HomeMy WebLinkAboutOrdinance 3393 ORDINANCE NO. 3393
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 2016"; providing for the payment of said certificates of obligation
by the levy of an ad valorem tax upon all taxable property within the City
and a limited pledge of the net revenues derived from the operation of the
City's waterworks and sewer system; providing the terms and conditions
of such certificates and resolving other matters incident and relating to the
issuance, payment, security and delivery of said certificates of obligation;
delegating matters relating to the sale and issuance of said certificates to
an authorized City official; and providing an effective date.
WHEREAS, the City Council of the City of North Richland Hills, Texas, has heretofore
determined that certificates of obligation should be issued in the maximum principal amount not
to exceed $6,000,000 for the purpose of paying contractual obligations to be incurred for
authorized needs and purposes, to wit: (i) street improvements, including drainage, landscaping,
curbs, gutters, sidewalks, entryways, signage, lighting and traffic signalization incident thereto
and the acquisition of land and rights-of-way therefor, (ii) park and recreation improvements,
including the acquisition of equipment therefor, (iii) the purchase of municipal equipment and
machinery, to wit: an ambulance, an excavator, and a street sweeper, (iv) constructing,
acquiring, purchasing, renovating, enlarging, equipping, and improving water and sewer system,
including the acquisition of land and rights-of-way therefor, and (v) professional services
rendered in relation to such projects and the financing thereof; and
WHEREAS, a "Notice of Intention to Issue City of North Richland Hills, Texas,
Certificates of Obligation, Series 2016" was duly published in Fort Worth Star Telegram, a
newspaper hereby found and determined to be of general circulation in the City of North
Richland Hills, Texas, on January 21, 2016 and January 28, 2016, 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 and adoption of this Ordinance; and
WHEREAS, no petition protesting the issuance of such certificates of obligation and
bearing valid petition signatures of at least 5% of the qualified voters 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 all of the certificates of
obligation described in such notice should be issued and sold at this time in the amount and
manner as hereinafter provided; and
WHEREAS, the City Council by this Ordinance, in accordance with the provisions of
Texas Government Code, Chapter 1371, as amended ("Chapter 1371"), delegates to a Pricing
Officer (hereinafter designated) the authority to determine the principal amount of the
Certificates to be issued and to negotiate the terms of sale thereof; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
NORTH RICHLAND HILLS, TEXAS:
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SECTION 1: Authorization — Designation — Principal Amount— Purpose. Certificates of
obligation of the City shall be and are hereby authorized to be issued in an amount not to
exceed the aggregate original principal amount hereinafter set forth 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 2016" or such other designation as specified in the Pricing Certificate (hereinafter
referred to as the "Certificates"), for the purpose of paying contractual obligations to be incurred
for authorized needs and purposes, to wit: (i) street improvements, including drainage,
landscaping, curbs, gutters, sidewalks, entryways, signage, lighting and traffic signalization
incident thereto and the acquisition of land and rights-of-way therefor, (ii) park and recreation
improvements, including the acquisition of equipment therefor, (iii) the purchase of municipal
equipment and machinery, to wit: an ambulance, an excavator, and a street sweeper,
(iv) constructing, acquiring, purchasing, renovating, enlarging, equipping, and improving water
and sewer system, including the acquisition of land and rights-of-way therefor, 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 Texas Local Government Code, Subchapter C of Chapter 271, as amended
and Chapter 1371.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Interest Rates - Date. The Certificates are issuable in fully registered form only;
shall be dated as provided in the Pricing Certificate (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 a date certain in each of the years and in
principal amounts (the "Stated Maturities") and bear interest at the per annum rates in
accordance with the details of the Certificates as provided in the Pricing Certificate.
The Certificates shall bear interest on the unpaid principal amounts from the date
specified in the Pricing Certificate (calculated on the basis of a 360-day year of twelve 30-day
months) and shall be payable in each year, on the dates and commencing on the date, set forth
in the Pricing Certificate.
SECTION 3: Delegation of Authority to Pricing Officer. (a) As authorized by Texas
Government Code, Section 1371.053, as amended, the City Manager or the Director of Finance
of the City (either a "Pricing Officer") is hereby authorized to act on behalf of the City in selling
and delivering the Certificates and carrying out the other procedures specified in this Ordinance
determining the aggregate principal amount of the Certificates, the date of the Certificates, any
additional or different designation or title by which the Certificates shall be known, the price at
which the Certificates will be sold, the manner of sale (negotiated, privately placed or
competitively bid), the years in which the Certificates will mature, the principal amount to mature
in each of such years, the rate of interest to be borne by each such maturity, the date from
which interest on the Certificates will accrue, the interest payment dates, the record date, the
price and terms upon and at which the Certificates shall be subject to redemption prior to
maturity at the option of the City, as well as any mandatory sinking fund redemption provisions,
determination of the use of a book-entry-only securities clearance, settlement and transfer
system, the terms of any bond insurance applicable to the Certificates, including any
modification of the continuing disclosure undertaking contained in Section 32 hereof as may be
required by the purchasers of the Certificates in connection with any amendments to Rule 15c2-
12, and all other matters relating to the issuance, sale and delivery of the Certificates, all of
which shall be specified in the Pricing Certificate, provided that:
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(i) the aggregate original principal amount of the Certificates shall not exceed
$6,000,000;
(ii) the maximum true interest cost for the Certificates shall not exceed 3.50%; and
(iii) the maximum maturity date of the Certificates shall not exceed February 15,
2036.
The execution of the Pricing Certificate shall evidence the sale date of the Certificates by
the City to the Purchasers (hereinafter defined).
If the Pricing Officer determines that bond insurance results in a net reduction of the
City's interest costs associated with the Certificates, then the Pricing Officer is authorized, in
connection with effecting the sale of the Certificates, to make the selection of the municipal
bond insurance company for the Certificates (the "Insurer") and to obtain from the Insurer a
municipal bond insurance policy in support of the Certificates. The Pricing Officer shall have the
authority to determine the provisions of the commitment for any such policy and to execute any
documents to affect the issuance of said policy by the Insurer.
(b) In establishing the aggregate principal amount of the Certificates, the Pricing
Officer shall establish an amount not exceeding the amount authorized in subsection (a)(i)
above, which shall be sufficient in amount to provide for the purposes for which the Certificates
are authorized and to pay costs of issuing the Certificates. The delegation made hereby shall
expire if not exercised by the Pricing Officer within 180 days of the date of the adoption of this
Ordinance. The Certificates shall be sold to the purchaser(s)/underwriter(s) named in the
Pricing Certificate (the "Purchasers"), at such price and with and subject to such terms as set
forth in the Pricing Certificate and the Purchase Contract (hereinafter defined), and may be sold
by negotiated or competitive sale or by private placement. The Pricing Officer is hereby
delegated the authority to designate the Purchasers, which delegation shall be evidenced by the
execution of the Pricing Certificate.
SECTION 4: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if
any, and the interest on the Certificates, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Certificates
(hereinafter called the "Holders") appearing on the registration and transfer books maintained by
the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the
United States of America, which at the time of payment is legal tender for the payment of public
and private debts, and shall be without exchange or collection charges to the Holders.
The selection and appointment of the paying agent/registrar for the Certificates (the
"Paying Agent/Registrar") shall be as provided in the Pricing Certificate. Books and records
relating to the registration, payment, exchange and transfer of the Certificates (the "Security
Register") shall at all times be kept and maintained on behalf of the City by the Paying
Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a
"Paying Agent/Registrar Agreement," substantially in the form attached hereto as Exhibit A and
such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Pricing Officer is hereby authorized to execute and deliver such Paying
Agent/Registrar 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 commercial bank,
trust company, financial institution, or other entity qualified and authorized to serve in such
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capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in
the Paying Agent/Registrar for the Certificates, the City agrees to promptly cause a written
notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which
notice shall also give the address of the new Paying Agent/Registrar.
The Certificates shall be payable at their Stated Maturities or upon their earlier
redemption, only upon the presentation and surrender of the Certificates to the Paying
Agent/Registrar at its designated offices provided in the Pricing Certificate (the "Designated
Payment/Transfer Office"); provided, however, while a Certificate is registered to Cede & Co.,
the payment thereof upon a partial redemption of the principal amount thereof may be
accomplished without presentation and surrender of such Certificate. Interest on a Certificate
shall be paid by the Paying Agent/Registrar to the Holders whose names appears in the
Security Register at the close of business on the Record Date (which shall be set forth in the
Pricing Certificate) and such interest payments shall be made (i) by check sent United States
Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register
or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the
risk and expense of, the Holder. If the date for the payment of the principal of or interest on the
Certificates shall be a Saturday, Sunday, a legal holiday, or a day on which 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 be closed, then the date for such payment
shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on
which banking institutions are authorized to be closed; 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 non-payment 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. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
Mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 5: Registration - Transfer - Exchange of Certificates Predecessor
Certificates. The Paying Agent/Registrar shall obtain, record and maintain in the Security
Register the name and address of each and every owner of the Certificates issued under and
pursuant to the provisions of this Ordinance or, if appropriate, the nominee thereof. Any
Certificate may be transferred or exchanged for Certificates of other authorized denominations
by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to
the Paying 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 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, executed on behalf of, and furnished by, the City,
of authorized denominations and having the same Stated Maturity and of a like aggregate
principal amount as the Certificate or Certificates surrendered for transfer.
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At the option of the Holders, Certificates (other than the Initial Certificate 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 Payment/Transfer Office of the Paying Agent/Registrar.
Whenever any Certificates are so surrendered for exchange, the Paying Agent/Registrar shall
register and deliver new Certificates, executed on behalf of, and furnished by the City, to the
Holder requesting the exchange.
All Certificates issued upon any transfer or exchange of Certificates shall be delivered at
the Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
mail, first class postage prepaid, to the Holder and, upon the registration and delivery thereof,
the same shall be valid obligations of the City, evidencing the same obligation to pay, and
entitled to the same benefits under this Ordinance, as the Certificates surrendered in such
transfer or exchange.
All transfers or exchanges of Certificates pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Certificates canceled 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 Section 25 hereof and such new replacement Certificate shall be deemed to
evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to
an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days
of the date fixed for the redemption of such Certificate; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Certificate called for redemption in part.
SECTION 6: Book-Entry-Only Transfers and Transactions. Notwithstanding the
provisions contained herein 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, a limited purpose
trust company organized under the laws of the State of New York ("DTC"), in accordance with
the operational arrangements referenced in the Blanket Issuer Letter of Representations by and
between the City and DTC (the "Depository Agreement").
In the event the Pricing Officer elects to utilize DTC's "Book-Entry-Only" System, which
election shall be made by the Pricing Officer in the Pricing Certificate, pursuant to the
Depository Agreement and the rules of DTC, the Certificates shall be deposited with DTC who
shall hold said Certificates for its participants (the "DTC Participants"). While the Certificates
are held by DTC under the Depository Agreement, the Holder of the Certificates on the Security
Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of
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DTC, notwithstanding the ownership of each actual purchaser or owner of each Certificate (the
"Beneficial Owners") being recorded in the records of DTC and DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general, or in the event the City decides to discontinue use of the system of book
entry transfers through DTC, 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 Agent/Registrar and payment of such Certificates shall be made in
accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Registration. The Certificates shall be executed on behalf of
the City by the Mayor or the Mayor Pro tem under its seal reproduced or impressed thereon and
countersigned by the City Secretary or Assistant City Secretary. The signature of said officers
on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile
signatures of said individuals who are or were the proper officers of the City on the Certificate
Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such
individuals or any of them shall cease to hold such offices prior to the 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 by Texas Government Code, Chapter 1201, 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 or her duly authorized agent, or a
certificate of registration substantially in the form provided in Section 9(d), manually executed by
an authorized officer, employee or representative of the Paying Agent/Registrar, and either such
certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly certified, registered and delivered.
SECTION 8: Initial Certificate. The Certificates herein authorized shall be initially
issued as a single fully registered certificate in the total principal amount with principal
installments to become due and payable as provided in the Pricing Certificate and numbered
T-1 (hereinafter called the "Initial Certificate") and the Initial Certificate shall be registered in the
name of the initial purchaser(s) or the designee thereof. The Initial Certificate shall be the
Certificate 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, the
Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the
designee thereof, shall cancel the Initial Certificate 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.
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(a) Forms Generally. The Certificates, the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
Agent/Registrar, and the form of Assignment to be printed on 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 to be
completed and modified with the information set forth in the Pricing Certificate 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 bond insurance and any reproduction
of an opinion of counsel) thereon as may, consistently herewith, be established by the City or
determined by the Pricing Officer. The Pricing Officer shall set forth the final and controlling
forms and terms of the Certificates. Any portion of the text of any Certificates may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of the Certificate.
The Certificates, including the Initial Certificate, shall be typewritten, printed,
lithographed, or photocopied, or produced in any other similar manner, all as determined by the
officers executing such Certificates as evidenced by their execution.
(b) Form of Definitive Certificate.
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 2016
Certificate Date: Interest Rate: Stated Maturity: CUSIP No.:
February 15, 2016
Registered Owner:
Principal Amount: DOLLARS
The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate
and municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, on the Stated Maturity date specified above the
Principal Amount stated above (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, or unless the "Registration Date" of this Certificate is prior to the initial
interest payment date, in which case it shall bear interest from the date of delivery to the initial
purchasers) 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 August 15 and February 15
of each year, commencing , 20_, until maturity or prior redemption of this
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Certificate. Principal of this Certificate is payable at its Stated Maturity or redemption to the
registered owner hereof upon presentation and surrender at the Designated Payment/Transfer
Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or
its successor; provided, however, while the Certificate is registered to Cede & Co., the payment
of principal upon a partial redemption of the principal amount may be accomplished without
presentation and surrender of this Certificate. Interest is payable to the registered owner of this
Certificate (or one or more Predecessor Certificates, as defined in the Ordinance hereinafter
referenced) whose name appears on the "Security Register" maintained by the Paying
Agent/Registrar at the close of business on the "Record Date", which is the last business day of
the month next preceding each interest payment date and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to
the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner.
If the date for the payment of the principal of or interest on the 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.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of $ 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 2016" (hereinafter referred to as the "Certificates"),
for the purpose of paying contractual obligations to be incurred for authorized needs and
purposes, to wit: (i) street improvements, including drainage, landscaping, curbs, gutters,
sidewalks, entryways, signage, lighting and traffic signalization incident thereto and the
acquisition of land and rights-of-way therefor, (ii) park and recreation improvements, including
the acquisition of equipment therefor, (iii) the purchase of municipal equipment and machinery,
to wit: an ambulance, an excavator, and a street sweeper, (iv) constructing, acquiring,
purchasing, renovating, enlarging, equipping, and improving water and sewer system, including
the acquisition of land and rights-of-way therefor, 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 Texas 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 having Stated Maturities on and after , 20_ may be
redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal
amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the
Paying Agent/Registrar), on , 20 , 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 terms and provisions relating thereto contained in the Ordinance. If
27005804.3/11600460 8
a Certificate (or any portion of its principal sum) shall have been duly called for redemption and
notice of such redemption duly given, then upon the redemption date such Certificate (or the
portion of its principal sum to be redeemed) shall become due and payable, and, if moneys for
the payment of the redemption price and the interest accrued on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar, interest shall cease to accrue and be payable from and after the redemption
date on the principal amount redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated Payment/Transfer 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 for the then unredeemed balance of the principal sum thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in
whole or in part, the City and the Paying Agent/Registrar 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 may state that said redemption 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 redemption; 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.]
The Certificates are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City and are additionally payable
from and secured by a lien on and limited pledge of the Net Revenues (as defined in the
Ordinance) of the City's combined waterworks and sewer system (the "System"), such lien and
pledge being limited to the amount of$1,000 and being junior and subordinate to the lien on and
pledge of the Net Revenues of the System securing the payment of "Prior Lien Bonds"
(identified and defined in the Ordinance) now outstanding and hereafter issued by the City. In
the Ordinance, the City reserves and retains the right to issue Prior Lien Bonds while the
Certificates are outstanding without limitation as to principal amount but subject to any terms,
conditions or restrictions as may be applicable thereto under law or otherwise, as well as the
right to issue additional obligations payable from the same sources as the Certificates and,
together with the Certificates, equally and ratably secured by a parity lien on and pledge of the
Net Revenues of the System.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the
Holder 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 Net Revenues of
the System pledged to the payment of the principal of and interest on the Certificates; the nature
and extent and manner of enforcement of the limited pledge; the terms and conditions relating
27005804.3/11600460 9
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 Agent/Registrar; the terms and provisions upon which the
tax levy and the liens, pledges, charges and covenants made therein may be discharged at or
prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding
thereunder; and for the other terms and provisions contained therein. Capitalized terms used
herein and not otherwise defined 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 Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Certificates of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, may treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this
Certificate as the owner entitled to payment of principal hereof at its Stated Maturity or its
redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes,
and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by
notice to the contrary. In the event of a non-payment 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. 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 covenanted that the City is duly organized
and legally incorporated under and by virtue of the Constitution and laws of the State of Texas;
that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things
required to exist and be done precedent to and in the issuance of the Certificates to render the
same lawful and valid obligations of the City have been properly done, have happened and
have been performed in regular and due time, form and manner as required by the Constitution
and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any
constitutional or statutory limitation; and that due provision has been made for the payment of
the principal of and interest on the Certificates by the levy of a tax and a pledge of the Net
Revenues of the System as aforestated. In case any provision in this Certificate or any
application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions and applications shall not in any way be affected or
impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be
construed in accordance with and shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be
duly executed under the official seal of the City as of the Certificate Date.
27005804.3/11600460 10
CITY OF NORTH RICHLAND HILLS, TEXAS
[Mayor][Mayor Pro Tern]
COUNTERSIGNED:
City Secretary
(CITY SEAL)
(c) Form of Registration Certificate of Comptroller of Public Accounts to
appear on the Initial Certificate only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
( REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and
approved by the Attorney General of the State of Texas and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
(d) Form of Certificate of Paying Agent/Registrar to appear on Definitive
Certificates only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Certificate has been duly issued and registered under the provisions of the
within-mentioned Ordinance; the certificate or certificates of the above entitled and designated
series originally delivered having been approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated office of the Paying Agent/Registrar located in
is the Designated Payment/Transfer Office for this Certificate.
27005804.3/11600460 11
as Paying Agent/Registrar
Registration Date:
By:
Authorized Signature
(e) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number: )
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept
for registration thereof, with full power of substitution in the premises.
DATED:
NOTICE: The signature on this
Signature guaranteed: assignment must correspond with the
name of the registered owner as it
appears on the face of the within
Certificate in every particular.
(f) The Initial Certificate shall be in the form set forth in paragraph (b) of this
Section, except that the heading and first paragraph shall be modified as follows:
REGISTERED: REGISTERED:
NO. T-1 $
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 2016
Certificate Date: , 20_
27005804.3/11600460 12
Registered Owner:
Principal Amount: DOLLARS
The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate
and municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, the above stated Principal Amount on February 15 in
each of the years and in principal installments in accordance with the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from the Pricing Certificate).
(or so much thereof as shall not have been redeemed prior to maturity) and to pay interest on
the unpaid Principal Amount 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, or unless the
"Registration Date" of this Certificate is prior to the initial interest payment date, in which case it
shall bear interest from the ) 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 and of each year, commencing 1, 20 , until
maturity or prior redemption of this Certificate. Principal installments of this Certificate are
payable at the year of maturity or on a redemption date to the registered owner hereof by
(the "Paying Agent/Registrar"), upon
presentation and surrender at its designated offices in , , or, with respect to a
successor paying agent/registrar, at the designated office of such successor (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 day of the month next preceding
each interest payment date hereof and interest shall be paid by the Paying Agent/Registrar by
check sent United States Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of, the registered owner. 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 following words or terms, whenever the same appears herein without
qualifying language, are defined to mean as follows:
27005804.3/11600460 13
•
(a) The term "Certificate Fund" shall mean the special Fund created and established
under the provisions of Section 11 of this Ordinance.
(b) The term "Certificates" shall mean the $ "City of North Richland Hills,
Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 2016" authorized by 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) Unless otherwise specified in the Pricing Certificate, the term "Government
Securities" shall mean (i) direct noncallable obligations of the United States of America,
including obligations the principal of and interest on which are unconditionally guaranteed by the
United States of America, (ii) noncallable obligations of an agency or instrumentality of the
United States, including obligations unconditionally guaranteed or insured by the agency or
instrumentality and, on the date of their acquisition or purchase by the City, are rated as to
investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent, (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 nationally recognized investment
rating firm not less than AAA or its equivalent, and (iv) any other then authorized securities or
obligations that may be used to defease obligations such as the Certificates under the then
applicable laws of the State of Texas.
(f) The term "Gross Revenues" shall mean all income and revenues of every nature
derived or received from the operation and ownership (excluding refundable meter 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 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 Council, reasonably and fairly exercised, are
necessary to maintain the operations and render adequate service to the City and the
inhabitants thereof, or such as might be necessary to meet some physical accident or condition
which would otherwise impair 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
27005804.3/11600460 14
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 respect to Certificates
means, as of the date of determination, all Certificates theretofore issued and delivered under
this Ordinance, except:
(1) those Certificates cancelled by the Paying 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 24 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.
(i) The term "Prior Lien Obligations" shall mean all revenue bonds or other
obligations 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 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
and the Subordinate Lien Obligations.
(k) 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 a lien 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
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 and the Certificates.
(I) 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 by law, the term "System" shall not mean to include facilities of any kind
which are declared not to be a part of the System and which are acquired or constructed by or
on behalf of the City with the proceeds from the issuance of "Special Facilities Bonds", which
are hereby defined as being special revenue obligations of the City which are not Prior Lien
Obligations but which are 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 on the books of the City to be designated "SPECIAL
SERIES 2016 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND," and all moneys
27005804.3/11600460 15
deposited to the credit of such account shall be kept and maintained in a banking fund
maintained at the City's depository. The Mayor, Mayor Pro Tern, City Manager, Assistant City
Manager, Director of Finance, City Secretary and Assistant City Secretary, individually or
collectively, are hereby authorized and directed to make withdrawals from the Certificate 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 of the "Public Funds Investment Act" 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 Levy. To provide for the payment of the "Debt Service
Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking
fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the
greater), there shall be and there is hereby levied, within the limitations prescribed by law, a
sufficient tax on each one hundred dollars' valuation of taxable property in said City, adequate
to pay such Debt Service Requirements while the Certificates remain Outstanding, full
allowance being made for delinquencies and costs of collection; 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 City Council shall determine:
(1) The amount on deposit in the Certificate Fund after (a) deducting
therefrom the total amount of Debt Service Requirements to become due on
Certificates prior to the Collection Date for the ad valorem taxes to be levied and
(b) adding thereto the amount of the Net Revenues of the System appropriated
and allocated to pay such Debt Service Requirements prior to the Collection Date
for the ad valorem taxes to be levied.
(2) The amount of Net Revenues of the System, and any other
lawfully available revenues which are appropriated and to be set aside for the
27005804.3/11600460 16
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.
The City has sufficient current funds available to pay the amounts to become due on the
Certificates on August 15, 2016, and there will be deposited in the Certificate Fund such amount
of current funds which will be sufficient to pay the amounts to become due on the Certificates on
August 15, 2016.
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 the amount of $1,000
are hereby irrevocably pledged, equally and ratably, 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 until such time as the City shall pay all of such $1,000, after which time the pledge
shall cease. Furthermore, such lien on and pledge of the Net Revenues securing the payment
of the Certificates shall be valid and binding and fully perfected from and after the date of
adoption of this Ordinance without physical delivery or transfer or transfer of control of the Net
Revenues, the filing of this Ordinance or any other act; all as provided in Texas Government
Code, Chapter 1208, as amended.
Texas Government Code, Section 1208, as amended, applies to the issuance of the
Certificates and the pledge of the Net Revenues of the System granted by the City under this
Section 13, and such pledge is therefore valid, effective and perfected. If Texas law is amended
at any time while the Certificates are Outstanding such that the pledge of the Net Revenues of
the System granted by the City under this Section 13 is to be subject to the filing requirements
of Texas Business and Commerce Code, Chapter 9, as amended, then in order to preserve to
the registered owners of the Certificates the perfection of the security interest in said pledge, the
City agrees to take such measures as it determines are reasonable and necessary under Texas
law to comply with the applicable provisions of Texas Business and Commerce Code, Chapter
9, as amended, and enable a filing to perfect the security interest in said pledge to occur.
SECTION 14: System Fund. The City covenants and agrees that all Gross Revenues
(excluding earnings from the investment of money held in any special funds or accounts created
for the payment and security of the Prior Lien Obligations) shall be deposited as collected into a
fund maintained at an official depository of the City and known on the books of the City as the
"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:
27005804.3/11600460 17
First: To the payment of all necessary and reasonable Operating and
Maintenance Expenses of the System as defined herein or required by
statute to be a first charge on and claim against the Gross Revenues of
the System.
Second: To the payment of all amounts required to be deposited in the special
Funds created and established for the payment, security and benefit of
Prior Lien Obligations in accordance with the terms and provisions of the
ordinances authorizing the issuance of Prior Lien Obligations.
Third: To the payment, equally and ratably, of the limited amounts pledged to
the payment of the Certificates.
Any Net Revenues remaining in the System Fund after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment thereof, may be
appropriated and used for payment of the Subordinate Lien Obligations and then for any other
City purpose now or hereafter permitted by law.
SECTION 15: : Deposits to Certificate Fund. Subject to the provisions of Section 13
hereof, the City hereby covenants and agrees to cause to be deposited in the Certificate Fund
from the pledged Net Revenues of the System in the Revenue Fund, the amount of Net
Revenues of the System pledged to the payment of the Certificates.
The City covenants and agrees that the amount of pledged Net Revenues of the System
($1,000), together with other lawfully available revenues appropriated by the City for payment of
the debt service requirements on the Certificates and ad valorem taxes levied, collected, and
deposited in the Certificate Fund for and on behalf of the Certificates, will be an amount equal to
one hundred percent (100%) of the amount required to fully pay the interest and principal due
and payable on the Certificates. In addition, any surplus proceeds from the sale of the
Certificates not expended for authorized purposes shall be deposited in the Certificate Fund,
and such amounts so deposited shall reduce the sums otherwise required to be deposited in
said Fund from ad valorem taxes and the Net Revenues of the System.
SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly
invested) shall be secured in the manner and to the fullest extent required by the laws of Texas
for the security of public funds, and moneys on deposit in such Funds shall be used only for the
purposes permitted by this Ordinance.
SECTION 17: Special Covenants. The City hereby further covenants as follows:
(1) It has the lawful power to pledge the Net Revenues of the System
supporting this issue of Certificates and has lawfully exercised said powers under
the Constitution and laws of the State of Texas, including said power existing
under Texas Government Code, Chapter 1502, as amended, and Texas Local
Government Code, Sections 271.041, et seq., as amended.
(2) Other than for the payment of the Prior Lien Obligations and the
Certificates and the Subordinate Lien Obligations, the Net Revenues of the
System are not pledged to the payment of any debt or obligation of the City or of
the System.
27005804.3/11600460 18
SECTION 18: Issuance of Prior Lien Obligations, Additional Obligations and
Subordinate 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
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 (b) Subordinate Lien Obligations.
SECTION 19: Application of Prior Lien Obligations Covenants and Agreements. It is the
intention of this governing body and accordingly hereby recognized and stipulated that the
provisions, agreements and covenants contained herein bearing upon the management and
operations of the System, and the administering and application of revenues derived from the
operation thereof, shall to the extent possible be harmonized with like provisions, agreements
and covenants contained in the ordinances authorizing the issuance of the Prior Lien
Obligations, and to the extent of any irreconcilable conflict between the provisions contained
herein and in the ordinances authorizing the issuance of the Prior Lien Obligations, the
provisions, agreements and covenants contained therein shall prevail to the extent of such
conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and
benefits, if any, conferred thereby to the holders of the Prior Lien Obligations.
SECTION 20: Further Procedures. Any one or more of the Mayor, Mayor Pro Tern, City
Manager, Assistant City Manager, Director of Finance and City Secretary are hereby expressly
authorized, empowered and directed from time to time 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 or desirable in order to carry out the terms and provisions of this
Ordinance and the issuance of the Certificates. In addition, prior to the initial delivery of the
Certificates, the Mayor, Mayor Pro Tem, City Manager, Assistant City Manager, Director of
Finance, 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 and if such
officer or counsel determines that such changes are consistent with the intent and purpose of
the Ordinance, which determination shall be final. 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 21: 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 on the Security Register at the close of business on the
business day next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides
27005804.3/11600460 19
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 22: Cancellation. All Certificates surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be
promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying
Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying
Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation
any Certificates previously certified or registered and delivered which the City may have
acquired in any manner whatsoever, and all Certificates so delivered shall be promptly canceled
by the Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar
shall be returned to the City.
SECTION 23: Covenants to Maintain Tax-Exempt Status.
(a) Definitions. When used in this Section, the following terms have the
following meanings:
"Closing Date" means the date on which the Certificates are first
authenticated and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date"has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b)
of the Regulations, and any replacement proceeds as defined in Section
1.148-1(c) of the Regulations, of the Certificates.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
Section 148(b) of the Code, in which Gross Proceeds of the Certificates are
invested and which is not acquired to carry out the governmental purposes of the
Certificates.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code,
and 103 of the Internal Revenue Code of 1954, which are applicable to the
Certificates. Any reference to any specific Regulation shall also mean, as
appropriate, any proposed, temporary or final Income Tax Regulation designed
to supplement, amend or replace the specific Regulation referenced.
27005804.3/11600460 20
"Yield"of (1) any Investment has the meaning set forth in Section 1.148-5
of the Regulations and (2) the Certificates has the meaning set forth in Section
1.148-4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit
the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Certificate to become includable in the gross income, as defined in Section 61 of the Code, of
the owner thereof for federal income tax purposes. Without limiting the generality of the
foregoing, unless and until the City receives a written opinion of counsel nationally recognized in
the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Certificate, the
City shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141
of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the
last Stated Maturity of Certificates:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates, and not use or permit the use
of such Gross Proceeds (including all contractual arrangements with terms
different than those applicable to the general public) or any property acquired,
constructed or improved with such Gross Proceeds in any activity carried on by
any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use
is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds,
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the
Certificates to make or finance loans to any person or entity other than a state or local
government. For purposes of the foregoing covenant, such Gross Proceeds are considered to
be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such
Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt
for federal income tax purposes; (2) capacity in or service from such property is committed to
such person or entity under a take-or-pay, output or similar contract or arrangement; or (3)
indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property
acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a
transaction which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by Section
148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior
27005804.3/11600460 21
to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
(f) Not Federally Guaranteed. Except to the extent permitted by Section
149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to
take any action which would cause the Certificates to be federally guaranteed within the
meaning of Section 149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by
Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in
Section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account
separately and apart from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of accounting for at least six
years after the day on which the last outstanding Certificate is discharged.
However, to the extent permitted by law, the City may commingle Gross
Proceeds of the Certificates with other money of the City, provided that the City
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in Section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Certificates until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Certificates by
the Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States from the general 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(f) of
the Code and the Regulations and rulings thereunder.
27005804.3/11600460 22
(4) The City shall exercise reasonable diligence to assure that no
errors are made in the calculations and payments required by paragraphs (2) and
(3), and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by Section
148 of the Code and the Regulations and rulings thereunder, the Issuer shall not, at any time
prior to the earlier of the Stated Maturity or final payment of the Certificates, enter into any
transaction that reduces the amount required to be paid to the United States pursuant to
Subsection (h) of this Section because such transaction results in a smaller profit or a larger
loss than would have resulted if the transaction had been at arm's length and had the Yield of
the Certificates not been relevant to either party.
0) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro
Tern, 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.
SECTION 24: Satisfaction of Obligations of City. 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 (to the extent
such limited pledge of Net Revenues shall not have been discharged or terminated by prior
payment of principal of or interest on the Certificates) and all covenants, agreements, and other
obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and
satisfied.
Certificates or any principal amount(s) thereof shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section ("Defeased Certificates") when
(i) money sufficient to pay in full such Certificates or the principal amount(s) thereof at maturity
or the redemption date therefor, together with all interest due thereon, shall have been
irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized
escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with
the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have
been certified by an independent accounting firm to mature as to principal and interest in such
amounts and at such times as will insure the availability, without reinvestment, of sufficient
money, together with any moneys deposited therewith, if any, to pay when due the principal of
and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated
Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable
arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the
redemption date thereof. At such time as Certificates shall be deemed to be Defeased
Certificates hereunder, as aforesaid, such Certificates and the interest thereon shall no longer
be secured by, payable from, or entitled to the benefits of, the taxes or revenues levied and
pledged as provided in this Ordinance, and such principal and interest shall be payable solely
from such money or Government Securities. Notwithstanding any other provision of this
Ordinance to the contrary, it is hereby provided that any determination not to redeem the
Defeased Certificates that is made in conjunction with the payment arrangements specified in (i)
27005804.3/11600460 23
or (ii) above in this paragraph shall not be irrevocable, provided that in the proceedings
providing for such payment arrangements, the City: (1) expressly reserves the right to call the
Defeased Certificates for redemption; (2) gives notice of the reservation of that right to the
registered owners of the Defeased Certificates immediately following the making of the payment
arrangements; and (3) directs that notice of the reservation be included in any redemption
notices that it authorizes. The City covenants that no deposit of moneys or Government
Securities will be made under this Section and no use made of any such deposit which would
cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of
the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying 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 City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 25: Mutilated, Destroyed, Lost, and Stolen Certificates. In case any
Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may
execute and deliver a replacement Certificate of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost
or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder
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 all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone
of the destroyed, lost, or stolen Certificates.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost or stolen Certificates.
SECTION 26: 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 Section 32 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
27005804.3/11600460 24
interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the written consent of Holders holding a majority
in aggregate principal amount of the Certificates and Additional 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 (1) extend the time or times of payment of the principal of, premium, if any, and interest on
the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest
thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or
interest on the Certificates, (2) give any preference to any Certificate over any other Certificate,
or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for
consent to any such amendment, addition, or rescission.
SECTION 27: Sale of the Certificates — Official Statement. The Certificates authorized
by this Ordinance are to be sold by the City to the Purchasers in accordance with a bond
purchase agreement in the event of a negotiated sale, letter agreement to purchase in the event
of a private placement, or the successful bid form in the event of a competitive sale, as
applicable (the "Purchase Contract"), the terms and provisions of which Purchase Contract are
to be determined by the Pricing Officer in accordance with Section 3 hereof. The Pricing Officer
is hereby authorized and directed to execute the Purchase Contract for and on behalf of the
City, as the act and deed of this Council, and to make a determination as to whether the terms
are in the City's best interests, which determination shall be final.
With regard to such terms and provisions of the Purchase Contract, the Pricing Officer is
hereby authorized to come to an agreement with the Purchasers on the following, among other
matters:
1. The details of the purchase and sale of the Certificates;
2. The details of any public offering of the Certificates by the Purchasers, if
any;
3. The details of any Official Statement or similar disclosure document (and,
if appropriate, any Preliminary Official Statement) relating to the
Certificates and the City's Rule 15c2-12 compliance, if applicable;
4. A security deposit for the Certificates, if any;
5. The representations and warranties of the City to the Purchasers;
6. The details of the delivery of, and payment for, the Certificates;
7. The Purchasers' obligations under the Purchase Contract;
8. The certain conditions to the obligations of the City under the Purchase
Contract;
9. Termination of the Purchase Contract;
10. Particular covenants of the City;
11. The survival of representations made in the Purchase Contract;
12. The payment of any expenses relating to the Purchase Contract;
13. Notices; and
14. Any and all such other details that are found by the Pricing Officer to be
necessary and advisable for the purchase and sale of the Certificates.
27005804.3/11600460 25
The Mayor or Mayor Pro Tem and City Secretary of the City are further authorized and
directed to deliver for and on behalf of the City copies of a Preliminary Official Statement and
Official Statement prepared in connection with the offering of the Certificates by the Purchasers,
in final form as may be required by the Purchasers, and such final Official Statement as
delivered by said officials shall constitute the Official Statement authorized for distribution and
use by the Purchasers.
SECTION 28: Proceeds of Sale. The proceeds of sale of the Certificates excluding
accrued interest, if any, received from the Purchasers, and amounts to pay costs of issuance
and any additional proceeds to be deposited to the Certificate Fund as specified in the Pricing
Certificate, shall be deposited in a fund maintained at a City depository bank (the "Construction
Fund"). Pending expenditure for authorized projects and purposes, such proceeds of sale may
be invested in authorized investments in accordance with the provisions of Texas Government
Code, Chapter 2256, as amended, including specifically guaranteed investment contracts
permitted by Texas Government Code, Section 2256.015, et seq., and the City's investment
policies and guidelines, and any investment earnings realized may be expended for such
authorized projects and purposes or deposited in the Certificate Fund as shall be determined by
the City Council. Accrued interest, if any, received from the Purchasers as well as proceeds of
sale, including investment earnings thereon, remaining after completion of all authorized
projects or purposes shall be deposited to the credit of the Certificate Fund.
SECTION 29: 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 pending the approval thereof by the Attorney General and its registration
thereof by the Comptroller of Public Accounts.
Furthermore, the Mayor, Mayor Pro Tern, City Manager, Assistant City Manager,
Director of Finance, City Secretary and Assistant City Secretary, individually or collectively, are
hereby authorized and directed to furnish and execute such documents and certifications
relating to the City and the issuance of the Certificates, including a certification as to facts,
estimates, circumstances and reasonable expectations pertaining to the use and expenditure
and investment of the proceeds of the Certificates as may be necessary for the approval of the
Attorney General and their registration by the Comptroller of Public Accounts. In addition, such
officials, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar,
are authorized and directed to make the necessary arrangements for the delivery of the Initial
Certificate to the initial purchasers.
SECTION 30: Bond Counsel's Opinion. The Purchasers' obligation to accept delivery of
the Certificates is subject to being furnished a final opinion of Norton Rose Fulbright US LLP,
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 31: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Certificates shall be of no significance or effect as regards the legality
27005804.3/11600460 26
thereof and neither the City nor attorneys approving said Certificates as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates.
SECTION 32: Continuing Disclosure Undertaking. This Section shall apply unless the
Pricing Officer determines in the Pricing Certificate that an undertaking is not required pursuant
to the Rule (defined below).
(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.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports.
The City will provide certain updated financial information and operating data to the
MSRB on an annual basis in an electronic format that is prescribed by the MSRB and available
via EMMA. The information to be updated includes all quantitative financial information and
operating data with respect to the City of the general type included in Tables numbered 1
through 5 and 7 through 14 and in APPENDIX B of the Official Statement approved by the
Pricing Officer. The City will update and provide the information in Tables 1 through 5 and 7
through 14 within six months after the end of each fiscal year ending in and after 2016. The City
will additionally provide audited financial statements when and if available, and in any event,
within 12 months after the end of each fiscal year ending in or after 2016. If the audit of such
financial statements is not complete within 12 months after any such fiscal year end, then the
City will file unaudited financial statements within such 12 month period and audited financial
statements for the applicable fiscal year, when and if the audit report on such statements
become available.
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
documents available to the public on the MSRB's internet web site or filed with the SEC.
(c) Notice of Certain Events.
The City shall provide notice of any of the following events with respect to the
Certificates to the MSRB in a timely manner and not more than ten (10) business days after
occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
27005804.3111600460 27
(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, the issuance by the Internal Revenue
Service of proposed or final determinations of taxability, Notices of Proposed
Issue (IRS Form 5701-TEB), or other material notices or determinations with
respect to the tax status of the Certificates, or other material events affecting the
tax status of the Certificates;
(7) Modifications to rights of holders of the Certificates, if material;
(8) Certificate calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of
the Certificates, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City,
which shall occur as described below;
(13) The consummation of a merger, consolidation, or acquisition
involving the City or the sale of all or substantially all of its assets, other than in
the ordinary course of business, the entry into of a definitive agreement to
undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms, if material; and
(14) Appointment of a successor or additional trustee or the change of
name of a trustee, if material.
For these purposes, any event described in the immediately preceding subsection
(c)(12) is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy
Code or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the City, or
if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the City.
The City shall notify 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 of this
Ordinance by the time required by such Section.
(d) Filings with the MSRB.
All financial information, operating data, financial statements, notices and other
documents provided to the MSRB in accordance with this Section shall be provided in an
electronic format prescribed by the MSRB and shall be accompanied by identifying information
as prescribed by the MSRB.
27005804.3/11600460 28
(e) Limitations, Disclaimers, and Amendments.
The City shall be obligated to observe and perform the covenants specified in this
Section for so long as, but only for so long as, 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) of this Section of any Certificate calls and defeasance
that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Certificates; and, nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section. Except as expressly
provided within this Section, the City does not undertake to provide any other information,
whether or not it may be relevant or material to a complete presentation of the City's financial
results, condition, or prospects; nor does the City undertake to update any information provided
in accordance with this Section or otherwise. Furthermore, the City does not make any
representation or warranty concerning such information or its usefulness to a decision to invest
in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
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 an underwriter 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 SEC amends or repeals the applicable provisions of the Rule or a court of final
jurisdiction determines that such provisions are invalid, but only if and to the extent that
reservation of the City's right to do so would not prevent underwriters of the initial public offering
27005804.3/11600460 29
of the Certificates from lawfully purchasing or selling Certificates in such offering. If the City so
amends the provisions of this Section, it shall include with any amended financial information or
operating data next provided pursuant to subsection (b) of this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
SECTION 33: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar, and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 34: Inconsistent Provisions. All ordinances, orders, or resolutions,-or parts
thereof which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 35: 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 36: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 37: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance or the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 38: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 39: Incorporation of Findings and Determinations. The findings and
determinations of the City Council contained in the preamble hereof are hereby incorporated by
reference and made a part of this Ordinance for all purposes as if the same were restated in full
in this Section.
SECTION 40: 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 Texas Government Code, Chapter 551, as amended.
SECTION 41: Effective Date. In accordance with the provisions of Texas Government
Code, Section 1201.028, as amended, this Ordinance shall be in force and effect from and after
its passage on the date shown below and it is so ordained.
27005804.3/11600460 30
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27005804.3/11600460 31
PASSED AND ADOPTED, this February 22, 2016.
CITY OF NORTH RICHLAND HILLS, TEXAS
Al>
Mayor
ATTEST:
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City Secretary
(City Seal) -6•. h 'e
nanm10
APPROVED AS TO LEGALITY:
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Rssk City Attorney j
APPROVED AS TO CONTENT:
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rector of Financ
27005804.3/11600460 5-1
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
27005804.3/11600460 A-1
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of February 23, 2016 (this "Agreement"), by and
between The Bank of New York Mellon Trust Company, N.A., 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 2016" (the "Securities"), dated February 15, 2016, such
Securities scheduled to be delivered to the initial purchasers thereof on or about
, 2016; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section 1.01 Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "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 for the Securities.
Section 1.02 Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
27022372.1/11600460
ARTICLE TWO
DEFINITIONS
Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date, if any, 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, or 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.
"Financial Advisor" means First Southwest a Division of Hilltop Securities
Inc. Fort Worth, Texas.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"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).
"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
27022372.1/11600460 2
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 3.01 Duties of Paying Agent. As Paying Agent, the Bank shall pay, provided
adequate collected funds have been provided to it for such purpose 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/Courier By Hand Only
The Bank of New York The Bank of New York The Bank of New York Mellon
Mellon Trust Company, N.A. Mellon Trust Company, N.A. Trust Company, N.A.
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P.O. Box 396 111 Sanders Creek Pkwy. Corporate Trust Window
East Syracuse, NY 13057 East Syracuse, NY 13057 101 Barclay Street, 1st Floor East
New York, NY 10286
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date (as defined in the 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 or (2) by such other method, acceptable to the Bank, requested in writing by
the Holder at the Holder's risk and expense.
Section 3.02 Payment Dates. The Issuer hereby instructs the Bank to pay the
principal of and interest on the Securities on the dates specified in the Authorizing Document.
ARTICLE FOUR
REGISTRAR
Section 4.01 Security Register-Transfers and Exchanges. The Bank agrees to
keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
27022372.1/11600460 3
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and 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 or a member of the National Association of Securities
Dealers, such written instrument to be in a form 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 or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02 Securities. The Issuer shall provide additional Securities when needed
to facilitate transfers or exchanges thereof. The Bank covenants that such additional Securities,
if and when provided, will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03 Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04 List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon 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
27022372.1/11600460 4
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
Section 4.05 Return of Cancelled 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, loss or theft of such Security,
and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated,
destroyed, lost or stolen.
Section 4.07 Transaction Information to Issuer. The Bank will, within a reasonable
time after receipt of written request from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to
Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01 Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02 Reliance on Documents, Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and
correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
27022372.1/11600460 5
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties. Without limiting the generality
of the foregoing statement, the Bank need not examine the ownership of any Securities, but is
protected in acting upon receipt of Securities containing an endorsement or instruction of
transfer or power of transfer which appears on its face to be signed by the Holder or an agent
of the Holder. The Bank shall not be bound to make any investigation into the facts or matters
stated in a resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, security or other paper or document supplied by 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 or through agents or attorneys of the Bank.
(g) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the Securities in the manner disclosed in the closing memorandum or letter as
prepared by the Issuer, the 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 Issuer, the
Issuer's financial advisor or other agent as the final closing memorandum or letter. The Bank
shall not be liable for any losses, costs or expenses arising directly or indirectly from the Bank's
reliance upon and compliance with such instructions.
Section 5.03 Recitals of Issuer. The recitals contained herein with respect to the
Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank
assumes no responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04 May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05 Moneys Held by Bank - Paying Agent AccountlCollateralization. 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.
27022372.1/11600460 6
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 with 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 interest 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 bond transactions of the Issuer, or act in any other
capacity not in conflict with its duties hereunder.
Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the state and county where the
administrative office of the Issuer is located, and agree that service of process by certified or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction 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 for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
27022372.1/11600460 7
Section 6.02 Assignment. 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(s) hereof.
Section 6.04 Effect of Headings. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 6.05 Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06 Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07 Merger, Conversion, Consolidation, or Succession. Any corporation
or association into which the Bank may be merged or converted or 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 or substantially all 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 on the part of either parties hereto.
Section 6.08 Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.09 Entire Agreement. This Agreement and the Authorizing Document
constitute the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar 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 6.11 Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying 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.
27022372.1/11600460 8
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 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
[Remainder of page left blank intentionally.]
27022372.1/11600460 9
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.
By:
Title:
Attest: Address: 2001 Bryan Street, 11th Floor
Dallas, Texas 75201
Title:
CITY OF NORTH RICHLAND HILLS, TEXAS
By:
Pricing Officer
Address: 7301 NE Loop 820
North Richland Hills, Texas, 76180
27022372.1/11600460 Signature Page to Paying Agent/Registrar Agreement
ANNEX A
27022372.1/11600460 A-1