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HomeMy Public PortalAboutOrdinance No. 809-96 12-10-1996 . ORDINANCE N0. 809-96 • ORDINANCE AUTHORIZING THE ISSUANCE OF COr~A~`T'TTAT, nRT,I("tATIONS THE STATE OF TEXAS COUNTY OF TARRANT CITY OF RICHLAND HILLS - WHEREAS, the Public Property Finance Act, Sec. 271.001, et seq., Local Government Code (the "Act") authorizes said City (the "Issuer") to execute, perform, and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in said Act; and WHEREAS, the Act permits the governing body of the Issuer 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 governing body of the Issuer desires to acquire or purchase personal property as described in Exhibit A attached hereto, or such other personal property, appliances, equipment, facilities, furnishings or interests therein, whether movable or fixed, deemed by the governing body of the Issuer to be necessary, useful and/or appropriate for the purposes of the Issuer (the "Property"); and WHEREAS, the governing body 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. RECITALS, AMOUNT AND PURPOSE OF CONTRACTUAL OBLIGATIONS. That the recitals set forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section. The Issuer's Public Property Finance Contractual Obligations (hereinafter sometimes called "Contractual Obligations") are hereby authorized to be issued in the aggregate principal amount of $200,000, 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, SEC. 271.001, ET SEQ., LOCAL GOVERNMENT CODE. Section 2. DESIGNATION. That said Contractual Obligations shall be designated as the CITY OF RICHLAND HILLS, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS, SERIES 1996. • 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 December 1, 1996, in the respective denominations and principal amounts hereinafter stated, numbered consecutively from R-1 upward, payable to the respective initial registered owners thereof (as designated in Section 15 hereof), or to the registered assignee or assignees of said contractual obligations or any portion or portions thereof (in each case, the "registered owner"), and said contractual obligations shall mature and be payable on August 15 in the years and in the aggregate principal amounts as set forth in the following schedule: PRINCIPAL egg ,,MOUNT 1997 $ 40,000 1998 35,000 1999 40,000 2000 40,000 2001 45•, 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. The Contractual Obligations shall bear interest from the dates specified in the FORM OF CONTRACTUAL OBLIGATION set forth in this Ordinance to their respective dates of maturity at the rates as set forth in the following schedule: y~g RATE ( % ) 1997 4.00 1998 4.20 • 1999 4.40 2000 4.50 2001 4.60 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 OBLIGATIONS. (a) ~~g~~''r''''^^ Transfer Conversion and Exchange: Authentication. That the Issuer shall keep or cause to be kept • at the corporate trust office in Jacksonville, Florida (the "Designated Trust Office") of Bank of New York (the "Paying 2 Agent/Registrar") books or records for the registration of the • transfer. 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 make such registrations of transfers and exchanges under such reasonable regulations as the Issuer and the Paying Agent/Registrar may prescribe; and the Paying Agent/Regis- trar shall make such registrations, transfers and exchanges as herein provided within three days of presentation in due and proper form. 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 Paying Agent/Registrar shall maintain a true and correct copy of the Registration Books in the State of Texas. The Issuer shall have the right to inspect the Registration Books at the Designated Trust Office of the Paying Agent/Registrar during regular business hours, 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, exchange and delivery of a substitute Contractual Obligation or Contractual Obligations. Registration of assignments, transfers 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 or Contractual Obligations surrendered for transfer 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 transfer 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, and said Contractual Obligations shall be of type composition printed on paper. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section • 6 thereof, the duty of transfer and exchange of Contractual Obligations as aforesaid is hereby imposed upon the Paying 3 I Agent/Registrar, and, upon the execution of said Contractual • ~ Obligations, the transferred and exchanged Contractual Obligations shall be valid, incontestable, and enforceable in the same manner and with the same effect as the 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. Neither the City nor the Paying Agent/Registrar shall be required (1) to issue, transfer, or exchange any Contractual Obligation during the period commencing at the close of business on the last business day of the month next preceding an interest payment date tthe "Record Date") and ending at the opening of business on such interest payment date for the Contractual Obligations. (b) ~~**~enr of Contractual Oblig~r~ons and Interest. The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the payment of 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, and of all transfers and exchanges of Contractual Obligations, and all replacements of Contractual Obligations, as provided in this Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new Record Date for such interest payment (a "Special Record • Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. 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 registered owner appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. (c) Tn 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 transferred and assigned, (iii) may be converted and exchanged for other Contractual Obligations, (iv) shall have the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi) the principal of and interest on the Contractual Obligations shall be payable, and (vii) 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 is attached the Registration Certificate of the Comptroller of Public 4 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) G-~bst~ tote Pay~g.~gent/ReQi stray. The Issuer covenants with the registered owners of the Contractual Obligations that at all times while the Contractual Obligations 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 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 and delivered to the initial purchasers named in Section 14 shall be issued in the form of a separate single fully registered Contractual Obligation for each of the maturities thereof registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and except as provided in subsection (i) hereof, all of the outstanding Contractual Obligations shall be registered in the name of Cede & Co., as nominee of DTC. • 5 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 registered owner of Contractual Obligations, 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 registered owner of Contractual Obligations, as shown in the Registration Books of any amount with respect to principal of, premium, if any, or interest on the Contractual Obligations. Notwithstanding any other provision of this Ordinance to the contrary but to the extent permitted by law, 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, 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 Ordinance, 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 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 certificate evidencing the obligation of the Issuer to make payments of principal, premium, if any, and interest pursuant to this Ordinance. 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 provision in this Ordinance 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 Ordinance shall refer to such new nominee of DTC. (f) y ,r; ; De~osito Transfers Outside Book-Entrv On y 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 (as described in 6 Section 16 of this Ordinance) or DTC determines to discontinue • providing its services with respect to the Contractual Obligations, the Issuer 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 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 holders transferring or exchanging Contractual Obligations shall designate, in accordance with the provisions of this Ordinance. (g) p~ymPrrs to Cede & Co. Notwithstanding any other provision of this Ordinance 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 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 Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of 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 • FORM OF CONTRACTUAL OBLIGATION N0. R- PRINCIPAL AMOUNT UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF TARRANT CITY OF RICHLAND HILLS, TEXAS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATION SERIES 1996 INTEREST DATE OF RATE ~'ONTR_ACTUAI: OBLIGATIONS MATURITY DATE CUSIP NO. December 1, 1996 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS ON THE MATURITY DATE specified above, THE CITY OF • RICHLAND HILLS, TEXAS, in Tarrant County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter called the "registered owner") the principal amount set forth above and to pay interest thereon from the Date of Contractual Obligations above, on August 15, 1997 and semiannually on each February 15 and August 15 thereafter to the maturity date specified above, 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 the first Record Date (hereinafter defined), 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 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 the Contractual Obligations (the 8 • "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 the "Property" in accordance with the terms and provisions of the Ordinance. 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 principal of this Contractual Obligation shall be paid to the registered owner hereof upon presentation and surrender of this Contractual Obligation at maturity at the corporate trust office in Jacksonville, Florida (the "Designated Trust Office") of Bank of New York, which is the "Paying Agent/Registrar" for this Contractual Obligation. The payment of interest on this Contractual Obligation shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by check or draft, dated as of such interest 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 interest 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 date (the • "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. In the event of a non-payment of interest on a scheduled payment date, and for 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 Issuer. 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 business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each owner of a Contractual Obligation appearing on the"Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. ANY ACCRUED INTEREST due at maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this Contractual Obligation for payment at the Designated Trust Office of the Paying Agent/Registrar. 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 9 all principal of and interest on the Contractual Obligations, • when due. IF THE DATE for the payment of this Contractual Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Designated Trust 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. THIS CONTRACTUAL OBLIGATION is one of a Series of CONTRACTUAL OBLIGATIONS, dated December 1, 1996, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $200,000, 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, SEC. 271.001, ET SEQ., LOCAL GOVERN- MENT CODE. ALL CONTRACTUAL OBLIGATIONS OF THIS SERIES are issuable solely as fully registered Contractual Obligations, without • interest coupons, in Authorized Denominations. As provided in the Ordinance, this Contractual Obligation may, at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate principal amount of fully registered Contractual Obligations, without interest coupons, payable to the appropriate registered owner, assignee or assignees, as the case may be, having the same denomination or denominations in any Authorized Denomination as requested in writing by the appropriate registered owner, assignee or assignees, as the case may be, upon surrender of this Contractual Obligation to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among other requirements for such assignment and transfer, this Contractual Obligation must be presented and surrendered to the Paying Agent/Registrar, together with the 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 in any integral multiple of $5,000 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 registered. The form of Assignment printed or endorsed on this Contractual Obligation may be executed by the registered owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying • Agent/Registrar may be used to evidence the assignment of this 10 • Contractual Obligation or any portion or portions hereof from time to time by the registered owner. NEITHER THE ISSUER nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Contractual Obligation during the period commencing at the close of business on the Record Date and ending at the opening of business on the next interest payment date for the Contractual Obligations. The registered owner requesting conversion and exchange of any Contractual Obligation or portion thereof shall pay the Paying Agent/Registrar's customary fees and charges, together with any taxes or governmental charges required to be paid with respect thereto, as a condition precedent to the exercise of such privilege of conversion and exchange, except, however, that in the case of the conversion and exchange of an assigned and transferred Contractual Obligation or Contractual Obligations or portion thereof, the fees and charges of the Paying Agent/Registrar will be paid by the Issuer. WHENEVER the beneficial ownership of this Contractual Obligation is determined by a book entry at a securities depository for the Contractual Obligations, the foregoing requirements of holding, delivering or transferring this Contractual Obligation shall be modified to require the appropriate person or entity to meet the requirements of the securities depository as to registering or transferring the book entry to produce the same effect. IN THE EVENT any Paying Agent/Registrar for the Contractual 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 an obligation of said 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 Ordinanceed to be levied against all taxable property in said Issuer, and have been pledged from the Issuer's annual ad valorem maintenance tax for such payment, within the limit prescribed by law. • BY ACCEPTANCE of this Contractual Obligation, the registered owner assents to the terms and provisions of the 11 • Ordinance, a copy of which is on file in the official records of the Issuer, and the Contractual 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. IN WITNESS WHEREOF, the Issuer has caused this Contractual 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) F'OFc~~i OF PAY iiv'G AGE vT'i i REG.Ti~TD. ;D~ ~ e AT~rrv~rrrTr'~TT(1T~7 ('F'RTTFTCnTF. 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: Paying Agent Registrar By Authorized Representative • 12 • 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 Contractual Obligation and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to register the transfer of the • within Contractual Obligation on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be NOTICE: The signature above guaranteed by an eligible must correspond with the guarantor institution parti- name of the registered owner cipating in a securities as it appears upon the front transfer association recog- of this Contractual Obliga- nized signature guarantee tion in every particular, program. without alteration or enlargement or any change whatsoever. FORM OF REGISTRATION CERTIFICATE OF 'i'HE 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 13 • 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) Section 7. INTEREST AND SINKING FUND/TAX LEVY. A special City of Richland Hills, Texas Public Property Finance Contractual Obligations, Series 1996 Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the benefit of the Contractual Obligations, and the Interest and Sinking Fund shall be established and maintained by the Issuer at an official depository bank of the Issuer for so long as the Contractual Obligations or interest thereon are outstanding and unpaid. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and principal of the Contractual Obligations. Until expended for the purposes set forth in Section 1 hereof, the proceeds derived from the sale of the Contractual Obligations shall be held as further security for • the timely payment of the principal and interest on the Contractual Obligations. 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 governing body 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; 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 by the governing body of the Issuer, 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 from the ad valorem taxes of the Issuer for such payment, within the limit prescribed by law. Furthermore, there is hereby appropriated • from funds on deposit in the City's General Fund, moneys to pay 14 the first scheduled principal and interest payment on the • Contractual Obligations due on August 15, 1997. Section 8. 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 8, 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, of 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 and pledged 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 8, shall mean 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, 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 to 15 provide and pay for such services as required by this Ordinance. • Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CONTRACTUAL OBLIGATIONS. (a) Replacement Contractual ObliQat^ions. In the event any outstanding Contractual 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 provid- ed. (b) 8Db1~Ga ion 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 9, 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 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 9. (d) ['harQe for Issuing Replacement Contractual Obligations. 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 9 by virtue of the fact that any Contractual Obligation is lost, stolen, or destroyed shall constitute a contractual 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 16 entitled to all the benefits of this Ordinance equally and • proportionately with any and all other Contractual Obligations duly issued under this Ordinance. (e) Author~~y for Issuing Replacement Contractual obligations. In accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section 9 of this Ordinance shall con- stitute 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 replacement 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 10. CUSTODY, APPROVAL, AND REGISTRATION OF CONTRACTUAL OBLIGATIONS; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED. 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 Registration Certificate attached to such Contractual Obligations, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Contractual Obligations issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and information of the registered owners of the Contractual Obligations. In addition, if bond insurance is obtained, the Contractual Obligations may bear an appropriate legend as provided by the insurer. Section 11. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE CONTRACTUAL OBLIGATIONS. The Issuer covenants to take any action necessary to assure, or refrain from any action which would adversely affect, the treatment of the Contractual Obligations 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 further- ance thereof, the Issuer covenants as follows: • (a) to take any action to assure that no more than 10 percent of the proceeds of the Contractual 17 • Obligations 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 10 percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not 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 10 percent of the debt service on the Contractual Obligations, 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 5 percent of the proceeds of the Contractual Obligations or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" which is "related" and not "disproportionate," 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 5 percent of the proceeds of the Contractual Obligations • (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 Contractual Obligations being treated as "private activity Contractual Obligations" within the meaning of section 141(b) of the Code; (e) to refrain from taking any action that would result in the Contractual Obligations 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 Contractual Obligations, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, 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 Contractual Obligations, other than investment property acquired with (1) proceeds of the Contractual Obligations invested for a reasonable temporary period of 3 • years or less or, in the case of a refunding bond, for a period of 30 days or less until such 18 • proceeds are needed for the purpose for which the Contractual Obligations are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b)of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Contractual Obligations; (g) to otherwise restrict the use of the proceeds of the Contractual Obligations or amounts treated as proceeds of the Contractual Obligations, as may be necessary, so that the Contractual Obligations 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); and (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 Contractual Obligations) 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 Contractual Obligations 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. For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in Treasury Regulations. 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 Contractual Obligations, 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 Contractual Obligations 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 Contractual Obligations, 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 Contractual • Obligations under section 103 of the Code. The City Council hereby authorizes the Mayor and the City Manager to execute any 19 • and all documents necessary to fulfill the intent of the Issuer to comply with, or make elections under, the Code to maintain and preserve the tax-exempt status of the Contractual Obligations. Section 12. 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 in accordance with terms and provisions of this Ordinance. Section 13. 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 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 or 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 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 14. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The Issuer hereby designates the' Contractual Obligations as "qualified tax-exempt obligations" as defined in Section 265(b)(3) of the Code. In furtherance of such designation, the Issuer 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 not designate Contractual Obligations, which will result in more than $10,000,000 of "qualified tax-exempt obligations" being issued; and (b) that the Issuer reasonable 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. 20 • Section 15. SALE OF CONTRACTUAL OBLIGATIONS. The Contractual Obligations are hereby initially sold and shall be delivered to Southwest Securities, Inc., at the price set forth in the hereinafter described "Bond Purchase Contract". The Mayor is authorized to execute, and the City Secretary is authorized to attest and affix the seal of the City to, the Bond Purchase Contract, dated December 10, 1996, between the City and Southwest Securities, Inc., in substantially the form attached to this Ordinance, which Bond Purchase Contract evidences the terms and conditions regarding the sale of the Contractual Obligations. The Contractual Obligations shall initially be registered in the name of Southwest Securities, Inc. It is hereby officially found, determined, and declared that the Contractual Obligations have been sold pursuant to an Official Statement dated December 10, 1996, prepared and distributed in connection with the sale of the Contractual Obligations. Said Official Statement and any addenda, supplement or amendment thereto have been and are hereby approved by the governing body of the Issuer, and their use in the offer and sale of the Contractual Obligations is hereby ap- proved. It is further officially found, determined, and declared that the statements and representations contained in .said Official Statement are true and correct in all material respects, to the best knowledge and belief of the governing body of the Issuer. The use of a Preliminary Official Statement in connection with the sale of the Contractual Obligations is hereby ratified. Section 16. ONGOING CONTINUING DISCLOSURE UNDER RULE 15c2-12. That under Rule 15c2-12, promulgated by the Securities and Exchange Commission, an issuer of municipal securities in an aggregate principal amount of less than $1,000,000 is exempt from satisfying the continuing ongoing disclosure obligation set forth in said Rule. As a result, the City shall not comply with the requirements of said Rule. Section 17. INTEREST EARNINGS ON CONTRACTUAL OBLIGATIONS. Interest earnings derived from the investment of proceeds from the sale of the Contractual Obligations shall be used along with other contractual obligation proceeds for the purpose for which the Contractual Obligations are issued set forth in Section 1 hereof; provided that after completion of such purpose, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on contractual obligation proceeds which are required to be rebated to the United States of America pursuant to Section 11 hereof in order to prevent the Contractual Obligations from being arbitrage Contractual Obligations shall be so rebated and not considered as interest earnings for the purposes of this Section. Section 18. DTC LETTER OF REPRESENTATION. The City Manager or the designee thereof is authorized and directed to • enter into a Letter of Representations with DTC with respect to 21 I~ • the Contractual Obligations to implement the Book-Entry Only System of Bond Registration. PASSED AND APPROVED THIS .the 10th of December, 1996. APPROVED AS TO FORM: City Attorney, City of Richland Hills • • 22 1 • EXHIBIT A DESCRIPTION OF PROPERTY (The acquisition date for the following items of personal property will occur during the current fiscal year of the Issuer.) Estimated Description Total Cost Library Computers $ 5,000 Police Portable Radios 3,000 Recreation Department Workstation 2,000 Police Department Workstation 15,000 Traffic Signal 35,000 Police Patrol Vehicles 65,000 Fire Department Command Suburban 35,000 Street Department One-Ton Truck 25,000 • • A-1