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HomeMy WebLinkAboutOrdinance 2863 ORDINANCE NO. 2863 AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICHLAND HillS, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005"; specifying the terms al1d features of said bonds; levyi~ a continuing direct annual ad valorem tax for the payment of said bOnds; providing for the -redemption of certain. outstanding obligations of the City; and resolving other matters incident and related to the· issuance, sale, payment and delivery of said· bonds, including the approval and execution of . a Paying Agent/Registrar Agreement, a Purchase Agreement and a Special.Escrow Agreement and the approval and distribution of an Official Statement; and p~oviding an effective date. WHEREAS, fhe City Council of the City of North Richland Hills, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding obligations totaling in . original principal amount $9,235,000 of the following issues or series (collectively ·hereinafter called the "Refunded Obligations"), to wit: (1) City of North Richland Hills, Texas, General Obligation Bonds, Series 1996, dated May 1, 1996, maturing on February 15 in each of ·the years 2008 and 2009, and aggregating in principal amount $720,000 (the "Series 1996 Refunded Bonds"); (2) City of North Richland Hills, Texas, Tax and Drainage Utility System Surplus Revenue Certificates of Obligation, Series 1996, dated May 1, 1996, maturing on February 15 in each of the years 2008 and 2009, an~ aggregating in principar" amount $125,000 (the "Series 1996 Refunded fl Certificates"); (3) City of North Richland Hills, Texas, General Obligation Bonds, Series 1997, dated· April 15, 1997, maturing on February 15 in each of the years 2010 through 2012, and aggregating h, principal amount $615,000 (the "Series 1997 Refunded Bonds"); (4) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Revenue (Limited Pledge) Certificates of Obligation, Series 1997, dated April 15, 1997, maturing on February 15 in each of the years 2009 through 2013, and aggregating in principal amount $310,000 (the "Series 1997 Refunded Certificates"); (5) City of North Richland Hills, Texas, General Obligation Bonds, Series 1998, dated May 1, 1998, maturing on February 15 in each of the years 2012 and 2018, and aggregating in principal amount $1,015,000 (the "Series 1998 Refunded Bonds"); (6) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) "Revenue Certificates of Obligation, Series 1998, dated May 1, 1998, maturing on February 15 in each of the years 2012 through 2018, and aggregating in principal amount $2, 115,000 (the. "Series 1998 Refunded Certificates"); 45681117.1/10511518 (7) City of North Richland Hills, Texas, General Obligation B9nds¡ Series 1999, dated April 15, 1999, being a portion of such bonds maturing on February 15 in each of the years 2015 and 2018, and aggregating in principal amount $500,000 (the "Series 1999 Refunded Bonds"); (8) City of North Richland Hills, Texas, Tax and Wat~rworks and· Sewer System (Limited Pledge) Revenue Certificates of Obliga~ion, Series 1999, dated April 15, 1999, maturing on February 15 in each of the years 2015, 2017 and 2019, and aggregating in prihcipal amount $875,000 (the "Series 1999 . Refunded Certificates"); . (9) Ci~ of North Richland Hills, Texas, General Obligation Bonds, series 2000, dated May 1, 2000, maturing on February 15 in each of the years 2013 through. 2020, and aggregating in principal amount $1 ,080,000 (the "Series 2000 Refunded Bonds"); (10) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (limited Pledge) Revenue Certificates of Obligation, Series 2000, dated May 1, 2000, maturing on February 15 in each of the years 2013 through 2020, and aggregating in principal amount $920,000 (the "Series 2000 Refunded Certificates"); and ' (11) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2001, dated April 15, 2001, maturing on February 15"in each of the years 2016 through 2021, and aggregating in principal amount $960,000 (the "Series 2001 Refunded Certificates"); AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with any place of payment for the Refunded Obligations, or other authorized depository, and such deposit, when made in accordance with said statute, shall constitute the making -of firm banking and financial arrangements for the· discharge and final payment of the Refunded Obligations; and WHEREAS, the City Council hereby finds and determines that the Refunded Obligations should be refunded at this time, and such refunding will result in the City saving approximately $619,841.53·in debt service payments on such indebtedness and further provide present value savings of approximately $453,271.90; now, therefore, BE IT ORDAINED BY THE 'CITY COUNCil OF THE. CITY OF NORTH RICHLAND HillS, TEXAS: SECTION 1: Authorization - Desianation - PrinciDal Amount - Puroose. General· obligation bonds of the City shall be and are hereby authorized to be issued in. the aggregate principal amount of $9,930,000 to be designated and bear the title· "CITY OF NORTH RICHLAND HillS, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005" (hereinafter referred to as the "Bonds"), for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations") ~nd to pay costs of. issuance, .in accordance with the 45681117.1/10511518 2 - . c~.' .~.~ ,C.·_ ,..- ~~..¡.~ . Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1207. SECTION 2: Fullv Reaistered Obliaations - Bond Date -Authorized Denominations-Stated Maturities-Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated November 1, 2005 (the "Bond Date"), shall ~ in denominations . of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall· become due and payable on February 15 in each of the years and in principal amounts' (the "Stated Maturities") in accordance with the following schedule: Year of Principal . Interest Stated Maturity Amount Rate ( s) 2006 $ 230,000 3.50% 2007 70,000 3.50% 2008 500,000 3.50% 2009 550,000 3.50% 2010 330,000 3.50% 2011 335,000 3.50% 2012 780,000 3.50% 2013 825,000 3.50% 2014 840,000 3.50% 2015 1 ,000,000 4.00% 2016 1,145,000 4.00% 2017 . 1,130,000 4.00% 2018 1,115,000 4.00% 2019 565,000 4.00% 2020 380,000 4.00% 2021 135,000 4.00% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the rate(s)per annum shown above in this Section (calculated on the basis of a 36O-day year of twelve 3O-day months). "Interest on the Bonds shall be payable on February 15 and August 15 in each·year, Commencing February 15, 2006. . . SECTION 3: Terms of Pavment-Pavina Aaent/Reaistrar. The principal of, premium, if any~ and the interest on thé Bonds, due and payable by reason of maturity, redemption. or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "HoIdersn) appearing on the registration and transfer books maintain~d by the Paying Agent/Registrar ·and the payment thereof shalf be in any coin or currency of the United states of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of JPMorgan Chase Bank; National Association, D~lIas, Texas to serve as Paying AgentlRegistrar for the Bonds is hereby approved. and confirmed. Books and records relating to the registration, payment~ transfer and exchange of . the Bonds (the "Security Register") shall at all times be· kept and maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions of a "Paying Agent! Registrar Agreement", substantially in the form attached hereto as 'Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may 45681117.1/10511518 3 prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a comm~råal bank, trust company, financial institution' or other entity qualified and authorized to serve in such capacity and peñorm the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for .the Bonds, the City . agrees. to promptly· cause a written notice thereof to be sent to each .Holder ° by United States M~iI,first class "postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated PaymentlTransfer Office"). Interest on the Bonds shall be paid to the Holdersowhose name appearsin·the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of othe Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated PaymentlTransfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, ·Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by' the Paying Agent! Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special. Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the "date of mailing of such notice. . SECTION 4: Redemotion. (a) ODtional RedemDtion. The Bonds having Stated Maturities on and after February 15, 2016, shall be subject to redemption prior to maturity, at the' option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2015 or on any date thereafter at the redemption price of par plus accrued in~erest to the date of redemption. (b) Exercise of Redemotion Ootion. At least forty-five (45) days prior to a· redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of.othe decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. 45681117.1/10511518 4 '·,"v,'> ,-..'> , 'i' ~,.." "', ",. ">C.",, ~"''''.J7'·.i (c) Selection of Bonds for RedemDtion~ If less than all Outstanding Bonds of the same Stated Maturity are to be .redeemed on a redemption 'date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the BondS, or principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of RedemDtion. Not less than thirty (30) days. prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States· Mail, first"class postage. prepaid, in the ·name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the dose of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the. Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed,. (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, ,or the principal amount thereof to be redeemed, shall be made at the Designated PaymentlTransfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption, and has been called for redemption, and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided. moneys sufficient for the payment of súch Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: . ·Reaistration - Transfer - Exchanae of Bonds-Predecessor Bonds. ' The - Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or· exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar· for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond (other than the Initial Bond(s) referenced in Section 8 hereof) for transfer at the Designated PaymentlTransfer Office of the Paying Agent/Registrar, the 'Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds of authorized denominations and having the same· Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds (other than the Initial Bond(s) referenced in Section 8 hereof) may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bo~ds to be exchang~d at the 4568111.7.1/10511518 5 ~,;",. Designated PaymentlTransfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. All Bonds issued in any transfer or exchange of Bonds shall be delivered to the .Holders· at th~ Designated PaymentlTransfer Office of the Paying Agent/Registrar or sent by United . States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery . thereof, the same shall be the ·valid obligations of the City, evidencing the same obJigation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All· transfers or exchanges of· Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer· or exchange. Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds,· evidencing all or a portion, as the case may· be, of the same obligation to pay eviden~ by the new Bond· or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term npr~decessor Bonds" shall indude any mutilated, lost, destroyed, or stolen Bond for which a. replacement Bond has been issued,' registered, and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such new replacement Bond· shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond., Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed. balance of a Bond called for redemption in part. SECTION 6: Book-Entrv Onlv Transfers and ' Transactions. Notwithstanding. the provisions contained in Sections 3, 4 and 5 ~~reof relating to the payment, and transfer/exchange of the Bonds, the City hereby approves and authorizes the' use of, "Book-Entry Only" securities clearance, settlement and .transfer system provided by. The Depository Trust Company (DTC)" a limited purpose trust company organized under the laws of the State of New York, in accordance with the operational arrangements referenced in the Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository Agreement"). Pursuant to t~e Depository Agreement and the roles of DTC, the Bonds shall be deposited with , DTC who shall hold said Bonds for its participants' (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on . the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in .the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book-entry clearan~ and settlement of securities transadions in general or the City determines that DTC is incapable of properly discharging its 45681117.1/10511518 6 duties as securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for " the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and "exchanged on the SecuritY Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with· the· provisions of Sections 3, 4 and 5 hereof. " "SECTION 7: Execution -Reaistration. The ·Bonds shall be executed on behalf of the City by the Mayor ·under its. seal reproduced or impressed thereon and countersigned by the" City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to- be duly executed on behalf of the City,- notwithstånding that such individuals or either of them shall cease to hold such offices at the time of delivery of tl1e Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose,· unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9(c), manually executed by. the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registratiån substantially in the form provided in Section 9(d), manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered, and delivered. SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the aggregate principal -amount of the Bonds with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered bonds, being one bond for e~ch year of maturity ·in ·the applicàble principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchàser(s) or the designee thereof. The Initial Bond( s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the· State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s)¡ the Paying Agent/Registrar~ pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instrudio"ns from the initial purchaser(s), or the designee thereof, and such other information and documentation· as the Paying Agent/Registrar may reasonably. require. SECTION 9: Forms. ~ Forms Generallv. The Bonds, the Registration CertifICate of ~e Comptroller of Public Accounts of the State of Texas, the Registration· Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required. by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and . letters of the Committee on Uniform Securities Identification Procedures of the American Bankers 45681117.1/10511518 7 ~'""f "r"í Association) and such legends and endorsements (including insurance legends in the . event the Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or detennined by the officers. executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may beset forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. " The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved, typewritten, photocopied or otherwise reproduced in any other similar manner,. all as determined by the-officers executing such Bonds as evidenced by their execution thereof. (b) Form of Definitive Bond. .REGISTERED NO. REGISTERED $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF NORTH RICHLAND HILLS, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2005 Bond Date: Interest Rate: November 1 ,2005 . Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: The City of North Richland Hills (hereinafter referred. to as the "City"), a body corporate and political subdivision in the County of Tarrant, State of Texas, for value received, acknowledges Itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, on the Statèd Maturity" date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) anø to pay interest on the unpaid prin.cipal amount hereof from the Bond" Date .at . the per.. annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 15 and August 15 in each year, commencing February 15, 2006. Principal of . this Bond is payable at its Stated Maturity or redemption. to the registered owner hereof, upon presentation and surrender, at the Designated PaymentlTransfer Office of the Paying Agent/Registrar exeCuting the registration certificate appearing hereon, or its successor. Interest is payable to the registerE;)d own~r of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next ·preceding· each interest payment date, and interest shall be paid by the Paying AgentlRegistrar by check sent United States Mail, first class postage prepaid, to the address of the r~istered owner recorded in the Security Register or by such other· method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated PaymentlTransfer Office of the Paying Agent/Registrar is located are authorized by I.aw or executive order to close, 45681117.1/10511518 8 '-'-:-Tj>":-'-O~-of~P:",,"_-~"""f.;r=~'fJ'¡¡\' ,.. ~'~''II,'t;¡.c;'';'~~-;:.~'T;~-''" .i;·~~~JJ''-'_'·:':~ê~'~¿'':'~'-i_~-_ ,L"",r.;-~,:.-,,- -~~).. " "-l:-;'~ - <; ... . then the date for such payment snail be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force. and· effect as if made on· the original date payment.. was due. All payments of principal of, premium, if any, 'and interest on this Bond shall be without exchange or·· collection charges to the owner hereof and in any coin or currency of the United States of America which at. the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $9,930,000 (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations") and to pay costs of issuance, under and in strict confonnity with the Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the City Council of the City (herein referred ·to as the "Ordinance"). The Bonds maturing on and after February 15, 2016, may be redeemed prior. to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof - (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2015, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption. At least thirty days prior to the date fixed for any redemption of Bonds, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been .duly called for redemption and notice of such redemption duly given, then upon such redemption date such Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purp~se of such payment by the Paying Agent/Registrar. In the event a portion of the principal amount of a Bond is to be-·redeemed and the registered owner is someone other than Cede & Co., payment of the redemption price of such _ principal amount shall be made to the registered owner only upon presentation and surrender of such Bond to the Designated PaymentfTransfer Office of the_ Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to " the registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an assignee of ··the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond redeemed in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by . law , upon all taxable property in the City. Reference is ·hereby made to the· Ordinance, a copy of which is on file in the Designated PaymentfTransfer Office of the Paying··AgentlRegistrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature . and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to 45681117.1/10511518 9 .- !,. - . ~_.... ~ the .transfer or eXèhange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be· discharged at or prior to its maturity or redemption, 'and deemed to be no .Ionger Outstanding thereunder; and for other' tenns and provisions contained therein. Cápitalized terms used· herein have the meanings assigned in the Ordinance. . This Bond, subject to· certain limitations contained in the Ordinance, may be transferred on thè Security Register' only upon its presentation and surrender at the Designated PaymentfTransfer Office of the Paying Agent/Registrar, ~ith the Assignment hereon· duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized ' agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing .the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security· Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the· payment of such interest have been received from the City. Notice of the Special Recòrd Date and of the scheduled payment date of the past due interest (which shall be 15 days ·after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtué of the· Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 45681117.1/10511518 10 - -_._-"-""1'""'';'f;:~-'"'"''~?'''''f__., ; _~_,;,,: IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Datè~ CITY OF NORTH RICHLAND HILLS, TEXAS Mayor COUNTERSIGNED: City Secretary (SEAL) (c) *Form of Reaistration Certificate of ComDtroller of Public Accounts to· aODear on Initial Bondls) onlY. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER ) ) . OF PUBLIC ACCOUNTS ) ). THE STATE OF TEXAS ) REGISTER NO. I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller. of Public Accounts of the State of Texas~ WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) *NOTE TO PRINTER: Do not print on definitive bonds 45681117.1/10511518 11 ê>·' iA·:'·!!"'''~'''i''\''{ , .' r''''''" " ".. :''''j[!''''~I}f¡:' ':'J~I"':~·· r -.: ·4· ,'> . (d) . Form of Certificàte of Pavina AaentlReaistrar to aDDear on Definitive Bonds onlv. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions. of the within-mentioned Ordinance; the bond or bonds of the above entitled and designated series . originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by thè records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar in Dallas, Texas is the "Designated PaymentlTransfer Office" for this Bond. JPMORGAN CHASE BANK. NATIONAL ASSOCIATION, Dallas, Texas Registration date: By Authorized Signature (e) Form of Assianment. ASSIGNMENT FOR VAlUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of . substitution in the premises. DATED: Signature guaranteed: . NOTICE: The signature on this assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. 45681117.1/10511518 12 ".,' . « '","' ?"", ,', .·~c,~" .....;"'- . <;".". ''''',- . (f) The Initial Bond(s) shall be in the form set forth in. paragraph (b) of this Section, except that the form of the single fully registered Initial Bond shall be modified .as follows: REGISTERED NO. T-1 REGISTERED $ U.NITED STATES OF AMERICA STATE .OF TEXAS CITY OF NORTH RICH LAND HILLS, TEXAS GENERAL OBLIGATION REFUNDING BOND, SERIES 2005 Bond· Date: November 1, 2005 Registered Owner: Principal Amount: The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Tarrant, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in ~ach of the years and in principal installments in accordance with the following schedule: PRINCIPAL INSTALLMENTS INTEREST RATE YEAR (Information to be inserted from schedule in Section 2 hereof). (or so much principal thereof as shall not have been prep~ld prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per 'annum rates of interest specified above computed on the basis of a 36o-day year of twelve 3o-day months; such interest being payable on February 15 and August 15 in each year, commencing February 15, 2006. Principal installments of this Bond are payable in the year of maturity or on a prepayment date to the registered owner hereof by JPMorgan Chase Bank, .National Association, Dallas, Texas (the "Paying AgentlRegistrar"), upon its presentation and surrender, . at its designated· offices in Dallas, Texas (the "Designated PaymentlTransfer Office"). Interest is payable to the registered owner of this Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the ~Iose of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on . the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the Designated PaymentlTransfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such paym"ent shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. All payments of principal of, premium, if . any, and interest on this Bond shall be without exchange or collection" charges to the owner 45681117.1/10511518 13 hereof and in any.coi~ or currency of the United States of America which at the time of payment . is legal tender for the payment of public and private debts. SECTION 10: . Lew of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund .fór their payment at maturity or redemption or a sinking fund of 2Ðk (whichever amount is the greater), . there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on. each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and Çostsof collection; separate books and records relating to the receipt and disbursement of taxes levied, ·assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the ·Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 2005 Bond Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually. is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause· to be transferred to the Paying Agent! Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. PROVIDED, however" in regard ·to the payments to become due on the Bonds on February 15, 2006 and August 15. 2006, sufficient current ·funds will be available and are hereby appropriated to make such payments; and proper officials of the 'City are hereby authorized and directed to transfer and deposit in the Interest and Sinking Fund such current funds which, together with the accrued interest received from the· initial purchasers, will be sufficient to pay the payments on the Bonds on February 15, 2006 ~nd 'August" 15, 2006. SECTION 11: Mutilated-Destroved-Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and delivër a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously' outstanding, in exchange and substitution for such mutilated Bond, or in Ii~~. of and in substitution for such destroyed, lost or stolen Bond. only upon the approval of the City and éJfter (i) the filing by the Holder thereof with· the paying AgentlRegistrar of evidence satisfactory to· the Paying Agent/Registrar of the destruction, loss or theft of such Bond, 'and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of· indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and .with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed. lost or stolen. . Every replacement Bond issued ·purSuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all 45681117.1/10511518 14 - ,.,.." - 'u''-"';._ ·.~'7.,. ".,-~,,~.,,~. "",,-,. ,,,,,,...--,--..,'n"~ ,"'...~l1',,}".,.,¡;.; '?'" other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. ' The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stoìen Bonds. " SECTION 12: Satisfaction of Obliaation of City. If the City shall' payor cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the· pledge of taxes levied "under this Ordinance and all covenants, agreements, and other obligations of the City to the Holde.rs shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principat amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon,· shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authOrized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to· principal and interest in such amounts and at such times as will insure the .availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys - so qeposited with the Paying Agent/ Registrar, or an autnorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Regi$trar, or an authorized escrow agent, pursuant to this Section wh.ich is not required for the payment of the Bonds, or "any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the. City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of thre$ (3) years after the Stated Maturity, or applicable redemption date, of the Bonds. such moneys were' deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt ther~for~ Notwithstanding the ~bove and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall· be subject to any ~pplicable unclaimed property laws of the State of Texas. The term "Government Securities" shall mean (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which· are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the U~ited States, including obligations· unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations. of a state or an agency or a 45681117.1/10511518 15 ··'~~,.~~,,:-~1;·,,<,t~t,.¡r.:. ' , .H '!;.1'&\';::,~;';:.i-'::f;;':'~ ,r,.,1JF~~\ <>L: .'n ,>h county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. SECTION 13: Ordinance a Contrad - Amendments - Outstandina Bonds.: This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, . and shall not be amended or repealed by the ·City so long as any BQnd remains Outstanding except as permitted in this ·Section and in Section 29 hereof. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all ·Holder:s of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the princÎpal of, premium, if any, and interest on the Bonds, reduce the· principal amount thereof, the redemption price therefor, or the rate of interest thereon, orin any other way modify the terms of payment of the principal of,premium, if any, or .interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to a·ny such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with resped to Bonds means,as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1 ) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in . Section 11 hereof. . SECTION 14: Covenants to Maintain Tax-ExemDt Status~ (a) Definitions. When used in this Section 14, the following terms have the foll~ing meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing. Date. "Computation Date" has the meaning set forth in Sedion 1.148-1 (b) of the Regulations. . " "Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. 45681117.1/10511518 16 ;'~'. "è!~,;"!,"1'l;"!' ;!,"~.~:. ";'~"'"'''''.'';;~~''.~.' "'fe:, ' "Investmenf' has the meaning set forth in Section 1.148-1 (b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined. in . section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of tne "Bonds. "Rebate Amount" has the meaning set forth in Section ·1.148-1(b) of the Regulations. "Regulations" means any 'proposed, temporary, or final Income Tàx Regulations issued pursuant to Se~ons 103 and 141 through 150 of the Code, alid103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shaU also mean, as· appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment ha$ the meaning set forth in Section 1.148- 5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the· use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross incomeï as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect· the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or.Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: . (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of the Refunded Obligations), and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those appiicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who· is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or' refinanced directly or indirectly with such Gross Proceeds 45681117.1/10511518 17 -~'ii"~.'~~'!ji ". .~ ';~'''''':'''}1;'::' ~'('~:'i:- f./-,I!'-<~rJ>'''- ~ ''L,-~-r . 1'..., . ,., ,. .'<' .. (including property financed with Gross Proceeds of the Refunded Obligations), other than taxes of general appUcation within the City or interest earned on investments acquired with suc~ Gross Proceeds pending application for their intended purposes. . (d) No Private Loan. Except to the extent permitted by section 141 "of the Code and ,the Regulations and·rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make Of fina.nceloans to any . person or entity ,other than a state or local government. For purposes of the fo~egoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or. leased to such person or èntity in a transaction which creates a debt for federal income tax purpo,~es; (2).capåcity. in or·service from such property is committed to such person 'or entity "µnder ·a take-or-p~y, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefit~ of ownership, 'of such Gross Proceeds· òr any property acquired, ,construcfed or improved with such Gross Proceeds are otherwise transferred in a transaction . which is the economic equivalent of a loa·n. (e)· Not to Invest at Hiaher Yield. Except tó the· extent permitted by section 148 of ,. the God'e and the Regulations and rulings thereunder, the City shall not at any time prior ·to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use· Gross Proceeds· to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced th~reby), whether then held or prèviously disposed of, exceeds the Yield of the Bonds. (f)" Not Federallv Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. . , . (g) Information ReDOrt. The City shall timely file the information required by section . ",' 14,9(e) of the Code with the' Secretary of the Treasury on Form 8038-G or such other form and in süch place as the 'Secretary may prescribe. (h) Rebate of. Arbitraae Profits. Except to the extent otherwise provided in 'section 148(f) of the Code and the Regulations a'nd rulings thereunder: " (1) The City shall account for aH Gross Proceeds (including all receipts, expendit~res and inyestments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures· and investments thereof) and shall retain all records of accounting for at leàst six years after the day on which the last· Outstanding Bond is discharged. However, to the· extent permitted by law, the City may commingle Gross Proceeds' of the Bonds with other money .of the City, provided that the City separately aCCOunts . for each receipt ·and expenditure of Gross Proceeds and the obligations acquired therewith. . (2) Not less frequently than each Computation Date, the City shall calculate th'e Rebate Amòunt in accordance with rules set forth in s.ection 148(f) of t~e Code and the Regulations and rulings thereunder. The City shall maintain such calculations With its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Da~e. 45681117.1/10511518 18 < '~.~"f':'-èf~"">:'t.: ''f1".''if~''}i''''''~:' . '.'~;i'i~~7~¡~~.'>(::':t".;f ". , .' '~ < ,_ "'..' . '_ '0 (3). As additional Consideration for the purchase o~ the. Bonds by the Underwriters and the ··Ioan ··of the··money represented thereby and· in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof-for· federal income . tax purposes, the City shall' ·pay to the United States out of the Interest and Sinking Fund or its general fùnd,' as permitted by applicable Texas statute, regulation or opinion of the Attorney Ge~eral of the State' of Texas, the amount that when added·to· the·' future 'value of previous rebate' payments made for the o Bonds equals (i) in the case of a' Final Computation 'Date as defined in Section '1.148-3(e)(2) of the Regulations, one hundred percent (10·0%) of the'Rebate Amount on such da·te; and (ii) in the case of any other ,CQrnputatio·n Date, ninety p~rœnt (90%) of the Rebate Amoúnt' on sùêh date. 'In all cases, the rebate payments· shall be .made at the times, in the installments, to the pla~ and in the manner as is 0 ·ormay be requirèd":by' sectiòn 148(f) of the ·Code' and ·the Regulations and rulings thereunder, and shall be accompanied· by Form 8·O.38-T or such· other forms and information as· is. oar may be required obySection 1.48(f) of" the Code,and the Regulations and rulings thereunde~.. . (4) The City ·shall ·exerclse reasonable diligence. to ,assure that no '-" '- errors are made in the calculations and payments required by paragraphs (2) and (3), and if àn error is made, to discover and promptly correct such erro~ within ·a reasonable amoui1t'of time thereafter (and in all events within one hundred eighty -(180) days after discovery of the error), including payment to the United States of any additional Rebate Amo~nt ~wed to it, interest thereon, and any pen~lty . imposed under Section 1.148-3(h) of the Regulatiåns. (i) Not to . Divert Arbitraae Profits. Excep1 to the extent permitted by section 148 of the Code and ttie Regulations and rulings thereunder, the City shall not, at a~y time prior to the earlier of the ~ Stated Maturity or final p~ytnent of the Bonds, enter into any transaction that reduces the amount required to be paid. to the United Sta~es pursuant to Subsection (h) of this Section beéãuse such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had· been at arm's length and had the Yield of-the Bonds. not been relevàrit to either party. ':-. . 0)4 Elections. The City hereby directs and authorizes the Mayor, City Manager;· Director'of Finance and City.. Secretary, indi~idt;Jally or jointly, to make elections permitted or required. pursuant to the provisions of. the Code or the·HRegulations, as they deem necessary or appropnate in connection with the Bonds, in the Certificate· as to Tax Exemption or similar or other appropriat~· certificate, form or document.. . ' . . " (k) Bonds Not Hedae Bonds. (1). At the time the original bonds refcnded by the Bonds were issued, the City reasonably.expected to's'pend at .Ieast 85% of the spendab·le proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bOnds refunded by the Bonds were invested in Nonpurpose· Investments having a substantially guaranteed Yield for a period' of 4 years or more. (I) Not An Advance Refundina. The ~rtion of the Bonds being issued to refund the Series 1996 Refunded Bonds and the Serie~ 1996 Certificates is a current .refunding in that such obligations are to be paid arid redeemed in fun on February 15, 2006, respectively, which d~te is within 90 days of the delivery date of the ~nds. 45681117.1/10511518 19 '!V-~':'''_'~-'~'''_.--_,;.._ ~, --"'-..;'''''':~''''-;~':.r ',' 'f..',_.',. ·F'..-,;'_'~';''j!I'?:..''.'_~ r,""~_'~ (m) Qualified Advance Refundina. A portion of the Bonds are issued in part to refund the Series 1997 Refunded Bonds, Series 1997 Refunded Certificates, Series 1998 Refunded Bonds, Series 1998 Refunded Certitjcates, Series 1999 Refunded Bonds, Series 1999 Refunded Certificates, Series 2000 Refunded Bonds, Series 2000 Refunded Certificates and the Series 2001 Refunded ·Certificates (collectively, the "Advance Refunded Obligation·s"), and the Bonds will be issued more than 90 days before the redemption of .the such Advance .. Refunded Obligations. Th~ City represents as follows: (a) The Bonds are the first advance refunding of the Advance Refunded . Obligations, within the meaning of section 149(d)(3) of the Code. ~ . (b) The Refunded Obligations are being called for redemption, and will be redeemed not later than ,the earliest date on which such bonds may be .redeemed. .(ç). - The initial temporary period underse.ction 148(c) of the Code will end: (i) with respect to the proceeds of the Bonds pot later than 30 days after the date of issue of such. .Bonds; and (ii) with respect to proceeds·' of the Advanced Refunded Obligations on the Closing Date if not ènded prior thereto. (d) On and after the date of issue of the Bonds, no proceeds of -the Advance Refunded Obligations will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such respective series of refunded obligations. (e) Tile Bonds are being issued for the purposes stated in the preamble of this Ordinance. There is a present value savings associated with the refunding. In the issuance of . the Bonds the City has neither: (I) overburdened the tax-exempt bond market· by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage devi~" within the m~aning of Section 1.148-10(a) of the Regulations; nor (iii) employed· a. "device" to obtain.a material financial advantage based on arbitrage, within the meaning of section 149(d)(4)of the Code, apart from savings attributable to lower interest rates and reduced debt service payments in early years. (n) Qualified· Tax ExemDt Obliaations. In. accordance with the provIsions of. paragraph (3) of subsection (b) of Section 265 of the Code, the City hereby designates the Bonds to be "qualified tax exempt obligations" in thåt the Bonds are not "private activity bonds" as defined in the Code and the reasonably anticipated amount of "qualified tax exempt obligations" to be issued by the City (including all subordinate entities of the City) for the calendar year in which the Bonds are issued will not exceed $10,000,000. - SECTION 15: Sale of Bonds - Official Statement AoDroval. . The 8Qnds authorized by this Ordinance are hereby sold by the City to Estrada Hinojosa & Company, Inc. and UBS . Financial Services, Inc. (herein referred to as the "Underwriters") in accordance with the· Purchase Agreement, dated November 14, 2005, attached hereto as Exhibit B and. incorporated herein' by reference as a part of this Ordin~nce for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Agreement for and on beha'f of the City and - as the act and deed of this City Council, and in regard to the approv~1 and execution .9f. the Purchase Agreement, the City Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the Purchase Agreement are true and correct in all material respects and shall be honored ~nd performed by the City. 45681117.1/10511518 20 -~~·r.r"! ,,:,'-'/""i";"'/'. 'r'+':"c~·:i"',,,.;;\'".¡:,,-~,,\ .",,~.·~,~,Jt~.'¡' '. "'''1.'.. "-~' .",,-",,"""'1"". ,. , .. -" " " Furthermore, the use of the Preliminary' Official Statement dated November 4, 2005 by the· Underwriters in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement, which refleds the terms of sale (together with such changes approved by the· Mayor, City Secretary, City Manager, and . Director of Finance, 'one or more of said officials), shall. be and is hereby in all respects approved and the Underwriters are hereby authorized to use and distribut$ said final Official . Statement, dated November 14, 2005, in the reoffering, sale and delivery of the Bonds to· the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf. of the City-copies of said Official Statement in final form as may be required by the Underwriters, and such final Official Statement in the form· and content manually executed by said officials shall be deemed to be approved by.the City Council and constitute the Official· S~tement authorized for distribution and use by the Underwriters. SECTION 16; Scecial Escrow Aareement AoDroval and Execution. The "Special Escrow Agreement" (the "Agreement') by and between the City and JPMorgan Chase Bank, National Association, Dallas, Texas (the· ~Escrow Agent")', attached hereto as Exhibit Cand incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form and content, and such Agreement in substantially the form and' substance attached hereto, together with such changes or revisions as may be necessary to accomplish the refunding or benefit the City, is hereby authorized to be executed by the Mayor and City Secretary for and on behalf of the City and as the act and deed of this City Council; and such Agreement as executed by said officials shall be deemed approved by the City Council and constitute the Agreement herein approved. Furthermore, appropriate officials of the City in cooperation with the Escrow Agent . are hereby authorized and directed to make the necessary arrangements for the purchase of· the escrowed securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Underwriters for deposit to the credit of the "SPECIAL 2005 CITY OF' NORTH RICH LAND HillS, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in .V.T.C.A., Government Code,Chapter 1207, as amended, this Ordinance and the Agreement. SECTION 17: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge' of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of - definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending. the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Underwriters. Furthermore, the Mayor, Mayor Pro Tem, C·ity Secretary, City Manager, and Director of Finance, anyone or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to· the City and the issuance of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure, and investment of the proceeds of the Bonds, as may be' necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Underwriters, and, together with the City's financial advisor, bond counsel ..and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Underwriters and the initial exchange thereof for definitive Bonds. 45681117.1/10511~18 21. ~\~i't~:C'-~'.:y~~¡.,:-_,:,_ - ."., ,~""", '" _ -- - 'y :,-",'" ,- ,- -f',W' 1, ~- '-~~¡._. \T' ".,'< ., ,.,," ..,. "'i .~. < .... ",""("'ì'''''"'' e', . '.'''''~'':*, K'; . ""'''' SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale in the sum of (i) $9,755,567.92 shall· be deposited to the credit of the Escrow Fund and (ii) the $47,280.80 shall be deposited to the credit of the Interest and Sinking Fund. The balance of. the proceeds of sale of the Bonds shall be expended to pay costs of issuance and. municipal bond insurance premium and any excess amount budgeted for such purpose shall be deposited to the credit of the Interest and Sinking .F,-,nd. Addition~lIy, on. or immediately prior to the date of the delivåry of the Bonds to the Underwriters, the Director of Finance shall cause to be transferred in immediately available funds to the·. Escrow Agent from moneys on deposit in the interest and sinking funds .maintained for the payment of the Refunded Obligations an amount which, together with the proceeds of sale of the Bonds, will be sufficient to accomplish the refunding. SECTION 19: Redemotion of Refunded Obliaations. (a) The. bonds of..that . series known as "City of North Richland Hills, Texas, General Obligation Bon'ds, Series 1996", dated May 1, 1996, maturing in the years 2008 and 2009, and aggregating in principal amount $720,000, shall be redeemed and the same are hereby called for redemption on February 15, 2006, at the price of par and accrued interest to the .dateofredemption. The City Secretary ¡:s hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provisions applicable to such bonds; such suggested form .of notice of redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of this Ordinance for all purposes. (b) The certificates of obligation· of that series known as "City of North Richland Hills, Texas, Tax and Drainage Utility System Surplus Revenue Certificates of Obligation, Series 1996", dated May 1, 1996, maturing in the years 2008 and 2009, and aggregating ¡nprincipal amount $125,000, shall be redeemed and the same are hereby called for redemption on February 15, 2006, at the price of par and accrued interest to the date of redemption. The City .Secretary is hereby autl10rized and directed to file a copy of this O~dinance, together with a suggested form of notice of redemption to be sent to certificateholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor payi.ng agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provisions applicable to such obligations;' such suggested form of notice of redemption being attached hereto as Exhibit E and incorporated herein· by reference as a part of this Ordinance for all purposes. (c) The bonds of that series known as "City of North Richland Hills, Texas, General Obligation Bonds, Series 1997", dated April 15, 1997, maturing in the year 2010 through 2012, and aggregating in principal amount $615,000, shall be redeemed and the same are hereby called for redemption on February 15, 2007, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ord·inanœ, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying· agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice .of redemption being attached hereto as Exhibit F and incorporated herein by reference as a pa·rt of this Ordinance for all purposes. (d) The certificates of obligation of that series known as "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Revenue (Limited Pledge) Certificates of Obligation, Series 1997", dated April 15, 1997, maturing in the years 2009 through 2013, and 45681117.1/10511518 22 ... ---~~.'::~n~~':;~"-~·'>':__·~:·:'.~r:1~~,M ,)~i-~~~~i·::·~~"t~~~Y~:~~; '-;~:2:-'~-'- <~ ,),;{:.~" :~~~~'-:'~"~--·~'-~+Y . , .. -~-'--, '.' ;""-<1.:;';;'~ ",:'~.;1-.:.-'._ ::~_""'---' ~ ,.". , aggregating ·in principal amount $310,000, shall be redeemed and the same are hereby called for redemption on February 15, 2007, at the price of par and .accrued interest to the- date of " redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with JPMorgan Chase Bank, National Assoçiation, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provisions . app.licable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit G and incorporated herein by reference as a part of this Ordinance for all purposes. (e) The bonds of that series known as "City of North Richland Hills, Texas, General Obligation Bonds, Series 1998", dated May 1,1998, maturing in the years 2012 and 2018, and aggregating in. principal amount $1,015,000, shall be redeemed and the same are hereby called for red.emption on February 15,2008, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed· to file a copy of this Ordinance, .together with a suggested form of notice of redemption to be sent to bondholders, . with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One., Texas, N.A.), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit H and incorporated herein by reference as a part of this Ordinance for all purposes. (f) The certificates of obligation of that series known as "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1998", dated May 1, 1998, maturing in the years 2012 through 2018, and aggregating in principal amount $2,115,000, shall be redeemed and the . same are hereby called for redemption on February 15, 2008, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with JPMorgan Chase Bank, National Association, Dallas, Texas· (successor paying agent/registrar to Bank One, Texas, N.A.),· in· accordance with the redemption provisions ·'applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit I and incorporated herein by reference as a part of this Ordinance for all purposes. (g) A portion of the bonds of that series known as "City of North Richland Hills, Texas, General Obligation Bonds, Series 1999", dated April 15, 1999, maturing in the years 2015 and 2018, and aggregating in principal amount $500,000, shall be -redeemed and the same are hereby called for redemption on February 15, 2009, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with JPMorgan Chase Bank, National Association, . Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit J and incorporated herein by reference as a part of.this Ordinance for all purposes.· Additionally, in accordance with the terms of the ordinance autoorizing the issuance of such bonds, the Paying Agent/Registrar is hereby authorized and directed to make a lot selection of the. bonds of the 2015 maturity to be redeemed in part and make arrangements· to· notify bondholders of such lot selection as soon as possible.·· . - (h) The certificates of obligation of that series known as "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of 45681117.1/10511518 23 -;<,'~-n"'-7"':"'\'G""7,:"","' -- ~."">'.-::_.! "'¡~t!"~~;;;"l"~'J<;'W;~:;,1':'f,''r('~¿~M;';<"!'"'";;".'''I''''f,'Ii'!'~"~>"7'i~"",,~"'''''' ,V'" .." . -,",'. .c·~.,: .'V' . . ' '" ,..\ .... Obligation, Series 1999", dated May 15, 1999, maturing in the years 2015, 2017 and 2019, and aggregating in principal amount $875,000, shall be redeemed and the same are hereby called for redemption ~on :February 15, 2009, at the price of par and accrued interest to the date of redemption. The City . Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to b'e s·ent to certificateholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor ,paying agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provision·s applicable'to such obligations;· such suggested form of notice of redemption being attached hereto as Exhibit K and incorporated herein by reference as a part of this Ordinance for all purposes. (i) The bonds of that series known as "City of North Richland· Hills, Texas, General Obligation Bonds, Series 2000", dated May 1, 2000, maturing in the years 2013 through· 2020, and aggregating in principal amount $1,080,000, shall be redeemed and the same· are hereby called for redemption on February 15, 2010, at the price of par and accrued interest to the date ' of redemption. . ·The City ·Secretary is hereby . authorized anddire'cted to file a copy -of this Ordinance, together with a suggested form of notice of redemption .to be sent to bondholders, with JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption ·provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit L and incorporated herein by reference as a part of this Ordinance for all purposes. (j) The certificates of obligation of that series known as "City of North Richland Hills, Texas, Tax and Waterworks and Sewer ·System (Limited Pledge) Revenue Certificates of Obligation, Series 2000", dated May 1, 2000, maturing in the years 2013 through 2020, and aggregating in principal amount $920,000, shall be redeemed and the same are hereby called for redemption on February 15, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this . . Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with. JPMorgan Chase Bank, National Association, Dallas, Texas (successor . paying agent/registrar to Bank One, Texas, N.A.), in accordance with the rede·mption provisions- applicable to such obligations; such suggested form of notice of redemption being' attached hereto as Exhibit M . and incorporated herein by reference as a part of this Ordinance for all purposes. (k) The certificates of obligation of that series known as "City of North Richland Hills, T.exas, Tax arid Waterworks a'nd Sewer System Surplus Revenue Certificates of ·Obligation, Series 2001", dated April 15, 2001, maturing in the years 2016 through 2021, and aggregating in principal amount $960,000, shall be redeemed and the same are hereby called for redemption on February 15, 2011, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to· be sent to certificateholders, with JPMorgan Chase Bank, National Association,Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A.), in accordance with the redemption provisions· applicable to such obligations; such suggested form of notice of redemption being attached hereto as· Exhibit N and incorporated herein by reference as a part of this Ordinance for all . purposes. The redemption of the . obligations described above being associated with the advance refunding of such obligations, the approval, authorization and arrangements herein given and provided for the redemption of such obligations on the redemp~ion dates designated therefor 45681117.1/10511518 24 ~. .- ;'-, "."¿,}. ê'::"~·:·>~·' ,. ····...".,...m.t~;~"·~!i' .\""'?....i'...,y<'!f!~~.,.......";1';,J"'~~,.":;"'..,."""'1,'1:"'11'.,c." ..< ';':""'·ê'?"'··'f,L. .'-".'.~"'.'. .... ,.....y. .n , and in the manner provided. shall be. irrevocable upon the issuance and delivery of the Bonds; and the City Secretary is hereby authorized and directed to make all arrangements necessary to notify the holders of such obligations of the City's decision to redeem such obligations on ·the dates and in the manner herein provided and in accordance with the ordinan~s authqrizi.ng the issuance of the obligations and this Ordinance. SECTION 20: Notices to Holders-Waiver. Wherever this Ordinance . provides for notice . to· Holders of any event, such notice shall be sufficiently .given (ùnless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage. prepaid, to the address -of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In' any .case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in . any notice so m~iled, shall affect the sufficiency of ··such notice with respect to all other Bonds. Where. this Ordinance provides for notice..in any·.manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to 'which such notice is given, and such waiver. shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 21: ·Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be. promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar. and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at..any time deliver to the Paying AgentlRegistrar ,for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so .delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to the City. . SECTION 22: LeaalODinion. The obligation of the Underwriters to accept delivery of the Bonds is subject to being furnished a final legal opinion of Fulbright & Jaworski L.L.P. , approvi'ng such Bonds as to their validity, said opinion to be dated and delivered as ·of the date of. delivery anq.. payment for such Bonds. A true and correct repr~uction of said opinion is . hereby authorized to be printed on the definitive Bonds or an executed counterpart thereof shall accompany the global Bonds deposited with the Depository Trust Company. SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are· to be held responsible for CUSIP numbers incorrectly printed or typed on the dE.)f.initive Bonds. SECTION 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than, the City, the P~ying Agent/Registrar and the Holders; any right, remedy, or daim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. 45681117.1/10511518 25 "' .,., '''';''T''"'"''.'''.'''rc;-.'- .';'>'" ''''.,:",,".,. '~;" ,,'. ..."..""....... .... ··r~,.·I~.:~ ..~. .',., ',C;')·."'-."Y:;::'"'f':';f·''''' .., ,.,., . '.<':"''1 ";'A" ,~., .""" .. .. ,,,,,., SECTION 25: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. . SECTION 26: Govemina Law. This Ordinance shall be construed ånd enforced in . accordance with the laws .of the State of Texas and the United States of America. . SECTION 27: . Effect of Headinas. The Section headings herein are for convenience··· only and shall not affect the construction hereof. SECTION 28: . Construction of Terms. If appropriate in the context· of thi~ Ordinance, words of' the singular number shall be considered to include' the plural, words of the plural numbershaUbe co~sidered to indude the singular, and words of the masculine, feminln·e or neuter gender shall be considered to include the other gende.rs. SECTION 29: Continuina Disclosure Undertakina. (a) Definitions. As ·used in· this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Muliicipal Securities Rulemaking Board. "NRMSIR" means each person whom· the SEC or its staff has· determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID." means any person designated by the State of Texas or an authorized department, officer, or agency-thereof as,· and determined by the SEC or its staff to be, . a state information depository within the meaning of the Rule from time· to time. (b) Annual ReDorts. The City shall provide annually to each NRMSIR and any. SID, . within six months after the end of each fiscal year (beginning with the fiscal . year . end·ing September 30, 2005) financial information and operäting· data with respect to the City of the general type included in the final Official Statement approved by Section 15 of this Ordinance, being the information described in Exhibit 0 hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principl.es described in Exhibit 0 . hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and· any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by whiCh the City otherwise would be required to provide financial information and operatin.g data pu~uant to this Section. 45681117.1/10511518 26 ,.., "."'~;"''''>:'fr-".. / "''''''' :'''!!''''f'''''~'~!''~'''~''''?~~~~''''>r.'.-!'......,.,~,. :"Y1!'¡",,,..,,~ ~' ."'",~:''''' ..... ....."'.,. .,.:~;.,... '/7"· ~,., ",..,);,..,~..,,,,,,..,..,,,. The financial information and operating data to be provided pursuant to this Section· may be set forth in full in one or more documents or may be included by specific reference to any docum~nt (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR.and any SID or filed with the SEC. (c) Material Event Notices. The City shall notify any SID and eith~r each NRMSIR or . the MSRB, in a timely manner, of any of the following events with resp~ct to the Bonds, if such event is material within ·the meaning of the federal· securities laws: . 1. , 2. 3. 4.' 5. 6. 7. 8. 9. 10. ' 11. Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws an credit enhancements reflecting financial difficulties; Subst~tution of credit or liquidity .providers, or their failure to· perform; Adverse tax opinions or events affecting the tax-exempt status of the Bonds; Modifications to rights of holders of the Bonds; Bond calls; Defeasances;, Release, substitution, or sale of property securing repayment of the Bonds; and Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or· operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations. Disclaimers. and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section while, but only while, the ·City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in'any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and benefici~1 owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial· information, operating data, financial statements, and· notices which it has expressly agreed to provide pursuant to thi's Sedion and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY ·BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, . FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. 45681117.1/10511518 27 "-:"'~Yf':?;';~, '~'.~$~:' - <"~"!-~~r'77~-~:; ,""q,~.",,:,;,,,".' '. " ':F .:h'~' ..~ ;'C-'·" ,·,.'\,··i'o",....·'·<,...:~', ",..", : '~''''/''. ." "~'!::, '~0" ',";",..:.'. , , ". '" ,'., '" """,' '. ,'. ¡ .',~" No· default by the City in observing or performing its obligations under this Section shall constitute a bre.ach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. . Notwithstanding anything to the contrary in this Ordinance, the provisions of this Section may be amended by the City from time to time to adapt to changed circumstances resulting from a' change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provision.s of this Section, as so amended, would· have permitted an underwriter to purchase or sell Bonds in the primary offering of the . Bonds in 'compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date Ç)f such· amendment, . as well as such changed circumstances. and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that ·such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the . ~ule or ~ court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data filed with each NRMSIR and SID pursuant to subsection (b) of this Section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 30: Severa bil itv. If any provision of this Ordinance' or the application thereof to any circumstance shall be held "to be invalid, the remainder of this' Ordinance and the application thereof to other circumstances shall nevertheless be· valid, and the City Council hereby declares that this Ordinance wòuld have been enacted without such invalid provision. SECTION 31: MBIA Insuranœ. The Bonds have been sold with the principal of and interest thereon being insured by MBIA Insurance- Corporation (hereinafter called "MBIA") pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms a"d conditions applicable to insurance provided by MBIA, the City covenants and' agrees that, in the event the principal and interest due on the Bonds shall be paid by MBIA pursuant to the policy referred to this Section, the assignment and pledge of all funds and all covenants, agreements and other obligations of the City to the Holders shall continue to exist and MBIA shall be subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that: (a) In the event that, on the second business day, and again on the business day,' prior to the payment date on the Bonds, the Paying Agent/Registrar has not received sufficient moneys to pay all principal of and interest on the Bonds due on the· second following or following, as the case may be, business day, the Paying Agent/Registrar'shall immediately notify MBIA or its designee on the same business day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. 45681117.1/10511518 28 (b) If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent/Registrar shall so notify MBIA or its designee. (c) In addition, if the Paying Agent/Registrar has notice that any Holder has been required to disgorge payments of principal of or intèrest on the Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jqrisdiction that such - payment constitutes a voidable preference to such Holder within the m~aning of any applicable bankruptcy laws, then the Paying Agent/Registrar shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirming in writing by registered or certified mail. (d) The Paying Agent/Registrar is hereby irrevocai;)ly designated, appointed, directed and authorized to act as attorney in fact for Holders of the Bonds· as follows: (1 ) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Paying Agent/Registrar shall (a) .execute and deliver to U. S. Bank Trust National Association, or its successors under the Policy (the "Insurance Paying AgentITrusteelJ), in form satisfactory to the Insurance Paying Ag, entlTrustee an instrument appointing MBIA as agent for such Holders in such legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (b) receive as designee to the respective Holders (and not as· Paying Agent/Registrar) in accordance with the tenor of the Policy payment from the Insurance Paying AgentlTrustee with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and (2) If and to the extent of a deficiency in amounts required to pay principal of the Bonds, the Paying AgentIRegistrar shall (a) execute and deliver to the -Insurance Paying AgentITrustee in form satisfactory to the Insurance Paying AgentITrustee an instrument appointing MBIA as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any of the Bonds surrendered to the Insurance Paying AgentITrustee or so much of the principal thereof as has not previously been paid or for which moneys are not held by the Paying Agent/Registrar and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying AgentITrustee is received), (b) receive as designee of the· respective Holders (and not as Paying Agent/Registrar) in accordance with the tenor of the Policy payment therefor from the Insurance Paying AgentITrustee, and (c) disburse the same to such Holders. (e) Payments with respect to claims for interest on and principal of Bonds disbursed by the Paying Agent/Registrar from proceeds of the Policy shall not be considered to discharge the obligation of the City with respect to such Bonds, and MBIA shall become of the owner of such unpaid Bond and claims for the interest in accordance with the tenor of the assignment· made to it under the provisions of this subsection or otherwise. (f) Irrespective of whether any such assignment is executed and delivered, the City and the Paying- Agent/Registrar hereby agree for the benefit of MBIA that: (1) They recognize that to the extent MBIA makes payments, directly or indirectly (as by paying through the Paying Agent/Registrar), on account of 45681117.1/10511518 29 '/~;;iJc;,~:F,_~~;!'~J?rv. ~.è .';?~:~.~;-~,'-'. '\"""":~~'~~~~.,'~~':~~ò1~~;¡~.:~ :,;'~j¡ . 'c· "Þ ~"f.'-i-¡:~-~':-'."" ~.... ..,.,~? .~.~ " "r">:"t"¡~>:~'-'::' .~ ;:""~~;j't?"..~",¥{· ....,.". <~.".; -''if:-;:,' .h_:;:"'.. principal of and interest on the Bonds, MBIA will be subrogated to the rights of· such Holders to receive the amount of such principal and interest from the City, as provided and solely from the'sources stated in this Ordinance and. the· Bonds; and (2) .. They will accordingly pay to MBIA the amount of such' principal·' and interest (induding principal and interest recovered. under subparagraph (ii) of ·the· first paragraph of the Policy, which principal ·and interest shall be deemed. past due and not to have been paid), as provided in this Ordinance and ·the . Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Bonds to Holders, and will otherwise ·tr~åt MBIA as the owner of such rights to the amount of such principal and interest. (g) In connection with the issuance of additional· obligations, the City shall deliver to MBIAðcopyof the disclosure document,· if any, circulated with respect to such addition'al'" obligations·. (h) With respect to amendments to this Ordinance, MBIAshall be notified of any such amendment and the City shall obtain MBIA's consent with respect to any amendment requiring owner consent. Copies of any amendments made to· the documents executed in connection with the· issuance of the Bonds which are consented to by MBIA shall be sent to Standard & Poor's Corporation. (i) MBIA shall receive notice of the resignation or removal of the Paying Agent/Registrar and the appointment of a successor thereto. Ol MBIA shall· receive copies of all notices required to be-delivered to Holders and, on an annual basis, copies of the City's audited financial statements and annual budget. (k) Any notice that is required to be given to a Holder of the ·Bonds or to the Paying Agent/Registrar pursuant to this Ordinance shall also be provided to MBIA. All notices required to . be . given to MBIA· under this Ordinance shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Surveillance. . (I) MBIA, acting alone, shall have..the righ.t .to direct aU remedies in the event of a default. MBIA shall be recognized as the registered owner of each bond which it insures for the purposes of exercising all rights and privileges available to Holders. For Bonds which it insures, MBtA shall have the right to institute any suit, action, or proceeding at law or in equity under the same terms as the Holder in accordance with the applicable provisions of this Ordinance. (m) The City agrees, subject to annual appropriation by the ·City and to the extent permitted by law, to reimburse MBIA for all reasonable expenses, including attorneys' fees and· expenses, incurred by MBIA in connection with (i) the enforcement by MBIA of the City's obligations, or the preservation or defense of any rights of MBIA, under this Ordinance and any other document executed in connection with the issuance of the Bonds, and (ii) any. consent, amendment, waiver or other action with respect this Ordinance or any. related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, MBIA reserves the right 45681117.1/10511518 30 to charge a fee in connection with its review of such consent, amendment or waiver,whether or not granted or approved. (n) The City agrees not to use. MBIA's name in any public document including, without limitation, a press' release or presentation, announcement or forum without MBIA's prior consent; provided, however, such prohibition on the use of MBIA's name shall' not. relate. to the . use of MBIA's standard approved form of disclosure in public doc~.me.nts iSsued in connection with the Bonds; and provided further such prohibition shall not apply to the use of MBIA's name in order to comply with public notice, public hearing or public reporting requirements~ (0) The City shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to· which Bonds are tendered or purchased for any purpose 'other than the . redemption and cancellation or legal defeasance of such Bonds without. the· prior written consent ofMBIA. (p) In regard to any defeasance of the Bonds, MBIA ·be shall provided with an opinion of counsel acceptance to MBIA that the Bonds have been legally defeased and,that the escrow agreement establishing such defeasance operates to legally defease the Bonds within the meaning of this Ordinance. In addition, MBIA shall be entitled to .receive (i) 15 business days notice of any advance refunding of the Bonds and (ii) an accountant's report with. respect to the sufficiency of the amounts deposited in escrow to defease the Bonds. SECTION 32: Public Meetina. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open· to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 55·1·, as amended. SECTION 33: Effective Date. This Ordinance shall be in force and effect from and after its passage on the date shown below and it is so ordained. [remainder of page . left blank intentionally] 45681117.1/10511518 31 , :~-:~"70"""~'~~;: ",",' .-:.::"~:'. "";" c" '!':': ~~<~' ,,",,"" ,,;, "">¡:t"';" '~'~'n, '~'" '~"',. . .,' Ii ' ,iYf'~ ii· '_,i..f' """, ." 'rz'ii" i· )h'<Þ " .<' ~.."....~.. ., , PASSED AND ADOPTED, this November 14, 2005. - APPROVED AS TO LEGALITY: (City Seal) 45681117.1/10511518 D HILLS, T·EXAS 8-1 ~- ~...,-~ ... .. '-~~.c:,,~.-... .-. ,C'. :--"""" 45681117.1/10511518 ""~¡-;'t1 ;;:~fJ,.,;tk\~;::·~~"~~,,i;t.: :>.·~j:¡?:'!.((;!WL~!0"i11~~:ÿ'~'\},:~-·T}f"'10' "~:17'·'""'t·~t~-"~'!iJ .R·. .,....-.,0.: "." ·"W*'¡:o!' . "":,.,,,,,. .,. .........'.. 'Y',"","".'." EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT A-1 ')"".,,"''''''''''.'':''!'~ ',",':, .,.... < '.', ~"'";'è"1~?'~·. '. ,. ,. -"..,,,, PAYING AGENTIREGISTRAR AGREEMENT THIS AGREEMENT entered into as of November 14, 2005 (this "Agreemenf'), by and between ,the City of North Richland Hills, Texas (the "Issuer"), and JPMorgan Chase· Bank, National Association, a banking corporation organized and existing under the laws of thé United States of America (the "Bank"), RECITALS WHEREAS, ·the Issuer has duly authorized and provided for the execution and delivery of· its "City of North Richland Hills, Texas, General Obligation Refunding Bonds, Series 2005" (the · Securities") , November 1, 2005, such Securities scheduled to be delivered to the initial purchasers thereof on or about December 14,2005; and WHEREAS, the Issuer has selected the. Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the· registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01 ADoointment. The Issuer· hereby appoints the Bank to serve as Paying Agent with respeqt to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities .as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). Th.e Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the' Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02 ComDensation. As compensation for the . Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in' Annex A attached. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in· accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). 4568249S.1/ioSllS18 ARTICLE TWO DEFINITIONS . . Section 2.01 Definitions. For all purposes of this Agreement, except. as oth~rwise expressly provided or unless the context otherwise requires: . . "Acceleration Date" on any Security means the date on and' after which the principal or any or all installments of interest, or both. are due and payable on any Security which has become accelerated pursuant to the terms of the . Security. "Bank Office" means the designated office of the Bank in Dallas. Texas at the address shown in Section 3.01 hereof. The Bank will notify the Issuer in writing of any. change in location of the Bank Office. "Bond Resolution· means the resolution. order. or ordinance of the governing body of the Issuer pursuant to whictl the Securities are issued,·. certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year" means the fiscal year of the Issuer, ending September 30th. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Requesr and ·'ssuer Order" means a written request or order signed in the name of the Issuer by the Mayor, City Secretary, City Manager, Assistant City Manager, or Director of Finance. anyone or more of said officials, and delivered to the Bank. "Legal Holiday· means a day on which the Bank is required or authorized to be dosed. . · Person" means any individual. corporation. partnership, joint venture, association, joint stock company. trust. unincorporated organization or government or any agency or political subdivision of a government. ·Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for th~ purposes of this definition. any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been' registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Resolution). "Redemption Date" when used with respect to any Security to be redeemed means the date fixed for such redemption pursuant to the terms of the Bond Resolution. "Responsible Officer" when used with respect to the Bank means the Chairman or Vice-Chairman of the Board of Dir~ctors, the Chairman or Vice-Chairman of the Executive Committee of the Board of' Directors, the 45682495.1/10511518 2 ... ,.,.,-. ,. ..~... President, ·any Vice President, the Secretary, any Assistant . Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust OffICer, or any other officer of the Bank 'customarily performing functions similar to those performed by any of the above designated officers and also· means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. . ·Security Register" means a register maintained by the Bank on behalf of . the Issuer providing for the registration and transfers of Securities. ·Stated MaturitY' means the date specified in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02 . Other Definitions. The terms "Bank,· "Issuer,· and "Securities (Security)· have the meanings assigned to them in the recital. paragraphs of this Agreement. _ The term ·Paying Agent/Registrar" refers to the Bank in the performance -of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01 Duties of Pavina Aaent. As Paying Agent, the Bank shall, provided adequate colleded funds have been provided to it for such purpose - by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated. Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 2001 Bryan Street, 9th Floor, Dallas, Texas 75201, Attention: Operations. As Paying Agent, the Bank shall,. provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date. All payments of principal and/or interest on the Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the paying agent account provided in Section 5.05 hereof, sent by United States mail, first class, postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. . Section 3.02 Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities at the dates specified in the Bond Resolution. ARTICLE FOUR REGISTRAR Section 4.01 Security Reaister - Transfers and Exchanaes. The Bank agrees to keep and maintain for and on behalf of ·the Issuer at the Bank Office books and records (herein sometimes referred to as the ·Security Register") for recording the name~ and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the 45682495.1/10511518 3 ,,'; .c~,,.,.:,:. ' .... """" }':V,'/:" ,",' C.."f',:~T'}.' ' , , ,'>1 ",-,,:,,1';'"":" '. >"~"'. ,'''' . .,. .' ~'t r"" ,¥,t~f"':?: Y'"''I'f'" '.~', \ " 9F' . 5'~i"!'J"'-"'1';',"'I';l$S",,~";"'"'''''''''~,;~J',~ '.::; 1< (~ ,-"' ,~'(.,,~""'"!'''''''.''" '.!"'.:'.'~ ,~,,,,',,,, ,:<¡",. ",~. .",",,<., .,. ".'.." ... ""c"", .., payment of the principal of and interest on the Securities to the Holders and containing such other infonnation as. may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and Bank may prescribe. All transfers, exchanges and· replacement of Securities shäll be noted in the Security Register. Every Security surrendered for transfer or exchange shall be du~y endorsed or ·be . accompanied by a written instrument of transfer, the signature on whiçh has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any· supporting documentation it feels necessary .,. to effect a _ re-registràtion, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the ~xchangeor transfer by the Holders thereof will. be completed and new Securities delivered to the Holder or the assignee .of the Holder in not more than three (3) business'days after the receipt of the Securities to be· cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02 Certificates. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations '·for which it serves as registrar, or that is maintained for its own securities. Section4.03 Form of Security Reaister. The Bank, as Registrar, will maintain the Security Register relating to··the registration, payment, transfer and exchange of the Securities in accordance with the Bank's gen'eral practices and procedures in effect from· time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the· Bank has currently available and currently utilizes at the time. ..; The Security ·Register may be maintained in written form or in any other form capable of being converted into written form within a· reasonable time. .. Section 4.04 List of Security Holders. The Bank will provide the Issuer at any time requested by the . Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee· of the Issuer, except upon reçeipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. 45682495.1i10511518 4 ~~:'~~:'~'~:'~.:~~~";:~~·~r'~0"·:~·f~~· ",' .':'~7F ~(~':' '.~c~ ,/ '}':" ~'i,',1-~(.. ,.-:-,,;_~ ,':-J"-" .. > ~-,:~:;::'·!'.~L~.~{_,_ 'i ': ,,' ','> , :'..'''. .';f~·· ...' ';:" .~".~~~"!'f;; ; ·~"!,;,:"i"',"1;~~m:",~ffi.·""T\"!":·~.·f,.~~·~":~"""w..'·;-:ft:"~1"'::'G"'. .... '"'''''I''!j'f",i~''¡H~~·~'··''''. ,... "'. ." Section 4.05 Return of Cancelled Certificates. The Bank. will, at such reasonable intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid. Section4.06 Mutilated. DestroYed. Lost or Stolen Securities. The Issuer, ·hereby instructs the Bank, subject to the provisions of the Bond Resolution, to. dèliver and issue . Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. . In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute and deliver a replacement Security of like fonn and tenor. and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only. upon the approval of the Issuer and atter (i) the filing by the Holder thereof with the Bank· of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the· Bank of indemnification in an amount satisfactory to hold the Issuer and the' Bank harmless. All expenses and charges' associated with such indemnity and with the preparation, execution ·and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. Section 4.07 Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid 'pursu~nt-to Section 3.01, Securities· it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. ARTICLE FIVE THE BANK Section 5.01 Outies··of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02 . Reliance on Documents. Etc. (a) The Bank may conclusively' rely, as . to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or· in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfadory to it against such risks or liability is not assured to it. (d) The· Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or docume~t believed by it to be genuine 45682495.1i10511518 5 --":'"[-::-'-,' '.;';'~¡';'~~;::·T~~'f:',:;' ,':'~:I>: ',." ,:, f~' :-:; '-~O:;~'~T""'!'Ii;"'~ -'~-.c' "f:~'~''-'< r'~--::~-?~;e:(' f\<_ -~>->-~~~~"".::':''11ti.' ,,: i~T"~~' .".';.''''\''''.~'''''I"::'.'" ;1~~~~~~~',I'+~~~'~'~'iN~""""'!Yi"~'("'f~i..,,,,,·~;.'>"'''''i.';\f\I'P1T~.C ·..··~f';"...;.".,.,.,;. ""11'..."<"'''.. ··."'c·,.,....".....,,·· .;",", .,...·c....,,,···,· .,'W ~. '..,~. and to have been signed or presented by the proper party or parties. Without limiting the generality. . of the foregoing statement, the Bank need not examine the ownership of any Securities, but 'is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the HOlder or an agent of the Holder. The Bank shall not be bound .to make any investigation into, the facts or matters. stated in a resolution, certificate, statement, instrument, opinion', report, notice, . request, direction, consent, order, bond, note, seCUrity, or other paper or document supplied by Issuer. , (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authoriza~ion and . protection with respect to any actio~ taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The ~nk may exercise any of the powers hereunder and _ perform any duties hereunder either directly or by or through agents or attorneys of the Bank. o Section 5.03 Recitals of Issuer. The recitals contained herein ·with respect to the Issuer and in the Securities shall be taken as the· statements of the Issuer, and'· the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. Section 5.04 Mav Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05 Monevs Held bv Bank - Pavina Aaent AccountlCollateralization. Mon'ey deposited by the Issuer with the Bank of the principal (or Redemption Price, if applicable) of· or interest on any Securities shall be' segregated from other funds of the Bank and the Issuer and shall be held. in trust for the benefit of the Holders of such Securities. All money deposited with the Bank hereunder shall be secured in the manner and to the fullest extent required by law for the security of funds of the Issuer. Amounts held by the Bank which represent principal of and interest on the Securities remaining unclaimed by the owner after the expiration of three years from the date such amounts have become due and payable shall b'è reported and disposed of by the Bank in accordance with the provisions of Texas law including, to the extent applicable, Title 60f the Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in compliance with IÞthis .provision. The Bank is not obligated to pay interest on any money received by it hereunder. This Agreement relates solely to money deposited for the purposes described herein, and the parties agree that the Bank may serve as depository for other funds of the Issuer, act as trustee under indentures authorizing other bond transactions of the Issuer, or act in any other capacity not ¡nconflict with its duties hereunder. Section 5.06 Indemnification. To the extent permitted by law.. the Issuer agrees toiindemnify the· Bank for, and hold it harmless against, any loss, liability" or expense incurred 45682495.1;10511518 6 · "d,"".,,~~<. " '·:.;r~~Y·' ·"'·è;'~è!:~"'-~:·:·(..~T ;'0';11' "", ..+' , '...' *' ~"Ji':4"l"'\"!"!""..' :".,*-',,,,~. '" ',' ,..# .... y C'. , ,,~ ..~" .""",: .~~.~,. , , "~')'~,,"'~:r ""'''7".'''!",'"... ..~.;.r W',?'¡ .T"" .,..~il(.C;· .:.... ~",,..t"',.,..':t " .",",,';1ir.'~~. ".' ", '. ,"'. '''Æi'';",!'''./··~''..·' ."C ...,...".. c·,. . without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim ·or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. . Section 5.07 Interoleader. The Issuer and the Bank agree that tlJe 'Bank may, seek , adjudication of any adverse claim, demand, or controversy over its per:son as well as funds on deposit, in either a Federal or 'State District Court located in the State and County where the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, retum receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has. the right to file a Bill of Interpleader ,in any court of competent jurisdiction in the State of Texas to determine the rights of any Person claiming any interest herein. Section 5.08 DT Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent· depository trust services by other organizations, the Bank has the capability and, to· the extent within its control, will comply with the "Operational Arrangements·, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS .. ~Section 6.01 Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02 Assianment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03 Notices. Any request, demand, authorization, direction, notice, consent, , waiver, or other document provided or permitted hereby to be given or fumished ·to the Issuer or the Bank shall be mailed or delivered to· the Issuer or the Bank, respectively, at the addresses shown on page 9. . Section 6.04 Effect of Headinas. The Article an'd Section headings herein ate for convenience only and shall not affect the construction hereof. Section 6.05 Successors and Assians. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section6.06 Severabilitv. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in . any way be affected or impaired thereby. Section 6.07 Benefits of Aareement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. 45682495.1i10511518 7 ":"~$"'~"('_ ?:':.;~~~'^}o/~';-~,/F"; ',_ '::'~':: - -, 0 i>.~ :'~-:/~'~~-",~;t ~>_"","'~o<_ #c,,' W"''''''''~.'?'''' ' "1:"\ ..c.\. '." ?·~J'~:~$J.,,'"!~"'::!'~~I'f':.!'~hi~.,!!t."&'"""E'iY"hv,,"<"'J:1.J·';;:f.,~'.t~""'~"'; ,..,..." .,,"""",.,w,.Z"1<"m1". )_~,~""'!":',. "'.",.".."..,, ,', ..., >, . . .... c, Section 6.08 Entire Aareernent. This Agreement and the Bond Resolution ·constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflictcexists between this Agreement and the, Bond Resolution, the Bond Resolution shall govem. Section· 6.09 Counteroarts. This Agreement may be executed .in . any number of . counterpa.rts, each of which shall be deemed an original and all of which shall constitute one - and the same Agreement. , Section 6.10 Termination. This Agreement will terminate (i) on the . date of final payment of the principal of and interest on the Securities to .the Holders thereof or (ii) may be earlier te~inated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been· appointed by the Issuer and such appointment accepted and (b) notice given to the Holders of the Securities of the appointment of a· successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and· deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Sedion 6.11 Govemina Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. 45682495.1/10511518 8 ."'''lé.:-CY::'':~'''""'~~'''"''''':f~7'.:\'-~t ,;~~. ':"'V' ,,~~>,}',-;>1~'".""!'!""'"~'1:1~~;"'.'.' -,. >'r.-\"~'''f,. "':~~i(.~~";~~i~·k"~<";"~¡;'~' '\ . ..'.~.·c,~. '" ·'t·" ;c··W''!ff>~.· "¡tiP'''',''' ' . ';, ""f'"'. " ' ",,,,, H. ,...,.,,;.~ ;þ" IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Attest: BY: Title: Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Title: CITY OF NORTH RICHLAND HillS, TEXAS BY: Mayor Address: P. O. Box 820609 North Richland Hills, TX 76182-0609 Attest: City Secretary 45682495.1/10511518 9 . M··· . .. . . . ., .." . . ; . ' .. ... . ,,,..:..... , ; .. " . " ~ . . ...' ~ "." ". : ..;. '.... . . . '. .. . ,.. .., .. . .. "'. ... .. .... . .,. . ... ,. 'o- J..'.:'..:".' .... ·0···. ·n··g···:a· .11"· .:;.::.:......::...:i:¡·..·. .. .. ...... " . " ... ,. . .".....' .... . .... ·.....u . ... ... .. .... ... ... .. .., . -... .... ...-... .,.- ..... . '..' .., ... ,. " . .-', . ,. " ' .. .... . . H" . . '.. . . .. . . ..., .. . ".. .. ..... -. .. - .. . .. ..,'. '" . .".. . ......... JPMorgan Fee Proposal Annex A Schedule of Fees for Services lIS Pøyin, Agent alUl Registrør in con"ection with . City of North Richl.lUIlIUls Gener. Obligøtion Refunding Bonds, Series 2005 Based upon our-current understanding of your proposed transaction, our fee proposal is as follows: Pricing for Paying Agent and Registrar· ne Paying Agent and Registrar Fee covers the maintenance of records as ·registrar, processing of transfers, and payment of interest/principal funds for Debt Service. Annual Fee (payable annually in advance) One Time Fee (payable upon closing) $300.00 $2,800.00 EXHIBIT B BOND PURCHASE AGREEMENT 45681117.1· B-1 $9,930,000 CITY OF NORTH RICHLAND HILLS, TEXAS GENERAL OBLIGATION REFUNDING BONDS SERIES 2005 PURCHASE AGREEMENT November 14,2005 The Honorable Mayor and Members of the City Council City of North Richland Hills, Texas 7301 N .E. Loop 820 North Richland Hills, Texas 76180 Dear Mayor and Members of the City Council: The undersigned, Estrada Hinojosa and Company, Inc. (hereinafter sometimes called the "Representative"), acting on behalf of itself and on behalf of the other underwriters named in the list attached as Schedule I hereto (the Representative and such other underwriters being collectively called the "Underwriters"), offers to enter into the following agreement with the City of North Richland Hills, Texas (hereinafter called the "Issuer"), which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the Underwriters. This offer is made subject to the Issuer's written acceptance hereof on or before 10:00 p.m., Central time on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Issuer at any time prior to the acceptance hereof by the Issuer. Capitalized terms not otherwise defined in this Purchase Agreement shall have the same meanings set forth in the Ordinance (as defined herein) or in the Official Statement (as defined herein). The Issuer acknowledges that in connection with the offering of the Bonds for sale and the discussions and negotiations relating to the terms of the Bonds set forth in this Agreement: (a) the Underwriters have acted at arms length, are not agents of or advisors to, and owe no fiduciary duties to, the Issuer or any other person, (b) the Underwriters' duties and obligations to the Issuer shall be limited to those contractual duties and obligations set forth in this Agreement and (c) the Underwriters may have interests that differ from those of the Issuer. 1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby agree to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriters, all, but not less than all, of the Issuer's $9,930,000 General Obligation Refunding Bonds, Series 2005 (the "Bonds"). The Bonds will be dated November 1, 2005. Interest on the Bonds will accrue from their dated date and will be payable February 15 and August 15 of each year, commencing February 15,2006. Dallas I033670_2.DOC The principal amount of the Bonds to be issued, the dated date therefor, the maturities, and optional redemption provisions and interest rates per annum are set forth in Schedule II hereto. The Bonds shall be as described in, and shall be issued and secured under and pursuant to the provisions of an ordinance adopted by the Issuer's City Council on November 14, 2005, authorizing the issuance of the City of North Richland Hills, Texas General Obligation Refunding Bonds, Series 2005 (the "Ordinance"). The purchase price for the Bonds shall be $9,905,169 (representing the principal amount of the Bonds of $9,930,000, plus a net premium of $42,075.75 less an Underwriters' discount on the Bonds of $66,906.75), plus interest accrued on the Bonds from the dated date of the Bonds to the Closing Date (as hereinafter defined). Delivered to the Issuer herewith is a corporate check of the Representative payable to the order of the Issuer in the amount of $99,400. The Issuer agrees to hold such check uncashed until the Closing (as hereinafter defined) to ensure the perfonnance by the Underwriters of their obligations to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with the payment by the Underwriters of the purchase price of the Bonds, the Issuer shall return such check to the Representative as provided in Paragraph 6 hereof. Should the Issuer fail to deliver the Bonds at the Closing, or should the Issuer be unable to satisfy the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Purchase Agreement (unless waived by the Underwriters), or should such obligations of the Underwriters be tenninated for any reason pennitted by this Purchase Agreement, such check shall immediately be returned to the Representative. In the event the Underwriters fail (other than for a reason pennitted hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing as herein provided, such check shall be retained by the Issuer as full liquidated damages for such failure of the Underwriters and for any defaults hereunder on the part of the Underwriters. The Underwriters and the Issuer understand that in such event the Issuer's actual damages may be greater or may be less than such amount. Accordingly, the Underwriters hereby waive any right to claim that the Issuer's actual damages are less than such amount, and the Issuer's acceptance of this offer shall constitute a waiver of any right the Issuer may have to additional damages from the Underwriters. The Underwriters hereby agree not to stop or cause payment on said check to be stopped unless this Purchase Agreement has been tenninated in accordance with its tenns. Inasmuch as this purchase and sale represents a negotiated transaction, the Issuer understands, and hereby confinns, that the Underwriters are not acting as a fiduciary of the Issuer, but rather are acting solely in their individual capacities as Underwriters for their own account. 2. Public Offering. The Underwriters agree to make a bona fide public offering of all of the Bonds at a price not to exceed the public offering price set forth on the front cover of the Official Statement and may subsequently change such offering price without any requirement of prior notice. The Underwriters may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering price stated on the inside front cover of the Official Statement. On or before the Closing Date, the Representative shall execute an issue price certificate prepared by Bond Counsel (as hereinafter Da11as l033670_2.DOC -2- defined) verifying the initial offering prices to the public at which a substantial amount of each stated maturity of the Bonds was sold to the public. 3. The Official Statement. (a) Attached hereto as Exhibit A is either a draft of the final Official Statement or a copy of the Preliminary Official Statement dated November 4, 2005 (the "Preliminary Official Statement"), including the cover page and Appendices thereto, of the Issuer relating to the Bonds. The final Official Statement relating to the Bonds and reflecting the maturity, pricing and redemption infonnation provided herein will be dated the date hereof and is hereinafter referred to as the "Official Statement." (b) The Preliminary Official Statement has been prepared for use in connection with the public offering, sale and distribution of the Bonds by the Underwriters. The Issuer hereby represents and warrants that the Preliminary Official Statement was deemed final by the Issuer as of its date, except for the omission of such infonnation which is dependent upon the final pricing of the Bonds for completion, all as pennitted to be excluded by Section (b)( 1) of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). (c) The Issuer hereby authorizes the Official Statement and the infonnation contained therein to be used by the Underwriters in connection with the public offering and the sale of the Bonds. The Issuer consents to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. The Issuer shall provide, or cause to be provided, to the Underwriters, as soon as practicable after the date of the Issuer's acceptance of this Agreement (but, in any event, not later than within seven business days after the Issuer's acceptance of this Agreement and in sufficient time to accompany any confirmation that requests payment from any customer), copies of the Official Statement which is complete as of the date of its delivery to the Underwriters in such quantity as the Underwriters shall request in order for the Underwriters to comply with Section (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board. (d) If, after the date of this Agreement to and including the date the Underwriters are no longer required to provide an Official Statement to potential customers who request the same pursuant to the Rule (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from a nationally recognized municipal securities infonnation repository, but in no case less than 25 days after the "end of the underwriting period" for the Bonds), the Issuer becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the Issuer will notify the Underwriters (and for the purposes of this clause provide the Underwriters with such infonnation as it may from time to time request), and if, in the opinion of the Underwriters, such fact or event requires preparation and publication of a supplement or amendment to the Official Statement, the Issuer will forthwith prepare and furnish, at the Issuer's own expense (in a fonn and manner approved by the Underwriters), a reasonable number of copies of either amendments or supplements to the Official Statement so that the statements in the Official Statement as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not Dallas 1033670_2.DOC -3- misleading or so that the Official Statement will comply with law. If such notification shall be subsequent to the Closing, the Issuer shall furnish such legal opinions, Bonds, instruments and other documents as the Underwriters may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. (e) The Underwriters hereby agree to timely file the Official Statement with a nationally recognized municipal securities infonnation repository. Unless otherwise notified in writing by the Underwriters, the Issuer can assume that the "end of the underwriting period" for purposes of the Rule is the Closing Date. 4. Representations and Warranties of the Issuer. The Issuer hereby represents and warrants to the Underwriters, which representations and warranties shall survive the purchase and offering of the Bonds as follows: (a) The Issuer is a duly organized municipal corporation and a political subdivision duly created and existing under the Constitution and the laws of the State of Texas and has full legal right, power and authority pursuant to the Constitution and laws of the State of Texas, including particularly Chapter 1207, Texas Government Code, as amended (the "Act"), and at the date of the Closing will have, full legal right, power and authority under the Act to (i) enter into this Purchase Agreement and the escrow agreement (the "Escrow Agreement") between the City and the Escrow Agent named in the Official Statement as authorized by the Ordinance, (ii) adopt the Ordinance, (iii) sell, issue and deliver the Bonds to the Underwriters as provided herein, and (iv) carry out and consummate the transactions described in this Purchase Agreement, the Escrow Agreement, the Ordinance and the Official Statement, and the Issuer has complied, and will at the Closing be in compliance in all respects, with the tenns of the Act and the Ordinance as they pertain to the issuance of the Bonds. (b) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of, and the perfonnance by the Issuer of the obligations on its part contained in, the Bonds, the Ordinance, the Escrow Agreement, this Purchase Agreement and the consummation by it of all other transactions described in the Official Statement, the Ordinance, the Escrow Agreement, and this Purchase Agreement; the Ordinance and this Purchase Agreement constitute legal, valid and binding agreements of the Issuer, enforceable in accordance with their respective tenns, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; and the Bonds, when issued, authenticated and delivered to the Underwriters in accordance with the Ordinance and this Purchase Agreement, will be payable from an ad valorem tax, levied annually, within the limits presented by law, against all taxable property in the City, and will be entitled to the benefits of the Ordinance and will be enforceable in accordance with their tenns, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights. (c) The Issuer is not in breach of or in material default under any applicable constitutional provision, law or administrative regulation of the State of Texas or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, Dallas I033670_2.DOC -4- note, ordinance, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets are otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a default or event of default by the Issuer under any such instrument; and the execution and delivery of the Bonds, the Escrow Agreement, this Purchase Agreement, and adoption of the Ordinance and compliance on the Issuer's part with the provisions contained therein, will not conflict with or constitute a breach of or default under any constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, ordinance, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer or any of its property or assets are otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Ordinance. (d) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer of its obligations under, this Purchase Agreement, the Escrow Agreement, the Ordinance and the Bonds, have been duly obtained, except for the approval of the Bonds by the Attorney General of the State of Texas (and the registration of the Bonds by the Comptroller of Public Accounts of the State of Texas). (e) The Bonds conform to the description thereof contained in the Official Statement under the caption "THE BONDS"; the Ordinance conforms to the description thereof contained in the Official Statement; and the proceeds of the sale of the Bonds will be applied generally as described in the Official Statement under the caption "PLAN OF FINANCING." (f) There is no litigation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the Issuer, threatened against the Issuer, affecting the corporate existence of the Issuer or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the collection or application of ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Ordinance, the Escrow Agreement, or this Purchase Agreement, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any authority for the issuance of the Bonds, the adoption of the Ordinance or the execution and delivery of this Purchase Agreement, nor, to the best knowledge of the Issuer, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds, the Ordinance, the Escrow Agreement, or this Purchase Agreement. Da11as I033670_2.DOC -5- (g) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) At the time of the Issuer's acceptance hereof and (unless an event occurs of the nature described in Paragraph 3(d)) at all times subsequent thereto during the period up to and including the Closing Date, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except as described in the Official Statement, the Issuer has complied in all material respects with all continuing disclosure agreements made by it in accordance with Rule 15c2-12. (i) If the Official Statement is supplemented or amended pursuant to Paragraph 3( d), at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the Closing Date, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. G) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Bonds as provided in and subject to all of the terms and provisions of the Ordinance and not take or omit to take any action which action or omission will adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds. (k) The Issuer will furnish such information and execute such instruments and take such action in cooperation with and at the expense of the Underwriters as the Underwriters may reasonably request (A) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Underwriters may designate and (z) determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of the Bonds (provided, however, that the Issuer will not be required to qualify as a foreign corporation or to file any general of special consents to service of process under the laws of any jurisdiction) and will advise the Underwriters immediately of receipt by the Issuer of any notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose. (1) The financial statements of the Issuer, and other financial information regarding the Issuer, in the Official Statement fairly present the financial position and results of the Issuer as of the dates and for the periods therein set forth. Prior to the Closing, the Issuer will not take any action within or under its control that will cause any adverse change of a material nature in such financial position, results of operations or condition, financial or otherwise, of the Issuer. The Issuer is not a party to any litigation or other proceeding pending or, to its knowledge, threatened which, if decided adversely to the Issuer, would have a materially adverse effect on the financial condition of the Issuer. Dallas I033670_2.DOC -6- (m) Prior to Closing, the Issuer will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by ad valorem taxes of the Issuer without the prior written consent of the Underwriters. (n) Any certificate, signed by any official of the Issuer authorized to do so in connection with the transactions contemplated by this Purchase Agreement, shall be deemed a representation and warranty by the Issuer to the Underwriters as to the statements made therein. 5. Closing. (a) At 10:00 a.m., Dallas, Texas time, on December 14, 2005, or at such other time and date as shall have been mutually agreed upon by the Issuer and the Representative (the "Closing Date"), the Issuer will, subject to the terms and conditions hereof, deliver to the Underwriters the initial Bond registered in the name of the Representative, in temporary form, together with the other documents hereinafter mentioned, and will have available for immediate exchange definitive Bonds deposited with The Depository Trust Company, New York, New York ("DTC"), or deposited with the Paying Agent/Registrar, if the Bonds are to be held in safekeeping for DTC by the Paying Agent/Registrar pursuant to DTC's FAST System and the Ordinance, duly executed and authenticated in the form and manner contemplated below, and the Underwriters will, subject to the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 hereof in immediately available funds (such events being referred to herein as the "Closing"). Concurrently with such payment by the Underwriters, the Issuer shall return to the Representative, the check referred to in Paragraph 1 hereof. Payment for the Bonds as aforesaid shall be made at the offices of the Paying Agent/Registrar, or such other place as shall have been mutually agreed upon by the Issuer and the Representative. (b) Delivery of the definitive Bonds in exchange for the initial bond shall be made through DTC, utilizing a book-entry only form of issuance, and the Issuer agrees to cooperate and execute such agreements as may be required to allow for the use of such book-entry only system. The definitive bonds shall be delivered in fully registered form bearing CUSIP numbers without coupons with one Bond for each maturity, registered in the name of CEDE & CO. and shall be made available to the Representative at least one business day before the Closing Date for purposes of inspection, except that the failure to include CUSIP numbers or the printing of an incorrect CUSIP number on any Bond shall not be a default under this Purchase Agreement. 6. Closing Conditions. The Underwriters have entered into this Purchase Agreement in reliance upon the representations, warranties and agreements of the Issuer contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions: Dallas I033670_2.DOC -7- (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing. (b) The Issuer shall have performed and complied with all agreements and conditions required by this Purchase Agreement to be performed or complied with by it prior to or at the Closing. (c) At the time of the Closing, the Ordinance shall be in full force and effect and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Representative. (d) At the time of the Closing, all official action of the Issuer relating to this Purchase Agreement, the Escrow Agreement, the Bonds and the Ordinance shall be in full force and effect and shall not have been amended, modified or supplemented; and the Underwriters shall have received, in appropriate form, evidence thereof. (e) At or prior to the Closing, the Ordinance shall have been duly adopted and filed in the records of the Issuer and the Issuer shall have duly executed and delivered and the Paying Agent/Registrar shall have duly authenticated the Bonds. (f) At the time of the Closing, there shall not have occurred any change in the condition, financial or otherwise, or in the operations of the Issuer, from that set forth in the Official Statement that, in the reasonable judgment of the Representative, is material and adverse and that makes it, in the reasonable judgment of the Representative, impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement. (g) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money. (h) All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the transactions contemplated by this Purchase Agreement shall be reasonably satisfactory in legal form and effect to the Underwriters. (i) At or prior to the Closing, the Representative shall have received copies of each of the following documents: (1) The Official Statement, and each supplement or amendment, if any. (2) The Ordinance certified by the City Secretary under the Issuer's seal as having been duly adopted by the Issuer and as being in effect, with such changes or amendments as may have been agreed to by the Representative, and containing therein the agreement of the Issuer to provide certain periodic information and notices of material events in accordance with Rule 15c2-12, as described in the Official Statement under the caption "CONTINUING DISCLOSURE OF INFORMATION." Dal1as I033670_2.DOC -8- (3) The opInIon of Fulbright & Jaworski L.L.P., Bond Counsel, In substantially the fonn and substance of Appendix C to the Official Statement. (4) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of the State of Texas, approving the Bonds, as required by law, and the registration certificate of the Comptroller of Public Accounts of the State of Texas for the Bonds. (5) The supplemental opinion, dated the date of the Closing, of Fulbright & Jaworski L.L.P., addressed to the Issuer and the Underwriters to the effect that: (i) the Ordinance has been duly adopted and is in full force and effect, (ii) the Bonds are exempted securities under the Securities Act of 1933, as amended (the "1933 Act") and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and it is not necessary, in connection with the offering and sale of the Bonds, to register the bonds under the 1933 Act or to qualify the Ordinance under the Trust Indenture Act, and (iii) except to the extent noted therein, said finn has not verified and is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement but that said finn has reviewed the infonnation contained in the Official Statement under the captions "PLAN OF FINANCING" (except under the subcaptions "Sources and Uses of Proceeds") "THE BONDS" (except under the subcaptions "Book-Entry-Only System" and "Bondholders Remedies"), "TAX MATTERS," "CONTINUING DISCLOSURE OF INFORMATION" (except under the subcaption "Compliance with Prior Undertakings"), and the subcaptions "OTHER INFORMATION-Legal Investments and Eligibility to Secure Public Funds in Texas," and "OTHER INFORMATION-Legal Matters," and such finn is of the opinion that the infonnation relating to the Bonds and legal matters contained under such captions and subcaptions is an accurate and fair description of the laws and legal issues addressed therein and, with respect to the Bonds, such infonnation confonns to the Ordinance. (6) An opInIon, dated the date of the Closing and addressed to the Underwriters, of Vinson & Elkins L.L.P., Dallas, Texas ("Underwriters' Counsel"), in substantially the fonn of Exhibit B hereto. (7) A certificate, dated the date of the Closing, signed by the City Manager and the Director of Finance, to the effect that (i) the representations and warranties of the Issuer contained herein or in any certificate or document delivered by the Issuer pursuant to the provisions hereof are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the Official Statement, no litigation is pending or, to the knowledge of such persons, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds or the collection or application of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Ordinance, the Escrow Agreement, or the Purchase Agreement or contesting the powers of the Issuer or contesting the authorization of the Bonds or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the Official Statement (but in lieu of or in conjunction with such certificate, Dallas 1033670 _2.DOC -9- the Representative may, in its sole discretion, accept bonds or opinions of the General Counsel of the Issuer that, in his or her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); (iii) no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and infonnation therein not misleading in any material respect; (iv) the descriptions and statements of or pertaining to the Issuer contained in the Official Statement, on the date of sale of the Bonds and on the date of the delivery of the Bonds, were and are true and correct in all material respects; (v) insofar as the Issuer and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (vi) insofar as the descriptions and statements including financial data, of or pertaining to entities, other than the Issuer, and their activities contained in the Official Statement are concerned, such statements and data have been obtained from sources which the Issuer believes to be reliable and the Issuer has no reason to believe that they are untrue in any material respect; and (vii) there has not been any material and adverse change in the affairs or financial condition of the Issuer since September 30, 2004, the latest date as to which audited financial infonnation is available. (8) Any other certificates and opinions required by the Ordinance for the issuance thereunder of the Bonds. (9) A certificate, dated the date of the Closing, of an appropriate official of the Issuer to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of the delivery of the Bonds, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of Section 148 of the Code. (10) Evidence in a fonn acceptable to the Representative that Moody's Investors Service, Inc., Standard & Poor's Rating Services, A Division of The McGraw- Hill Companies, Inc., and, pursuant to municipal bond insurance policy (the "Policy") issued by MBIA Insurance Corporation ("MBIA") have assigned ratings of "Aaa" and "AAA" to the Bonds. (11) The Policy issued by MBIA unconditionally and irrevocably guaranteeing the payment of the principal of and interest on the Bonds, together with an opinion of counsel to MBIA as to the validity and enforceability of the Policy in a fonn acceptable to the Representative. (12) A copy of a special report prepared by the independent Certified Public Accountants named in the Official Statement, addressed to the Issuer, Bond Counsel and the Underwriters verifying (A) the arithmetical computations of the adequacy of the maturing principal and interest on the escrowed securities and uninvested cash on hand under the Escrow Agreement to pay, when due, the principal, interest and early Dal1as I033670_2.DOC -10- redemption premium requirements, if any, of the Refunded Obligations and (B) the computation of the yields with respect to such securities; (13) Such additional legal opinions, certificates, instruments and other documents as the Representative or Underwriters' Counsel may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer on or prior to the date of the Closing of all the respective agreements then to be performed and conditions then to be satisfied by the Issuer. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in fonn and substance reasonably satisfactory to the Representative. (j) If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Agreement, or if the obligation of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be tenninated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriters nor the Issuer shall be under any further obligation hereunder, except that (i) the check referred to in Paragraph 1 hereof shall be immediately returned to the Representative by the Issuer and (ii) the respective obligations of the Issuer and the Underwriters set forth in Paragraph 9 hereof shall continue in full force and effect. 7. Termination. The Representative shall have the right to terminate in its sole discretion, reasonably exercised, the Underwriters' obligation under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Issuer of its election to do so if, after the execution hereof and prior to the Closing: (a) (i) Legislation (including any amendment thereto) shall have been introduced in or adopted by either House of the Congress of the United States or recommended to the Congress or otherwise endorsed for passage by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation is under consideration by either such committee or is introduced as an option for consideration by either such committee by the staff of such committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or a bill to amend the Code (which, if enacted, would be effective as of a date prior to the Closing) shall be filed in either house, or (ii) a decision shall have been rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or (iii) an order, filing, ruling or regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United States or the Internal Revenue Service or any other agency of the United States, or (iv) a release or official statement shall have been issued by the President of the United States or by the Treasury Department of the United States or by the Internal Revenue Service, the effect of which, in any such case described in clause (i), (ii), (iii), Dal1as 1033670_2 .DOC -11- or (iv), would be to impose, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds or upon income of the general character to be derived by the Issuer, other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the date hereof, in such a manner as in the reasonable judgment of the Representative would make it impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement. (b) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection with the public offering of the Bonds, or any action shall have been taken by any court or by any governmental authority suspending the use of the Official Statement or any amendment or supplement thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court or by any such authority. (c) (i) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the Issuer, its property or income, its obligations (including the Bonds) or the interest thereon, which in the reasonable judgment of the Representative would make it impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement. (d) Any fact or event shall exist or have existed that, in the Representative's reasonable judgment, requires or has required an amendment of or supplement to the Official Statement which in the reasonable judgment of the Representative would make it impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement. (e) (i) (A) Trading generally shall have been suspended or materially limited on or by, as the case may be, either of the New York Stock Exchange or the American Stock Exchange, (B) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services shall have occurred, or (C) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the reasonable judgment of the Representative, is material and adverse and (ii) in the case of any of the events specified in clauses (i)(A) through (C), such event singly or together with any other such event makes it, in the reasonable judgment of the Representative, impracticable to market the Bonds on the terms and in the manner contemplated in the Official Statement. (f) There shall have occurred any downgrading, or any notice shall have been given of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate the direction of a possible change, in the rating accorded any of the Issuer's obligations (including the underlying ratings to be accorded the Bonds) by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act of 1933, as amended. Dal1as I033670_2.DOC -12- (g) Legislation shall have been enacted by the federal government or the State of Texas, a decision of any federal or State of Texas court shall have been made, or a ruling or regulation (proposed, temporary or final) of the Securities and Exchange Commission or other governmental agency shall have been made or issued that, in the opinion of Underwriters' Counsel, has the effect of requiring the contemplated distribution of the Bonds or any agreement offered in connection therewith to be registered under the Securities Act of 1933, as amended, or the Ordinance to be qualified as an indenture under the Trust Indenture Act of 1939, as amended. (h) The purchase of and payment for the Bonds by the Underwriters, or the resale of the Bonds by the Underwriters, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; provided that such prohibition shall not be due to any action or inaction of one or more of the Underwriters. (i) There shall have been any material adverse change in the affairs of the City which in the Representative's reasonable judgment will materially adversely affect the market for the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds. (j) There shall have occurred (i) an outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war occurs; or (2) any other calamity or crisis or any change in the financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (1) or (2), in the reasonable judgment of the Underwriters, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner contemplated in the Preliminary Official Statement 8. Expenses. (a) The Underwriters shall be under no obligation to pay, and the Issuer shall pay, any expenses incident to the performance of the Issuer's obligations hereunder, including, but not limited to (i) the cost of preparation, printing and delivery of the Preliminary Official Statement and the Official Statement; (ii) the cost of preparation and printing of the Bonds; (iii) the fees and disbursements of Fulbright & Jaworski LLP for their services as Bond Counsel to the Issuer; (iv) the fees and disbursements of First Southwest Company, Inc. for their services as Financial Advisor to the Issuer; (v) the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the Issuer; (vi) the premium associated with the Policy; and (vii) the fees, if any, for bond ratings. (b) The Underwriters shall pay (i) the cost of preparation and prIntIng of this Purchase Agreement; (ii) all advertising expenses in connection with the public offering of the Bonds; and (iii) all other expenses, other than the costs indentified in 9(a) above, incurred by them or any of them in connection with the public offering of the Bonds, including the fees and disbursements of Underwriters' Counsel. 9. Notices. Any notice or other communication to be given to the Issuer under this Purchase Agreement may be given by delivering the same in writing at City of North Richland Hills, Texas, 7301 N.E. Loop 820, North Richland Hills, Texas 76180, Attention: Mayor, and any notice or other communication to be given to the Underwriters under this Purchase Agreement may be given by delivering the same in writing to Estrada Hinojosa & Company, Inc., 1717 Main Street, Suite 4740, Dallas, Texas 75201, Attention: Noe Hinojosa. Dal1as I033670_2.DOC -13- 10. Parties in Interest. This Purchase Agreement as heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the Issuer and the Underwriters (including successors or assigns of any Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. This Purchase Agreement may not be assigned by the Issuer. All of the Issuer's representations and warranties contained in this Purchase Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters; (ii) delivery of and payment for the Bonds pursuant to this Purchase Agreement; and (iii) any termination of this Purchase Agreement. 11. Effectiveness. This Purchase Agreement shall become effective upon the acceptance hereof by the Issuer and shall be valid and enforceable at the time of such acceptance. 12. Representative Capacity. Any authority, right, discretion, or other power conferred upon the Underwriters or the Representative under any provision of this Purchase Agreement may be exercised by the Representative, and the Issuer shall be entitled to rely upon any request, notice or statement if the same shall have been given or made by the Representative. 13. CHOICE OF LAW. THIS PURCHASE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. 14. Severability. If any provision of this Purchase Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Purchase Agreement invalid, inoperative or unenforceable to any extent whatever. 15. Business Day. For purposes of this Purchase Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 16. Paragraph Headings. Paragraph headings have been inserted in this Purchase Agreement as a matter of convenience of reference only, and it is agreed that such paragraph headings are not a part of this Purchase Agreement and will not be used in the interpretation of any provisions of this Purchase Agreement. 17. Counterparts. This Purchase Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. Dallas l033670_2.DOC -14- Very truly yours, ESTRADA HINOJOSA & COMPANY, INC. as Representative for the Underwriters identified on Schedule I By: Title: Accepted and agreed to this day of November, 2005 CITY OF NORTH RICHLAND HILLS, TEXAS By: Mayor Signature Page to Purchase Agreement SCHEDULE I LIST OF UNDERWRITERS ESTRADA HINOJOSA & COMPANY, INC. VBS FINANCIAL SERVICES INC. Dallas I033670_2.DOC SCHEDULE II $9,930,000 General Obligation Refunding Bonds Series 2005 Maturity Maturity Date Principal Interest Date Principal Interest (02/15) Amount Rate Yield (02/15) Amount Rate Yield 2006 $230,000 3.500% 2.900% 2014 $ 840,000 3.500% 3.700% 2007 70,000 3.500% 3.170% 2015 1,000,000 4.0000/0 3.7500/0 2008 500,000 3.500% 3.280% 2016 1,145,000 4.000% 3.800% 2009 550,000 3.500% 3.400% 2017 1,130,000 4.000% 3.850% 2010 330,000 3.500% 3.430% 2018 1 , 115,000 4.000% 3.920% 2011 335,000 3.500% 3.470% 2019 565,000 4.000% 3.970% 2012 780,000 3.500% 3.520% 2020 380,000 4.000% 4.020% 2013 825,000 3.500% 3.630% 2021 135,000 4.000% 4.070% (Interest accrues from November 1, 2005) Optional Redemption. The Bonds maturing on and after February 15,2016, are subject to optional redemption, in whole or in part in Authorized Denominations, on February 15,2015, or any date thereafter, at a redemption price of par plus accrued interest to the date of redemption as further described herein. Dallas 1033670_2.DOC Danas I033670_2.DOC [Attach form of Official Statement completed as provided in Section 3 hereof] A-I Exhibit A Exhibit B [Closing Date] Estrada Hinojosa & Company, Inc. UBS Financial Services Inc. c/o Estrada Hinojosa & Company, Inc. 1717 Main, Suite 4740 Dallas, Texas 75201 Re: City of North Richland Hills, Texas, General Obligation Refunding Bonds, Series 2005 Ladies and Gentlemen: We have acted as counsel to you as Underwriters of $9,930,000 aggregate principal amount of the captioned bonds (the "Bonds") issued by the City of North Richland Hills, Texas (the "Issuer"), pursuant to an ordinance adopted by the City Council of the Issuer on November 14, 2005 (the "Ordinance"). The Underwriters are purchasing the Bonds pursuant to the Purchase Agreement (the "Purchase Agreement") with respect thereto, dated November 14, 2005. Unless otherwise expressly provided herein, capitalized tenns used in this opinion shall have the meanings ascribed to them in the Purchase Agreement. As your counsel, we have examined executed copies of the Ordinance, the Purchase Agreement and the Official Statement and the certificates and opinions referred to in Paragraph 7(i) of the Purchase Agreement. In addition, we have examined the originals or copies, certified or otherwise identified to our satisfaction, of such records of the Issuer, agreements and other instruments, certificates of public officials and representatives of the Issuer, and such other documents as we have deemed necessary or advisable as a basis for the opinions hereinafter expressed. Based on the foregoing and in reliance on the matters described below, we are of the opinion that the offer and sale of the Bonds by you do not require the registration of any security under the Securities Act of 1933, as amended and now in effect, and no instrument need be qualified under the Trust Indenture Act of 1939, as amended and now in effect, in connection therewith. Because the primary purpose of our professional engagement was not to establish factual matters and because of the wholly or partially non-legal character of many detenninations involved in the preparation of the Official Statement, we are not passing upon and do not assume any responsibility for the accuracy, completeness, or fairness of the statements contained in the Official Statement, and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements. At your request, we have participated as your counsel in conferences with representatives of the Issuer, bond counsel to the Issuer, the financial Dallas I033670_2.DOC B-1 advisor to the Issuer and your representatives, at which conferences the contents of the Official Statement and related matters were discussed. Based on our participation in the above- mentioned conferences and in reliance thereon and on the certificates, opinions and other documents herein mentioned, we advise you that no facts have come to our attention that lead us to believe that the Official Statement (except as to any statistical or financial data included in the Official Statement, the information related to the Depository Trust Company and its book-entry- only system and the information of MBIA Insurance Corporation and its municipal bond insurance policy, each as to which we are not called upon to express any opinion or belief) contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The opinions expressed herein are expressed only insofar as the laws of the State of Texas and the United States of America may be applicable. This opinion may be relied upon only by the addressees hereof and may not be used or relied upon by any other person for any purpose whatsoever without, in each instance, our prior written consent. Very truly yours, Dallas I033670_2.DOC B-2 EXHIBIT C SPECIAL ESCROW AGREEMENT 45681117.1 C-1 SPECIAL ESCROW AGREEMENT THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as of November 14, 2005, by and between the City of North Richland Hills, Texas, a duly incorporated municipal corporation in Tarrant County, Texas (the "City") acting by and through the Mayor and City Secretary, and JPMorgan Chase Bank, National Association, Dallas, Texas, a banking association organized and existing under the laws of the United States of America, or its successors or assigns hereunder (the "Bank"), WITNESSETH: WHEREAS, the City Council of the City of North Richland Hills, Texas (the "City") has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $9,235,000 (collectively, the "Refunded Obligations") more particularly described as follows: (1) City of North Richland Hills, Texas, General Obligation Bonds, Series 1996, dated May 1, 1996, maturing on February 15 in each of the years 2008 and 2009, and aggregating in principal amount $720,000 (the "Series 1996 Refunded Bond.s"); (2) City of North Richland Hills, Texas, Tax and Drainage Utility System Surplus Revenue Certificates of Obligation, Series 1996, dated May 1, 1996, maturing on February 15 in each of the years 2008 and 2009, and aggregating in principal amount $125,000 (the "Series 1996 Refunded Certificates"); (3) City of North Richland Hills, Texas, General Obligation Bonds, Series 1997, dated April 15, 1997, maturing on February 15 in each of the years 2010 through 2012, and aggregating in principal amount $615,000 (the "Series 1997 Refunded Bonds"); (4) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Revenue '(Limited Pledge) Certificates of Obligation, Series 1997, dated April 15, 1997, maturing on February 15 in each of the years 2009 through 2013, and aggregating in principal amount $310,000 (the "Series 1997 Refunded Certificates"); (5) City of North Richland Hills, Texas, General Obligation Bonds, Series 1998, dated May 1, 1998, maturing on February 15 in each of the years 2012 and February 15, 2018, and aggregating in principal amount $1,015,000 (the "Series 1998 Refunded Bonds"); (6) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1998, dated May 1, 1998, maturing on February 15 in each of the years 2012 through 2018, and aggregating in principal amount $2, 115,000 (the "Series 1998 Refunded Certificates"); (7) City of North Richland Hills, Texas, General Obligation Bonds, Series 1999, dated April 15, 1999, being a portion of such bonds maturing on 45682496.1/10511518 February 15 in each of the years 2015 and 2018, and aggregating in principal amount $500,000 (the "Series 1999 Refunded Bonds"); (8) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1999, dated April 15, 1999, maturing on February 15 in each of the years 2015, 2017 and 2019, and aggregating in principal amount $875,000 (the "Series 1999 Refunded Certificates"); (9) City of North Richland Hills, Texas, General Obligation Bonds, Series 2000, dated May 1, 2000, maturing on February 15 in each of the years 20·13 through 2020, and aggregating in principal amount $1,080,000 (the "Series 2000 Refunded Bonds"); (10) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2000, dated May 1, 2000, maturing on February 15 in each of the years 2013 through 2020, and aggregating in principal amount $920,000 (the "Series 2000 Refunded Certificates"); and (11) City of North Richland Hills, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2001, dated April 15, 2001, maturing on February 15 in each of the years 2016 through 2021, and aggregating in principal amount $960,000 (the "Series 2001 Refunded Certificates"); AND WHEREAS, in accordance with the provisions of V.T.C.A., Government Code, Chapter 1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an amount sufficient to provide for the payment of obligations to be refunded, deposit the proceeds of such refunding bonds with any place of payment for the obligations being refunded, or other authorized depository, and enter into an escrow or similar agreement with such depository for the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon such terms and conditions as the parties may agree, provided such deposits may be invested only in (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent (hereinafter called the "Governmental Securities") that mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of the Refunded Obligations; and WHEREAS, in accordance with the provisions of the ordinances authorizing the Series 1996 Refunded Bonds, the Series 1996 Refunded Certificates, the Series 1997 Refunded Bonds, the Series 1997 Refunded Certificates, the Series 1998 Refunded Bonds, the Series 1998 Refunded Certificates, the Series 1999 Refunded Bonds, and the Series 1999 Refunded Certificates, the deposits to refund and defease such Refunded Obligations shall be invested 45682496.1/10511518 2 only in direct obligations of the United States of America, including obligations the principal of and interest on are unconditionally guaranteed by the United States of America (the "Federal Securities"); and WHEREAS, the Refunded Obligations are scheduled to mature, or be. redeemed, and interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and incorporated herein by reference as a part of this Agreement for all purposes; and· WHEREAS, the City on the 14th day of November, 2005, pursuant to an ordinance (the "Bond . Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds known as "City of North Richland Hills, Texas, General Obligation Refunding Bonds, Series 2005" (the "Bonds"), and such Bonds are being issued to refund, discharge and make final payment of the principal of and interest on the Refunded Obligations; and WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other available funds of the City to be deposited with the Bank, are to be used in part to purchase the Governmental Securities and Federal Securities listed and identified in Exhibit B attached hereto and incorporated herein by reference as a part of this Agreement for all purposes (together with substituted securities therefor in accordance with the provisions of Section 11 hereof hereinafter referred to as the "Escrowed Securities") ; and WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the "Escrow Fund" to be established and maintained by the Bank in accordance with this Agreement; and WHEREAS, the Escrowed Securities, together with the beginning cash balance in the Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the existence of monies sufficient to pay the principal amount of the Refunded Obligations and the accrued interest thereon, as the same shall become due in accordance with the terms of the ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A attached hereto; and WHEREAS, the City has completed all arrangements for the purchase of the Escrowed Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as provided herein; and WHEREAS, the Bank is a banking association organized and existing under the laws of the State of New York, possessing trust powers and is fully qualified and empowered to enter into this Agreement and authorized to do business in the State of Texas; and WHEREAS, in Section 16 of the Bond Ordinance, the City Council duly approved and authorized the execution of this Agreement; and WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the provisions thereof, including, without limitation, all actions required by the ordinances authorizing the Refunded Obligations, the Act, the Bond Ordinance and this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to secure the payment of the principal of and the interest on the Refunded Obligations as the 45682496.1/10511518 3 same,. shall become due, the City and the Bank hereby mutually undertake, promise and agree as follows: SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the ordinances authorizing the issuance of the Refunded Obligations and the Bond Ordinance are hereby acknowledged by the Bank. Reference herein to or citation herein of ·any provision of said documents shall be deemed an incorporation of such provision as a part hereof in the same manner and with the same effect as if it were fully set forth herein. . SECTION 2: Escrow Fund Creation/Fundina. There is hereby created by the City with the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2005 CITY OF NORTH RICH lAND HillS, TEXAS, REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow Fund") for the benefit of the holders of the Refunded Obligations, and, immediately following the delivery of the Bonds, the City agrees and covenants to cause to be deposited with the Bank the following amounts: $9,755,566.00 For the purchase of Escrowed Securities identified in Exhibit B to be held for the account of the Escrow Fund $ 1.92 For deposit in the Escrow Fund as a beginning cash balance. The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys, apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and credited to the Escrow Fund for application and disbursement for the purposes and in the manner provided in this Agreement. SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on the Refunded Obligations as the same shall become due and payable, and such Refunded Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at the times and in the amounts set forth and identified in Exhibit A attached hereto. FURTHERMORE, the Bank acknowledges receipt of a copy of the Bond Ordinance which also provides for the redemption of the (a) Series 1996 Refunded Bonds and Series 1996 Refunded Certificates on February 15, 2006 at the redemption price of par plus accrued interest, (b) Series 1997 Refunded Bonds and Series 1997 Refunded Certificates on February 15, 2007 at the redemption price of par plus accrued interest, (c) Series 1998 Refunded Bonds and Series 1998 Refunded Certificates on February 15, 2008 at the redemption price of par plus accrued interest, (d) Series 1999 Refunded Bonds and Series 1999 Refunded Certificates on February 15, 2009 at the redemption price of par plus accrued interest, (e) Series 2000 Refunded Bonds and Series 2000 Refunded Certificates on February 15, 2010 at the redemption price of par plus accrued interest thereon, and (f) Series 2001 Refunded Certificates on February 15, 2011 at the price of par plus accrued interest; all in accordance with the provisions of the notice requirements applicable to said Refunded Obligations and the notice requirements contained in the respective ordinances authorizing such Refunded Obligations. The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations to be sent to the registered owners thereof appearing on the registration books at least thirty (30) days prior to the respective redemption dates therefor. 45682496.1/10511518 4 SECTION 4: Pledae of Escrow. The Bank agrees that all- cash and Escrowed Securities, together with any income or interest earned thereon, held in the Escrow Fund shall be and is hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations which will mature and become due on and after the date of this Agreement, and such funds initially deposited and to be received from· maturing principal and interest on the Escrowed Securities in the Escrow Fund shall be applied soleiy in accordance with the provisions of this Agreement. SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A attached hereto, as the same becomes due and payable, the City shall make timely deposits to the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be immediately given by the Bank to the City by the fastest means possible, but the Bank shall in no manner be responsible for the City's failure to make such deposits. SECTION 6: Escrow Fund Securities/Seareaation. The Bank shall hold said Escrowed Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys and securities on deposit with the Bank; shall never commingle said Escrowed Securities and moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an equal amount, except to the extent such are represented by the Escrowed Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow agent; and a special account evidencing such facts shall at all times be maintained on the books of the Bank. SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time collect and receive the principal of and interest on the Escrowed Securities as they respectively mature and become due and credit the same to the Escrow Fund. On or before each principal and/or interest payment date or redemption date, as the case may be, for the Refunded Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone, including the City, shall cause to be withdrawn from the Escrow Fund the amount required to pay the accrued interest on the Refunded Obligations due and payable on said payment date and the principal of the Refunded Obligations due and payable on said payment date or redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be immediately transmitted and deposited with the paying agent for the Refunded Obligations to be paid with such amount. The paying agent for the Refunded Obligations is the Bank. If any Refunded Obligation thereon shall not be presented for payment when the principal thereof or interest thereon shall have become due, and if cash shall at such times be held by the Bank in trust for that purpose sufficient and available to pay the principal of such Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash without liability to the holder of such Refunded Obligation for interest thereon after such maturity or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on or with respect to said Refunded Obligation, including for any claim for the payment thereof and interest thereon. All cash required by the provisions hereof to be set aside or held in trust for the payment of the Refunded Obligations, including interest thereon, shall be applied to and 45682496.1/10511518 5 used solely for the payment of the Refunded Obligations and interest thereon with respect to which such cash has been so set aside in trust. Subject to the provisions of the last sentence of Section 25 hereof, cash held by the Bank in trust for the payment and discharge of any of the Refunded Obligations and interest thereon which remains unclaimed for a period of three (3) years after the stated maturity date or redemption date of such Refunded Obligations shall be returned to the City. Notwithstanding the above and foregoing, any remittance of funds from the Bank to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 8: Disposal of Refunded ObliQations. All Refunded Obligations cancelled on account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and an appropriate certificate of destruction furnished the City. SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be irrevocable and the holders of the Refunded Obligations shall have an express lien on all moneys and Escrowed Securities in the Escrow Fund until paid out, used and applied in accordance with this Agreement. Unless disbursed in payment of the Refunded Obligations, all funds and the Escrowed Securities received by the Bank for the account of the City hereunder shall be and remain the property of the Escrow Fund and the City and the owners of the Refunded Obligations shall be entitled to a preferred claim and shall have a first lien upon such funds and Escrowed Securities enjoyed by a trust beneficiary. The funds and Escrowed Securities received by the Bank under this Agreement shall not be considered as a banking deposit by the City and the Bank and the City shall have no right or title with respect thereto, except as otherwise provided herein. Such funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City. SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for payment of services rendered hereunder, services rendered as paying agent/registrar for the Refunded Obligations, or for any costs or expenses incurred hereunder and reimbursable from the City. SECTION 11: Substitution of Investments/Reinvestments. (a) The Bank shall be authorized to accept initially and temporarily cash and/or substituted Escrowed Securities pending the delivery of the Escrowed Securities identified in the Exhibit B attached hereto, or shall be authorized to redeem the Escrowed Securities and reinvest the proceeds thereof, together with other moneys held in the Escrow Fund in noncallable direct obligations of the United States of America provided such early redemption and reinvestment of proceeds does not change the repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank receives the following: (1) an opinion by an independent certified public accountant to the effect that (i) the initial and/or temporary substitution of cash and/or securities for one or more of the Escrowed Securities identified in Exhibit B pending the receipt and delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the Escrowed Securities and the reinvestment of such funds in one or more substituted Governmental Securities or Federal Securities, as applicable, together with the interest thereon and other available moneys then held in the Escrow Fund, will, in either case, be sufficient, without reinvestment, to pay, as 45682496.1/10511518 6 the same become due in accordance with Exhibit A, the principal of, and interest on, the Refunded Obligations which have not previously been paid, and (2) with respect to an early redemption of Escrowed Securities and the reinvestment of the proceeds thereof, an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause interest on the Bonds or Refunded Obligations to be included in the gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such investment, or otherwise make the interest on the . Bonds or the Refunded Obligations subject to Federal income taxation and (b) such reinvestment complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Refunded Obligations and the Bonds. (b) If on the date and in the amount shown in Exhibit C attached hereto there exists cash in the Escrow Fund, the Bank and the City agree at least fifteen (15) days prior to such date, to subscribe for the purchase of United States Treasury Securities - State and Local Government Series (SLGS) bearing zero interest (00/0) and on such date, in the amount and scheduled to mature as provided in Exhibit C and subscription forms prepared therefor as may be then required by the United States Department of the Treasury; provided that the then existing rules and regulations and policy of United States Department of the Treasury permit and authorize such investments. Should the policy, rules and regulations of the United States Department of Treasury not permit or authorize the purchase of such SLGS at such time or times, such cash balance or balances shall remain uninvested and held in trust for the benefit of the holders of the Refunded Obligations and used for the payment of the Refunded Obligations on the dates and in the amount such moneys would have been expended had such SLGS been acquired and matured. SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys deposited in the Escrow Fund except as specifically provided by this Agreement. SECTION 13: Excess Funds. If at any time through redemption or cancellation of the Refunded Obligations there exists or will exist excesses of interest on or maturing principal of the Escrowed Securities in excess of the amounts necessary hereunder for the Refunded Obligations, the Bank may transfer such excess amounts to or on the order of the City, provided that the City delivers to the Bank the following: (1) an opinion by an independent certified public accountant that after the transfer of such excess, the principal amount of securities in the Escrow Fund, together with the interest thereon, and other available monies then held in the Escrow Fund, will be sufficient to pay, as the same become due and without reinvestment, in accordance with Exhibit A, the principal of, and interest on, the Refunded Obligations which have not previously been paid, and (2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such transfer will not cause interest on the Bonds or the Refunded Obligations to be included in gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such transfer, or otherwise make the interest on the Bonds or the Refunded 45682496.1/10511518 7 Obligations subject to Federal income taxation, and (b) such transfer complies with the Constitution and laws of the State of Texas and with all re'levant documents relating to the issuance of the Refunded Obligations or the Bonds. SECTION 14: Collateralization. The Bank shall continuously secure the monies in the Escrow Fund not invested in Escrowed Securities by a pledge of direct obligatións of the United States of America, in the par or face amount at least equal to the principal amount of said uninvested monies to the extent such money is not insured by the Federal Deposit Insurance Corporation. SECTION 15: Absence of Bank's Liability for Investments. The Bank shall not be liable or responsible for any loss resulting from any investment made in the Escrowed Securities or substitute securities as provided in Section 11 hereof. SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Payina Aqent's Charaes. The City agrees to pay the Bank for the performance of services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount of $3,750.00 and, except for reimbursement of costs and expenses incurred by the Bank pursuant to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete payment for the administration of this Agreement. The City also agrees to deposit with the Bank on the effective date of this Agreement, the sum of $2,500.00, which represents the total charge due the Bank as paying agent for the Refunded Obligations and the Bank acknowledges and agrees that above amount is and represents the total amount of compensation due the Bank for services rendered as paying agent for the Refunded Obligations. The Bank hereby agrees to pay, assume and be fully responsible for any additional charges that it may incur in the performance of its duties and responsibilities as paying agent for the Refunded Obligations. SECTION 17: Escrow Aaent's Duties / Responsibilities/Liability. The Bank shall not be responsible for any recital herein, except with respect to its organization and its powers and authority. As to the existence or nonexistence of any fact relating to the City or as to the sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution or other instrument in the form therein set forth has been adopted by the City Council of the City, as conclusive evidence that such resolution or other instrument has been duly adopted and is in full force and effect. The duties and obligations of the Bank shall be determined solely by the express provisions of this Agreement and the Bank shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Bank. In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement; but notwithstanding any provision of this Agreement to the contrary, in the case of any such certificate or opinion or any evidence which by any provision hereof is specifically req.uired to be 45682496.1/10511518 8 furnished to the Bank, the Bank shall be under a duty to examine the same to determine whether it conforms to the requirements of this Agreement. The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent in ascertaining or acting upon the pertinent facts. The Bank shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of all said Refunded Obligations at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Bank not in conflict with the intent and purpose of this Agreement. For the purposes of determining whether the holders of the required principal amount of said Refunded Obligations have concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded Obligations, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such obligor, shall be disregarded, except that for the purposes of determining whether the Bank shall be protected in relying on any such direction only Refunded Obligations which the Bank knows are so owned shall be so disregarded. The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and include the Chairman of the Board of Directors, the President, any Vice President and any Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any Assistant Treasurer, and every other officer and assistant officer of the Bank customarily performing functions similar to those performed by the persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred, because of his knowledge of and familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in this Agreement, shall mean and include any of said officers or persons. SECTION 18: Limitation Re: Bank's Duties/Responsibilities/Liabilities to Third Parties. The Bank shall not be responsible or liable to any person in any manner whatever for the sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect to the City, or for the· identity or authority of any person making or executing this Agreement for and on behalf of the City. The Bank is authorized by the City to rely upon the representations of the City with respect to this Agreement and the deposits made pursuant hereto and as to the City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assign or attempt to assign or transfer any interest hereunder or any portion of any such interest. Any such assignment or attempted assignment shall be in direct conflict with this Agreement and be without effect. SECTION 19: Interpleader. In the event conflicting demands or notices are made upon the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to what action should be taken hereunder, the Bank shall have the right at its election to: (1) Withhold and stop all further proceedings in, and performance of, this Agreement with respect to the issue in question and of all instructions received hereunder in regard to such issue; and 45682496.1/10511518 9 (2) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction requiring all persons involved to interplead and litigate in such court their several claims and rights among themselves. In the event the Bank becomes involved in litigation in connection with this Section, the City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result thereof. The obligations of the Bank under this Agreement shall be performable at the corporate office of the Bank in the City of Dallas, Texas. The Bank may advise with legal counsel in the event of any dispute or question regarding the construction of any of the provisions hereof or its d~ties hereunder, and in the absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting in accordance with the opinion and instructions of legal counsel that is knowledgeable and has expertise in the field of law addressed in any such legal opinion or with respect to the instructions given. SECTION 20: Accountina - Annual Report. Promptly after September 30th of each year, commencing with the year 2005, while the Escrow Fund is maintained under this Agreement, the Bank shall forward to the City, to the attention of the Director of Finance, or other designated official of the City, a statement in detail of the Escrowed Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from the Escrow Fund for the preceding 12 month period ending September 30th of each year. SECTION 21: Notices. Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: CITY OF NORTH RICH lAND HillS, TEXAS P.O. Box 820609 North Richland Hills, Texas 76182-0609 Attention: Director of Finance JPMORGAN CHASE BANK, NATIONAL ASSOCIATION 2001 Bryan Street, 8th Floor Dallas, Texas 75201 Attention: Issuer Administrative Services The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. SECTION 22: Performance Date. Whenever under the terms of this Agreement the performance date of any provision hereof, including the date of maturity of interest on or 45682496.1/10511518 10 principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the Bank is authorized by law to close, then the performance thereof, including the payment of principal of and interest on the Refunded Obligations, need not be made on such date but may be performed or paid, as the case may be, on the next succeeding business day of the Bank with the same force and effect as if made on the date of performance or payment and with respect to a payment, no interest shall accrue for the period after such date. . SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow Aareement. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Agreement, in any and every said Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining thereto as said Refunded Obligations shall have been modified as provided in this Agreement. The City covenants that it is duly authorized under the Constitution and laws of the State of Texas to execute and deliver this Agreement, that all actions on its part for the payment of said Refunded Obligations as provided herein and the execution and delivery of this Agreement have been duly and effectively taken and that said Refunded Obligations and coupons in the hands of the holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof as provided in this Agreement. SECTION 24: Severabilitv. If anyone or more of the covenants or agreements provided in this Agreement on the part of the parties to be performed should be determined by a court of competent jurisdiction tö be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. In the event any covenant or agreement contained in this Agreement is declared to be severable from the other provisions of this Agreement, written notice of such event shall immediately be given to each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch Investors Service) which has rated the Refunded Obligations on the basis of this Agreement. SECTION 25: Termination. This Agreement shall terminate when the Refunded Obligations, including interest due thereon, have been paid and discharged in accordance with the provisions of this Agreement: If any Refunded Obligations are not presented for payment when due and payable, the nonpayment thereof shall not prevent the termination of this Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued interest thereon shall upon termination of this Agreement be held by the Bank for such purpose in accordance with Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow Fund at termination and not needed for the payment of the principal of or interest on any of the Refunded Obligations shall be paid or transferred to the City. SECTION 26: Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Bank by this Agreement. SECTION 27: Successors/Assians. (a) Should the Bank not be able to legally serve or perform the duties and obligations under this Agreement, or should the Bank be declared to be insolvent or closed for any reason by federal or state regulatory authorities or a court of competent jurisdiction, the City, upon being notified or discovering the Bank's inability or disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held hereunder, together with all books, records and accounts relating to the Escrow Fund and the Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under this Agreement to such successor. If the City should fail to appoint such a successor within 45682496.1/10511518 11 ninety (90) days from the date the City discovers, or is notified of, the event or circumstance causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of the Refunded Obligations, may apply to a court of competent jurisdiction to appoint a successor or assigns of the Bank and such court, upon determining the Bank is unable to continue to serve, shall appoint a successor to serve under this Agreement and . the amount of compensation, if any, to be paid to such successor for the remainder of the term of this Agreement for services to be rendered both for administering the Escrow Fund and for paying agent duties and responsibilities for the Refunded Obligations. . (b) Furthermore, the Bank may resign and be discharged from performing its duties and responsibilities under this Agreement upon notifying the City in writing of its intention to resign and requesting the City to appoint a successor. No such resignation shall take effect until a successor has been appointed by the City and such successor has accepted such appointment and agreed to perform all duties and obligations hereunder for a total compensation equal to the unearned proportional amount paid the Bank under Section 16 hereof for the administration of this Agreement and the unearned proportional amount of the paying agents fees for the Refunded Obligations due the Bank. Any successor to the Bank shall be a bank, trust company or other financial institution that is duly qualified under applicable law (the Act or other appropriate statute) to serve as escrow agent hereunder and authorized and empowered to perform the duties and obligations contemplated by this Agreement and organized and doing business under the laws of the United States or the State of Texas, having its principal office and place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the supervision or examination by Federal or State authority. Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City and the Bank, or its successor or assigns, an instrument accepting such appointment hereunder, and the Bank shall execute and deliver an instrument transferring to such successor, subject to the terms of this Agreement, all the rights, powers and trusts created and established and to be performed under this Agreement. Upon the request of any such successor Bank, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used herein shall be the Bank and its legal assigns and successor hereunder. SECTION 28: Escrow Aareement - Amendment/Modification. This Agreement shall be binding upon the City and the Bank and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the Bank and their respective successors and legal representatives. Furthermore, no alteration, amendment or modification of any provision of this Agreement shall (1) alter the firm financial arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i) prior written consent of such alteration, amendment or modification shall have been obtained from the holders of all Refunded Obligations outstanding at the time of such alteration, amendment or modification and (ii) such alteration, amendment or modification is in writing and signed by the parties hereto; provided, however, the City and the Bank may, without the consent of the holders of the Refunded Obligations, amend or modify the terms and provisions of this Agreement to cure in a manner not adverse to the holders of the Refunded Obligations any ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any amendment or modification to this Agreement, prior written notice of such amendment or proposed modification, together with the legal documents amending or modifying this Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation, 45682496.1/10511518 12 Moody's Investors Service or Fitch Investors Service) which has rated the Refunded Obligations on the basis of this Agreement, prior to such amendment or modification being executed. SECTION 29: Effect of Headinas. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 30: Executed Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. SECTION 31: Governina Law. This Agreement shall be governed by the laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds. [remainder of page left blank intentionally] 45682496.1/10511518 13 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. CITY OF NORTH RICHlAND HillS, TEXAS Mayor ATTEST: City Secretary JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Dallas, Texas, as Escrow Agent Title: ATTEST: Authorized Signer (Bank Seal) 45682496.1/10511518 8-1 EXHIBIT D NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, GENERAL OBLIGATION BONDS SERIES 1996 DATED MAY 1,1996 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on Februàry 15, 2008 and February 15, 2009 and aggregating in principal amount $720,000 have been called for redemption on February 15, 2006 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Maturity Principal Amount Outstandina CUSIP Number 2008 2009 $360,000 $360,000 All SUCH BONDS shall become due and payable on February 15, 2006, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Rea istered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank N.A. I nstitutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117. 1 EXHIBIT E NOTICE OF REDEMPTION CITY OF NORTH RICH LAND HILLS, TEXAS, TAX AND DRAINAGE UTILITY SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 1996 DATED MAY 1,1996 NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series maturing on February 15, 2008 and February 15, 2009, and aggregating in principal amount $125,000 have been called for redemption on February 15, 2006 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year .of Maturity Principal Amount Outstandina CUSIP Number 2008 2009 $60,000 $65,000 ALL SUCH CERTIFICATES shall become due and payable on February 15, 2006, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said obligations shall be paid to the registered owners thereof only upon presentation and surrender of such obligations to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express DeliverY/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117. 1 EXHIBIT F NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, GENERAL OBLIGATION BONDS SERIES 1997 DATED APRil 15,1997 NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on February 15, 2010 through February 15, 2012 and aggregating in principal amount $615,000 have been called for redemption on February 15, 2007 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Maturitv Principal Amount Outstanding CUSIP Number 2010 2011 2012 $205,000 $205,000 $205,000 .ALL SUCH BONDS shall become due and payable on February 15, 2007, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agenUregistrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank N.A. I nstitutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 Bv Hand Onlv JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117. 1 EXHIBIT G NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION SERIES 1997 DATED APRil 15,1997 NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series maturing on February 15, 2009 through February 15, 2013 and aggregating in principal amount $310,000 have been called for redemption on February 15, 2007 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of CUSIP Year of CUSIP Maturitv Principal Amount Number Maturitv Principal Amount Number 2009 $55,000 2012 $65,000 2010 $60,000 2013 $70,000 2011 $60,000 ALL SUCH CERTIFICATES shall become due and payable on February 15, 2007, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said obligations shall be paid to the registered owners thereof only upon presentation and surrender of such obligations to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Deliverv/Courier JPMorgan Chase Bank N.A. I nstitutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 Bv Hand Onlv JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117. 1 EXHIBIT H NOTICE OF REDEMPTION CITY OF NORTH RICHLAND HillS, TEXAS, GENERAL OBLIGATION BONDS SERIES 1998 DATED MAY 1,1998 NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on February 15, 2012 ànd February 15, 2018, and aggregating in principal amount $1,015,000 have been called for redemption on February 15, 2008 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Principal Amount Maturity Outstandinq CUSIP Number 2012 $145,000 2018 $870,000 All SUCH BONDS shall become due and payable on February 15, 2008, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agenUregistrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Deliverv/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117.1 EXHIBIT I NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (liMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION SERIES 1998 DATED MAY 1, 1998 . NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series maturing on February 15, 2012 through February 15, 2018 and aggregating in principal amount $2, 115,000 have been called for redemption on February 15, 2008 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of CUSIP Year of CUSIP Maturitv Principal Amount Number Maturitv Principal Amount Number 2012 $305,000 2016 $300,000 2013 $305,000 2017 $300,000 2014 $305,000 2018 $300,000 2015 $300,000 All SUCH CERTIFICATES shall become due and payable on February 15, 2008, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said obligations shall be paid to the registered owners thereof only upon presentation and surrender of such obligations to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Deliverv/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 Bv Hand Onlv JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117. 1 EXHIBIT J NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, GENERAL OBLIGATION BONDS SERIES 1999 DATED APRIL 15, 1999 NOTICE IS HEREBY GIVEN that a portion of the bonds of the above series maturing on February 15, 2015 and February 15, 2018, and aggregating in principal amount $500,000 have been called for redemption on February 15, 2009 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of Principal Amount Principal Amount Maturity Outstandina Beina Redeemed CUSIP Number 2015 $300,000 $200,000 2018 $300,000 $300,000 A LOT SELECTION has been made and your Bond has been selected for redemption. The bonds selected for redemption shall become due and payable on February 15, 2009, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Rea istered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Deliverv/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank N.A. Room 234-North Building Institutionàl Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117.1 EXHIBIT K NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION SERIES 1999 DATED APRil 15,1999 . NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series maturing on February 15, 2015, February 15, 2017 and February 15, 2019, and aggregating in principal amount $875,000 have been called for redemption on February 15, 2009 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal Amount Maturity Outstandina CUSIP Number 2015 $175,000 2017 $350,000 2019 $350,000 ALL SUCH CERTIFICATES shall become due and payable on February 15, 2009, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said obligations shall be paid to the registered owners thereof only upon presentation and surrender of such obligations to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117.1 EXHIBIT L NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, GENERAL OBLIGATION BONDS SERIES 2000 DATED MAY 1, 2000 NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on February 15, 2013 through February 15, 2020, and aggregating in principal amount $1,080,000 have been called for redemption on February 15, 2010 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: : Year of CUSIP Year of CUSIP Maturitv Principal Amount Number Maturitv Principal Amount Number 2013 $135,000 2017 $135,000 2014 $135,000 2018 $135,000 2015 $135,000 2019 $135,000 2016 $135,000 2020 $135,000 ALL SUCH BONDS shall become due and payable on February 15, 2010, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered1Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 Bv Hand Onlv JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117. 1 EXHIBIT M NOTICE OF REDEMPTION CITY OF NORTH RICHlAND HillS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (liMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION SERIES 2000 DATED MAY 1,2000 . NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series maturing on February 15, 2013 through February 15, 2020 and aggregating in principal amount $920,000. have been called for redemption on February 15, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of CUSIP Year of CUSIP Maturity Principal Amount Number Maturity Principal Amount Number 2013 $115,000 2017 $115,000 2014 $115,000 2018 $115,000 2015 $115,000 2019 $115,000 2016 $115,000 2020 $115,000 All SUCH CERTIFICATES shall become due and payable on February 15, 2010, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said obligations shall be paid to the registered owners thereof only upon presentation and surrender of such obligations to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agenUregistrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: , First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Deliverv/Courier JPMorgan Chase .Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117.1 EXHIBIT N NOTICE OF REDEMPTION CITY OF NORTH RICHLAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM· SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2001 DATED APRIL 15,2001 NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series maturing on February 15, 2016 through February 15, 2021 and aggregating in principal amount $960,000 have been called for redemption on February 15, 2011 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of CUSIP Year of CUSIP Maturitv Principal Amount Number Maturitv Principal Amount Number 2016 $160,000 2019 $160,000 2017 $160,000 2020 $160,000 2018 $160,000 2021 $160,000 ALL SUCH CERTIFICATES shall become due and payable on February 15, 2011, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said obligations shall be paid to the registered owners thereof only upon presentation and surrender of such obligations to JPMorgan Chase Bank, National Association, Dallas, Texas (successor paying agent/registrar to Bank One, Texas, N.A., Fort Worth, Texas) at its designated offices at the following addresses: First Class/ Reaistered/Certified JPMorgan Chase Bank N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Deliverv/Courier JPMorgan Chase Bank N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 Bv Hand Onlv JPMorgan Chase Bank N.A. Room 234-North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an ordinance by the City Council of the City of North Richland Hills, Texas. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION Address: 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45681117.1 Exhibit 0 to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 29 of this Ordinance. Annual Financial Statements and Operatina Data . The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information in the Official Statement under Tables 1 through 6 and 8 through 15. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above 45681117.1