HomeMy WebLinkAboutOrdinance 2552
ORDINANCE NO. 2552
AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICHLAND
HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES
2001"; 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 City and a pledge of the net
revenues from the operation of the City's Waterworks and 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 Paying AgenURegistrar Agreement and a
Purchase Contract 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 $3,255,000 for the purpose of paying contractual obligations to
be incurred for (i) street improvements, including drainage and utility line relocations and the
purchase of land and right-of-way, and (ìi) professional services rendered in relation to suct:J
projects and the financing thereof, has been duly pUblished in the Fort Worth Star Telegram, a
newspaper hereby found and determined to be of general circulation in the City of North
Richland Hills, Texas, on March 28, 2001 and April 4, 2001, the date 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 at least 5% 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 the aforesaid notice should be issued and sold at this time in the amount
and manner as hereinafter provided; 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 City shall be and are hereby authorized to be issued in the aggregate principal
amount of $3,255,000, to be designated and bear the title "CITY OF NORTH RICHLAND HILLS,
TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2001" (hereinafter referred to as the "Certificates"),
for the purpose of paying contractual obligations to be incurred for (i) street improvements,
including drainage and utility line relocations and the purchase of land and right-of-way, and (ii)
professional services rendered in relation to such projects and the financing thereof, pursuant to
authority conferred by and in conformity with the Constitution and laws of the State of Texas,
including V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended.
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SECTION 2: Fully Registered Obligations - Authorized Denominations-Stated
Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated April
15, 2001 (the "Certificate Date") and 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 the per annum rate(s) in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
2002 $165,000 4.50%
2003 165,000 4.50%
2004 165,000 4.50%
2005 165,000 4.50%
2006 165,000 4.50%
2007 165,000 4.50%
2008 165,000 4.50%
2009 165,000 4.50%
2010 165,000 4.50%
2011 165,000 4.625%
2012 165,000 4.75%
2013 160,000 4.875%
2014 160,000 5.00%
2015 160,000 5.125%
2016 160,000 5.25%
2017 160,000 5.25%
2018 160,000 5.25%
2019 160,000 5.25%
2020 160,000 5.375%
2021 160,000 5.375%
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), and such interest shall be payable on February 15 and August
15 of each year, commencing February 15, 2002.
SECTION 3: Terms of Payment-Paying AgenURegistrar. 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 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 Bank One National Association to serve as Paying
AgenURegistrar for the Certificates is hereby approved and confirmed. Books and records
relating to the registration, payment, transfer and exchange of the Certificates (the "Security
Register") shall at all times be kept and maintained on behalf of the City by the Paying
AgenURegistrar, as provided herein and in accordance with the terms and provisions of a
"Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A,
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and such reasonable rules and regulations as the Paying AgenURegistrar and the City may
prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement
in connection with the delivery of the Certificates. The City covenants to maintain and provide a
Paying AgenURegistrar at all times until the Certificates are paid and discharged, and any
successor Paying AgenURegistrar 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 AgenURegistrar. Upon any change in the Paying AgenURegistrar 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 AgenURegistrar.
Principal of and premium, if any, on the Certificates shall be payable at the Stated
Maturities or the redemption thereof only upon presentation and surrender of the Certificates to
tAe Paying AgenURegistrar at its designated offices in Westerville, Ohio (the "Designated
PaymenUTransfer 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
AgenURegistrar (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 AgenURegistrar, 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 banking institutions in the City where the Designated
PaymenUTransfer Office of the Paying AgenURegistrar 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 AgenU 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 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. 2012 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,
2011, 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
AgenURegistrar), the City shall notify the Paying AgenURegistrar 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 City to exercise the right to redeem Certificates shall
be entered in the minutes of the governing body of the City.
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and such reasonable rules and regulations as the Paying AgenURegistrar and the City may
prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement
in connection with the delivery of the Certificates. The City covenants to maintain and provide a
Paying AgenURegistrar at all times until the Certificates are paid and discharged, and any
successor Paying AgenURegistrar 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 AgenURegistrar 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
Maturities or the redemption thereof only upon presentation and surrender of the Certificates to
the Paying AgenURegistrar at its designated offices in Westerville, Ohio (the "Designated
PaymenUTransfer 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
AgenURegistrar (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 AgenURegistrar, 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, p
legal holiday, or a day when banking institutions in the City where the Designated
PaymenUTransfer Office of the Paying AgenURegistrar 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 AgenU 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 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, 2012 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 AgenURegistrar), on February 15.
2011, 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 AgenURegistrar 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 City to exercise the right to redeem Certificates shall
be entered in the minutes of the governing body of the City.C
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(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 AgenU
Registrar shall treat such Certificates as representing the number of Certificates Outstanding
which is obtained by dividing the principal amount of such Certificates by $5,000 and shall
select the Certificates to be redeemed within such Stated Maturity by lot.
(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 City and at the City'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 principal 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, provided moneys sufficient for the payment of such Certificate (or the
principal amount thereof to be redeemed) at the then applicable redemption price are held for
the purpose of such payment by the Paying AgenURegistrar 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 Designated PaymenUTransfer Office of the Paying AgenURegistrar 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.
SECTION 5: Registration Transfer - Exchange of Certificates-Predecessor
Certificates. The Paying AgenURegistrar shall obtain, record, and maintain in the Security
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 denominations
by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to
the Paying AgenURegistrar for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying AgenURegistrar.
Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in
Section 8 hereof) for transfer at the Designated PaymenUTransfer Office of the Paying
Agent/Registrar, the Paying AgenURegistrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized denominations
and 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 and
having the same Stated Maturity, bearing the same rate of interest and of like aggregate
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principal amount as the Certificates surrendered for exchange, upon surrender of the
Certificates to be exchanged at the Designated Payment/Transfer 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 Designated PaymenUTransfer Office of the Paying AgenURegistrar or sent by
United States Mail, first class, postage prepaid to the Holders, and, upon the registration and
delivery thereof, the same shall be the valid obligations of the City, evidencing the same
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 AgenURegistrar 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 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 20 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 AgenU 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 operational arrangements referenced in the
Blanket Issuer Letter of Representations by and between the City and DTC (the "Depository
Agreement").
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").
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.
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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 issued and delivered to OTC Participants and 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
City 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 V.T.C.A., Government Code, Chapter 1201.
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 AgenURegistrar, 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: Initial Certificate(s). The Certificates herein authorized shall be initially
issued either (i) as a single fully registered certificate in the total principal amount of $3,255,000
with principal installments to become due and payable as provided in Section 2 hereof and
numbered T-1, or (ii) as multiple 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-1 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 Initial 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
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 AgenURegistrar, pursuant to
written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial
Certificate(s) delivered hereunder and exchange therefor definitive 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
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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 definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or
engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as
determined by the officers executing such Certificates as evidenced by their execution.
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
SURPLUS REVENUE '
CERTIFICATE OF OBLIGATION,
SERIES 2001
Certificate Date:
April 15, 2001
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 assigns thereof, on the Stated Maturity 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 15,2002. Principal of this Certificate is payable at its
Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender,
at the Designated PaymenUTransfer Office of the Paying AgenURegistrar executing the
registration certificate appearing hereon, or its successor; provided, however, while this
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Certificate is registered to Cede & Co., the payment of principal upon a partial redemption of the
principal amount hereof may be accomplished without presentation and surrender of this
Certificate. 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 AgenURegistrar 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 AgenURegistrar by check
sent United States Mail, first class postage prepaid, to the address of the registered owner
recorded in the Security Register or by such other method, acceptable to the Paying
AgenURegistrar, 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 United
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 $3,255,000 (herein referred to as the "Certificates") for the purpose of paying
contractual obligations to be incurred for (i) street improvements, including drainage and utility
line relocations and the purchase of land and right-of-way, and (ii) professional services
rendered in relation to such projects and the financing thereof, 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 City Council of the City (herein referred to as the "Ordinance").
The Certificates maturing on and after February 15, 2012, 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
AgenURegistrar), on February 15, 2011, or on any date thereafter, at the redemption price of
par, together with accrued interest to the date of redemption.
At least thirty days prior to a redemption date, the City shall cause a written notice of
such redemption to be sent by United States Mail, first class postage prepaid, to the registered
owners of each Certificate to be redeemed at the address shown on the Security Register and
subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate
(or any portion of its principal sum) shall have been duly called for redemption and notice of
such redemption duly given, then upon the redemption date such Certificate (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the payment
of the redemption price and the interest accrued on the principal amount to be redeemed to the
date of redemption are held for the purpose of such payment by the Paying AgenURegistrar,
interest shall cease to accrue and be payable from and after the redemption date on the
principal amount redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated PaymenUTransfer Office of the Paying AgenURegistrar, and 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 thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in
whole or in part, the City and the Paying AgenURegistrar shall not be required to transfer such
Certificate to an assignee of the registered owner within 45 days of the redemption date
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therefor; provided, however, such limitation on transferability shall not be applicable to an
exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part.
The Certificates are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City, and are additionally payable
from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of
the City's combined Waterworks and Sewer System (the "System"), such lien and pledge,
however, being junior and subordinate to the lien on and pledge of such Net Revenues securing
the payment of the "Prior Lien Obligations" (identified and defined in the Ordinance) now
outstanding and hereafter issued by the City. In the Ordinance, the City 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 Designated
PaymenUTransfer Office of the Paying AgenURegistrar, and to all the provisions of which the
owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of
terms; the description of and the nature and extent of the tax levied for the payment of the
Certificates; the nature and extent of the pledge of the Net Revenues securing the payment of
the Certificates; 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 without the
consent of the Holders; the rights, duties, and obligations of the City and the Paying
AgenURegistrar; the terms and provisions upon which the tax levy and the pledge of the· Net
Revenues and covenants made in the Ordinance 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.
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 Designated
PaymenUTransfer Office of the Paying AgenURegistrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying AgenURegistrar 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
AgenURegistrar to the designated transferee or transferees.
The City and the Paying AgenURegistrar, 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 AgenURegistrar, 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 AgenURegistrar, 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
45024656.1
9
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; 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 limitation; and that
due provision has been made for the payment of the principal of and interest on the Certificates
as aforestated. In case any provision 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 RICH LAND HILLS, TEXAS '
Mayor
COUNTERSIGNED:
City Secretary
(SEAL)
45024656.1
10
C. *Form of Registration Certificate of Comptroller
of Public Accounts to appear on Initial Certificate(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
)
OF PUBLIC ACCOUNTS )
)
THE STATE OF TEXAS }
REGISTER NO.
I HEREBY CERTIFY that this 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
D. Form of Certificate of Paying AgenURegistrar 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
AgenURegistrar.
The designated offices of the Paying AgenURegistrar located in Westerville, Ohio, is the
"Designated PaymenUTransfer Office" for this Certificate.
BANK ONE NATIONAL ASSOCIATION,
as Paying Agent/Registrar
Registration Date:
By
Authorized Signature
45024656.1
11
E. Form of Assignment
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for registration thereof, with full
power of substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within
Certificate in every particular.
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 certificate the headings "Interest Rate "
and "Stated Maturity "shall both be omitted; -
(ii) paragraph one shall read as follows:
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 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
45024656.1
12
interest being payable on February 15 and August 15 of each year, commencing February 15,
2002. Principal installments of this Certificate are payable at its Stated Maturity or on a
prepayment date to the registered owner hereof by Bank One National Association (the "Paying
Agent/Registrar"), upon presentation and surrender, at its designated offices in Westerville,
Ohio (the "Designated PaymentlTransfer Office"). Interest is payable to the registered owner of
this Certificate whose name appears on the "Security Register" maintained by the Paying
AgenURegistrar 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 Mail, first class postage prepaid, to the
address of the registered owner recorded in the Security Register or by such other method,
acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the
registered owner. 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 United States of America which at the time of payment is legal tender for the payment of
public and private debts.
SECTION 10: Definitions. For purposes of this Ordinance and for clarity with 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 "Additional Obligations" shall mean tax and revenue
obligations hereafter issued which by their terms are payable from ad valorem
taxes and additionally payable from and secured by a parity lien on and pledge of
the Net Revenues of the System of equal rank and dignity with the lien and
pledge securing the payment of the Certificates.
(b) The term "Certificates" shall mean the $3,255,000 "City of North
Richland Hills, Texas, Tax and Waterworks and Sewer System Surplus Revenue
Certificates of Obligation, Series 2001 "authorized by this Ordinance.
(c) The term "Certificate Fund" shall mean the special Fund created
and established under the provisions of Section 11 of this Ordinance.
(d) 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 City become delinquent.
(e) The term "Fiscal Year" shall mean shall mean the twelve month
operating period for the System ending September 30th of each year.
(f) The term "Government Securities" shall mean (i) direct
noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United
States of America, (ii) noncallable obligations of an agency or instrumentality of
the United States, including obligations unconditionally guaranteed or insured by
the agency or instrumentality and on the date of their acquisition or purchase by
the City are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a
state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and on the date of their acquisition or purchase by
45024656.1I
13
the City, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(g) The term "Net Revenues" shall mean and include the gross
revenues derived from the operation of the System, less reasonable expenses of
operation and maintenance, 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 City and the inhabitants thereof, or such as might be
necessary to meet some physical accident or condition which would otherwise
impair the security of obligations payable from and secured by a lien on and
pledge of the Net Revenues of the System shall be deducted in determining "Net
Revenues".
(h) The term "Outstanding" when used in this Ordinance with respect
to Certificates means, as of the date of determination, all Certificates theretofore
issued and delivered under this Ordinance, except:
(1) those Certificates cancelled by the Paying
AgenURegistrar or delivered to the Paying AgenURegistrar for
cancellation;
(2) those Certificates for which payment has been duly
provided by the City in accordance with the provisions of
Section 21 hereof; and
(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 20
hereof.
(i) The term "Prior Lien Obligations" shall mean (A) all revenue bonds
or other obligations, now outstanding and hereafter issued, payable from and
secured by a lien on and pledge of the Net Revenues of the System, including,
but not limited to, the outstanding and unpaid:
(1) "City of North Richland Hills, Texas, Waterworks
and Sewer System Revenue Refunding Bonds, Series 1996",
dated December 1, 1996; and issued in the original principal
amount of $5,135,000;
(B) obligations now outstanding and hereafter issued which by the terms
of this Ordinance and the ordinances authorizing their issuance have a prior right
and claim on the Net Revenues of the System to the claim and right securing the
payment of the Certificates, including, but not limited to, the outstanding:
(1) "City of North Richland Hills, Texas, Tax and
Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 1992", dated February 1, 1992,
and issued in the original principal amount of $900,000;
45024656.1
14
(2) "City of North Richland Hills, Texas, Tax and
Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 1997", dated April 15, 1997, and
issued in the original principal amount of $2,755,000;
(3) "City of North Richland Hills, Texas, Tax and
Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 1998", dated May 1, 1998, and
issued in the original principal amount of $8,180,000;
(4) "City of North Richland Hills, Texas, Tax and
Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 1999", dated April 15, 1999, and
issued in the original principal amount of $3,560,000; and
(5) "City of North Richland Hills, Texas, Tax and
Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 2000", dated May 1, 2000, and
issued in the original principal amount of $2,315,000.
U) The term "System" shall mean the City's combined Waterworks
and Sanitary Sewer System, including all present and future additions,
extensions, replacements and improvements thereto, whether situated within or
without the corporate limits of the City.
SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide
a sinking fund for the payment, redemption and retirement 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 2001 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND", and
all moneys deposited to the credit of such Fund shall be shall be kept and maintained in a
special 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 AgenURegistrar 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 AgenURegistrar to be made in such manner as
will cause immediately available funds to be deposited with the Paying AgenURegistrar 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 AgenURegistrar, money in the Certificate
Fund may, at the option of the City, be invested in obligations identified in, and in accordance
with the provisions of the "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter
2256) relating to the investment of "bond proceeds"; 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.
45024656,1
15
SECTION 12: Tax Levy. 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 a sufficient tax on each one hundred dollars'
valuation of taxable property in said City, adequate to pay such Debt Service Requirements
while the Certificates remain Outstanding, full allowance being made for delinquencies and
costs of collection; and said tax shall be assessed and collected each year and applied to the
payment of the Debt Service Requirements, and the same shall not be diverted to any other
purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The City
Council hereby declares its purpose and intent to provide and levy a tax legally and fully
sufficient to pay the said Debt Service Requirements, it having been determined that the
existing and available taxing authority of the City for such purpose is adequate to permit a
legally sufficient tax in consideration of all other outstanding indebtedness.
The amount of taxes to be provided annually for the payment of the principal of and
interest on the Certificates shall be determined and accomplished in the following manner:
(a) Prior to the date the City Council establishes the annual tax rate
and passes an ordinance levying ad valorem taxes each year, the Council shall
determine:
(1) The amount on deposit in the Certificate Fund after
(a) deducting therefrom the total amount of Debt Service
Requirements to become due on Certificates prior to the
Collection Date for the ad valorem taxes to be levied and
(b) adding thereto the amount of the Net Revenues of the System
appropriated and allocated to pay such Debt Service
Requirements prior to the Collection Date for the ad valorem taxes
to be levied.
(2) The amount of Net Revenues of the System,
appropriated and to be set aside for the payment of the Debt
Service Requirements on the Certificates between the Collection
Date for the taxes then to be levied and the Collection Date for the
taxes to be levied during the next succeeding calendar year.
(3) The amount of Debt Service Requirements to
become due and payable on the Certificates between the
Collection Date for the taxes then to be levied and the Collection
Date for the taxes to be levied during the next succeeding
calendar year.
(b) The amount of taxes to be levied annually each year to pay the
Debt Service Requirements on the Certificates shall be the amount established in
paragraph (3) above less the sum total of the amounts established in
paragraphs (1) and (2), after taking into consideration delinquencies and costs of
collecting such annual taxes.
SECTION 13: Pledge of Net Revenues. The City hereby covenants and agrees that,
subject to the prior lien on and pledge of the Net Revenues of the System to the payment and
security of Prior Lien Obligations, all the Net Revenues of the System, with the exception of
45024656.1
16
those in excess of the amounts required to be deposited to the Certificate Fund as hereafter
provided, are hereby irrevocably pledged, equally and ratably, to the payment of the principal of
and interest on the Certificates and Additional Obligations, if issued, and the pledge of 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 and 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 all Gross Revenues
(excluding earnings from the investment of money held in any special funds or accounts created
for the payment and security of the Prior Lien Obligations) shall be deposited as collected into a
fund maintained at an official depository of the City and known on the books of the City as the
"System Fund" (hereinafter called the "System Fund"). All moneys deposited to the credit of the
System Fund shall be allocated, dedicated and disbursed to the extent required for the following
purposes and in the order of priority shown, to wit:
First: To the payment of all necessary and reasonable maintenance and
operating expenses of the System as defined herein or required by statute to be
a first charge on and claim against the revenues thereof.
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.
Third: To the payment of the 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: Deposits to Certificate Fund. The City hereby covenants and agrees to
cause to be deposited to the credit of the Certificate Fund prior to each principal and interest
payment date for the Certificates from the pledged Net Revenues of the System in the System
Fund, after the deduction of all payments required to be made to the special Funds or accounts
created for the payment and security of the Prior Lien Obligations, an amount equal to one
hundred per centum (100%) of the amount required to fully pay the interest and principal
payments then due and payable on the Certificates, such deposits to pay accrued interest and
maturing principal on the Certificates to be made in substantially equal monthly installments on
or before the 1 sl day of each month beginning on or before the 1 st day of the month following
the date of delivery of the Certificates to the purchasers.
The monthly deposits to the Certificate Fund, as hereinabove provided, shall be made
until such time as such Fund contains an amount equal to pay the principal of and interest on
the Certificates to maturity. Accrued interest received from the purchasers of the Certificates
deposited to the Certificate Fund and ad valorem taxes levied, collected and deposited in the
Certificate Fund for and on behalf of the Certificates may be taken into consideration and
reduce the amount of the monthly deposits otherwise required to be deposited in the Certificate
Fund from the Net Revenues of the System. In addition, any proceeds of sale of the Certificates
in excess of the amount required to pay the contractual obligations to be incurred (including
45024656.1
17
change orders to a construction contract) shall be deposited in the Certificate Fund, which
amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem
taxes and the Net Revenues of the System.
SECTION 16: 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 17: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge 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 V.T.C.A, Government Code,
Sections 1502.056 and 1502.058 and V.T.C.A., Local Government Code,
Sections 271.041, et seq.
(b) Other than for the payment of the Prior Lien Obligations and the
Certificates, 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 18: Issuance of Prior Lien Obligations/Additional Obligations. The City
hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation
as to principal amount but subject to any terms, conditioRs or restrictions applicable thereto
under law or otherwise, 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, 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 19: 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 irreconcilable 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
benefits, if any. conferred thereby to the holders of the Prior Lien Obligations.
SECTION 20: 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 City and after (i) the filing by the Holder
45024656.1
18
thereof with the Paying AgenURegistrar of evidence satisfactory to the Paying Agent/Registrar
of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership
thereof and (ii) the furnishing to the Paying AgenURegistrar of indemnification in an amount
satisfactory to hold the City and the Paying AgenURegistrar 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.
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 21: Satisfaction of Obligation of City. If the City shall payor cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the 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 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 AgenURegistrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying AgenURegistrar, or an
authorized escrow agent, which Government Securities have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such 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 AgenU Registrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Securities will be made under this Section and no use
made of any such deposit which would cause the 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.
Any moneys so deposited with the Paying Agent! Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying AgenURegistrar,
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 with respect to which
such moneys have been so deposited shall be remitted to the City or deposited as directed by
the City. Furthermore, any money held by the Paying AgenURegistrar for the payment of the
principal of and interest on the Certificates and remaining unclaimed for a period of three (3)
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
45024656,1
19
of funds from the Paying AgenURegistrar to the City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 22: 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 23: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used
in this Section, the following terms have the following meanings:
"Closing Date" means the date on which the Certificates are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the
Regulations, of the Certificates.
"Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired
to carry out the governmental purposes of the Certificates.
"Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
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"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit
the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
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 receives a written opinion of counsel nationally recognized in
the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Certificate, the
City shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141
of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the
last Stated Maturity of Certificates:
(1) exclusively own, operate and possess all property
the acquisition, construction or improvement of which is to be
financed or refinanced directly or indirectly with Gross Proceeds of
the Certificates, and not use or permit the use of such Gross
Proceeds (including all contractual arrangements with terms
different than those applicable to the general public) or any
property acquired, constructed or improved with such Gross
Proceeds in any activity carried on by any person or entity
(including the United States or any agency, department and
instrumentality thereof) other than a state or local government,
unless such use is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any
charge or other payment by any person or entity who is treated as
using Gross Proceeds of the Certificates or any property the
acquisition, construction or improvement of which is to be financed
or refinanced directly or indirectly with such Gross Proceeds, other
than taxes of general application within the City or interest earned
on investments acquired with such Gross Proceeds pending
application for their intended purposes.
(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 entity other than a state or local
government. For purposes of the foregoing covenant, such Gross Proceeds are considered to
be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such
Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt
for federal income tax purposes; (2) capacity in or service from such property is committed to
such person or entity under a take-or-pay, output or similar contract or arrangement; or (3)
indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property
acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a
transaction which is the economic equivalent of a loan.
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21
(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 in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
(f) Not Federally Guaranteed. Except to the extent permitted by section
149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to
take any action which would cause the 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 the information required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in
section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds
(including all receipts, expenditures and investments thereof) on
its books of account separately and apart from all other funds (and
receipts, expenditures and investments thereof) and shall retain all
records of accounting for at least six years after the day on which
the last Outstanding Certificate is discharged. However, to the
extent permitted by law, the City may commingle Gross Proceeds
of the Certificates with other money of the City, provided that the
City separately accounts for each receipt and expenditure of
Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date,
the City shall calculate the Rebate Amount in accordance with
rules set forth in section 148(f) of the Code and the Regulations
and rulings thereunder. The City shall maintain such calculations
with its official transcript of proceedings relating to the issuance of
the Certificates until six years after the final Computation Date.
(3) As additional consideration for the purchase of the
Certificates by the Purchasers and the loan of the money
represented thereby and in order to induce such purchase by
measures designed to insure the excludability of the interest
thereon from the gross income of the owners thereof for federal
income tax purposes, the City shall pay to the United States out of
the Interest and Sinking Fund or its general fund, as permitted by
applicable Texas statute, regulation or opinion of the Attorney
General of the State of Texas, the amount that when added to the
future value of previous rebate payments made for the Certificates
equals (i) in the case of a Final Computation Date as defined in
Section 1.148-3(e)(2) of the Regulations, one hundred percent
(100%) of the Rebate Amount on such date; and (ii) in the case of
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any other Computation Date, ninety percent (90%) of the Rebate
Amount on such date. In all cases, the rebate payments shall be
made at the times, in the installments, to the place and in the
manner as is or may be required by section 148(f) of the Code
and the Regulations and rulings thereunder, and shall be
accompanied by Form 8038- T or such other forms and information
as is or may be required by Section 148(f) of the Code and the
Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to
assure that no errors are made in the calculations and payments
required by paragraphs (2) and (3), and if an error is made, to
discover and promptly correct such error within a reasonable
amount of time thereafter (and in all events within one hundred
eighty (180) days after discovery of the error), including payment
to the United States of any additional Rebate Amount owed to it,
interest thereon, and any penalty imposed under Section
1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section
148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior
to the earlier of the Stated Maturity or final payment of the Certificates, enter into any
transaction that reduces the amount required to be paid to the United States pursuant to
Subsection (h) of this Section because such transaction results in a smaller profit or a larger
loss than would have resulted if the transaction had been at arm's length and had the Yield of
the Certificates not been relevant to either party.
ü) Elections. The City hereby directs and authorizes the Mayor, City
Manager, or Director of Finance, individually or jointly, to make elections permitted or required
pursuant to the provisions of the Code or the Regulations, as they deem necessary or
appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar
or other appropriate certificate, form or document.
SECTION 24: Sale of Certificates - Official Statement Approval. The Certificates
authorized by this Ordinance are hereby sold by the City to Southwest Securities and Dain
Rauscher Incorporated (herein referred to as the "Purchasers") in accordance with the
Purchase Contract, dated April 23, 2001, attached hereto as Exhibit B and incorporated herein
by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and
directed to execute said Purchase Contract for and on behalf of the City and as the act and
deed of this City Council, and in regard to the approval and execution of the Purchase Contract,
the City Council hereby finds, determines and declares that the representations, warranties and
agreements of the City contained in the Purchase Contract are true and correct in all material
respects and shall be honored and performed by the City.
Furthermore, the use of the Official Statement by the Purchasers in connection with the
public offering and sale of the Certificates is hereby ratified, confirmed and approved in all
respects. The final Official Statement, which reflects the terms of sale, attached as Exhibit A to
the Purchase Contract (together with such changes approved by the Mayor, City Manager,
Director of Finance, or City Secretary, one or both 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 April 23, 2001, in the reoffering, sale and delivery of the Certificates to
45024656.1
23
the public. The Mayor and City Secretary are further authorized and directed to manually
execute and deliver for and on behalf of the City copies of said Official Statement in final form
as may be required by the 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 25: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the
accrued interest and premium, if any, 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 in
accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, including
guaranteed investment contracts permitted by V.T.C.A., Section 2256.015 et seq., and the
City's investment policies and guidelines, and any investment earnings realized may be
expended for such authorized projects and purposes or deposited in the Certificate Fund as
shall be determined by the City Council. Accrued interest and premium, if any, as well as all
surplus proceeds of sale of the Certificates, including investment earnings, remaining after
completion of all authorized projects or purposes shall be deposited to the credit of the
Certificate Fund.
SECTION 26: Control and Custody of Certificates. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending the sale
of the Certificates, the investigation by the Attorney General of the State of Texas, including the
printing and supply of definitive Certificates, and shall take and have charge and control of the
Initial Certificate(s) pending the approval thereof by the Attorney General, the registration
thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Manager, Director of Finance, and City
Secretary, anyone or more of said officials, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the City and the issuance of the
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, together with the City's
financial advisor, bond counsel and the Paying AgenURegistrar, are authorized and directed to
make the necessary arrangements for the delivery of the Initial Certificate(s) to the Purchasers
and the initial exchange thereof for definitive Certificates.
SECTION 27: Notices to Holders-Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder appearing in the Security Register at the close of business on the
business day next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall 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 writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying AgenURegistrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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SECTION 28: Cancellation. All Certificates surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Paying AgenURegistrar, shall be
promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying
AgenURegistrar and, if not already cancelled, shall be promptly cancelled by the Paying
AgenURegistrar. The City may at any time deliver to the Paying AgenURegistrar 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 AgenURegistrar. All cancelled Certificates held by the Paying
AgenURegistrar shall be returned to the City.
SECTION 29: Bond Counsel's Opinion. The Purchasers' obligation to accept delivery of
the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P.,
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. An executed counterpart of
said opinion shall accompany the global certificates deposited with The Depository Trust
Company or a reproduction thereof shall be printed on the definitive Certificates in the event the
book entry only system shall be discontinued.
SECTION 30: 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 legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates.
SECTION 31: 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
AgenURegistrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is
intended to be and shall be for the sole and exclusive benefit of the City, the Paying
AgenURegistrar and the Holders.
SECTION 32: 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 33: 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 34: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 35: 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 36: 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.
45024656.1
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SECTION 37: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2001) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 24 of this Ordinance,
being the information described in Exhibit C hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report
when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if
such event is material within the meaning of the federal securities laws:
(1 )
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the Certificates;
Modifications to rights of holders of the Certificates;
Certificate calls;
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(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Certificates;
and
(11) Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe
and perform the covenants specified in this Section while, but only while. the City remains an
"obligated person" with respect to the Certificates within the meaning of the Rule, except that
the City in any event will give the notice required by subsection (c) hereof of any Certificate calls
and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances resulting from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted underwriters to purchase or
sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well
as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the Outstanding Certificates consent to such amendment or
(b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel)
45024656.1
27
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Certificates. The provisions of this Section may also be amended from
time to time or repealed by the City if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and
to the extent that reservation of the City's right to do so would not prevent underwriters of the
initial public offering of the Certificates from lawfully purchasing or selling Certificates in such
offering. If the City so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with subsection (b) an
explanation, in narrative form, of the reasons for the amendment and of the impact of any
change in the type of financial information or operating data so provided.
SECTION 38: MBIA Insurance. The Certificates have been sold with the principal of
and interest thereon being insured by MBIA Insurance Corporation (hereinafter called "MBIA")
pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by MBIA, the City covenants and agrees that, in the event the
principal and interest due on the Certificates shall be paid by MBIA pursuant to the policy
referred to this Section, the assignment and pledge of all funds and all covenants, agreements
and other obligations of the City to the Holders shall continue to exist and MBIA shall be
subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that:
(a) In the event that, on the second business day, and again on the
business day, prior to the payment date on the Certificates, the Paying
AgenURegistrar has not received sufficient moneys to pay all principal of and
interest on the Certificates due on the second following or following, as the case
may be, business day, the Paying AgenURegistrar shall immediately notify MBIA
or its designee on the same business day by telephone or telegraph, confirmed
in writing by registered or certified mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on the
payment date, the Paying AgenURegistrar shall so notify MBIA or its designee.
(c) In addition, if the Paying AgenURegistrar has notice that any
Holder has been required to disgorge payments of principal of or interest on the
Certificates to a trustee in bankruptcy or creditors or others pursuant to a final
judgment by a court of competent jurisdiction that such payment constitutes
avoidable preference to such Holder within the meaning of any applicable
bankruptcy laws, then the Paying AgenURegistrar shall notify the MBIA or its
designee of such fact by telephone or telegraphic notice, confirming in writing by
registered or certified mail.
(d) The Paying AgenURegistrar is hereby irrevocably designated,
appointed, directed and authorized to act as attorney-in-fact for Holders of the
Certificates as follows:
(1) If and to the extent there is a deficiency in amounts
required to pay interest on the Certificates, the Paying
Agent/Registrar shall (a) execute and deliver to State Street Bank
and Trust Company, N.A., or its successors under the Policy (the
"Insurance Paying Agent"), in form satisfactory to the Insurance
Paying Agent, an instrument appointing the MBIA as agent for
such Holders in such legal proceeding related to the payment of
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28
such interest and an assignment to the MBIA of the claims for
interest to which such deficiency relates and which are paid by
MBIA, (b) receive as designee to the respective Holders (and not
as Paying AgenURegistrar) in accordance with the tenor of the
Policy payment from the Insurance Paying Agent with respect to
the claims for interest so assigned, and (c) disburse the same to
such respective Holders; and
(2) If and to the extent of a deficiency in amounts
required to pay principal of the Certificates, the Paying
AgenURegistrar shall (a) execute and deliver to the Insurance
Paying Agent in form satisfactory to the Insurance Paying Agent
an instrument appointing MBIA as agent for such Holder in any
legal proceeding relating to the payment of such principal and an
assignment to MBIA of any of the Certificates surrendered to the
Insurance Paying Agent or so much of the principal thereof as has
not previously been paid or for which moneys are not held by the
Paying AgenURegistrar and available for such payment (but such
assignment shall be delivered only if payment from the Insurance
Paying Agent is received), (b) receive as designee of the
respective Holders (and not as Paying AgenURegistrar) in
accordance with the tenor of the Policy payment therefor from the
Insurance Paying Agent, and (c) disburse the same to such
Holders.
(e) Payments with respect to claims for-interest on and principal of
Certificates disbursed by the Paying AgenURegistrar from proceeds of the Policy
shall not be considered to discharge the obligation of the City with respect to
such Certificates, and MBIA shall become of the owner of such unpaid Certificate
and claims for the interest in accordance with the tenor of the assignment made
to it under the provisions of this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed and
delivered, MBIA and the Paying AgenURegistrar hereby agree for the benefit of
the MBIA that:
(1) They recognize that to the extent the MBIA makes
payments, directly or indirectly (as by paying through the Paying
AgenURegistrar), on account of principal of and interest on the
Certificates, MBIA will be subrogated to the rights of such Holders
to receive the amount of such principal and interest from the City,
with interest thereon as provided and solely from the sources
stated in this Ordinance and the Certificates; and
(2) They will accordingly pay to MBIA the amount of
such principal and interest (including principal and interest
recovered under subparagraph (ii) of the first paragraph of the
Policy, which principal and interest shall be deemed past due and
not to have been paid), with interest thereon as provided in this
Ordinance and the Certificates, but only from the sources and in
the manner provided herein for the payment of principal of and
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29
interest on the Certificates to Holders, and will otherwise treat the
MBIA as the owner of such rights to the amount of such principal
and interest.
(g) In connection with the issuance of additional obligations, the City
shall deliver to the MBIA a copy of the disclosure document, if any, circulated
with respect to such additional obligations.
(h) Copies of any amendments made to the documents executed in
connection with the issuance of the Certificates which are consented to by the
MBIA shall be sent to Standard & Poor's Corporation.
(i) MBIA shall receive notice of the resignation or removal of the
Paying AgenURegistrar and the appointment of a successor thereto.
ü) MBIA shall receive copies of all notices required to be delivered to
Holders and, on an annual basis, copies of the City's audited financial statements
and annual budget.
(k) Any notice that is required to be given to a Holder of the
Certificates or to the Paying AgenURegistrar pursuant to the Ordinance shall also
be provided to MBIA. All notices required to be given to MBIA under the
Ordinance shall be in writing and shall be sent by registered or certified mail
addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York
10504, Attention: Surveillance.
SECTION 39: 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 V.T.C.A., Government Code, Chapter 551, as
amended.
45024656.1
30
SECTION 40: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below.
PASSED AND ADOPTED, this April 23, 2001.
CITY OF NORTH RICHLAND HILLS, TEXAS
{JU
Mayor
ATTEST:
~d~~
City Secretary
APPROVED AS TO LEGALITY:
(City Seal)
45024656.1
31
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of April 23, 2001 (this "Agreement"), by and between
the City of North Richland Hills, Texas (the "Issuer"), and Bank One, National Association. a
national association duly organized and existing under the laws of the United States of America,
(the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
North Richland Hills, Texas, Tax and Waterworks and Sewer System Surplus Revenue
Certificates of Obligations, Series 2001" (the "Securities") in the aggregate principal amount of
$3,255,000, which Securities are scheduled to be delivered to the initial purchasers on or about
June 5, 2001; and
WHEREAS, the Issuer has selected the Bank to serve as Paying AgenURegistrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of thé
Issuer and has full power and authority to perform and serve as Paying AgenURegistrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follow!?~
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as
Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank
shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest
on the Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and amounts
set forth in the Bank's current fee schedule then in effect for services as Paying AgenURegistrar
for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of
45024736
the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any Security
which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in Westerville, Ohio at the
address appearing in Section 3.01 hereof. The Bank will notify the Issuer in writing of any.
change in location of the Bank Office. .
"Bond Resolution" means the resolution, order, or ordinance of the governing body
of the Issuer pursuant to which the Securities are issued, certified by the Secretary or any
other officer of the Issuer and delivered to the Bank, '
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in the
name of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Director of Finance or
City Secretary, anyone or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"Person" means any individual, corporation, partnership, joint venture, association,
joint stock company, trust, unincorporated organization or government or any agency or
political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous Security
evidencing all or a portion of the same obligation as that evidenced by such particular
Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen
Security for which a replacement Security has been registered and delivered in lieu thereof
pursuant to Section 4.06 hereof and the Resolution).
45024736
-2-
EXHIBIT A .
"Record Date" means the last business day of the month next preceding each
interest payment date.
"Redemption Date" when used with respect to any Security to be redeemed means
the date fixed for such redemption pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the Chairman or
Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive
Committee of the Board of Directors, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant
Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.
"Securities" means the securities defined in the recital paragraphs herein.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principàl of
a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," '~Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying AgenURegistrar" refers to the Bank in the performance of the duties and
functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer,
pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date,
or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following
offices:
Bank One, Texas, N.A.
Attention: Securities Transfer
235 West Schrock Road
Westerville, Ohio 43081-0393
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and making
payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record
Date (as defined in the Resolution). All payments of principal and/or interest on the Securities to
45024736
-3-
~XHIBIT A ·
the registered owners shall be accomplished (1) by the issuance of checks, payable to the
registered owners, drawn on the fiduciary account provided in Section 5.05 hereof, sent by United
States mail, first class, postage prepaid, to the address appearing on the Security Register or (2)
by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's
risk and expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security ReQister - Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such other
information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. The Bank represents and warrants its office
in Fort Worth, Texas will at all times have immediate access to the Security Register by electronic
or other means and will be capable at all times of producing a hard copy of the Security Register'
at its Fort Worth office for use by the Issuer. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchaooe shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by
an officer of a federal or state bank or a member of the National Association of Securities Dealers,
in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized
in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in not
more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly executed
by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying
Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than
the care maintained by the Bank for debt securities of other governments or corporations for which
it serves as registrar, or that is maintained for its own securities.
45024736
-4-
EXHIBIT A ..
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities in
accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those which
the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Sank to provide an up-to-date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the contents
of the Security Register.
Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act of
1934, all Securities in lieu of which or in exchange for which other Securities have been issued,
or which have been paid.
Section 4.06. Mutilated. Destroyed, Lost or Stolen Securities. The Issuer hereby instructs
the Bank, subject to the provisions of Section 20 of the Bond Resolution, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as Jong as
the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute
and deliver a replacement Security of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange and substitution for such
mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only
upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of
evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an
amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges
associated with such indemnity and with the preparation, execution and delivery of a replacement
Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
45024736
-5-
EXHIBIT A"
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein
and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents. Etc. (a) The Bank may conclusively
rely, as to the truth of the statements and correctness of the opinions expressed therein, on
certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon:
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties. Without limiting the generality
of the foregoing statement, the Bank need not examine the..ownership of any Securities, but is
protected in acting upon receipt of Securities containing an endorsement or instruction of transfer
or power of transfer which appears on its face to be signed by the Holder or an agent of the
Holder. The Bank shall not be bound to make any investigation into the facts or matters stated
in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written advice of such counselor any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent/Registrar, or any other agent.
45024736
-6-
EXHIBIT A .
Section 5.05. Moneys Held by Bank - Fiduciary Account/Collateralization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities shall
be continuously collateralized by securities or obligations which qualify and are eligible under both
the laws of the State of Texas and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal
Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by
check drawn on such fiduciary account unless the owner of such Securities shall, at its own
expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees tò
indemnify the Bank its directors, officers and employees, and hold it harmless against, any loss,
liability, or expense incurred without negligence or bad faith on its part, arising out of or in
connection with its acceptance or administration of its duties hereunder, including the cost and
expense against any claim or liability in connection with the ~ercise or performance of any of its
powers or duties under this Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where either the
Bank Office or the administrative offices of the Issuer is located, and agree that service of process
by certified or registered mail, return receipt requested, to the address referred to in Section 6.03
of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that
the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to
determine the rights of any Person claiming any interest herein.
Section 5.08. DTC Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to the
extent within its control, will comply with the "Operational Arrangements", which establishes
requirements for securities to be eligible for such type depository trust services, including, but not
limited to, requirements for the timeliness of payments and funds availability, transfer turnaround
time, and notification of redemptions and calls.
45024736
-7-
EXHIBIT A"
ARTICLE SIX
MISCELLANEOUS PROVISIONS
, . ~ection 6.01. Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6,02. Assiqnment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein shall be invalid, illegal, or'
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein;express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute the
entire agreement between the parties hereto relative to the Bank acting as Paying AgenURegistrar
and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution
shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment
of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier
terminated by either party upon sixty (60) days written notice; provided, however, an early
termination of this Agreement by either party shall not be effective until (a) a successor Paying
AgenVRegistrar has been appointed by the Issuer and such appointment accepted and (b) notice
given to the Holders of the Securities of the appointment of a successor Paying AgenURegistrar.
Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination
of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely
affect the payment of the Securities.
45024736
-8-
EXHIBIT .-
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for
the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a
successor Paying AgenURegistrar has not been delivered to the resigning Paying Agent/Registrar
within sixty (60) days after the giving of such notice of resignation.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force and
effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
BANK ONE, TEXAS, N.A.
..
BY
Title:
[SEAL]
Attest:
.
Address:
403 West Fourth Street
PG-1
Fort Worth, Texas 76102
Title:
CITY OF NORTH RICHLAND HILLS, TEXAS
BY
Mayor
(CITY SEAL)
Address:
P.O. Box 820609
North Richland Hills, Texas 76182
Attest:
City Secretary
45024736
-9-
EXHIBIT A"
~YmlJIT B
$3,255,000
CITY OF NORTH RICHLAND HILLS, TEXAS
Tax and Waterworks and Sewer System Surplus Revenue
Certificates of Obligation,
Series 2001
PURCHASE CONTRACT
"
April 23, 2001
The Honorable Mayor and Members of the City Council
City of North Richland Hills
P.O. Box 820069
North Richland Hills, Texas 76182
Dear Mayor and Members of the City Council:
Southwest Securities, Inc. (the "Authorized Representative") and Dain Rauscher Incorporated
(collectively, the "Underwriters"), offer to enter into this Purchase Contract with the City of North Richland
Hills, Texas (the "City"). This offer is made subject to the City's acceptance of this Purchase Contract on
or before 9:00 p.m. Central Time on April 23, 2001.
1. Purchase and Sale of the Certificates. Upon the tenns and conditions and upon the
basis of the representations set forth herein, the Underwriters jointly and severally hereby agree to purchase
trom the City, and the City hereby agrees to sell and deliver to the Underwriters an aggregate of
$3,255,000 principal amount of City of North Richland Hills, Texas Tax and Waterworks anq. Sewer
System Surplus Revenue Certificates of Obligation, Series 200 1 (the "Certificates"). The Certificates shall
have the maturities, interest rates and be subject to redemption in accordance with the provisions of Exhibit
A hereto and shall be issued and secured under the provisions of the Ordinance (as defined below). The
purchase price for the Certificates shall be $3,249,020.13, representing the principal amount of the
Certificates of $3,255,000.00, less an Underwriters' discount on the Certificates of $21,981.60, less an
aggregate original issue discount on the Certificates of$5,816.85, and plus accrued interest in the amount
of $21 ,818.58.
Southwest Securities, Inc. represents that it has been duly authorized to execute tills Purchase
Contract and has been duly authorized to act hereunder as the Authorized Representative. All actions that
may be taken by the UndeI'\VfÍters may be taken by the Authorized Representative alone.
2. Ordinance. The Certificates shall be as described in and shall be issued and secured under
the provisions of the Ordinance authorizing the issuance and sale of the Certificates adopted by the City
on April 23, 2001 (the "Ordinance"). The Certificates shall be secured and payable as provided in the
Ordinance.
3, Public Offering. It shall be a condition of the obligations of the City to sell and deliver the
Certificates to the Underwriters, and of the obligations of the Underwriters to purchase and accept delivery
of the Certificates, that the entire principal amount of the Certificates authorized by the Ordinance shall be
sold and delivered by the City and accepted and paid for by the Underwriters at the Closing. The
UndeI'\VfÍters agree to make a bona fide public offering of all of the Certificates, at not in excess of the initial
public offering prices, as set forth in the Official Statement; provided however at least ten percent (10%) .'
of the principal amount of the Certificates of each maturity shall be sold to the "public" (exclusive of dealers,
brokers and investment bankers, etc.) at the initial offering price set forth in the Official Statement.
4. Security Deposit, Delivered to the City herewitI:t)s a corporate check of the Authorized
Representative payable to the order of the City in the amount of$91,750.00. Such check is a common
"Good Faith" check for the Certificates and the City's General Obligation Refunding and Improvement
Bonds, Series 200 1 (the "Bonds"), and an amount of such check equal to 1% of the principal amount of
the Certificates may be applied toward any obligation of the Underwriters owing as a result of the failure
of the Underwriters to accept delivery of the Certificates, as provided herein. The City agrees to hold such
check uncashed until the Closing to ensure the perfonnance by the Underwriters of their obligation to
purchase, accept delivery of and pay for the Certificates at the Closing. ConCUlTeIltly with the payment
by the Underwriters of the purchase price of the Certificates, the City shall return such check to the
Authorized Representative as provided in Paragraphs 7 and 8 hereof. Should the City fail to deliver the
Certificates at the Closing, or should the City be unable to satisfY the conditions of the obligations of the
Underwriters to purchase, accept delivery of and pay for the Certificates, as set forth in this Purchase
Contract (unless waived by the Authorized Representative), or should such obligations of the Underwriters
be tenninated for any reason pennitted by this Purchase Contract, such check shall immediately be returned
to the Authorized Representative. In the event the Underwriters fail (other than for a reason permitted
hereunder) to purchase, accept delivery of and pay for the Certificates at the Closing as herein provided,
such check shall be retained by the City as and for full liquìdated damages for such failure of the
Underwriters and for any defaults hereunder on the part of the Underwriters. The Authorized
Representative hereby agrees not to stop or cause payment on said check to be stopped unless the City
has breached any of the tenns of this Purchase Contract.
2
EXHIBIT B"
5. Official Statement. The Official Statement, including the cover pages and Appendices
thereto, of the City, dated April 23, 2001, with respect to the Certificates, as further amended only in the
manner herein provided, is hereinafter called the "Official Statement." The City hereby authorizes the
Ordinance and the Official Statement and the information therein contained to be used by the Underwriters
in connection with the public offering and sale of the Certificates. The City confirms its consent to the use
by the Underwriters prior to the date hereof of the Preliminary Official Statement, relative to the
Certificates, dated Aprill6, 200 I (the "Preliminary Official Statement"), in connection with the preliminary
public offering and sale of the Certificates, and it is "deemed final" as of its date, within the meaning, and
for the purposes, of Rule 15c2-12 promulgated under authority granted by the federal Securities and
Exchange Act of 1934 (the "Rule"). The City agrees to cooperate with the Underwriters to provide a
supply of final Official Statements within seven business days of the date hereof in sufficient quantities to
comply with the Underwriters' obligations under the Rule and the applicable rules of the Municipal
Securities Rulemaking Board. The Underwriters will use their best efforts to assist the City in the
preparation of the final Official Statement in order to ensure compliance with the aforementioned rules,
If at any time after the date of this Purchase Contract but before the first to occur of (i) the date
upon which the Underwriters notify the City that the period of the initial public offering of the Certificates
has expired or (ii) the date that is 90 days after the date hereof, any event shall occur that 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 the light of the
circumstances under which they were made, not misleading, the City shall notify the Authorized
Representative, and if, in the opinion of the Authorized Representa!ive, such event requires the preparation
and publication of a supplement or amendment to the Official Statement, the City will at its expense
supplement or amend the Official Statement in the fonn and in a manner approved by the Authorized
Representative and furnish to the Underwriters a reasonable number of copies requested by the Authorized
Representative in order to enable the Underwriters to comply with the Rule.
To the best knowledge and belief of the City, the Official Statement contains information, including
financial infonnation or operating data, as required by the Rule. The City has not failed to comply with any
undertaking specified in paragraph (bX5Xi) of the Rule within the last five years.
6. Representations, Warranties and Agreements ofthe City. On the date hereof, the
City represents, warrants and agrees as follows:
(a) The City is a home rule municipality and a political subdivision of the State ofT exas
and a body politic and corpomte, and has full legal right, power and authority to enter into this
Purchase Contract, to adopt the Ordinance, to sell the Certificates, and to issue and deliver the
Certificates to the Underwriters as provided herein and to cany out and conswmnate all other
transactions contemplated by the Ordinance and this Purchase Contract;
3
EXHIBIT B f
(b) By official action of the City prior to or concurrently with the acceptance hereof.
the City has duly adopted the Ordinance, has duly authorized and approved the execution and
delivery of, and the performance by the City of the obligations contained in the Certificates and this
Purchase Contract and has duly authorized and approved the performance by the City of its
obligations contained in the Ordinance and in this Purchase Contract;
(c) The City is not in breach of or default under any applicable law or administrative
regulation of the State of Texas or the United States (including regulations of its agencies) or any
applicable judgment or decree or any loan agreement, note, order, agreement or other instrument,
except as may be disclosed in the Official Statement, to which the City is a party or to the
knowledge of the City it is otherwise subject, that would have a material and adverse effect upon
the business or financial condition of the City; and the execution and delivery of this Purchase
Contract by the City and the execution and delivery of the Certificates and the adoption of the
Ordinance by the City and compliance with the provisions of each thereof will not violate or
constitute a breach of or default under any existing law, administrative regulation, judgment, decree
or any agreement or other instnunent to which the City is a party or, to the knowledge of the City,
is otherwise subject;
.
.
(d) All approvals, consents and orders of any governmental authority or agency having
jurisdiction of any matter that would constitute a condition precedent to the performance by the
City of its obligations to sell and deliver the Certificates hereunder will have been obtained prior
to the Closing;
(e) At the time of the City's acceptance hereof and at the time of the Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or OllÚt to
state a material fact required to be stated therein or necessary to make the statements therein. :1
the light of the circwnstances under which they were made, not misleading;
(t) Between the date of this Purchase Contract and the Closing, the City will not,
without the prior written consent of the Underwriters, issue any additional bonds, notes or other
obligations for bonuwed money payable in whole or in part from ad valorem taxes (except for the
Bonds, which are being sold concmrently with the Certificates), and the City will not incur any
material liabilities, direct or contingent, nor will there be any adverse change of a material nature
in the financial position of the City;
(g) Except as described in the Official Statement, no litigation is pending or, to the
knowledge of the City, threatened in any court affecting the corporate existence of the City, the title
of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of
the Certificates, the levy, collection or application of the ad valorem taxes and revenues of the
City's Waterworks and Sewer System (the "System") pledged or to be pledged to pay the principal
of and interest òn the Certificates, or in any way contesting or affecting the issuance, execution,
4
ßXHIBIT B
delivery, payment, security or validity of the Certificates, or in any way contesting or affecting the
validity or enforceability of the Ordinance or this Purchase Contract, or contesting the powers of
the City, or any authority for the Certificates, the Ordinance or this Purchase Contract or contestina
b
in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the
Official Statement;
(h) The City will cooperate with the Underwriters in arranging for the qualification of
the Certificates for sale and the detennination of their eligibility for investment lUlder the laws of
such jurisdictions as the Authorized Representative designates, and will use its best efforts to
continue such qualifications in effect so long as required for distribution of the Certificates;
provided, however, that the City will not be required to execute a consent to service of process
or to qualifY to do business in connection with any such qualification in any jurisdiction;
(i) The descriptions of the Certificates and the Ordinance contained in the Official
Statement accurately summarize certain provisions of such instruments, and the Certificates, when
validly executed, authenticated and delivered in accordance with the Ordinance and sold to the
Underwriters as provided herein, will be validly issued and outstanding obligations of the City
entitled to the benefits of, and subject to the limitations contained in, the Ordinance;
.
,
U) Ifprior to the Closing an event occurs affecting the City that is materially adverse
for the purpose for which the Official Statement is to be used and is not disclosed in the Official
Statement, the City shall notify the Authorized Representatwe, and if in the opinion of the City and
the Authorized Representative such event requires a supplement or amendment to the Official
Statement, the City will supplement or amend the Official Statement in a fonn and in a manner
approved by the Authorized Representative;
(k) The financial statements contained in the Official Statement present fairly the
financial position of the City as of the date and for the period covered thereby and are stated on
a basis substantially consistent with that of the prior year's audited financial statements;
(l) Any certificate signed by any official of the City and delivered to the Unde1'\VTÌters
shall be deemed a representation and warranty by the City to the Underwriters as to the truth of
the statements therein contained;
(m) The City has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be
relied upon; and
(n) The City will not knowingly take or omit to take any action, which action or
omission will in any way cause the proceeds from the sale of the Certificates to be applied in a
5
EXHIBIT B .
manner other than as provided in the Ordinance or that would cause the interest of the Certificates
to be includable in gross income of the holders thereof for federal income tax purposes,
7, Closing. At 10;00 A.M., Central Time, on June 5, 2001 (the "Closing"), the City will
deliver the initial Certificates (as defmed in the Ordinance) to the Underwriters and the City shall take
appropriate steps to provide DTC with one definite securities certificate for each year of maturity of the
Certificates, and to provide the Underwriters with the other documents hereinafter mentioned. On or prior
to the date of Closing, the Underwriters shall make arrangements with The Depository Trust Company
("DTC") for the Certificates to be immobilized and thereafter traded as book-entry only securities and on
the date of Closing the Underwriters will accept such delivery and pay the purchase price of the Certificates
as set forth in Paragraph 1 hereof in immediately available fì.mds. Concurrently with such payment by the
Underwriters, the City shall return to the Authorized Representative the check referred to in paragraph 4
hereof. Delivery and payment as aforesaid shall be made at the office of the paying agent/registrar, as
noted in the Official Statement, or such other place as shall have been mutually agreed upon by the City
and the Authorized Representative.
8. Conditions. The Underwriters have entered into this Purchase Contract in reliance upon
the representations and warranties of the City contained herein and to be contained in the documents and \ot
instruments to be delivered at the Closing, and upon the perfonnance by the City of its obligations
hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriters'
obligations under this Purchase Contract to purchase and pay for the Certificates shall be subject to the
performance by the City of its obligations to be performed here.under and under such documents and
instruments at or prior to the Closing, and shall also be subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of
Closing, as if made on the date of Closing;
(b) At the time of the Closing, (i) the Ordinance shall be in full force and effect, and
the Ordinance shall not have been amended, modìfied or supplemented and the Official Statement
shall not have been amended, modified or supplemented, except as may have been agreed to by
the Authorized Representative; and (ü) the net proceeds of the sale of the Certificates shall be
deposited and applied. as described in the Official Statement and in the Ordinance;
(c) At the time of the Closing, all official action of the City related to the Ordinance
shall be in full force and effect and shall not have been amended, modified or supplemented;
(d) The City shall not have failed. to pay principal or interest when due on aq.y of its
outstanding obligations for borrowed money;
6
~XHIBIT B
(e) At or prior to the Closing, the Underwriters shall have received each of the
following doctunents:
(1) The Official Statement of the City executed on behalf of the City by the
Mayor and City Secretary;
(2) The Ordinance certified by the City Secretary under the seal of the City
as having been duly adopted by the City and as being in effect, with such changes or
amendments as may have been agreed to by the Underwriters, the Ordinance shall contain
the agreement of the City, in fonn satisfactory to the Underwriters, that is described under
the caption "Continuing Disclosure of Infonnation" in the PreliminaIy Official Statement;
(3) The opinion, dated the date of Closing, of Fulbright & Jaworski LLP.
("Bond Counsel") in substantially the fonn and substance of Appendix C to the Official
Statement;
(4) An opinion or certificate, dated on or prior to the date of Closing, of the
Attorney General of Texas, approving the Certificates as required by law and the
registration certificate of the Comptroller of Public Accounts of the State of Texas;
(5) The supplemental opinion or opinions, dated the date of Closing, of Bond
Counsel, addressed to the City and the Un~erwriters, which provides that the
Underwriters may rely upon the opinion of Bond Counsel delivered in accordance with the
provisions of paragraph 8(t)(3) hereof, and opining to the effect that (a) the Purchase
Contract has been duly authorized. executed and delivered by the City and (assuming due
authorization by the Underwriters) constitutes a binding and enforceable agreement of the
City in accordance with its tenns; (b) in its capacity as Bond Counsel, such finn has
reviewed the infonnation in the Official Statement under the captions or subcaptions
subcaptions tlPlan of Financing," "The Bonds and Certificates" (exclusive of the infonnation
under the subcaptions "Book-Entry Only Systemtl and "Holders' Remedies"), "Tax
Matters," "Other Infonnation - Continuing Disclosure of Infonnation" (exclusive of the
infonnation under the subcaption "Compliance with Prior Undertakings"), "Other
Infonnation - Legal Opinions" (exclusive of the last two sentences of the first paragraph
thereot) and "Other Infonnation - Legal Investments and Eligibility to Secure Public Funds
in Texas" and such £inn is of the opinion that such descriptions present a fair and accurate
summæy of the provisions of the laws and instrwnents therein described and, with respect
to the Certificates, such infonnation conforms to the Ordinance; and (c) the Certificates are
exempt from registration pursuant to the Securities Act of 1933, as amended, and the
Ordinance is exempt from qualification as an indenture pursuant to the Trust Indenture Act
of 1939, as amended;
7
EXHIBIT B .
(6) An opinion of McCall, Parkhurst & Horton L.L.P., Underwriters' Counsel
addressed to the Underwriters, and dated the date of Closing to the effect that: (i) 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;
and (ü) in their participation in the preparation of the Official Statement, nothing has come
to the attention of said finn that would lead them to believe that the Official Statement
(excluding the financial and statistical data and forecasts included therein, all as to which
no view need be expressed) contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in light of the circwnstances
under which they were made, not misleading;
(7) A certificate, dated the date of Closing, signed by the Mayor and Director
of Finance of the City, to the effect that (i) the representations and warranties of the City
contained herein are true and correct in all material respects on and as of the date of
Closing as if made on the date of Closing; (ü) 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 and revenues of the System 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 Contract, or contesting the powers of the City or 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
Underwriters may, in their sole discretion. accept certificates or opinions of the City
Attorney that, in the opinion thereof, the issues raised in any such pending or threatened
litigation are without substance or that the contentions of all plaintiffs therein are without
merit); (ill) to the best of their knowledge, no event affecting the City has occurred since
the date of the Official Statement that should be disclosed in the Official Statement for the
purpose for which it is to be used or that it is necessary to disclose therein in order to make
the statements and infonnation therein not misleading in any respect; and (iv) that there has
not been any material and adverse change in the affairs or financial condition of the City
since September 30, 2000, the latest date as to which audited financial infonnation is
available;
(8) A certificate, dated the date of the Closing, of an appropriate officer 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
8
EXHIBIT ø.
-~-_.._--~
bonds within the meaning of Section 148 of the Internal Revenue Code of 1986. as
amended;
(9) Evidence of the rating on the Certificates, which shaH be "Aaa" by
Moody's Investors Service, Inc. ("Moody's") and "AAA" by Standard and Poor's
Corporation, a division of the McGraw-Hill Companies, Inc. ("S&P"), shall be delivered
in a fonn acceptable to the Underwriters;
(10) A copy of the policy of municipal bond insurance issued by MBlA
Insurance Corporation with respect to the Certificates; and
(11) Such additional legal opinions, certificates, instruments and other
documents as Bond Counselor the Underwriters may reasonably request to evidence the
truth, accuracy and completeness, as of the date hereof and as of the date of Closing, of
the City's representations and warranties contained herein and of the statements and
information contained in the Official Statement and the due perfonnance and satisfaction
by the City at or prior to the date of Closing of all agreements then to be perfonned and
all conditions then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but
only if, they are satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, to accept delivery of and to pay for the Certificates as set forth in this Purchase Contract, or if
the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Certificates shall
be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate,
the security deposit referred to in Paragraph 4 of this Purchase Contract shall be returned to the Authorized
Representative and neither the Underwriters nor the City shall be under further obligation hereunder, except
that the respective obligations of the City and the Underwriters set forth in Paragraphs 10 and 12 hereof
shall continue in full force and effect.
9. Termination. The Underwriters may terminate their obligation to purchase at any time
before the Closing if any of the following should occw:
(a) (i) Legislation shall have been enacted by the Congress of the United States, or
recommended to the Congress for passage by the President of the United States or favorably
reported for passage to either House of the Congress by any Committee of such House; or (ii) a
decision shall have been rendered by a court established under Article ill of the Constitution of the
United States or by the United States Tax Court; or (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
9
EXHIBIT B .
Internal Revenue Service or any other agency of the United States; or (iv) a release or otfIcial
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 City, other than any imposition of
federal income taxes upon interest received on obligations of the general character as the
Certificates on the date hereof and other than as disclosed in the Official Statement, in such a
. manner as in the judgment of the Authorized Representative would materially impair the
marketability or materially reduce the market price of obligations of the general character of the
Certificates.
(b) Any action shall have been taken by the Securities and Exchange Commission or
by a court that 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 by any governmental authority suspending the use of the 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 (ü) legislation shall be enacted; or (ill) a d.ecision shall have been rendered as to
matters of Texas law; or (iv) any order, ruling or regulation shall have been issued or proposed by
or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax
status of the City, its property or income, its bonds or other obligations (including the Certificates)
or the interest thereon, that in the judgment of the Authorized Representative would materially affect
the market price of the Certificates.
(d) (i) A general suspension of trading in securities shall have occurred on the New
York Stock Exchange; or (ü) the United States shall have become engaged in hostilities (including
the escalation of any hostilities existing on the date hereof, whether foreseeable), the effect of
which, in either case described in clause (i) and (ü), that, in the judgment of the Authorized
Representative, would materially affect the market price of the Certificates.
(e) An event described in Paragraph 6G) hereof occurs that, in the opinion of the
Authorized Representative, requires a supplement or amendment to the Official Statement that is
deemed by them. in their discretion, to adversely affect the market for the Certificates.
(f) A general banking moratorium shall have been declared by authorities of the United
States, the State of New York or the State of Texas.
10
EXHIBIT B .
(g) A lowering of the ratings of "Aaa" and "AAA" initially assigned to the Certificates
by Moody's and S&P, respectively, shall occur prior to the Closing.
10. Expenses. (a) The City shall pay all expenses incident to the issuance of the Certificates,
including but not limited to: (i) the cost of the preparation, printing and distribution 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 Bond Counsel to the City; (iv) the fees and disbursements of the City's accountants,
advisors, and of any other experts or consultants retained by the City; and (v) the premium for mlillÌcipal
bond insurance; and (vi) the fees for the bond ratings and any travel or other expenses incurred incident
thereto.
(b) The Underwriters shall pay (i) all advertising expenses in connection with the offering of
the Certificates; (ii) the cost of the preparation and printing of all the underwriting docwnents; and (iii) the
fee of McCall, Parkhurst & Horton L.L.P. for such finn's opinion required by Paragraph 8(e)(6) hereof
11. Notices. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing at the address for the City set forth above, and any
notice or other communication to be given to the Underwriters under this Purchase Contract may be given "
by delivering the same in writing to Southwest Securities, Inc., 1201 Elm St., Suite 3500, Dallas, Texas
75270, Attention: Leon Johnson.
12. Parties in Interest This Purchase Contract is made solely for the benefit of the City and
the Underwriters (including the successors or assigns of any Underwriter) and no other person shall acquire
or have any right under this contract. The City's representations, warranties and agreements contained in
this Purchase Contract that exist as of the Closing, and without regard to any change in fact or circumstance
occurring subsequent to the Closing, shall remain operative and in full force and effect, regardless of (i) any
investigations made by or on behalf of the Underwriters, and (ü) delivery of any payment for the Certificates
hereunder; and the City's representations and wammties contained in Paragraph 6 of this Purchase
Contract shall remain operative and in full force and effect, regardless of any tennination of this Purchase
Contract.
13. Severability. If any provision of this Purchase Contract 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 circumstances, or of rendering any
other provision inoperative or unenforceable to any extent whatever.
14. Choice of La\V, This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
11
EXHIBIT B
15. Execution in Counterparts, This Purchase Contract may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties
hereto may execute this Purchase Contract by signing any such counterpart.
16. Section Headings. Section headings have been inserted in this Contract as a matter of
convenience of reference only, and it is agreed that such section headings are not a part of this Contract
and will not be used in the interpretation of any provisions of this Contract.
17. Status of the Underwriters. It is understood and agreed that for all purposes of this
Contract and the transactions contemplated hereby the Underwriters have, in their role as underwriters,
acted solely as independent contractors and have not acted as financial or investment advisors, fiduciaries
or agents to or for the City, whether directly or indirectly through any person. The City recognizes that the
Underwriters expect to profit ITom the acquisition and potential distribution of the Certificates.
[Signature page follows.]
12
EXHIBIT B.
-"-,..~._-~~-
Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such
acceptance.
Very truly yours,
Southwest Securities, Inc.
Dain Rauscher Incorporated
By: Southwest Securities, Inc.
Authorized Representative
By:
Title: Senior Vice President
Accepted:
This 23rd day of April, 2001
.
.
By:
Mayor
City of North Richland Hills, Texas
Attest:
City Secretary
City of North Richland Hills, Texas
EXHIBIT ß
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
City of North Richland Hills, Texas Tax and Waterworks and
Sewer System Surplus Revenue Certificates of Obligation, Series 2001
Maturity
(2/15)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Principal
Amount
$165,000
165,000
165,000
165,000
t65,000
165,000
165,000
165,000
165,000
165,000
165,000
160,000
160,000
160,000
160,000
160,000
160,000
160,000
160,000
160,000
Interest Rate
(%)
4.500
4.500
4.500
4.500
4.500
4.500
4.500
4.500
4.500
4.625
4.750
4.875
5.000
5.125
5.250
5.250
5.250
5.250
5.375
5.375
Yield
(%)
3.40
3.75
3.91
4.04
4.19
4.31
4.45
4.55
4.63
4.74
4.88
5.00
5.09
5.17
5.25
5.33
5.35
5.41
5.45
5.46
.
.
The Certificates maturing on and after February 15,2012 are subject to redemption prior to maturity at
the option of the City on February 15, 2011 or any date thereafter at a price of par plus accrued interest
to the date of redemption.
A-I
r':'-ìC!i'Brr 13 .
......~..i:uJ._t -..;0.
Exhibit C
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 38 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2.
Statement
The information contained in Tables 1 through 6 and 8 through 15 in the Official
"
Accounting Principles
The accounting principles referred to in such S.ection are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
45024656
INVOICE
Star-Telegram
400 W. 7th Street
FORT WORTH, TX 76102
(817) 390-7761
Federal Tax ID 22-3148254
Customer ID:
Invoice Number:
Invoice Date:
Terms:
Due Date:
PO Number:
Order Number:
Sales Rep:
Description:
Publication Dates:
lUll To:
CITY OF N RICHLAND HILLS/SECRET
PO BOX 820609
NORTH RICHLAND HILLS, TX 76182-
CIT13
190054001
4/4/01
Net due in 21 days
4/30/01
19005400
073
NOTICE OF INTEN
3/28/01 -4/4/01
NOTICE OF INTENTION TO ISSUE C
1358
69
69 LINE
Net Amount:
'1
$6.09
$840.04
($790.36)
$52,50
$102.18
-------------