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HomeMy WebLinkAboutResolution 2022-012RESOLUTION NO. 2022-012 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AUTHORIZING THE DEFEASANCE AND CALLING FOR REDEMPTION OF CERTAIN CURRENTLY OUTSTANDING DEBT OBLIGATIONS OF THE CITY; DIRECTING THAT AUTHORIZED CITY OFFICIALS EFFECTUATE THE DEFEASANCE AND REDEMPTION OF SUCH OBLIGATIONS; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE REDEMPTION AND DEFEASANCE OF SUCH OBLIGATIONS. WHEREAS, pursuant to ordinances passed and adopted by the City Council of the City of North Richland Hills, Texas (the "City"), the following described obligations were duly authorized to be issued and are currently outstanding, to wit: (1) "City of North Richland Hills, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligations, Series 2010," dated May 15, 2010 (the "Series 2010 Obligations); (2) "City of North Richland Hills, Texas, General Obligation Refunding Bonds, Series 2012," dated December 1, 2011 (the "Series 2012 Bonds"); (3) "City of North Richland Hills, Texas, General Obligation Refunding and Improvement Bonds, Series 2014," dated October 15, 2014 (the "Series 2014 Bonds"); and (4) "City of North Richland Hills, Texas, General Obligation Refunding Bonds, Series 2016," dated February 15, 2016 (the "Series 2016 Bonds"); and WHEREAS, the City Council hereby finds and determines that it is in the best interest of the City and the citizens of the City to defease the (1) Series 2010 Obligations maturing on February 15 in each of the years 2023 through 2027, inclusive, in the aggregate principal amount of $5,525,000, (2) Series 2012 Bonds maturing on February 15, 2023, in the aggregate principal amount of $105,000, (1) the Series 2014 Bonds maturing on February 15 in each of the years 2023 through 2026, inclusive, in the aggregate principal amount of $1,610,000, and (4) the Series 2016 Bonds maturing on February 15 in each of the years 2023 through 2027, inclusive, in the aggregate principal amount of $490,000 (such obligations are collectively hereinafter referred to as the "Defeased Obligations"); and Resolution No. 2022-012 Page 1 of 5 WHEREAS, each of the Defeased Obligations are subject to redemption prior to their maturity, at the option of the City; and WHEREAS, in accordance with the provisions of Texas Government Code, Sections 1207.061 and 1207.062, as amended (the "Act"), the City is authorized and empowered to deposit funds and/or securities directly with the place of payment for the Defeased Obligations, or other authorized depository, and enter into an escrow or similar agreement with such place of payment for the safekeeping, investment, reinvestment, administration and disbursement of such deposit; and such deposit, when made in accordance with the Act, shall constitute the making of firm banking and financial arrangements for the discharge and full payment of the Defeased Obligations; and WHEREAS, in accordance with the provisions of Texas Government Code, Sections 1207.061 and 1207.062, as amended (the "Act"), the City is authorized and empowered to deposit funds and/or securities directly with the place of payment for the Defeased Obligations, or other authorized depository, and enter into an escrow or similar agreement with such place of payment for the safekeeping, investment, reinvestment, administration and disbursement ,of such deposit; and such deposit, when made in accordance with the Act, shall constitute the making of firm banking and financial arrangements for the discharge and full payment of the Defeased Obligations; and WHEREAS, the City Council hereby finds and determines that such Escrow Agreement for the payment and defeasance of the Defeased Obligations should be approved and authorization for its execution provided; and WHEREAS, the City Council further finds and determines that certain Defeased Obligations should be redeemed prior to maturity on the dates and in the manner hereinafter provided and in accordance with the requirements prescribed therefor and notices of redemption of such obligations should be approved and authorized by the City Council to be given at this time. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, THAT: SECTION 1. The Mayor, Mayor Pro Tem, City Manager, Deputy City Manager, Assistant City Manager, Director of Finance or City Secretary (each of the foregoing, an "Authorized Official') is hereby authorized and directed, from lawfully available and otherwise unencumbered funds of the City, to cause the sum needed to pay the principal of, premium, if any, and interest on the Defeased Obligations to their maturity and/or redemption dates, as applicable, to be deposited with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, as paying agent/registrar for the Defeased Obligations (in such capacity, the "Paying Agent/Registrar"), or as Escrow Agent pursuant to the Escrow Agreement (defined below). SECTION 2. The Escrow Agreement, dated as of March 15, 2022 (the "Escrow Agreement"), by and between the City and the Escrow Agent and relating Resolution No. 2022-012 Page 2 of 5 to the Defeased Obligations, attached hereto as Exhibit E and incorporated herein by reference as a part of this Resolution for all purposes, is hereby approved as to form and content. The Escrow Agreement, together with such changes or revisions as may be necessary to accomplish the defeasance of the Defeased Obligations or benefit the City, is hereby authorized to be executed by the Mayor or Mayor Pro Tern for and on behalf of the City and as the act and deed of this City Council; and such Escrow Agreement as executed by such officials shall be deemed approved by the City Council and constitute the Escrow Agreement herein approved. Furthermore, each Authorized Official, the City's Financial Advisor, and Bond Counsel, in cooperation with the Escrow Agent, are hereby authorized and directed to make the necessary arrangements for the deposit of cash and/or the purchase of any securities referenced in the Escrow Agreement and the delivery thereof to the Escrow Agent for deposit to the credit of the escrow fund established pursuant to the Escrow Agreement (the "Escrow Fund"), including the execution of the subscription forms, if any, for the purchase and issuance of the "United States Treasury Securities State and Local Government Series" for deposit to the Escrow Fund; all as contemplated and provided by the provisions of the Act, the ordinances authorizing the issuance of the Defeased Obligations, this Resolution, and the Escrow Agreement. SECTION 3. The Series 2010 Obligations, the Series 2012 Bonds, the Series 2014 Bonds and the Series 2016 Bonds are hereby called for redemption and shall be redeemed as set forth in the forms of notice of redemption that are attached hereto as Exhibit A through Exhibit D, respectively, and incorporated herein by reference as a part of this Resolution for all purposes. Each Authorized Official is hereby authorized and directed to file a copy of this 69747654.3 - 3 - Resolution, together with such forms of notice of redemption to be sent to holders, with the Paying Agent/Registrar, in accordance with the redemption provisions applicable to such obligations. Additionally, the Paying Agent/Registrar is hereby authorized and directed to make a lot selection of the obligations to be redeemed and make arrangements to notify obligation holders of such lot selection as soon as possible. Each Authorized Official or other appropriate City official is hereby authorized and directed to transfer lawfully available funds to the Escrow Agent to accomplish the defeasance and redemption of the Defeased Obligations in accordance with the terms of the Escrow Agreement. SECTION 4. The City Council hereby delegates to each Authorized Official the authority to select a verification agent (the "Verification Agent") to verify the sufficiency of the deposit to the Escrow Fund, and/or with the Paying Agent/Registrar, to accomplish the defeasance of the Defeased Obligations, to the extent such appointment is necessary or desired. SECTION 5. Each Authorized Official is hereby authorized and directed to make all Resolution No. 2022-012 Page 3 of 5 arrangements necessary to notify the holders of the obligations of the City's decision to redeem such obligations on the dates and in the manner herein provided and in accordance with the ordinances authorizing the issuance of the Defeased Obligations. Each Authorized Official is authorized to provide evidence of adoption of this Resolution and to do any and all things necessary or convenient to effect the defeasance and redemption described herein and otherwise give effect to the intent and purpose hereof, including the selection of a verification agent and execution of the Escrow Agreement. SECTION 6. The City Council hereby approves payment from lawfully available City funds of professional fees and expenses of the City's Bond Counsel, the City's Financial Advisor, the Escrow Agent, the Verification Agent, the Paying Agent/Registrar, and any other party whose services have been determined by the City to be necessary to accomplish the purpose and intent of this Resolution. SECTION 7. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgement and findings of the City Council. SECTION 8. It is officially found, determined, and declared that the meeting at which this Resolution 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 Resolution, was given, all as required by Texas Government Code, Chapter 551, as amended. SECTION 9. This Resolution shall be in force and effect from and after its passage on the date shown below. PASSED AND APPROVED on this 14th day of February, 2022. CITY OF RT H AND HILLS 1Wuuintn /0##, By: ,����.�`�•� �L. 4" Oscar Trevino ayor ATTEST: Et% Alicia Richardson , '••..,,,., .•�' �\������ City Secretary/Chief Gov'� 1 „ i1)cer Resolution No. 2022-012 Page 4 of 5 APPROVED AS TO FORM AND LEGALITY: Maleshia B. McGinnis, City Attorney APPROVED AS TO CONTENT: Mark C. Mills, Director of Finance Resolution No. 2022-012 Page 5 of 5 � "s City Secretary Office ; .E� Official Record Cop, v ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Agreement"), made and entered into as of March 15, 2022, by and between the City of North Richland Hills, Texas, a governmental agency, body politic and corporate and political subdivision of the State of Texas in Tarrant County (the "City"), and The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the "Escrow Agent"), a national banking association organized and existing under the laws of the United States of America, WITNESSETH: WHEREAS, the City Council of the City has heretofore issued, sold, and delivered and there is currently outstanding obligations in the aggregate principal amount of $2,100,000 of the following issues or series (hereinafter collectively referred to as the "Defeased Bonds"), to wit: (1) "City of North Richland Hills, Texas, General Obligation Refunding and Improvement Bonds, Series 2014," dated October 15, 2014, scheduled to mature on February 15 in each of the years 2023 through 2026, inclusive, and aggregating in the principal amount of $1,610,000 (the "Series 2014 Defeased Bonds"); (2) "City of North Richland Hills, Texas, General Obligation Refunding Bonds, Series 2016," dated February 15, 2016 scheduled to mature on February 15 in each of the years 2023 through 2027, inclusive, and aggregating in the principal amount of $490,000 (the "Series 2016 Defeased Bonds"); and WHEREAS, in accordance with the provisions of Texas Government Code, Chapter 1207, as amended (the "Act"), the City is authorized to deposit funds with the place of payment for the Defeased Bonds, or other authorized depository, and enter into an escrow or similar agreement with such place of payment for the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon such terms and conditions as the parties may agree, provided such deposits may be invested only (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent (hereinafter called "Governmental Securities") that mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of the Defeased Bonds; and WHEREAS, the Defeased Bonds are scheduled to mature, or be redeemed, and interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and incorporated herein by reference as a part of this Agreement for all purposes; and WHEREAS, the City on the 14th day of February, 2022, pursuant to a Resolution (the "Resolution") finally passed and adopted by the City Council, authorized an Authorized Official 69752365.3/1000336996 Cozy Secretary Office. Official Record Copy (as defined in the Resolution) to transfer and deposit at the time specified therein certain lawfully available funds of the City in an amount sufficient to pay, redeem, discharge, and make final payment of the principal of and premium, if any, on the Defeased Bonds at their respective stated maturity or redemption dates and interest thereon to such dates; and WHEREAS, the City will cause funds to be deposited to the credit of the Escrow Fund (as defined below) in an amount sufficient to purchase the Governmental Securities listed and identified in the verification report prepared by Samuel Klein and Company, Certified Public Accountants, in conjunction with Public Finance Partners LLC, attached hereto as Exhibit B (the "Verification Report") (together with substituted securities therefor in accordance with the provisions of Section 11 hereof hereinafter referred to as the "Escrowed Securities"); and WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the "Escrow Fund" to be established and maintained by the Escrow Agent in accordance with this Agreement; and WHEREAS, the Escrowed Securities, together with the beginning cash balance in the Escrow Fund, shall mature and the interestthereon shall be payable at such times to insure the existence of monies sufficient to pay the principal amount of the Defeased Bonds and the accrued interest thereon, as the same shall become due in accordance with the terms of the ordinances authorizing the issuance of the Defeased Bonds and as set forth in Exhibit A attached hereto; and WHEREAS, the City has completed all arrangements for the purchase of the Escrowed Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as provided herein; and WHEREAS, the Escrow Agent is a banking association organized and existing underthe laws of the United States of America, possessing trust powers and is fully qualified and empowered to enter into this Agreement; and WHEREAS, in Section 2 of the Resolution, the City Council duly approved and authorized the execution of this Agreement; and WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action necessary to call, pay, redeem and retire such Defeased Bonds in accordance with the provisions thereof, including, without limitation, all actions required by the ordinances authorizing the Defeased Bonds, the Act, the Resolution and this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to secure the payment of the principal of and the interest on the Defeased Bonds as the same shall become due, the City and the Escrow Agent hereby mutually undertake, promise and agree as follows: SECTION 1: Receipt of Defeased Bonds Ordinances. Receipt of true and correct copies of the ordinances authorizing the issuance of the Defeased Bonds and the pricing certificates related thereto, if any, and the Resolution are hereby acknowledged by the Escrow Agent. Reference herein to or citation herein of any provision of such documents shall be deemed an incorporation of such provision as a part hereof in the same manner and with the same effect as if it were fully set forth herein. 69752365.3/1000336996 2 City Secretary Office Off 'idal Record Copy FURTHERMORE, the Escrow Agent acknowledges receipt of a copy of the Resolution which provides for the redemption of the (i) Series 2014 Defeased Bonds maturing on February 15, 2025, and February 15, 2026, on February 15, 2024, at the price of par plus accrued interest to the date of redemption, and (ii) the Series 2016 Defeased Bonds maturing on February 15, 2027, on February 15, 2026, at the price of par plus accrued interest to the date of redemption; all in accordance with the provisions of the notice requirements applicable to such Defeased Bonds and the notice requirements contained in the ordinances authorizing the issuance of the Defeased Bonds. The EscrowAgent, as paying agent/registrarfor the Defeased Bonds, agrees to cause a notice of redemption pertaining thereto to be sent to the registered owners thereof appearing on the registration books at least thirty (30) days prior to the respective redemption dates therefor. SECTION 2: Escrow Fund Creation/Funding. There is hereby created by the City with the Escrow Agent special segregated and irrevocable. trust funds designated "SPECIAL 2022 CITY OF NORTH RICHLAND HILLS, TEXAS, SERIES 2014 DEFEASED BONDS ESCROW FUND" (the "2014 Escrow Fund") and "SPECIAL 2022 CITY OF NORTH RICHLAND HILLS, TEXAS, SERIES 2016 DEFEASED BONDS ESCROW FUND" (the "2016 Escrow Fund" and, together with the 2014 Escrow Fund, the "Escrow Fund") for the benefit of the holders of the Defeased Bonds. The City agrees and covenants to cause to be deposited with the Escrow Agent to the credit of the 2014 Escrow Fund the following: $1,694,409.00 for the purchase of the Escrowed Securities listed in Exhibit B to be held for the account of the 2014 Escrow Fund; $0.48 for deposit in the 2014 Escrow Fund as a beginning cash balance. The City further agrees and covenants to cause to be deposited with the EscrowAgent to the credit of the 2016 Escrow Fund the following: $513,205.00 for the purchase of the Escrowed Securities listed in Exhibit B to be held for the account of the 2016 Escrow Fund; $0.51 for deposit in the 2016 Escrow Fund as a beginning cash balance. The EscrowAgent hereby accepts the Escrow Fund and further agrees to receive such moneys, apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and credited to each Escrow Fund for application and disbursement for the purposes and in the manner provided in this Agreement. SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the cash and Escrowed Securities, togetherwith the interest to be earned thereon, deposited to the credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on the Defeased Bonds as the same shall become due and payable, and such Defeased Bonds, 69752365.3/1000336996 3 h L4i�� City Secretary Office FN Official Record Copy and the interest thereon, are to mature or be redeemed and shall be paid at the times and in the amounts set forth and identified in Exhibit A attached hereto. SECTION 4: Pledge of Escrow. The Escrow Agent agrees that all cash and Escrowed Securities, togetherwith any income or interest earned thereon, held in the respective Escrow Fund shall be and is hereby irrevocably pledged to the payment of the principal of and interest on the respective series of Defeased Bonds which will mature and become due on and after the date of this Agreement, and such funds initially deposited and to be received from maturing principal and interest on the Escrowed Securities in the respective Escrow Fund shall be applied solely in accordance with the provisions of this Agreement. SECTION 5: Escrow Insufficiency. If, for any reason, at any time, the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A attached hereto, as the same becomes due and payable, notice of any such insufficiency shall be immediately given by the Escrow Agent.to the City by the fastest means possible, but neither the Escrow Agent nor the City shall in any manner be responsible for any insufficiency of funds in the Escrow Fund. SECTION 6: Escrow Fund Securities/Segregation. The EscrowAgent shall hold such Escrowed Securities and moneys in each Escrow Fund at all times as a special and separate trust fund for the benefit of the holders of the respective series of Defeased Bonds, wholly segregated from other moneys and securities on deposit with the Escrow Agent; shall never commingle such Escrowed Securities and moneys with other moneys or securities of the Escrow Agent; and shall hold and dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed as requiring the Escrow Agent to keep the identical moneys, or any part thereof, in such Escrow Fund, if it is impractical, but moneys of an equal amount, except to the extent such are represented by the Escrowed Securities, shall always be maintained on deposit in the respective Escrow Fund by the Escrow Agent and a special account evidencing such facts shall at all times be maintained on the books of the Escrow Agent. SECTION 7: Escrow Fund Collections/Payments. The Escrow Agent shall from time to time collect and receive the principal of and interest on the Escrowed Securities as they respectively mature and become due and credit the same to the respective Escrow Fund. On or before each principal and/or interest payment date or redemption date, as the case may be, for the Defeased Bonds shown in Exhibit A attached hereto, the Escrow Agent, without further direction from anyone, including the City,, shall cause to be withdrawn from the respective Escrow Fund the amount required to pay the accrued interest on the respective series of Defeased Bonds due and payable on such payment date and the principal of the respective series of Defeased Bonds due and payable on such payment date or redemption date, as the case may be, and the amount withdrawn from the respective Escrow Fund shall be immediately transmitted and deposited with the paying agent for the Defeased Bonds to be paid with such amount. The paying agent for the Defeased Bonds is the Escrow Agent. If any Defeased Bonds or interest coupon thereon shall not be presented for payment when the principal thereof or interestthereon shall have become due, and if cash shall at such times be held by the Escrow Agent in trust for that purpose sufficient and available to pay the principal of such Defeased Bonds and interest thereon it shall be the duty of the Escrow Agent to hold such cash without liability to the holder of such Defeased Bonds for interest thereon after such maturity or redemption date, in trust for the benefit of the holder of such Defeased Bonds, who shall thereafter be restricted exclusively to such cash for any claim of whatever nature on 69752365.3/1000336996 4 City Secretary Office Official Record Copy his part on or with respect to such Defeased Bonds, including for any claim for the payment thereof and interest thereon. All cash required by the provisions hereof to be set aside or held in trust for the payment of the Defeased Bonds, including interest thereon, shall be applied to and used solely for the payment of the Defeased Bonds and interest thereon with respect to which such cash has been so set aside in trust. Subject to the provisions of the last sentence of Section 25 hereof, cash held by the Escrow Agent in trust for the payment and discharge of any of the Defeased Bonds and interest thereon which remains unclaimed for a period of three (3) years after the stated maturity date or redemption date of such Defeased Bonds shall be returned to the City. Notwithstanding the above and foregoing, any remittance of funds from the EscrowAgent to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 8: Disposal of Defeased Bonds. All Defeased Bonds cancelled on account of payment by the Escrow Agent shall be cremated or otherwise destroyed by the Escrow Agent, and an appropriate certificate of destruction furnished the City. SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be irrevocable and the holders of the Defeased Bonds shall have an express lien on all moneys and respective Escrowed Securities in the respective Escrow Fund until paid out, used and applied in accordance with this Agreement. Unless disbursed in payment of the Defeased Bonds, all funds and the Escrowed Securities received by the Escrow Agent for the account of the City hereunder shall be and remain the property of the Escrow Fund and the City and the owners of the Defeased Bonds shall be entitled to a preferred claim and shall have a first Lien upon such respective funds and respective Escrowed Securities enjoyed by a trust beneficiary. The funds and Escrowed Securities received by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the City and the Escrow Agent and the City shall have no right or title with respect thereto, except as otherwise provided herein. Such funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City. SECTION 10: Absence of Claim/Lien on Escrow Fund. The EscrowAgent shall have no lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for payment of services rendered hereunder, services rendered as paying agent/registrar for the Defeased Bonds, or for any costs or expenses incurred hereunder and reimbursable from the City. SECTION 11: Substitution/Reinvestments. (a) The EscrowAgent shall be authorized to accept initially and temporarily cash and/or substituted Governmental Securities pending the delivery of the Escrowed Securities identified in Exhibit B attached hereto, or shall be authorimd to redeem the Escrowed Securities and reinvest the proceeds thereof, together with other moneys held in the respective Escrow Fund in Governmental Securities, provided such early redemption and reinvestment of proceeds does not change the repayment schedule of the Defeased Bonds appearing in Exhibit A and the Escrow Agent receives the following: (1) an opinion by an independent certified public accountant to the effect that (i) the initial and/or temporary substitution of cash and/or securities for one or more of the Escrowed Securities identified in Exhibit B pending the receipt and delivery thereof to the EscrowAgent or (ii) the redemption of one or more of the Escrowed Securities and the reinvestment of such funds in one or more 69752365.3/1000336996 5 c4 atia OfficeCity Secretary substituted Governmental Securities, together with the interest thereon and other available moneys then held in the respective Escrow Fund, will, in either case, be sufficient without reinvestment to pay, as the same become due in accordance with Exhibit A, the principal of, and interest on, the respective series of .Defeased Bonds which have not previously been paid, and (2) with respect to an early redemption of Escrowed Securities and the reinvestment of the proceeds thereof, an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause interest on the Defeased Bonds to be included in the gross income for federal income tax purposes, under the Code and related regulations as in effect on the date of such investment, or otherwise make the interest on the Defeased Bonds subject to Federal income taxation and (b) such reinvestment complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Defeased Bonds. (b) If on the date and in the amount shown in Exhibit C attached hereto there exists cash in the Escrow Fund, the EscrowAgent and the City agree at least fifteen (15) days prior to such date, to subscribe for the purchase of United States Treasury Securities - State and Local Government Series (SLGS) bearing zero interest (0%) and on such date, in the amount and scheduled to mature as provided in Exhibit C and subscription forms prepared therefor as may be then' required by the United States Department of the Treasury; provided that the then existing rules and regulations and policy of United States Department of the Treasury permit and authorize such investments. Should the policy, rules and regulations of the United States Department of Treasury not permit or authorize the purchase of such SLGS at such time or times, such cash balance or balances shall remain uninvested and held in trust for the benefit of the holders of the Defeased Bonds and used for the payment of the Defeased Bonds on the dates and in the amount such moneys would have been expended had such SLGS been acquired and matured. SECTION 12: Restriction Re: Escrow Fund Investments/ Re -investment, Except as provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed Securities listed in Exhibit B and neither the City nor the Escrow Agent shall reinvest any moneys deposited in the Escrow Fund except as specifically provided by this Agreement. SECTION 13: Excess Funds. If at any time through redemption or cancellation of the Defeased Bonds there exists or will exist excesses of interest on or maturing principal of the Escrowed Securities in excess of the amounts necessary hereunder for the Defeased Bonds, the Escrow Agent may transfer such excess amounts to or on the order of the City, provided that the City delivers to the Escrow Agent the following: (1) an opinion by an independent certified public accountant that after the transfer of such excess, the principal amount of securities in the respective Escrow Fund, togetherwith the interest thereon and other available monies then held in the respective Escrow Fund, will be sufficient to pay, as the same become due, in accordance with Exhibit A, the principal of, and interest on, the respective series of Defeased Bonds which have not previously been paid, and (2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such transfer will not cause interest on the Defeased Bonds to be included in gross income for federal income tax purposes, under the 69752365.3/1000336996 6 Lacy Secretory Offic �Z y Official Record Copy Code and related regulations as in effect on the date of such transfer, or otherwise make the interest on the Defeased Bonds subject to Federal income taxation, and (b) such transfer complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Defeased Bonds. SECTION 14: Collateralization. The EscrowAgent represents that the deposit covered by this Agreement shall constitute firm banking arrangements to insure payment of the Defeased Bonds and, to the extent not invested in Escrowed Securities, such deposit is collateralized to insure against any loss or diminution by virtue of any action of the. Escrow Agent or as a result of its lack of financial integrity and such deposit, if not invested in the Escrowed Securities, will 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. SECTION 15: Absence of Escrow Agent's Liability Re: Investments. The EscrowAgent shall not be liable or responsible for any loss resulting from any investment made in the Escrowed Securities or substitute securities as provided in Section 11 hereof. SECTION 16: Escrow Agent's Compensation - Escrow Administration Settlement of Paying Agents' Charges. The City agrees to pay the Escrow Agent for the performance of services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the amount of $4,500 and, except for reimbursement of costs and expenses incurred by the Escrow Agent pursuant to Sections 11 and 19 hereof, the Escrow Agent hereby agrees such amount is full and complete payment for the administration of this Agreement; provided, however, notwithstanding anything herein to the contrary, the aggregate value of this Agreement shall not exceed the dollar limitation set forth in Section 2271.002(a)(2) of the Texas Government Code or Section 2274.002(a)(2) of the Texas Government Code. The City also agrees to deposit with the Escrow Agent on the effective date of this Agreement, the sum of $1,000, which represents the total charges due the paying agent for the Defeased Bonds and the Escrow Agent acknowledges and agrees that such amount is and represents the total amount of compensation due the EscrowAgent for services rendered as paying agent for the Defeased Bonds. The EscrowAgent hereby agrees to pay, assume and be fully responsible for any additional charges that it may incur in the performance of its duties and responsibilities as paying agent for the Defeased Bonds. SECTION 17: Escrow Agent's Duties/Responsibilities/Liability. The EscrowAgent shall not be responsible for any recital herein, except with respect to its organization and its powers and authority. As to the existence or nonexistence of any fact relating to the City or as to the sufficiency or validity of any instrument, paper or proceedings relating to the City, the Escrow Agent shall be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or City Manager of the City as sufficient evidence of the facts therein contained. The Escrow Agent may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution or other instrument in the form therein set forth has been adopted by the City Council of the City, as conclusive evidence that such resolution or other instrument has been duly adopted and is in full force and effect. The duties and obligations of the Escrow Agent shall be determined solely by the express provisions of this Agreement and the EscrowAgent shall not be liable except for the 69752365.3/1000336996 7 C i Secretary Office. -I Record Copy performance of such duties and obligations as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the EscrowAgent. In the absence of willful misconduct on the part of the Escrow Agent, the Escrow Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Escrow Agent, conforming to the requirements of this Agreement; but notwithstanding any provision of this Agreement to the contrary, in the case of any such certificate or opinion or any evidence which by any provision hereof is specifically required to be furnished to the EscrowAgent, the EscrowAgent shall be under a duty to examine the same to determine whether it conforms to the requirements of this Agreement. The EscrowAgent shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the EscrowAgent unless it shall be proven that the Escrow Agent was negligent in ascertaining or acting upon the pertinent facts. The Escrow Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in aggregate principal amount of all such Defeased Bonds at the time outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Escrow Agent not in conflict with the intent and purpose of this Agreement. For the purposes of determining whetherthe holders of the required principal amount of such Defeased Bonds have concurred in any such direction, Defeased Bonds owned by any obligor upon the Defeased Bonds, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with such obligor, shall be disregarded, except that for the purposes of determining whether the EscrowAgent shall be protected in relying on any such direction only Defeased Bonds which the EscrowAgent actually knows are so owned shall be so disregarded unless all Defeased Bonds are so owned. The term "Responsible Officers" of the Escrow Agent, as used in this Agreement, shall mean and include the Chairman of the Board of Directors, the President, any Vice President and any Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any Assistant Treasurer, and every other officer and assistant officer of the Escrow Agent customarily performing functions similar to those performed by the persons who at the time shall be officers, respectively, or to whom any corporate trust matter is referred, because of his knowledge of and familiarity with a particular subject; and the term "Responsible Officer" of the Escrow Agent, as used in this Agreement, shall mean and include any of such officers or persons. The Escrow Agent may consult with "independent legal counsel' (such term does not include an attorney who is an employee of the Escrow Agent) and the Escrow Agent shall be entitled to conclusively rely on such advice of such independent legal counsel in good faith. Such advice or opinion of independent legal counsel, relied upon in good faith, shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it in accordance with such advice. The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys and may in all cases pay reasonable compensation to any agent or attorney retained or employed by it in connection therewith. The EscrowAgent may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, written investment direction, statement, instrument, opinion, notice or other paper or document believed by it to be genuine and to have been signed or presented by the proper party. The Escrow Agent need not 69 7523 65.31100 03 3 6996 8 investigate any fact or matter stated in the document. None of the provisions of this Agreement shall require the EscrowAgent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder. To the extent permitted by law, the City shall indemnify, defend and hold harmless the Escrow Agent and its officers, directors, employees, representatives and agents, from and against and reimburse the Escrow Agent for any and all claims, obligations, liabilities, losses, damages, actions, suits, judgments, reasonable costs and expenses (including reasonable attorneys' and agents' fees and expenses) of whatever kind or nature regardless of their merit, demanded, asserted or claimed against the Escrow Agent directly or indirectly relating to, or arising from, claims against the Escrow Agent by reason of its participation in the transactions contemplated hereby, except to the extent caused by the Escrow Agent's negligence or willful misconduct. The foregoing indemnity shall survive the termination of this Agreement or the earlier resignation or removal of the EscrowAgent. Any bank, corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any bank, corporation or association resulting from any merger, conversion or consolidation to which the EscrowAgent shall be a party, or any bank, corporation or association succeeding to all or substantially all of the corporate trust business of the EscrowAgent shall be the successor of the EscrowAgent hereunderwithout the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except on the part of any of the parties hereto where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding. SECTION 18: Limitation Re: Escrow Agent's Duties/Responsibilities/Liabilities to Third Parties. The Escrow Agent shall not be responsible or liable to any person in any manner whatever for the sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect to the City, or for the identity or authority of any person making or executing this Agreement for and on behalf of the City. The Escrow Agent is authorized by the City to rely upon the representations of the City with respect to this Agreement and the deposits made pursuant hereto and as to the City's right and power to execute and deliver this Agreement, and the EscrowAgent shall not be liable in any manner as a result of such reliance. The duty of the Escrow Agent hereunder shall only be to the City and the holders of the Defeased Bonds. Neither the City nor the EscrowAgent shall assign or attempt to assign or transfer any interest hereunder or any portion of any such interest; provided, however, that such assignment or transfer by the EscrowAgent shall be permitted if such assignment or transfer is due to a merger, consolidation, conversion, or business sale of the EscrowAgent as described in the last paragraph of Section 17 hereof. Any such assignment or attempted assignment shall be in direct conflict with this Agreement and be without effect. SECTION 19: Interpleader. In the event conflicting demands or notices are made upon the EscrowAgent growing out of or relating to this Agreement or the EscrowAgent in good faith is in doubt as to what action should be taken hereunder, the EscrowAgent shall have the right at its election to: (a) Withhold and stop all further proceedings in, and performance of, this Agreement with respect to the issue in question and of all instructions received hereunder in regard to such issue; and 69752365.3/1000336996 9 OfficeCity Secretary Offlub-I Record Copy (b) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction requiring all persons involved to interplead and litigate in such court their several claims and rights among themselves. In the event the Escrow Agent becomes involved in litigation in connection with this Section, the City, to the extent permitted by law, agrees to indemnify and save the Escrow Agent harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the Escrow Agent as a result thereof. The obligations of the Escrow Agent under this Agreement shall be performable at the corporate office of the Escrow Agent in the City of Dallas, Texas. To the extent permitted by law, and subject to any applicable statutes of limitation, the foregoing indemnification shall survive the resignation or removal of the Escrow Agent or the termination of this Agreement. The EscrowAgent may advise with legal counsel in the event of any dispute or question regarding the construction of any of the provisions hereof or its duties hereunder, and in the absence of negligence or willful misconduct on the part of the EscrowAgent, no liability shall be incurred by the Escrow Agent for any action taken pursuant to this Section and the Escrow Agent shall be fully protected in acting in accordance with the opinion and instructions of legal counsel that is knowledgeable and has expertise in the field of law addressed in any such legal opinion or with respect to the instructions given. SECTION 20: Accounting - Annual Report. Promptly after September30th of each year, commencing with the year 2022, while the Escrow Fund is maintained under this Agreement, the Escrow Agent shall forward to the City, to the attention of the Finance Director, or other designated official of the City, a statement in detail of the Escrowed Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from the Escrow Fund for the preceding 12 month period ending September 30th of each year. SECTION 21: Notices. Any notice, authorization, request or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: CITY OF NORTH RICHLAND HILLS, TEXAS P. O. Box 820609 North Richland Hills, Texas 76182-0609 Attention: Finance Director THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. 2001 Bryan Street, 10th Floor Dallas, Texas 75201 Attention: Corporate Trust Division The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. SECTION22: Performance Date. Whenever under the terms of this Agreement the performance date of any provision hereof, including the date of maturity or interest on or principal of the Defeased Bonds, shall be a Sunday or a legal holiday or a day on which the 69752365.3/1000336996 10 Escrow Agent is authorized by law to close, then the performance thereof, including the payment of principal of and interest on the Defeased Bonds, need not be made on such date but may be performed or paid, as the case may be, on the next succeeding business day of the Escrow Agent with the same force and effect as if made on the date of performance or payment and with respect to a payment, no interest shall accrue for the period after such date. SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow Agreement. The City covenantsthat it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Agreement, in any and every such Defeased Bonds as executed, authenticated and delivered and in all proceedings pertaining thereto as such Defeased Bonds shall have been modified as provided in this Agreement. The City covenants that it is duly authorized underthe Constitution and laws of the State of Texas to execute and deliver this Agreement, that all actions on its part for the payment of such Defeased Bonds as provided herein and the execution and delivery of this Agreement have been duly and effectively taken and that such Defeased Bonds and coupons in the hands of the holders and owners thereof are and will be valid and enforceable obligations of the City according to the import thereof as provided in this Agreement. SECTION 24: Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the parties to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. In the event any covenant or agreement contained in this Agreement is declared to be severable from the other provisions of this Agreement, written notice of such event shall immediately be given to each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch Investors Service) which has rated the Defeased Bonds on the basis of this Agreement. SECTION 25: Termination. This Agreement shall terminate when the Defeased Bonds, including interest due thereon, have been paid and discharged in accordance with the provisions of this Agreement. If any Defeased Bonds are not presented for payment when due and payable, the nonpayment thereof shall not prevent the termination of this Agreement. Funds for the payment of any nonpresented Defeased Bonds and accrued interest thereon shall upon termination of this Agreement beheld by the Escrow Agent for such purpose in accordance with Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow Fund at termination and not needed for the payment of the principal of or interest on any of the Defeased Bonds shall be paid or transferred to the City. SECTION 26: Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. SECTION 27: Successors/Assigns. (a) Should the Escrow Agent not be able to legally serve or perform the duties and obligations under this Agreement, or should the Escrow Agent be declared to be insolvent or closed for any reason by federal or state regulatory authorities or a court of competent jurisdiction, the City, upon being notified or discovering the Escrow Agent's inability or disqualification to serve hereunder, shall forthwith appoint a successor to replace the Escrow Agent, and upon being notified of such appointment, the EscrowAgent shall (i) transfer all funds and securities held hereunder, together with all books, records and accounts relating to the Escrow Fund and the Defeased Bonds, to such successor and (ii) assign all rights, duties and 69 752365.31100 03369 96 11 �IN City Secretary Of i-e y Official Record obligations under this Agreement to such successor. If the City should fail to appoint such a successor within sixty (60) days from the date the City discovers, or is notified of, the event or circumstance causing the Escrow Agent's inability or disqualification to serve hereunder, the Escrow Agent, or a bondholder of the Defeased Bonds, may apply, at the expense of the City, to a court of competent jurisdiction to appoint a successor or assigns of the Escrow Agent and such court, upon determining the EscrowAgent is unable to continue to serve, shall appoint a successor to serve under this Agreement and the amount of compensation, if any, to be paid to such successor for the remainder of the term of this Agreement for services to be rendered both for administering the Escrow Fund and for paying agent duties and responsibilities for the Defeased Bonds. (b) Furthermore, the EscrowAgent may resign and be discharged from performing its duties and responsibilities underthis Agreement upon notifying the City in writing of its intention to resign and requesting the City to appoint a successor. No such resignation shall take effect until a successor has been appointed by the City and such successor has accepted such appointment and agreed to perform all duties and obligations hereunder for a total compensation equal to the unearned proportional amount paid the EscrowAgent under Section 16 hereof for the administration of this Agreement and the unearned proportional amount of the paying agents fees for the Defeased Bonds due the EscrowAgent. If the City does not make such appointment within sixty (60) days of the date that such resignation notice is sent to the City, the Escrow Agent shall be entitled to petition of a court of competent jurisdiction for the appointment of a successor. Any successor to the Escrow Agent shall be a bank, trust company or other financial institution that is duly qualified under applicable law (the Act, or other appropriate statute) to serve as escrow agent hereunder and authorized and empowered to perform the duties and obligations contemplated by this Agreement and organized and doing business under the laws of the United States or the State of Texas, having an office and place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the supervision or examination by Federal or State authority. Any successor or assigns to the EscrowAgent shall execute, acknowledge and deliver to the City and the Escrow Agent, or its successor or assigns, an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor, subject to the terms of this Agreement, all the rights, powers and trusts created and established and to be performed under this Agreement Upon the request of any such successor EscrowAgent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers and duties. The term "EscrowAgent as used herein shall be the Escrow Agent and its legal assigns and successor hereunder. SECTION 28: Escrow Agreement - Amendment/Modification. This Agreement shall be binding upon the City and the Escrow Agent and their respective successors and legal representatives and shall inure solely to the benefit of the holders of the Defeased Bonds, the City, the EscrowAgent and their respective successors and legal representatives. Furthermore, no alteration, amendment or modification of any provision of this Agreement (1) shall alter the firm financial arrangements made for the payment of the Defeased Bonds or (2) shall be effective unless (i) prior written consent of such alteration, amendment or modification shall have been obtained from the holders of all Defeased Bonds outstanding at the time of such alteration, amendment or modification and (ii) such alteration, amendment or modification is in writing and signed by the parties hereto; provided, however, the City and the Escrow Agent 69752365.3/1000336996 12 0�"� Cite, Secretary OfFice 01'f`c�a� Record Copy may, without the consent of the holders of the Defeased Bonds, amend or modify the terms and provisions of this Agreement to cure in a manner not materially adverse to the holders of the Defeased Bonds as evidenced by an opinion of counsel delivered to the Escrow Agent any ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any amendment or modification to this Agreement, prior written notice of such amendment or proposed modification, together with the legal documents amending or modifying this Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation, Moody's Investors Service or Fitch Investors Service) which has rated the Defeased Bonds on the basis of this Agreement, prior to such amendment or modification being executed. SECTION 29: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 30: Executed Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. SECTION 31: Iran. Sudan and Foreign Terrorists Organizations. The Escrow Agent represents that neither it nor any of its parent company, wholly- or majority -owned subsidiaries, and other affiliates is a company identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and posted on any of the following pages of such officer's internet website: hftps://comptroller.texas.gov/purchasing/docs/Sudan-list.pdf, https://comptroller.texas.gov/purchasing/docs/iran-list.pdf, or https://comptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing representation is made solely to comply with Section 2252.152, Texas Government Code, and to the.extent such Section does not contravene applicable Federal law and excludes the Escrow Agent and each of its parent company, wholly- or majority -owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. The Escrow Agent understands "affiliate" to mean an entity that controls, is controlled by, or is under common control with the Escrow Agent within the meaning of SEC Rule 133(f), 17 C.F.R. § 230.133(f), and exists to make a profit. SECTION 32: Governing Law. This Agreement shall be governed by the laws of the State of Texas and shall be effective as of the date first written above. [remainder of page left blank intentionally] 69752365.3/1000336996 13 air Cott' aGc(Sta'ry office Official Record Copy Yr IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers as of the date first above written. CITY OF NORTH RICHLAND HILLS, TEXAS ATTEST: `.%J11111111 APPROVED AS TO FORM AND LEGALITY: co City Secretary it Attorney +''�18118111ot��® THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., Dallas, Texas, as Escrow Agent Title: ASSOCIATE ATTEST: Title: Associate 69752365.3/1000336996 [signature page of Escrow Agreement] � f CGty Secretary Office Offi in-1 Record Cope EXHIBIT A (page 1 of 2) DEBT SERVICE REQUIREMENTS FOR DEFEASED BONDS 69752365.3/1000336996 A-1 City Secretary Offic Official Record Copy op It EXHIBIT A (page 2 of 2) DEBT SERVICE REQUIREMENTS FOR DEFEASED BONDS 69752365.3/1000336996 A-2 ��,cH�gti rc,City Secretary Office F°s Oylc'.all Record Copy EXHIBIT B VERIFICATION REPORT 69752365.3/1000336996 B-1 pity Secretary Office Record EXHIBIT C ZERO REINVESTMENTS 69752365.3/1000336996 C-1