HomeMy WebLinkAboutOrdinance 3049ORDINANCE N0.3049
AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICHLAND
HILLS, TEXAS, TAX AND WATERWORKS AND. SEWER SYSTEM
{LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2009"; specifying the terms and features of said certificates;
providing for the payment of said certificates by the levy of an ad valorem
tax upon all taxable property within the City and a limited 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 Agent/Registrar Agreement and the
approval and distribution of an Official Statement; and providing an
effective date.
WHEREAS, notice of the City Council's intention to issue certificates of obligation in.
the maximum principal amount of $11,455,000 for the purpose of paying contractual obligations
to be incurred for (i) construeting, improving and equipping NRH2O wafer park, (ii) purchasing
equipment for fire service, including vehicles related thereto, {iii) constructing and improving the
City of North Richland Hills' water and sewer system, (iv} constructing and improving City of
North Richland Hills' streets and drainage improvements, (v) the purchase of municipal facility
land, and (vi) professional services rendered in relation to such 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 April 4,
2009 and April. 1 1, 2009, the date of the first publication of such notice being not less than thirty-
one (31 } 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 City Council hereby finds and determines that 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 1'HE 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 $6,205,000, to be designated and bear the title "CITY OF NORTH RICHLAND
HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2009" (hereinafter referred to as the
"Certificates"), for the purpose of paying contractual obligations to be incurred. for (i)
$0540315.1~I0813698
Ordinance No. 3049
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constructing, improving and equipping NRH2O water park, (ii) purchasing equipment for fire
service, including vehicles related thereto, (iii) constructing and improving the City of North
Richland Hills' water and sewer system, (iv) constructing and improving City of North Richland
Hills' streets and drainage improvements, and (v) 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.
SECTION 2: Fully Reeistered Obligations -Authorized Denominations - Stated
Maturities -Date. The Certificates are issuable in fully registered form only; shall. be dated
May 1, 2009 (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)1,%)
2010 $ 320,000
2011 320,000
2012 320,000
2013 315,000
2014 315,000
2015 315,000
2016 315,000
2017 315,000
2018 315,000
2019 315,000
2020 310,000
2021 305,000
2022 305,000
2023 305,000
2024 305,000
2025 305,000
2026 305,000
2027 3oo,ooa
2028 300,000
2029 300,000
The Certificates shall bear interest on the unpaid principal amounts from the Certificate
Date at the rates per annum shown above in this Section (calculated on the basis of a 360-day
year of twelve 30-day months), and such interest shalt be payable on February 15 and August 15
in each year, commencing February 15, 2010, until maturity ar prior redemption,
SECTION 3: Terms of Payment -Paying A~ent/Re istrar. 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
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Ordinance No. 3049
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(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 can ency 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 The Bank of New York Mellon Tnlst Company, N.A.,
Dallas, Texas to serve as Paying AgenURegistrar for the Certificates is hereby approved and
confirmed. Baoks 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 AgentlRegistrar, as provided herein and in accordance with the terms and
provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying AgentlRegistrar and the City
may prescribe. The Mayox 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 Agent/Registrar at all times until the Certificates are paid and discharged,
and any successor Paying Agent/Registrar shall be a bank, including a commercial bank, at
which principal of the fonds is payable, or trust company organized under the laws of the State
of Texas or other entity duly qualified and legally authorized to serve as and perform the duties
and services of Paying AgentlRegistrar far the Certificates. Upon any change in the Paying
Agent/Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to
be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also
give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Certificates shall be payable at the Stated
Maturities or upon prior redemption thereof only upon presentation and surrender of the
Certiftcates to the Paying Agent/Registrar at its designated offices in Dallas, Texas, or such
office as may be designated for such purpose by the Paying Agent/Registrar or any successor to
its functions (the "Designated Payment/T'ransfer Office"). Interest on the Certificates shall be
paid to the Holders whose names appear in the Security Register at the close of business on the
Record Date (the last business day of the month next preceding each interest payment date) and
shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, frst class
postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such
other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and
expense of, the Holder. If the date for the payment of the principal of or interest on the
Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking insritutions in
the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located
are authorized by law or executive order to close, then the date for such payment shall be the
next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking
institutions are authorized to close; and payment on such date shall have the same force and
effect as if made on the original date payment was due.
In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date far such interest payment (a "Special Record Date") will be
established by the Paying Agent/ Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be I S 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,
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Ordinance No. 3049
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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
rebniary 15, 2020 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, 2019, or on any date
thereafter at the redemption price of par plus accrued interest to the date of redemption.
(b) Exercise of Redemption 0,,..ption At least forty-five (45) days prior to a
redemption date far the Certificates (unless a shorter notification period shall be satisfactory to
the Paying Agent/Registrar), the City shall notify the Paying AgentlRegistrar 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) Selection of Certificates for Redemption. If less than all Outstanding Certificates
of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/
Registrar shall treat such Certificates as representing the number of Certificates 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
far 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 file 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 Agent/Registrar 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 PaymentlTransfer Office of the Paying AgentJRegistrar 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 hereinabave
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.
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Ordinance No. 3049
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(e) Conditional Notice of Redemption -With respect to any optionat redemptian of
the Certificates, unless moneys sufficient to pay the principal of and premium, if any, and
interest on the Certificates to be redeemed shall have been received by the Paying
Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said
redemptian may, at the option of the City, be conditional upon the receipt of such moneys by the
Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon the satisfaction
of any prerequisites set forth in such notice of redempfion; and, if sufficient moneys are not
received, such notice shall be of no force and effect, the City shall not redeem such Certificates
and the Paying Agent/Registrar shall give notice, in the manner in which the notice of
redemption was given, to the effect that the Certificates have not been redeemed.
SECTION 5: Reeistration - Transfer - Exchange of Certificates_ - Predecessor
Certificates. The Paying AgentlR.egistrar 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 far Certificates of other authorized denominations
by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to
the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in
Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying
Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized. denominations
and having the same Stated Maturity and of a like aggregate principal amount as the Certificate
or Certificates suxrendered 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 principal
amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be
exchanged at the Designated Payrnent/Transfer Office of the Paying Agent/Registrar. Whenever
any Certificates are surrendered for exchange, the Paying Agent/R.egistrar 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 Payrnent/Transfer Office of the Paying Agent/Registrar or sent by
United States Mail, first class postage prepaid, to the Holders, and, upon the registration and
delivery thereof, the same shall be the valid obligations of the City, evidencing the same
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 AgentlRegistrar shall require payment by the Holder requesting such transfer or exchange
805M10315.1~10813678
Ordinance No. 3049
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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 19 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 PayingAgent/Registrar shall be required to issue or transfer to an
assignee of a Holder any Certificate called for redemption, in whale or in part, within 45 days of
the date fixed far 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-Oniv 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 & Ca., as nominee of DTC, notwithstanding the ownership of each actual purchaser or
owner of each Certificate (the `Beneficial Owners") being retarded in the records of DTC and
DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities. depository for the Certificates, the City covenants and agrees with the
Holders of the Certificates to cause Certificates to be printed in definitive form and issued and
delivered to DTC 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 AgentlRegistrar and payment of such Certificates shall be
made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Re istration. 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.
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Ordinance No. 3049
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Certificates bearing the manual or facsimile signatures of individuals who are or were the proper
otlicers 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 12t)1, as amended.
No Certificate shall be entitled. to any right or benefit under this Ordinance, or be valid or
obligatory for ..any purpose, unless there appears on such Certificate either a certificate of
registration substantially in the form provided in Section 9(c), 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 Secrion 9(d), manually executed
by an authorized officer, employee ox representative of the Paying Agent/Registrar, and either
such certificate duty 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 stated in
Section 1 hereof 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 Certificates}") 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 Agent/Registrar, pursuant to
written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial
Certificate(s) delivered hereunder and exchange therefor 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) Foxms Generally. The Certificates, the Registration Certificate of the Comptroller
of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar,
and the form of Assignment to be printed on each of the Certificates, shall be substantially in the
forms set forth in this Section with such. appropriate insertions, omissions, substitutions, and
other variations as are permitted or required by this Ordinance and may have such letters,
numbers, or other marks of identification (including identifying numbers and letters of the
Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends in the event the
Certificates, or any maturities thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be established by the City or
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Ordinance No. 3049
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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,
engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as
determined by the officers executing such Certificates as evidenced by their executian.
(b) Form of Certificates.
REGISTERED REGISTERED
NO. ~
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF NORTH RICHLAND HILLS, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION,
SERIES 2009
Certificate Date: Interest Rate: Stated Maturity: CUSIP NO:
May 1, 2009 °!° February 15, 20
Registered Owner:
Principal Amount: DOLLARS
The City of North 'Richland Hills (hereinafter referred to as the "City"), a body carporate
and municipal corporation in the County of Tarrant, State of Texas, far value received,
acknowledges itself indebted to and hereby promises to pay to 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 interest payment
date next preceding the "Registration Date" of this Certificate appearing below (unless this
Certificate bears a "Registration Date" as of an interest payment date, in which case it shall bear
interest from such date, ar unless the "Registration Date" of this Certificate is prior to the initial
interest payment date in which case it shall bear interest 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, carnmencing
February 15, 2010, until maturity or prior redemption. Principal of this Certificate is payable at
its Stated Maturity or upon its prior redemption to the registered owner hereof, upon presentation
and surrender, at the Designated Paymentl'I'ransfer OflYCe of the Paying Agent/Registrar
executing the registration certificate appearing hereon, or its successor; provided, however, while
this 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
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Ordinance No. 3049
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Certificate. Interest is payable to the registered owner of this Certificate (ar one or more
Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name
appears an the "Security Register" maintained by the Paying AgentlRegistrar 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 AgentlRegistraz 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 AgentlRegistrar,
requested by, and at the risk and expense of, the registered owner. If the date for the payment of
the principal of or .interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a
day when banking institutions in the city where the Designated Payment/Transfer Office of the
Paying Agent/Registrar is located are authorized by law or executive order to close, then the date
for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, ar day when banking institutions aze authorized to close; and payment on such date shall
have the same force and effect as if made on the original date payment was due. All payments of
principal of, premium, if any, and interest an 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 $5,205,000 (herein referred to as the "Cert~cates") for the purpose of paying
contractual obligations to be incurred for (i) constructing, improving and equipping NRH2O
water park, (ii) purchasing equipment for fire service, including vehicles related thereto, (iii)
constructing and improving the City of North Richland Hills' water and sewer system, (iv)
constructing and improving City of North Richland Hills' streets and drainage improvements,
and (v) 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, 2020 may be redeemed prior to their
Stated. Maturities, at the option of the City, in whole ar in part in principal amounts of $5,000 or
any integral multiple thereof (and if within a Stated Maturity by lot by the Paying
AgentlRegistraz), on February 15, 2019 or on any date thereafter, at the redemption price of par,
together with accrued interest to the date of redemption.
At least thirty (30) 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 teams 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 fihe principal amount to be redeemed to the date
of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest
shall cease to accrue and be payable from and after the redemption date on the principal amount
refee>ned.
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Ordinance No. 3049
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In the event a portion of the principal amount of a Certifcate 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 Payment/1'ransfer Office of the Paying Agent/Registrar, and a
new Certificate or Certificates of like maturity and interest rate in any authorized denominations
provided by the Ordinance far 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 AgentlRegistrar shall not be required to transfer such
Certificate to an assignee of the registered owner within forty-five (45) days of the redemption
date therefor; provided, however, such limitation on transferability shall not be applicable to an
exchange by the registered owner of the unredeemed balance of a Certificate. redeemed in part.
With respect to any optional redemption of the Certificates, unless moneys sufficient to
pay the principal of and premium, if any, and interest on the Certificates to be redeemed shall
have been received by the Paying Agent/Registrar prior to the giving of such notice of
redemption, such notice shall state that said redemption may, at the option of the City, be
conditional upon the receipt of such moneys by the Paying AgentlRegistrar on or prior to the
date fixed for such redemption, or upon the satisfaction of any prerequisites set forth in such
notice of redemption; arid, if sufficient moneys are not received, such notice shall be of no force
and effect, the City shall. not redeem such Certificates and the. Paying Agent/Registrar shall give
notice, in the manner in which the notice of redemption was given, to the effect that the
Certificates have not been redeemed.
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 from a limited pledge of
the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sanitary
Sewer System (the "System"), such pledge of the Net Revenues for the payment of the
Certificates being limited to an amount not in excess of $1,000 and, together with a parity pledge
securing the payment of the Previously Issued Certificates, being junior and subordinate to the
lien on and pledge of such Net Revenues securing the payment of "Prior Lien Obligations" (as
defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance,
the City reserves and. retains the right to issue Prior Lien Obligations without limitation as to
principal amount but subject to any applicable terms, canditions or restrictions under law or
otherwise.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
PaymentJTransfer Office of the Paying Agent/Registrar, and to all the provisions of which the
owner or holder of this Certificate by the acceptance hereof hereby assents, for 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
AgentlRegistrar; 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 Certif cate, and this Certificate deemed to be no longer Outstanding thereunder; and. for the
80540315_ l~l Q813678 1 ~
Ordinance No. 3049
Page 10 of 44
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
Payment/Transfer Office of the Paying Agent/Registrar, with. the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying AgentlRegistrar duly executed by, the registered owner hereof, or his duly authorized
agent. When. a transfer on the Security Register occurs, one or mare 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
AgentlRegistrar to the designated transferee or transferees.
The City and the Paying AgentlRegistrar, 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 interes# 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 ather date as the owner for all other purposes, and neither the City nor the
Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the
event of nonpayment of interest on a scheduled payment date and. for thirty (30) days thereafter,
a new record date for such. interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five {5)
business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, 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 da 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. Incase 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. 'I`he 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 ofTexas.
84540315.I~ID8I3678 1 1
Ordinance No. 3049
Page 11 of 44
IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be
duly executed under the official seal. of the City as of the Certificate Date.
CITY OF NORTH RICHLAND HILLS,
TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(SEAL)
{c) Form of Registration Certificate of Comptroller of Public Accounts to appear on
Initial Certificate(sl only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS
I HEREIIY 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)
80540315.I~1 OR 13b78 12
Ordinance No. 3049
Page 12 of 44
{d) Form. of Certificate of Paying Agent/Itegistrar 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 At#orney General of the State of Texas
and registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registraz.
The designated offices of the Paying Agent/Registraz located in Dallas, Texas, or such
office as may be designated for such purpose by the Paying Agent/Registraz or any successor to
its functions, is the "Designated Payment/Transfer Office" for this Certificate.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., Dallas, Texas,
as Paying AgentlRegistraz
Registration Date:
By:
Authorized Signature
(e) Form of Assiunment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Print
or typewrite name, address and ,zip code of transferee):
(Soctat 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 thet~eof, with full
power of substitution in the premises.
DATED:
NOTICE: The signature on this
assignment must correspond with. the
Signature guaranteed: name of the registered owner as it appears
on the face of the within Certificate in
every particular.
SDSAD315.1~10813678 1 3
Ordinance No. 3049
Page 13 of 44
(fl
follows:
REGISTERED REGISTERED
NO. T-1 $6,205,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF NORTH RICHLAND HILLS, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE} REVENUE
CERTIFICATE OF OBLIGATION,
SERIES 2009
Certificate Date: May I, 2009
Registered Owner:
Principal Amount: SIX MILLION TWO HUNDRED FIVE THOUSAND 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 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:
PRINCIl'AL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been redeemed prior to maturity) and to pay interest on the
unpaid. principal. amounts hereof from the interest payment date next preceding the "Registration
Date" of this Certificate appearing below at the per annum rate(s) of interest specified above
computed on the basis of a 360-day year of twelve 30-day months; such interest being payable
on February 1 S and August 15 in each year, commencing February 15, 2010, until maturity or
prior redemption.. Principal installments of this Certificate are payable at its Stated Maturity ar
on a redemption date to the registered owner hereof by The .Bank of New York Mellon Trust
Company, N.A., Dallas, Texas (the "Paying Agent~Registrar"), upon presentation and surrender,
at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest is
payable to the registered owner of this Certificate whose name appears on the "Security
Register".maintained by the Paying Agent/Registrar at the close of business on the "Record
Date", which is the last business day of the month next preceding each interest payment date
hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail,
Frst class postage prepaid, to the address of the registered owner recorded in the Security
Register ar by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at
8054031S.1~10813678 ltl
Ordinance No. 3049
Page 14 of 44
the risk and expense of, the registered owner. 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 Payment/Transfer Office of the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for
such. payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day when banking institutions are authorized to close; and payment on such date shall
have the same force and effect as if made on the original date payment was due. 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 fallowing words or terms, whenever the same appears herein without
qualifying language, are defined to mean as follows:
(a) The term "Certificates" shall mean the $6,205,000 "City of North Richland Hills,
Texas, Tax and Waterworks and Sewer System (Limited Pledge). Revenue Certificates of
Obligation, Series 2009" .authorized by this Ordinance.
(b) The term "Certificate Fund" shall mean the special Fund created and established
under the provisions of Section 11 of this Ordinance.
(c) The term "Collection Date" shall mean, when reference is being made to the levy
and collection of annual ad valorem taxes, the date the annual ad valorem taxes levied each year
by the City become delinquent.
(d} The term "Fiscal Year" shall mean the twelve month financial accounting period
for the System ending September 30th of each year; provided, however, the City, by ordinance,
may change the Fiscal Year to another period of not less than twelve calendar months.
{e) The term "Government Securities" shall mean (i) direct noncallable obligations of
the United States of America, including obligations the principal of and interest on which are
wiconditionally 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 instnunentality 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 that, on.
the date of their acquisition or purchase by the City, are rated as to investment quality by a
na#ionally recognized investment rating firm not less than AAA or its equivalent.
(~ The term "Grass Revenues" shall mean all income and revenues of every nature
derived or received from the operation and ownership (excluding refundable meter deposits,
restricted gifts and grants in aid of construction, impact fees charged developers and special
assessments against landowners) of the System, including earnings and income derived from the
investment or deposit of moneys in any special funds or accounts created and established. for the
80540315.110813678 15
Ordinance No. 3049
Page 15 of 44
payment and security of the Prior Lien Obligations and. other obligations payable solely from and
secured only by a lien on and pledge of the Net Revenues.
(g) The term '"Net Revenues" shall mean Gross Revenues of the System, with respect
to any period, after deducting the System's Operating and Maintenance Expenses during such
period.
(h) The term "Operating and Maintenance Expenses" shall mean all current expenses
of operating and maintaining the System, including all salaries, labor, materials, .repairs and
extensions necessary to render efficient service; provided, however, that only such repairs and
extensions, as in the judgment of the Ciry Council, reasonably and fairly exercised, are necessazy
to maintain the operations and render adequate service to the Ciry and the inhabitants thereof, or
such as might be necessary to meet some physical accident or condition which would otherwise
impair obligations payable from Net Revenues shall be deducted in determining'"Net Revenues".
Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating
and Maintenance Expenses shall include payments under contracts for the purchase of water
supply, treatment of sewage or other materials, goods or services for the System to the extent
authorized by law and the provisions of such contract.
(i) The term "Outstanding" when used in this Ordinance with respeet 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 Agent/Registrar or delivered to
the Paying Agent/Registrar for cancellation;
(2) those Certificates for which payment has been duly provided by the City
in accordance with the provisions of Section 20 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 19 hereof.
(j) The term "Previously Issued Certificates" shall mean the outstanding (i) "City of
North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 1998", dated May 1, 1998, originally issued in the principal
amount of $8,180,000; (ii) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer
System {Limited Pledge) Revenue Certificates of Obligation, Series 1999", dated April 15, 1999,
originally issued in the principal amount of $3,560,000; (iii) "City of North Richland. Hills,
Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 2000", dated May 1, 2000, originally issued in the principal amount of
$2,315,000; (iv) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System
{Limited Pledge) Revenue Certificates of Obligation, Series 2006", dated April 15, 2006,
originally issued in the principal amount of $11,310,000, (v) "City of North Richland Hills,
Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 200?", dated April 15, 2007, originally issued in the principal amount of
$2,705,000, and (vi) "City of North. Richland Hills, Texas, Tax and Waterworks and Sewer
60540315. JI108! 3678 1C
Ordinance No. 3049
Page 16 of 44
System (Linuted Pledge) Revenue Certificates of Obligation, Series 2008", dated April I5, 2008,
originally issued in the principal amount of $4,750,000.
(k) The term "Prior Lien Obligations" shall mean all revenue bonds or other
obligations, now outstanding and hereafter issued, payable from and secured, in whole or in part,
by a lien on and. pledge of the Net Revenues of the System that is superior to the lien on and
pledge of the Net Revenues of the System securing the Certificates, the Previously Issued
Certificates, the Subordinate Lien Obligations and any obligations having a lien on and pledge of
the Net Revenues of the System that is on an parity with the lien on and. pledge of the Net
Revenues of the System securing any of the Certificates, the Previously Issued Certificates, and
the Subordinate Lien Obligations.
{1) The term "Subordinate Lien Obligations" shall mean all revenue bonds or other
obligations now outstanding or hereafter issued payable from and secured, in whole or in part, by
alien on and pledge of the Net Revenues of the System that is inferior to the lien on and pledge
of the Net Revenues of the System securing the Prior Lien Obligations, the Certificates, the
Previously Issued Certificates and any obligation having a lien on and pledge of the Net
Revenues of the System that is on a parity with the lien on and pledge of the Net Revenues of the
System securing any- of the Prior Lien Obligations, the Certificates and the Previously Issued
Certificates, including, but not limited to, the outstanding "City of North Richland Hills, Texas,
Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series
2001 ", dated April 15, 2001, originally issued in the principal amount of $3,255,000, "City of
North Richland Hills, Texas, Tax and Waterworks and Sewer System. Surplus Revenue
Certificates of Obligation, Series 2002", dated April 1.5, 2002, originally issued in the principal
amount of $6,745,000, "City of North Richland Hills, Texas, Tax and Waterworks and Sewer
System Surplus Revenue Certificates of Obligation, Series 2003", dated April 15, 2003,
originally issued in the principal amomit of $3,700,000, and "City of North Richland Hills,
Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation,
Series 2004", dated April 15, 2004, originally issued in the principal amount of $685,000.
(m) The term. "System" shall mean all properties, facilities and plants currently
owned, operated and maintained by the City for the supply, treatment and transmission of treated
potable water and the collection, treatment and disposal of water-carried wastes, together with all
future extensions, improvements, replacements and additions thereto; provided, however, that
notwithstanding. the foregoing, and to the extent now or hereafter authorized or permitted bylaw,
the term "System" shall not mean to include facilities of any kind which are declared not to be a
part of the System and which are acquired or constructed by or on behalf of the City with the
proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being
special revenue obligations of the City which are not Prior Lien Obligations but which are
payable from and secured by other liens on and pledges of any revenues, sources or payments,
not pledged to the payment of the Prior Lien Obligations including, but not limited to, special
contract revenues or payments received from any other legal entity in connection with such
facilities.
SECTION 11: Certificate Fund. 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
60540315.1~l0913679 1 7
Ordinance No. 3049
Page 17 of 44
"SPECIAL SERIES 2409 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 a depository bank of the City. The Mayor, Mayor Pro Tem, City
Manager, Assistant City Manager, Dixector of Finance, and City Secretary of the City,
individually or jointly, are hereby authorized and directed to make withdrawals from said Fund
sufficient to pay the principal of and interest on the Certificates as the same become due and
payable, and, shall cause to be transferred to the Paying Agent/Registrar from moneys on deposit
in the Certificate Fund an amount sufficient to pay the amount of principal and/or interest falling
due on the Certificates, such transfer of funds to the Paying Agent/Registrar to be made in such
manner as will cause immediately available funds to be deposited with the Paying
Agent/Registrar on or before the last business day next preceding each interest and principal
payment date for the Certificates.
Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate
Fund may, at the option of the City, be invested in obligations identified in, and in accordance
with the provisions ofthe "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter
2256, as amended) 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.
SECTION 12: Tax Levv. 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 amotmt shall be the
greater), .there shall be and there is hereby levied a sufficient tax, within the limitations
prescribed. by law, 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 detexmine:
(1) The amount on deposit in the Certificate Fund after (a) deducting
therefrom the total amount of Debt Service Requirements to become due an 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
sosao3is.i/ios~3e~s 1 g
Ordinance No. 3049
Page 18 of 44
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: Limited 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, the Net Revenues of the System in an aggregate amount
nat to exceed $1,000 are hereby irrevocably pledged to the payment of the principal of and
interest on the Certificates, and the limited pledge of $1,000 of the Net Revenues of the System
herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the
System in accordance with the terms and provisions hereof and shall be on an parity in all
respects with the lien on the Net Revenues securing the payment of the Previously Issued
Certificates. Furthermore, such lien on and pledge of the Net Revenues securing the payment of
the Certificates shall constitute a lien on the Net Revenues of the System until such time as the
City shaI1 pay all of such $1,000, after which time the pledge shall cease, all 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: S +~stem Fund. The City covenants and agrees that ail Gross Revenues
(excluding earnings from the ilivestment 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
"Water and Sewer 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 Operating and
Maintenance Expenses of the System as defined herein or required by statute to
be a first charge on and claim against the Gross Revenues of the System.
Second: To the payment of all amounts required to be deposited in the special
Funds created and established for the payment, security and benefit of Prior Lien.
805A0315J~1OS13678 1~
Ordinance No. 3049
Page 19 of 44
Obligations in accordance with the terms and provisions of the ordinances
authorizing the issuance of Prior Lien Obligations.
Third: To the payment, equally and ratably, of the limited amounts pledged to
the payment of the Previously Issued Certificates and 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 payment of the Subordinate Lien Obligations and then far any other
Cry purpose now or hereafter permitted by law.
SECTION 15: Securi of Funds. Ali moneys on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly invested)
shall be secured in the manner and to the fullest extent required by the laws of Texas for the
security of public funds, and moneys on deposit in such Funds shall be used only for the
purposes permitted by this Ordinance.
SECTION 16: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge th.e 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 1S02AS8 and V.T.C.A., Local Government Code, Sections
271.041, et seq.
(b) Other than for the payment of the Prior Lien Obligations, the
Previously Issued Certificates, the Certificates and the Subordinate Lien
Obligations, 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 17: Issuance of Prior Lien Obligations. The City expressly reserves the right
to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to
any terms, conditions or restrictions applicable thereto under law or otherwise. Prior Lien
Obligations hereafter issued may be payable, in whole or in part, from the Net Revenues
(without impairment of the obligation of contract with the Holders of the Certificates) upon such
terms and conditions as the City Council may determine. Additionally, the City reserves the
right to issue (a) 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 and the Previously
Issued Certificates and (b) Subordinate Lien Obligations.
SECTION 18: Application of Prior Lien Obli ations Covenants and Agreements. It is
the intention of this govetrung 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,
SOi4p315.1~108t3678 20
Ordinance No. 3049
Page 20 of 44
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, agreemen#s
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 19: Mutilated. Destroved 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 thereof with
the Paying Agent/Registrar 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 Agent/Registrar of indemnification in an amount satisfactory to
hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated
with such indemnity and with the preparation, execution and delivery of a replacement
Certificate shall be borne by the Holder of the Certificate mutilated., or destroyed, lost or stolen.
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 al]
other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the
destroyed, last, 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 20: Satisfaction of Oblitzation of Citv. If the City shall pay or 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 (ij money sufficient to pay
in full such Certificates or the principal amount(s) thereof at maturity or the redemption date
therefor, together with. all. interest due thereon, shall have been irrevocably deposited with and
held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying AgentlRegistrar, or an
authorized escrow agent, which Govemment 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 AgentLR.egistrar 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
80540315,11081367$ ~l
Ordinance No. 3049
Page 21 of 44
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, ar an authorized escrow
agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or
an authorized escrow agent, pursuant to this Section which is not required for the payment of the
Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the City.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the 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 of funds from
the Paying Agent/Registrar to the Ciry shall be subject to any applicable unclaimed property laws
of the State of Texas.
SECTION 21: 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 and in Section 37 hereof. The City may, without the consent of or notice to any Holders,
from time to time and at any time, amend this Ordinance in any manner not detrimental to the
interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the consent of Holders holding a majority in
aggregate principal amount of the Certificates then Outstanding, 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 (i) extend the time ar 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 22: 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 Intemal 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.
80540315.110813678 22
Ordinance No. 3049
Page 22 of 44
"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 1.14$-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 aze 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.
"Yield" of (l) 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 pxoperty the acquisition,
construction ar 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 aiid 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
80540315.110813679 23
Ordinance No. 3049
Page 23 of 44
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 Grass 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 atake-or-pay, output or similar contract or arrangement; or (3) indirect benefits, ar
burdens and benefits of ownership, of such Gross Froceeds or any property acquired, constructed
ar improved with such Gross Proceeds are otherwise transferred in a transaction which is the
economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall nat 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 (ar
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
(f) Not Federall 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 fedexally 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 803$-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 an which the last Outstanding Certificate is discharged. However, to the
extent permitted by law, the City may commingle Gross Proceeds Qf 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.
80540315.i~10813678 24
Ordinance No. 3049
Page 24 of 44
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accoxdance 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 far federal income
tax purposes, the City shall pay to the United States out of the construction fund,
other appropriate fund or, if permitted by applicable Texas statute, regulation or
opinion. of the Attorney General. of the State of Texas, the Certificate Fund, 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 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(fj 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
xeasonable 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.
O Not to Divert Arbitra a 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
eazlier 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.
(j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
City Manager, Assistant City Manager, Director of Finance or City Secretary, 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.
8D540315.1~10813678 2$
Ordinance No. 3049
Page 25 of 44
(k} 9ualified Tax Exempt Obli a ions. In accordance with the provisions of
paragraph (3} of subsection (b) of Section 265 of the Code, the City hereby designates the
Certificates to be "qualified tax exempt obligations" in that the Certificates are not "private
activity bonds" as defined in the Cade and the reasonably anticipated amount of "qualified. tax
exempt obligations" to be issued by the City (including all subordinate entities of the City} for
the calendar year 2009 will not exceed $30,000,000.
SECTION 23: Sale of Certificates. Pursuant to a public sale for the Certificates, the bid
submitted by (herein referred to as the "Purchasers") is declared.
to be the best bid. received producing the lowest true interest cost rate to the City, and the sale of
the Certificates to said Purchasers at the price of par and accrued interest to the date of delivery,
plus a premium of $ is hereby approved and confirmed. Delivery of the
Certificates to the Purchasers shall occur as soon as possible upon payment being made
therefor in accordance with the terms of sale.
SECTION 24: Official Statement Approval. 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,. (together with such changes approved by the Mayor, Mayor Pro Tem, City Manager,
Assistant 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 May 11, 2009, in the reoffering, sale and
delivery of the Certificates to the public.
SECTION 25: Proceeds of Sale. The proceeds of sale of the Certificates (less accrued
interest and premium in the amount of $ received from the Purchasers and amounts
to pay costs of issuance} shall be deposited in a construction fund maintained. at a depository
bank of the City. 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, as amended, including guaranteed investment contracts
permitted by V.T.C.A., Section 2256.015 et seq., and the City's investment policies and
guidelines, and, subject to the provisions of Section 22(h) hereof, any investment earnings
realized may be expended far such. authorized projects and purposes or deposited in the
Certificate Fund as shall be determined by the City Council. Accrued interest and premium in
the amount of $ received from the Purchasers as well as any surplus proceeds of
sale of the Certificates, including investment earnings on the construction fund, remaining after
completion of al! authorized projects or purposes and paying or making provision for the
payment of the amounts owed pursuant to Section 22(h) hereof 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 tq the Purchasers.
80540315.1~10813G78 26
Ordinance No. 3049
Page 26 of 44
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
suffciency 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 Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 28: Cancellation. All Certificates surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Paying AgentlRegistrar, shall be
promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying
AgentlRegistrar and, if not already cancelled, shall be promptly cancelled by the Paying
Agent/Registrar. The City may at any time deliver to the Paying Agent/Rcgistrar for
cancellation any Certificates previously certified or xegistered and delivered which the City may
have acquired in any manner whatsoever, and all Certif cafes so delivered shall be promptly
cancelled by the Paying Agent/Registrar. All cancelled Certificates held by the Paying
Agent/Registrar shall be returned to the City.
SECTION 29: Bond Counsel's Ovinion. 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
defuutive 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
AgentlRegistrar 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 sale and exclusive benefit of the City, the Paying
Agent/IZegistrar and the Holders.
805A0315.1~L08t3678 2']
Ordinance No. 3049
Page 27 of 44
SECTION 32: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict ar 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 ofHeadin>?s. The Section headings herein are for convenience of
reference 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 wards 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.
SECTION 37: Continuins? Disclosure Undertald~.
(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 ar 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, 2009) financial information and operating data with respect to the City of the
general type included in the final Offrcial Statement approved by Section 24 of this Ordinance,
being the information described. in Exhibit B hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit B hereto and
(2) audited, if the City corrimissions 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
805A0315.1~10813678 28
Ordinance No. 3049
Page 28 of 44
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 Gity 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 ox 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
MSRI3) 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. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the
Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
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
Certifcate calls and defeasance tha# cause the City to be no longer such an "obligated person."'
80540315.110813678 ~9
Ordinance No. 3049
Page 29 of 44
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 TN 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, 1N CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCT;.
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.
Notwithstanding anything herein to the contrary ,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) 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 SEG 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 f aancial information or operating data next provided
in accordance with subsection (b) an explanation, in narrative form, of the reasons for the
80540315,1110813698 30
Ordinance No. 3049
Page 30 of 44
amendment and of the impact of any change in the type of financial information or operating
data so provided.
SECTION 38: Further Procedures. Any one or more of the Mayor, Mayor Pro Tem, City
Manager, Assistant City Manager, Director of Finance, and City Secretary are hereby expressly
authorized, empowered and directed from time to tune and at any time to do and perform all such
acts and things and to .execute, acknowledge and deliver in the name and on behalf of the City all
agreements, instruments, certificates or other documents, whether mentioned herein or not, as
may be necessary ar desirable in order to carry out the terms and provisions of this Ordinance
and the issuance, sale and. delivery of the Certificates. In addition, prior to the delivery of the
Certificates, the Mayor, Mayor Pro Tem, City Manager, Assistant City Manager, Director of
Finance, City Secretary or Bond Counsel to the City are each hereby authorized and directed to
approve any changes or corrections to this Ordinance or to any of the documents authorized and
approved by this Ordinance: (i) in order to cure any ambiguity, formal defect, or omission in the
Ordinance or such other document, or (ii) as requested by the Attorney General of the State of
Texas or his representative to obtain the approval of the Certificates by the Attorney General. In
the event that any officer of the City whose signature shall appear on any document shall cease
to be such officer before the delivery of such document, such signature nevertheless shall be
valid and sufficient for all purposes the same as if such officer had remained in office until such
delivery.
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.
SECTION 40: Effective Date. This Ordinance shall take effect and be in full. force from
and after its adoption on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028, as amended.
[remainder ofpage left blank intentianallyJ
80540315.I~108136~8 3 1
Ordinance No. 3049
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PASSED AND ADOPTED, this May 11, 2009.
CITY OF NORTH
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APPROV'E'D AS TO LEGALITY:
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City Attorne
APPROVED AS TO CONTENT:
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Director of Fi ice
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EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
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EXHIBIT B
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 37 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. The information contained in Tables 1 through 6 and 8 through 15 in the Official
Statement
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in parsgraph 1 above.
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PAYING AGEN'I'/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of May 11, 2009 (this "Agreement"), by and
between The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, a banking
association duly organized and existing under the laws of the United States of America {the
"Bank") and the City of North Richland Hills, Texas {the "Issuer"),
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 (Limited Pledge) Revenue
Certificates of Obligation, Series 2009" (the "Securities"), dated May 1, 2009, such. Securities
scheduled to be delivered to the initial purchasers thereof on or about June 16, 2009; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/R.egistrar in
connection with the paymenfi 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 anal on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar For the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section i.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
responsibie 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 "Authorizing Document" (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 Authorizing Document.
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar far the Securities.
Section L02 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 Earth in
Annex A attached hereto.
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
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the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section Z.OI Definitions. Far 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.
"Authorizing Document" means the resolution, order, ar ordinance of the
governing body of the Issuer pursuant to which the Securities are issued, as the
same may be amended or modified, including any pricing certificate related
thereto, certified by the secretary or any other officer of the Issuer and delivered
to the Bank.
"Bank Office" means the designated office of the Bank at the address
shown in Section 3.01 hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order
signed in the name of the Issuer by the Mayor, City Secretary, City Manager,
Assistant City Manager, or Director of Finance, any one 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
Authorizing Document}.
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"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
Authorizing. Document.
"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.
"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 Authorizing Document
the principal of a Security is scheduled to be due and payable.
Section 2.02 Other Definitions. The terms "Bank," "Issuer," and ."Securities
(Security)" have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.OI Duties of Paving Agent. As Paying Agent, the Bank shall pay, provided
adequate collected funds have been provided to it for such propose by or on behalf of the Issuer,
on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date or
Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following
address:
First Class/
Registered/Certified Express Delivery Only >Eiy Hand Only
The Bank of New York The Bank of New York Mellon The Bank of New York Mellon
Mellon Trust Company, N.A. Trust Company, N.A. Trust Company, N.A.
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P. O. Box 2320 2001 Bryan Street, 9th Floor Corporate Trust Window
Dallas, Texas 75221-2320 Dallas, Texas 75201 101 Barclay Street, 1st Floor East
New York, New York 10286
As Paying Agent, the Bank shall, provided adequate collected fiends have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
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each Security when due, by computing the amoun# 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 Authorizing Document). All payments of principal and/or interest on the
Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable
to the registered owners, drawn on the paying agent account provided in Section 5.05 hereof,
sent by United States mail, first class postage prepaid, to the address appearing on the Security
Register ar (2) by such. other method, acceptable to the Bank, requested in writing by the Haider
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 on the dates specified in the Authorizing Document.
ARTICLE FOUR
REGISTRAR
Section 4.01 Security Resister -Transfers and Exchanses. 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 infannation as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and the Bank may prescribe. All transfers, exchanges and replacements
of Securities shall be noted. in the Security Register.
Every Security surrendered for transfer or exchange 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 ar a member of the National Association of Securities
Dealers, such written instrument to be in a farm satisfactory to the Bank and 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 ar 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 Securities. 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 awn securities.
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Section 4.03 Form of Securi Resister. 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 Lfst of Security Holders. The Bank wilt provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained in
the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank toprovide 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 Caneelied Securities. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, 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 the Authorizing Document, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as
the same does not result in an overissuance.
In case any Security shall be mutilated, 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 mutilated, 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, toss 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,
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
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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 4A6.
ARTICLE I+'IVE
THE BANK
Section S.QI 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.Q2 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, certifica#e, 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 the Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete 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 ar through agents or attorneys of the Bank.
(g} 1'he Bank is also authorized to transfer funds relating to the closing and initiat
delivery of the Securities in the manner disclosed in the closing memorandum or letter as
prepazed by the Issuer's financial advisor or other agent. The Bank may act on a facsimile or e-
mail transmission of the closing memorandum or letter acknowledged by the financial advisor or
the Issuer as the final closing memorandum ar letter. The Bank shall not be liable for any losses,
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costs or expenses arising directly or indirectly from the Bank's reliance upon and compliance
with such instructions.
Section SA3 Recitals of Issuer. The recitals contained herein with. respect to the Issuer
and in flee Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correc#ness.
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 fiends.
Section S.d4 Mav Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and lnay otherwise deal with the Issuer with the
same rights it would have if it were nat the Paying AgentlRegistrar, or any other agent.
Section 5.05 Monevs Held by Bank - Pavins Asent AceoundCollateralization. A
paying agent account shall at all times be kept and maintained by the Bank for the receipt,
safekeeping, and disbursement of moneys received from the Issuer under this Agreement 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 paying agent accounts to the extent
such money is not insured by the Federal Deposit Insurance Corporation. Payments made from
such paying agent account shall be made by check drawn on such account unless the owner of
the Securities shall, at its own expense and risk, request an alternative method of payment.
Subject to the applicable unclaimed. property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal of, 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 held by the Bank and disposed of only in accordance wifih Title 6 of the
Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in
compliance with this provision.
The Bank is not obligated to pay interes# on any money received by it under this
Agreement.
This Agreement relates solely to money deposited for the purposes described herein, and
the parties agree that the Bank may serve as depository for other funds of the Issuer, act as
trustee under indentures authorizing other band transactions of the issuer, or act in any other
capacity not in conflict with its duties hereunder.
Section SAti indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, ar expense incurred
without negligence ar bad faith on its part, arising out of or in connection with its acceptance or
admirlistratian of its duties hereunder, including the cost and expense against any claim or
liability in connection. with the exercise or performance of any of its powers or duties under this
Agreement.
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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 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 b.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State
of Texas to determine the rights of any Person claiming any interest herein.
In the event the Bank becomes involved in litigation in connection with this Section, the
Issuer, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses, and attorney fees suffered or incurred by the Bank as a result. The
obligations of the Bank under this Agreement shall be performable at the principal corporate
office of the Bank in the City of Dallas, Texas.
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 far securities to be eligible for such type depository trust services,
including, but not limited. to, requirements for the timeliness of payments and funds availability,
transfer turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6A1 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the. parties hereto.
Section 6.02 Assisnment. 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 the signature page hereof.
Section 6.04 Effect of Hcadinsrs. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 6.05 Successors and Assiens. 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.
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Section G.0'I Mercer, Conversion, Consolidation, or Succession. Any corporation or
association into which the Bank may be merged or converted ar with which it may be
consolidated, or any corporation or association resulting from any merger, conversion, or
consolidation to which the Bank shall be a party, or any corporation or association succeeding to
all. ar substantially ali of the corporate trust business of the Bank. shall be the successor of the
Bank as Paying Agent under this Agreement without the execution or filing of any paper or any
further act. an the part of either parties hereto.
Section 6.08 Benefits of Aereement. 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,. ar claim hereunder.
Section 6.09 Entire Aereement. This Agreement and the Authorizing Document
constitute the entire agreement between the parties hereto relative to the Bank acting as Paying
AgentlRegistrar and if any conflict exists between this Agreement and the Authorizing
Document, the Authorizing Document shall govern.
Section 6.10 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 6.1.1. Termination. This Agreement will terminate (i} an 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 (50) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b)
notice has been given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. However, if the Issuer fails to appoint a successor Paying Agent/Registrar
within a reasonable time, the Bank may petition a court of competent jurisdiction within the State
of Texas to appoint a successor. Furthermore, the Bank and the Issuer mutually agree that the
effective date of an early termination of this Agreement shall not occur at any time which would
disrupt, delay or otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with the 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 6.12 Governinc Law. This Agreement shall be construed in accaxdance with.
and governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., Dallas, Texas
By:
Title:
Address: 2001 Bryan Street, 9th Floox
Dallas, Texas 75201
Attest:
Title:
BY:
Attest:
City Secretary
CITY OF NORTH RICHLAND
HILLS, TEXAS
Mayor
Address: P. O. Box 820609
North Richland Hills,
Texas 76182-0609
$QSk2949.1I108i3678 [signature page of Paying Agent/Registrar Agreement]
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