HomeMy WebLinkAboutOrdinance 2551
ORDINANCE NO. 2551
AN ORDINANCE authorizing the issuance of "CITY OF NORTH RICHLAND
HILLS, TEXAS, GENERAL OBLIGATION REFUNDING AND
IMPROVEMENT BONDS, SERIES 2001"; specifying the terms and
features of said bonds; levying a continuing direct annual ad valorem tax
for the payment of said bonds; providing for the redemption of certain
outstanding bonds of the City; and resolving other matters incident and
related to the issuance, sale, payment and delivery of said bonds,
including the approval and execution of a Paying AgenURegistrar
Agreement, a Purchase Contract and a Special Escrow Agreement and
the approval and distribution of an Official Statement; and providing an
effective date.
WHEREAS, the City Council of the City of North Richland Hills, Texas (the "City") has
heretofore issued, sold, and delivered, and there is currently outstanding obligations, payable
from ad valorem taxes, totaling in original principal amount $4,890,000 of the following issues or
series (collectively hereinafter called the "Refunded Bonds"), to wit:
(i) City of North Richland Hills, Texas, Tax and Golf Course Revenue
Refunding Bonds, Series 1991, dated April 1, 1991, maturing on September 1 in
each of the years 2002 through 2011, and aggregating in principal amount
$3,590,000 (the "Series 1991 Refunded Bonds"); and
(ii) City of North Richland Hills, Texas, General Obligation Bonds, Series
1993, dated May 1, 1993, maturing on February 15 in each of the years 2004
through 2009, and aggregating in principal amount $1,300,000 (the "Series 1993
Refunded Bonds");
AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter
1207, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale
directly with any place of payment for the Refunded Bonds, and such deposit, when made in
accordance with said statute, shall constitute the making of firm banking and financial
arrangements for the discharge and final payment of the Refunded Bonds; and
WHEREAS, the City Council hereby finds and determines that the Refunded Bonds
should be refunded at this time, and such refunding will result in the City saving approximately
$594,452.47 in debt service payments on such indebtedness and further provide present value
savings of approximately $386,427.82; and,
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WHEREAS, in combination with the issuance of such refunding bonds, the City Council
further finds and determines that general obligation bonds in the principal amount of $980,000
approved and authorized to be issued at an election held September 27, 1994, should be issued
and sold at this time; a summary of the general obligation bonds authorized at said election, the
principal amount authorized, amounts heretofore issued and being issued pursuant to this
ordinance and amounts remaining to be issued subsequent hereto being as follows:
Purpose
Amount
Authorized
Previously
Issued
Amount Being
Issued
Unissued
Balance
Street Improvements
$20,000,000
$16,115,000
$980,000
$2,905,000
AND WHEREAS, the Council hereby reserves and retains the right to issue the balance
of unissued bonds approved at said election in one or more installments when, in the judgment
of the Council, funds are needed to accomplish the purposes for which such bonds were voted;
now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND
HILLS, TEXAS:
SECTION 1: Authorization - Designation- Principal Amount- Purpose. General
obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate
principal amount of $5,920,000, to be designated and bear the title "CITY OF NORTH
RICHLAND HILLS, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT
BONDS, SERIES 2001" (hereinafter referred to as the "Bonds"), for the purpose of providing
funds for the discharge and final payment of certain outstanding obligations of the City
(identified in the preamble hereof and referred to as the "Refunded Bonds"), to pay costs of
issuance and to provide funds in the amount of $980,000 for permanent public improvements
and public purposes, to wit: street improvements, including traffic signalization, drainage
incidental thereto and the acquisition of land and right-of-way therefor, in accordance with the
Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapters
1331 and 1207.
SECTION 2: Fully Registered Obligations - Bond Date -Authorized
Denominations-Stated Maturities-Interest Rates. The Bonds shall be issued as fully registered
obligations only, shall be dated April 15, 2001 (the "Bond Date"), shall be in denominations of
$5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and
payable on February 15 in each of the years and in principal amounts (the "Stated Maturities")
in accordance with the following schedule:
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thereof, the same shall be the valid obligations of the City, evidencing the same obligation to
pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such
transfer or exchange.
All transfers or exchanges of Bonds 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.
Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in
the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered, and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and
such new replacement Bond shall be deemed to evidence the same obligation as the mutilated,
lost, destroyed, or stolen Bond.
Neither the City nor the Paying AgenURegistrar shall be required to issue or transfer to
an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of
the date fixed for the redemption of such Bond; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Bond called for redemption in part.
SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
transfer/exchange of the Bonds, the City hereby approves and authorizes the use of
"Book-Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository
Ag reement").
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (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
Bonds or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Bonds, the City covenants and agrees with the Holders of
the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to
be issued and delivered to DTC Participants and Beneficial Owners, as the case may be.
Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall
be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
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SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Bond Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the
time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government
Code, Chapter 1201.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 9C, manually executed by the Comptroller of Public
Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 90, manually executed by an authorized officer,
employee or representative of the Paying AgenURegistrar, and either such certificate duly
signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has
been duly certified, registered, and delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issue<!i
either (i) as a single fully registered bond in the aggregate principal amount of the Bonds with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity
in the applicable principal amount and denomination and to be numbered consecutively from
T-1 and upward (hereinafter called the "Initial Bond(s)") arrd, in either case, the Initial Bond(s)
shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial
Bond(s) shall be the Bonds 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
Bond(s), the Paying AgenURegistrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds 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 AgenURegistrar may reasonably require.
SECTION 9: Forms .A. Forms Generally. The Bonds, the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
AgenURegistrar, and the form of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in this Section with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance and may have
such letters, numbers, or other marks of identification (including identifying numbers and letters
of the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends in the event the
Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be established by the City or
determined by the officers executing such Bonds as evidenced by their execution. Any portion
of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Bond.
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The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
B. Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF NORTH RICHLAND HILLS, TEXAS
GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 2001
Bond Date:
April 15, 2001
Interest Rate:
Stated Maturity:
CUSIP NO:
Registered Owner:
Principal Amount:
DOLLARS
The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate
and political subdivision in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of the Registered
Owner named above, or the registered assigns thereof, on the Stated Maturity date specified
above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid
upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Bond
Date at the per annum rate of interest specified above computed on the basis of a 360-day year
of twelve 30-day months; such interest being payable on February 15 and August 15 in each
year, commencing February 15, 2002. Principal of this Bond is payable at its Stated Maturity or
redemption to the registered owner hereof, upon presentation and surrender, at the Designated
PaymenUTransfer Office of the Paying AgenURegistrar executing the registration certificate
appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or
one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose
name appears on the "Security Register" maintained by the Paying AgenURegistrar at the close
of business on the "Record Date", which is the last business day of the month next preceding
each interest payment date, and interest shall be paid by the Paying AgenURegistrar by check
sent United States Mail, first class postage prepaid, to the address of the registered owner
recorded in the Security Register or by such other method, acceptable to the Paying
AgenURegistrar, requested by, and at the risk and expense of, the registered owner. All
payments of principal of, premium, if any, and interest on this Bond 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 Bond is one of the series specified in its title issued in the aggregate principal
amount of $5,920,000 (herein referred to as the "Bonds") for the purpose of providing funds for
the discharge and final payment of certain outstanding obligations of the City (identified in the
preamble hereof and referred to as the "Refunded Bonds"), to pay costs of issuance and to
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provide funds in the amount of $980,000 for permanent public improvements and public
purposes, to wit: street improvements, including traffic signalization, drainage incidental thereto
and the acquisition of land and right-of-way therefor, under and in strict conformity with the
Constitution and laws of the State of Texas and pursuant to an Ordinance adopted by the City
Council of the City (herein referred to as the "Ordinance").
The Bonds maturing on and after February 15, 2012, may be redeemed prior to their
Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or
any integral multiple thereof (and if within a Stated Maturity by lot by the Paying
AgenURegistrar), on February 15, 2011, or on any date thereafter, at the redemption price of
par, together with accrued interest to the date of redemption.
At least thirty days prior to the date fixed for any redemption of Bonds, 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 Bond to be redeemed at the address shown on the
Security Register and subject to the terms and provisions relating thereto contained in the
Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date such
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor; provided
moneys for the payment of the redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
AgenURegistrar.
In the event a portion of the principal amount of a Bond 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 Bond to the Designated PaymenUTransfer Office of the Paying AgenURegistrar, and a new
Bond or Bonds 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 Bond is selected for redemption, in whole or in part,
the City and the Paying AgenURegistrar shall not be required to transfer such Bond to an
assignee of the registered owner within 45 days of the redemption date therefor; provided,
however, such limitation on transferability shall not be applicable to an exchange by the
registered owner of the unredeemed balance of a Bond redeemed in part.
The Bonds are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to
the Ordinance, a copy of which is on file in the Designated PaymenUTransfer Office of the
Paying AgenURegistrar, and to all of the provisions of which the owner or holder of this Bond 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 Bonds; the terms and conditions relating to
the transfer or exchange of this Bond; the conditions upon which the Ordinance' may be
amended or supplemented with or without the consent of the Holders; the rights, duties, and
obligations of the City and the Paying AgenURegistrar; the terms and provisions upon which this
Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer
Outstanding thereunder; and for other terms and provisions contained therein. Capitalized
terms used herein have the meanings assigned in the Ordinance.
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This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
PaymenUTransfer Office of the Paying AgenURegistrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying AgenURegistrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds
of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and
of the same aggregate principal amount will be issued by the Paying AgenURegistrar to the
designated transferee or transferees.
The City and the Paying AgenURegistrar, and any agent of either, shall treat the
registered owner whose name appears on the Security Register (i) on the Record Date as the
owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the
owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or
in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor
the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In
the event of nonpayment of interest on a scheduled payment date and for thirty (30) days
thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying AgenURegistrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
Mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the Bonds 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 Bonds 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 Bonds 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 Bonds by the levy of a tax as
aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Bond Date.
CITY OF NORTH RICHLAND HILLS, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(SEAL)
C. *Form of Registration Certificate of Comptroller
of Public Accounts to appear on Initial Bond(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
)
OF PUBLIC ACCOUNTS )
)
THE STATE OF TEXAS )
REGISTER NO.
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*NOTE TO PRINTER: Do not print on definitive bonds
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D. Form of Certificate of Paying AgenURegistrar to
appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered under the provisions of the
within-mentioned Ordinance; the bond or bonds of the above entitled and designated series
originally delivered having been approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts, as shown by the records of the Paying
AgenURegistrar.
The designated offices of the Paying AgenURegistrar in Westerville, Ohio is the
"Designated PaymenUTransfer Office" for this Bond.
BANK ONE, NATIONAL ASSOCIATION
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
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every particular.
F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section,
except that the form of the single fully registered Initial Bond shall be modified as
follows:
(i) immediately under the name of the bond the headings "Interest Rate" and
"Stated Maturity" shall both be omitted.
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(ii) Paragraph one shall read as follows:
Registered Owner:
Principal Amount:
DOLLARS
The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate
and municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of the Registered
Owner named above, or the registered assigns thereof, the Principal Amount hereinabove
stated on February 15 in each of the years and in principal installments in accordance with the
following schedule:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much principal thereof as shall not have been prepaid prior to maturity) and to pay
interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates öf
interest specified above computed on the basis of a 360-day year of twelve 30-day months;
such interest being payable on February 15 and August 15 in each year, commencing
February 15, 2002. Principal installments of this Bond are payable in the year of maturity or on a
prepayment date to the registered owner hereof by Bank One, National Association (the "Paying
AgenURegistrar"), upon its presentation and surrender, at its designated offices in Weste rvi lie ,
Ohio (the "Designated PaymenUTransfer Office"). Interest is payable to the registered owner
of this Bond whose name appears on the "Security Register" maintained by the Paying
AgenURegistrar at the close of business on the "Record Date", which is the last business day of
the month next preceding each interest payment date, and interest shall be paid by the Paying
AgenURegistrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to
the Paying AgenURegistrar, requested by, and at the risk and expense of, the registered owner.
All payments of principal of, premium. if any, and interest on this Bond 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: Levy of Taxes. To provide for the payment of the "Debt Service
Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their
redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is
hereby levied, and there shall be annually assessed and collected in due time, form, and
manner, a tax on all taxable property in the City, within the limitations prescribed by law, and
such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for
the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be
ample and sufficient to provide funds each year to pay the principal of and interest on said
Bonds while Outstanding; full allowance being made for delinquencies and costs of collection;
separate books and records relating to the receipt and disbursement of taxes levied, assessed
and collected for and on account of the Bonds shall be kept and maintained by the City at all
times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt
Service Requirements on the Bonds shall be deposited to the credit of a "Special 2001 Bond
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Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited
in a special fund maintained at an official depository of the City's funds; and such tax hereby
levied, and to be assessed and collected annually, is hereby pledged to the payment of the
Bonds.
Proper officers of the City are hereby authorized and directed to cause to be transferred
to the Paying Agent! Registrar for the Bonds, from funds on deposit in the Interest and Sinking
Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and
principal of the Bonds as the same accrues or matures or comes due by reason of redemption
prior to maturity; such transfers of funds to be made in such manner as will cause collected
funds to be deposited with the Paying AgenURegistrar on or before each principal and interest
payment date for the Bonds.
SECTION 11: Mutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be
mutilated, or destroyed, lost or stolen, the Paying AgenURegistrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying AgenURegistrar of evidence
satisfactory to the Paying AgenURegistrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying AgenURegistrar of
indemnification in an amount satisfactory to hold the City and the Paying AgenURegistrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be borne by the Holder of the Bond
mutilated, or destroyed, lost or stolen. -
Every replacement Bond 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 Bonds; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Bonds.
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 Bonds.
SECTION 12: Satisfaction of Obligation of City. If the City shall payor cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes
levied under this Ordinance and all covenants, agreements, and other obligations of the City to
the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient' to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in
trust by the Paying AgenURegistrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying AgenURegistrar, or an
authorized escrow agent, which Government Securities have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
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deposited therewith, if any, to pay when due the principal of and interest on such Bonds, 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 AgenURegistrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Securities will be made under this Section and no use
made of any such deposit which would cause the Bonds 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 AgenU Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying AgenURegistrar,
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the
City. Furthermore, any money held by the Paying AgenURegistrar for the payment of the
principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity, or applicable redemption date, of the Bonds 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 AgenURegistrar to the City shall be subject to any applicable unclaimed
property laws of the State of Texas.
The term "Government Securities" shall mean (i) direct noncallable obligations of the
United States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
agency or instrumentality of the United States, including obligations unconditionally guaranteed
or insured by the agency or instrumentality and on the date of their acquisition or purchase by
the City are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and on the
date of their acquisition or purchase by the City, are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent.
SECTION 13: Ordinance a Contract - Amendments - Outstanding Bonds. 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 Bond remains Outstanding
except as permitted in this Section. The City may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the City may, with the consent of Holders holding a
majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend,
add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of
all Holders of Outstanding Bonds, 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 Bonds,
reduce the principal amount thereof, the redemption price therefor, 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 Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce
the aggregate principal amount of Bonds required to be held by Holders for consent to any such
amendment, addition, or rescission.
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The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of
the date of determination, all Bonds theretofore issued and delivered under this Ordinance,
except:
(1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the
Paying Agent/Registrar for cancellation;
(2) those Bonds deemed to be duly paid by the City in accordance with the
provisions of Section 12 hereof; and
(3) those mutilated, destroyed, lost, or stolen Bonds which have been
replaced with Bonds registered and delivered in lieu thereof as provided in Section 11
hereof.
SECTION 14: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used
in this Section 14, the following terms have the following meanings:
"Closing Date" means the date on which the Bonds 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 Bonds.
"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 Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds.
"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
Bonds. Any reference to any specific Regulation shall also mean, as
appropriate, any proposed, temporary or final Income Tax Regulation designed
to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-
5 of the Regulations and (2) the Bonds has the meaning set forth in Section
1.148-4 of the Regulations.
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(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
Bond 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 Bond, 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 Bonds:
(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 Bonds, 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 Bonds 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 Bonds 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 to the
final Stated Maturity of the Bonds 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 Bonds.
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(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 Bonds 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
Bond is discharged. However, to the extent permitted by law, the City may commingle
Gross Proceeds of the Bonds 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 Bonds until six years
after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to induce such
purchase by measures designed to insure the excludability of the interest thereon from
the gross income of the owners thereof for federal income tax purposes, the City shall
pay to the United States out of the Interest and Sinking Fund or its general fund, as
permitted by applicable Texas statute, regulation or opinion of the Attorney General of
the State of Texas, the amount that when added to the future value of previous rebate
payments made for the Bonds 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.
(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
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to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the
Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, 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 Bonds not been
relevant to either party.
ü) Elections. The City hereby directs and authorizes the Mayor, City Manager,
Director of Finance and 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 Bonds, in the Certificate as to Tax Exemption or similar or
other appropriate certificate, form or document.
(k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the
Bonds were issued, the City reasonably expected to spend at least 85% of the spendable
proceeds of such bonds within three years after such bonds were issued and (2) not more than
50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose
Investments having a substantially guaranteed Yield for a period of 4 years or more.
(I) Not An Advance Refunding. The portion of the Bonds being issued to refund the
Series 1991 Refunded Bonds is a current refunding in that tAe Series 1991 Refunded Bonds are
to be paid and redeemed in full on September 1, 2001, which date is within 90 days of the
delivery date of the Bonds.
(m) Qualified Advance Refunding. A portion of the Bonds are issued in part to refund
the Series 1993 Refunded Bonds, and the Bonds will be issued more than 90 days before the
redemption of the Series 1993 Refunded Bonds. The City represents as follows:
(a) The Bonds are the first advance refunding of the Series 1993 Refunded
Bonds, within the meaning of section 149(d)(3) of the Code.
(b) The Series 1993 Refunded Bonds are being called for redemption, and
will be redeemed not later than the earliest date on which such bonds may be
redeemed.
(c) The initial temporary period under section 148(c) of the Code will end: (i)
with respect to the proceeds of the Bonds not later than 30 days after the date of issue
of such Bonds; and (ii) with respect to proceeds of the Series 1993 Refunded Bonds on
the Closing Date if not ended prior thereto.
(d) On and after the date of issue of the Bonds, no proceeds of the Series
1993 Refunded Bonds will be invested in Nonpurpose Investments having a Yield in
excess of the Yield on such Series 1993 Refunded Bonds.
(e) The Bonds are being issued for the purposes stated in the preamble of
this Ordinance. There is a present value savings associated with the refunding. In the
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issuance of the Bonds the City has neither: (i) overburdened the tax-exempt bond
market by issuing more bonds, issuing bonds earlier or allowing bonds to remain
outstanding longer than reasonably necessary to accomplish the governmental purposes
for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the
meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to
obtain a material financial advantage based on arbitrage, within the meaning of section
149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced
debt service payments in early years.
SECTION 15: Sale of Bonds - Official Statement Approval. The Bonds authorized by
this Ordinance are hereby sold by the City to Southwest Securities and Oain Rauscher
Incorporated (herein referred to as the "Underwriters") in accordance with the Purchase
Contract, dated April 23, 2001, attached hereto as Exhibit B and incorporated herein by
reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and
directed to execute said Purchase Contract for and on behalf of the City and as the act and
deed of this City Council, and in regard to the approval and execution of the Purchase Contract,
the City Council hereby finds, determines and declares that the representations, warranties and
agreements of the City contained in the Purchase Contract are true and correct in all material
respects and shall be honored and performed by the City.
Furthermore, the use of the Official Statement by the Purchasers in connection with the
public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects.
The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the
Purchase Contract (together with such changes approved by the Mayor, City Secretary, City
Manager, and Director of Finance, one or more of said officials), shall be and is hereby in all
respects approved and the Underwriters are hereby authorized to use and distribute said final
Official Statement, dated April 23, 2001, in the reoffering, sale and delivery of the Bonds to the
public. The Mayor and City Secretary are further authorized and directed to manually execute
and deliver for and on behalf of the City copies of said Official Statement in final form as may be
required by the Underwriters, and such final Official Statement in the form and content manually
executed by said officials shall be deemed to be approved by the City Council and constitute the
Official Statement authorized for distribution and use by the Underwriters.
SECTION 16: Special Escrow Agreement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement") by and between the City and Bank One, National
Association (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by
reference as a part of this Ordinance for all purposes, is hereby approved as to form and
content, and such Agreement in substantially the form and substance attached hereto, together
with such changes or revisions as may be necessary to accomplish the refunding or benefit the
City, is hereby authorized to be executed by the Mayor and City Secretary for and on behalf of
the City and as the act and deed of this City Council; and such Agreement as executed by said
officials shall be deemed approved by the City Council and constitute the Agreement herein
approved.
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on
the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL
2001 CITY OF NORTH RICHLAND HILLS, TEXAS, REFUNDING BOND ESCROW FUND" (the
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"Escrow Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter
1207, as amended, this Ordinance and the Agreement.
SECTION 17: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the initial purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City Manager, and Director of
Finance, anyone or more of said officials, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the City and the issuance of the Bonds,
including certifications as to facts, estimates, circumstances and reasonable expectations
pertaining to the use, expenditure, and investment of the proceeds of the Bonds, as may be
necessary for the approval of the Attorney General, the registration by the Comptroller of Public
Accounts and the delivery of the Bonds to the purchasers, and, together with the City's financial
advisor, bond counsel and the Paying AgenURegistrar, make the necessary arrangements for
the delivery of the Initial Bond(s) to the purchasers and the initial exchange thereof for definitive
Bonds.
SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale in the sum of (i) $974,249.05 shall be deposited to the construction fund and
$4,842,674.85 shall be deposited with the Escrow Agent for application in accordance with the
Agreement and (iii) $36,305.55 shall be deposited in the Interest and Sinking Fund. The balance
of the proceeds of sale shall be disbursed for payment of costs of issuance in accordance with
instructions from the City, and any proceeds of sale remaining after payment of the costs of
issuance for the Bonds shall deposited in the Interest and Sinking Fund for the Bonds. Pending
expenditure for authorized projects and purposes, such proceeds of sale may be invested in
authorized investments and any investment earnings realized may be expended for such
authorized projects and purposes or deposited in the Bond Fund as shall be determined by the
appropriate authorized officials of the City. All surplus proceeds of sale of the Bonds, including
investment earnings, remaining after completion of all authorized projects or purposes shall be
deposited to the credit of the Interest and Sinking Fund.
Additionally, on or immediately prior to the date of the delivery of the Bonds to the
Underwriters, the Director of Finance shall cause to be transferred in immediately available
funds to the Escrow Agent from moneys on deposit in the interest and sinking funds maintained
for the payment of the Refunded Bonds the sum of $190,315.83 to accomplish the refunding.
SECTION 19: Redemption of Refunded Bonds. (a) The bonds of that series known as
"City of North Richland Hills, Texas, Tax and Golf Course Revenue Refunding Bonds, Series
1991", dated April 1, 1991, maturing in the years 2002 through 2011, and aggregating in
principal amount $3,590,000, shall be redeemed and the same are hereby called for redemption
on September 1, 2001, at the price of par and accrued interest to the date of redemption. The
City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a
suggested form of notice of redemption to be sent to bondholders, with Bank One, National
Association (successor paying agent/registrar to Team Bank, Fort Worth), in accordance with
the redemption provisions applicable to such bonds; such suggested form of notice of
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Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart
thereof shall accompany the global Bonds deposited with the Depository Trust Company.
SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving the Bonds as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
AgenURegistrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying
AgenURegistrar and the Holders.
SECTION 25: 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 26: 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 27: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 28: 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 29: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
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(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2001) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 15 of this Ordinance,
being the information described in Exhibit F hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit F hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report
when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such
event is material within the meaning of the federal securities- laws:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
(7) Modifications to rights of holders of the Bonds;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds; and
(11) Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except
that the City in any event will give the notice required by subsection (c) hereof of any Bond calls
and defeasance that cause the City to be no longer such an "obligated person."
SECTION 30: MBIA Insurance. The Bonds have been sold with the principal of and
interest thereon being insured by MBIA Insurance Corporation (hereinafter called "MBIA")
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pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by MBIA, the City covenants and agrees that, in the event the
principal and interest due on the Bonds shall be paid by MBIA pursuant to the policy referred to
this Section, the assignment and pledge of all funds and all covenants, agreements and other
obligations of the City to the Holders shall continue to exist and MBIA shall be subrogated to the
rights of such Holders; and furthermore, the City covenants and agrees that:
(a) In the event that, on the second business day, and again on the business day,
prior to the payment date on the Bonds, the Paying AgenURegistrar has not received sufficient
moneys to pay all principal of and interest on the Bonds due on the second following or
following, as the case may be, business day, the Paying AgenURegistrar shall immediately
notify MBIA or its designee on the same business day by telephone or telegraph, confirmed in
writing by registered or certified mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on the payment date,
the Paying AgenURegistrar shall so notify MBIA or its designee.
(c) In addition, if the Paying AgenURegistrar has notice that any Holder has been
required to disgorge payments of principal of or interest on the Bonds to a trustee in bankruptcy
or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes avoidable preference to such Holder within the meaning of any applicable
bankruptcy laws, then the Paying AgenURegistrar shall notify the MBIA or its designee of such
fact by telephone or telegraphic notice, confirming in writing by registered or certified mail.
(d) The Paying AgenURegistrar is hereby irrevocably designated, appointed, directed
and authorized to act as attorney-in-fact for Holders of the Bonds as follows:
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If and to the extent there is a deficiency in amounts required to pay interest on
the Bonds, the Paying AgenURegistrar shall (a) execute and deliver to State
Street Bank and Trust Company, N.A., or its successors under the Policy (the
"Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an
instrument appointing the MBIA as agent for such Holders in such legal
proceeding related to the payment of such interest and an assignment to the
MBIA of the claims for interest to which such deficiency relates and which are
paid by MBIA, (b) receive as designee to the respective Holders (and not as
Paying AgenURegistrar) in accordance with the tenor of the Policy payment from
the Insurance Paying Agent with respect to the claims for interest so assigned,
and (c) disburse the same to such respective Holders; and
If and to the extent of a deficiency in amounts required to pay principal of the
Bonds, the Paying AgenURegistrar shall (a) execute and deliver to the Insurance
Paying Agent in form satisfactory to the Insurance Paying Agent an instrument
appointing MBIA as agent for such Holder in any legal proceeding relating to the
payment of such principal and an assignment to MBIA of any of the Bonds
surrendered to the Insurance Paying Agent or so much of the principal thereof as
has not previously been paid or for which moneys are not held by the Paying
AgenURegistrar and available for such payment (but such assignment shall be
delivered only if payment from the Insurance Paying Agent is received), (b)
receive as designee of the respective Holders (and not as Paying
B.
25
SECTION 31: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the City Council
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 32: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 33: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below and it is so ordained.
PASSED AND ADOPTED, this April 23, 2001.
CITY OF NORTH RICHLAND HILLS, TEXAS
Ma(lÚ
ATTEST:
~é!/~~
City Secretary
APPROVED AS TO LEGALITY:
(City Seal)
45007991
27
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of April 23, 2001 (this "Agreement"), by and between
the City of North Richland Hills, Texas (the "Issuer"), and Bank One, National Association, a
national association duly organized and existing under the laws of the United States of America,
(the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
North Richland Hills, Texas, General Obligation Refunding and Improvement Bonds, Series 2001"
(the "Securities") in the aggregate principal amount of $5,920,000, which Securities are scheduled
to be delivered to the initial purchasers on or about June 5, 2001; and
WHEREAS, the Issuer has selected the Bank to serve as Paying AgenURegistrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration. transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the.
Issuer and has full power and authority to perform and se/'\{e as Paying Agent/Registrar for thè
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 "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and amounts
set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar
for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of
the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year.
45024858
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel),
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any Security
which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in Westerville, Ohio at the
address appearing in Section 3.01 hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
,"
"Bond Resolution" means the resolution, order, or ordinance of the governing body
of the Issuer pursuant to which the Securities are issued, certified by the Secretary or any
other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issùer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in the
name of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Director of Finance or
City Secretary, anyone or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"Person" means any individual, corporation, partnership, joint venture, association,
joint stock company, trust, unincorporated organization or government or any agency or
political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous Security
evidencing all or a portion of the same obligation as that evidenced by such particular
Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen
Security for which a replacement Security has been registered and delivered in lieu thereof
pursuant to Section 4.06 hereof and the Resolution).
"Record Date" means the last business day of the month next preceding each
interest payment date.
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EXHIBIT A
"Redemption Date" when used with respect to any Security to be redeemed means
the date fixed for such redemption pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the Chairman or
Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive
Committee of the Board of Directors, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant
Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and familiarity
with the particular sUbject.
"Securities" means the securities defined in the recital paragraphs herein.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the 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 AgenURegistrar" refers to the Bank-rn the performance of the duties and
functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Aqent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer,
pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date,
or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following
offices:
Bank One, Texas, N.A.
Attention: Securities Transfer
235 West Schrock Road
Westerville, Ohio 43081-0393
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalfof the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and making
payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record
Date (as defined in the Resolution). All payments of principal and/or interest on the Securities to
the registered owners shall be accomplished (1) by the issuance of checks, payable to the
registered owners, drawn on the fiduciary account provided in Section 5.05 hereof, sent by United
States mail, first class, postage prepaid, to the address appearing on the Security Register or (2)
45024858
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EXHIBIT A
by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's
risk and expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security 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
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such other
information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. The Bank represents and warrants its office
in Fort Worth, Texas will at all times have immediate access to the Security Register by electronic
or other means and will be capable at all times of producing a hard copy of the Security Register
at its Fort Worth office for use by the Issuer. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register.
"
Every Security surrendered for transfer or 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.
in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized
in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in not
more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly executed
by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying
Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than
the care maintained by the Bank for debt securities of other governments or corporations for which
it serves as registrar, or that is maintained for its own securities.
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
45024858
-4-
EXHIBIT A
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
Issuer so that the Issuer may contest the court order or such release or disclosure of the contents
of the Security Register.
Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act or
1934, all Securities in lieu of which or in exchange for which other Securities have been issued,
or which have been paid.
Section 4.06. Mutilated. Destroyed. Lost or Stolen Securities. The Issuer hereby instructs
the Bank, subject to the provisions of Section 11 of the Bond Resolution, 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, or destroyed, lost or stolen, the Bank may execute
and deliver a replacement Security of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange and substitution for such
mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only
upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank of
evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an
amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges
associated with such indemnity and with the preparation, execution and delivery of a replacement
Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
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EXHIBIT A
Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein
and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents. Etc. (a) The Bank may conclusively
rely, as to the truth of the statements and correctness of the opinions expressed therein, on
certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine anq,
to have been signed or presented by the proper party or parties. Without limiting the generality
of the foregoing statement, the Bank need not examine the ownership of any Securities, but is
protected in acting upon receipt of Securities containing an endorsement or instruction of transfer
or power of transfer which appears on its face to be signed by the Holder or an agent of the
Holder. The Bank shall not be bound to make any investigation into the facts or matters stated
in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written advice of such counselor any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Monevs Held bv Bank - Fiduciarv Account/Collateralization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
45024858
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EXHIBIT A
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities shall
be continuously collateralized by securities or obligations which qualify and are eligible under both
the laws of the State of Texas and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal
Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by
check drawn on such fiduciary account unless the owner of such Securities shall, at its own
expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank its directors, officers and employees, and hold it harmless against, any loss"
liability, or expense incurred without negligence or bad faith on its part, arising out of or in
connection with its acceptance or administration of its duties hereunder, including the cost and
expense against any claim or liability in connection with the 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 either the
Bank Office or the administrative offices of the Issuer is located, and agree that service of process
by certified or registered mail, return receipt requested, to the address referred to in Section 6.03
of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that
the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction to
determine the rights of any Person claiming any interest herein.
Section 5.08. DTC Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to the
extent within its control, will comply with the "Operational Arrangements", which establishes
requirements for securities to be eligible for such type depository trust services, including, but not
limited to, requirements for the timeliness of payments and funds availability, transfer turnaround
time, and notification of redemptions and calls,
45024858
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EXHIBIT A
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.
Section 6.02. AssiQnment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06. Severabilitv. In case any provision herein shall be invalid, illegal,or'
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein.; express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute the
entire agreement between the parties hereto relative to the Bank acting as Paying AgenURegistrar
and if any conflict exists between this Agreement and the Bond Resolution, the Bond Resolution
shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment
of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier
terminated by either party upon sixty (60) days written notice; provided, however, an early
termination of this Agreement by either party shall not be effective until (a) a successor Paying
Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice
given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar.
Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination
of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely
affect the payment of the Securities.
45024858
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EXHIBIT A
The resigning Paying AgenURegistrar may petition any court of competent jurisdiction for
the appointment of a successor Paying AgenURegistrar if an instrument of acceptance by a
successor Paying AgenURegistrar has not been delivered to the resigning Paying AgenURegistrar
within sixty (60) days after the giving of such notice of resignation.
Upon an early termination of this Agreement. the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying AgenURegistrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force and
effect following the termination of this Agreement.
Section 6.11. Governinq Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
BANK ONE, TEXAS, N.A.
.'
BY
Title:
[SEAL]
Attest:
Address:
403 West Fourth Street
PG-1
Fort Worth, Texas 76102
Title:
CITY OF NORTH RICH LAND HILLS
BY
Mayor
(CITY SEAL)
Address:
P. O. Box 820609
North Richland Hills, Texas 76182
Attest:
City Secretary
45024858
-9-
EXHIBIT A.
EXHiBIT B
$5,920,000
CITY OF NORTH RICHLAND HILLS, TEXAS
General Obligation Refunding and Improvement Bonds,
Series 2001
PURCHASE CONTRACT
April 23, 2001
. .
The Honorable Mayor and Members of the City Council
City of North Richland Hills
P.O. Box 820069
North Richland Hills, Texas 76182
i
Dear Mayor and Members of the City Council:
Southwest Securities, Inc. (the "Authorized Representative") and Dain Rauscher IncOlporated
(collectively, the "Underwriters"), offer to enter into this Purchase Contract with the City of North RicWand
Hills, Texas (the "City"). This offer is made subject to the City's acceptance of this Purchase Contract on
or before 9:00 p.m. Central Time on April 23, 2001.
1. Purchase and Sale of the Bonds. Upon the tenns and conditions and upon the basis of
the representations set forth herein, the Underwriters jointly and severally hereby agree to purchase from
the City, and the City hereby agrees to sell and deliver to the Underwriters an aggregate of $5,920,000
principal amount of City of North Richland Hills, Texas General Obligation Refunding and Improvement
Bonds, Series 2001 (the "Bonds"). The Bonds shall have the maturities, interest rates and be subject to
redemption in accordance with the provisions of Exhibit A hereto and shall be issued and secured under
the provisions of the Ordinance (as defined below). The purchase price for the Bonds shall be
$5,915,229.45, representing the principal amount of the Bonds of$5,920,000.00, less an Underwriters'
discount on the Bonds of$38,779.00, less an aggregate original issue discount on the Bonds of$2,297.1 0,
and plus accrued interest in the amount of $36,305.55.
Southwest Securities, Inc, represents that it has been duly authorized to execute this Purchase
Contract and has been duly authorized to act hereunder as the Authorized Representative. All actions that
may be taken by the Underwriters may be taken by the Authorized Representative alone.
2. Ordinance, The Bonds shall be as described in and shall be issued and secured under the
provisions of the Ordinance authorizing the issuance and sale of the Bonds adopted by the City on April
23,2001 (the "Ordinance"). The Bonds shall be secured and payable as provided in the Ordinance.
3, Public Offering. It shall be a condition of the obligations of the City to sell and deliver the
Bonds to the Underwriters, and of the obligations of the Underwriters to purchase and accept delivery of
the Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and
delivered by the City and accepted and paid for by the Underwriters at the Closing. The Underwriters
agree to make a bona fide public offering of all of the Bonds, at not in excess of the initial public offering
prices, as set forth in the Official Statement; provided however at least ten percent (10%) of the principal
amount of the Bonds of each maturity shall be sold to the "public" (exclusive of dealers, brokers and
investment bankers, etc.) at the initial offering price set forth in the Official Statement.
4. Security Deposit, Delivered to the City herewith is a corporate check of the Authorized "
Representative payable to the order of the City in the amount of $91,750.00. Such check is a common
"Good Faith" check for the Bonds and the City's Tax and Waterworks and Sewer System Surplus Revenue
Certificates of Obligation, Series 2001 (the "Certificates"), and an amount of such check equal to 1% of
the principal amount of the Bonds may be applied toward any obligation of the Underwriters owing as a
result of the failure of the Underwriters to accept delivery of the Bonds, as provided herein. The City
agrees to hold such check uncashed until the Closing to ensure the perfonnance by the Underwriters of
their obligation to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with
the payment by the Underwriters of the purchase price of the Bonds, the City shall return such check to
the Authorized Representative as provided in Paragraphs 7 and 8 hereof. Should the City fail to deliver
the Bonds at the Closing, or should the City be unable to satisfy the conditions of the obligations of the
Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Purchase Contract
(unless waived by the Authorized Representative), or should such obligations of the Underwriters be
tenninated for any reason pennitted by this Purchase Contract, such check shall immediately be returned
to the Authorized Representative. In the event the Underwriters fail (other than for a reason permitted
hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing as herein provided, such
check shall be retained by the City as and for fiillliquidated damages for such failure of the Underwriters
and for any defaults hereunder on the part of the Underwriters. The Authorized Representative hereby
agrees not to stop or cause payment on said check to be stopped unless the City has breached any of the
tenns of this Purchase Contract.
5. Official Statement. The Official Statement, including the cover pages and Appendices
thereto, of the City, dated April 23, 2001, with respect to the Bonds, as further amended only in the
manner herein provided, is hereinafter called the "Official Statement." The City hereby authorizes the
2
EXHIBIT B
Ordinance and the Official Statement and the infonnation therein contained to be used by the Underwriters
in connection with the public offering and sale ofthe Bonds. The City confmns its consent to the use by
the Underwriters prior to the date hereof of the Preliminary Official Statement, relative to the Bonds, dated
April 16, 200 1 (the "PreliminaIy Official Statement"), in connection with the preliminary public offering and
sale of the Bonds, and it is "deemed final" as of its date, within the meaning, and for the purposes, of Rule
15c2-12 promulgated under authority granted by the federal Securities and Exchange Act of 1934 (the
"Rule"). The City agrees to cooperate with the Underwriters to provide a supply of final Official Statements
within seven business days of the date hereof in sufficient quantities to comply with the Underwriters'
obligations under the Rule and the applicable rules of the Municipal Securities Rulemaking Board. The
Underwriters will use their best efforts to assist the City in the preparation of the final Official Statement in
order to ensure compliance with the aforementioned rules.
If at any time after the date of this Purchase Contract but before the fIrst to occur of (i) the date
upon which the Underwriters notify the City that the period of the initial public offering of the Bonds has
expired or (ii) the date that is 90 days after the date hereof, any event shall occur that might or would cause
the Official Statement to contain any tmtrue statement of a material fact or to omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances
tmder which they were made, not misleading, the City shall notify the Authorized Representative, and if, .'
in the opinion of the Authorized Representative, such event requires the preparation and publication of a
supplement or amendment to the Official Statement, the City will at its expense supplement or amend the
Official Statement in the fonn and in a manner approved by the Authorized Representative and furnish to
the Underwriters a reasonable nwnber of copies requested by the, Authorized Representative in order to
enable the Underwriters to comply with the Rule.
To the best knowledge and belief of the City, the Official Statement contains infonnation, including
financial infonnation or operating data, as required by the Rule. The City has not failed to comply with any
tmdertaking specified in paragraph (bX5)(i) of the Rule within the last five years.
6. Representations, Warranties and Agreements ofthe City. On the date hereof, the
City represents, warrants and agrees as follows:
(a) The City is a home rule municipality and a political subdivision of the State ofT exas
and a body politic and corporate, and has full legal right, power and authority to enter into this
Purchase Contract and the Escrow Agreement pertaining to the Bonds between the City and the
Escrow Agent named therein (the "Escrow Agreement"), to adopt the Ordinance, to sell the Bonds,
and to issue and deliver the Bonds to the Underwriters as provided herein and to cany out and
conswnmate all other transactions contemplated by the Ordinance, the Escrow Agreement and this
Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance hereof,
the City has duly adopted the Ordinance, has duly authorized and approved the execution and
3
EXHIBIT B
delivery of, and the perfonnance by the City of the obligations contained in the Bonds, the Escrow
Agreement and this Purchase Contract and has duly authorized and approved the perfonnance by
the City of its obligations contained in the Ordinance, the Escrow Agreement and in this Purchase
Contract;
(c) The City is not in breach of or default under any applicable law or administrative
regulation of the State of Texas or the United States (including regulations of its agencies) or any
applicable judgment or decree or any loan agreement, note, order, agreement or other instnunent,
except as may be disclosed in the Official Statement, to which the City is a party or to the
knowledge of the City it is otherwise subject, that would have a material and adverse effect upon
the business or financial condition of the City; and the execution and delivery of the Escrow
Agreement and this Purchase Contract by the City and the execution and delivery of the Bonds and
the adoption of the Ordinance by the City and compliance with the provisions of each thereof will
not violate or constitute a breach of or default under any existing law, administrative regulation,
judgment, decree or any agreement or other instnunent to which the City is a party or, to the
knowledge of the City, is otherwise subject;
(d) All approvals, consents and orders of any governmental authority or agency having
jurisdiction of any matter that would constitute a condition precedent to the perfonnance by the
City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the
Closing;
(e) At the time of the City's acceptance hereof and at the time of the Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(f) Between the date of this Purchase Contract and the Closing, the City will not,
without the prior written consent of the Underwriters, issue any additional bonds, notes or other
obligations for borrowed money payable in whole or in part fÌ'Om ad valorem taxes (except for the
Certificates, which are being sold concurrently with the Bonds), and the City will not incur any
material liabilities, direct or contingent, nor will there be any adverse change of a material nature
in the financial position of the City;
(g) Except as described in the Official Statement, no litigation is pending or, to the
knowledge of the City, threatened in any court affecting the corporate existence of the City, the title
of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of
the Bonds, the levy, collection or application of the ad valorem taxes pledged or to be pledged to
pay the principal of and interest on the Bonds, or in any way contesting or affecting the issuance,
execution, delivery, payment, security or validity of the Bonds, or in any way contesting or affecting
the validity or enforceability of the Ordinance, the Escrow Agreement or this Purchase Contract,
4
EXHIBIT B
------
or contesting the powers of the City, or any authority for the Bonds, the Ordinance. the Escrow
Agreement or this Purchase Contract or contesting in any way the completeness. accuracy or
fairness of the Preliminary Official Statement or the Official Statement;
(h) The City will cooperate with the Underwriters in arranging for the qualification of
the Bonds for sale and the detennination of their eligibility for investment under the laws of such
jurisdictions as the Authorized Representative designates, and will use its best efforts to continue
such qualifications in effect so long as required for distribution of the Bonds; provided, however,
that the City will not be required to execute a consent to service of process or to qualify to do
business in connection with any such qualification in any jurisdiction;
(i) The descriptions of the Bonds, the Escrow Agreement and the Ordinance
contained in the Official Statement accurately summarize certain provisions of such instnunents, and
the Bonds, when validly executed, authenticated and delivered in accordance with the Ordinance
and sold to the Underwriters as provided herein, will be validly issued and outstanding obligations
of the City entitled to the benefits of, and subject to the limitations contained in, the Ordinance;
U) If prior to the Closing an event occurs affecting the City that is materially adverse "
for the purpose for which the Official Statement is to be used and is not disclosed in the Official
Statement, the City shall notify the Authorized Representative, and if in the opinion of the City and
the Authorized Representative such event requires a supplement or amendment to the Official
Statement, the City will supplement or amend the Official Statement in a fonn and in a manner
approved by the Authorized Representative;
(k) The financial statements contained in the Official Statement present fairly the
financial position of the City as of the date and for the period covered thereby and are stated on
a basis substantially consistent with that of the prior year's audited financial statements;
(l) Any certificate signed by any official of the City and delivered to the Underwriters
shall be deemed a representation and warranty by the City to the Underwriters as to the truth of
the statements therein contained;
(m) The City has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be
relied upon; and
(n) The City will not knowingly take or omit to take any action, which action or
omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner
other than as provided in the Ordinance and the Escrow Agreement or that would cause the
interest of the Bonds to be includable in gross income of the holders thereof for federal income tax
purposes.
5
i1XHIBIT B .~
7. Closing, At 10:00 A.M., Central Time, on June 5, 2001 (the "Closing"), the City will
deliver the initial Bonds (as defined in the Ordinance) to the Underwriters and the City shall take
appropriate steps to provide DTC with one definite securities certificate for each year of maturity of the
Bonds, and to provide the Underwriters with the other documents hereinafter mentioned, On or prior to
the date of Closing, the Underwriters shall make arrangements with The Depository Trust Company
("DTC") for the Bonds to be immobilized and thereafter traded as book-entry only securities and on the
date of Closing the Underwriters will accept such delivery and pay the purchase price of the Bonds as set
forth in Paragraph I hereof in immediately available funds. Concurrently with such payment by the
Underwriters, the City shall return to the Authorized Representative the check referred to in paragraph 4
hereof Delivery and payment as aforesaid shall be made at the office of the paying agent/registrar, as
noted in the Official Statement, or such other place as shall have been mutually agreed upon by the City
and the Authorized Representative.
8. Conditions. The Underwriters have entered into this Purchase Contract in reliance upon
the representations and warranties of the City contained herein and to be contained in the documents and
instruments to be delivered at the Closing, and upon the perfonnance by the City of its obligations
hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriters'
obligations under this Purchase Contract to purchase and pay for the Bonds shall be subject to the "
perfonnance by the City of its obligations to be perfonned hereunder and under such documents and
instruments at or prior to the Closing, and shall also be subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of
Closing, as if made on the date of Closing;
(b) At the time of the Closing, (i) the Ordinance and the Escrow Agreement shall be
in full force and effect, and the Ordinance and the Escrow Agreement shall not have been
amended, modified or supplemented and the Official Statement shall not have been amended,
modified or supplemented, except as may have been agreed to by the Authorized Representative;
and (ii) the net proceeds of the sale of the Bonds shall be deposited and applied as described in
the Official Statement and in the Ordinance;
(c) At the time of the Closing, all official action of the City related to the Ordinance
shall be in full force and effect and shall not have been amended, modified or supplemented;
(d) The City shall not have failed to pay principal or interest when due on any of its
outstanding obligations for borrowed money;
(e) The City will purchase or cause to be purchased the Federal Securities (as defined
in the Official Statement) as may be necessary to effect the refunding of the City's outstanding
obligations as contemplated by the Escrow Agreement;
6
EXHIBIT B
(f) At or prior to the Closing, the Underv.rriters shall have received each of the
following documents:
(1) The Official Statement of the City, executed on behalf of the City by the
Mayor and City Secretary;
(2) The Ordinance, certified by the City Secretary under the seal of the City
as having been duly adopted by the City and as being in effect, with such changes or
amendments as may have been agreed to by the Underwriters. The Ordinance shall contain
the agreement of the City, in form satisfactory to the Underwriters, that is described under
the caption "Continuing Disclosure of Information" in the Preliminary Official Statement;
(3) The opinion, dated the date of Closing, of Fulbright & Jaworski LLP,
("Bond Counsel") in substantially the form and substance of Appendix C to the Official
Statement;
(4) An opinion or certificate, dated on or prior to the date of Closing, of the
Attorney General of Texas, approving the Bonds as required by law and the registration .'
certificate of the Comptroller of Public Accounts of the State of Texas;
(5) The supplemental opinion or opinions, dated the date of Closing, of Bond
Counsel, addressed to the City and the Unçierwriters, which provides that the
Underwriters may rely upon the opinion of Bond Counsel delivered in accordance with the
provisions of paragraph 8(f)(3) hereof, and opining to the effect that (a) the Purchase
Contract has been duly authorized, executed and delivered by the City and (assuming due
authorization by the Underwriters) constitutes a binding and enforceable agreement of the
City in accordance with its terms; (b) in its capacity as Bond Counsel, such finn has
reviewed the information in the Official Statement under the captions or subcaptions
subcaptions "Plan of Financing," "The Bonds and Certificates" (exclusive of the information
under the subcaptions "Book-Entry Only System" and "Holders' Remedies"), "Tax
Matters," "Other Information - Continuing Disclosure of Information" (exclusive of the
information under the subcaption "Compliance with Prior Undertakings"), "Other
Information - Legal Opinions" (exclusive of the last two sentences of the first paragraph
thereof) and "Legal Investments and Eligibility to Secure Public Funds in Texas" and such
finn is of the opinion that such descriptions present a fair and accurate summary of the
provisions of the laws and instruments therein described and. with respect to the Bonds.
such information conforms to the Ordinance; and (c) the Bonds are exempt rrom
registration pursuant to the Securities Act of 1933, as amended. and the Ordinance is
exempt rrom qualification as an indenture pursuant to the Trust Indenture Act of 1939, as
amended;
7
EXHIBIT B
(6) An opinion of McCall, Parkhurst & Horton L.L.P., Underwriters' Counsel,
addressed to the Underwriters, and dated the date of Closing to the effect that: (i) the
Bonds are exempt securities within the meaning of Section 3(a)(2) of the Securities Act of
1933, as amended, and it is not necessary in connection with the sale of the Bonds to the
public to register the Bonds under the Securities Act of 1933, as amended, or to qualify
the Ordinance under the Trust Indenture Act of 1939, as amended; and (ii) in their
participation in the preparation of the Official Statement, nothing has come to the attention
of said finn that would lead them to believe that the Official Statement (excluding the
financial and statistical data and forecasts included therein, all as to which no view need be
expressed) contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading;
(7) A certificate, dated the date of Closing, signed by the Mayor and the
Director of Finance of the City, to the effect that (i) the representations and warranties of
the City contained herein are true and correct in all material respects on and as of the date
of Closing as if made on the date of Closing; (ü) except to the extent disclosed in the
Official Statement, no litigation is pending or, to the knowledge of such persons, threatened .
in any court to restrain or enjoin the issuance or delivery of the Bonds, or the levy,
collection or application of the ad valorem taxes pledged or to be pledged to pay the
principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or
affecting the validity of the Bonds, the Ordinance, .the Escrow Agreement or this Purchase
Contract, or contesting the powers of the City or the authorization of the Bonds or the
Ordinance, or contesting in any way the accuracy, completeness or fairness of the Official
Statement (but in lieu of or in conjunction with such certificate, the Underwriters may, in
their sole discretion, accept certificates or opinions of the City Attorney that, in the opinion
thereof, the issues raised in any such pending or threatened litigation are without substance
or that the contentions of all plaintiffs therein are without merit); (iii) to the best of their
knowledge, no event affecting the City has occurred since the date of the Official
Statement that should be disclosed in the Official Statement for the purpose for which it is
to be used or that it is necessary to disclose therein in order to make the statements and
information therein not misleading in any respect; and (iv) that there has not been any
material and adverse change in the affairs or financial condition of the City since September
30, 2000, the latest date as to which audited financial information is available;
(8) A certificate, dated the date of the Closing, of an appropriate officer of the
City to the effect that, on the basis of the facts, estimates and circumstances in effect on the
date of delivery of the Bonds, it is not expected that the proceeds of the Bonds will be
used in a manner that would cause the Bonds to be aroitrage bonds within the meaning of
Section 148 of the Internal Revenue Code of 1986, as amended;
8
ßXHlBIT B ;
(9) Evidence of the rating on the Bonds, which shall be "Aaa" by Moody's
Investors Service, Inc, ("Moody's") and "AAA" by Standard and Poor's Corporation. a
division of the McGraw-Hill Companies, Inc. ("S&P"), shall be delivered in a form
acceptable to the Underwriters;
(l0) A copy of the policy of municipal bond insurance issued by MBIA
Insurance Corporation with respect to the Bonds; and
(11) A copy of a special report prepared by Grant Thornton LLP with respect
to the Bonds addressed to the City, Bond Counsel, Underwriter's Counsel and the
Underwriter verifying the arithmetical computations of the adequacy of the maturing
principal and interest on the Federal Securities and uninvested cash on hand under the
Escrow Agreement to pay, when due, the principal of and interest on the bonds being
refunded and the computation of the yield with respect to such Federal Securities and the
Bonds;
(12) Such additional legal OpIniOns, certificates, instruments and other
documents as Bond Counselor the Underwriters may reasonably request to evidence the .'
truth, accuracy and completeness, as of the date hereof and as of the date of Closing, of
the City's representations and warranties contained herein and of the statements and
infonnation contained in the Official Statement and the due perfonnance and satisfaction
by the City at or prior to the date of Closing of all-agreements then to be performed and
all conditions then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but
only if, they are satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the
obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be
terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate, the
security deposit referred to in Paragraph 4 of this Purchase Contract shall be returned to the Authorized
Representative and neither the Underwriters nor the City shall be under further obligation hereunder, except
that the respective obligations of the City and the Underwriters set forth in Paragraphs 10 and 12 hereof
shall continue in full force and effect.
9. Termination. The Underwriters may terminate its obligation to purchase at any time
before the Closing if any of the following should occur:
9
EXHIBIT B
(a) (i) Legislation shall have been enacted by the Congress of the United States, or
recommended to the Congress for passage by the President of the United States or favorably
reported for passage to either House of the Congress by any Committee of such House; or (ii) a
decision shall have been rendered by a court established lUlder Article III of the Constitution of the
United States or by the United States Tax Court; or (iü) an order, ruling or regulation shall have
been issued or proposed by or on behalf of the TreasUl)' Department of the United States or the
Internal Revenue Service or any other agency of the United States; or (iv) a release or official
statement shall have been issued by the President of the United States or by the Treasury
Department of the United States or by the Internal Revenue Service, the effect of which, in any
such case described in clause (i), (ü), (iü), or (iv), would be to impose, directly or indirectly, federal
income taxation upon interest received on obligations of the general character of the Bonds or upon
income of the general character to be derived by the City, other than any imposition of federal
income taxes upon interest received on obligations of the general character as the Bonds on the
date hereof and other than as disclosed in the Official Statement, in such a manner as in the
judgment of the Authorized Representative would materially impair the marketability or materially
reduce the market price of obligations of the general character of the Bonds.
(b) Any action shall have been taken by the Securities and Exchange Commission or .'
by a court that would require registration of any security lUlder the Securities Act of 1933, as
amended, or qualification of any indenture lUlder the Trust Indenture Act of 1939, as amended, in
connection with the public offering of the Bonds, or any action shall have been taken by any court
or by any govemmental authority suspending the use of th@ Preliminary Official Statement or the
Official Statement or any amendment or supplement thereto, or any proceeding for that purpose
shall have been initiated or threatened in any such court or by any such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment shall
be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to
matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by
or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax
status of the City, its property or income, its bonds (including the Bonds) or the interest thereon,
that in the judgment of the Authorized Representative would materially affect the market price of
the Bonds.
(d) (i) A general suspension of trading in securities shall have occurred on the New
York Stock Exchange, or (ü) the United States shall have become engaged in hostilities (including
the escalation of any hostilities existing on the date hereof, whether or not foreseeable), the effect
of which, in either case described in clause (i) and (ii), that, in the judgment of the Authorized
Representative, would materially affect the market price of the Bonds.
10
EXHIBIT B
(e) An event described in Paragraph 6û) hereof occurs that, in the opinion of the
Authorized Representative, requires a supplement or amendment to the Official Statement that is
deemed by them, in their discretion, to adversely affect the market for the Bonds,
(f) A general banking moratoriwn shall have been declared by authorities of the United
States, the State of New York or the State of Texas.
(g) A lowering of the ratings of "Aaa" and "AM" initially assigned to the Bonds by
Moody's and S&P, respectively, shall occur prior to the Closing.
10. Expenses. (a) The City shall payout of the bond proceeds all expenses incident to the
issuance of the Bonds, including but not limited to: (i) the cost of the preparation, printing and distribution
of the Preliminary Official Statement and the Official Statement; (ü) the cost of the preparation and printing
of the Bonds; (iii) the fees and expenses of Bond Counsel to the City; (iv) the fees and disbursements of
the City's accountants, advisors, and of any other experts or consultants retained by the City, including the
fee of the Grant Thornton LLP for the preparation of the verification report relating to the refunding; (v) the
premium for municipal bond insurance; and (vi) the fees for the bond ratings and any travel or other
expenses incurred incident thereto. .'
(b) The UndeIWIÌters shall pay (i) all advertising expenses in connection with the offering of
the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents; and (ill) the fee
of McCall, Parkhurst & Horton L.L.P. for such finn's opinion required by Paragraph 8(t)(6) hereof
11. Notices. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing at the address for the City set forth above, and any
notice or other communication to be given to the Underwriters under this Purchase Contract may be given
by delivering the same in writing to Southwest Securities, Inc., 1201 Elm St, Suite 3500, Dallas, Texas
75270, Attention: Leon Johnson.
12. Parties in Interest This Purchase Contract is made solely for the benefit of the City and
the Underwriters (including the successors or assigns of any Underwriter) and no other person shall acquire
or have any right under this contract. The City's representations, warranties and agreements contained in
this Purchase Contract that exist as of the Closing, and without regard to any change in fact or circumstance
occurring subsequent to the Closing, shall remain operative and in full force and effect, regardless of (i) any
investigations made by or on behalf of the Underwriters, and (ü) delivet)' of any payment for the Bonds
hereunder; and the City's representations and warranties contained in Paragraph 6 of this Purchase
Contract shall remain operative and in full force and effect, regardless of any tennination of this Purchase
Contract.
13. Severability. If any provision of this Purchase Contract shall be held or deemed to be
or shall, in fact, be invalid, inoperative or Wlenforceable as applied in any particular case in any jurisdiction
11
EXHIBIT B
or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any constitution, statute, rule
of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision
in question invalid, inoperative or unenforceable in any other case or circumstances, or of rendering any
other provision inoperative or unenforceable to any extent whatever.
14. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
15. Execution in Counterparts. This Purchase Contract may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instnunent, and any of the parties
hereto may execute this Purchase Contract by signing any such counterpart.
16, Section Headings. Section headings have been inserted in this Contract as a matter of
convenience of reference only, and it is agreed that such section headings are not a part of this Contract
and will not be used in the interpretation of any provisions of this Contract.
17. Status of the Underwriters. It is understood and agreed that for all purposes of this
Contract and the transactions contemplated hereby the Undernriters have, in their role as undernriters, ..
acted solely as independent contractors and have not acted as financial or investment advisors, fiduciaries
or agents to or for the City, whether directly or indirectly through any person. The City recognizes that the
Underwriters expect to profit ITorn the acquisition and potential distribution of the Bonds.
18. Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such
acceptance.
[Signature page follows.]
12
EXHIBIT B
Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such
acceptance.
Vel)' truly yours,
Southwest Securities, Inc.
Dam Rauscher Incorporated
By: Southwest Securities, Inc.
Authorized Representative
By:
Title: Senior Vice President
Accepted:
This 23rd day of April, 2001
By:
Mayor
City of North Richland Hills, Texas
Attest:
City Secretai)'
City of North Richland Hills, Texas
13
ClXHIBIT B
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
City of North Richland Hills, Texas
General Obligation Refunding and Improvement Bonds, Series 2001
Maturity
(2/15)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Principal Amount
$295,000
375,000
580,000
600,000
620,000
645,000
675,000
695,000
470,000
485,000
50,000
50,000
50,000
50,000
50,000
50,000
45,000
45,000
45,000
45,000
Interest Rate
(%)
4.250
4.250
4.250
4.250
4.250
4.250
4.375
4.500
4.500
4.625
4.750
4.875
5.000
5.125
5.125
5.2'50
5.250
5.250
5.375
5.375
Yield
(%)
3.40
3.75
3.91
4.04
4.17
4.29
4.43
4.55
4.63
4.72
4.86
4.97
5.07
5.17
5.25
5.31
5.35
5.41
5.45
5.46
,
The Bonds manning on and after February 15,2012 are subject to redemption prior to maturity at the
option of the City on February 15,2011 or any date thereafter at a price of par plus accrued interest to
the date of redemption.
A-I
EXHIBIT B
EXHIBIT c
SPECIAL ESCROW AGREEMENT
COUNTY OF DALLAS
§
§
§
THE STATE OF TEXAS
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as
of April 23, 2001, by and between the City of North Richland Hills, Texas, a duly incorporated
municipal corporation in Tarrant County, Texas (the "City") acting by and through the Mayor and
City Secretary, and Bank One, National Association, a national banking association organized
and existing under the laws of the United States of America, or its successors or assigns
hereunder (the "Bank"),
WITNESSETH:
WHEREAS, the City Council of the City of North Richland Hills, Texas (the "City") has
heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in
principal amount $4,890,000 (collectively, the "Refunded Obligations") more particularly
described as follows:
(i) City of North Richland Hills, Texas, Tax and Golf Course Revenue
Refunding Bonds, Series 1991, dated April 1, 1991, maturing on September 1 in
each of the years 2002 through 2011, and aggregating in principal amount
$3,590,000 (the "Series 1991 Refunded Bonds"); and
(ii) City of North Richland Hills, Texas, Gen~ral Obligation Bonds, Series
1993, dated May 1, 1993, maturing on February i 5 in each of the years 2004
through 2009, and aggregating in principal amount $1,300,000 (the "Series 1993
Refunded Bonds");
AND WHEREAS, in accordance with the provisions of V.T.C.A., Government Code,
Chapter 1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an
amount sufficient to provide for the payment of obligations to be refunded, deposit the proceeds
of such refunding bonds with any place of payment for the obligations being refunded 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 in direct
obligations of the United States of America, including obligations the principal of and interest on
are unconditionally guaranteed by the United States of America, (hereinafter called the "Federal
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 Refunded Obligations; and
WHEREAS, the Refunded Obligations 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 23rd day of April, 2001, pursuant to an ordinance (the "Bond
Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds
known as "City of North Richland Hills, Texas, General Obligation Refunding and Improvement
Bonds, Series 2001" (the "Bonds"), and such Bonds are being issued to refund, discharge and
make final payment of the principal of and interest on the Refunded Obligations; and
45024864
WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other
available funds of the City, are to be deposited with the Bank and used in part to purchase the
Federal Securities listed and identified in Exhibit B attached hereto and incorporated by
reference as a part of this Agreement for all purposes; and
WHEREAS, the Federal Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Bank in accordance with this
Agreement; and
WHEREAS, the Federal Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Obligations and the
accrued interest thereon, as the same shall become due in accordance with the terms of the
ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A
attached hereto; and
WHEREAS, the City has completed all arrangements for the purchase of the Federal
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Bank is a banking association organized and existing under the laws Q.f
the State of New York, possessing trust powers and is fully qualified and empowered to enter
into this Agreement; and
WHEREAS, in Section 16 of the Bond Ordinance, 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 said Refunded Obligations in accordance with the
provisions thereof, including, without limitation, all actions required by the ordinances
authorizing the Refunded Obligations, the Act, the Bond Ordinance 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 Refunded Obligations as the
same shall become due, the City and the Bank hereby mutually undertake, promise and agree
as follows:
SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the
ordinances authorizing the issuance of the Refunded Obligations and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of
said 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.
SECTION 2: Escrow Fund Creation/Funding. There is hereby created by the City with
the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2001 CITY OF
NORTH RICHLAND HILLS, TEXAS, REFUNDING BOND ESCROW FUND" (hereinafter called
the "Escrow Fund") for the benefit of the holders of the Refunded Obligations, and, immediately
following the delivery of the Bonds, the City agrees and covenants to cause to be deposited with
the Bank the following amounts:
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2
EXHIBIT C
$5,032,989,83
For the purchase of Federal Securities identified in Exhibit B to
be held for the account of the Escrow Fund
$0,85
For deposit in the Escrow Fund as a beginning cash balance.
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Federal Securities deposited and
credited to the 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 Federal Securities, together with 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 Refunded Obligations as the same shall become due and payable, and such Refunded
Obligations, 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.
FURTHERMORE, the Bank acknowledges receipt of a copy of the order providing for
the redemption of the (i) Series 1991 Refunded Obligations on September 1, 2001 at the
redemption price of par plus accrued interest thereon and (ii) Series 1993 Refunded
Obligations on February 15, 2003; all in accordance with the provisions of the notiç~
requirements applicable to said Refunded Obligations and the notice requirements contained in
the respective ordinances authorizing such Refunded Obligations.
The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations
to be sent to the registered owners thereof appearing on, the registration books at least thirty
(30) days prior to the respective redemption date therefor.
SECTION 4: Pledge of Escrow. The Bank agrees that all cash and Federal Securities,
together with any income or interest earned thereon, held in the Escrow Fund shall be and is
hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations 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
Federal Securities in the Escrow Fund shall be applied solely in accordance with the provisions
of this Agreement.
SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, 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, the City shall make timely deposits to
the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be immediately given by the Bank
to the City by the fastest means possible, but the Bank shall in no manner be responsible for the
City's failure to make such deposits.
SECTION 6: Escrow Fund Securities/Segregation. The Bank shall hold said Federal
Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for
the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys
and securities on deposit with the Bank; shall never commingle said Federal Securities and
moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets
therein only as set forth herein. Nothing herein contained shall be construed as requiring the
Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical,
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EXHIBIT c
but moneys of an equal amount, except to the extent such are represented by the Federal
Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow
agent; and a special account evidencing such facts shall at all times be maintained on the books
of the Bank.
SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time
collect and receive the principal of and interest on the Federal Securities as they respectively
mature and become due and credit the same to the Escrow Fund. On or before each principal
and/or interest payment date or redemption date, as the case may be, for the Refunded
Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone,
including the City, shall cause to be withdrawn from the Escrow Fund the amount required to
pay the accrued interest on the Refunded Obligations due and payable on said payment date
and the principal of the Refunded Obligations due and payable on said payment date or
redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be
immediately transmitted and deposited with the paying agent for the Refunded Obligations to be
paid with such amount. The paying agent for the Refunded Obligations is the Bank.
If any Refunded Obligation thereon shall not be presented for payment when the
principal thereof or interest thereon shall have become due, and if cash shall at such times be
held by the Bank in trust for that purpose sufficient and available to pay the principal of such
Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash
without liability to the holder of such Refunded Obligation for interest thereon after such maturity
or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall
thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on
or with respect to said Refunded Obligation, including for any claim for the payment thereof and
interest thereon. All cash required by the provisions herepf to be set aside or held in trust for
the payment of the Refunded Obligations, including interest thereon, shall be applied to and
used solely for the payment of the Refunded Obligations 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
Bank in trust for the payment and discharge of any of the Refunded Obligations and interest
thereon which remains unclaimed for a period of three (3) years after the stated maturity date or
redemption date of such Refunded Obligations shall be returned to the City. Notwithstanding
the above and foregoing, any remittance of funds from the Bank to the City shall be subject to
any applicable unclaimed property laws of the State of Texas.
SECTION 8: Disposal of Refunded Obligations. All Refunded Obligations cancelled on
account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, 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 Refunded Obligations shall have an express lien on all
moneys and Federal Securities in the Escrow Fund until paid out, used and ~pplied in
accordance with this Agreement.
Unless disbursed in payment of the Refunded Obligations, all funds and the Federal
Securities received by the Bank 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 Refunded Obligations shall be
entitled to a preferred claim and shall have a first lien upon such funds and Federal Securities
enjoyed by a trust beneficiary. The funds and Federal Securities received by the Bank under
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4
EXHIBIT c
this Agreement shall not be considered as a banking deposit by the City and the Sank and the
City shall have no right or title with respect thereto, except as otherwise provided herein. Such
funds and Federal Securities shall not be subject to checks or drafts drawn by the City.
SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no
lien whatsoever upon any of the moneys or Federal Securities in the Escrow Fund for payment
of services rendered hereunder, services rendered as paying agent/registrar for the Refunded
Obligations, or for any costs or expenses incurred hereunder and reimbursable from the City.
SECTION 11: Substitution of Investments/Reinvestments. The Bank shall be authorized
to accept initially and temporarily cash and/or substituted Federal Securities pending the
delivery of the Federal Securities identified in the Exhibit B attached hereto, or shall be
authorized to redeem the Federal Securities and reinvest the proceeds thereof, together with
other moneys held in the Escrow Fund in noncallable direct obligations of the United States of
America provided such early redemption and reinvestment of proceeds does not change the
repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank 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 Federal Securities identified in Exhibit B pending the receipt and
delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the
Federal Securities and the reinvestment of such funds in one or more substituted
securities (which shall be noncallable direct obligations of the United States of
America), together with the interest thereon and other available moneys then
held in the 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 Refunded Obligations which have not previously been paid,
and
(2) with respect to an early redemption of Federal 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 Bonds or Refunded Obligations 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
Bonds or the Refunded Obligations 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 Refunded
Obligations and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as
provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Federal
Securities listed in Exhibit B and neither the City nor the Bank 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
Refunded Obligations there exists or will exist excesses of interest on or maturing principal of
the Federal Securities in excess of the amounts necessary hereunder for the Refunded
Obligations, the Bank may transfer such excess amounts to or on the order of the City, provided
that the City delivers to the Bank the following:
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5
EXHIBIT Q
(1) an opinion by an independent certified public accountant that after
the transfer of such excess, the principal amount of securities in the Escrow
Fund, together with the interest thereon, and other available monies then held in
the Escrow Fund, will be sufficient to pay, as the same become due and without
reinvestment, in accordance with Exhibit A. the principal of, and interest on, the
Refunded Obligations 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 Bonds or
the Refunded Obligations to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded
Obligations 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 Refunded Obligations or the Bonds.
SECTION 14: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Federal Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Bank's Liability for Investments. The Bank shall not be liable
or responsible for any loss resulting from any investment made in the Federal Securities or
substitute securities as provided in Section 11 hereof.
SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Paying
Agent's Charges. The City agrees to pay the Bank for the performance of services hereunder
and as reimbursement for anticipated expenses to be incurred hereunder the amount of
$ and, except for reimbursement of costs and expenses incurred by the Bank
pursuant to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and
complete payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the effective date of this Agreement,
the sum of $ , which represents the total charge due all paying agents for the
Refunded Obligations and the Bank acknowledges and agrees that above amount is and
represents the total amount of compensation due the Bank for services rendered as paying
agent for the Refunded Obligations. The Bank 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 Refunded Obligations.
The Bank agrees to continue to provide paying agent services for the life of the
Refunded Obligations, with the remedy for nonpayment being solely an action for amounts
owing under the paying agent contract.
SECTION 17: Escrow Agent's Duties / Responsibilities/Liability. The Bank 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 Bank shall
be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor
and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank
45024864
6
EXHIBIT C
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 Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the 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 Bank.
In the absence of bad faith on the part of the Bank, the Bank 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 Bank, 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 Bank, the Bank shall be under a duty to examine the same to determine
whether it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent facts.
The Bank 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 said Refunded Obligations at the time outstanding relating to
the time, method and place of conducting any proceeding .for any remedy available to the Bank
not in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Obligations have
concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded
Obligations, 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 Bank shall be protected in relying on any such direction only Refunded
Obligations which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, 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 Bank 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 Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 18: Limitation Re: Bank's Duties/Responsibilities/Liabilities to Third Parties.
The Bank 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 Bank 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 Bank shall not be liable in
any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the
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7
EXIIIBIT c
City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assign or
attempt to assign or transfer any interest hereunder or any portion of any such interest. 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 Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(1) 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
(2) 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 Bank becomes involved in litigation in connection with this Section, the
City, 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
thereof. The obligations of the Bank under this Agreement shall be performable at the corporatß
office of the Bank in the City of Houston, Texas. '
The Bank 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 bad faith on the part of the Bank. no liability shall be incurred by the
Bank for any action taken pursuant to this Section and the aank 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 September 30th of each
year, commencing with the year 2001, while the Escrow Fund is maintained under this
Agreement, the Bank shall forward to the City, to the attention of the Director of Finance, or
other designated official of the City, a statement in detail of the Federal 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 RICH LAND HILLS, TEXAS
P.O. Box 820609
North Richland Hills, Texas 76182
Attention: Director of Finance
BANK ONE, NATIONAL ASSOCIATION
45024864
8
T~ZJIIBIT c
8111 Preston Road, 2nd Floor
Dallas, Texas 75225
Attention: Corporate Trust Department
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.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the
Bank is authorized by law to close, then the performance thereof, including the payment of
principal of and interest on the Refunded Obligations, 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 Bank
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 Escrol}{
Agreement. The City covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in any and every said
Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Obligations shall have been modified as provided in this Agreement.
The City covenants that it is duly authorized under the Constitution and laws of the State of
Texas to execute and deliver this Agreement, that all actions on its part for the payment of said
Refunded Obligations as provided herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded Obligations 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 anyone 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 Refunded Obligations on the basis of this Agreement.
SECTION 25: Termination. This Agreement shall terminate when the Refunded
Obligations, including interest due thereon, have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Obligations 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 Refunded Obligations and accrued
interest thereon shall upon termination of this Agreement be held by the Bank for such purpose
in accordance with Section 7 hereof. Any moneys or Federal Securities held in the Escrow
Fund at termination and not needed for the payment of the principal of or interest on any of the
Refunded Obligations shall be paid or transferred to the City.
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EXHIBIT C ¡
SECTION 26: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Bank by this Agreement.
SECTION 27: Successors/Assigns. (a) Should the Bank not be able to legally
serve or perform the duties and obligations under this Agreement, or should the Bank 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 Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under
this Agreement to such successor. If the City should fail to appoint such a successor within
ninety (90) days from the date the City discovers, or is notified of, the event or circumstance
causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of
the Refunded Obligations, may apply to a court of competent jurisdiction to appoint a successor
or assigns of the Bank and such court, upon determining the Bank 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 Refunded Obligations.
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this 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 Bank under Section 16 hereof for the administration of
this Agreement and the unearned proportional amount of the paying agents fees for the
Refunded Obligations due the Bank.
Any successor to the Bank 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 its principal 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 Bank shall execute, acknowledge and deliver to the City
and the Bank, or its successor or assigns, an instrument accepting such appointment
hereunder, and the Bank 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 Bank, the
City shall execute any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used
herein shall be the Bank and its legal assigns and successor hereunder.
SECTION 28: Escrow Agreement - AmendmenUModification. This Agreement shall be
binding upon the City and the Bank and their respective successors and legal representatives
and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the
Bank and their respective successors and legal representatives. Furthermore, no alteration,
45024864
10
. illlT c
IXHIBIT c
amendment or modification of any provision of this Agreement shall (1) alter the firm financial
arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i)
prior written consent of such alteration, amendment or modification shall have been obtained
from the holders of all Refunded Obligations 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 Bank may, without the consent
of the holders of the Refunded Obligations, amend or modify the terms and provisions of this
Agreement to cure in a manner not adverse to the holders of the Refunded Obligations 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 Refunded Obligations
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.
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11
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. This Agreement shall be governed by the
laws of the State of Texas and shall be effective as of the date of the delivery of the Bonds.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
CITY OF NORTH RICHLAND HILLS, TEXAS
Mayor
ATTEST:
City Secretary
(City Seal)
"
BANK ONE, NATIONAL ASSOCIATION,
as Escrow Agent
Title:
ATTEST:
Authorized Signer
(Bank Seal)
45024864
12
EXHIBIT C
EXHIBIT 0
NOTICE OF REDEMPTION
CITY OF NORTH RICHLAND HILLS, TEXAS,
TAX AND GOLF COURSE REVENUE REFUNDING BONDS
SERIES 1991
DATED APRIL 1, 1991
NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on and after
September 1, 2002 and aggregating in principal amount $3,590,000 have been called for
redemption on September 1, 2001 at the redemption price of par and accrued interest to the
date of redemption, such bonds being identified as follows:
Year of
Maturity
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Principal Amount
Outstanding
$265,000
280,000
300,000
320,000
340,000
365,000
390,000
415,000
445,000
470,000
CUSIP Number
.'
ALL SUCH BONDS shall become due and payable on September1, 2001, and interest
thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said bonds shall be paid to the registered owners of the bonds only upon
presentation and surrender of such bonds to Bank One, National Association (successor paying
agent/registrar to Team Bank, Fort Worth) at its designated office in Westerville, Ohio, at the
following address: 235 West Schrock Road, Westerville, Ohio 43081-0393, Attention: Bond
Services.
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
North Richland Hills, Texas.
45015246110019217
BANK ONE, NATIONAL ASSOCIATION
as Paying Agent/Registrar
Address: 8111 Preston Road, 2nd Floor,
Dallas, Texas 75225
EXHIBIT E
NOTICE OF REDEMPTION
CITY OF NORTH RICHLAND HILLS, TEXAS,
GENERAL OBLIGATION BONDS
SERIES 1993
DATED MAY 1,1993
NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on February 15,
2004 through February 15, 2009 and aggregating in principal amount $1,300.000 have been
called for redemption on February 15, 2003 at the redemption price of par and accrued interest
to the date of redemption, such bonds being identified as follows:
Year of
Maturity
2004
2005
2006
2007
2008
2009
Principal Amount
Outstanding
$190,000
200,000
210,000
220,000
235,000
245,000
CUSIP Number
.'
ALL SUCH BONDS shall become due and payable on February 15, 2003, and interest
thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said bonds shall be paid to the registered owners of the bonds only upon
presentation and surrender of such bonds to Bank One, National Association (successor paying
agent/registrar to Bank One, Texas, N. A. ) at its designated office inWesterville. Ohio, at the
following address: 235 West Schrock Road, Westerville, Ohio 43081-0393, Attention: Bond
Services.
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
North Richland Hills, Texas.
BANK ONE, NATIONAL ASSOCIATION
as Paying AgenURegistrar
Address: 8111 Preston Road, 2nd Floor,
Dallas, Texas 75225
45015246
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Exhibit F
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 28 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below;
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2. The information in the Official Statement under Tables 1 through 6 and 8 through
15.
Accounting Principles
. .
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above
45015246