publication to be not less than thirty
(30) days and not more than sixty (6o) days prior to the effective date of
such resignation, in one newspaper published and having general circulation
in the City of Corpus Christi and in a financial newspaper or journal publish-
p
ed in the City of New York, New York. �V-ach of such notices shall specify the
date on which such resignation is totake effect. Such resignation shall take
effect on the day specified in such notice, unless previously a successor
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Trustee shall have beon appointed, either by the bondholders or by the City as
hereinafter provided, in which event such resignation shall take effect im-
mediately upon the appointment of such successor Trustee.
SECTION 9.12. The Trustee or any successor Trustee may
be removed at any time by the holders of a majority in principal amount of the
bonds secured hereby and at the time outstanding, upon payment to the Trustee
so removed of all moneys then due to it hereunder, by an instrument or con-
current instruments in writing executed in duplicate by such holders. One
copy shall be filed with the City Secretary and the other with the Trustee so
removed.
SECTION 9.13. In case at any time the Trustee or any
successor Trustee shall resign, die, be dissolved, or be removed, or otherwise
shall become disqualified to act or incapable of acting, or in case control of
the Trustee or of any successor Trustee or of its officers shall be taken over
by any public officer or officers, a successor Trustee may be appointed by the
holders of a majority in principal amount of bonds secured hereby and at the
time outstanding, by an instrument or concurrent instruments in writing signed
and duly acknowledged by such bondholders or by their attorney -in -fact duly
authorized, and filed, one copy with the retiring Trustee, and the other with
the successor Trustee, notification thereof being given to the City Secretary
by such successor Trustee; but until a successor Trustee shall be so appointed
by the bondholders as herein authorized the City by an instrument in writing
duly authorized by resolution shall in such case appoint a successor to the
Trustee. In the case of any appointment by the City of a successor to the
Trustee, the City shall forthwith cause notice to be published once in each
week for two consecutive calendar weeks in one newspaper published and having
general circulation in the City of Corpus Christi and in one financial news-
paper or journal published in the City of New York, New York. Every such
successor Trustee so appointed by the bondholders, by a court of competent
jurisdiction, or by the City shall be a bank or trust company in good standing,
organized and doing business under the laws of the United States or of any
State, and having its principal office in the State of Texas or in the Borough
of Manhattan, the City of New York, New York, or in the City of Chicago,
Illinois, and having a combined capital and surplus of not less than
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$2,500,000.00 which is authorized under the laws of the jurisdiction of in-
corporation to exercise corporate trust powers and is subject to supervision
or examination by a Federal or State authority.
SECTION 9.14. Any successor Trustee appointed hereunder
shall execute, acknowledge and deliver to its predecessor Trustee, and also
to the City, an instrument accepting such appointment hereunder, and there-
upon such successor Trustee, without any further act, deed or conveyance shall
become fully vested with all the estate, properties, rights, powers, trusts,
duties and obligations of its predecessor in trust hereunder, with like effect
as if originally named as Trustee herein; but the Trustee ceasing to act
shall, nevertheless, on the written request of the City, or of the successor
Trustee, execute, acknowledge and deliver such instruments of conveyance and
further assurance and do such other things as may reasonbly be required for
more fully and certainly vesting and confirming in such successor Trustee all
the rights, title and interest of the Trustee which it succeeds, in and to the
property subject to the terms hereof and such rights, powers, trusts, duties
and obligations, and the Trustee ceasing to act shall also, upon like request,
pay over, assign and deliver to the successor Trustee, any money or other
property subject to the lien of this Deed of Trust, including any pledged
securities which may then be in its possession. Should any deed, conveyance
or instrument in writing from the City be required by the new Trustee for more
fully and certainly vesting in and confirming to such new Trustee such estate,
properties, rights, powers and duties, any and all such deeds, conveyances and
instruments in writing shall, on request, be executed, acknowledged and deliver-
ed by the City.
In case any of the bonds to be issued hereunder or any
supplement hereto, shall have been authenticated but not delivered, any
successor Trustee may adopt the certificate of authentication of the Trustee
or of any successor to the Trustee; and in case any of the bonds shall not have
been authenticated any successor to the Trustee may authenticate such bonds in
its own name; and in all such cases such certificates shall have the full force
which it is anywhere in the bonds or in this Deed of Trust provided that the
certificate of the Trustee shall have.
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SECTION 9.15. Any notice, request or other instrument
required by this Deed of Trust to be served on the City or sent to the City
shall, unless otherwise expressly provided, be considered to have been suffi-
ciently given when sent by registered mail to the City Secretary addressed to
the City Eall in the City of Corpus Christi, Any notice, request or other
writing by or in behalf of the City or any of the bondholders delivered to the
Trustee at its office in Dallas, Texas, shall constitute proper delivery of
such notice.
SECTION 9.1.6. The Trustee shall authenticate and turn ever
to the City Official then performing the duties of City Treasurer, or his order,
for delivery the bonds secured by this Deed of Trust.
SECTION 9.17. The City Secretary shall file with the
Trustee annually a certificate showing the names of the then members of the
City Council of the City of Corpus Christi. The Trustee shall be entitled for
all purposes of this Deed of Trust to assume that the persons whose names
appear on the latest list filed with it continue to hold their offices until
it is notified to the contrary by the City Secretary.
SECTION 9.18. The Trustee shall not be accountable in any
manner whatsoever for any action of the City or failure of the City to act or
for any action or failure to act by the City's depository or for any funds un-
less and until such funds shall have been received by the Trustee. Nor shall
the Trustee be liable for application by the City of revenues from the Trust
Estate.
SECTION 9.19. All cash collected by, or payable to, the
Trustee shall be paid to, and deposited with, and all bonds and other obliga-
tions or securities shall be held by, the Trustee, except as otherwise requir-
ed by law.
SECTION 9.20. The holder of a bond shall be permitted at
reasonable times duxi -mg, regular business hours and in accordance with reason-
able regulations psescr° bed by the Trustec, to examine at the principal office
of the Trustee a copy of any current report theretofore filed with the Trustee
showing the condition of the Trust Estate.
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ART.ICIE X.
franchise
SECTION 10.01. In the event that any sale of the Trust
Estate shall be made under any of the provisions of this Deed of Trust for the
enforcement of the lien of this Deed of Trust, the City of Corpus Christi
hereby grants to the purchaser or purchasers at such sale a franchise to
operate the property so purchased for a term of twenty (20) years dating from
such purchase, subject to all laws regulating same then in force.
.ARTICLE XI.
Modification of This Deed of Trust
SECTION 11.01, The holders of seventy -five per cent (75 %)
in principal amount of the bonds at any time outstanding (not including in any
case any bonds which may then be held or owned by or for the account of the
City, but including the Additional Bonds issued under the provision of this
Deed of Trust, and such refunding bonds as are specified in Section 2.04 of
Article II hereof and are not owned by the City) shall have the right from time
to time to consent to and approve the execution by the City and the Trustee of
such Deed of Trust or Deeds of Trust supplemental hereto as shall be deemed
necessary or desirable by the City for the purpose of modifying or amending
any of the terms or provisions contained in this Deed of Trust, or in any Deed
of Trust or Deeds of Trust supplemental thereto, or contained in the ordinance
authorizing the Bonds secured by this Deed of Trust, provided, however, that
nothing herein contained shall permit or be construed as permitting the modifi-
cation or amendment of the terms and conditions contained in this Deed of Trust
or in said ordinance or in the bonds so as to:
(a) Make any change in the maturity of the bonds;
(b) Reduce the rate of interest borne by any of the
bonds;
(c) R��ducn the a:nc-�mt of th.� principal payable on the
bonds;
(d) Modify the terms of payment of principal or of
interest upon the bonds or any of them or impose any conditions
with respect to such payment;
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(e) Affect the rights of the holders of less than
all of the bonds then outstanding;
(f) Change the minimum percentage of the principal
amount of bonds necessary for consent to such modification.
If at any time the City shall request the Trustee to enter
into such supplemental Deed of Trust, the Trustee, unless it shall deem that
such proposed supplemental Deed of Trust shall contain provisions which effect
its -rights or obligations and to which it is unwilling to assent, shall at the
expense of the City cause notice of the proposed execution of such supplemental
Deed of Trust to be published in a newspaper or journal published in the City
of New York, New York, and in a newspaper of general circulation published in
the City of Corpus Christi, once during each calendar week for at least four
successive calendar weeks. Such notice shall briefly set forth the nature of
such proposed supplemental Deed of Trust and shall state that a copy thereof
is on file at the principal office of the Trustee for inspection by all holders
of Bonds.
A substantial copy of such notice shall be mailed by the
trustee to each holder of registered bonds, but the failure to mail such
notice in any instance shall not affect the sufficiency of the consent by the
holders of 75% of the bonds. Such mailed notice is for the convenience of such
registered holders and is not a prerequisite to the modification of the Deed of
Trust.
Whenever at any time within one year from the date of the
first publication of said notice, the City shall deliver to the Trustee an in-
strument or instruments exenuted by the holders of at least seventy -five per
cent (75 %) in aggregate principal amount of the bonds then outstanding as in
this section defined, which instrument or instruments shall refer to the pro-
posed supplemental Deed of Trust described in said notice and shall specifi-
cally consent to and approve the execution thereof in substantially the form
of the copy thereof on fi:_e ;a. th the Trustee, thereupon, but not otherwise, the
Trustee shall execute the said supplemental Deed of Trust in substantially the
said form without liability or responsibility to any holder of any bond,
whether or not such holder shall have consented thereto.
-6o-
If the holders of at least seventy -five per cent (750) in
aggregate principal amount of the bonds outstanding as in this section defined
at the time of execution of any such supplemental Deed of Trust, or the pre-
decessors in title of such holders, shall have consented to and approved the
execution thereof as herein provided, no holder of any bond, whether or not
such holder shall have consented to or shall have revoked any consent as in
this section provided, shall have any right or interest to object to the
execution of such supplemental Deed of Trust or to object to any of the terms
or provisions therein contained or to the operation thereof, or to enjoin or
restrain the Trustee of the City from executing the same or from taking any
action pursuant to the provisions thereof.
Upon the execution of any supplemental Deed of Trust pur-
suant to the provisions of this section, this Deed of Trust and the ordinance
authorizing the bonds shall be and be deemed to be modified and amended in
accordance with such supplemental Deed of Trust, and the respective rights,
duties and obligations under this Deed of Trust of the city, the Trustee, and
all the holders of outstanding bonds shall thereafter be determined, exercised
and enforced hereunder, subject in all respects to such modifications and amend-
ments.
Any consent given by the holder of a bond pursuant to the
provisions of this section shall be irrevocable for a period of six months from
the date of the first publication of the notice provided for in this section,
and shall be conclusive and binding upon all future holder of the same bond
during such period. Such consent may be revoked at any time after six months
from the date to the first publication of such notice by the holder who gave
such consent or by a successor in title, by filing notice with the Trustee in
form satisfactory to it of such revocation of consent, but such revocation
shall not be effective if the holders of seventy -five per cent (75%) aggregate
principal amount of the bonds outstanding as in this section defined have, prior
to the attempted revocation, consented to and approved the supplemental Deed of
Trust referred to in such revocation. For the purposes of this section, owner-
ship of bonds shall be established in the manner provided in Section 12.01 of
Article XII of this Deed of Trust.
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Any supplemental Deed of Trust executed in accordance with
the provisions of this Article shall thereafter form a part of this Deed of
Trust and all the terms and conditions in any such supplemental Deed of Trust
to any provision authorized to be contained therein shall be and be deemed to
be part of the terms and conditions of this Deed of Trust for any and all pur-
poses.
ARTICLE XII.
General provisions
SECTION 12.01. Any notice, request or other instrument
required by this Deed of Trust to be signed or executed by bondholders may be
executed by the execution of any number of concurrent instruments of similar
tenor, and may be signed or executed by such bondholders in person or by agent
appointed in writing. As a condition for acting thereunder the Trustee may
demand proof of the execution of any such instrument and of the fact that any
person claiming to be the owner of any of said bonds is such owner and may fur-
ther require the actual deposit of such bond or bonds with the Trustee. The
fact and date of the execution of such instrument may be proved by the certi-
ficate of any officer in any jurisdiction who by the laws thereof is authorized
to take acknowledgments of deeds within such jurisdiction, that the person
signing such instrument acknowledged before him the execution thereof, or may
be proved by an affidavit of a witness to such execution sworn to before such
Officer.
The amount of bonds held by any person executing such in-
strument as a bondholder and the fact, amount and numbers of the bonds held by
such parson and the date of his holding the same may be proved by a certificate
executed by any responsible trust company, bank, bankers, or other depository,
in a form approved by the Trustee, snowing that at the date therein mentioned
such person had on deposit with such depository the bonds described in such
certificate; provided, however, that at all times the Trustee may require the
actual deposit of snch bon(. or bonds with the Trustee.
SECTION 12.02. The covenants, agreements, conditions,
promises and undertakings in the Deed of Trust shall extend to and be binding
upon the successors and assigns of the City and all of the covenants hareoi
shall bind such successors and assigns, and each of them, jointly and severally.
- 62 -
All the covenants, conditions and provisions hereof shell be held to be for
the sole and exclusive benefit of the parties hereto and their successors and
assigns and of the holders from time to time of Said bonds and coupons.
No transfer of the Trust Estate, of any part thereof, by
the City and no extension of the time of payment of any of said bonds or
coupons after such transfer shall operate to release or discharge the City,
it being agreed that the liability of the City shall continue as principal
until all of said bonds and coupons are paid in full, notwithstanding any
transfer of said property or subsequent extension of time to the then owner,
or other act which might serve as alegal or equitable discharge of a surety.
SECTION 12.03. This Deed of Trust shall operate
effectually as a lien on all property conveyed, mortgaged or pledged hereby,
whether real, personal or mixed. Failure to file said instrument in the office
of the County Clerk of the County in which the Trust Estate is situated shall
in no wise invalidate such lien, but this instrument may be filed and recorded
in the records of each and every County in which the Trust Estate or any part
thereof is situated in the manner in which a Deed of Trust on real estate is
filed and recorded, and may remain in his office on file as a Chattel Mortgage
covering the personal property encumbered hereby. The City covenants and
agrees that this Deed of Trust will be so filed as a Deed of Trust and as a
Chattel Mortgage in each and every County in which any part of the Trust
Estate is situated.
SECTION 12.04. If the lien of this Deed of Trust shall be
or shall ever become ineffectual, invalid or unenforceable against any property
hereby mortgaged or pledged because of want of power or title in the City, the
inclusion of any such property described herein shall not in any way affect
or invalidate the provisions or lien hereof against such property as the City
had the right to mortgage or pledge.
SEO ,0N 12.05. No holder of bonds issued under this Deed
of Trust nor of any coupons representing interest on such bonds shall ever have
the right to demand payment of such bonds or coupons out of funds raised or to
be raised by taxation.
SECTION 12.06. Any request or consent of the holder of
any Bonds secured hereby given for any of the purposes of this Deed of Trust
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shall bind all future holders of the same bond or bonds issued in exchange
therefor or in substitution thereof in respect of anything done or suffered
by the City or the Trustee in pursuance of such request or consent.
SECTION 12.07. Although this Deed of Trust for convenience
and for the purpose of reference is dated as of December 11 1953, the actual
dates of execution by the City and by the Trustee are as indicated by their
respective acknowledgments hereto annexed.
ARTICLE XIII.
Defeasance
SECTION 13.01. When all of the bonds and coupons hereby
secured shall have been paid or redeemed, or, all of the Bonds having become
due by reason of maturity or proper call for redemption, and the City shall
have provided for such payment by depositing in cash with the Trustee the
amount necessary for such payment or redemption and shall also have paid, or
caused to be paid, all sums accrued and payable hereunder by the City, then and
in that case the City shall be entitled to have all of the Trust Estate revert
to it and to have the estate, right, title and interest of the Trustee in
respect thereof cease, determine and become void. Then, if the City shall so
request in writing, the Trustee upon the cancellation of all bonds and coupons
for the payment of which money shall not have been deposited in accordance with
the provisions of this Deed of Trust, shall at the cost and expense of the
City execute and deliver to the City proper instruments acknowledging satis-
faction of the Deed of Trust. Money deposited for the payment of bonds and
coupons under the provisions hereof shall be held by the Trustee as a special
trust fund for the account of the holder or holders of such bonds and coupons
and so far as necessary for such purposes shall be applied to the payment of
such bonds and coupons upon presentation and surrender thereof.
IN WITNESS WHEREOF, the City of Corpus Christi, Texas,
acting through and being duly authorized thereunto by its governing body, the
City Council, has caus-�6 this Decd of Trust in quadruplicate originals to be
signed in its name by its Mayor, and its corporate seal to be hereunto affixed,
and to be attested by its City Secretary and said Mercantile National Sank at
Dallas, to evidence its acceptance of the trusts hereby created, has caused
its corporate name and seal to be hereunto affixed, and this Decd of Trust to
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be signed by Clarence E. Sample, its Trust Officer, and to be countersigned
and said seal to be attested by its Cashier or Assistant Cashier, all as of
the day and year first above written.
ATT. 5
'C =H Secsstary.
(CIT. SEAL)
ATTEST:
1cs Asii. tan. Cssbier. .
(BANI{ SEAL)
CITY OF CORPUS CMISTI, TEXAS
MY
M09CANTI12 NATIONAL BANK AT DALLAS,
DALLAS, TEXAS, T %ustee,
BY
Its Trust Officer.
b -
THE STATE OF TEXAS
COUNTY OF NUECES
BEFORE ME, THE UNDERSIGNED AUTHORITY, in and for Nueces
County, Texas, on this day personally appeared A. A. Lichtenstein, Mayor, and
T. Ray Kring, City Secretary, respectively, of the City of Corpus Christi,
Texas, known to be to be the persons whose names are subscribed to the fore-
going instrument and known to me to be, respectively, the Mayor and City
Secretary of the City of Corpus Christi, a municipal corporation, and each
acknowledged to me that he executed the same for the purposes and consideration
therein expressed and in the capacity therein stated, as the act and deed of
said City of Corpus Christi, Texas.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the
day of , 195+.
(SEAL)
Notary Public in and for Nueces County,
Texas.
-(S -
THE STATE OF TMAS
COUNTY OF DALLAS
BEFORE ME, TIE UMMSIMiMD AUTHORITY, in and for Dallas
County, Texas, on this day personally appeared C74FI ?NCE E. SMPLE, Trust
Office, and , Assistant Cashier, rospecti'v�-:!'y, of
MMCANTILE NATIONAL BANK AT DALLAS, known to me to be th..o pax>ons who:-.. names
are subscribed to the foregoing instrument and known to me to be, respectively,
the °'?ast Officer and Assistant Cashier of PQFI.`2CANTIIE NATIONAL BANK AT DAL'_AS,
a corporation, and each acknowledged to me that he executed the same for the
purposes and consideration therein expressed and in the capacity therein
stated as the act and deed of said MERCANTILE NATIONAL BANK AT DALLAS.
GIVEN UNDER MY HAND AND SEAT. OF OFFICE, this the day
Of 195•
Notary public, in and for Dallas County,
Texas.
(SEAL)
THE STATE OF T.7:AS
COUNTY OF NUECES
I , County Clerk of Nueces County,
Texas, do hereby certify ti4t the foregoing instrument of writing dated on
the lot day of December, 193, with its certificates of authentication, was
fi.lcd for record in my office on the day of _, A. D., 1954,
at o'clock, . M.,'and duly recorded this day of �_,
19; +, at o'clock, . M., in the Deed of Trust Records of said County,
in Volume , on pages �
I do further certify that an executed and acknowledged
copy of said instrument was filed in my office on the day of
1954, at o'clock, _ _. M., as a chattel mortgage.
WITNESS MY OFFICIAL HAND and seal of office this the
day of , 1954.
County Clerk, Nueces County, T�Xaa.
(SEAL)
Try" STATE OF i'EYAS
CO!Pq-j Y OF JIM WELLS
I, , County Clerk of Jim Wells County,
Texas, do hereby certify that the foregoing instrument of writing dated on the
1st day of December, 1953, with its certificates of authentication, was failed
for, record in my office on the day of , A. D., 1954, at
o'clock, . M., and duly recorded this day of
at o'clock, . M., in the Deed of Trust Records of said County,
in Volume , on pages
I do further certify that an executed and acknowlecged
copy of said instrument was filed in my office on the day of ,
1954, at o'clock, _ . M., as a chattel mortgage.
WITNESS MY OFFICIAL HAND and seal of office this the
day of , 1954.
(S:;AL)
i.
Count „> l lWels on
TiE STATE OF TEXAS
COUNTY OF LIVE OAK
I, , County Clerk of Live Oak County;
Texas, do hereby certify that the foregoing instrument of writing dated on
the 1st day of December, 19531 with its certificates of authentication,
was filed for record in my office on the day of ,
A.D. 10,54, at +` o'clock _ M., and duly reocrded this day of
, 1954, at o'clock ` .M., in the Deed of Trust
Records of said County, in Volume , on pages
I do further certify that an executed and acknowledged cony
of said instrument was filed in my office) on the day of ,
1954, at o'clock `.M., as a chattel mortgage.
WITNESS MY OFFICIAL HAND and seal of office this the
day of , 1954•
County Clerks 5i.re' Oax C —.,Ty, Te =s.—
(SEAL)
THE STATE OF TEXAS
COUNT: OF SAN PATRICIO
I, _ _ —, County Clerk of San Patricio
County, Texas, do hereby certify that the foregoing instrument of writing
dated on the lst day of December, 1953, with its certificates of authenti-
cation, was riled for record in my office on the day of ,
A. D., 1954, at o'clock, . M., and duly recorded this day of
, 1954, at T o'clock, M., in the Deed of Tcust
Records of said County, in Volume , on pages __
I do further certify that an executed and acknowledged
copy of said instrument was filed in my office on the day of ,
1954, at o'clock, __. M., as a chattel mortgage.
WITNESS MY OFFICIAL HAND and seal of office this the
day of , 1954.
(SEAL)
County C erk, San Patricio County, Texas.
12. Said Deed of Trust and all of the provisions thereof are
hereby made a part of this ordinance. While any bonds issued under said
Deed of Trust are outstanding the City Council hereby agrees that it will
pass such ordinances and adopt such resolutions from time to time as may
be required to make fully effective each of the terms and provisions of said
Deed of Trust, and its officers and employees are hereby authorized to
execute ouch instruments and documents and make such publications as from
time to time may be required or needed to assure full compliance with
the terms and provisions of said Deed of Trust or any ordinances or
resolutions subsequently passed or adopted by the City Council in pursuance
hereof.
13, After said bonds shall have been executed they shall be
submitted to the Attorney General for his approval, and after such approval
they shall be registered by the Comptroller of Public Accounts and
authenticated by the Trustee as required in said Deed of Trust.
14. Additional Waterworks System Revenue Bonds may be issued
to be secured by a pledge of the revenues and a lien upon the properties
of the Waterworks System and upon the franchise of the System of equal
dignity with the pledge and liens securing the Waterworks Revenue Refunding
Bonds herein authorized, provided that such additional Waterworks Revenue
Bonds shall be issued for improvements or extensions or repairs or replacements
of and to the Waterworks System or for any one or more or all of such
purposes, subject to the limitations contained in Article II of said Deed
of Trust, hereinabove in Section 11 made a part of this ordinance.
15. In the event the City later obtains necessary authority it
may combine the operation of its waterworks and sanitary sewer systems. If
and when such event occurs the bonds of the issue herein authorized, together
with revenue bonds issued for sanitary sewer purposes, then outstanding
and any additional revenue bonds theretofore or thereafter issued for
waterworks or sanitary sewer purposes, will be payable from and secured by
a pledge of and lien on the revenues of such combined systems, and a mortgage
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on the waterworks systea :, and, if so prescribed by the City may be
further secured by a mortgaQa on the sanitary sewer system in the manner
and to the extent permitted by law at such time. Section 2.06, Article II
of said Deed of Trust shall govern the method and manner of exercising
the right thus reserved to the City to later combine the operations of
its waterworks and sanity y sewer systems.
16. The holders of the bonds herein authorized shall be and
are hereby subrogated to all the rights had and possessed by the holders of
the bonds refunded hereby, except to the extent such rights have been
expressly altered or changed by this ordinance and the Deed of Trust herein
authorized to be executed and delivered.
17. The Comptroller of Public Accounts of the State of Texas is
authorized to receive from the holders, or their designees, the $3,831,000.00
principal amount of outstanding bonds of the City, more particularly
described in the preamble of this ordinance, and to deliver to said holders,
or their designees, in exchange therefor, the refunding bonds of the issue
herein authorized on the basis of par for per.
18. That all ordinances, resolutions and orders or parts
thereof in conflict herewith are, to the extent of such conflict, hereby
repealed.
19. That if any section, provision or part hereof shall be
held to be invalid or ineffective for any reason, the remainder hereof shall
nevertheless remain in full force and effect.
20. The fact that urgeptly needed improvements, extensions
and repairs cannot be made to the City's waterworks system until the bonds
and Deed of Trust herein authorized have been issued and executed creates
a public emergency and an imperative public necessity requiring the suspension
of the Charter requirement that no ordinance shall be passed finally on
the date it is introduced, and the Mayor having declared that such public
emergency exists and having requested the suspension of such Charter rule
-8-
and the passage finally cf thic on the day of its introduction
it is accordingly so c •�d that this ordinance shall take effect and
be in full force from a.id, rafter i
PASCED MiD APMObr'D
ATTEST:
City Se,_etary
(CITY SEAL)
The foregoing Ordinance, Deed of Trust, and form of bond
and coupon therein contained have been approved as to form and correctness
this -3'-�day of , 1954.
City Attorney
M
CORPUS CHRISTI, TEXAS
195
TO THE MEMBERS OF THE CITY COUNCIL
CORPUS CHRISTI, TEXAS
GENTLEMEN:
FOR THE REASONS SET FORTH IN THE EMERGENCY CLAUSE OF
THE FOREGOING ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY
EXIST FOR THE SUSPENSION OF THE CHARTER RULE OR REQUIREMENT THAT NO
ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS
INTRODUCED, AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT
THREE MEETINGS OF THE CITY COUNCIL; I, THEREFORE, HEREBY REQUEST
THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS THIS
ORDINANCE FINALLY ON THE DATE IT IS INTRODUCED, OR AT THE PRESENT
MEETING OF THE CITY COUNCIL.
RESPECTFULLY,
J y3
J
MAYOR
CITY pF CORPUS CHRISTI, TEXAS
THE CHARTER RULE WAS SUSPENDED BY THE
FOLLOWING VOTE:
A. A. LICHTENSTEIN
ELLROY KING���,
I
P. C. CALLAWAY
JAMES A. NAISMITH
/
W. JAMES BRACE
THE ABOVE ORDINANCE WAS PASSED BY THE
t
FOLLO NG VOAE:
A. A. LICHTENSTEIN /y\
ELLROY KING
P. C: CALLAWAY
JAMES S. NAISMITH
W. JAMES BRACE