HomeMy WebLinkAboutOrdinance 2166
ORDINANCE NO.
2166
AN ORDINANCE authorizing the issuance of "CITY OF NORTH
RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 1996"; prescribing
the forms, terms, and provisions of said bonds;
pledging the net revenues of the City's Waterworks
and Sewer System to the payment of the principal of
and interest on said bonds; enacting provisions
incident and related to the issuance, payment,
security, sale and delivery of said bonds,
including the approval and execution of a Paying
Agent/Registrar Agreement and a Special Escrow
Agreement and the approval and distribution of an
Official Statement pertaining thereto; and
providing an effective date.
WHEREAS, the city of North Richland Hills, Texas (the "city")
has duly issued and delivered, and there is currently outstanding
the following described obligations, payable from and secured by a
lien on and pledge of the net revenues of the City's combined
Waterworks and Sewer System (the "System"), and totalling in
original principal amount $11,308,614.60 and totalling in principal
and maturity amount $17,285,000, to wit:
(1) city of North Richland Hills, Texas,
Waterworks and Sewer System Improvement and
Refunding Revenue Bonds, Series 1989, dated
March 1, 1989, consisting of (i) current
interest bonds in the aggregate principal
amount of $3,995,000 and scheduled to mature
on September 1 in each of the years 1997
through 2001 and (ii) capital appreciation
bonds in the aggregate maturity amount of
$4,070,000 and scheduled to mature on
September 1 in each of the years 2002 through
2008, and totalling in principal amount and
maturity amount of
$8,065,000
(2) City of North Richland Hills, Texas,
Waterworks and Sewer System Refunding Revenue
Bonds, Series 1989-A, dated March 1, 1989,
consisting of (i) current interest bonds in
the aggregate principal amount of $1,740,000
and scheduled to mature on September 1 in each
of the years 1997 through 2001 and (ii)
capital appreciation bonds in the aggregate
maturity amount of $1,730,000 and scheduled to
mature on September 1 in each of the years
2002 through 2008, and totalling in principal
amount and maturity amount of
$3,470,000
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(3) City of North Richland Hills, Texas,
Waterworks and Sewer System Refunding Revenue
Bonds, Series 1989-B, dated July 1, 1989,
consisting of (i) current interest bonds in
the aggregate principal amount of $2,730,000
and scheduled to mature on September 1 in each
of the years 1997 through 2001 and (ii)
capital appreciation bonds in the aggregate
maturity amount of $3,020,000 and scheduled to
mature on September 1 in each of the years
2002 through 2008, and totalling in principal
amount and maturity amount of
$5,750,000
AND WHEREAS, all the current interest bonds described above,
together with $355,000 in maturity amount of the capital
appreciation bonds of the Series 1989-B Bonds scheduled to mature
on September 1, 2002, totalling in principal and/or maturity amount
of $8,820,000, are hereinafter collectively referred to as the
"Defeased Bonds" and all of the capital appreciation bonds
described above (except for the $355,000 in maturity amount of the
capital appreciation bonds of the Series 1989-B Bonds scheduled to
mature on September 1, 2002), totalling in maturity amount of
$8,465,000, are hereinafter collectively referred to as the
"Refunded Bondstl)¡ and
WHEREAS, the City recently sold a portion of its Waterworks
and Sewer System serving the residents of Watagua to the City of
Watagua, and the City Council has determined the proceeds of such
sale of System properties should be used to payoff and discharge
the Defeased Bonds and refunding bonds in an amount sufficient to
refinance the obligations represented by the Refunded Bonds should
be issued to restructure such indebtedness to reflect the changed
financial condition and operations of the City's Waterworks and
Sewer System occassioned by the aforesale¡ and the refunding of the
Refunded Bonds will result in a gross dollar savings of
approximately $1,784,702.21 while providing present value savings
of approximately $589,800.40¡ now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH
RICHLAND HILLS, TEXAS:
SECTION 1: Authorization-Designation-Principal Amount
-Purpose. Revenue refunding bonds of the City shall be and are
hereby authorized to be issued in the aggregate principal amount of
$5,135,000 to be designated and bear the title "CITY OF NORTH
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RICHLAND HILLS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
REFUNDING BONDS, SERIES 1996" (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
(identif ied in the preamble hereof and referred to as the "Refunded
Bonds"), and paying costs of issuance, pursuant to authority
conferred by and in conformity with the Constitution and laws of
the State of Texas, including Article 717k, V.A.T.C.S., as amended.
SECTION 2: Fully Registered Obligations - Authorized
Denominations - Stated Maturities - Date. The Bonds shall be
issued as fully registered obligations, without coupons, shall be
dated December 1, 1996 (the "Issue Date") and, other than the
single fully registered Initial Bond referenced in section 8
hereof, shall be in denominations of $5,000 or any integral
multiple thereof (within a Stated Maturity), shall be numbered
consecutively from One (1) upward and shall become due and payable
on September 1 in each of the years and in principal amounts (the
"Stated Maturities") and bear interest at per annum rates in
accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
1997 $445,000 4.125%
1998 370,000 4.125%
1999 385,000 4.25 %
2000 375,000 4.30 %
2001 390,000 4.40 %
2002 410,000 4.50 %
2003 425,000 4.60 %
2004 445,000 4.60 %
2005 440,000 4.70 %
2006 460,000 4.80 %
2007 485,000 4.90 %
2008 505,000 5.10 %
The Bonds shall bear interest on the unpaid principal amounts
from the Issue Date at the rate(s) per annum shown in the above
schedule (calculated on the basis of a 360-day year of twelve
30-day months). Interest on the Bonds shall be payable on March 1
and september 1 in each year, commencing September 1, 1997.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The
principal of, premium, if any, and the interest on the Bonds, due
and payable by reason of maturity, redemption or otherwise, shall
be payable only to the registered owners or holders of the Bonds
(hereinafter called the "Holders") appearing on the registration
and transfer books maintained by the Paying Agent/Registrar and the
payment thereof shall be in any coin or currency of the United
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states of America, which at the time of payment is legal tender for
the payment of public and private debts, and shall be without
exchange or collection charges to the Holders.
The selection and appointment of Bank One, Texas, N.A., Fort
Worth, Texas to serve as Paying Agent/Registrar for the Bonds is
hereby approved and confirmed. Books and records relating to the
registration, payment, exchange and transfer of the Bonds (the
"Security Register") shall at all times be kept and maintained on
behalf of the City by the Paying Agent/Registrar, all as provided
herein, in accordance with the terms and provisions of a "paying
Agent/Registrar Agreement", substantially in the form attached
hereto as Exhibit A, and such reasonable rules and regulations as
the paying Agent/Registrar and the City may prescribe. The Mayor
and City Secretary are hereby authorized to execute and deliver
such Agreement in connection with the delivery of the Bonds. The
City covenants to maintain and provide a Paying Agent/Registrar at
all times until the Bonds are paid and discharged, and any
successor Paying Agent/Registrar shall be a bank, trust company,
financial institution or other entity qualified and authorized to
serve in such capacity and perform the duties and services of
Paying Agent/Registrar. Upon any change in the Paying
Agent/Registrar for the Bonds, the City agrees to promptly cause a
written notice thereof to be sent to each Holder by united States
Mail, first class postage prepaid, which notice shall also give the
address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be
payable at the Stated Maturities or upon their earlier redemption,
only upon presentation and surrender of the Bonds to the Paying
Agent/Registrar at its designated offices in Westerville, Ohio (the
"Designated Payment/Transfer Office") Interest on the Bonds shall
be paid to the Holders whose names appear in the Security Register
at the close of business on the Record Date (the 15th day of the
month next preceding each interest payment date) and shall be paid
by the Paying Agent/Registrar (i) by check sent united States Mail,
first class postage prepaid, to the address of the Holder recorded
in the Security Register or (ii) by such other method, acceptable
to the Paying Agent/Registrar, requested by, and at the risk and
expense of, the Holder. If the date for the payment of the
principal of or interest on the Bonds shall be a Saturday, Sunday,
a legal holiday, or a day on which banking institutions in the City
where the Designated Payment/Transfer Office of the Paying
Agent/Registrar is located are authorized by law or executive order
to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday,
or day on which banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if
made on the original date payment was due.
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In the event of a non-payment of interest on one or more
maturities on a scheduled payment date, and for thirty (30) days
thereafter, a new record date for such interest payment for such
maturity or maturities (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for
the payment of such interest have been received from the city.
Notice of the Special Record Date and of the scheduled payment date
of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to
the Special Record Date by united States Mail, first class postage
prepaid, to the address of each Holder of such maturity or
maturities appearing on the Security Register at the close of
business on the last business day next preceding the date of
mailing of such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds
maturing on and after September 1, 2005 shall be subject to
redemption prior to maturity, at the option of the City, in whole
or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying
Agent/Registrar), on September 1, 2004 or on any date thereafter at
the redemption price of par plus accrued interest to the date of
redemption.
(b) Exercise of Redemption Option. At least forty-five (45)
days prior to a date set for the redemption of Bonds (unless a
shorter notification period shall be satisfactory to the Paying
Agent/Registrar), the City shall notify the Paying Agent/Registrar
of its decision to exercise the right to redeem Bonds, the
principal amount of each Stated Maturity to be redeemed, and the
date set for the redemption thereof. The decision of the City to
exercise the right to redeem Bonds shall be entered in the minutes
of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all
outstanding Bonds of the same Stated Maturity are to be redeemed on
a redemption date, the Paying Agent/Registrar shall treat such
Bonds as representing the number of Bonds outstanding which is
obtained by dividing the principal amount of such Bond by $5,000
and shall select the Bonds, or principal amount thereof, to be
redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days
prior to a redemption date for the Bonds, a notice of redemption
shall be sent by united States Mail, first class postage prepaid,
in the name of the City and at the City's expense, to each Holder
of a Bond to be redeemed in whole or in part at the address of the
Holder appearing on the Security Register at the close of business
on the business day next preceding the date of mailing such notice,
and any notice of redemption so mailed shall be conclusively
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presumed to have been duly given irrespective of whether received
by the Holder.
All notices of redemption shall (i) specify the date of
redemption for the Bonds, (ii) identify the Bonds to be redeemed
and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state
the redemption price, (iv) state that the Bonds, or the portion of
the principal amount thereof to be redeemed, shall become due and
payable on the redemption date specified, and the interest thereon,
or on the portion of the principal amount thereof to be redeemed,
shall cease to accrue from and after the redemption date, and (v)
specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the
Designated Payment/Transfer Office of the paying Agent/Registrar
only upon presentation and surrender thereof by the Holder. If a
Bond is subject by its terms to prior redemption and has been
called for redemption and notice of redemption thereof has been
duly given or waived as herein provided, such Bond (or the
principal amount thereof to be redeemed) shall become due and
payable, and interest thereon shall cease to accrue from and after
the redemption date therefor, provided moneys sufficient for the
payment of such Bonds (or of the principal amount thereof to be
redeemed) at the then applicable redemption price are held for the
purpose of such payment by the Paying Agent/Registrar.
SECTION 5: Reqistration - Transfer - Exchange of Bonds -
Predecessor Bonds. The Paying Agent/Registrar shall obtain,
record, and maintain in the Security Register the name and address
of each registered owner of the Bonds issued under and pursuant to
the provisions of this Ordinance. Any Bond may, in accordance with
its terms and the terms hereof, be transferred or exchanged for
Bonds of other authorized denominations upon the Security Register
by the Holder, in person or by his duly authorized agent, upon
surrender of such Bond to the Designated Payment/Transfer Office of
the Paying Agent/Registrar for cancellation, accompanied by a
written instrument of transfer or request for exchange duly
executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/ Registrar.
Upon surrender for transfer of any Bond (other than the
Initial Bonds authorized in section 8 hereof) at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, one or more
new Bonds shall be registered and issued to the assignee or
transferee of the previous Holder; such Bonds to be in authorized
denominations, of like Stated Maturity and of a like aggregate
principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial
Bonds authorized in section 8 hereof) may be exchanged for other
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Bonds of authorized denominations and having the same Stated
Maturity, bearing the same rate of interest and of like aggregate
principal amount as the Bonds surrendered for exchange, upon
surrender of the Bonds to be exchanged at the Designated
Payment/Transfer Office of the Paying Agent/ Registrar. Whenever
any Bonds are surrendered for exchange, the Paying Agent/Registrar
shall register and deliver new Bonds, executed on behalf of, and
furnished by, the city, to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall
be delivered at the Designated Payment/Transfer Office of the
Paying Agent/Registrar, or sent by United states Mail, first class
postage prepaid, to the Holder and, upon the delivery thereof, the
same shall be valid obligations of the city, evidencing the same
obligation to pay, and entitled to the same benefits under this
Ordinance, as the 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 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
Section 29 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 Agent/Registrar shall be
required to transfer or exchange any Bond called for redemption, in
whole or in part, within 45 days of the date fixed for 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
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accordance with the requirements and procedures identified in the
Letter of Representa.tion, by and between the City, the Paying
Agent/Registrar and DTC (the "Depository Agreement") relating to
the Bonds.
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.
SECTION 7: Execution - Reqistration. 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 Issue 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 the Bond Procedures Act of 1981, as amended.
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 9D, manually executed
by an authorized officer, employee or representative of the Paying
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Agent/Registrar, and either such certificate upon any Bond duly
signed 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 issued either (i) as a single fully registered
bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in
Section 2 hereof and numbered T-1, or (ii) as twelve (12) 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)") and, 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 Agent/Registrar, 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
Agent/Registrar 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 certificate of Registration, 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 on insured Bonds 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 thereof. 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.
The definitive Bonds and the Initial Bond(s) shall be printed,
lithographed, or engraved or typewritten, photocopied or otherwise
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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,
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BOND
SERIES 1996
Issue Date:
December 1, 1996
Interest Rate: Stated Maturity: CUSIP NO:
Registered Owner:
Principal Amount:
DOLLARS
The City of North Richland Hills (hereinafter referred to as
the "City"), a body corporate and municipal corporation in the
County of Tarrant, State of Texas, for value received, hereby
promises to pay to the order of the Registered Owner named above,
or the registered assigns thereof, solely from the revenues
hereinafter identified, on the Stated Maturity date specified
above, the Principal Amount stated above (or so much thereof as
shall not have been paid upon prior redemption) and to pay interest
on the unpaid Principal Amount hereof from the Issue 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 March 1 and September 1 of each year, commencing September 1,
1997. Principal of this Bond is payable at the Stated Maturity or
redemption to the registered owner hereof, upon presentation and
surrender, at the Designated Payment/Transfer Office of the Paying
Agent/Registrar executing the registration certificate appearing
hereon, or its successor. 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 Agent/ Registrar at
the close of business on the "Record Date", which is the 15th day
of the month next preceding each interest payment date and interest
shall be paid by the Paying Agent/ Registrar by check sent United
states Mail, first class postage prepaid, to the address of the
registered owner recorded in the S~curity Register or by such other
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method, acceptable to the paying Agent/Registrar, requested by, and
at the risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this 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 $5,135,000 (herein referred to
as the "Bonds") for the purpose of refunding certain outstanding
obligations, and paying costs of issuance, under and in strict
conformity with the Constitution and laws of the state of Texas,
including Article 717k, V.A.T.C.S., 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 September 1, 2005, may be
redeemed prior to their Stated Maturities, at the option of the
city, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity by lot
by the Paying Agent/ Registrar), on September 1, 2004, 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 the redemption date suchs Bond (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if
moneys for the payment of the redemption price and the interest
accrued on the principal amount to be redeemed to the date of
redemption are held for the purpose of such payment by the Paying
Agent/Registrar, interest shall cease to accrue and be payable from
and after the redemption date on the principal amount redeemed.
In the event of a partial redemption of the principal amount
of a Bond, 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 Payment/Transfer Office of
the Paying Agent/Registrar and, there shall be issued to the
registered owner hereof, without charge, a new Bond or Bonds of
like maturity and interest rate in any authorized denominations
provided in the Ordinance for the then unredeemed balance of the
principal sum of the Bond partially redeemed. If a Bond is called
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for redemption, in whole or in part, the City and the Paying
Agent/Registrar shall not be required to transfer such Bond to an
assignee of the Holder within 45 days of the redemption date
therefor; provided, however, such limitation on transferability
shall not be applicable to an exchange by the Holder of the
unredeemed balance of a Bond redeemed in part.
The Bonds are special obligations of the City payable solely
from and equally and ratably secured by a first lien on and pledge
of the Net Revenues (as defined in the Ordinance) of the City's
combined Waterworks and Sanitary Sewer System (the "System"). The
Bonds do not constitute a legal or equitable pledge, charge, lien
or encumbrance upon any property of the City or the system, except
with respect to the Net Revenues. The holder hereof shall never
have the right to demand payment of this obligation out of any
funds raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed
therefor, the City has reserved the right to issue additional
revenue obligations payable from and equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System, in
the same manner and to the same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is
on file in the Designated Payment/Transfer Office of the Paying
Agent/Registrar, and to all of the provisions of which the Holder
by the acceptance hereof hereby assents, for definitions of terms;
the description of and the nature and extent of the security for
the Bonds; the properties constituting the System; the Net Revenues
pledged to the payment of the principal of and interest on the
Bonds; the nature and extent and manner of enforcement of the lien
and pledge securing the payment of the Bonds; the terms and
conditions for the issuance of additional revenue obligations; 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
Agent/Registrar; the terms and provisions upon which the liens,
pledges, charges and covenants made therein may be discharged at or
prior to the maturity or redemption of this Bond, and this Bond
deemed to be no longer outstanding thereunder; and for the other
terms and provisions contained therein. Capitalized terms used
herein have the same meanings assigned in the Ordinance.
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 Payment/Transfer
Office of the Paying Agent/Registrar, with the Assignment hereon
duly endorsed by, or accompanied by a written instrument of
0374905
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transfer in form satisfactory to the Paying Agent/Registrar duly
executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or
more new fully registered 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
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of
either, may treat the registered owner hereof whose name appears on
the Security Register (i) on the Record Date as the owner entitled
to payment of interest hereon, (ii) on the date of surrender of
this 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 non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest
payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest
have been received 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 covenanted
that the City is a duly organized and legally existing municipal
corporation 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 a pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any application
thereof shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby.
The terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws of
the State of Texas.
0374905
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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 Issue Date.
CITY OF NORTH RICHLAND HILLS, TEXAS
COUNTERSIGNED:
Mayor
City Secretary
(SEAL)
C. *Form of Reqistration 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
(
(
(
(
REGISTER NO.
THE STATE OF TEXAS
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
0374906
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D. Form of certificate of Paying Agent/Registrar 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 Agent/Registrar.
The designated offices of the Paying Agent/Registrar in
westerville, Ohio, is the Designated Payment/Transfer Office for
this Bond.
BANK ONE, TEXAS, N.A.,
Fort Worth, Texas,
as Paying Agent/Registrar
Registration Date:
By
Authorized Signature
E.
Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned
assigns, and transfers unto (Print or typewrite
and zip code of transferee:)
hereby sells,
name, address,
(SocialSecurity
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 a sinqle
fully registered Initial Bond shall be modified as follows::
0374901i
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( i) immediately under the name of the bond the headings
"Interest Rate " and "Stated Maturity "
shall both be omitted;"
(ii) Paragraph one shall read as follows:
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, hereby
promises to pay to the order of the Registered Owner named above,
or the registered assigns thereof, solely from the revenues
hereinafter identified, on September 1 in each of the years and in
principal amounts and bearing interest at per annum rates in
accordance with the following schedule:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from
schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to
maturity) and to pay interest on the unpaid principal amounts
hereof from the Issue Date at the per annum rates of interest
specified above computed on the basis of a 360-day year of twelve
30-day months; such interest being payable on March 1 and
September 1 of each year, commencing September 1, 1997. Principal
installments of this Bond are payable at its Stated Maturity or on
a prepayment date to the registered owner hereof by Bank One,
Texas, N.A., Fort Worth, Texas (the "Paying Agent/Registrar"),
upon presentation and surrender, at its designated off ices in
Westerville, Ohio (the "Designated Payment/Transfer Office").
Interest is payable to the registered owner of this Bond whose
name appears on the "Security Register" maintained by the Paying
Agent/ Registrar at the close of business on the "Record Date",
which is the 15th day of the month next preceding each interest
payment date and interest shall be paid by the paying
Agent/Registrar by check sent United States Mail, first class
postage prepaid, to the address of registered owner recorded in
the Security Register on the Record Date or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the
risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this 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: Definitions. For all purposes of this
Ordinance and in particular for clarity with respect to the
0374906
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issuance of the Bonds herein authorized and the pledge and
appropriation of revenues to the payment of the Bonds, the
following definitions are provided:
"Additional Bonds" - The additional revenue bonds
or obligations which the City reserves the right to
issue on a parity with the Bonds in accordance with the
terms and conditions set forth in section 18 hereof.
"Average Annual Debt Service" - That average amount
which, at the time of computation, will be required to
pay the Debt Service of obligations when due and derived
by dividing the total of such Debt Service by the number
of years then remaining before final maturity.
Capitalized interest payments provided from proceeds of
Bonds Similarly Secured shall be excluded in making the
aforementioned computation.
"Bonds" - The "City of North Richland Hills, Texas
Waterworks and Sewer System Revenue Refunding Bonds,
Series 1996", dated December 1, 1996, authorized by this
Ordinance.
"Bonds Similarly Secured" - Collectively, the Bonds
and any Additional Bonds, which shall be obligations
equally and ratably secured by a parity lien on and
pledge of the Net Revenues of the System.
"City" - The City of North Richland Hills, located
in the County of Tarrant, Texas.
"Debt Service" - As of any particular date of
computation, with respect to any obligations and with
respect to any period, the aggregate of the amounts to
be paid or set aside by the City as of such date or
in such period for the payment of the principal of,
premium, if any, and interest (to the extent not
capitalized) on such obligations; assuming, in the case
of Bonds Similarly Secured without a fixed numerical
rate, that such obligations bear, or would have borne,
interest at the highest rate reached, or that would have
applied to such obligations (using the index or method
for computing interest applicable to such obligations)
during the twenty-four (24) month period next preceding
the date of computation; and further assuming in the
case of obligations required to be redeemed or prepaid
as to principal prior to maturity, the principal amounts
thereof will be redeemed prior to maturity in accordance
0374906
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with the mandatory redemption provisions applicable
thereto.
"Fiscal Year" - The twelve month financial
accounting period of the System ending September 30th of
each year; provided, however, the City, by ordinance,
may change the Fiscal Year to another period of not less
than twelve calendar months.
"Government Obligations" - Direct 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, and united
States Treasury obligations such as its State and Local
Government Series in book-entry form.
"Gross Revenues" - All income, receipts and
revenues of every nature derived or received from the
operation and ownership (excluding refundable meter
deposits, restricted gifts and grants in aid of
construction, impact fees charged developers and special
assessments against landowners) of the System, including
earnings and income der i ved from the investment or
deposi t of moneys in any special funds or accounts
created and established for the payment and security of
the Bonds Similarly Secured and other obligations
payable solely from and secured only by a lien on and
pledge of the Net Revenues.
"operating and Maintenance Expenses" - All current
expenses of operating and maintaining the System,
including all salaries, labor, materials, repairs and
extensions necessary to render efficient service;
provided, however, that only such repairs and
extensions, as in the judgment of the City Council,
reasonably and fairly exercised, are necessary to
maintain the operations and render adequate service to
the City and the inhabitants thereof, or such as might
be necessary to meet some physical accident or condition
which would otherwise impair obligations payable from
Net Revenues shall be deducted in determining Net
Revenues. Depreciation charges shall not be considered
Operating and Maintenance Expenses. Operating and
Maintenance Expenses shall include payments under
contracts for the purchase of water supply, treatment of
sewage or other materials, goods or services for the
System to the extent authorized by law and the
provisions of such contract.
0374905
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"Net Earnings" - The meaning assigned to such term
in section 18 hereof.
"Net Revenues" - Gross Revenues of the System, with
respect to any per iod, after deducting the System's
operating and Maintenance Expenses during such period.
"outstanding" - When used in this Ordinance with
respect to Bonds or Bonds Similarly Secured, as the case
may be, means, as of the date of determination, all
Bonds and Bonds Similarly Secured theretofore sold,
issued and delivered by the City, except:
(1) those Bonds or Bonds Similarly
Secured cancelled or delivered to the
transfer agent or registrar for cancellation
in connection with the exchange or transfer
of such obligations;
(2) those
Secured paid
accordance with
hereof; and
Bonds or Bonds Similarly
or deemed to be paid in
the provisions of section 28
(3) those Bonds or Bonds Similarly
Secured that have been mutilated, destroyed,
lost, or stolen and replacement bonds have
been registered and delivered in lieu
thereof.
"Required Reserve - The amount required to be
deposited and maintained in the Reserve Fund under the
provisions of section 14 of this Ordinance.
"System" - All properties, facilities and plants
currently owned, operated and maintained by the City for
the supply, treatment and transmission of treated
potable water and the collection, treatment and disposal
of water-carried wastes, together with all future
extensions, improvements, replacements and additions
thereto; provided, however, that notwithstanding the
foregoing, and to the extent now or hereafter authorized
or permitted by law, the term "system" shall not mean to
include facilities of any kind which are declared not to
be a part of the System and which are acquired or
constructed by or on behalf of the ci ty wi th the
proceeds from the issuance of "Special Facilities
Bonds", which are hereby defined as being special
revenue obligations of the City which are not Bonds
Similarly Secured but which are payable from and secured
037490ð
-19-
by other liens on and pledges of any revenues, sources
or payments, not pledged to the payment of the Bonds
Similarly Secured including, but not limited to, special
contract revenues or payments received from any other
legal entity in connection with such facilities.
SECTION 11: Pledge. The City hereby covenants and agrees
that all of the Net Revenues of the System, with the exception of
those in excess of the amounts required to establish and maintain
the special Funds created for the payment and security of the Bonds
Similarly Secured, are hereby irrevocably pledged, equally and
ratably, to the payment of the Bonds and Additional Bonds, if
issued, and the interest thereon, as hereinafter provided. It is
hereby ordained that the Bonds Similarly Secured, and the interest
thereon, shall constitute a first lien on the Net Revenues of the
System and be valid and binding without any physical delivery
thereof or further act by the city.
SECTION 12: Water and Sewer System Fund. While the Bonds
Similarly Secured remain outstanding, the City hereby covenants and
agrees that the Gross Revenues of the System shall be deposited, as
collected and received, into a separate account (previously
created, established and to be maintained with a depository bank of
the City) known as the Waterworks and Sewer System Fund (herein
called the "System Fund") and that the Gross Revenues of the System
shall be kept separate and apart from all other funds of the City.
All Gross Revenues deposited into the System Fund shall be pledged
and appropriated to the extent required for the following uses and
in the order of priority shown:
FIRST: To the payment of all necessary and reasonable
Operating and Maintenance Expenses as defined herein or
required by statute to be a first charge on and claim
against the Gross Revenues of the System.
SECOND: To the payment of the amounts required to be
deposited into the Interest and Sinking Fund (hereinafter
defined) created and established for the payment of the
principal of and interest on each of the Bonds Similarly
Secured as the same become due and payable.
THIRD: To the payment of the amounts required to be
deposited into the Reserve Fund (hereinafter defined) to
establish and maintain the Required Reserve in accordance
with the provisions of this Ordinance or any other
ordinance relating to the issuance of Bonds Similarly
Secured.
Any Net Revenues remaining in the System Fund after satisfying
the foregoing payments, or makiQg adequate and sufficient provision
0374906
-20-
for the payment thereof, may be appropriated and used for any other
City purpose now or hereafter permitted by law.
SECTION 13: Interest and Sinking Fund. For purposes of
providing funds to pay the principal of and interest on the Bonds
similarly Secured as the same become due and payable, the City
agrees to maintain on the books and records of the City, a separate
and special account or fund known as the "Waterworks and Sewer
System Interest and Sinking Fund" (the "Interest and Sinking Fund")
and moneys deposited to the credit of such account shall be kept in
a special fund maintained at the depository of the city. The city
covenants that there shall be deposited to the credit of the
Interest and Sinking Fund prior to each principal and interest
payment date from the available Net Revenues an amount equal to one
hundred per centum (100%) of the amount required to fully pay the
interest on and the principal of the Bonds then falling due and
payable, such deposits to pay maturing principal and accrued
interest on the Bonds to be made in substantially equal monthly
installments on or before the fifteenth day of each month,
beginning on or before the fifteenth day of the month next
following the delivery of the Bonds to the initial purchaser(s).
The required monthly deposits to the Interest and Sinking Fund
for the payment of principal of and interest on the Bonds shall
continue to be made as hereinabove provided until such time as
(i) the total amount on deposit in the Interest and Sinking Fund
and Reserve Fundi is equal to the amount required to fully pay and
discharge all Outstanding Obligations Bonds Secured (principal and
interest) or, (ii) the Bonds are no longer Outstanding.
Accrued interest and premium, if any, received from the
initial purchaser(s) of the Bonds, shall be taken into
consideration and reduce the amount of the monthly deposits
hereinabove required to be deposited into the Interest and Sinking
Fund from the Net Revenues of the System. Additionally, any
proceeds of the Bonds not required to complete the improvements and
extensions to be made to the System shall be deposited into the
Interest and Sinking Fund and may be taken into consideration and
reduce the amount of monthly deposits required to be deposited into
the Interest and Sinking Fund from the Net Revenues of the System.
SECTION 14: Reserve Fund. For purposes of providing a
reserve for the payment of the Bonds Similarly Secured, the City
agrees and covenants to maintain a special fund or account known as
the "Waterworks and Sewer System Reserve Fund" (the "Reserve
Fund"), which Fund shall be kept and maintained at an official
depository of City funds. All funds deposited to the credit of the
Reserve Fund (excluding earnings and income derived or received
from deposits or investments which may be transferred to the System
Fund referenced in section 13 of this qrdinance during such periods
0374906
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as there is on deposit in the Reserve Fund the full amount required
to be accumulated and maintained therein) shall be used for the
payment of (i) the principal of and interest on the Bonds Similarly
Secured, when and to the extent other funds available for such
purposes are insufficient, and (ii) the final principal amount of
a series of Bonds Similarly Secured provided following such payment
(x) such series of Bonds Similarly Secured is no longer deemed to
be "outstanding" as such term is defined herein and (y) the balance
remaining on deposit to the credit of the Reserve Fund after making
such payment is the total amount required to be accumulated and
maintained in such Fund for the Bonds Similarly Secured to remain
Outstanding. Additionally, in the event one or more surety bonds
are used to provide all or part of the amount required to be
maintained in the Reserve Fund as hereinafter authorized, amounts
deposited to the credit of the Reserve Fund may also be used to
restore or replenish the full amount of the surety bond coverage
afforded by such surety bond.
By reason of the issuance of the Bonds, the total amount
required to be accumulated and maintained in the Reserve Fund shall
be and is hereby determined to be $ (the "Required
Reserve"), which amount equals at least the Average Annual Debt
Service for the Bonds. Simultaneously with the delivery of the
Bonds, the city shall cause to be deposited to the credit of the
Reserve Fund an amount equal to the Required Reserve from funds on
deposit in the reserve fund maintained for the payment and security
of the Refunded Bonds and Defeased Bonds.
As and when Additional Bonds are delivered or incurred, the
Required Reserve shall be increased, if required, to an amount
equal to the lesser of (i) the Average Annual Debt Service
(calculated on a Fiscal Year basis) for all Bonds Similarly Secured
then Outstanding, as determined on the date each series of
Additional Bonds are delivered or incurred, as the case may be, or
(ii) the maximum amount in a reasonably required reserve fund that
can be invested without restriction as to yield pursuant to
subsection (d) of section 148 of the Internal Revenue Code of 1986,
as amended, and regulations promulgated thereunder. Any additional
amount required to be maintained in the Reserve Fund shall be
accumulated (i) by depositing cash to the credit of the Reserve
Fund (immediately after the delivery of the then proposed
Additional Bonds) in an amount to fully fund the Required Reserve,
or, (ii) at the option of the City, by making monthly deposits, on
or before the 15th day of each month fOllowing the month of
delivery of the then proposed Additional Bonds, of not less than
1/60th of the additional amount to be maintained in said Fund by
reason of the issuance of the Additional Bonds then being issued
(or 1/60th of the balance of the additional amount not deposited
immediately in cash). In lieu of depositing cash or making monthly
deposits to the Reserve Fund to accumulate any increase in the
0374906
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Reserve Fund by reason of the issuance of Additional Bonds and to
the extent permitted by law, the City may provide for one or more
surety bonds issued by a company or institution having a rating in
the highest rating category by two nationally recognized rating
agencies or services to be deposited to the credit of Reserve Fund.
Such surety bonds shall provide surety bond coverage in an amount
sufficient to provide for all or part of the total amount then
required to be accumulated and maintained in the Reserve Fund for
the benefit of the Bonds Similarly Secured.
When and so long as the cash and investments and/or surety
bond coverage in the Reserve Fund total not less than the Required
Reserve, no deposits need be made to the credit of the Reserve
Fundi but, if and when the Reserve Fund at any time contains less
than the Required Reserve (other than as the result of the issuance
of Additional Bonds as provided in the preceding paragraph and the
City has elected to accumulate all or a portion of the Required
Reserve with Net Revenues of the System) , the City covenants and
agrees to cause monthly deposits to the Reserve Fund to be made on
or before the 15th day of each month (beginning the month next
following the month the deficiency in the Required Reserve occurred
by reason of a draw on the Reserve Fund or as a result of a
reduction in the market value of investments held for the account
of the Reserve Fund) in an amount equal to 1/60th of the Required
Reserve from the Net Revenues of the System until the Required
Reserve has been fully restored. Should all or a portion of the
Required Reserve be provided by a surety bond and should the City
be obligated to repay or reimburse the issuer of the surety bond to
replenish and restore the full amount of surety bond coverage,
monthly deposits from the Net Revenues shall be made to the Reserve
Fund in the amounts required to restore the full amount of the
surety bond coverage in accordance with the terms of such surety
bond or any agreement executed in connection therewith. The City
further covenants and agrees that, subject only to the payments to
be made to the Interest and sinking Fund, the Net Revenues shall be
applied and appropriated and used to establish and maintain the
Required Reserve and to cure any def iciency in such amounts as
required by the terms of this Ordinance and any other ordinance
pertaining to the issuance of Additional Bonds.
SECTION 15: Deficiencies: Excess Net Revenues. (a) If on
any occasion there shall not be sufficient Net Revenues of the
System to make the required deposits into the Interest and Sinking
Fund and the Reserve Fund, then such deficiency shall be cured as
soon as possible from the next available Net Revenues of the
System, or from any other sources available for such purpose.
(b) Subject to making the required deposits to the Interest
and Sinking Fund and the Reserve Fund when and as required by this
Ordinance, or any ordinance authorizing the issuance of Additional
0374906
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Bonds, the excess Net Revenues may be used by the City for any
lawful purpose.
SECTION 16: Investments Security of Funds. (a) Money
deposited to the credit of any Fund referenced in this Ordinance
may, at the option of the City, be placed in time deposits or
certificates of deposit secured (to the extent not insured by the
Federal Deposit Insurance Corporation) by obligations of the type
hereinafter described, or be invested, including investments held
in book-entry form, in direct obligations of the united States of
America and obligations guaranteed or insured by the united States
of America, which, in the opinion of the Attorney General of the
United States, are backed by its full faith and credit or represent
its general obligations; provided that all such deposits and
investments shall be made in such a manner that the money required
to be expended from any Fund will be available at the proper time
or times. Such investments (except State and Local Government
Series investments held in book entry form, which shall at all
times be valued at cost) shall be valued in terms of current market
value within 45 days of the close of each Fiscal Year and, with
respect to investments held for the account of the Reserve Fund,
within 30 days of the date of passage of each ordinance authorizing
the issuance of Additional Bonds. All interest and income derived
from deposits and investments in the Interest and Sinking Fund
immediately shall be credited to, and any losses debited to, the
Interest and Sinking Fund. All interest and interest income
derived from deposits in and investments of the Reserve Fund shall,
subject to the limitations provided in section 14 hereof, be
credited to and deposited in the System Fund. All such investments
shall be sold promptly when necessary to prevent any default in
connection with the Bonds.
(b) That money deposited to the credit of any of the Funds
referenced in this Ordinance, to the extent not invested, shall be
secured in the manner and to the fullest extent required by the
laws of the state of Texas for the security of public funds.
SECTION 17: Payment of Bonds. While any of the Bonds are
Outstanding, the city's Director of Finance (or other designated
financial officer of the City) shall cause to be transferred to the
Paying Agent/Registrar, from funds on deposit in the Interest and
Sinking Fund, and, if necessary, in the Reserve Fund, amounts
sufficient to fully pay and discharge promptly as each installment
of interest and principal of the Bonds accrues or matures or comes
due by reason of redemption prior to maturity; such transfer of
funds to be made in such manner as will cause immediately available
funds to be deposited with the Paying Agent/Registrar for the Bonds
at the close of the business day next preceding the date of payment
for the Bonds.
0374906
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SECTION 18: Issuance of Additional Bonds. Subject to the
provisions hereinafter appearing as to conditions precedent which
must be satisfied, the City reserves the right to issue, from time
to time as needed, Additional Bonds for any lawful purpose. Such
Additional Bonds may be issued in such form and manner as now or
hereafter authorized by the laws of the State of Texas for the
issuance of evidences of indebtedness or other instruments, and
should new methods or financing techniques be developed that differ
from those now available and in normal use, the City reserves the
right to employ the same in its financing arrangements provided
only that the following conditions precedent for the authorization
and issuance of the same are satisfied, to wit:
(1) The Director of Finance of the City (or other
officer of the City then having the primary
responsibility for the financial affairs of the City)
shall have executed a certificate stating (a) that, to
the best of his knowledge and belief, the City is not
then in default as to any covenant, obligation or
agreement contained in any ordinance or other proceeding
relating to any obligations of the City payable from and
secured by a lien on and pledge of the Net Revenues of
the System that would materially affect the security or
payment of such obligations and (b) either (i) payments
into all special funds or accounts created and
established for the payment and security of all
outstanding obligations payable from and secured by a
lien on and pledge of the Net Revenues of the System have
been made and that the amounts on deposit in such special
funds or accounts are the amounts then required to be on
deposit therein or (ii) the application of the proceeds
of sale of such obligations then being issued will cure
any such deficiency.
(2) The Additional Bonds shall be scheduled to
mature or be payable as to principal on March 1 or
September 1 (or both) in each year the same are to be
outstanding or during the term thereof.
(3) The City has secured a certificate or opinion
of an independent Certified Public Accountant to the
effect that, according to the books and records of the
City, the Net Earnings, for the preceding Fiscal Year or
for 12 consecutive months out of the 15 months
immediately preceding the month the ordinance
authorizing the issuance of the Additional Bonds is
adopted, are at least equal to 1.25 times the Average
Annual Debt Service for all Bonds Similarly Secured then
outstanding after giving effect to the issuance of the
Additional Bonds then being issued. In making a
0374906
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determination of the Net Earnings, the Accountant may
take into consideration a change in the rates and charges
for services and facilities afforded by the system that
became effective at least sixty (60) days prior to the
last day of the period for which Net Earnings are
determined and, for purposes of satisfying the above Net
Earnings test, make a pro forma determination of the Net
Earnings of the System for the period of time covered by
his certif ication or opinion based on such change in
rates and charges being in effect for the entire period
covered by the Accountant's certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean
the Gross Revenues of the System after deducting the operating and
Maintenance Expenses of the System, but not depreciation charges or
expenditures which, under generally accepted accounting principles,
should be charged to capital expenditures.
SECTION 19: Refunding Bonds. The City reserves the right to
issue refunding bonds to refund all or any part of the Bonds
Similarly Secured (pursuant to any law then available) upon such
terms and conditions as the City Council of the City may deem to be
in the best interest of the city and its inhabitants, and if less
than all such Bonds Similarly Secured then outstanding are
refunded, the conditions precedent prescribed (for the issuance of
Additional Bonds) set forth in section 18(3) of this Section shall
be satisfied and the Accountant's certificate or opinion required
in Section 18(3) shall give effect to the Debt Service of the
proposed refunding bonds (and shall not give effect to the Debt
Service of the Bonds Similarly Secured being refunded following
their cancellation or provision being made for their payment).
SECTION 20: Obligations of Inferior Lien and Pledqe. The
City hereby reserves the right to issue obligations payable from
and secured by a lien on and pledge of the Net Revenues of the
System, junior and subordinate in rank and dignity to the lien and
pledge securing the payment of the Bonds Similarly Secured
(including amounts to be repaid following a draw on a surety bond
held for the Reserve Fund), as may be authorized by the laws of the
State of Texas.
SECTION 21: Rates and Charges. For the benef it of the
Holders of the Bonds and in addition to all provisions and
covenants in the laws of the State of Texas and in this Ordinance,
the City hereby expressly stipulates and agrees, while any of the
Bonds are outstanding, to establish and maintain rates and charges
for facilities and services afforded by the system that are
reasonably expected, on the basis of available information and
experience and with due allowance for contingencies, to produce
Gross Revenues in each Fiscal Year sufficient:
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(1) To pay Operating and Maintenance Expenses,
depreciation charges and replacement and betterment
costs, and
(2) To produce Net Revenues sufficient to pay the
principal of and interest on the Bonds Similarly Secured
and the amounts required to be deposited in any reserve
or contingency fund created for the payment and security
of the Bonds Similarly Secured, and any other obligations
or evidences of indebtedness issued or incurred that are
payable only from and secured solely by a lien on and
pledge of the Net Revenues of the System.
(3) To produce Net Revenues equal to at least 1.20
times the annual Debt Service for the then outstanding
Bonds Similarly Secured.
(4) Any other legally incurred indebtedness payable
from the revenues of the System and/or secured by a lien
on the System.
SECTION 22: Maintenance of System - Insurance. The City
shall maintain the system in good condition and operate the system
in an efficient manner and at reasonable cost. While any Bonds are
Outstanding, the City agrees to maintain casualty and other
insurance on the System of a kind and in an amount customarily
carried by municipal corporations owning and operating similar
properties. Nothing in this Ordinance shall be construed as
requiring the City to expend any funds derived from sources other
than the operation of the System, but nothing herein shall be
construed as preventing the City from doing so.
SECTION 23: Sale or Lease of Properties. The City, to the
extent and in the manner authorized by law, may sell or exchange
for consideration representing the fair value thereof, as
determined by the city Council of the City, any property not
necessary or required in the efficient operations of the System, or
any equipment not necessary or useful in the operations thereof or
which is obsolete, damaged or worn out or otherwise unsuitable for
use in the operation of the System. The proceeds of any sale of
properties of the System shall be deposited in the system Fund.
SECTION 24: Records and Accounts. The City hereby covenants
and agrees that so long as any of the Bonds are outstanding, it
will keep and maintain separate and complete records and accounts
pertaining to the operations of the System in which complete and
correct entries shall be made of all transactions relating
thereto, as provided by Article 1113, V.A.T.C.S. or other
applicable law. The Holders of any Bonds or any duly authorized
agent or agents of such Holders shall have the right at all
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reasonable times to inspect such records, accounts and data
relating thereto, and to inspect the System and all properties
comprising same. The City further agrees that following the close
of each Fiscal Year, it will cause an audit of such books and
accounts to be made by an independent firm of Certified Public
Accountants. Each such audit, in addition to whatever other
matters may be thought proper by the accountant, shall particularly
include the following:
(1) A statement of the income and expenses of the
System for such Fiscal Year.
(2) A balance sheet for the System as of the end of
such Fiscal Year.
(3) A statement describing the sources and
application of funds of the System for such Fiscal Year.
(4) The Accountant's comments regarding the manner
in which the City has carried out the requirements of
this Ordinance and any other ordinance authorizing the
issuance of Additional Bonds and his recommendations for
any changes or improvements in the operations, records
and accounts of the System.
Expenses incurred in making an annual audit of the operations
of the System are to be regarded as Operating and Maintenance
Expenses. Copies of each annual audit shall be furnished to the
Executive Director of the Municipal Advisory Council of Texas at
his office in Austin, Texas, and, upon request, to the initial
purchasers of the Bonds and subsequent Holders of any of said
Bonds. The audits herein required shall be made within 120 days
following the close of each Fiscal Year insofar as is possible.
SECTION 25: Special Covenants. The City further covenants
and agrees by and through this Ordinance as follows:
(1) It has the lawful power to pledge the Net
Revenues of the System to the payment of the Bonds to the
extent provided herein and has lawfully exercised said
power under the Constitution and laws of the State of
Texas, and that the Bonds issued hereunder, together with
the Additional Bonds, shall be ratably secured in such
manner that no one bond shall have preference over any
other bond of said issues.
(2) The Net Revenues of the System have not been in
any manner pledged or encumbered to the payment of any
debt or obligation of the City or the System, save and
except for the Bonds and the outstanding "City of North
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Richland Hills, Texas, Tax and Waterworks and Sewer
System (Limited Pledge) Revenue certificates of
Obligation, Series 1992", dated February 1, 1992 and
"City of North Richland Hills, Texas, Tax and Waterworks
and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 1993", dated May 1, 1993.
(3) No free services of the System shall be
allowed, and should the City or any of its agents or
instrumentalities make use of the services and facilities
of the system, payment of the reasonable value thereof
shall be made by the City out of funds from sources other
than the revenues and income of the System.
(4) To the extent that it legally may and so long
as any of the Bonds are outstanding, no franchise shall
be granted for the installation or operation of any
waterworks or sewer system other than those owned by the
Ci ty , and the operation of any such system by anyone
other than this City is hereby prohibited.
(5) The City will comply with all of the terms and
conditions of any and all franchises, permits and
authorizations applicable to or necessary with respect to
the System, and which have been obtained from any
governmental agency; and the City has or will obtain and
keep in full force and effect all franchises, permits,
authorizations and other requirements applicable to or
necessary with respect to the acquisition, construction,
equipment, operation and maintenance of the System.
SECTION 26: Remedy in Event of Default. In addition to
all rights and remedies provided by the laws of the State of Texas,
the City covenants and agrees particularly that in the event the
City (1) defaults in payments to be made to the Interest and
Sinking Fund or the Reserve Fund as required by this Ordinance
or (2) defaults in the observance or performance of any other of
the covenants, conditions or obligations set forth in this
Ordinance, the Holders of any of the Bonds shall be entitled to a
writ of mandamus issued by a court of proper jurisdiction,
compelling and requiring the City and its officers to observe and
perform any covenant, condition or obligation prescribed in this
Ordinance. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power, or
shall be construed to be a waiver of any such default or
acquiescence therein, and every such right and power may be
exercised from time to time and as often as may be deemed
expedient.
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The specific remedy herein provided shall be cumulative of all
other existing remedies and the specification of such remedy shall
not be deemed to be exclusive.
SECTION 27: Special Obligations. The Bonds are special
obligations of the City payable from the pledged Net Revenues of
the System and the Holders thereof shall never have the right to
demand payment thereof out of funds raised or to be raised by
taxation.
SECTION 28: 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 the Net Revenues of the System under this
Ordinance and all other obligations of the City to the Holders
shall thereupon cease, terminate, and become void 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 (1) 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 Agent/Registrar, or an authorized escrow agent, or
(2) Government Obligations shall have been irrevocably deposited in
trust with the Paying Agent/ Registrar, or an authorized escrow
agent, which Government Obligations have been certified by an
independent accounting firm to mature as to principal and interest
in such amounts and at such times as will insure the availability,
without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and
interest on such 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 Agent/Registrar have been made)
the redemption date thereof. The City covenants that no deposit of
moneys or Government Obligations 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 Agent/ Registrar, or
an authorized escrow agent, and all income from Government
Obligations held in trust by the Paying Agent/Registrar or an
authorized escrow agent, pursuant to this Section which is not
required for the payment of the Bonds, or any principal amount(s)
thereof, or interest thereon with respect to which such moneys have
0374906
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been so deposited shall be remitted to the City or deposited as
directed by the City. Furthermore, any money held by the Paying
Agent/Registrar for the payment of the principal of and interest on
the Bonds and remaining unclaimed for a period of four (4) 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 Agent/Registrar
to the City shall be subject to any applicable unclaimed property
laws of the state of Texas.
SECTION 29: Ordinance a Contract - Amendments. This
Ordinance shall constitute a contract with the Holders from time to
time, be binding on the City, and shall not be amended or repealed
by the City so long as any 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 written consent from the owners holding a majority in
aggregate principal amount of the Bonds Similarly Secured then
Outstanding affected thereby, amend, add to, or rescind any of the
provisions of this Ordinance; provided that, without the written
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 or Bonds Similarly Secured, as the case may be, required
to be held for consent to any such amendment, addi tion, or
rescission.
SECTION 30: Mutilated - Destroyed - Lost and Stolen Bonds.
In case any Bond shall be mutilated, or destroyed, lost or stolen,
the Paying Agent/Registrar 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 (a) the filing by the Holder thereof
with the Paying Agent/ Registrar of evidence satisfactory to the
Paying Agent/ Registrar of the destruction, loss or theft of such
Bond, and of the authenticity of the ownership thereof and (b) the
furnishing to the Paying Agent/Registrar of indemnification in an
amount satisfactory to hold the City and the Paying Agent/Registrar
0374905
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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 new Bond issued pursuant to this Section in lieu of any
mutilated, destroyed, lost, or stolen Bond shall constitute a
replacement of the prior obligation of the City, whether or not the
mutilated, destroyed, lost, or stolen Bond shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and ratably with all other outstanding
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 31: Notices to Holders-Waiver. Wherever this
Ordinance provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and sent by United States Mail, first class
postage prepaid, to the address of each Holder as it appears in the
Security Register.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice to any particular Holders, nor any
defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Bonds. Where this Ordinance
provides for notice in any manner, such notice may be waived in
writing by the Holder entitled to receive such notice,
either before or after the event with respect to which such notice
is given, and such waiver shall be the equivalent of such notice.
waivers of notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
SECTION 32: Cancellation. All Bonds surrendered for payment,
redemption, transfer or exchange, if surrendered to the paying
Agent/Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying
Agent/Registrar and, if not already cancelled, shall be promptly
cancelled by the paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds
previously certified or registered and delivered which the City may
have acquired in any manner whatsoever, and all Bonds so delivered
shall be promptly cancelled by the Paying Agent/Registrar. All
cancelled Bonds held by the Paying Agent/Registrar shall be
destroyed as directed by the City.
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SECTION 33: Covenants to Maintain Tax-Exempt Status. (a)
Definitions. When used in this Section, the following terms shall
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 specif ic 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 (including
property financed with Gross Proceeds of the Refunded
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 (including property
financed with Gross Proceeds of the Refunded Bonds),
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
0374906
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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
permi tted 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.
(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
0374906
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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 addi tional Rebate Amount owed to it,
interest thereon, and any penalty imposed under section
1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent
permitted by section 148 of the Code and the Regulations and
rulings thereunder, the City shall not, at any time prior to the
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statement in the reoffering of the Bonds by the Purchasers is
hereby approved and authorized.
SECTION 36: Special Escrow Agreement Approval and Execution.
The "Special Escrow Agreement" (the "Agreement") by and between the
City and Bank One, Texas, N .A., Fort Worth, Texas (the "Escrow
Agent"), attached hereto as Exhibit B 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 1996 CITY OF
NORTH RICHLAND HILLS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND"
(the "Escrow Fund"); all as contemplated and provided in Article
717k, V.A.T.C.S., as amended, this Ordinance and the Agreement.
SECTION 37: 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 Bonds pending the approval thereof by the
Attorney General, the registration thereof by the comptroller of
Public Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tern, City Secretary, City
Manager, Assistant 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
Agent/Registrar, make the necessary arrangements for the delivery
of the Initial Bond(s) to the Purchasers and the initial exchange
thereof for definitive Bonds.
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SECTION 38: Proceeds of Sale. Immediately following the
delivery of the Bonds, proceeds of sale thereof (less certain costs
of issuance and accrued interest received from the Purchasers of
the Bonds) shall be deposited with the Escrow Agent for application
and disbursement in accordance with the provisions of the
Agreement. The proceeds of sale of the Bonds not so deposited
with the Escrow Agent for the refunding of the Refunded Bonds shall
be disbursed for payment of costs of issuance and deposited in the
Interest and Sinking Fund, all in accordance with written
instructions to the Escrow Agent.
SECTION 39: Legal Opinion. The obligation of the
Purchasers to accept delivery of the Bonds is subject to being
furnished a final opinion of Fulbright & Jaworski L.L.P.,
Attorneys, 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 or an executed counterpart thereof is
hereby authorized to be either printed on definitive printed
obligations or deposited with DTC along with the global
certificates for the implementation and use of the Book Entry Only
System used in the settlement and transfer of the Bonds.
SECTION 40: 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 said Bonds as
to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the definitive Bonds.
SECTION 41: Benefits of Ordinance. Nothing in this
Ordinance, expressed or implied, is intended or shall be construed
to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal
or equitable, under or by reason of this Ordinance or any provision
hereof, this Ordinance and all its provisions being intended to be
and being for the sole and exclusive benefit of the City, the
paying Agent/Registrar and the Holders.
SECTION 42: 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 43: 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.
0374005
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SECTION 44: 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 this governing body hereby declares that this Ordinance
would have been enacted without such invalid provision.
SECTION 45: 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 46: Incorporation of Findings and Determinations.
The findings and determinations of the City Council contained in
the preamble hereof are hereby incorporated by reference and made
a part of this Ordinance for all purposes as if the same were
restated in full in this section.
SECTION 47: Continuing Disclosure Undertaking. (a)
Defini tions. 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"
authorized
determined
depository
means any person designated by the State of Texas or an
department, officer, or agency thereof as, and
by the SEC or its staff to be, a state information
within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each
NRMSIR and any SID, within six months after the end of each fiscal
year (beginning with the fiscal year ending September 30, 1996)
financial information and operating data with respect to the City
of the general type included in the final Official Statement
approved by section 35 of this Ordinance, being the information
described in Exhibit C hereto. Financial statements to be provided
shall be (1) prepared in accordance with the accounting principles
described in Exhibit C hereto and (2) audited, if the City
commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited
financial statements are not available at the time the financial
0374905
-40-
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
0374900
-41-
subsection (c) hereof of any Bond calls and defeasance that cause
the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the
Holders and beneficial owners of the Bonds, and nothing in this
Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person.
The City undertakes to provide only the financial information,
operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not
hereby undertake to provide any other information that may be
relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to
update any information provided in accordance with this Section or
otherwise, except as expressly provided herein. The City does not
make any representation or warranty concerning such information or
its usefulness to a decision to invest in or sell Bonds at any
future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its
obligations under this section shall constitute a breach of or
default under this Ordinance for purposes of any other provision of
this Ordinance.
Nothing in this Section is intended or shall act to disclaim,
waive, or otherwise limit the duties of the City under federal and
state securities laws.
The provisions of this Section may be amended by the City from
time to time to adapt to changed circumstances resulting from a
change in legal requirements, a change in law, or a change in the
identity, nature, status, or type of operations of the City, but
only if (1) the provisions of this Section, as so amended, would
have permitted an underwriter to purchase or sell Bonds in the
primary offering of the Bonds in compliance with the Rule, taking
into account any amendments or interpretations of the Rule to the
date of such amendment, as well as such changed circumstances, and
(2) either (a) the Holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of
this Ordinance that authorizes such an amendment) of the
outstanding Bonds consent to such amendment or (b) a Person that is
unaffiliated with the City (such as nationally recognized bond
counsel) determines that such amendment will not materially impair
the interests of the Holders and beneficial owners of the Bonds.
03749M
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The provisions of this section may also be amended from time to
time or repealed by the City if the SEC amends or repeals the
applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, but only if and to the
extent that reservation of the City's right to do so would not
prevent underwriters of the initial public offering of the Bonds
from lawfully purchasing or selling Bonds in such offering. If the
City so amends the provisions of this Section, it shall include
with any amended financial information or operating data filed with
each NRMSIR and SID pursuant to subsection (b) of this Section an
explanation, in narrative form, of the reasons for the amendment
and of the impact of any change in the type of financial
information or operating data so provided.
SECTION 48: FSA Insurance. The Bonds have been sold with
the principal of and interest thereon being insured by Financial
Security Assurance Inc. (hereinafter called "FSA") pursuant to an
Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by FSA, the City covenants and
agrees that, in the event the principal and interest due on the
Bonds shall be paid by FSA 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 FSA shall be subrogated to the rights of such
Holders; and furthermore, the City covenants and agrees that:
(a) FSA shall be deemed to be a Holder for purposes
of Section 26 of this Ordinance.
(b) No amendment or supplement to this Ordinance
may become effective without prior notice to FSA.
(c) While the Municipal Bond Insurance Policy is in
effect, the City shall furnish to FSA a copy of any
notice to be given to the registered owners of the Bonds.
(d) The notice address of FSA is: Financial
security Assurance Inc., 350 Park Avenue, New York, New
York 10022-6022, Attention: Managing Director
Surveillance.--Re: Policy No. ,Telephone: (212)
826-0100; Telecopier: (212) 339-3529. In each case in
which notice or other communication refers to an Event of
Default then a copy of such notice or other communication
shall also be sent to the attention of General Counsel
and shall be marked to indicate 'URGENT MATERIAL
ENCLOSED."
SECTION 49: 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.
0374906
-43-
The provisions of this section may also be amended from time to
time or repealed by the City if the SEC amends or repeals the
applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, but only if and to the
extent that reservation of the City's right to do so would not
prevent underwriters of the initial public offering of the Bonds
from lawfully purchasing or selling Bonds in such offering. If the
City so amends the provisions of this Section, it shall include
with any amended financial information or operating data filed with
each NRMSIR and SID pursuant to subsection (b) of this section an
explanation, in narrative form, of the reasons for the amendment
and of the impact of any change in the type of financial
information or operating data so provided.
SECTION 48: FSA Insurance. The Bonds have been sold with
the principal of and interest thereon being insured by Financial
Security Assurance Inc. (hereinafter called "FSA") pursuant to an
Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by FSA, the City covenants and
agrees that, in the event the principal and interest due on the
Bonds shall be paid by FSA 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 FSA shall be subrogated to the rights of such
Holders; and furthermore, the City covenants and agrees that:
(a) FSA shall be deemed to be a Holder for purposes
of section 26 of this Ordinance.
(b) No amendment or supplement to this Ordinance
may become effective without prior notice to FSA.
(c) While the Municipal Bond Insurance Policy is in
effect, the City shall furnish to FSA a copy of any
notice to be given to the registered owners of the Bonds.
(d) The notice address of FSA is: Financial
Security Assurance Inc., 350 Park Avenue, New York, New
York 10022-6022, Attention: Managing Director
Surveillance.--Re: Policy No. ,Telephone: (212)
826-0100; Telecopier: (212) 339-3529. In each case in
which notice or other communication refers to an Event of
Default then a copy of such notice or other communication
shall also be sent to the attention of General Counsel
and shall be marked to indicate 'URGENT MATERIAL
ENCLOSED."
SECTION 49: 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.
0374906
-43-
SECTION 50: Effective Date. This Ordinance shall be in
full force and effect from and after its passage on the date shown
below and it is so ordained.
PASSED AND ADOPTED, this December 16, 1996.
CITY OF NORTH RICHLAND HILLS,
TEXAS
C
Mayor
ATTEST:
-(¿â&uvd ~
City Secretary
(City Seal)
APPROVED AS TO LEGALITY:
:K~j1&
0374905
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of December 16, 1996 (this
"Agreement"), by and between the City of North Richland Hills,
Texas (the "Issuer"), and Bank One Texas, N.A., Fort Worth, Texas,
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, Waterworks
and Sewer System Revenue Refunding Bonds, Series 1996" (the
"securities") in the aggregate principal amount of $5,135,000,
which Securities are scheduled to be delivered to the initial
purchasers on or about January 22, 1997; and
WHEREAS, the Issuer has selected the Bank to serve as Paying
Agent/Registrar in connection with the payment of the principal
of, premium, if any, and interest on said Securities and with
respect to the registration, transfer and exchange thereof by the
registered owners thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for
and on behalf of the Issuer and has full power and authority to
perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
section 1. 01. Appointment. The Issuer hereby appoints the
Bank to serve as Paying Agent with respect to the Securities, and,
as Paying Agent for the Securities, the Bank shall be responsible
for paying on behalf of the Issuer the principal, premium (if
any), and interest on the Securities as the same become due and
payable to the registered owners thereof; all in accordance with
this Agreement and the "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
0383891
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.
In addition, the Issuer agrees to reimburse the Bank upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Bank in accordance with any of the
provisions hereof (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) .
ARTICLE TWO
DEFINITIONS
section 2.01. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on
and after which the principal or any or all installments of
interest, or both, are due and payable on any security which
has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in
westerville, Ohio at the address appearing in section 3.01
hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Bond Resolution" means the resolution, order, or
ordinance of the governing body of the Issuer pursuant to
which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer,
ending September 30th.
"Holder" and "Security Holder" each means the Person in
whose name a Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written
request or order signed in the name of the Issuer by the
Mayor , City Manager, Assistant City Manager/Director of
Finance, or City Secretary, anyone or more of said
officials, and delivered to the Bank.
"L.e.9..ª-l R9J.iªªY" means a day on which the Bank is
-^-.--.-
. . "Person" means any individual, corporation partnership
Jo~nt venture, association, joint stock co~pany trust'
un1~c~rporated.o7g~nization or government or any ;gency o~
pol1t1cal subd1v1s10n of a government.
"Predecessor Securities" of any particular Securit
means every p:evi~us Security evidencing all or a portion oi
thes~me obl1gat10n as that evidenced by such particular
sec';lr1ty (and, for the purposes of this definition, any
mut1lated, lost, ~estroyed, or stolen Security for which a
r7placement Secur1ty has been registered and delivered in
11eu t~ereof pursuant to Section 4.06 hereof and the
Resolut1on).
"Record Date" means the Record Date as defined in the
Bond Resolution.
"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" wh~n 11~~n wi i-h rOC!T\O,..+-
~" ~......""" D__l.,
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.
In addition, the Issuer agrees to reimburse the Bank upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Bank in accordance with any of the
provisions hereof (including the reasonable compensation and the
expenses and disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
section 2.01. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on
and after which the principal or any or all installments of
interest, or both, are due and payable on any security which
has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in
Westerville, Ohio at the address appearing in section 3.01
hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Bond Resolution" means the resolution, order, or
ordinance of the governing body of the Issuer pursuant to
which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer,
ending September 30th.
"Holder" and "Security Holder" each means the Person in
whose name a Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written
request or order signed in the name of the Issuer by the
Mayor, City Manager, Assistant 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.
0383891
-2-
EXHiB'T A
"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 Record Date as defined in the
Bond Resolution.
"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.
0383891
-3-
EXH\B\1 A
Section 2.02. Other Definitions. The terms "Bank,"
"Issuer," and "Securities (Security)" have the meanings assigned
to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the
performance of the duties and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent. As Paying Agent, the
Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on
behalf of the Issuer the principal of each Security at its Stated
Maturity, Redemption Date, or Acceleration Date, to the Holder
upon surrender of the Security to the Bank at the following
offices:
Bank One, Texas, N.A.
Attention: Securities Transfer
235 West Schrock Road
Westerville, Ohio 43081-0393
As Paying Agent, the Bank shall, provided adequate collected
funds have been provided to it for such purpose by or on behalf of
the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid
each Holder and making payment thereof to the Holders of the
Securities (or their Predecessor Securities) on the Record Date
(as defined in the Resolution). All payments of principal and/or
interest on the Securities to the registered owners shall be
accomplished (1) by the issuance of checks, payable to the
registered owners, drawn on the fiduciary account provided in
Section 5.05 hereof, sent by united States mail, first class,
postage prepaid, to the address appearing on the Security Register
or (2) by such other method, acceptable to the Bank, requested in
writing by the Holder at the Holder's risk and expense.
section 3.02. Payment Dates. The Issuer hereby instructs
the Bank to pay the principal of and interest on the Securities at
the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
section 4.01. Security Register - Transfers and Exchanqes.
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
0383891
-4-
EXH\B\" A
the Issuer and subj ect 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 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.
EXH'B\T A
0383891
-5-
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 of 1934, all
Securities in lieu of which or in exchange for which other
Securities have been issued, or which have been paid.
section 4.06. Mutilated. Destroyed. Lost or Stolen Securi-
ties. The Issuer hereby instructs the Bank, subj ect to the
provisions of Section 30 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
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.
may conclusively rely, as to the truth of the
correctness of the opinions expressed therein, on
opinions furnished to the Bank.
(a) The Bank
statements and
certificates or
(b\ 'T'h4=> R;:¡¡nk' c:::.h;:¡,ll TIn+- h"", '~",h',.. ç:,..- __eo _____ -~ ..!.u-"_____~
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 of 1934, all
Securities in lieu of which or in exchange for which other
Securities have been issued, or which have been paid.
section 4.06. Mutilated. Destroved. Lost or Stolen Securi-
ties. The Issuer hereby instructs the Bank, subject to the
provisions of section 30 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.
0333391
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EXHIBIT A
Section 4.07. Transaction Information to Issuer. The Bank
will, within a reasonable time after receipt of written request
from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has
delivered upon the transfer or exchange of any Securities pursuant
to section 4.01, and Securities it has delivered in exchange for
or in lieu of mutilated, destroyed, lost, or stolen Securities
pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to
perform the duties set forth herein and agrees to use reasonable
care in the performance thereof.
Section 5.02. Reliance on Documents, Etc. (a) The Bank
may conclusively rely, as to the truth of the statements and
correctness of the opinions expressed therein, on certificates or
opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Bank was negligent in ascertaining the pertinent
facts.
(c) No provisions of this Agreement shall require the Bank
to expend or risk its own funds or otherwise incur any financial
liability for performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, security, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine
the ownership of any Securities, but is protected in acting upon
receipt of Securities containing an endorsement or instruction of
transfer or power of transfer which appears on its face to be
signed by the Holder or an agent of the Holder. The Bank shall
not be bound to make any investigation into the facts or matters
stated in a resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
note, security, or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written
advice of such counselor any opinion of counsel shall be full and
complete authorization and protection with respect to any action
0383891
-7-
EXHIBIT A
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. Moneys Held by Bank - Fiduciary Account/
Collateralization. A fiduciary account shall at all times be kept
and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the
payment of the Securities, and money deposited to the credit of
such account until paid to the Holders of the Securities shall be
continuously collateralized by securities or obligations which
qualify and are eligible under both the laws of the State of Texas
and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation.
Payments made from such fiduciary account shall be made by check
drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other
medium of payment.
The Bank shall be under no liability for interest on any
money received by it hereunder.
Subject to the applicable unclaimed property laws of the
State of Texas, any money deposited with the Bank for the payment
of the principal, premium (if any), or interest on any Security
and remaining unclaimed for four 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 for, and hold it
harmless against, any loss, liability, or expense incurred without
0333891
-8-
EXHIBIT A
negligence or bad faith on its part, arl.sl.ng 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
consti tute 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", effective
December 12, 1994, which establishes requirements for securities
to be eligible for such type depository trust services, including,
but not limited to, requirements for the timeliness of payments
and funds availability, transfer turnaround time, and notification
of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement may be amended only
by an agreement in writing signed by both of the parties hereto.
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 11.
section 6.04. Effect of Headings. The Article and section
headings herein are for convenience only and shall not affect the
construction hereof.
0383891
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EXHIBIT .Ä
section 6.05. Successors and Assigns. All covenants and
agreements herein by the Issuer shall bind its successors and
assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein
shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
section 6.07. Benefits of Agreement. Nothing herein,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
section 6.08. Entire Agreement. This Agreement and the Bond
Resolution constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent/Registrar 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.
The resigning paying Agent/Registrar may petition any court
of competent jurisdiction for the appointment of a successor
Paying Agent/Registrar if an instrument of acceptance by a
successor Paying Agent/Registrar has not been delivered to the
resigning Paying Agent/Registrar within sixty (60) days after the
giving of such notice of resignation.
Upon an early termination of this Agreement, the Bank agrees
to promptly transfer and deliver the Security Register (or a copy
thereof), together with other pertinent books and records relating
to the Securities, to the successor Paying Agent/Registrar
designated and appointed by the Issuer.
0383891
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EXH\B\T A
The provisions of Section 1. 02 and of Article Five shall
survive and remain in full force and effect following the
termination of this Agreement.
section 6.11. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State
of Texas.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
BANK ONE, TEXAS, N.A.,
Fort Worth, Texas
BY
Title:
[SEAL]
Attest:
Title:
Address: 500 Throckmorton
suite 704-West Complex
Fort Worth, Texas 76102
CITY OF NORTH RICHLAND HILLS, TEXAS
BY
Mayor
(CITY SEAL)
Attest:
Address: 7301 N.E. Loop 820
North Richland Hills, Texas
76182
City Secretary
0383891
-11-
EXH'BIT A
tXH\B\1 B
SPECIAL ESCROW AGREEMENT
THE STATE OF TEXAS
§
§
§
COUNTY OF TARRANT
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and
entered into as of December 16, 1996 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, Texas, N.A.,
Fort Worth, Texas, a national banking association organized and
existing under the laws of the united States of America, or its
successors or assigns hereunder (the "Bank"),
WIT N E SSE T H :
WHEREAS, the City has duly issued certain obligations now
outstanding in the aggregate original principal amount of
$11,853,614.60 and in the aggregate principal and maturity amount
of $17,285,000, and more particularly described as follows:
(1) city of North Richland Hills, Texas,
Waterworks and Sewer System Improvement and
Refunding Revenue Bonds, Series 1989, dated
March 1, 1989, consisting of (i) current
interest bonds in the aggregate principal
amount of $3,995,000 and scheduled to mature
on September 1 in each of the years 1997
through 2001 and (ii) capital appreciation
bonds in the aggregate maturity amount of
$4,070,000 and scheduled to mature on
September 1 in each of the years 2002 through
2008, and totalling in principal amount and
maturity amount of
$8,065,000
(2) City of North Richland Hills, Texas,
Waterworks and Sewer system Refunding Revenue
Bonds, Series 1989-A, dated March 1, 1989,
consisting of (i) current interest bonds in
the aggregate principal amount of $1,740,000
and scheduled to mature on September 1 in each
of the years 1997 through 2001 and (ii)
capi tal appreciation bonds in the aggregate
maturity amount of $1,730,000 and scheduled to
mature on September 1 in each of the years
2002 through 2008, and totalling in principal
amount and maturity amount of
$3,470,000
0384070
(3) City of North Richland Hills, Texas,
Waterworks and Sewer System Refunding Revenue
Bonds, Series 1989-B, dated July 1, 1989,
consisting of ( i) current interest bonds in
the aggregate principal amount of $2,730,000
and scheduled to mature on September 1 in each
of the years 1997 through 2001 and (ii)
capital appreciation bonds in the aggregate
maturity amount of $3,020,000 and scheduled to
mature on September 1 in each of the years
2002 through 2008, and totalling in principal
amount and maturity amount of
$5,750,000
AND WHEREAS, all the current interest bonds described above,
together with $355,000 in maturity amount of the capital
appreciation bonds of the Series 1989-B Bonds scheduled to mature
on September 1, 2002, totalling in principal and/or maturity amount
of $8,820,000, are hereinafter collectively referred to as the
"Defeased Bonds" and all of the capital appreciation bonds
described above (except for the $355,000 in maturity amount of the
capital appreciation bonds of the Series 1989-B Bonds scheduled to
mature on September 1, 2002), totalling in maturity amount of
$8,465,000, are hereinafter collectively referred to as the
"Refunded Bonds"; and
AND WHEREAS, in accordance with the prov~s~ons of Article
7l7k, V.A.T.C.S., as amended (the "Act"), the City is authorized to
make a cash deposit and/or sell refunding bonds in an amount
sufficient to provide for the payment of obligations to be refunded
and defeased, deposit the proceeds of such refunding bonds with any
place of payment for the obligations being defeased and/or refunded
and enter into an escrow or similar agreement with such place of
payment for the safekeeping, investment, reinvestment,
administration and disbursement 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 Defeased Bonds
and the Refunded Bonds (sometimes hereinafter collectively referred
to as the "Defeased Obligations"); and
WHEREAS, the Refunded Bonds and the Defeased Bonds are
scheduled to mature, or be called for redemption, 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
03840711
-2-
EXHiBIT d
WHEREAS, the City on the 16th day of December, 1996, 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, Waterworks and Sewer System
Revenue Refunding Bonds, Series 1996" (the "Bonds"), and such Bonds
are being issued to refund, discharge and make final payment of the
principal of and interest on the Refunded Bonds; and
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" and the respective accounts 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 of the Defeased Obligations
and the accrued interest thereon, as the same shall become due in
accordance with the terms of the ordinances authorizing the
issuance thereof 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 Escrow Fund as provided herein; and
WHEREAS, the Bank is a national banking association organized
and existing under the laws of the United States of America,
possessing trust powers and is fully qualified and empowered to
enter into this Agreement; and
WHEREAS, in section 36 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 Bonds and the Defeased Bonds in accordance with the
provisions thereof, including, without limitation, all actions
required by the ordinances authorizing the Defeased 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
0384075
-3-
EXH'B'T B
the interest on the Defeased 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
Defeased 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 1996 CITY OF NORTH
RICHLAND HILLS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND"
(hereinafter called the "Escrow Fund") for the benefit of the
holders of the Defeased Obligations, and within such Fund there
shall be created, established and maintained two separate and
distinct accounts for the payment of the Defeased obligations.
Account Number 1 of the Escrow Fund shall be established and
maintained solely for the payment of the Refunded Bonds and
immediately following the delivery of the Bonds, the City agrees
and covenants to cause to be deposited with the Bank from the
proceeds of sale of the Bonds, the following:
$5,007,300.00 for the purchase of Federal Securities
identified in Exhibit B to be held for the
Account Number 1 of the Escrow Fund
$-0- for deposit in the Account Number 1 Escrow
Fund as a beginning cash balance.
Account Number 2 of the Escrow Fund shall be established and
maintained solely for the payment of the Defeased Bonds and
simultaneously with the delivery of the Bonds, the City agrees and
covenants to cause to be deposited with the Bank from other
available funds the following:
$9,132,389.75 for the purchase of Federal Securities
identified in Exhibit B to be held for the
Account Number 2 of the Escrow Fund
$ 671.36 for deposit in the Account Number 2 Escrow
Fund as a beginning cash balance.
The Bank hereby accepts the Escrow Fund and the respective
accounts to be maintained 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
0384075
-4-
EXHIBIT B
for application and disbursement for the purposes and in the manner
provided in this Agreement.
SECTION 3: Escrow Fund Suff iciency Warranty. The City hereby
represents that the cash and Federal Securities, together with the
interest to be earned thereon, depos i ted to the credit of the
respective accounts of the Escrow Fund will be sufficient to pay
the principal of and premium and interest on the Refunded Bonds and
the Defeased Bonds as the same shall become due and payable, and
such Defeased Bonds and Refunded Bonds, 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
resolution providing for the redemption of (i) the capital
appreciation bonds of each series of Defeased Obligations on
March 1, 1997 at the redemption price equivalent to 104.5% of the
accreted value of such bonds as of such redemption date and (ii)
the current interest bonds of each series of Defeased Obligations
maturing on and after September 1, 2000 on September 1, 1999 at the
redemption price of par plus accrued interest thereon; all in
accordance with the provisions of the respective notice
requirements applicable to said Defeased Obligations and the notice
requirements contained in the ordinances authorizing such Defeased
obligations.
The Bank agrees to cause a notice of redemption pertaining to
the Defeased Obligations to be sent to the registered owners
thereof appearing on the registration books at least thirty (30)
days prior to the respective redemption dates therefor.
The Defeased Obligations to be redeemed prior to maturity and
the Accounts to be used to accomplish their redemption are further
identified as follows:
(a) From Account No.1, the redemption on March 1,
1997 at the redemption price equivalent to 104.5% of the
accreted value of the capital appreciation bonds as of
the redemption date of the (i) Series 1989 Bonds, dated
March 1, 1989, maturing on September 1 in each of the
years 2002 through 2008, in the aggregate maturity amount
of $4,07~,000, (ii) Series 1989-A Bonds, dated March 1,
1989, maturing on September 1 in each of the years 2002
through 2008, in the aggregate maturity amount of
$1,730,000, and (iii) Series 1989-B Bonds, dated July 1,
1989, maturing on September 1 in each of the years 2003
through 2008 and $310,000 in maturity amount of the
capital appreciation bonds maturing on September 1, 2002,
in the aggregate maturity amount of $2,665,000;
0384075
-5-
EXHIB'T B
(b) From Account No.2, the redemption on March 1,
1997 at the redemption price equivalent to 104.5% of the
accreted value of the capital appreciation bonds as of
the redemption date of the Series 1989-B Bonds, dated
July 1, 1989, maturing on September 1, 2002 in the
aggregate maturity amount of $355,000;
(c) From Account No.2, the payment on September 1,
1997, on September 1, 1998 and on September 1, 1999, of
(i) the Series 1989 Bonds, dated March 1, 1989, maturing
on such dates in the aggregate principal amount of
$2,225,000, (ii) the Series 1989-A Bonds, dated March 1,
1989, maturing on such dates in the aggregate principal
amount of $970,000, (iii) the Series 1989-B Bonds, dated
July 1, 1989, maturing on such dates in the aggregate
principal amount of $1,530,000; and
(d) From Account No.2, the redemption on
September 1, 1999, at the redemption price of par plus
accrued interest to the date of redemption of (i) the
Series 1989 Bonds, dated March 1, 1989, maturing on
September 1, 2000 and 2001, in the aggregate principal
amount of $1,770,000, (ii) the Series 1989-A Bonds, dated
March 1, 1989, maturing on September 1 in each of the
years 2001 and 2002, and aggregating in the principal
amount of $770,000, (iii) the Series 1989-B Bonds, dated
July 1, 1989, maturing on september 1 in each of the
years 2000 and 2001, in the aggregate principal amount of
$1,200,000; and
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
Defeased 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 either Account of 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.
0384075
-6-
EXHIBIT B
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 Defeased 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, 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 trustee; 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 Defeased Obligations shown in Exhibit A
attached hereto, the Bank, without further direction from anyone,
including the City, shall cause to be withdrawn from the
appropriate Account of the Escrow Fund the amount required to pay
the accrued interest on the Defeased Obligations due and payable on
said payment date and the principal of the Defeased 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
Defeased obligations to be paid with such amount. The paying agent
for the Defeased obligations is the Bank.
If any Defeased 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 Defeased obligation and interest thereon it shall
be the duty of the Bank to hold said cash without liability to the
holder of such Defeased Obligation for interest thereon after such
maturity or redemption date, in trust for the benefit of the holder
of such Defeased 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 Defeased Obligation, including for
any claim for the payment thereof and interest thereon. All cash
required by the provisions hereof to be set aside or held in trust
for the payment of the Defeased Obligations, including interest
thereon, shall be applied to and used solely for the payment of the
Defeased Obligations and interest thereon with respect to which
such cash has been so set aside in trust.
0384075
-7-
EXHIBIT B
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 Defeased Obligations and interest thereon
which remains unclaimed for a period of four (4) years after the
stated maturity date or redemption date of such Defeased
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 Defeased Obligations. All Defeased
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 escrows created
hereby shall be irrevocable. The persons entitled to payment with
respect to the Refunded Bonds shall have an express lien on all
moneys and Federal Securities deposited to the credit of Account
Number 1 of the Escrow Fund until paid out, used and applicable in
accordance with this Agreement and the persons entitled to payment
with respect to the Defeased Bonds shall have an express lien on
all moneys and Federal Securities deposited to the credit of
Account Number 2 of the Escrow Fund until paid out, used and
applicable in accordance with this Agreement.
Unless disbursed in payment of the Defeased 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 Bonds
in regard to Account Number 1 of the Escrow Fund and the owners of
the Defeased Bonds in regard to Account Number 2 of the Escrow Fund
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 this Agreement shall not be considered as a banking deposit
by the City and the Bank 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 Defeased 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
0S840711
-8-
EXHIBIT a
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 Defeased 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 Defeased Obligations which have not
previously been paid, and
(2) with respect to an early redemption of Federal
Secur i ties 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
Defeased 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 Defeased 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
Defeased Obligations and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments -
Reinvestment. Except as provided in section 11 hereof, moneys in
the Escrow Fund ~ill 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 Defeased Obligations there exists or will
0384075
-9-
EXHIBIT -1
exist excesses of interest on or maturing principal of the Federal
Securities in excess of the amounts necessary hereunder for the
Defeased 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:
(1) an op1n10n 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 Defeased 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 Defeased 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 Defeased 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
Defeased 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 $3,000.00 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 $7,500.00 and the
Bank acknowledges and agrees that the above amount is and
represents the total amount of compensation due the Bank for
services rendered as paying agent for the Defeased 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 Defeased
Obligations.
The City acknowledges and agrees that the above amount
deposited with the Escrow Agent to cover paying agents' charges
and expenses does not include amounts which shall become due and
payable for services rendered as registrar and transfer agent for
fully registered Defeased Obligations, and the City agrees to pay
directly to each "registrar" for the Defeased Obligations all
reasonable costs, expenses and charges incurred in connection with
the maintenance of the registration books and records and the
transfer of such fully registered obligations as and when such
costs, expenses and charges are incurred and against written
invoices, statements or bills submitted therefor.
exist excesses of interest on or maturing principal of the Federal
Securities in excess of the amounts necessary hereunder for the
Defeased 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:
(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 Defeased 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 Defeased 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 Defeased 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
Defeased 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 $3,000.00 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.
03840711
-10-
EXHIBIT ~
The City also agrees to deposit with the Bank on the
effective date of this Agreement, the sum of $7,500.00 and the
Bank acknowledges and agrees that the above amount is and
represents the total amount of compensation due the Bank for
services rendered as paying agent for the Defeased 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 Defeased
Obligations.
The City acknowledges and agrees that the above amount
deposited with the Escrow Agent to cover paying agents' charges
and expenses does not include amounts which shall become due and
payable for services rendered as registrar and transfer agent for
fully registered Defeased Obligations, and the City agrees to pay
directly to each "registrar" for the Defeased Obligations all
reasonable costs, expenses and charges incurred in connection with
the maintenance of the registration books and records and the
transfer of such fully registered obligations as and when such
costs, expenses and charges are incurred and against written
invoices, statements or bills submitted therefor.
SECTION 17: Escrow Agent's Duties I 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 Manager or Mayor and/or City Secretary of the
City as sufficient evidence of the facts therein contained. The
Bank 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
0334076
-11-
EXHIBIT a
certif icate 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 Defeased 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 Defeased Obligations have concurred in
any such direction, Defeased Obligations owned by any obligor upon
the Defeased 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 Defeased 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
0384076
-12-
EXHIBIT B
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
city and the holders of the Defeased 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:
(a) withhold and stop all further proceedings in,
and performance of, this Agreement with respect to the
issue in question and of all instructions received
hereunder in regard to such issue; and
(b) File a suit in interpleader and obtain an
order from a court of appropriate jurisdiction requiring
all persons involved to interplead and litigate in such
court their several claims and rights among themselves.
In the event the 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 corporate office of the
Bank in the city of Fort Worth, 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 Bank 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 1997, 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 each Account
0384076
-13-
EXHIBIT B
of the Escrow Fund for the preceding 12 month period ending
September 30th of each year.
SECTION 21: Notices. Any notice, authorization, request or
demand required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given when mailed by
registered or certified mail, postage prepaid addressed as
follows:
CITY OF NORTH RICHLAND HILLS, TEXAS
7301 N. E. Loop 820
North Richland Hills, Texas 76182
Attention: Director of Finance
BANK ONE, TEXAS, N.A.
500 Throckmorton, Suite 704
Fort Worth, Texas 76102
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
Defeased 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 Defeased 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 Escrow 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 Defeased Obligation as executed,
authenticated and delivered and in all proceedings pertaining
03840711
-14-
EXHIBIT a
thereto as said Defeased 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 Defeased Obligations as provided
herein and the execution and delivery of this Agreement have been
duly and effectively taken and that said Defeased 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 Defeased Obligations on the
basis of this Agreement.
SECTION 25: Termination. This Agreement shall terminate
when the Defeased Obligations, including interest due thereon,
have been paid and discharged in accordance with the provisions of
this Agreement. If any Defeased 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 Defeased 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 Defeased Obligations shall be paid or
transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the
essence in the performance of obligations from time to time
imposed upon the 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
0384076
-15-
EXHIBIT B
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 Defeased 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
Ci ty discovers, or is notif ied of, the event or circumstance
causing the Bank's inability or disqualification to serve
hereunder, the Bank, or a bondholder of the Defeased 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 Defeased 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 Defeased 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
03M075
-16-
EXHIBIT 8
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 - Amendment/Modification. 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 Defeased Obligations,
the City, the Bank and their respective successors and legal
representatives. Furthermore, no alteration, amendment or
modification of any provision of this Agreement shall (1) alter
the firm financial arrangements made for the payment of the
Defeased 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 Defeased 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 Defeased Obligations, amend or modify the terms and provisions
of this Agreement to cure in a manner not adverse to the holders
of the Defeased 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 Defeased 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.
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.
0384076
-17-
EXHIBIT B
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
ATTEST:
Mayor
city Secretary
(City Seal)
BANK ONE, TEXAS, N.A.,
Fort Worth, Texas,
as Escrow Agent
ATTEST:
Title:
Authorized Signer
(Bank Seal)
088-4076
-18-
EXHIBIT d
Exhibit C
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in section 47 of this
Ordinance.
Annual Financial Statements and Operatinq Data
The financial information and operating data with respect to
the City to be provided annually in accordance with such Section
are as specif ied (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 under Tables 1 through 12.
Accountinq Principles
The accounting principles referred to in such Section are the
generally accepted accounting principles as applicable to
governmental units as prescribed by The Government Accounting
Standards Board.
0374906