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HomeMy Public PortalAboutOrdinance No. 719-94 04-12-1994 ORDINANCE N0. 719-94 ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS • WHEREAS, the Public Property Finance Act, Section 271.001 et seq., Texas Local Government Code (the "Act") authorizes, among others, cities to execute, perform, and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in the Act; and WHEREAS, the Act permits the governing body of a city to execute contracts in any form deemed appropriate by said governing body in connection with the use, acquisition or purchase of personal property; and WHEREAS, the City Council of the City of Richland Hills Texas (the "City" or the "Issuer") desires to acquire or purchase personal property, to-wit: a radio system, police tape logging system, police vehicles, pickup truck, administrative vehicles, computer equipment, lawn mower, backhoe loader, and police equipment (the "Property"); and WHEREAS, the City Council of the Issuer deems it appropriate to adopt this Ordinance and issue the "Contractual Obligations" herein authorized as permitted by the Act. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF RICHLAND HILLS, TEXAS: Section 1. AMOUNT AND PURPOSE OF CONTRACTUAL OBLIGA- TIONS: That the said Issuer's Public Property Finance Contractual Obligations (hereinafter sometimes called "Contractual Obligations") are hereby authorized to be issued in the aggregate principal amount of $315,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE ISSUER'S CONTRACTUAL OBLIGATIONS TO BE INCURRED IN CONNECTION WITH THE ACQUISITION OR PURCHASE OF PERSONAL PROPERTY, IN ACCORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE ACT, SECTION 271.001 ET SEQ., TEXAS LOCAL GOVERNMENT CODE. Section 2. DESIGNATION. That said Contractual Obliga- tions shall be designated as the: CITY OF RICHLAND HILLS, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES 1994. Section 3. DATE, DENOMINATIONS, NUMBERS, AND MATURITIES OF CONTRACTUAL OBLIGATIONS. That initially there shall be issued, sold, and delivered hereunder fully registered contractual obligations dated April i, 1994, in the respective denominations and principal amounts hereinafter stated, payable to the respective initial registered owners thereof (as designated in Section 19 hereof), or to the registered assignee or assignees of said contractual obligations or any portion or portions thereof (in each case, the "registered ORDINANCE N0. 719-94 owner"), and said contractual obligations shall mature and be payable on the dates and in the aggregate principal amounts as • follows: MATURITY DATE PRINCIPAL AMOUNT October 1, 1994 $ 75,000 October 1, 1995 75,000 October 1, 1996 75,000 October 1, 1997 20,000 October 1, 1998 20,000 October 1, 1999 20,000 October 1, 2000 30,000 The term "Contractual Obligations" as used in this Ordinance shall mean and include collectively the contractual obligations initially issued and delivered pursuant to this Ordinance and all substitute contractual obligations exchanged therefor, as well as all other substitute contractual obligations and replacement contractual obligations issued pursuant hereto, and the term "Contractual Obligation" shall mean any of the Contractual Obligations. Section 4. INTEREST. That the Contractual Obligations shall bear interest from the dates specified in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance to their maturity dates at the following rates per annum: MATURITY DATE INTEREST RATE October 1, 1994 6.350°s October 1, 1995 6.350% October 1, 1996 4.350 October 1, 1997 4.700% October 1, 1998 4.950 October 1, 1999 5.200 October 1, 2000 5.400 Said interest shall be payable in the manner provided and on the dates stated in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. Section 5. CHARACTERISTICS OF THE CONTRACTUAL OBLIGA- TIONS. (a) Registration, Transfer, Conversion and Exchange; Authentication; Book-Entry Only System. That the Issuer shall keep or cause to be kept at the principal corporate trust office of NationsBank of Texas, N.A., Dallas, Texas (the "Paying Agent/Registrar") books or records for the registration of the transfer, conversion and exchange of the Contractual Obligations (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and • -2 ORDINANCE N0. 719-94 make such registrations of transfers, conversions and exchanges under such reasonable regulations as the Issuer and • the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each Contractual Obligation to which payments with respect to the Contractual Obligations shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of a substitute Contractual Obligation or Contractual Obligations. Registration of assignments, transfers, conversions and exchanges of Contractual Obligations shall be made in the manner provided and with the effect stated in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance. Each substitute Contractual Obligation shall bear a letter and/or • number to distinguish it from each other Contractual Obligation. Except as provided in Section 5(c) of this Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Contractual Obligation, date and manually sign said Contractual Obligation, and no such Contractual Obligation shall be deemed to be issued or outstanding unless such Contractual Obligation is so executed. The Paying Agent/Registrar promptly shall cancel all paid Contractual Obligations surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Contractual Obligation or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Contractual Obligations in the manner prescribed herein. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the duty of conversion and exchange of Contractual Obligations as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Contractual Obligations, the converted and exchanged Con- tractual Obligations shall be valid, incontestable, and enforceable in the same manner and with the same effect as the • -3- ORDINANCE N0. 719-94 Contractual Obligations which initially were issued and • delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (b) Payment of Contractual Obligations and Interest. The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Contractual Obligations, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all .payments made by the Issuer and the Paying Agent/Registrar with respect to the Contractual Obligations. (c) In General. The Contractual Obligations (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Contractual Obligations to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and exchanged for other Contractual Obligations, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Contractual Obligations shall be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Contractual Obligations, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF CONTRACTUAL OBLIGATION set forth in this • Ordinance. The Contractual Obligations initially issued and delivered pursuant to this Ordinance (to which Contractual Obligations shall be attached the Registration Certificate of the Comptroller of Public Accounts) are not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Contractual Obligation issued in conversion of and exchange for any Contractual Obligation or Contractual Obligations issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF CONTRACTUAL OBLIGATION. (d) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of the Contractual Obligations that at all times while the Contractual Obliga- tions are outstanding the Issuer will provide a competent and legally qualified bank, trust company, financial institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Contractual Obligations under this Ordinance, and that the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice. In the event that • -4- ORDINANCE N0. 719-94 the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should • resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Contractual Obligations, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Contractual Obligations, by United States Mail, first-class postage prepaid, which notice also shall give the address of the new Paying/Agent Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar. (e) Book-Entry Only System. The Contractual Obligations issued in exchange for the Contractual Obligations initially issued to the purchaser specified herein shall be initially issued in the form of a separate single fully registered Contractual Obligation for each of the maturities thereof. • Upon initial issuance, the ownership of each such Contractual Obligation shall be registered in the name of Cede & Co., as nominee of Depository Trust Company of New York ("DTC"), and except as provided in subsection (f) hereof, all of the outstanding Contractual Obligations shall be registered in the name of Cede & Co., as nominee of DTC. With respect to Contractual Obligations registered in the name of Cede & Co., as nominee of DTC, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest on the Contractual Obligations. Without limiting the immediately preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Contractual Obligations, (ii) the delivery to any DTC Participant or any other person, other than a Contractual Obligation holder, as shown on the Registration Books, of any notice with respect to the Contractual Obligations, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Contractual Obligation holder, as shown in the Registration Books of any amount with respect to principal of, premium, if any, or • -5- ORDINANCE N0. 719-94 interest on, as the case may be, the Contractual Obligations. Notwithstanding any other provision of this Order to the • contrary, the Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Contractual Obligation is registered in the Registration Books as the absolute owner of such Contractual Obligation for the purpose of payment of principal, premium, if any, and interest, as the case may be, with respect to such Contractual Obligation, for the purpose of giving notices of redemption and other matters with respect to such Contractual Obligation, for the purpose of registering transfers with respect to such Contractual Obligation, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the Contractual Obligations only to or upon the order of the respective owners, as shown in the Registration Books as provided in this Order, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of, premium, if any, and interest on, or as the case may be, the Contractual Obligations to the extent of the sum or sums so paid. No person other than an owner, as shown in the Registration Books, shall receive a Contractual Obligation certificate evidencing the obligation of the Issuer to make payments of principal, premium, if any, and interest, as the case may be, pursuant to this Order. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect • that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Order with respect to interest checks being mailed to the registered owner at the close of business on the Record Date, the word "Cede & Co." in this Order shall refer to such new nominee of DTC. (f) Successor Securities Depository; Transfers Outside Book-Entry Only System. In the event that the Issuer or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities described herein and in the representation letter of the Issuer to DTC and that it is in the best interest of the beneficial owners of the Contractual Obligations that they be able to obtain certificated Contractual Obligations, the Issuer or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17 (a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Contractual Obligations to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Contractual Obligations and transfer one or more separate Contractual Obligations to DTC Participants having Contractual Obligations credited to their • -6- ORDINANCE N0. 719-94 DTC accounts. In such event, the Contractual Obligations shall no longer be restricted to being registered in the • Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Contractual Obligation holders transferring or exchanging Contractual Obligations shall designate, in accordance with the provisions of this Order. (g) Payments to Cede & Co. Notwithstanding any other provision of this Order to the contrary, so long as any Contractual Obligation is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on, or as the case may be, such Contractual Obligation and all notices with respect to such Contractual Obligation shall be made and given, respectively, in the manner provided in the representation letter of the Issuer to DTC. Section 6. FORM OF CONTRACTUAL OBLIGATIONS. The form of the Contractual Obligations, including the form of the Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Contractual Obligations initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, • omissions, or insertions as are permitted or required by this Ordinance. • -7- ORDINANCE N0. 719-94 FORM OF CONTRACTUAL OBLIGATION • NO. R-_ UNITED STATES OF AMERICA PRINCIPAL STATE OF TEXAS AMOUNT CITY OF RICHLAND HILLS, TEXAS $ ,000 PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION SERIES 1994 ORIGINAL MATURITY INTEREST ISSUE DATE DATE RATE CUSIP April 1, 1994 $ ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF RICHLAND HILLS, IN TARRANT COUNTY, TEXAS (the "Issuer"), hereby promises to pay to , or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon from the original issue date specified above, on October 1, 1994 and on each April 1 and October 1 thereafter while this Contractual Obligation is outstanding at the interest rate per annum specified above; except that if this Contractual Obligation is required to be • authenticated and the date of its authentication is later than October 1, 1994, such principal amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date (hereinafter defined) but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Contractual Obligation or Contractual Obligations, if any, for which this Contractual Obligation is being exchanged or converted from is due but has not been paid, then this Contractual Obligation shall bear interest from the date to which such interest has been paid in full. IN CONSIDERATION of the registered owner's acceptance hereof, which acceptance shall constitute the registered owner's assent hereto and to the terms and conditions of the ordinance authorizing the issuance of this Contractual Obligation (the "Ordinance"), the Issuer hereby unilaterally contracts with such registered owner that it will utilize the net available proceeds of the Contractual Obligations, after payment of the costs of issuance related thereto, to acquire or purchase personal property in accordance with the Ordinance and the Issuer's plan of acquisition therefor. • -8- ORDINANCE N0. 719-94 THE PRINCIPAL OF AND INTEREST ON this Contractual Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The payment of interest on this Contractual Obligation shall be made by NationsBank of Texas, N.A., Dallas, Texas, which is the "Paying Agent/Registrar" for this Contractual Obligation, to the registered owner hereof on each interest payment date by check or draft, dated as of such payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the Ordinance to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such payment date, to the registered owner hereof, at its address as it appeared on the last business day of the month next preceding each such payment date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The payment of the principal of this Contractual Obligation shall be paid only upon surrender of this Contractual Obligation to the Paying Agent/Registrar for cancellation. The Issuer covenants with the registered owner of this Contractual Obligation that on or before each principal payment date and interest payment date for this Contractual Obligation it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal • of and interest on the Contractual Obligations, when due. IF THE DATE for the payment of the principal of or interest on this Contractual Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institu- tions in the city where the principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, or the United States Postal Service is not open for business, 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, or the United States Postal Service is not open for business; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS CONTRACTUAL OBLIGATION is one of a Series of PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS dated as of April 1, 1994, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $315,000, FOR THE PURPOSE OF PAYING ALL OR A PORTION OF THE ISSUER'S CONTRACTUAL OBLIGATIONS TO BE INCURRED IN CONNECTION WITH THE ACQUISITION OR PURCHASE OF PERSONAL PROPERTY, IN ACCORDANCE WITH THE PROVISIONS OF THE PUBLIC PROPERTY FINANCE ACT, SECTION 271.001 ET SEQ., TEXAS LOCAL GOVERNMENT CODE. • -9- ORDINANCE N0. 719-94 THIS CONTRACTUAL OBLIGATION OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and . shall be transferred only in the Registration Books kept by the Paying Agent/Registrar acting in the capacity of registrar for the Contractual Obligations, upon the terms and conditions set forth herein and in the Ordinance. This Contractual Obligation may only be assigned and transferred upon presentation and surrender to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Contractual Obligation or any portion or portions hereof to the assignee or assignees in whose name or names this Contractual Obligation or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Contractual Obligation shall be executed by the regis- tered owner, or its duly authorized attorney or representa- tive, and shall conclusively evidence the assignment hereof. Upon surrender of this Contractual Obligation or any portion or portions hereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new Contractual Obligation or Contractual Obligations payable to such assignee or assignees, or to the registered owner hereof in the case of the assignment and transfer of only a portion of this Contractual Obligation, in exchange for this • Contractual Obligation, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of Contractual Obligations. The registered owner of this Contractual Obligation shall be deemed and treated by the Issuer and the Payinq Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Contractual Obligation to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. ALL CONTRACTUAL OBLIGATIONS OF THIS SERIES issued as a result of a transfer, conversion or exchange are issuable solely as fully registered certificates, without interest coupons, in the denomination of any integral multiple of $5,000. In accordance with the form and procedures set forth in the Ordinance, this Contractual Obligation, or any unpaid portion hereof, may, at the written request of the registered owner or the assignee or assignees hereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, be converted into and exchanged for a Contractual Obligation or Contractual Obligations of like aggregate principal amount, payable to the appropriate registered owner, assignee, or assignees, as the case may be, maturing on the same dates, and bearing interest at the same rate, in any denomination or • -10- ORDINANCE N0. 719-94 denominations in any integral multiple of $5,000, upon surrender of this Contractual Obligation to the Paying • Agent/Registrar at its principal corporate trust office for cancellation. The one requesting a transfer, conversion, or exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of transfer, conversion or exchange. The Paying Agent/Registrar shall not be required to make any such transfer, conversion, or exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. IN THE EVENT any Paying Agent/Registrar for the Contrac- tual Obligations is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the registered owners of the Contractual Obligations. IT IS HEREBY certified, recited and covenanted that this Contractual Obligation has been duly and validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Contractual Obligation have been performed, existed, • and been done in accordance with law; that this Contractual Obligation is a direct obligation of the Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Contractual Obligation, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for such payment, within the limit prescribed by law. BY HIS ACCEPTANCE the registered owner assents to the terms and provisions of the Ordinance, a copy of which is on file in the official records of the Issuer, and this Contrac- tual Obligation, agrees to be bound by such terms and provisions, and agrees that the terms and provisions of this Contractual Obligation and the Ordinance constitute a contract between each registered owner hereof and the Issuer. • -11- ORDINANCE N0. 719-94 IN WITNESS WHEREOF, the Issuer has caused this Contrac- tual Obligation to be signed with the manual or facsimile • signature of the Mayor of the Issuer and countersigned with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Contractual Obligation. (signature) (signature) City Secretary Mayor (SEAL) FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Contractual Obligation is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) • It is hereby certified that this Contractual Obligation has been issued under the provisions of the Ordinance described in the text of this Contractual Obligation; and that this Contractual Obligation has been issued in conversion or replacement of, or in exchange for, a contractual obligation, contractual obligations, or a portion of a contractual obligation or contractual obligations of a Series which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: NationsBank of Texas, N.A., Dallas, Texas Paying Agent/Registrar By Authorized Representative • -12- ORDINANCE N0. 719-94 FORM OF ASSIGNMENT: • ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee / / (Please print or typewrite name and address, including zip code of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to register the transfer of the within Bond on the • books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must NOTICE: The signature above be guaranteed by a member must correspond with the firm of the New York Stock name of .the Registered Owner Exchange or a commercial as it appears upon the front bank or trust company. of this Contractual Obligation Bond in every particular, without alteration or enlarge- ment or any change whatsoever. • -13- ORDINANCE N0. 719-94 • (For Initial Delivery only) FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS. COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Contractual Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Contractual Obligation has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) The Bond printer is hereby authorized to print on the Contractual Obligations a legend describing any municipal bond insurance policy obtained in connection with the sale of the • Contractual Obligations. Section 7. DEFINITIONS. That the terms defined in this Section for all purposes of this Ordinance, except where the context by clear implication shall otherwise require, shall have the respective meanings as follows, to-wit: (a) The term "Code" shall mean the Internal Revenue Code of 1986, as amended. (b) The terms "Contractual Obligation", "Contractual Obligations" shall mean the Public Property Finance Contrac- tual Obligations, Series 1994 authorized to be issued and delivered by this Ordinance. (c) The term "Paying Agent/Registrar" shall mean initially NationsBank of Texas, N.A., Dallas, Texas, or any successor named by the Issuer in accordance with the pro- visions of Section 5 of this Ordinance. Section 8. INTEREST AND SINKING FUND. The City of Richland Hills, Texas, Series 1994 Contractual Obligation Interest and Sinking Fund, hereinafter called the "Interest and Sinking Fund", is hereby authorized and shall be estab- lished and maintained in a depository bank of the Issuer, so • -14- ORDINANCE N0. 719-94 long as the Contractual Obligations, or interest thereon, are outstanding and unpaid. Section 9. USE OF INTEREST AND SINKING FUND. Upon the initial delivery of the Contractual Obligations to the purchasers thereof, any accrued interest received by the Issuer shall be deposited in the Interest and Sinking Fund. In addition, on or before the 25th day of September, 1994, and on or before the 25th day of each March and September there- after so long as any of the Contractual Obligations remain outstanding, there shall be deposited in the Interest and Sinking Fund an amount, together with other amounts in the Interest and Sinking Fund, not less than the amount of the principal and interest coming due on the Contractual Obliga- tions on the next succeeding payment date. The Interest and Sinking Fund shall be used to pay the principal of and interest on the Contractual Obligations as such principal and interest come due. Section 10. TAX LEVY. All ad valorem taxes levied and collected for and on account of said Contractual Obligations shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of said Contractual Obligations are outstanding and unpaid, the City Council of said Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on said • Contractual Obligations as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of such Contractual Obligations as such principal matures (but never less than 2~ of the original principal amount of said Contractual Obligations as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of said Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all taxable property in said Issuer for each year while any of said Contractual Obligations are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of said Contractual Obligations, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Section 11. SECURITY FOR FUNDS. All Funds created by this Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for the security of public funds, and such Funds shall be used only for the purposes and in the manner permitted or required by this Ordinance. . -15- ORDINANCE N0. 719-94 Section 12. DEFEASANCE OF CONTRACTUAL OBLIGATIONS. (a) Any Contractual Obligation and the interest thereon shall be • deemed to be paid, retired, and no longer outstanding (a "Defeased Contractual Obligation") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section 12, when payment of the principal of such Contractual Obligation, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, or sufficient money to provide for such payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Contractual Obligations shall have become due and payable. At such time as a Contractual Obligation shall be deemed to be a Defeased Contractual Obligation hereunder, as aforesaid, such Contractual Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied as provided in this Ordinance, and such principal and interest shall be • payable solely from such money or Government Obligations. (b) Any moneys so deposited with the Paying Agent/ Registrar may at the written direction of the Issuer also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/ Registrar which is not required for the payment of the Contractual Obligations and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. (c) The term "Government Obligations" as used in this Section 12, shall mean direct, non-callable 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, which may be United States Treasury obligations such as its State and Local Government Series, which may be in book-entry form. (d) Until all Defeased Contractual Obligations shall have become due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Contractual Obligations the same as if they had not been defeased, and the Issuer shall make proper arrangements • -16- ORDINANCE N0. 719-94 to provide and pay for such services as required by this Ordinance. • Section 13. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CONTRACTUAL OBLIGATIONS. (a) Replacement Con- tractual Obligations. In the event any outstanding Contrac- tual Obligation is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new contractual obligation of the same principal amount, maturity, and interest rate as the damaged, mutilated, lost, stolen, or destroyed Contractual Obligation, in replacement for such Contractual Obligation in the manner hereinafter provided. (b) Application for Replacement Contractual Obligations. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Contractual Obligations shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Contractual Obligation, the registered owner applying for a replacement contractual obligation shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Contractual Obligation, the registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, • theft, or destruction of such Contractual Obligation, as the case may be. In every case of damage or mutilation of a Contractual Obligation, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Contractual Obligation so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section 13, in the event any such Contractual Obligation shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on such Contractual Obligation, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Contractual Obligation) instead of issuing a replacement contractual obligation, provided security or indemnity is furnished as above provided in this Section 13. (d) Charge for Issuing Replacement Contractual Obliga- tions. Prior to the issuance of any replacement contractual obligation, the Paying Agent/Registrar shall charge the registered owner of such Contractual Obligation with all legal, printing, and other expenses in connection therewith. Every replacement contractual obligation issued pursuant to the provisions of this Section 13 by virtue of the fact that • -17- ORDINANCE N0. 719-94 any Contractual Obligation is lost, stolen, or destroyed shall constitute an obligation of the Issuer whether or not the • lost, stolen, or destroyed Contractual Obligation shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Contractual Obligations duly issued under this Ordinance. (e) Authority for Issuing Replacement Contractual Obligations. In accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section 13 of this Ordinance shall constitute authority for the issuance of any such replacement contractual obligation without necessity of further action by the Issuer or any other body or person, and the duty of the replacement of such contractual obligations is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Contractual Obligations in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance for Contractual Obligations issued in conversion and exchange of other Contractual Obligations. Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF CONTRACTUAL OBLIGATIONS. The Mayor of the Issuer is hereby authorized to have control of the Contractual Obligations initially issued and delivered hereunder and all necessary records and proceedings pertaining to the Contractual • obligations pending their delivery and their investigation, examination, and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Contractual Obligations said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registra- tion Certificate attached to such Contractual Obligations, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Registration Certificate. Section 15. CONTRACTUAL UNDERTAKING WITH REGISTERED OWNER. The Issuer hereby, and by the acceptance of each of the Contractual Obligations, contractually obligates and commits itself to utilize the net proceeds available from the issuance and delivery of the Contractual Obligations, after payment of costs of issuance related thereto, for the acquisition or purchase of the Property as soon as practicable after the date of initial delivery of the Contractual Obligations, in accordance with this Ordinance and the Issuer's plan of acquisition therefor. Section 16. REMEDIES IN EVENT OF DEFAULT. In addition to all of the rights and remedies provided by the laws of the State of Texas, the Issuer covenants and agrees that in the -18- ORDINANCE N0. 719-94 event of default in payment of principal or interest on any of the Contractual Obligations when due, or, in the event it • fails to make the payments required to be made into the Interest and Sinking Fund or defaults in the observance of performance of any other of the contracts, covenants, conditions or obligations set forth in this Ordinance or in the Contractual Obligations, the following remedies shall be available: (a) the registered owners shall be entitled to seek a writ of mandamus issued by a court of competent jurisdiction compelling and requiring the Issuer and the officials thereof to observe and perform the contracts, covenants, obligations or conditions prescribed in this Ordinance; and (b) any delay or omission to exercise any right or power accruing upon any default shall not impair any such right or power nor 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. Section 17. TAX COVENANTS. That the Issuer covenants to take any action to assure, or refrain from any action which would adversely affect, the treatment of the Bonds as • obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows: (a) to take any action to assure that no more than ten percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any "private business use", as defined in section 141(b) (6) of the Code or, if more than ten percent of the proceeds are so used, that amounts, whether received by the Issuer, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than ten percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds five percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used for a "private business use" which is "related" and not "disproportionate", • -19- ORDINANCE N0. 719-94 within the meaning of section 141(b)(3) of the Code, to the governmental use; • (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (d) to refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (e) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149 (b) of the Code; (f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indi- rectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with • (1) proceeds of the Bonds invested for a reasonable temporary period of three years or less (or thirty days or less, in the case of a refunding bond) until such proceeds are needed for the purpose for which the bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.103- 13(b)(12) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed ten percent of the proceeds of the Bonds; (g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings) ; • -20- ORDINANCE N0. 719-94 (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code; and (i) to maintain such records as will enable the Issuer to fulfill its responsibilities under this section and section 148 of the Code and to retain such records for at least six years following the final payment of principal and interest on the Bonds. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the • Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the Mayor and the City Manager to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the City, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. In order to facilitate compliance with the above covenants (h) and (i), a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of America, and such Fund shall not be subject to the claim of any other person, including without limitation the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. Section 18. DESIGNATION AS QUALIFIED TAX-EXEMPT BONDS. The Issuer hereby designates the Contractual Obligations as "qualified tax-exempt bonds" as defined in section 265(b)(3) of the Code. In furtherance of such designation, the Issuer -21- ORDINANCE N0. 719-94 represents, covenants and warrants the following: (a) that during the calendar year in which the Contractual Obligations are issued, the Issuer (including any subordinate entities) has not designated nor will designate bonds, which when aggregated with the Contractual Obligations, will result in more than $10,000,000 of "qualified tax-exempt bonds" being issued; (b) that the Issuer reasonably anticipates that the amount of tax-exempt obligations issued during the calendar year in which the Contractual Obligations are issued, by the Issuer (or any subordinate entities) will not exceed $10,000,000; and (c) that the Issuer will take such action or refrain from such action as necessary, and as more particularly set forth in Section 17 of this Ordinance, in order that the Contractual Obligations will not be considered "private activity bonds" within the meaning of section 142 of the Code. Section 19. SALE OF CONTRACTUAL OBLIGATIONS. (a) That said Contractual Obligations are hereby sold and shall be del- ivered in the amounts and to Service Asset Management for the par value thereof and any accrued interest to date of delivery, and any such accrued interest shall be deposited into the Interest and Sinking Fund. The use of the Official Statement dated April 7, 1994, prepared in connection with the sale of the Contractual Obligations, in the form attached hereto, is hereby approved. • (b) Upon the final acquisition of the Property, any remaining proceeds (including interest earnings thereon) from the sale of the Contractual Obligations shall be transferred to the Interest and Sinking Fund and used, together with other moneys therein on deposit, to pay interest on and principal of the Contractual Obligations. Section 20. APPROPRIATION. The Issuer hereby appropriates from current funds on hand and directs the transfer to the Interest and Sinking Fund for the Bonds of an amount of money sufficient, when added to the accrued interest received from the sale of the Bonds, to pay the principal and interest scheduled to come due on the Bonds on October 1, 1994. Section 21. EFFECTIVE DATE. That this Ordinance shall take effect and be in full force and effect from and after the date of its passage, and it is so ordained. • -22- ORDINANCE N0. 719-94 PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF Richland Hills, TEXAS, this 12th day of April, 1994, at which meeting a quorum was present. Ma z, City of Richland Hills, Texa ATTEST: C ' se retary, City of~Richland Hills, Texas -24- ti ORDINANCE N0. 719-94 r CERTIFICATE FOR ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS THE STATE OF TEXAS . COUNTY OF TARRANT CITY OF RICHLAND HILLS . We, the undersigned officers of said City, hereby certify as follows: 1. The City Council of said City convened in REGULAR MEETING ON THE 12TH DAY OF APRIL, 1994, at the designated meeting place, and the roll was called of the duly constituted officers and members of said City Council, to- wit: C. F. Kelley, Mayor Terri Willis, Roy Maberry, Mayor City Secretary Pro Term Nelda Stroder Jerry Wright Cary Hocker Curtis Whitfield and all of said persons were present, except the following absentees: ~bn~. thus constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS was duly introduced for the consideration of said City Council and read in full. It was then duly moved and seconded that said Ordinance be passed; and, after due discussion, said motion carrying with it the passage of said Ordinance, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye". NAYS: None. 2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and suf- ORDINANCE N0. 719-94 ficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551 of the Government Code. 3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance; that the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Ordinance for all purposes. SIGNED AND SEALED the 12th day of April, 1994. ~ C_.._,~, _ ecr tary Mayor (SEAL) •