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Home My WebLink AboutOrdinance 1783 ORDINANCE NO. 1783 AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICHLAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1992"; specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the Ci ty and a I imi ted pledge of the net revenues from the operation of the Ci ty' s Waterworks and Sani tary Sewer System; and resolving other matters incident and relating to the issuance, payment, security, sale and delivery of said Certificates, including the approval and execution of a Purchase Agreement and the approval and distribution of an Official Statement; and providing an effective date. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $900,000 for the purpose of paying contractual obligations to be incurred for (i) street improvements, including related right-of-way acquisition, utility lines relocation and drainage and (ii) professional services, has been duly published in the Mid-Cities News, a newspaper hereby found and determined to be of general circulation in the City of North Richland Hills, Texas, on January 23, 1992 and January 30, 1992, the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the passage of the ordinance authorizing the issuance of such certificates; and WHEREAS, no petition protesting the Issuance of the certificates of obligation and bearing valid petition signatures of 5% or more of the qualified electors of the City, has been presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to the date of the passage of this ordinance; and WHEREAS, the Council hereby finds and determines that all of the certificates of obligation described in such notice should be issued and sold at this time; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: SECTION 1: Authorization, Designation, Principal Amount, Purpose. Certificates of obligation of the Ci ty shall be and are hereby authorized to be issued in the aggregate principa 1 amount of $900,000, to be designated and bear the ti t Ie "CITY OF NORTH RICHLAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 1992" (hereinafter referred to as the "Certificates"), for the purpose of paying contractual obligations to be incurred for (i) street improvements, including related right-of-way acquisition, utility lines relocation and drainage and (ii) profess,ional services, pursuant to authority conferred by and in conformi ty wi th the Consti tution and laws of the State of Texas, including V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended. SECTION 2: Fully Registered Obligations - Authorized Denominations-Stated Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated February 1, 1992 (the "Certificate Date") and, other than the single fully registered Initial Certificate referenced in Section 8 hereof, shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at per annum rates in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate 1994 $ 25,000 4.30% 1995 25,000 4.65% 1996 30,000 4.90% 1997 30,000 5.20% 1998 30,000 5.45% 1999 35,000 5.65% 2000 35,000 5.80% 2001 40,000 5.95% 2002 40,000 6.10% 2003 45,000 6.20% 2004 50,000 6.30% 2005 50,000 6.40% 2006 55,000 6.45% 2007 60,000 6.50% 2008 60,000 6.55% 2009 65,000 6.60% 2010 70,000 6.65% 2011 75,000 6.70% 2012 80,000 6.75% -2- The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the rate per annum shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Certificates shall be payable on February 15 and August 15 of each year, commencing February IS, 1993. SECTION 3: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter called the "Holders") appearing on the registration and transfer books (the "Security Register") maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Team Bank, Fort Worth, Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Certificates shall be payable at the Stated Maturi ties or the redemption thereof only upon presentation and surrender of the Certificates to the Paying Agent/Registrar at its principal office. Interest on the Certificates shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when -3- banking institutions in the City where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the 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: Redemption. (a) Optional Redemption. The Certificates having Stated Maturities on and after February 15, 2003, 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, 2002 or on any date thereafter at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date for the Certificates (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the Ci ty to exercise the right to redeem Certificates shall be entered in the minutes of the governing body of the City. (c) Selection of Certificates for Redemption. If less than all Outstanding Certificates of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/ Registrar shall treat such Certificates as representing the number of Certificates Outstandinq which is obtained by dividing the principal amount of such Certificates by $5,000 and shall select the Certificates to be redeemed wi thin such Stated Maturity by lot. -4- (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Certificates, a notice of redemption shall be sent by United states Mail, first class postage prepaid, in the name of the Ci ty and at the Ci ty' s expense, to each Holder of a Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close 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 Certificates, (ii) identify the Certificates to be redeemed and, in the case of a portion of the principa 1 amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Certificates, 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 Certificates, or the principal amount thereof to be redeemed, shall be made at the principal office of the Paying Agent/Registrar only upon presentation and surrender of the Certificates. If a Certificate is subject by its terms to prior redemption and has been called for redemption and notice of redemption has been duly given as hereinabove provided, such Certificate (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 such Certificate (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: Registration Transfer - Exchange of Certificates-Predecessor Certificates. A Security Register relating to the registration, payment, and transfer or exchange of the Certificates 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 provisions of an agreement wi th the Paying Agent/Registrar and such rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Paying Agent/Registrar shall obtain, record, and maintain in the Securi ty Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized -5- denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate 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 a form satisfactory to the Paying Agent/Registrar. Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in Section 8 hereof) for transfer at the principal office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Certificates of authorized denominations, having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates (other than the Initial Certificate(s) authorized in Section 8 hereof) may be exchanged for other Certificates of authorized denominations, having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the principal office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the principal office of the Paying Agent/Registrar or sent by Uni ted 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 obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates 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. Certificates cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in -6- the exchange or transfer therefor. Additionally, the term "Predecessor Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 21 hereof and such new replacement Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. Neither the City nor the Paying Agent/ Registrar shall be required to issue or transfer to an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Certificate; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Certificate called for redemption in part. SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment and transfer/exchange of the Certificates, 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 requi rements and procedures identified in the Letter of Representation by and between the City, the Paying Agent/Registrar and DTC (the "Depository Agreement") relating to the Certificates. Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants") and, while the Certificates are held by DTC under the Depository Agreement, the Holder of the Certificates 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 Certificate (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 Certificates or otherwise ceases to provide book-entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as securities depository for the Certificates, the City covenants and agrees with the Holders of the Certificates to cause Certificates to be printed in definitive form and provide for the Certificate certificates to be issued and delivered to DTC Participants and -7- Beneficial Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Certificates shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the Ci ty Secretary. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in Section 9C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 90, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certified, registered and delivered. SECTION 8: Ini t i a 1 Cert i f icate (s) . The Cert i fica tes herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal amount of $900,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-l, or (ii) as nineteen (19) fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-l and upward (hereinafter called the "Initial Certificate(s)") and, in either case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Ini tial Certificate(s) shall be the Certificates submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the -8- Comptroller of Public Accounts of the state of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Certificate{s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Certificate{s) delivered hereunder and exchange therefor defini ti ve Certificates 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 instructions 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. A. Forms Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Certificates, 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 Association) and such legends and endorsements (including insurance legends in the event the Certificates, 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 determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the certificate. The Certificates, including the Initial Certificate(s), shall be typewritten, printed, lithographed, or photocopied, or produced in any other similar manner, all as determined by the officers executing such Certificates as evidenced by their execution. -9- B. Form of Certificates. REGISTERED NO. REGISTERED $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF NORTH RICHLAND HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATE OF OBLIGATION, SERIES 1992 Certificate Date: February 1, 1992 Interest Rate: Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: DOLLARS 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 order of the Registered Owner named above, or the registered ass igns thereof, on the Stated Maturi ty date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Certificate 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, 1993. Principal of this Certificate is payable at its Stated Maturi ty or redemption to the registered owner hereof, upon presentation and surrender, at the principal office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Certificate (or one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the -10- 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. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the Uni ted States of America which at the time of payment is legal tender for the payment of public and private debts. This Certificate is one of the series specified in its title issued in the aggregate principal amount of $900,000 (herein referred to as the "Certi f icates") for the purpose of paying contractual obligations to be incurred for (i) street improvements, including related right-of-way acquisition, utility lines relocation and drainage and (ii) professional services, under and in strict conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended, and pursuant to an Ordinance adopted by the Ci ty Counci 1 of the City (herein referred to as the "Ordinance"). The Certificates maturing on and after February 15, 2003, 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, 2002, or on any date thereafter, at the redemption price of pa r, together wi th accrued interest to the date of redempt ion and upon 30 days prior written notice being sent by Uni ted States Mail, first class postage prepaid, to the registered owners of the Certificates to be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance. If this Certificate (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Certificate (or the portion of the principal sum hereof 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 purpose of such payment by the Paying Agent/Registrar. In the event of a partial redemption of the principal amount of this Certificate, payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of this Certificate to the principal office of the Paying Agent/Registrar, and there shall -11- be issued to the registered owner hereof, without charge, a new Certificate or Certificates of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum hereof. If this Certificate is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this Certificate 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 hereof in the event of its redemption in part. The Certificates are payable from the proceeds of an ad valorem tax levied, wi thin the limitations prescribed by law, upon all taxable property in the City and from a limited pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sani tary Sewer System (the "System"), such pledge of the Net Revenues for the payment of the Certificates being limited to an amount not in excess of $2,500 and being junior and subordinate to the lien on and pledge of such Net Revenues securing the payment of "Prior Lien Obligations" (as defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance, the Ci ty reserves and retains the right to issue Prior Lien Obligations without limitation as to principal amount but subject to any applicable terms, conditions or restrictions under law or otherwise. Reference is hereby made to the Ordinance, a copy of which is on file in the principal office of the Paying Agent/Registrar, and to all the provisions of which the owner or holder of this Certificate by the acceptance hereof hereby assents, for def ini t ions of terms; the descr ipt ion of and the nature and extent of the tax levied for the payment of the Certificates; the properties constituting the System; the Net Revenues pledged to the payment of the principal of and interest on the Certificates; the nature and extent and manner of enforcement of the pledge; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or wi thout the consent of the Holders; the rights, duties, and obligations of the Ci ty and the Paying Agent/Registrar; the terms and provisions upon which the tax levy and the pledges, charges and covenants made therein may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. -12- This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the principal office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Certificates 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 Certificate 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 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. It is hereby certified, reci ted, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texasi that the issuance of the Certificates 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 Certificates 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 Certificates do not exceed any Constitutional or statutory limi tationi and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. -13- In case any provlslon in this Certificate 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 Certificate and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. CITY OF NORTH RICHLAND HILLS, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) C. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Certificate(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS ( ( ( ( REGISTER NO. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and 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 Certificates -14- D. Form of Certificate of Paying Agent/Registrar to appear on Definitive Certificates only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Certificate has been duly issued and registered under the provisions of the within-mentioned Ordinance; the certificate or certificates of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. Registration Date: TEAM BANK, Fort Worth, Texas, as Paying Agent/Registrar By Authorized Signature E. Form of Assignment. ASSIGNMENT FOR assigns, address, VALUE RECEIVED and transfers and zip code of the undersigned hereby sells, unto (Print or typewrite name, transferee:) ..................... . ......... ...... ......... ....... ..... ....... ...... .... ...... . ......... ..... ................. ..... ............. .... ...... (Social Security or other identifying number: ................) the within Certificate and thereunder, and hereby irrevocably constitutes ............. all rights and appoints .... ........... ............. ..... ...... ........... .......... attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DATED: .. ..... ........... ..... ..... ...... ..... ........... ........ ............. NOTICE: The signature on this assign- ment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular. Signature guaranteed: -15- F. The Initial Certificate(s) shall be in the form set forth in paragraph B of this Section, except that the form of a single fully registered Initial Certificate shall be modified as follows: (i) immediately under the name of the headings "Interest Rate Maturity .. shall both be omitted; .. certificate the and "Stated (ii) paragraph one shall read as follows: Registered Owner: Principal Amount: Dollars The City of North Richland Hills (hereinafter referred to as the "Ci ty"), 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 order of the the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: YEAR PRINCIPAL INSTALLMENTS INTEREST RATE (Information to be inserted from schedule in Section 2 hereof). (or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) 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, 1993. Principal installments of this Certificate are payable at its Stated Maturity or on a prepayment date to the registered owner hereof, upon its presentation and surrender, at the principal office of Team Bank, Fort Worth, Texas (the "Paying Agent/Registrar"). Interest is payable to the registered owner of this Certificate 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 hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States Mai 1, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, -16- acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the Uni ted States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 10: Definitions. That for purposes of this Ordinance and for clari ty wi th respect to the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net Revenues therefor, the following words or terms, whenever the same appears herein without qualifying language, are defined to mean as follows: (a) The term "Certificates" shall mean the $900,000 "Ci ty of North Richland Hi lIs, Texas ¡Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1992" authorized by this Ordinance. (b) The term "Certificate Fund" shall mean the special Fund created and established under the provisions of Section 10 of this Ordinance. (c) The term "Collection Date" shall mean, when reference is being made to the levy and collection of annual ad valorem taxes, the date the annual ad valorem taxes levied each year by the Ci ty become delinquent. (d) The term "Fiscal Year" shall mean the twelve month financial accounting period for the System ending September 30th of each year; provided, however, the City, by ordinance, may change the Fiscal Year to another period of not less than twelve calendar months. (e) The term "Government Obligations" shall mean direct 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, and United States Treasury obligations such as its State and Local Government Series in book-entry form. (f) The term "Gross Revenues" shall mean all income and revenues of every nature derived or received from the operation and ownership (excluding refundable meter deposi ts, restricted gifts and -17- grants in aid of construction, impact fees charged developers and special assessments against landowners) of the System, including earnings and income derived from the investment or deposit of moneys in any special funds or accounts created and established for the payment and security of the Prior Lien Obligations and other obligations payable solely from and secured only by a lien on and pledge of the Net Revenues. (g) The term "Operating and Maintenance Expenses" shall mean all current expenses of operating and maintaining the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the operations and render adequate service to the Ci ty and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair obligations payable from Net Revenues shall be deducted in determining "Net Revenues", Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating and Maintenance Expenses shall include payments under contracts for the purchase of water supply, treatment of sewage or other materials, goods or services for the System to the extent authorized by law and the provisions of such contract. (h) The term "Net Revenues" shall mean Gross Revenues of the System, wi th respect to any period, after deducting the System I s Operating and Maintenance Expenses during such period. (i) The term "Outstanding" when Ordinance with respect to Certificates the date of determination, all theretofore issued and delivered Ordinance, except: used in this means, as of Certificates under this (1) those Certificates cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Certificates for which payment has been duly provided by the City in accordance with the provisions of Section 22 hereof; and -18- (3) those Certificates that have been mutilated, destroyed, lost, or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 21 hereof. (j) The term "Prior Lien Obligations" shall mean all revenue bonds or other obligations, now outstanding and hereafter issued, payable from and secured, in whole or in part, by a lien on and pledge of the Net Revenues of the System, including, but not limited to, the outstanding and unpaid: (1) Ci ty of North Richland Hi lIs, Texas, Waterworks and Sewer System Improvement and Refunding Revenue Bonds, Series 1989, dated March I, 1989, and originally issued in the principal amount of $9,296,800.25; (2) City of North Texas, Waterworks and Refunding Revenue Bonds, dated March I, 1989, and in the principal amount and Richland Hills, Sewer System Series 1989-A, originally issued of $4,041,763.75; (3) Ci ty of North Richland Hi lIs, Texas, Waterworks and Sewer System Refunding Revenue Bonds, Series 1989-B, dated July I, 1989, and originally issued in the principal amount of $6,745,050.60. (k) The term "System" shall mean all properties, facilities and plants currently owned, operated and maintained by the City for the supply, treatment and transmission of treated potable water and the collection, treatment and disposal of water-carried wastes, together wi th all future extensions, improvements, replacements and addi tions thereto; provided, however, that notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law, the term "System" shall not mean to include facilities of any kind which are declared not to be a part of the System and which are acquired or constructed by or on behalf of the City with the proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being special revenue obligations of the City which are not Prior Lien Obligations but which are -19- payable from and secured by other liens on and pledges of any revenues, sources or payments, not pledged to the payment of the Prior Lien Obligations including, but not limited to, special contract revenues or payments received from any other legal entity in connection with such facilities. SECTION 11: Certificate Fund. That, for the purpose of paying the interest on and to provide a sinking fund for the payment, redemption and reti rement of the Certificates, there shall be and is hereby created a special account or fund on the books and records of the City known as the "SPECIAL SERIES 1992 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND", and all moneys deposited to the credit of such Fund shall be kept and maintained in a banking account at the City's depository bank. Authorized officials of the City are hereby authorized and directed to make withdrawals from said Fund sufficient to pay the principal of and interest on the Certificates as the same become due and payable, and, shall cause to be transferred to the Paying Agent/Registrar from moneys on deposit in the Certificate Fund an amount sufficient to pay the amount of principal and/or interest falling due on the Certificates, such transfer of funds to the Paying Agent/Registrar to be made in such manner as wi 11 cause immediately avai lable funds to be deposited with the Paying Agent/Registrar on or before the last business day next preceding each interest and principal payment date for the Certificates. Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund may, at the option of the Ci ty, be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act of 1987" relating to the investment of "bond proceeds" or other applicable laws governing the investment of interest and sinking funds; provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 12: Tax Levy. That, to provide for the payment of the "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby levied for the current year and each succeeding year thereafter while said Certificates or any interest thereon -20- shall remain Outstanding, a sufficient tax on each one hundred dollars' valuation of taxable property in said Ci ty, adequate to pay such Debt Service Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requi rements, and the same sha 11 not be diverted to any other purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The City Counci 1 hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service Requirements, it having been determined that the existing and avai lable taxing authority of the Ci ty for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. Accrued interest and premium, if any, received from the purchasers of the Certificates shall be deposited to the Certificate Fund. In addition, any surplus proceeds from the sale of the Certificates not expended for authorized purposes shall be deposited in the Certificate Fund, and such amounts so deposited shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes. SECTION 13: Limi ted Pledge of Net Revenues. The Ci ty hereby covenants and agrees that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment and securi ty of Prior Lien Obligations, the Net Revenues of the System in an aggregate amount not to exceed $2,500 are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates, and the limited pledge of $2,500 of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof. Furthermore, such lien on and pledge of the Net Revenues securing the payment of the Certificates shall be valid and binding without further action by the City and without any filing or recording except for the filing of this Ordinance in the records of the City. SECTION 14: System Fund. The City covenants and agrees that revenues derived from the operation of the System shall be accounted for separate and apart from all other funds, accounts and moneys of the City, and all such revenues shall be deposi ted as collected into a fund maintained at an official deposi tory of the Ci ty and known on the books of the Ci ty as the "Water and Sewer System Fund" (hereinafter called the "System Fund"). All moneys deposited to the credit of the System Fund shall be allocated, appropriated and budgeted to the extent required for the following purposes and in the order of priority shown, to wit: -21- First: To the payment of all necessary and reasonable Operating and Maintenance Expenses of the System as defined herein or required by statute to be a first charge on and claim against the Gross Revenues of the System, Second: To the payment of all amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations. Thi rd: To the payment of the I imi ted amounts pledged to the payment of the Certificates. Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. SECTION 15: Security of Funds. All moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 16: Maintenance and Operation - Insurance. The Ci ty shall maintain the System in good condi tion and operate the same in an efficient manner and at reasonable cost. In regard to the operations and properties of the System, the City also agrees to carry and maintain liability and property damage insurance of the kind and in the amounts carried by municipal corporations in Texas owning and operating similar facilities and providing like services; provided, however, the City in lieu of and/or in combination with carrying such insurance may self-insure against such perils and risks by establishing self-insurance reserves. Annually each year not later than the end of each Fiscal Year, the City shall prepare or cause to be prepared by a person competent and knowledgable in such matters a wri tten evaluation of the adequacy of such self-insurance and/or insurance coverage and of any recommended changes in regard to the City's insurance/self-insurance policies, practices and procedures. -22- SECTION 17: Remedies in Event of Default. In addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in the payments to be made to the Certificate Fund, or (b) defaults in the observance or performance of any other of the covenants, condi t ions or obligations set forth in this Ordinance, the owner or owners of any of the Certificates shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the governing body of the City and other officers of the Ci ty to observe and perform any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescense therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specification of such remedies shall not be deemed to be exclusive. SECTION 18: Special Covenants. The City hereby further covenants as follows: (a) That it has the lawful power to p ledge the Net Revenues of the System to the payment of the Certificates in the manner herein contemplated and has lawfully exercised such power under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 et seq., V.A.T.C.S. and V.T.C.A., Local Government Code, Sections 271.041, et seq. (b) That other than for the payment of the Certificates and the Prior Lien Obligations ident if ied in Sect ion 10 (j) hereof, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. SECTION 19: Issuance of Prior Lien Obligations. The City expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but sUbject to any terms, conditions or restrictions applicable thereto under law or otherwise. Prior Lien Obligations hereafter issued may be payable, in whole or in part, from the Net Revenues (without impairment of the obligation of contract with the Holders of the Certificates) upon such terms and conditions as the City Council may determine. Additionally, -23- the City reserves the right to issue obligations payable, in whole or in part, from the Net Revenues of the System and, to the extent provided, secured by a lien on and pledge of the Net Revenues of equal rank and dignity with the lien and pledge securing the payment of the Certificates. SECTION 20: Application of Prior Lien Obligations Covenants and Agreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System, and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in the ordinances authorizing the issuance of the Prior Lien Obligations, and to the extent of any irreconci lable conflict between the provisions contained herein and in the ordinances authorizing the issuance of the Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefi ts, if any, conferred thereby to the holders of the Prior Lien Obligations. Notwi thstanding the above, any change or modification affecting the application of revenues derived from the operation of the System shall not impair the obligation of contract wi th respect to the limi ted pledge of revenues herein made for the payment and security of the Certificates. SECTION 21: Mutilated - Destroyed - Lost and Stolen Certificates. In case any Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the Ci ty and after (i) the fi ling by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Certi ficate, and of the authentici ty of the ownership thereof and (i i) 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 Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. -24- Every replacement Certificate 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 other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Certificates. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Certificates. SECTION 22: Satisfaction of Obligation of City. If the City shall payor cause to be paid, or there shall otherwise be paid to the Holders, the principa 1 of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and the Net Revenues of the System (to the extent such limited pledge of Net Revenues shall not have been discharged or terminated by prior payment of principal of or interest on the Certificates) and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Certificates 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 Certificates or the principal amount(s) thereof at maturity or 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 Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Obligations have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, wi thout reinves tment, of suff icient money, together wi th any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, 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 Obligations will be made under this Section and no use made of any such deposit which would cause the Certificates 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. -25- Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount (s) thereof, or interest thereon wi th respect to which such moneys have been so depos i ted sha 11 be remi t ted 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 Certificates and remaining unclaimed for a period of four (4) years after the Stated Maturity, or applicable redemption date, of the Certificates such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 23: Ordinance a Contract -Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and 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 Certificates then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission. SECTION 24: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in this Section 24, the following terms have the following meanings: -26- "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Computation Date" has the meaning stated in Treas. Reg. § 1.148-8T(b)(1). "Gross Proceeds" has the meaning stated in Treas. Reg. § 1.148-8T(d). "Investment" has the meaning stated in Treas. Reg. § 1.148-8T(e). "Issue Date" means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. "Nonpurpose Investment" means any Investment in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purpose of the Certificates. "Rebatable Arbitrage" has the meaning stated in Treas. Reg. § 1.148-2T. "Yield of" (1) any Investment shall be computed in accordance with Treas. Reg. §1.148-2T, and (2) the Certificates has the meaning stated in Treas. Reg. § 1.l48-3T. (b) Not to Cause Interest to Become Taxable. The Ci ty 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 Certificate to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City shall have received a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exclusion of interest on any Certificate from gross income for federal income tax purposes pursuant to Section 103 of the Code, the City shall comply with each of the specific covenants in this Section. -27- (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the regulations and rulings thereunder, the City, at all times prior to the last Stated Maturity of Certificates, (1) shall exclusively own, operate, and possess all property acquired, constructed or improved directly or indirectly with Gross Proceeds of the Certificates and shall not use or permit the use of such Gross Proceeds or any property acquired, constructed, or improved with such Gross Proceeds in any activity carried on by any person or entity other than a state or local government, unless such use is solely as a member of the general public, or (2) sha 11 not di rect ly or indi rect ly impose or accept any charge or other payment for use of Gross Proceeds of the Certificates or for any property acquired, constructed or improved indirectly with such Gross proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (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 Certificates to make or finance loans to any person or enti ty other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if (1) property acquired, constructed, or improved wi th such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for f eder a 1 income tax purposes, (2) capaci ty in 0 r service from such property is committed to such person or entity under a take-or-pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed, or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the regulations and rulings thereunder, the City shall not, at any time prior to the final Stated Maturity of the Certificates, directly or indirectly invest Gross Proceeds of the Certificates in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Investments allocated to such Gross Proceeds whether then held or previously disposed of, exceeds the Yield of the Certificates. -28- (f) Not Federally Guaranteed. Except to the extent permitted by section l49(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 Certificates to be federally guaranteed within the meaning of Section 149(b) of the Code and the regulations and rulings thereunder. (g) Information Report. The City shall timely file with the Secretary of the Treasury the information required by section 149(e) of the Code with respect to the Certificates on such form and in such place as such Secretary may prescribe. (h) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in section 148(f) of the Code and the regulations and rulings thereunder, (1) The City shall account for all Gross Proceeds of the Certificates (including all receipts, expendi tures, and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures, and investments thereof) and shall maintain all records of such accounting with the official transcript of the proceedings relating to the issuance of the Certificates unti 1 six years after the final Computation Date. The City may, however, to the extent permitted by section l48(f) of the Code and the regulations thereunder, commingle Gross Proceeds of the Certificates with other money of the City, provided that the City separately accounts for each receipt and expendi ture of such Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall either (i) cause to be calculated by a nationally recognized accounting or financial advisory firm or (ii) calculate and cause its calculations to be verified by a nationally recognized account ing or f inanci a 1 advisory firm, in ei ther case in accordance wi th rules set forth in section 148(f) of the Code and Treas. Reg. § 1.148-2T and rulings thereunder, the Rebatable Arbi trage wi th respect to the Certificates. The City shall maintain such calculations relating to the Certificates until six years after the f~nal Computation Date. (3) purchase purchasers represented As additional consideration for the of the Certificates by the initial thereof and the loan of the money thereby, and in order to induce such -29- purchase by measures designed to result in the excludabi Ii ty of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States the amount described in paragraph (2) above and the amount described in paragraph (4) below, at the times, in the installments, to the place, in the manner, and accompanied by such forms or other information as is or may be required by section 148(f) of the Code and Treas. Reg. §§ 1.148-lT through 1.148-9T and rulings thereunder. (4) The City shall exercise reasonable di 1 igence to assure that no er rors are made in the calculations required by paragraph (2) and, if such error is made, to discover and promptly to correct such error within a reasonable amount of time thereafter, including payment to the United States of any Correction Amount as described in Treas. Reg. § 1.148-lT(c)(2) and any penalty under Treas. Reg. § 1.148-lT(c)(3)(ii)(B). SECTION 25: Sale of Certificates - Official Statement Approval. The Certificates are hereby sold to Prudential Securi ties Incorporated (herein referred to as the "Purchasers") in accordance with the Purchase Agreement, dated February 10, 1992, attached hereto as Exhibi t A and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Agreement for and on behalf of the Ci ty and as the act and deed of this Counci 1, and the Ci ty Secretary is authorized to attest said Purchase Agreement. In regard to the approval and execution of the Purchase Agreement, the Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained therein are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Preliminary Official Statement by the Purchasers in connection wi th the public offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects. The final Official Statement, being a modification and amendment of the Preliminary Official Statement to reflect the terms of sale, attached as Exhibit A to the Purchase Agreement (together with such changes approved by the Mayor, Ci ty Secretary, Di rector of Finance and City Manager, anyone or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated February 10, 1992, in the reoffering, sale and delivery -30- of the Certificates to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Preliminary Official Statement and Official Statement in final form as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 26: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the accrued interest received from the Purchasers, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and, subject to the provisions of Section 24(h) hereof, any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. All surplus proceeds of sale of the Certificates, including investment earnings, remaining after completion of all authorized projects or purposes and paying or making provision for the payment of the amounts owed pursuant to Section 24(h)(2) hereof, shall be deposited to the credit of the Certificate Fund. SECTION 27: Control and Custody of Proceedings. Pending settlement for the purchase of the Certificates by the Purchasers, the appropr i ate Ci ty off ici a Is and representat i ves are hereby authorized and directed to initiate and undertake the necessary arrangements to complete the issuance of such obligations by the City to the initial purchasers, including the preparation and printing, if any, on behalf of the City of the Initial Certificate and the Certificates to be delivered in lieu thereof and the preparation of a record of proceedings relating to the issuance of the Certificates for the approval of the Certif.icates by the Attorney General of the State of Texas and the registration thereof by the Comptroller of Public Accounts. Furthermore, the Mayor, City Secretary, City Manager, and Di rector of Finance, anyone or more of said off ici a Is, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General and their registration by the Comptroller of Public Accounts. In addition, such officials, -31- together with the City's financial advisor, bond counsel and the Paying Agent/ Registrar, are authorized and directed to make the necessary arrangements for the delivery of the Initial Certificate(s) to the initial purchasers. SECTION 28: Notices to Holders-Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in wri ting and sent by Uni ted 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 mai 1, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mai led, sha 11 affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be waived in wri ting 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 29: Cancellation. All Certificates 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 Agent/Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled Certificates held by the Paying Agent/Registrar shall be returned to the City. SECTION 30: Printed Opinion. The Purchasers' obligation to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski, Attorneys, Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Certificates. Printing of a true and correct reproduction of said opinion on the reverse side of each of the definitive Certificates is hereby approved and authorized. -32- SECTION 31: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Certificates as to legali ty are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates. SECTION 32: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 33: 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 34: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 35: Effect of Headings. herein are for convenience only and construction hereof. The shall Section headings not affect the SECTION 36: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 37: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. -33- SECTION 38: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by Article 6252-17, Vernon's Texas Civil Statutes, as amended. SECTION 39: Effective Date. This Ordinance shall be in full force and effect from and after its passage on the date shown below and it is so ordained. PASSED AND ADOPTED, this February 10, 1992. CITY OF NORTH RICHLAND HILLS, TEXAS ATTEST: ~1:rw:/iw~~ (/}/7~~~;; . ftY' Secretary APPROVED AS TO LEGALITY: (City Seal) 61015 -34- $900,000.00 City of North Richland Hills, Texas Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation Series 1992 PURCHASE AGREEMENT February 10, 1992 THE HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL City of North Richland Hills, Texas 7301 North East Loop 820 North Richland Hills, Texas 76182 Dear Mayor and Members of the City Council: The undersigned, Prudential Securities IncOIporated (the "Underwriter"), offers to enter into this Purchase Agreement with the City of North Richland Hills, Texas (the "Issuer") which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the Underwriter. This offer is made subject to the Issuer's written acceptance hereof on or before 9:00 p.m. Central Standard time on the date hereof, and if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Issuer at any time prior to the acceptance hereof by the Issuer. 1. Purchase and Sale of the Certificates. Subject to the tenns and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriter, all, but not less than all, of the Issuer's $900,000 principal amount of City of North Richland Hills, Texas Tax and Waterworks and Sewer System (Limited Pledge) Certificates of Obligation, Series 1992 (the "Certificates"). The principal amount of the Certificates to be issued, the dated date thereof, the maturities and optional redemption provisions, and interest rates per annum are set forth in, and the Certificates shall otherwise have such tenns and provisions as set forth in the Official Statement (as hereinafter dermed). The purchase price for the Certificates shall be $906,025.23, plus interest accrued on the Certificates, from their date to the date of payment for and delivery of the Certificates. 1 13820016:3 The Underwriter has delivered to the Issuer a corporate check of the Underwriter payable to the order of the Issuer in the aggregate amount of $230,999.32. The Issuer agrees to hold such check uncashed until the Closing to ensure the perfonnance by the Underwriter of its obligations to purchase, accept delivery of and pay for the Certificates at Closing. Concurrently with the payment by the Underwriter of the purchase price of the Certificates, the Issuer shall return such check to the Underwriter as provided in Paragraph 6 hereof. Should the Issuer fail to deliver the Certificates at the Closing, or should the Issuer be unable to satisfy the conditions of the obligations of the Underwriter to purchase, accept delivery of and pay for the Certificates, as set forth in this Purchase Agreement (unless waived by the Underwriter), or should such obligations of the Underwriter be tenninated for any reason pennitted by this Purchase Agreement, such check shall immediately be returned to the Underwriter. In the event the Underwriter fails (other than for a reason pennitted hereunder) to purchase, accept delivery of and pay for the Certificates at the Closing as herein provided, such check shall be retained by the Issuer as and for full liquidated damages for such failure of the Underwriter and for any defaults hereunder on the part of the Underwriter. The Underwriter hereby agrees not to stop, or cause payment on said check to be stopped, unless the Issuer has breached any of the tenns of this Purchase Agreement. The Preliminary Official Statement of the Issuer, dated January , 1992, including the cover p,age and Appendices thereto, relating to the Certificates (the "Preliminary Official Statement ), with such changes and amendments to the date hereof as have been mutually agreed to by the Issuer and the Underwriter, is attached as Exhibit A hereto, and is hereinafter called the "Official Statement." 2. The Certificates and the Official Statement; End of the Underwritin~ Period. (a) The Certificates shall be as described in,and shall be issued and secured under and pursuant to the provisions of, an ordinance to be adopted by the City Council (the "Council") of the Issuer on February 10, 1992, as amended and supplemented (the "Ordinance "). (b) Prior to or concurrently with the acceptance hereof by the Issuer, the Issuer has delivered to the Underwriter: (i) one certified copy of the Ordinance authorizing the issuance and sale of the Certificates; and (ii) two copies of the Official Statement manually signed on behalf of the Issuer by the Mayor. (c) The Issuer hereby represents and warrants that the Official Statement delivered to the Underwriter immediately prior to or concurrently herewith is deemed fmal by the Issuer as of the date hereof, except for the omission of such infonnation which is dependent upon the fmal pricing of the Certificates for completion, all as pennitted to be excluded by Rule 15c2-12 under the Securities Exchange Act of 1934, as amended ("Rule 15c2-12"). 2 13820016:3 (d) Unless otherwise notified in writing by the Underwriter by the Closing Date (defmed herein), the Issuer can assume that the "end of the underwriting period" for purposes of Rule 15c2-12 shall be the Closing Date. In the event such notice is so given in writing by the Underwritér, the Underwriter agrees to notify the Issuer in writing following the occurrence of the "end of the underwriting period" as defmed in Rule 15c2-12. The "end of the underwriting period" as used in this Purchase Agreement shall mean the Oosing Date or such later date as to which notice is given by the Underwriter in accordance with the preceding sentence. 3. Public Offerini. It shall be a condition to the Issuer's obligations to sell and deliver the Certificates to the Underwriter and to the Underwriter's obligations to purchase, to accept delivery of and to pay. for the Certificates that the entire principal amount of the Certificates authorized by the Ordinance shall be issued, sold and delivered by the Issuer and purchased, accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public offering of the Certificates at prices not in excess of the initial offering prices or yields set forth on the cover page of the Official Statement and in Schedule 1 attached hereto, plus interest accrued thereon from the date of the Certificates. 4. Use of Documents; Certain Covenants and Aireements of the Issuer. (a) The Issuer hereby authorizes the use by the Underwriter of the Ordinance and the Official Statement, including any supplements or amendments thereto, and the infonnation therein contained, in cOlUlection with the public offering and sale of the Certificates. The Issuer ratifies and confinns the use by the Underwriter prior to the date hereof of the Preliminary Official Statement, which the Issuer confmns is "deemed fmal" as of the date of initial mailing, within the meaning of and for the purposes of Rule 15c2-12 in connection with the public offering of the Certificates. (b) The Issuer covenants and agrees: (i) To cause reasonable quantities of the Official Statement, as requested by the Underwriter, to be delivered to the Underwriter, without charge, within seven business days of the date hereof; (ii) To apply the proceeds from the sale of the Certificates as provided in and subject to all of the tenns and provisions of the Ordinance and not to 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 Certificates; (üi) If, after the date of this Purchase Agreement and until twenty-five (25) days after the end of the underwriting period, any event shall occur, or circumstances shall exist, or such occurrence or existence shall become known, which might or would cause the Official Statement 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, in light of the circumstances under which they were made, not misleading, or as a result of which it is necessary to amend or supplement the Official Statement in order to make the statements made therein, in the light of the circumstances when the 3 13820016:3 Official Statement is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, to notify the Underwriter (and for the purpose of this clause (ill) to provide the Underwriter with such infonnation as it may from time to time request), and to amend or supplement the Official Statement so that the statements in the Official Statement, as so amended and supplemented, will not, in the light of the. circumstances when the Official Statement is delivered to a purchaser, be misleading or so that the Official Statement will comply with law; (iv) To furnish such infonnation and execute such instruments and take such action in cooperation with the Underwriter as the Underwriter may reasonably request (A) to qualify the Certificates 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 Underwriter may designate, and to detennine the eligibility of the Certificates 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 Certificates; provided, however, that the Issuer will not be required to qualify as a foreign corporation or to fIle any general or special consents to service of process under the laws of any state; (v) To advise the Underwriter immediately of receipt by the Issuer of any notification with respect to the suspension of the qualification of the Certificates for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; and (vi) Prior to Closing not to 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 a pledge of the revenues or other assets of the Issuer other than the Issuer's General Obligation Refunding Bonds, Series 1992, and General Obligation Improvement Bonds, Series 1992-A. 5. Representations and Warranties of the Issuer. The Issuer represents and warrants to the Underwriter, which representations and warranties shall survive the purchase and offering of the Certificates, as follows: (a) The Issuer is a home-rule municipality, a political subdivision of the State of Texas, a body politic and corporate, and has full legal right, power and authority, and at the date of the Closing will have full legal right, power and authority, (i) to enter into this Purchase Agreement and to adopt the Ordinance, (ü) to sell, issue and deliver the Certificates to the Underwriter as provided herein and (ill) to carry out and consummate the transactions contemplated by this Purchase 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 relevant law and the Ordinance as they pertain to such transactions; (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 Certificates, the Ordinanèe, this Purchase 4 13820016:3 Agreement, and the consummation by it of all other transactions contemplated by the Official Statement, the Ordinance and this Purchase Agreement; the Ordinance and this Purchase Agreement constitute legal, valid and binding obligations 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 creditor's rights; the Certificates, when issued,authenticated and delivered to the Underwriter in accordance with the Ordinance and this Purchase Agreement, will be payable from an ad valorem tax, within legal limits as set forth in the Official Statement, against taxable property within the City, and will be entitled to the benefits of the Ordinance and 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 creditor's rights; (c) The Issuer is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any 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, 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 Certificates and this Purchase Agreement and the adoption of the Ordinance by the Issuer and compliance with the provisions on the Issuer's part contained therein will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative regulation, judgment, decree, loan 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 or under the tenns of any such constitutional provision, law, regulation or instrument, except as provided by the Certificates and the Ordinance; (d) All authorizations, approvals, licenses, pennits, 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 perfonnance by the Issuer of its obligations under, this Purchase Agreement, the Ordinance and the Certificates have been duly obtained, except for the approval of the Certificates by the Attorney General of the State of Texas (and the registration of the Certificates by the Comptroller of Public Accounts of the State of Texas) and such approvals, consents and orders as are stated in the Official Statement as yet to be obtained or as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Certificates; 5 13820016:3 (e) The descriptions contained in the Official Statement of the Certificates and the Ordinance accurately reflect the provisions of such instruments and agreement, and the proceeds of the sale of the Certificates will be applied generally as described in the Official Statement under the caption "Plan of Financing - Sources and Applications of Funds"; (f) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or, to the best knowledge of the Issuer, after due inquiry, 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 Certificates or in any way contesting or affecting the issuance, execution, delivery, payment, security, validity or enforceability of the Certificates, the Ordinance, or this Purchase Agreement, or contesting the exclusion from gross income of interest on the Certificates 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 Certificates, 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 fmding would materially adversely affect the validity or enforceability of the Certificates, the Ordinance, or this Purchase Agreement; (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; at the time of the Issuer's acceptance hereof and as of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in 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 or circumstance occurs or becomes known of the nature described in clause (ill) of paragraph (b) of Section 4) at all times subsequent thereto during the period up to and including twenty-five (25) days subsequent to the end of the underwriting period, 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 light of the circumstances under which they were made, not misleading; (i) If the Official Statement is supplemented or amended pursuant to clause (iii) of paragraph (b) of Section 4, 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 twenty-five (25) days subsequent to the end of the underwriting period, 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 light of the circumstances under which they were made, not misleading; 6 13820016:3 (j) The fmancial statements of, and other fmancial infonnation regarding, the Issuer in the Official Statement present fairly the fmancial position of the Issuer as of the dates and for the period covered thereby and are stated on a basis substantially consistent with that of the Issuer's prior year's audited fmancial statements; and (k) Between the date of this Purchase Agreement and the Closing, the Issuer will not issue any additional bonds, notes or other obligations for borrowed money payable in whole or in part from ad valorem taxes (other than the Issuer's General Obligation Refunding Bonds, Series 1992 and General Obligation bnprovement Bonds, Series 1992-A), and the Issuer will not incur any material liabilities, direct or contingent, nor will there be any adverse change of a material nature in the fmancial position of the Issuer. 6. Closin2. At 9:00 a.m., Central Standard time, on March 10, 1992, or at such other time and date ãs shall have been mutually agreed upon by the Issuer and the Underwriter (the "Closing" or the "Closing Date"), the Issuer will, subject to the tenns and conditions hereof, deliver the Certificates to the Underwriter duly executed and authenticated in the fonn and manner contemplated below, together with the other documents hereinafter mentioned, and the Underwriter will, subject to the tenns and conditions hereof, accept such delivery and pay the purchase price of the Certificates as set forth in Section 1 hereof in immediately available funds. The Issuer will deliver the initial certificate of certificates (as defmed in the Ordinance) to the Underwritèr and, provided the Underwriter shall have made arrangements with The Depository Trust Company ("DTC") for the Certificates to be immobilized and thereafter traded as book-entry-oruy securities, the Issuer shall take appropriate steps to provide DTC with one defmitive certificate for each year of maturity of the Certificates, the Issuer shall make available to the Underwriter the other documents hereinafter mentioned and the U ~derw~ter will accept ~uch d~livery an? pay the purchase price of ~e Certificates as set forth m SectIon 1 hereof m munedIately available funds. Concurrently WIth such payment by the Underwriter, the Issuer shall return to the Underwriter the deposit check referred to in Section I hereof. Payment for the Certificates as aforesaid shall be made at the offices of the Paying Agent/R.egistrar named in the Official Statement, or such other place as shall have been mutually agreed upon by the Issuer and the Underwriter. 7. ClosiT)~ Conditions. The Underwriter has entered into this Purchase Agreement in reliance upon the representations, warranties, covenants 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 perfonnance by the Issuer of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriter's obligations under this Purchase Agreement to purchase, to accept delivery of, and to pay for the Certificates shall be conditioned upon the perfonnance by the Issuer of its obligations to be perfonned hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct, and the Issuer shall have complied with the covenants and agreements of the Issuer contained herein, on the date hereof and on and as of the date of Closing, as if made on the date of Closing; , 7 13820016:3 (b) 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 amended, modified or supplemented, except in any such case as may have been agreed to by the Underwriter; (c) At the time of the Closing, all official action of the Issuer relating to this Purchase Agreement, the Certificates and the Ordinance shall be in full force and effect and shall not have been amended, modified or supplemented and the Underwriter shall have received, in appropriate fonn, evidence thereof; (d) At the time of the Closing, there shall not have occurred any change in the condition, financial or otherwise, from that set forth in the Official Statement that, in the judgment of the Underwriter, is material and adverse and that makes it, in the judgment of the Underwriter, impracticable to market the Certificates on the tenns and in the manner contemplated in the Official Statement; (e) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; and (f) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (i) The Official Statement and each supplement or amendment, if any, thereto, executed on behalf of the Issuer by the Mayor and City Secretary; (ii) The Ordinance, certified by the City Secretary under its 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 Underwriter; (iii) The opinion of Fulbright & Jaworski ("Bond Counsel") in substantially the fonn and substance of Appendix C to the Official Statement and a reliance letter from Bond Counsel addressed to the Underwriter, each dated the date of Closing; (iv) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Certificates as required by law and the registration certificate of the Comptroller of Public Accounts of the State of Texas; (v) The supplemental opinion, dated the date of Closing, of Fulbright & Jaworski addressed to the Issuer and the Underwriter to the effect that: (A) the Certificates are exempt securities within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended, and it is not necessary in connection with the sale of the Certificates to the public to register the Certificates under the Securities Act of 1933, as amended, or to qualify the Ordinance under the Trust Indenture Act of 1939, as amended; (B) except to the extent noted herein, 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 relating to the Certificates and the Ordinance contained under the 8 13820016:3 captions "Certificate Infonnation," "Other Relevant Infonnation - Tax Exemption," and "Other Relevant Infonnation - Legal Investments and Eligibility to Secure Public Funds in Texas" contained in the Official Statement and such fmn is of the opinion that the infonnation relating to the Certificates and the Ordinance contained under such captions is a fair and accurate swrunary of the infonnation pwpoited to be shown and that the infonnation and descriptions contained under such captions relating to the provisions of applicable state and federal laws confonn to such state and federal laws; and (C) such fmn has reviewed the Official Statement and, although such fmn has not undertaken to verify, is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Official Statement, and although such finn has not been requested to investigate or verify and have not independently investigated or verified any records, data or other material relating to the fmancial condition or capabilities of the Issuer and has not assumed any responsibility with respect thereto, such finn does not have knowledge of facts which have resulted in a conclusion that the Official Statement (excluding therefrom the reports, fmancial and statistical data and forecasts included therein, and excluding therefrom the Appendices thereto, all as to which such finn expresses no view) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (vi) The opinion, dated the date of Dosing, of Hughes & Luce, L.L.P. ("Underwriter's Counsel") addressed to the Underwriter as to such matters as the Underwriter may reasonably request; (vii) A certificate, dated the date of Dosing, signed by the City Manager and the Director of Finance of the City, to the effect that (A) the representations and warranties of the Issuer contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (B) 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 Certificates, or the levy, collection, or application of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Certificates, or the pledge thereof, or in any way contesting or affecting the validity of the Certificates, the Ordinance or this Purchase Agreement, or contesting the powers of the Issuer or contesting the authorization of the Certificates 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 the Underwriter may, in its sole discretion, accept certificates or opinions of the City Attorney that, in his or her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); (C) to the best of their knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the pwpose for which it is to be used or which it is necessary to disclose 9 13820016:3 therein in order to make the statements and infonnation therein not misleading in any respect; and (D) there has not been any material and adverse change in the affairs or fmancial condition or anticipated future fmancial condition or prospects of the Issuer since September 30, 1991, the latest date as to which audited fmancial infonnation is available; (viii) A certificate, dated the date of the Oosing, of the Director of Finance of the City to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of delivery of the Certificates, it is not expected that the proceeds of the Certificates will be used in a manner that would cause the Certificates to be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (ix) A copy of or policy of municipal bond insurance insuring the timely payment of the principal of and interest on the Certificates issued by a company having the highest rating by Standard & Poor's Corporation and Moody's Investors Service; (x) Evidence of the rating or ratings on the Certificates shall be delivered in a fonn acceptable to the Underwriter; and (xi) Such additional legal opinions, certificates, instruments and other documents as the Underwriter or the Underwriter's Counsel may request to evidence the truth, accuracy and completeness, as of the date hereof and as of the date of Closing, of the Issuer's representations and warranties contained herein and of the statements and infonnation contained in the Official Statement and the due perfonnance and satisfaction by the Issuer on or prior to the date of Closing of all agreements then to be perfonned and all 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 satisfactory to the Underwriter. If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Certificates contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Certificates shall be tenninated for any reason pennitted by this Purchase Agreement, this Purchase Agreement shall tenninate and neither the Underwriter nor thelssuer shall be under further obligation hereunder, except that the respective obligations of the Issuer and the Underwriter set forth in Section 9 hereof shall continue in full force and effect, and the Issuer shall return to the Underwriter the deposit check referred to in Section 1 hereof. 8. Tennination. The Underwriter shall have the right to tenninate in its absolute discretion the Underwriter's obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Certificates by notifying the Issuer of its election to do so if, after the execution hereof and prior to the Closing: 10 13820016:3 (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 reconunended 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 Chainnan or ranking minority member of the Conunittee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation is proposed for consideration by either such committee by any member thereof or presented as an option for consideration by either such committee by the staff of such committee, or by the staff of the Joint Conunittee on Taxation of the Congress of the United States, or a bill to amend the Internal Revenue Code (which, if enacted, would be effective as of a date prior to the Oosing) shall be f'Iled in either House, or (ii) a decision shall have been rendered by a court established under Article ill of the Constitution of the United States or by the United States Tax Court, or (ill) an order, 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), (ü), (ill), or (iv), would be to impose, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Certificates or upon income of the general character to be derived by the Issuer, other than as imposed on the Certificates and income therefrom under the federal tax laws in effect on the date hereof, in such a manner as in the judgment of the Underwriter would make it impracticable to market the Certificates on the tenns and in the manner contemplated in the Official Statement. (b) Any action shall have been taken by the Securities and Exchange Conunission 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 Certificates, or any action shall have been taken by any court or any governmental authority suspending the use of Preliminary Official Statement or 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 (ill) 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, or by an official, agency or department thereof, affecting the legality or tax status of the Issuer, its property or income, its notes or bonds (including the Certificates) or the interest thereon, which in the judgment of the Underwriter would make it impracticable to market the Certificates on the tenns and in the manner contemplated in the Official Statement. (d) Any fact or event shall exist or have existed that in the Underwriter's judgment requires or has required a supplement or amendment to the Official Statement, which in the judgment of the Underwriter would make it impracticable to market the Certificates on the tenns and in the manner contemplated in the Official Statement. . 11 13820016:3 (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 (C) there shall have occurred any outbreak or escalation of hostilities or any change in fmancial markets or any calamity or crisis that, in the judgment of the Underwriter, is material and adverse and (ii) in the case of any of the events specified in clauses (A) through (C), such event singly or together with any other such event makes it, in the judgment of the Underwriter, impracticable to market the Certificates on the tenns 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 (includìng the rating to be accorded the Certificates) by any "nationally recognized statistical rating organization," as such tenn is defmed for purposes of Rule 436(g)(2) under the Securities Act of 1933, as amended. (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 fmal) of the Securities and Exchange Commission or other governmental agency shall have been made or issued that, in the opinion of Underwriter's Counsel, has the effect of requiring the contemplated distribution of the Certificates 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 Certificates by the Underwriter, or the resale of the Certificates by the Underwriter, on the tenns and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission. 9. RJq)enses. (a) The Underwriter shall be under no obligation to pay, and the Issuer shall pay, any expenses incident to the perfonnance of the Issuer's obligations hereunder, including but not limited to: (i) the cost of the preparation, printing and delivery of the Preliminary Official Statement and the Official Statement; (ii) the cost of the preparation and printing of the Certificates; (iii) the fees and expenses of Fulbright & Jaworski, Bond Counsel to the Issuer; (iv) the fees and disbursements of First Southwest Company for their services as fmancial advisor to the Issuer; (v) the fees and disbursements of any engineers, accountants, and other experts, consultants, or advisors retained by the Issuer; and (vi) the fees for bond ratings and travel or other expenses incuned incident thereto. (b) The Underwriter shall pay: (i) the cost of the preparation and printing of the underwriting documents, including, without limitation, this Purchase Agreement; (ii) all advertising expenses incurred in the public offering of the Certificates; and (iii) all other expenses incurred by the Underwriter in connection with the public offering of the Certificates, including the fees and disbursements of its counsel. 12 13820016:3 10. Notices. Any notice or other conununication to be given to the Issuer under this Purchase Agreement may be given by delivering the same in writing at the address for the Issuer set forth above, and any notice or other conununication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Prudential Securities Incorporated, 2121 San Jacinto Street, Suite 1900, Dallas, Texas 75201, Attention: John W. Thomas, Vice President. 11. 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 Underwriter (including successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. This Purchase Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriter; (ü) delivery of and payment for the Certificates pursuant to this Purchase Agreement; and (ill) any tennination of this Purchase Agreement. 12. Effective nate. This Purchase Agreement shall become effective upon the execution of the acceptance hereof by the Issuer and shall be valid and enforceable as of the time of such acceptance. 13. Choice of Law. This Purchase Agreement shall be governed by and construed in accordance with the laws 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 pwposes of this Purchase Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 16. Section Headinis. Section headings have been inserted in this Purchase Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Purchase Agreement and will not be used in the interpretation of any provisions of this Purchase Agreement. 13 13820016:3 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. ACCEPTED: This 10th day of February, 1992 By:"--. k;~1 ~. Mayor The City of orth Riclùand Hills, Texas ATTEST: By: (l{~~ ¡!a4~ ? Secretary Very truly yours, PRUDENTIAL SECURITIES INCORPORATED By: ~~~~=deDt ~o;f W. ' (SEAL ) 14 13820016:3 .;: NOTICE OF INTENTION TO ISSUE CITY OF NORTH RICHLAND HILLS, TEXAS CERTIFICATES OF OBLIGATION TAKE NOTICE the the City Council of the City of North Rlchland Hills. Texas, shall convene at 7'30 ?'clOCk P.M. on, the 10th day of February, 1992,' at Its regular meeting place in the City Hall. 7301 N.E. Loop 820, North Richland Hills, Texas, and. during such meeting, the City. Council will consider the P8S$8ge of an ordinance authorizing the Issuance of oertlflcates of obligatIon In an amount not to ex- ceed $900,000 for the purpose of paying contraciual obligation to be Incurred for (I) street Improve- m~.nts, Including related rlght-of·way acquisition, utility lines relocation and drainage and (Ii) pro- fessional services. such certificates to be payable from ad valorem taxes and â limited pledge of{ the net revenues of the City's combined Waterworks and Sanitary Sewer System. The certificates are to be Issued, and. this notice is gIven. under and pur- suant to the provisions of V.T.C.A. Local Govern- . ment Code. Subchapter C of Chapter 271. /s/ Jeanette Rewis City Secretary . City of North Rlchland Hills, Texas MCN CPN 819 PUB: 01/23/92 & 01/30/92 ,. LEGAL AFFIDAVIT THE STATE OF TEXAS: COUNTY OF TARRANT Before me, the undersigned authority on this day personally ap- peared MARG I t LANGLEY known to me to be a credible person, who first being sworn, deposed and upon her oath said: That she is the C. L . A . R. of the MID CITIES NHJS , a newsl'a- per which has been regularly and continuously published and of general circulation in the Cityffown of N. RICHLAND HILLS , for a period of .more than one year next preceding the first publication of the attached LEGAL AD said newspaper on the following date(s). and that he caused said notice to be published in , t -à3>· 9 ~ ~ J . 30 . q~ That the attached is a true and correct copy of said notice as published on said date(s) in said NEW.SPAPER. ,/J . 1f\~ QC~M ~ before me, this the M' day oi0-52:;;- Sworn to and subscribed 19 qd-;- ,~~~~\~~ .\' Notary Public, "'TARRANT County, Texas