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<br />"Year" or "fiscal year" means the regular fiscal year used by the Authority in connection with the operation
<br />of the System, which may be any 12 consecutive month period established by the Board, presently October I to
<br />September 30.
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<br />Section 2. DESCRIPTION OF BONDS. The authorization and description of the Bonds and designation of
<br />certain rights respecting the Bonds shall be as follows:
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<br />2.01. Bond Amount. Name. and Pumose. The Bonds to be designated as "LA PORTE AREA WATER
<br />AUTHORITY CONTRACT REVENUE REFUNDING BONDS, SERIES 1999," are hereby authorized to be issued
<br />and delivered in accordance with the Constitution and laws of the State of Texas, in particular the Act and Chapters
<br />49 and 54 of the Texas Water Code, as amended, in the principal amount of $8,080,000 for the purpose of refunding
<br />the Refunded Bonds. The Authority hereby designates the Bonds to be a "qualified tax-exempt obligation" within
<br />the meaning of section 26S(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the "Code").
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<br />2.02. Form. Numbers. Date. and Denominations. The Bonds shall be issued and delivered in fully
<br />registered from without coupons, shall be dated as of September IS, 1999, and shall each be in denominations of
<br />$5,000 or any integral multiple thereof (up to the maximum principal amount of the Bonds maturing in the year
<br />involved). Initially, the Bond numbered I-I in the principal amount of $8,080,000 shall be issued. Bonds registered
<br />and delivered in exchange for any of the Initial Bond surrendered for transfer or exchange shall be numbered from
<br />R-I upward in the order that they are authenticated and delivered by the Paying Agent/Registrar.
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<br />2.03. Interest. Maturities. and Pavment. The Bonds shall bear interest (computed on the basis of a 360-day
<br />year of twelve 30-day months) from September IS, 1999, payable March IS, 2000, and each September IS and
<br />March IS thereafter until the principal sum is paid in full. Payment of interest shall be made to the registered owner
<br />of each Bond as shown on the Bond Register provided for in Section 2.05 hereof as of the 15th day of the calendar
<br />month next preceding the interest payment date by check or draft mailed by the Paying AgentlRegistrar to the
<br />address of each such owner as it appears on such Bond Register on the date aforesaid. The Bonds shall mature and
<br />become payable, subject to prior redemption in accordance with the provisions of Section 2.04 hereof, on March IS
<br />of each of the years and in the principal amount set forth in the schedule below and shall bear interest at the
<br />respective rates per annum set forth opposite the y.ear of maturity in such schedule, to-wit:
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<br />Year Amount Interest Rate Year Amount Interest Rate
<br />2002 $370,000 % 2010 $525,000 %
<br />2003 385,000 2011 550,000
<br />2004 405,000 2012 580,000
<br />2005 420,000 2013 615,000
<br />2006 445,000 2014 640,000
<br />2007 460,000 2015 670,000
<br />2008 485,000 2016 705,000
<br />2009 505,000 2017 320,000
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<br />The principal of the Bonds shall be payable, without exchange or collection charges, in any coin or
<br />currency of the United States of America which, on the date of payment thereof, is legal tender for the payment of
<br />debts due the United States of America, upon their presentation and surrender as they become due or at their earlier
<br />redemption date, if any, at the principal office of the Paying Agent/Registrar.
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<br />2.04. Optional Redemotion. The Authority reserves the right to redeem, in whole or from time to time in
<br />part, all of the Bonds on March 15,2010, or any date thereafter, by paying the principal thereof and accrued interest
<br />thereon. The Authority shall, at least 45 days prior to the date fixed for redemption (unless a shorter notice shall be
<br />satisfactory to the Paying AgentlRegistrar), notifying the Paying AgentlRegistrar of such date and, if less than all of
<br />the Bonds within any maturity are to be redeemed, the particular Bonds within each maturity to be redeemed. The
<br />registered owner of any Bond, all or a portion of which has been called for redemption, shall be required to present
<br />such Bond to the Paying AgentJRegistrar for payment of the principal of, and accrued interest on, that portion of the
<br />Bond called for redemption; provided, however, upon the surrender of any such Bond, the Authority shall execute
<br />and the Paying AgentlRegistrar shall authenticate and deliver to the registered owner thereof a new Bond or Bonds
<br />of the same maturity in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered.
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