HomeMy Public PortalAboutOrdinance No. 830-98 01-27-1998 i c'~~~~
CERTIFICATE FOR ORDINANCE ~
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
27TH DAY OF JANUARY, 1998, 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
Pat Watkins, Mayor Pro-Tem
Jim McKnight
Horace Hamilton
Phil Heinze
Wayne Erickson
Terri Willis, City Secretary
i
and all of said persons were present, except ,thus constituting a quorum.
Whereupon, among other business, the following was transacted at said Meeting: a written
ORDINANCE PROVIDING FOR THE ISSUANCE OF $4,000,000 CITY OF RICHLAND
HILLS, TEXAS COMBINATION TAX AND WATER AND SEWER REVENUE
CERTIFICATES OF OBLIGATION, SERIES 1998; AND ORDAINING OTHER
MATTERS RELATING TO THE SUBJECT
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 the City Council shown present
above voted "Aye", except
NOES:
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 sufficiently 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, Texas Government Code, as amended.
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 27th day of January, 1998.
r.
it ecretary Mayor
(SEAL)
•
ORDINANCE
BY THE CITY COUNCIL OF THE CITY OF RICHLAND HILLS, TEXAS,
PROVIDING FOR THE ISSUANCE OF $4,000,000 CITY OF RICHLAND
HILLS, TEXAS COMBINATION TAX AND WATER AND SEWER
REVENUE CERTIFICATES OF OBLIGATION, SERIES 1998; AND
ORDAINING OTHER MATTERS RELATING TO THE SUBJECT
WHEREAS, on the 1 lth day of November, 199 the City Council of the City of Richland
Hills, Texas (the "City" or the "Issuer") passed a rdsoluton authorizing and directing notice of its
intention to issue the Certificates of Obligation herein authorized to be issued, to be published in a
newspaper as required by Section 271.049 of the Texas Local Government Code; and
WHEREAS, said notice was published in the Fort Worth Star-Telegram, a "newspaper" of
the type described in Section 2051.044, Texas Government Code, as required by said Section
271.049 of the Texas Local Government Code, on January 4, 1998 and January 11, 1998; and
WHEREAS, no petition, signed by 5% of the qualified electors of said City as permitted by
said Section 271.049 of the Texas Local Government Code protesting the issuance of such
Certificates of Obligation, has been filed; and
• WHEREAS, the Certificates of Obligation hereinafter authorized are to be issued and
delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code; and
WHEREAS, there are presently outstanding bonds issued by the City which are secured by
a pledge of, and first lien on, the net revenues of its Waterworks and Sewer System, to-wit: City of
Richland Hills, Texas Utility System Revenue Bonds, Series 1993 (the "Series 1993 Bonds");
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF RICHLAND HILLS,
TEXAS:
Section 1. AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That said City's
Certificates of Obligation, to be designated the "City of Richland Hills, Texas Combination Tax and
Water and Sewer Revenue Certificates of Obligation, Series 1998", are hereby authorized to be issued
and delivered in the principal amount of $4,000,000 for the purpose of providing part of the funds
for paying contractual obligations to be incurred by the City, to-wit: the extension and improvement
of the City's sanitary sewer system component of its combined Waterworks and Sewer System (the
"System"), and the payment of fiscal, engineering and legal fees incurred in connection therewith.
Section 2. DATE, DENOMINATIONS, NiJMBERS AND MATURITIES. That said
Certificates of Obligation shall initially be issued, sold and delivered hereunder as fully registered
certificates, without interest coupons, dated February 1, 1998, in the respective denominations and
• principal amounts hereinafter stated, numbered consecutively from R-1 upward, payable to the
respective initial registered owners thereof, or to the registered assignee or assignees of said
certificates or any portion or portions thereof (in each case, the "Registered Owner"), and said
. Certificates of Obligation shall mature and be payable on August 15 in each of the years and in the
principal amounts as follows:
YEAR AMOUNT YEAR AM UNT
1999 $120,000 2009 $ 195,000
2000 125,000 2010 205,000
2001 13 5,000 2011 220,000
2002 140,000 2012 230,000
2003 145,000 2013 240,000
2004 155,000 2014 250,000
2005 160,000 2015 265,000
2006 170,000 2016 280,000
2007 180,000 2017 290,000
2008 190,000 2018 305,000
The term "Certificates" as used in this Ordinance shall mean and include collectively the Certificates
of Obligation initially issued and delivered pursuant to this Ordinance and all substitute Certificates
. of Obligation exchanged therefor, as well as all other substitute Certificates of Obligation and
replacement Certificates of Obligation issued pursuant hereto, and the term "Certificate" shall mean
any of the Certificates.
The Texas Water Development Board ("TWDB") will purchase the Certificates in the manner
described in Section 21 of this Ordinance.
Section 3. INTEREST. The Certificates scheduled to mature during the years, respectively,
set forth below shall bear interest at the following rates per annum:
maturities 1999, 2.65% maturities 2009, 3.35%
maturities 2000, 2.75% maturities 2010, 3.45%
maturities 2001, 2.85% maturities 201 1, 3.55%
maturities 2002, 2.90% maturities 2012, 3.60%
maturities 2003, 2.95% maturities 2013, 3.65%
maturities 2004, 3.05% maturities 2014, 3.70%
maturities 2005, 3.10% maturities 2015, 3.75%
maturities 2006, 3.15% maturities 2016, 3.80%
maturities 2007, 3.20% maturities 2017, 3.85%
maturities 2008, 3.25% maturities 2018, 3.90%
•
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Said interest shall be payable to the registered owner of any such Certificate in the manner provided
and on the dates stated in the FORM OF CERTIFICATE set forth in this Ordinance.
Section 4. CHARACTERISTICS OF THE CERTIFICATES. (a) Registration, Transfer,
Conversion and Exchange; Authentication. The Issuer shall keep or cause to be kept at the
designated corporate trust office in Fort Worth, Texas (the "Designated Trust Office") of Bank One,
Texas, N.A. (the "Paying Agent/Registrar") books or records for the registration of the transfer,
conversion and exchange of the Certificates (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, conversions and exchanges under such reasonable regula-
tions as the Issuer and 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 Certificate to which payments with respect to the Certificates 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 Certificate or Certificates. Registration of assignments, transfers,
. conversions and exchanges of Certificates shall be made in the manner provided and with the effect
stated in the FORM OF CERTIFICATE set forth in this Ordinance. Each substitute Certificate shall
bear a letter and/or number to distinguish it from each other Certificate.
Except as provided in Section 4(c) hereof, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign said
Certificate, and no such Certificate shall be deemed to be issued or outstanding unless such Certificate
is so executed. The Paying Agent/Registrar promptly shall cancel all paid Certificates and Certificates
surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be
passed or adopted by the governing body of the Issuer or any other body or person so as to
accomplish the foregoing conversion and exchange of any Certificate or portion thereof, and the
Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute
Certificates in the manner prescribed herein, and said Certificates shall be of type composition printed
on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant
to Vernon's Ann. Tex. Civ. St. Art. 717k-6, and particularly Section 6 thereof, the duty of conversion
and exchange of Certificates as aforesaid is hereby imposed upon the Paying Agent/Registrar, and,
upon the execution of said Certificate, the converted and exchanged Certificate shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the Certificates 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 Certificates 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 Certificates,
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• 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 Certificates, and of
all conversions and exchanges of Certificates, and all replacements of Certificates, 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) In General. The Certificates (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Certificates to be payable only to the registered
owners thereof, (ii) may be redeemed prior to their scheduled maturities (notice of which shall be
given to the Paying Agent/Registrar by the Issuer at least 50 days prior to any such redemption date),
(iii) transferred and assigned, (iv) may be converted and exchanged for other Certificates, (v) shall
have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of
and interest on the Certificates 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
Certificates, all as provided, and in the manner and to the effect as required or indicated, in the FORM
OF CERTIFICATE set forth in this Ordinance. The Certificates initially issued and delivered
pursuant to this Ordinance are not required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Certificate issued in conversion of and exchange for any
Certificate or Certificates 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 CERTIFICATE. The Paying Agent/Registrar shall complete the "Date of Delivery"
on each installment of Certificates initially delivered to the TWDB, and interest on each installment
of Certificates so delivered shall accrues from the "Date of Delivery".
(d) Substitute Paying A eng
t/Registrar. The Issuer covenants with the registered owners of
the Certificates that at all times while the Certificates 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 Certificates 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 Certificates, 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
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written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Certificates, 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 Onlv System. The Certificates issued in exchange for the Certificates initially
issued to the purchaser specified herein shall be initially issued in the form of a separate single fully
registered Certificate for each of the maturities thereof. Upon initial issuance, the ownership of each
such Certificate shall be registered in the name of Cede & Co., as nominee of The Depository Trust
Company of New York ("DTC"), and except as provided in subsection (f) hereof, all of the
outstanding Certificates shall be registered in the name of Cede & Co., as nominee of DTC.
With respect to Certificates 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 securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations
on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities transactions among DTC Participants or to any person on behalf of whom
such a DTC Participant holds an interest in the Certificates. 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 Certificates, (ii) the delivery to any DTC Participant or
any other person, other than a registered owner of Certificates, as shown on the Registration Books,
of any notice with respect to the Certificates, or (iii) the payment to any DTC Participant or any other
person, other than a registered owner of Certificates, as shown in the Registration Books of any
amount with respect to principal of or interest on the Certificates. Notwithstanding any other
provision of this Ordinance to the contrary, the Issuer and the Paying Agent/Registrar shall be entitled
to treat and consider the person in whose name each Certificate is registered in the Registration
Books as the absolute owner of such Certificate for the purpose of payment of principal and interest
with respect to such Certificate, for the purpose of registering transfers with respect to such
Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal
of and interest on the Certificates only to or upon the order of the registered 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 and interest on the Certificates to the extent of the
sum or sums so paid. No person other than a registered owner, as shown in the Registration Books,
shall receive a Certificate certificate evidencing the obligation of the Issuer to make payments of
principal 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 provisions in this Ordinance with respect to interest checks
being mailed to the registered owner at the close of business on the Record date, the words "Cede
& Co." in this Ordinance shall refer to such new nominee of DTC.
. (f1 Successor Securities Depository: Transfers Outside Book-Entr,~nl,~ystem. In the
event that the Issuer determines that DTC is incapable of discharging its responsibilities described
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herein and in the representation letter of the Issuer to DTC or that it is in the best interest of the
• beneficial owners of the Certificates that they be able to obtain certificated Certificates, 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 Certificates
to such successor securities depository or (ii) notify DTC and DTC Participants of the availability
through DTC of Certificates and transfer one or more separate Certificates to DTC Participants
having Certificates credited to their DTC accounts. In such event, the Certificates 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 registered owners transferring or exchanging Certificates shall designate,
in accordance with the provisions of this Ordinance.
(g) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of and interest on such Certificate and all notices with respect to
such Certificate shall be made and given, respectively, in the manner provided in the representation
letter of the Issuer to DTC.
Section 6. FORM OF CERTIFICATES. The form of the Certificates, 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 Certificates 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:
FORM OF CERTIFICATE
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF TARR.ANT
CITY OF RICHL.AND HILLS, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION
SERIES 1997
MATURITY DATE INTEREST RATE DATE OF DELIVERY CUSIP
REGISTERED OWNER:
• PRINCIPAL AMOUNT: DOLLARS
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ON THE MATURITY DATE specified above, the CITY OF RICHLAND HILLS, in
• Tarrant County, Texas (the "City" or 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 Delivery as set forth above, on August 15, 1998 and
semiannually thereafter on each February 15 and August 15 to the maturity date specified above,
or the date of redemption prior to maturity, at the interest rate per annum specified above; except
that if this Bond is required to be authenticated and the date of its authentication is later than the
first Record Date (hereinafter clF~.fined), 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 Certificate or Certificates,
if any, for which this Certificate is being exchanged or converted from is due but has not been
paid, then this Certificate shall bear interest from the date to which such interest has been paid in
full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money
of the United States of America, without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, or upon 'the date fixed for its redemption prior to maturity, at the
designated corporate trust office in Fort Worth, Texas (the "Designated Trust Office") of Bank
One, Texas, N.A., which is the "Paying Agent/Registrar" for this Certificate. The payment of
interest on this Certificate shall be made by the Paying Agent/Registrar to the registered owner
hereof on each interest payment date by check, 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 authorizing the issuance of this Certificate (the "Certificate Ordinance") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check
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 preceding each such date (the "Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any accrued
interest due at maturity or upon redemption of this Certificate shall be paid to the registered
owner upon presentation and surrender of this Certificate for payment at the Designated Trust
Office of the Paying Agent/Registrar. The foregoing notwithstanding, so long as the Texas Water
Development Board is the registered owner of 100% in aggregate principal amount of the Bonds
then outstanding, payment of principal and interest on the Bonds shall be made thereto by wire
transfer, at no expense to the Texas Water Development Board. The Issuer covenants with the
registered owner of this Certificate that on or before each principal payment date, interest
payment date, and accrued interest payment date for this Certificate it will make available to the
Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate
Ordinance, the amounts required to provide for the payment, in immediately available funds, of all
principal of and interest on the Certificates, when due.
•
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IN THE EVENT OF 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 ("Special Payment Date", 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 registered owner of a
Certificate appearing on the Registration Books kept by the Paying Agent/Registrar 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 or upon the redemption of this Certificate
prior to maturity as provided herein shall be paid to the registered owner upon presentation and
surrender of this Certificate for redemption and payment at the principal corporate trust office of
the Paying Agent/Registrar. The Issuer covenants with the registered owner of this Certificate
that on or before each principal payment date, interest payment date, and accrued interest
payment date for this Certificate it will make available to the Paying Agent/Registrar, from the
"Interest and Sinking Fund" created by the Certificate Ordinance, the amounts required to provide
for the payment, in immediately available funds, of all principal of and interest on the Certificates,
when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
Designated Trust Of17ce 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 CERTIFICATE is one of a Series of Certificates dated as of February 1, 1998,
authorized in accordance with the Constitution and laws of the State of Texas in the principal
amount of $4,000,000, FOR THE PURPOSE OF PROVIDING PART OF THE FUNDS FOR
PAYING CONTRACTUAL OBLIGATIONS TO BE INCURRED BY THE CITY, TO-WIT,
the extension and improvement of the City's sanitary sewer system component of its combined
Waterworks and Sewer System (the "System"), and the payment of fiscal, engineering and legal
fees incurred in connection therewith.
ON AUGUST 15, 2008, or on any date thereafter, the Certificates of this Series maturing
on and after August 15, 2009 and thereafter may be redeemed prior to their scheduled maturities,
at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or
in part (provided that a portion of a Certificate may be redeemed only in an integral multiple of
$5,000), at par and accrued interest to the date fixed for redemption; provided, that during any
period in which ownership of the Certificates is determined only by a book entry at a securities
depository for the Certificates, if fewer than all of the Certificates of the same maturity and
bearing the same interest rate are to be redeemed, the particular Certificates of such maturity and
bearing such interest rate shall be selected in accordance with the arrangements between the
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Issuer and the securities depository. The years of maturity of the Certificates called for
redemption at the option of the Issuer prior to stated maturity shall be selected by the Issuer on
the basis of the inverse chronological order of the Certificates then outstanding that are being
called for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Certificates or portions
thereof prior to maturity a written notice of such redemption shall be published once in a financial
publication, journal or reporter of general circulation among securities dealers in The City of New
York, New York or in the State of Texas. Such notice also shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the
date fixed for any such redemption, to the registered owner of each Certificate to be redeemed at
its address as it appeared on the 45th day prior to such redemption date and to major securities
depositories, national bond rating agencies and bond information services; provided, however,
that the failure to send, mail or receive such notice, or any defect therein or in the sending or
mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of any Certificate, and it is hereby specifically provided that the publication of srzch notice as
required above shall be the only notice actually required in connection with or as a prerequisite to
the redemption of any Certificates or portions thereof. By the date fixed for any such redemption
due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Certificates or portions thereof which are to be so redeemed. If such
written notice of redemption is published and if due provision for such payment is made, all as
provided above, the Certificates or portions thereof which are to be so redeemed thereby auto-
matically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being outstanding
except for the right of the registered owner to receive the redemption price from the Paying
Agent/Registrar out of the funds provided for such payment. If a portion of any Certificate shall
be redeemed a substitute Certificate or Certificates having the same maturity date, bearing interest
at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the
written request of the registered owner, and in aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for
cancellation, at the expense of the Issuer, all as provided in the Certificate Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered
certificates, without interest coupons, in the denomination of any integral multiple of $5,000. As
provided in the Certificate Ordinance, this Certificate may, at the request of the registered owner
or the assignee or assignees hereof, be assigned, transferred, and exchanged for a like aggregate
principal amount of fully registered certificates, without interest coupons, payable to the
appropriate registered owner, assignee, or assignees, as the case maybe, having the same maturity
date, and bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Certificate to the Paying Agent/Registrar at
its Designated Trust Office for cancellation, all in accordance with the form and procedures set
forth in the Certificate Ordinance. Among other requirements for such assignment and transfer,
this Certificate must be presented and surrendered to the Paying Agent/Registrar at its Designated
. Trust Office, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or
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any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in
whose name or names this Certificate or any such portion or portions hereof is or are to be
transferred and registered. The form of Assignment printed or endorsed on this Certificate 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 Certificate or any portion or portions hereof from time to
time by the registered owner. The one requesting such exchange shall pay the Paying
Agent/Registrar's reasonable standard or customary fees and charges for exchanging any
Certificate or portion thereof. The foregoing notwithstanding, in the case of the exchange of an
assigned and transferred Certificate or Certificates or any portion or portions thereof, such fees
and charges of the Paying Agent/Registrar will be paid by the Issuer. In any circumstance, any
taxes or governmental charges required to be paid with respect thereto shall be paid by the one
requesting such assignment, transfer, or exchange as a condition precedent to the exercise of such
privilege.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute therefor, and promptly
will cause written notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate 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 Certificate have been performed, existed, and been done in accordance with law; that this
Certificate is a direct 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 Certificate, as such interest comes due and such principal matures, have been levied and
ordered to be levied against all taxable property in said Issuer, and have been pledged for such
payment, within the limit prescribed by law; and that surplus revenues from the operation of the
System remaining after payment of all operation and maintenance expenses thereof and any other
obligations heretofore or hereafter incurred to which such revenues have been encumbered by a
lien on and pledge of such revenues superior to the lien on and pledge of such revenues to the
Certificates, have been pledged as additional security for the Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the Issuer, and agrees that the terms
and provisions of this Certificate and the Certificate Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate 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 Certificate.
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XXXXX XXXXX
City Secretary Mayor
(SEAL)
FORM OF COMPTROLLER'S CERTIFICATE ATTACHED ONLY TO
THE CERTIFICATES UPON INITIAL DELIVERY THEREOF
OFFICE OF COMPTROLLER
REGISTER NO.
STATE OF TEXAS
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Certificate has been examined by him as
required by law, and that he finds that it has been issued in conformity with the Constitution and
laws of the State of Texas, and that it is a valid and binding obligation of the City of Richland
Hills, Texas, payable in the manner provided by and in the ordinance authorizing same, and said
Certificate has this day been registered by me.
WITNESS MY HAND and seal of office at Austin, Texas this
Comptroller of Public Accounts of
(SEAL) the State of Texas
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate of Obligation has been issued under the provisions
of the proceedings adopted by the City as described in the text of this Certificate of Obligation;
and that this Certificate of Obligation has been issued in exchange for or replacement of a
certificate of obligation, certificates of obligation, or a portion of a certificate of obligation or
certificates of obligation of an issue 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
•
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Bank One, Texas, N.A.,
• Paying Agent/Registrar
By:
Authorized Representative
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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 Certificate of Obligation and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney to register the transfer of the within Certificate of Obligation on books kept for registra-
. tion thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by a member firm of the New York Stock correspond with the name of the Registered
Exchange or a commercial bank or trust Owner as it appears upon the front of this
company. Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
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Section 7. DEFINITIONS. That the terms "Certificates" and "Certificates of Obligation"
shall mean the City of Richland Hills, Texas Combination Tax and Revenue Certificates of
• Obligation, Series 1998 authorized to be issued and delivered by this Ordinance; the term
"MSRB" means the Municipal Securities Rulemaking Board; the term "NRMSIR" means each
person whom the SEC or its staff has determined to be a nationally recognized municipal
securities information repository within the meaning of the Rule from time to time; the term
"Rule" means SEC Rule 15c2-12, as amended from time to time; the term "SEC" means the
United States Securities and Exchange Commission; the term "SID" means any person designated
by the State of Texas or an authorized department, officer, or agency thereof as, and determined
by the SEC or its staff to be, a state information depository within the meaning of the Rule from
time to time; the term "Surplus Revenues" shall mean those revenues from the operation of the
System remaining after payment of all operation and maintenance expenses thereof and other
obligations heretofore or hereafter incurred to which such revenues have been encumbered by a
lien on and pledge of such revenues superior to the lien on and pledge of such revenues to the
Certificates; the term "System" shall mean the City's combined waterworks and sewer system; and
the term "TWDB" shall mean the Texas Water Development Board, or any successor agency
thereto. In addition to the foregoing, the City agrees that any funds held pursuant to this
Ordinance shall be invested only in those investments authorized by the Public Funds Investment
Act, Texas Government Code Chapter 2256, consistent with the investment policy adopted by the
City in accordance with said Act.
Section 8. INTEREST AND SINKING FUND. That a special fund or account, to be
designated the "City of Richland Hills, Texas Series 1998 Certificate of Obligation Interest and
Sinking Fund" is hereby created and shall be established and maintained by the Issuer. Said
Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of
said Issuer, and shall be used only for paying the interest on and principal of said Certificates. All
ad valorem taxes levied and collected for and on account of said Certificates shall be deposited, as
collected, to the credit of said Interest and Sinking Fund. During each year while any of said
Certificates are outstanding and unpaid, the governing body of said Issuer shall compute and
ascertain the rate and amount of ad valorem tax, based on the latest approved tax rolls of said
Issuer, with full allowances being made for tax delinquencies and the cost of tax collections,
which will be sufficient to raise and produce the money required to pay the interest on said
Certificates as such interest comes due, and to provide a sinking fund to pay the principal of said
Certificates as such principal matures, but never less than 2% of the original amount of said
Certificates as a sinking fund each year. Said rate and amount of ad valorem tax is hereby
ordered to be levied against all taxable property in said Issuer for each year while any of said
Certificates are outstanding and unpaid, and said ad valorem 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 necessary to pay the interest on and principal of said Certificates, as such interest
comes due and such principal matures, are hereby pledged for such payment, within the limit
prescribed by law. If Surplus Revenues then on deposit in the Interest and Sinking Fund or
budgeted for deposit herein are not sufficient to meet the debt service payment requirements for
the Certificates, the City shall deposit ad valorem taxes to the Interest and Sinking Fund for such
purpose.
•
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Section 9. REVENUES. That the Certificates of Obligation are additionally secured by
and shall be payable from the Surplus Revenues. The pledge of the Surplus Revenues is made in
• accordance with the provisions of Articles 1111 through 1118, inclusive, Texas Revised Civil
Statutes, as amended.
Section 10. TRANSFER. That the City shall do any and all things necessary to
accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to
pay such items of principal and interest due on the Certificates of Obligation.
Section 11. SECURITY FOR FUNDS. That the Interest and Sinking Fund 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 Fund shall be used only for the purposes and in the
manner permitted or required by this Ordinance.
Section 12. PROJECT FUND. (a) That there is hereby created, established and
maintained on the books of the City, a separate fund to be entitled the "City of Richland Hills,
Texas Series 1998 Certificates of Obligation Project Fund" (hereinafter called the "Project Fund").
(b) The proceeds of each installment delivery of the Certificates to the purchaser shall be
deposited into the Project Fund and used by the City for payment of the costs of extending and
improving the System, and the payment of costs associated therewith, including any costs for
engineering, financing, financial consultation, administrative, auditing and legal expenses.
(c) Any surplus proceeds, including the investment earnings derived from the investment
of monies on deposit in the Project Fund, from the Certificates remaining on deposit in the Project
Fund after completing the improvements and extensions to the System and upon the completion
of the final accounting as described in Section 18(b) hereof, shall be transferred to the Interest and
Sinking Fund to redeem, in inverse order of maturity, the Certificates owned by TWDB. The
foregoing notwithstanding, it is further provided, however, that any interest earnings on monies
on deposit in the Project Fund which are required to be rebated to the United States of America
pursuant to Section 14 hereof in order to prevent the Certificates from being arbitrage bonds shall
be transferred to the "Rebate Fund" hereinafter established and shall not be considered as interest
earnings for purposes of this subsection.
(d) The moneys held in said Project Fund shall be held by the Paying AgentlRegistrar and
disbursed in accordance with the terms of the "Special SRF Escrow Agreement", a copy of which
in substantially the form attached to this Ordinance is hereby approved.
Section 13. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement Certificates. That in the event any outstanding Certificate is
damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be
printed, executed, and delivered, a new certificate of the same principal amount, maturity, and
interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for
such Certificate in the manner hereinafter provided.
•
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(b) Application for Replacement Certificates. That application for replacement of
damaged, mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner
• thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate,
the registered owner applying for a replacement certificate shall furnish to the City 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 Certificate, the registered owner shall furnish to the City and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate,
as the case may be. In every case of damage or mutilation of a Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or
mutilated.
(c) No Default Occurred. That notwithstanding the foregoing provisions of this Section,
in the event any such Certificate 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 the
Certificate, the City may authorize the payment of the same (without surrender thereof except in
the case of a damaged or mutilated Certificate) instead of issuing a replacement certificate,
provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. That prior to the issuance of any
replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in connection therewith. Every replacement
certificate issued pursuant to the provisions of this Section by virtue of the fact that any
Certificate is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether
or not the lost, stolen, or destroyed Certificate 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 Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. That in accordance with Section 6 of
Vernon's Ann. Tex. Civ. St. Art. 717k-6, this Section of this Ordinance shall constitute authority
for the issuance of any such replacement certificate without necessity of further action by the City
or any other body or person, and the duty of the replacement of such certificates is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Certificates in the form and manner and with the effect, as provided
in Section 5(a) of this Ordinance for Certificates issued in conversion and exchange of other
Certificates.
Section 14. FEDERAL INCOME TAX MATTERS. That the City covenants to refrain
from any action which would adversely affect, or to take such action as to ensure, the treatment
of the Certificates of Obligation 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 City covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of
• the Certificates of Obligation (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
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10 percent of the proceeds are so used, that amounts, whether or not received by the City,
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 Certificates of Obligation, 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 Certificates of
Obligation (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 gov-
ernmental 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 Certificates of Obligation (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
Certificates of Obligation 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 Certificates of
Obligation being "federally guaranteed" within the meaning of section 149(b) of the Code;
(fj to refrain from using any portion of the proceeds of the Certificates of
Obligation, 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 Certificates of Obligation,
other than investment property acquired with
(1) proceeds of the Certificates of Obligation invested for a reasonable
temporary period of three years or less or, in the case of a refunding bond, for a
period of 30 days or less until such proceeds are needed for the purpose for which
the certificates of obligation 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
Certificates of Obligation;
• (g) to otherwise restrict the use of the proceeds of the Certificates of Obligation
or amounts treated as proceeds of the Certificates of Obligation, as may be necessary, so
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that the Certificates of Obligation 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 Certificates of Obligation) 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 Certificates of Obligation 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.
The Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the
Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and
proceeds of the refunded bonds expended prior to the date of issuance of the Certificates of
Obligation. It is the understanding of the City 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 ruling are hereafter
promulgated which modify or expand provisions of the Code, as applicable to the Certificates of
Obligation, the City 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 Certificates of
Obligation 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 Certificates of
• Obligation, the City 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 Certificates of Obligation under Section 103 of the Code. In
furtherance of such intention, the City hereby authorizes and directs the Mayor, the City Manager
and the Director of Finance 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 Certificates of Obligation.
In order to facilitate compliance with clause (h) above, 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 15. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. That the Issuer covenants to account for the expenditure of proceeds from the sale
of the Certificates and any investment earnings thereon to be used for the purposes described in
Section 1 of this Ordinance (each such purpose referred to herein and Section 16 hereof as a
"Project") on its books and records by allocating proceeds to expenditures within 18 months of
the later of the date that (a) the expenditure on a Project is made or (b) each such Project is
completed. The foregoing notwithstanding, the Issuer shall not expend such proceeds or
investment earnings more than 60 days after the later of (a) the fifth anniversary of the date of
• delivery of the Certificates or (b) the date the Certificates are retired, unless the Issuer obtains an
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opinion ofnationally-recognized bond counsel substantially to the effect that such expenditure will
• not adversely affect the tax-exempt status of the Certificates.
Section 17. DISPOSITION OF PROJECT. That the Issuer covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the
receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of
nationally-recognized bond counsel substantially to the effect that such sale or other disposition
will not adversely affect the tax-exempt status of the Certificates.
Section 18. GENERAL COVENANTS. That the City further covenants and agrees that
in accordance with and to the extent required or permitted by law:
(a) Audits. For so long as the State of Texas owns any of the Certificates, the City shall
mail a copy of the audit required by the ordinance authorizing the Series 1993 Bonds to the
TWDB.
(b) Final Accounting. The City shall render a final accounting to the TWDB in reference
to the total cost incurred by the City for improvements and extensions to the System which were
financed by the issuance of the Certificates, together with a copy of "as built" plans of such
improvements and extensions upon completion.
(c) Compliance with the Texas Water Development Board's Rules and Regulations. The
• City covenants to comply with the rules and regulations of the TWDB, and to maintain insurance
on the System in such amount as may be required by TWDB.
Section 19. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES.
That the Mayor of the City is hereby authorized to have control of the Certificates initially issued
and delivered hereunder and all necessary records and proceedings pertaining to the Certificates
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 Certificates 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 Certificates, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on such certificate.
Section 20. CONTINUING DISCLOSURE OBLIGATION.
(a) Annual Reports. (i) The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year as described in subsection (e) of this Section,
financial information and operating data with respect to the City of the general type included in
the final Application submitted to TWDB. Any financial statements to be so provided shall be (1)
prepared in accordance with the accounting principles described in subsection (e) of this Section,
or such other accounting principles as the City may be required to employ from time to time
thereafter pursuant to state law or regulation, and (2) audited, if the City commissions an audit of
• such statements and the audit is completed within the period during which they must be provided.
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If the audit of such financial statements is not complete within such period, then the City shall
• provide unaudited financial statements within such period and shall provide audited financial
statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit
report on such statements become available.
(ii) If the City changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant to this
Section. The City agrees to provide financial information and operating data of a nature
consistent with that provided by the City in connection with the issuance of Additional Priority
Certificates to which the Rule applies. The financial information and operating data to be
provided pursuant to this Section may be set forth in full in one or more documents or may be
included by specific reference to any document (including an official statement or other offering
document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR
and any SID or filed with the SEC.
(b) Material Event Notices. The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if
such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
• 3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the
Certificates;
7. Modifications to rights of holders of the Certificates;
8. Obligation calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the
Certificates; and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the City to provide financial information or operating data in accordance with
subsection (a) of this Section by the time required by such subsection.
(c) Limitations, Disclaimers, and Amendme~rts. (i) The City shall be obligated to
observe and perform the covenants specified in this Article for so long as, but only for so long as,
the City remains an "obligated person" with respect to the Certificates within the meaning of the
Rule, except that the City in any event will give notice of any deposit made in accordance with
this Ordinance or applicable law that causes Certificates no longer to be outstanding.
•
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(ii) The provisions of this Section are for the sole benefit of the registered owners and
• beneficial owners of the Certificates and the beneficial owners of TWDB's bonds under the Rule,
and nothing in this Section, express or implied, shall give any benefit or any legal or equitable
right, remedy, or claim hereunder to any other person. The City undertakes to provide only the
financial information, operating data, financial statements, and notices which it has expressly
agreed to provide pursuant to this Section and does not hereby undertake to provide any other
information that may be relevant or material to a complete presentation of the City's financial
results, condition, or prospects or hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN
PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON
ACCOUNT OF ANY SUCH BREACH SHALL BE LIlVIITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under this Section
• shall comprise a breach of or default under this Ordinance for purposes of any other provision of
this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise
limit the duties of the City under federal and state securities laws.
(v) The provisions of this Section may be amended by the City from time to time to adapt
to changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into
account any amendments or interpretations of the Rule since such offering as well as such
changed circumstances and (2) either (a) the registered owners of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the outstanding Certificates consent to such amendment or (b)
a person that is unaffiliated with the City (such as nationally recognized bond counsel) determined
that such amendment will not materially impair the interest of the registered owners and beneficial
owners of the Certificates. If the City so amends the provisions of this Section, it shall include
with any amended financial information or operating data next provided in accordance with
subsection (a) of this Section an explanation, in narrative form, of the reason for the amendment
and of the impact of any change in the type of financial information or operating data so provided.
The City -may also amend or repeal the provisions of this continuing disclosure agreement if the
SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters
judgment that such provisions of the Rule are invalid, but only if and to the extent that the
• provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling
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Certificates in the primary offering of the Certificates.
• Section 21. SALE. (a) The Certificates are hereby sold to TWDB for the price of par.
The Certificates may be delivered to TWDB in accordance with the schedule set forth in Section 2
of this Ordinance, and paid for in whole, or in installments at such times as shall be approved by
the City Manager, provided none of the Certificates shall be so delivered without the City's
receiving full payment therefor. The Certificates initially delivered shall be registered in the name
as directed by the Texas Water Development Board.
(b) The City hereby authorizes the City Manager to approve and execute such
documents necessary to effect the delivery of the Certificates, including, without limitation, any
agreements, instruments or documents to obtain a municipal bond insurance policy from Financial
Guaranty Insurance Company ("FGIC"). The City authorizes the printing on the Certificates of
any statement of insurance provided by FGIC in connection with the issuance of said insurance
policy.
(c) The Paying Agent/Registrar shall complete the "Date of Delivery" on each
Obligation delivered to TWDB as provided in Section 5(c) of this Ordinance, and interest on the
Certificates so delivered shall commence from such date.
(d) It is the intent of the parties to the sale of the Certificates that if TWDB ever
determines to sell all or a part of the Certificates, it shall notify the City at least 60 days prior to
• the sale of the Certificates of the decision to so sell the Certificates.
Section 22. AMENDMENTS TO ORDINANCE. That this Ordinance may be amended
with the consent of the TWDB, so long as the TWDB is the owner of 100% in aggregate
principal amount of the Bonds then outstanding.
Section 23. PREAMBLE. That the findings set forth in the preamble to this Ordinance
are hereby incorporated into the body of this Ordinance and made a part hereof for all purposes.
Section 24. FURTHER PROCEDURES. The Mayor and City Secretary of the Issuer
and all other officers, employees and agents of the Issuer, and each of them, shall be and they are
hereby expressly authorized, empowered and directed from time to time and at any time to do and
perform all such acts and things and to execute, acknowledge and deliver in the name and under
the corporate seal and on behalf of the Issuer the Letter of Representation with DTC regarding
the Book-Entry Only System attached hereto, the Paying Agent/Registrar Agreement with the
Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Letter
of Representation, the Certificates, the sale of the Certificates and the Official Statement.
Notwithstanding anything to the contrary contained herein, while the Certificates are subject to
DTC's Book-Entry Only System and to the extent permitted by law, the Letter of Representation
is hereby incorporated herein and its provisions shall prevail over any other provisions of this
Ordinance in the event of conflict. In case any officer whose signature shall appear on any
• Certificate shall cease to be such officer before the delivery of such Certificate, such signature
shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained
in office until such delivery.
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APPROVED AS TO FORM:
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City ttorney, rty o
Richland Hills, Texas
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