HomeMy Public PortalAboutOrdinance No. 897-01 05-22-2001
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• CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF TARRANT §
CITY OF RICHLAND HILLS §
We, the undersigned officers of the City of Richland Hills, Texas (the "City"), hereby
certify as follows:
1. The City Council of the City (the "City Council") convened in REGULAR MEETING
ON THE 22nd DAY OF MAY, 2001, at the designated meeting place, and the roll was called of
the duly constituted officers and members of the City Council, to wit:
C. F. Kelley, Mayor
Phil Heinze, Mayor Pro-Tem
Jim McKnight,
Charlet Thompson,
Horace Hamilton,
Steve Couch Councilmembers
Terri Willis, City Secretary
and all of said persons were present, except Horace Hamilton, thus constituting a quorum.
• Whereupon, among other business, the following was transacted at said meeting (the "Meeting"):
a written
ORDINANCE BYTHE CITYCOUNCIL OF THE CITY OF RICHLAND HILLS, TEXAS, PROVIDING
FOR THE ISSUANCE OF $1,325,000 CITY OF RICHLAND HILLS, TEXAS COMBINATION TAX
AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001; AND ORDAINING OTHER
MATTERS RELATING TO THE SUBJECT
was duly introduced for the consideration of the City Council. It was then duly moved and
seconded that said Ordinance (the "Ordinance") be adopted and, after due discussion, said
motion, carrying with it the adoption of the Ordinance, prevailed and carried by the following vote:
AYES: All members of the City Council voting and shown present
above voted "Aye," except as shown below:
NOES: None
ABSTAIN: None
2. That a true, full and correct copy of the Ordinance adopted at the Meeting is attached
to and follows this Certificate; that the Ordinance has been duly recorded in the City Council's
minutes of the Meeting; that the above and foregoing paragraph is a true, full and correct excerpt
from the City Council's minutes of the Meeting pertaining to the adoption of the Ordinance; that
• the persons named in the above and foregoing paragraph are the duly chosen, qualified and
acting officers and members of the City Council as indicated therein; that each of the officers and
• of the time, place and purpose of the Meeting, and that the Ordinance would be introduced and
considered for adoption at the Meeting, and each of said officers and members consented, in
advance, to the holding of the Meeting for such purpose, and that the 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.
3. That the Mayor of the City has approved and hereby approves the Ordinance; that the
Mayor and the City Secretary of the City have duly signed the Ordinance; and that the Mayor and
the City Secretary of the City hereby declare that their signing of this Certificate shall constitute
the signing of the attached and following copy of the Ordinance for all purposes.
SIGNED AND SEALED the 22nd day of May, 2001.
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City Secretary Mayor
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• ORDINANCE NO. 897-01
BY THE CITY COUNCIL OF THE CITY OF RICHLAND HILLS, TEXAS,
PROVIDING FOR THE ISSUANCE OF $1,325,000 CITY OF RICHLAND HILLS,
TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2001; AND ORDAINING OTHER MATTERS RELATING TO THE
SUBJECT
WHEREAS, on the 24th day of April, 2001, the City Council of the City of Richland Hills
(the "City" or the "Issuer") passed an ordinance 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, as required by
Section 271.049 of the Texas Local Government Code, on May 4, 2001 and May 11, 2001; and
WHEREAS, no petition, signed by 5% of the qualified electors of the Issuer as permitted
• by 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;
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF RICHLAND HILLS, TEXAS:
Section 1. AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That the Issuer's
Certificates of Obligation, to be designated the "City of Richland Hills, Texas Combination Tax and
Revenue Certificates of Obligation, Series 2001" (the "Certificates"), are hereby authorized to be
issued and delivered in the principal amount of $1,325,000, for the purpose of providing part of
the funds for paying contractual obligations to be incurred by the Issuer, to-wit: construction of
improvements to Burns Street within the City and the payment of fiscal, engineering and legal fees
incurred in connection therewith. 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.
Section 2. DATE, DENOMINATIONS, NUMBERS AND MATURITIES. Thatthe Certificates
shall initially be issued, sold and delivered hereunder as fully registered certificates, without
interest coupons, dated May 15, 2001, 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 the Certificates or any
portion or portions thereof (in each case, the "Registered Owner"), and the Certificates shall
mature and be payable on August 15 in each of the years and in the principal amounts as follows:
PRINCIPAL PRINCIPAL
YEAR AMOUNT YEAR AMOUNT
2002 40, 000
2003 60, 000 2011 190, 000
2004 65, 000 2012 105, 000
2005 70, 000 2013 110, 000
• 2006 75, 000 2014 115, 000
2007 80,000 2015 120,000
2008 80,000 2016 130,000
2009 85,000
The Certificates shall be issued in denominations of $5,000 or any integral multiple thereof (an
"Authorized Denomination"). For purposes of this Ordinance, the Certificates maturing on August
15, 2011 are "Term Certificates".
Section 3. REDEMPTION. (a) Optional Redemption. That the Issuer reserves the right
to redeem the Certificates maturing on or after August 15, 2011, in whole or in part in an
Authorized Denomination, on August 15, 2009, or on any date thereafter, at the redemption price
of par plus accrued interest to the date fixed for redemption. If less than all of the Certificates are
to be redeemed by the Issuer, the Issuer shall determine the maturity or`maturities and the
amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot
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• Certificates, or portions thereof, within such maturity or maturities and in such principal amounts,
for redemption.
(b) Mandatory Redemption. The Certificates of Obligation that constitute Term Certificates
under this Ordinance shall be subject to mandatory sinking fund redemption, on the dates and in
the amounts as set forth in the FORM OF CERTIFICATE set forth in this Ordinance.
(c) Notice. At least thirty (30) days prior to the date any Certificates are to be redeemed,
a written notice of redemption shall be given by the Paying Agent/Registrar to the registered owner
of each Certificate, or a portion thereof, being called for redemption by depositing such notice in
the United States mail, first-class, postage prepaid, addressed to each such registered owner at
the address thereof as shown on the registration books of the Paying Agent/Registrar atthe close
of business on the business day next preceding the date of mailing such notice; 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. By the date fixed for any such redemption, due provision shall be
made by the Issuer with the Paying Agent/Registrarfnr the payment of the required redemption
price forthe Certificates orthe portions thereof which are to be so redeemed, plus accrued interest
thereon to the date fixed for redemption. If such notice of redemption is given, and if due
provision for such payment is made, all as provided above, the Certificates, or the portions thereof,
which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled
maturities, and shall not bear interest after the date fixed for their redemption, and shall not be
regarded as being outstanding except for the right of the registered owner to receive the
redemption price plus accrued interest to the date fixed for redemption from the Paying
Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall
record in the Registration Books all such redemptions of principal of the Certificates, or any portion
• thereof. If a portion of any Certificate shall be redeemed, a substitute Certificate or Certificates
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• having the same maturity date, bearing interest at the same rate, in any Authorized Denomination,
at the written request of the registered owner, and in an 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 this Ordinance. In addition, notice of
such redemption shall be provided in the manner described in Section 5(h) hereof, but the failure
to provide such notice as described in Section 5(h) hereof shall not affect the validity or
effectiveness of the proceedings for the redemption of the Certificates.
Section 4. INTEREST. That the Certificates scheduled to mature during the years,
respectively, set forth below shall bear interest at the following rates per annum:
maturities 2002, 5.60%
maturities 2003, 5.60% maturities 2011, 4.50%
maturities 2004, 5.60% maturities 2012, 4.60%
maturities 2005, 5.60% maturities 2013, 4.70%
maturities 2006, 5.60% maturities 2014, 4.75%
maturities 2007, 5.60% maturities 2015, 4.80%
• maturities 2008, 5.60% maturities 2016, 4.85%
maturities 2009, 4.25%
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 5. CHARACTERISTICS OFTHE CERTIFICATES. (a) Registration and Transfer.
That the Issuer shall keep or cause to be kept at the designated corporate trust office in Austin,
Texas (the "Designated Trust Office") of Bank One, NA, or such other bank, trust company,
financial institution, or other agency named in accordance with the provisions of subsection (g)
below (the "Paying Agent/Registrar") books or records for the registration and transfer 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 transfers and
registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar may
• prescribe; and the Paying Agent/Registrarshatl make such transfers and registrations as herein
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• provided. It shall be the duty of the Paying AgentRegistrar to obtain from the registered owner
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. The Issuer
or its designee shall have the right to inspect the Registration Books during regular business hours
of the Paying AgentRegistrar at its Designated Trust Office, but otherwise the Paying Agent/Reg-
istrar shall keep the Registration Books confidential and, unless otherwise required by law, shall
not permit their inspection by any other entity. Registration of each Certificate may be transferred
in the Registration Books only upon presentation and surrender thereof to the Paying Agent/-
Registrar at its Designated Trust Office for transfer of registration and cancellation, together with
proper written instruments of assignment, in form and with guarantee of signatures satisfactory
to the Paying AgenURegistrar, evidencing the assignment of such Certificate, or any portion
thereof in any Authorized Denomination, to the assignee or assignees thereof, and the right of
• such assignee or assignees to have such Certificate or any such portion thereof registered in the
name of such assignee or assignees. Upon the assignment and transfer of any Certificate or any
portion thereof, a new substitute certificate or certificates shall be issued in exchange therefor in
the manner herein provided.
(b) Ownership; Registration Books. The entity in whose name any Certificate shall be
registered in the Registration Books at any time shall be treated as the absolute owner thereof for
all purposes of this Ordinance, whether or not such Certificate shall be overdue, and the Issuer
and the Paying AgentRegistrar shall not be affected by any notice to the contrary; and payment
of, or on account of, the principal of, premium, if any, and interest on any such Certificate shall be
made only to such registered owner. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Certificate to the extent of the sum or sums `so paid.
(c) Paying Agent. The Issuer hereby further appoints the Paying AgenURegistrar to act as
• the paying agent for paying the principal of and interest on the Certificates, and to act as its agent
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• to exchange or replace Certificates, 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 exchanges thereof, and all replacements thereof, as provided
in this Ordinance.
(d) Exchange of Certificates. Each Certificate may be exchanged for fully registered
certificates in the manner set forth herein. Each Certificate issued and delivered pursuant to this
Ordinance may, upon surrenderthereof at the Designated Trust Office of the Paying Agent/Regis-
tray, togetherwith a written request therefor duly executed by the registered ownerorthe assignee
or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee
of signatures satisfactory to the Paying Agent/Registrar, at the option of the registered owner or
such assignee or assignees, as appropriate, be exchanged for fully registered certificates, without
interest coupons, in the form prescribed in the FORM OF CERTIFICATE set forth in this
• Ordinance, in any Authorized Denomination (subject to the requirement hereinafter stated that
each substitute certificate shall have a single stated maturity date), as requested in writing by such
registered owner or such assignee or assignees, in an aggregate principal amount equal to the
principal amount of any Certificate or Certificates so surrendered, and payable to the appropriate
registered owner, assignee, or assignees, as the case maybe. If any Certificate or portion thereof
is assigned and transferred, each certificate issued in exchange therefor shall have the same
principal maturity date and bear interest at the same rate as the certificate for which it is being
exchanged. Each substitute certificate shall bear a letter and/or number to distinguish it from each
other certificate. The Paying Agent/Registrar shall exchange or replace Certificates as provided
herein, and each fully registered certificate or certificates delivered in exchange for or replacement
of any Certificate or portion thereof as permitted or required by any provision of this Ordinance
shall constitute one of the Certificates for all purposes of this Ordinance, and may again be
• exchanged or replaced. It is specifically provided, however, that any Certificate delivered in
exchange for or replacement of another Certificate prior to the first scheduled interest payment
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date on the Certificates (as stated on the face thereof) shall be dated the same date as such
• Certificate, but each substitute certificate so delivered on or after such first scheduled interest
payment date shall be dated as of the interest payment date preceding the date on which such
substitute certificate is delivered, unless such substitute certificate is delivered on an interest
payment date, in which case it shall be dated as of such date of delivery; provided, however, that
if at the time of delivery of any substitute certificate the interest on the certificate for which it is
being exchanged has not been paid, then such substitute certificate shall be dated as of the date
to which such interest has been paid in full. On each substitute certificate issued in exchange for
or replacement of any Certificate or Certificates issued under this Ordinance there shall be printed
thereon a Paying Agent/Registrar'sRuthentication Certificate, in the form hereinafter set forth in
the FORM OF CERTIFICATE set forth in this Ordinance (the "Authentication Certificate"). An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
• substitute certificate, date such substitute certificate in the manner set forth above, and manually
sign and date the Authentication Certificate, and no such substitute certificate shall be deemed
to be issued or outstanding unless the Authentication Certificate is so executed. The Paying
Agent/Registrar promptly shall cancel all Certificates surrendered for exchange or replacement.
No additional ordinances, orders, or resolutions need be passed or adopted by the City Council
or any other body or person so as to accomplish the foregoing exchange or replacement of any
Certificates or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execu-
tion, and delivery of the substitute certificates in the manner prescribed herein. Pursuant to
Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Certificates
as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the
Authentication Certificate, the exchanged or replaced certificate shall be valid,ncontestable, and
enforceable in the same manner and with the same effect as the Certificates which originally were
• delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the
Comptroller of Public Accounts.
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(e) General Characteristics. All Certificates issued in exchange or replacement of any
• other Certificate or portion thereof, (i) shall be issued in fully registered form, without interest cou-
pons, 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, (iii) may be transferred
and assigned, (iv) may be exchanged for other Certificates, (v) shall have the characteristics, (vi)
shall be signed and sealed, and (vii) the principal of and interest on the Certificates shall be pay-
able, all as provided, and in the manner required or indicated, in the FORM OF CERTIFICATE set
forth in this Ordinance.
(f) Fees. The Issuer shall pay the Paying Agent/Registrar's reasonable and customary fees
and charges for making transfers of Certificates, but the registered owner of any Certificates
requesting such transfer shall pay any taxes or other governmental charges required to be paid
with respect thereto. The registered owner of any Certificates requesting any exchange shall pay
the Paying Agent/Registrar's reasonable and standard or customary fees and charges for
exchanging any such certificate or portion thereof, together with any taxes or governmental
charges required to be paid with respect thereto, all as a condition precedent to the exercise of
such privilege of exchange, except, however, that in the case of the exchange of an assigned and
transferred certificate or certificates or any portion or portions thereof in any Authorized
Denomination, as provided in this Ordinance, such fees and charges will be paid by the Issuer.
In addition, the Issuer hereby covenants with the registered owners of the Certificates that it will
(i) pay the reasonable and standard or customary fees and charges of the Paying Agent/Registrar
for its services with respect to the payment of the principal of and interest on Certificates, when
due, and (ii) pay the fees and charges of the Paying Agent/Registrarfnr services with respect to
the transfer or registration of Certificates solely to the extent above provided,`and with respect to
the exchange of Certificates solely to the extent above provided.
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• (g) Successor Paying AgenURegistrar. 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 AgenURegistrar for the Certificates under this Ordinance,
and that the Paying AgenURegistrar will be one entity. The Issuer reserves the right to, and may,
at its option, change the Paying AgenURegistrar upon not less than 60 days written notice to the
Paying AgenURegistrar. In the event that the entity at any time acting as Paying AgenURegistrar
(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
national or state banking institution which shall be a corporation organized and doing business
under the laws of the United States of America or of any state, authorized under such laws to
exercise trust powers, subject to supervision or examination by federal or state authority, and
• whose qualifications substantially are similar to the previous Paying AgenURegistrar to act as
Paying AgenURegistrar under this Ordinance. Upon any change in the Paying AgenURegistrar,
the previous Paying AgenURegistrar 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 AgenURegistrar designated and appointed by the Issuer. Upon any change in the
Paying AgenURegistrar, the Issuer promptly will cause a written notice thereof to be sent by the
new Paying AgenURegistrar 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
AgenURegistrar. By accepting the position and performing as such, each Paying AgenURegistrar
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 AgenURegistrar.
(h) Additional Redemption Notice. (i) In addition to the manner of providing notice of
redemption of Certificates as set forth in Section 3 hereof, the Paying AgenURegistrar shall give
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notice of redemption of Certificates by United States mail, first-class, postage prepaid, at least
• thirty (30) days prior to a redemption date to the SID (hereinafter defined) and each NRMSIR
(hereinafter defined). In addition, in the event of a redemption caused by an advance refunding
of the Certificates, the Paying Agent/Registrar shall send a second notice of redemption to the
persons specified in the immediately preceding sentence at least thirty (30) days but not more
than ninety (90) days prior to the actual redemption date. Any notice sent to the SID and a
NRMSIR shall be sent so that such notice is received at least two (2) days prior to the general
mailing or publication date of such notice. The Paying Agent/Registrar shall also send a notice
of redemption to the registered owner of any Certificates who has not sent the Certificates in for
redemption sixty (60) days after the redemption date. The failure to send, mail or receive any
such notice described in this clause (i), 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.
(ii) Each redemption notice, whether required in the FORM OF CERTIFICATE or
otherwise by this Ordinance, shall contain a description of the Certificates to be redeemed
including the complete name of the Certificates, the Series, the date of issue, the interest rate, the
maturity date, the CUSIP number, the amounts called of each Certificate, the publication and
mailing date for the notice, the date of redemption, the redemption price, the name of the Paying
Agent/Registrar and the address at which the Certificate may be redeemed including a contact
person and telephone number.
(iii) All redemption payments made by the Paying Agent/Registrarto the registered owners
of the Certificates shall include a CUSIP number relating to each amount paid to such registered
owner.
Section 6. FORM OF CERTIFICATES. That the form of the Certificates, including the form
• of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
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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 TARRANT
CITY OF RICHLAND HILLS, TEXAS COMBINATION TAX
AND REVENUE CERTIFICATES OF OBLIGATION
SERIES 2001
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE CUSIP
MAY 15, 2001
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF RICHLAND HILLS,
TEXAS (the "City" or the "Issuer"), being a political subdivision of the State of Texas, hereby
promises to pay to , or
to the registered assignee hereof (either being hereinafter called the "registered owner") the
principal amount of
DOLLARS
and to pay interest thereon, from the Original Issue Date specified above, to the Maturity Date
specified above, or the date of its redemption prior to scheduled maturity, at the interest rate
per annum specified above, with said interest payable on February 15, 2002, and
semiannually on each August 15 and February 15 thereafter; except that if this Certificate is
required to be authenticated and the date of its authentication is later than February 15, 2002,
such interest is payable semiannually on each August 15 and February 15 following such date.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money
of the United States of America, without exchange or collection charges. At maturity or
redemption prior to maturity, the principal of this Certificate shall be paid to the registered
owner hereof upon presentation and surrender of this Certificate at the designated corporate .
trust office in Austin, Texas (the "Designated Trust Office") of Bank One, NA, 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/Registrarfnr 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
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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 as provided herein shall be paid to the registered owner upon
presentation and surrender of this Certificate for payment at the Designated Trust Office of the
Paying AgentJRegistrar. The Issuer covenants with the registered owner of this Certificate that
on or before each principal and interest payment date for this Certificate it will make available
to the Paying Agent/Registrar, from the "Interest and Redemption 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. All Certificates of
this Series are issuable solely as fully registered certificates, without interest coupons, in any
integral multiple of $5,000 (an "Authorized Denomination").
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 business day next preceding the date of
mailing of such notice.
• 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 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 CERTIFICATE is one of a Series of Certificates dated as of the Original Issue
Date stated above, authorized in accordance with the Constitution and laws of the State of
Texas in the principal amount of $1,325,000, FOR THE PURPOSE OF PROVIDING PART OF
THE FUNDS FOR PAYING CONTRACTUAL OBLIGATIONS TO BE INCURRED BY THE
CITY, TO-WIT, THE CONSTRUCTION OF IMPROVEMENTS TO BURNS STREET WITHIN
THE CITY AND THE PAYMENT OF FISCAL, ENGINEERING AND LEGAL FEES INCURRED
IN CONNECTION THEREWITH.
ON AUGUST 15, 2009, or on any date thereafter, the Certificates of this Series
maturing on August 15, 2011 and thereafter may be redeemed prior to their scheduled
maturities, at the option of the Issuer, in whole or in part in any Authorized Denomination, at
par and accrued interest to the date fixed for redemption. 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. The Certificates or portions thereof redeemed within a maturity shall be
selected by lot or other method by the Paying Agent/Registrar; 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
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and bearing such interest rate shall be selected in accordance with the arrangements between
• the Issuer and the securities depository.
THE CERTIFICATES are also subject to mandatory redemption in part by lot pursuant
to the terms of the Certificate Ordinance, on August 15 in the year 2010, with respect to
Certificates maturing August 15, 2011, in the following years and in the following amounts, at a
price equal to the principal amount thereof and accrued and unpaid interest to the date of
redemption, without premium:
Year Principal Amount
2010 90, 000
2011 * 100, 000
Final Maturity
To the extent, however, that Certificates subject to sinking fund redemption have been
previously purchased or called for redemption in part and otherwise than from a sinking fund
redemption payment, each annual sinking fund payment for such Certificate shall be reduced
by the amount obtained by multiplying the principal amount of Certificates so purchased or
redeemed by the ratio which each remaining annual sinking fund redemption payment for such
Certificates bears to the total remaining sinking fund payments, and by rounding each such
payment to the nearest $5,000 integral; 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, the particular Certificates to be called for mandatory redemption shall be selected
in accordance with the arrangements between the Issuer and the securities depository.
AT LEAST 30 days prior to the date fixed for any such redemption a written notice of
such redemption shall be given to the registered owner of each Certificate or a portion thereof
being called for redemption by depositing such notice in the United States mail, first class
postage prepaid, addressed to each such registered owner at his address shown on the
Registration Books of the Paying Agent/Registrar at the close of the business day next
preceding the date of mailing such notice; 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. By the
date fixed for any such redemption due provision shall be made by the Issuer with the Paying
Agent/Registrar for the payment of the required redemption price for this Certificate or the
portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for
redemption. If such notice of redemption is given, and if due provision for such payment is
made, all as provided above, this Certificate, or the portion hereof which is to be so redeemed,
thereby automatically shall be redeemed prior to its scheduled maturity, and shall not bear
interest after the date fixed for its redemption, and shall not be regarded as being outstanding
except for the right of the registered owner to receive the redemption price plus accrued ,
interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds pro-
vided for such payment. The Paying Agent/Registrarshsll record in the Registration Books all
such redemptions of principal of this Certificate or any portion hereof. 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 Authorized Denomination, at the written request
• of the registered owner, and in aggregate principal amount equal to the unredeemed portion
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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 Ordinance.
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 may be, having the same maturity date, and bearing interest at the same rate, 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 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 any portion or portions hereof in any Authorized Denomination
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
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. 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. 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 any circumstance, neither the Issuer nor the Paying Agent/Registrar shall be required (1) to
make any transfer or exchange during a period beginning at the opening of business 30 days
before the day of the first mailing of a notice of redemption of the Certificates and ending at
the close of business on the day of such mailing, or (2) to transfer or exchange any Certificates
so selected for redemption when such redemption is scheduled to occur within 30 calendar
days.
WHENEVER the beneficial ownership of this Certificate is determined by a book entry
at a securities depository for the Certificates, the foregoing requirements of holding, delivering
or transferring this Certificate 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 Certificates is changed by the -
Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Cert-
ificate 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
-14-
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 a limited pledge
(not to exceed $1,000) of the surplus revenues from the operation of the City's municipal water
and sewer 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
or shall be 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, this Certificate has been signed with the manual or facsimile
signature of the Mayor of the Issuer and attested by the manual or facsimile signature of the
City Secretary, and the official seal of the Issuer has been duly affixed to, or impressed, or
placed in facsimile, on this Certificate.
• xxxxx xxx~oc
City Secretary Mayor
(SEAL)
•
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•
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 Issuer 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
BANK ONE, NA
Paying Agent/Registrar
By----
Authorized Representative
• "FORM OF COMPTROLLER'S CERTIFICATE ATTACHED 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 o~
(SEAL) the State of Texas
• NOTE: to accompany initial certificates only
s-
• 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 registration
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
Exchange or a commercial bank or trust Registered Owner as it appears upon the
company. front of this Certificate in every particular,
without alteration or enlargement or any
change whatsoever.
The printer of the Certificates is hereby authorized to print on the Certificates (i) the form of
bond counsel's opinion relating to the Certificates, and (ii) an appropriate statement of
insurance furnished by a municipal bond insurance company providing municipal bond
insurance, if any, covering all or any part of the Certificates.
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 2001, authorized to be issued and delivered by this Ordinance; and the term
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• "Pledged Revenues" shall mean a limited pledge (not to exceed $1,000) of the surplus
revenues from the operation of the City's municipal waterworks and sewer 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 or shall be encumbered by
alien on and pledge of such revenues superior to the lien on and pledge of such revenues to
the Certificates.
Section 8. INTEREST AND SINKING FUND. That a special fund or account, to be
designated the "City of Richland Hills, Texas Series 2001 Certificate of Obligation Interest and
Sinking Fund" (the "Interest and Sinking Fund") is hereby created and shall be established and
maintained by the Issuer. 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 Certificates. All ad valorem taxes levied and collected for and on account
• of the Certificates shall be deposited, as collected, to the credit of the Interest and Sinking
Fund. During each year while any of the Certificates are outstanding and unpaid, the
governing body of the Issuer shall compute and ascertain the rate and amount of ad valorem
tax, based on the latest approved tax rolls of the 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 the Certificates as such interest comes due, and to
provide a sinking fund to pay the principal of the Certificates (including mandatory sinking fund
redemption payments on the Term Certificates) as such principal matures, but never less than
2% of the original amount of the 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 the
Issuer for each year while any of the 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
• Interest and Sinking Fund. Said ad valorem taxes necessary to pay the interest on and
8-
• principal of the Certificates, as such interest comes due and such principal matures or comes
due through operation of the mandatory sinking fund redemption as provided in the FORM OF
CERTIFICATE, are hereby pledged for such payment, within the limit prescribed by law.
Section 9. REVENUES. That the Certificates of Obligation are additionally secured by
and shall be payable from the Pledged Revenues. The Pledged Revenues are pledged by the
Issuer pursuant to authority of Chapter 1502, Texas Government Code. The Issuer shall
promptly deposit the Pledged Revenues upon their receipt to the credit of the Interest and
Sinking Fund created pursuant to Section 8, to pay the principal and interest on the
Certificates of Obligation. Notwithstanding the requirements of Section 8, if in advance of the
time when ad valorem taxes are scheduled to be levied for any year, moneys should actually
be on deposit in the Interest and Sinking Fund in an amount at least equal to the amount of
taxes required to be levied pursuant to Section 8, then the amount of taxes which otherwise
• would have been required to be levied pursuant to Section 8 may be reduced to the extent and
by the amount of such moneys then on deposit in the Interest and Sinking Fund.
Section 10. TRANSFER. That the Issuer 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.
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 the Interest and Sinking Fund shall be used only for
the purposes and in the manner permitted or required by this Ordinance.
Section 12. 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/Registrarshsll cause to be
printed, executed, and delivered, a new certificate of the same principal amount, maturity, and
-19-
interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement
• for such Certificate in the manner hereinafter provided.
(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
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 Certificate, 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 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 Issuer 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
• Issuer whether or not the lost, stolen, or destroyed Certificate shall be found at any time, or be
-20-
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 Chapter
1206, Texas Government Code, this Section of this Ordinance shall constitute authority for the
issuance of any such replacement certificate without necessity of further action by the Issuer
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 13. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES. (a) Covenants. The Issuer covenants to take any action necessary to
• ensure, or refrain from any action which would adversely affect, the treatment of the
Certificates as obligations described in section 103 of the Internal Revenue Code of 1986, as
amended (the "Code"), the interest on which is not includable in the "gross income" of the
holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as
follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates (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 are so used, that 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 Certificates, in
• contravention of Section 141(b)(2) of the Code;
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(2) 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 or the Project (as defined in subsection (d) of this Section) financed
therewith (less amounts deposited into a reserve fund, if any} then the amount in
excess of 5 percent is used fora "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;
(3) 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 (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;
• (4) to refrain from taking any action which would otherwise result in the
Certificates being treated as "private activity bonds" within the meaning of Section
141(b) of the Code;
(5) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of Section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Certificates, 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, other than invest-
ment property acquired with
(A) proceeds of the Certificates invested for a rea"sonable 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,
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• (B) amounts invested in a bona fide debt service fund, within the
meaning of Section 1.148-1 (b) of the Treasury Regulations, and
(C) 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;
(7) to otherwise restrict the use of the proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as may be necessary, so that the Certificates
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
(8) 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) 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 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.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a
"Rebate Fund" is hereby established by the Issuer 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 holders of the Certificates. The Rebate Fund is established for the additional
purpose of compliance with section 148 of the Code.
(c) Proceeds. 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. It is the understanding of the Issuer that the covenants
-23-
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 Certificates, 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 Certificates 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, 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 Certificates under section 103 of the Code. In
furtherance of such intention, the Issuer 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 Issuer, which may be
permitted by the Code as are consistent with the purpose for the issuance of the Certificates.
(d) Allocation Of, and Limitation On, Expenditures for the Project. The Issuer
covenants to account for the expenditure of sale proceeds and investment earnings to be used
for the purposes described in Section 1 of this Ordinance (the "Project") on its books and
records in accordance with the requirements of the Code. The Issuer recognizes that in order
for the proceeds to be considered used for the reimbursement of costs, the proceeds must be
allocated to expenditures within 18 months of the later of the date that (1) the expenditure is
made, or (2) the Project is completed; but in no event later than three years after the date on
which the original expenditure is paid. The foregoing notwithstanding, the' Issuer recognizes
that in order for proceeds to be expended under the Code, the sale proceeds or investment
• earnings must be expended no more than 60 days after the earlier of (1) the fifth anniversary
of the delivery of the Certificates, or (2) the date the Certificates are retired. The Issuer agrees
-24-
to obtain the advice of nationally recognized bond counsel if such expenditure fails to comply
• with the foregoing to assure that such expenditure will not adversely affect the tax-exempt
status of the Certificates. For purposes hereof, the Issuer shall not be obligated to comply with
this covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the interest on the
Certificates.
(e) Disposition of Project. The Issuer covenants that the property constituting the
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 that such sale or other disposition will not adversely affect the tax-
exempt status of the Certificates. For purposes of the foregoing, the portion of the property
comprising personal property and disposed in the ordinary course shall not be treated as a
• transaction resulting in the receipt of cash or other compensation. For purposes hereof, the
Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such
failure to comply will not adversely affect the excludability for federal income tax purposes from
gross income of the interest on the Certificates.
(f) Designation as Qualified Tax-Exempt Obligations. The Issuer hereby designates the
Certificates as "qualified tax-exempt bonds" as defined in section 265(b)(3) of the Code. In
furtherance of such designation, the Issuer represents, covenants and warrants the following:
(i) that during the calendar year in which the Certificates are issued, the Issuer (including any
subordinate entities) has not designated nor will designate bonds or other obligations, which,
when aggregated with the Certificates, will result in more than $10,000,000 of "qualified tax-
exempt bonds" being issued; (ii) that the Issuer reasonably anticipates that fhe amount of tax-
exempt obligations issued, during the calendar year in which the Certificates are issued, by the
• Issuer (or any subordinate entities) will not exceed $10,000,000; and (iii) that the Issuer will
-25-
take such action or refrain from such action as necessary, and as more particularly set forth in
• this Section, in order that the Certificates will not be considered " rivate activit bonds" within
P Y
the meaning of section 141 of the Code.
Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES. That
the City Manager of the Issuer or the designee thereof 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 Certifi-
Cates 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,
• thereon.
Section 15. DTC REGISTRATION. That the Certificates initially shall be issued and
delivered in such manner that no physical distribution of the Certificates will be made to the
public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as
depository for the Certificates. DTC has represented that it is a limited purpose trust company
incorporated under the laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered under Section 17A of the Securities Exchange Act of
1934, as amended, and the Issuer accepts, but in no way verifies, such representations. The
Certificates initially authorized by this Ordinance shall be delivered to and registered in the
name of CEDE & CO., the nominee of DTC. It is expected that DTC will hold the Certificates
on behalf of the Purchaser (as defined in Section 17 of this Ordinance) and its participants. So
• long as each Certificate is registered in the name of CEDE & CO., the Paying Agent/Registrar
-2s-
. shall treat and deal with DTC the same in all respects as if it were the actual and beneficial
owner thereof. It is expected that DTC will maintain abook-entry system which will identify
ownership of the Certificates in integral amounts of $5,000, with transfers of ownership being
effected on the records of DTC and its participants pursuant to rules and regulations
established by them, and that the Certificates initially deposited with DTC shall be immobilized
and not be further exchanged for substitute Certificates except as hereinafter provided. The
Issuer is not responsible or liable for any functions of DTC, will not be responsible for paying
any fees or charges with respect to its services, will not be responsible or liable for maintaining,
supervising, or reviewing the records of DTC or its participants, or protecting any interests or
rights of the beneficial owners of the Certificates. It shall be the duty of the DTC Participants,
as defined in the Official Statement herein approved, to make all arrangements with DTC to
establish this book-entry system, the beneficial ownership of the Certificates, and the method
• of paying the fees and charges of DTC. The Issuer does not represent, nor does it in any way
covenant that the initial book-entry system established with DTC will be maintained in the
future. Notwithstanding the initial establishment of the foregoing book-entry system with DTC,
if for any reason any of the originally delivered Certificates is duly filed with the Paying
Agent/Registrar with proper request for transfer and substitution, as provided for in this
Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and
there will be no assurance or representation that any book-entry system will be maintained for
such Certificates. In connection with the initial establishment of the foregoing book-entry
system with DTC, the Issuer heretofore has executed a "Blanket Letter of Representations"
prepared by DTC in order to implement the book-entry system described above. _
Section 16. CONTINUING DISCLOSURE OBLIGATION. (a) Definitions. That as
used in this Ordinance, the following terms have the meanings ascribed to such terms below:
• "MSRB" means the Municipal Securities Rulemaking Board.
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"NRMSIR" means each person whom the SEC or its staff has determined to be
• a nationally recognized municipal securities information repository within the meaning of the
Rule from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state
information depository within the meaning of the Rule from time to time.
(b) Annual Reports. (1) The Issuer shall provide annually, within six months after the
end of each fiscal year ending in or after 2001, financial information and operating data with
respect to the Issuer of the general type described in Exhibit A hereto provided that such
information and data is customarily prepared by the Issuer. Such information shall be provided
• to any person upon request made to the Issuer provided that the Issuer reserves the right at
any time to commence making such annual filings with the SID (if any, and if none, to each
NRMSIR) in lieu of providing such information upon request. Any financial statements so to be
provided shall be (i) prepared in accordance with the accounting principles described in Exhibit
A hereto, or such other accounting principles as the Issuer may be required to employ from
time to time pursuant to state law or regulation, and (ii) audited, if the Issuer commissions an
audit of such statements and the audit is completed within the period during which they must
be provided. If the audit of such financial statements is not complete within such period, then
the Issuer shall provide unaudited financial statements by the required time 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.
•
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• (2) If the Issuer changes its fiscal year, it will notify the SID of the change (and of
the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would
be required to provide financial information and operating data pursuant to this paragraph (b).
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 the SID or filed with the SEC.
(c) Material Event Notices. The Issuer shall notify the SID and 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. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates;
and
11. Rating changes.
The Issuer shall notify the SID and the MSRB, in a timely manner, of any failure by the Issuer
to provide financial information or operating data in accordance with subsection (b) of this
Section by the time required by such subsection.
(d) Limitations, Disclaimers, and Amendments. (1) The Issuer shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long _
as, the Issuer remains an "obligated person" with respect to the Certificates within the meaning
of the Rule, except that the Issuer in any event will give the notice required by Subsection (c)
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hereof of any Certificate calls and defeasance that cause the Issuer to no longer be such an
• obligated person.
(2) The provisions of this Section are for the sole benefit of the registered owners
and beneficial owners of the Certificates, 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 Issuer undertakes to provide only the financial information, operating data,
financial statements, and notices that 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 Issuer'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 Issuer 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.
(3) UNDER NO CIRCUMSTANCES SHALL THE ISSUER 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 ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(d) No default by the Issuer in observing or performing its obligations under this
Section shall comprise a breach of or default under the 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 Issuer under federal and state securities laws.
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• (e) The provisions of this Section may be amended by the Issuer 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 Issuer, 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 (i) 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 (ii) a person that is unaffiliated with the Issuer (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 Issuer so amends the
• provisions of this Section, it shall include with any amended financial information or operating
data next provided in accordance with subsection (b) 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 Issuer 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 Certificates in the primary offering of
the Certificates.
Section 17. SALE. (a) The Certificates of Obligation are hereby sold and shall be
delivered to SAMCO Capital Markets, (the "Purchaser"), for a price of par and accrued interest
thereon to the date of delivery, plus a premium of $-0-. The Official Notice of Sale,
• Official Bid Form, and Official Statement, prepared and distributed in connection with
the sale of the Certificates of Obligation, in substantially the form attached hereto, are
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hereby approved by the City Council, and their use in the offer and sale of the Certificates of
• Obligation is hereby approved. It is hereby officially found, determined and declared that the
Certificates of Obligation were sold to the highest bidder at terms that were the most
advantageous reasonably obtained. One Certificate in the principal amount maturing on each
maturity date as set forth in Section 2 hereof shall be delivered to the Purchaser, and the
Purchaser shall have the right to exchange such certificates as provided in Section 5 hereof
without cost. Accrued interest and premium, if any, received from the sale of the .Certificates,
shall be deposited in the Interest and Sinking Fund.
(b) The printing of a statement of insurance on the Certificates is hereby authorized, if
and to the extent a municipal bond insurance policy is obtained in connection with the sale of
the Certificates. The City Manager is hereby authorized to executed any documents
necessary in connection with the issuance of such an insurance policy by the issuer thereof.
Section 18. INTEREST EARNINGS. That the interest earnings derived from the
• investment of proceeds from the sale of the Certificates may be used along with other
proceeds for the construction of the permanent improvements set forth in Section 1 hereof for
which the Certificates are issued; provided that after completion of such permanent
improvements, 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 proceeds which are required to be rebated to the United States of America
pursuant to this Ordinance hereof in order to prevent the Certificates from being arbitrage
bonds shall be so rebated and not considered as interest earnings for the purposes of this
Section.
Section 19. DEFEASANCE. (a) Defeased Certificates. That any :Certificate and the
interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased
• Certificate") within the meaning of this Ordinance, except to the extent provided in subsection
(d) of this Section, when payment of the principal of such Certificate, plus interest thereon to
the due date (whether such due date be by reason of maturity or otherwise) either (i) shall
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• 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 in accordance with an escrow agreement or other
instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United
States of America sufficient to make such payment or (2) Defeasance Securities that 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 Certificates shall have become due and payable. At such time
as a Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such
Certificate and the interest thereon shall no longer be secured by, payable from, or entitled to
the benefits of, the ad valorem taxes or revenues herein levied and pledged as provided in this
• Ordinance, and such principal and interest shall be payable solely from such money or
Defeasance Securities. Notwithstanding any other provision of this Ordinance to the contrary, it
is hereby provided that any determination not to redeem Defeased Certificates that is made in
conjunction with the payment arrangements specified in clauses (i) or (ii) above shall not be
irrevocable, provided that, in the proceedings providing for such payment arrangements, the
Issuer (1) expressly reserves the right to call the Defeased Certificates for redemption; (2)
gives notice of the reservation of that right to the owners of the Defeased Certificates
immediately following the making of the payment arrangements; and (3) directs that notice of
the reservation be included in any redemption notices that it authorizes.
(b) Investment in Defeasance Securities. Any moneys so deposited with the _
Paying Agent/Registrar may at the written direction of the Issuer be invested in Defeasance
Securities, maturing in the amounts and times as hereinbefore set forth, and alt income from
• such Defeasance Securities received by the Paying Agent/Registrar that is not required for the
payment of the Certificates and interest thereon, with respect to which such money has been
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• so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the
Issuer. Any Future Escrow Agreement pursuant to which the money and/or Defeasance
Securities are held for the payment of Defeased Certificates may contain provisions permitting
the investment or reinvestment of such moneys in Defeasance Securities or the substitution of
other Defeasance Securities upon the satisfaction of the requirements specified in subsection
21(a)(i) or (ii). All income from such Defeasance Securities received by the Paying
Agent/Registrar which is not required for the payment of the Defeased Certificates, with
respect to which such money has been so deposited, shall be remitted to the Issuer or
deposited as directed in writing by the Issuer.
(c) Defeasance Securities Defined. The term "Defeasance Securities" means (i)
direct, noncallable obligations of the United States of America, including obligations that are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
• agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of
the purchase thereof are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an
agency or a county, municipality, or other political subdivision of a state that have been
refunded and that, on the date on the date the governing body of the Issuer adopts or
approves the proceedings authorizing the financial arrangements are rated as to investment
quality by a nationally recognized investment rating firm not less than AAA or its equivalent.
(d) Paying Agent/Registrar Services. Until alf Defeased Certificates shall have
become due and payable, the Paying Agent/Registrar shall perform the services of Paying ,
Agent/Registrar for such Defeased Certificates the same as if they had not been defeased,
and the Issuer shall make proper arrangements to provide and pay for such services as
• required by this Ordinance.
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. (e) Selection of Certificates for Defeasance. In the event that the Issuer elects to
defease less than all of the principal amount of Certificates of a maturity, the Paying
Agent/Registrar shall select, or cause to be selected, such amount of Certificates by such
random method as it deems fair and appropriate.
Section 20. 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 21. OPEN MEETING. That it is hereby officially found and determined that the
meeting at which this Ordinance was passed 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.
Section 22. FURTHER PROCEDURES. That the Mayor, the City Manager, the
• Director of Finance, and all other officers, employees, and agents of the City, 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 City
all such instruments, whether herein mentioned, as may be necessary or desirable in order to
carry out the terms and provisions of this Ordinance, and the sale and delivery of the
Certificates and fixing all details in connection therewith.
Section 23. RULES OF CONSTRUCTION. That for all purposes of this Ordinance,
unless the context requires otherwise, all references to designated Sections and other
subdivisions are to the Sections and other subdivisions of this Ordinance. The titles and
headings of the Sections and subsections of this Ordinance -have been inserted for
convenience of reference only and are not to be considered a part hereof and shall not in any
• way modify or restrict any of the terms or provisions hereof. The words "herein", "hereof' and
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• "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any
particular Section or other subdivision. Except where the context otherwise requires, terms
defined in this Ordinance to impart the singular number shat{ be considered to include the
plural number and vice versa. References to any named person means that party and its
successors and assigns. References to any constitutional, statutory or regulatory provision
means such provision as it exists on the date this Ordinance is adopted by the City and any
future amendments thereto or successor provisions thereof. Any reference to the payment of
principal in this Ordinance shall be deemed to include the payment of any mandatory sinking
fund redemption payments as described herein.
ADOPTED this 22nd day of May, 2001.
OVED AS TO F RM AND~LEGALITY:
• A omey,
Cit ichland Hills, Texas
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• Exhibit A
to Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 16 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be
provided annually in accordance with such Section are as specified (and included in the
Appendix or under the headings of the Official Statement referred to) below:
The information of the general type included in tables 1 through 15, inclusive, set forth
in Appendix A to the Official Statement.
Appendix D to the Official Statement, "Audited Financial Statement of the City of
Richland Hills, Texas for the Fiscal Year Ended September 30, 2000".
Accounting Principles
The accounting principles referred to in such Section are the accounting
principles described in the notes to the financial statements referred to in paragraph 1 above.
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