HomeMy WebLinkAbout1946 02-28-2012 CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTY OF TARRANT §
CITY OF EULESS §
I, the undersigned, City Secretary of the City of Euless, Texas, DO HEREBY CERTIFY
as follows:
1. On the 28th day of February, 2012, a regular meeting of the City Council (the
"Council") of the City of Euless, Texas (the "City") was held at a meeting place within the City;
the duly constituted members of the Council being as follows:
MARY LIB SALEH MAYOR
DONNA MICKAN ) MAYOR PRO-TEM
TIM STINNEFORD )
LEON HOGG )
LINDA MARTIN ) COUNCIL MEMBERS
GLENN PORTERFIELD )
PERRY BYNUM )
and all of said persons were present at said meeting, except the following: Donna Mickan and
Glenn Porterfield. Among other business considered at said meeting, the attached ordinance
entitled:
"AN ORDINANCE authorizing the issuance of `CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING
BONDS, SERIES 2012'; pledging the net revenues of the City's
Waterworks and Sewer System to the payment of the principal of and
interest on said Bonds; enacting provisions incident and related to the
issuance, payment, security and delivery of said bonds, including the
approval and execution of a Paying Agent/Registrar Agreement, a
Purchase Letter and a Special Escrow Agreement; providing for the
redemption of the bonds being refunded; and providing an effective date"
was introduced and submitted to the Council for passage and adoption. After presentation and
due consideration of the ordinance, and upon a motion being made and seconded, the ordinance
was finally passed and adopted by the Council to be effective immediately by the following vote:
5 voted"For" 0 voted"Against" 0 abstained
all as shown in the official minutes of the Council for the meeting held on the aforesaid date.
95490648.1/11111507
IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the
seal of said City,this the 28th day of February,2012.
A —4t`///
qty ecretary,
Ci of Euless,Texas
(City Seal)
95490648.1/11111507 S-1
ORDINANCE NO. 1946
AN ORDINANCE authorizing the issuance of "CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING
BONDS, SERIES 2012"; pledging the net revenues of the City's
Waterworks and Sewer System to the payment of the principal of and
interest on said Bonds; enacting provisions incident and related to the
issuance, payment, security and delivery of said bonds, including the
approval and execution of a Paying Agent/Registrar Agreement, a
Purchase Letter and a Special Escrow Agreement; providing for the
redemption of the bonds being refunded; and providing an effective date.
WHEREAS, the City of Euless, Texas (the "City") has duly issued and delivered
obligations, payable from and secured by a lien on and pledge of the net revenues of the City's
Waterworks and Sewer System (the "System") (collectively referred to herein as the "Refunded
Bonds"),to wit:
(1) City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2004, dated June 15, 2004, being the bonds scheduled to mature on
July 15 in each of the years 2014 through 2024, and aggregating in the principal
amount of$1,405,000(the"Series 2004 Refunded Bonds"); and
(2) City of Euless, Texas, Waterworks and Sewer System Revenue
Refunding Bonds, Series 2006, dated January 1, 2006, being the bonds scheduled
to mature on July 15 in each of the years 2012 through 2020, and aggregating in
the principal amount of$1,990,000 (the"Series 2006 Refunded Bonds"); and
WHEREAS,pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207, as
amended,the City Council(the"Council")is authorized to issue refunding bonds and deposit the
proceeds of sale thereof directly with the place of payment for the Refunded Bonds, or other
authorized depository, and such deposit, when made in accordance with said statute, shall
constitute the making of firm banking and financial arrangements for the discharge and final
payment of the Refunded Bonds; and
WHEREAS, the Council hereby finds and determines that refunding bonds should be
issued at this time to refund the Refunded Bonds, and such refunding will result in the City
saving approximately $334,843.50 in debt service payments on such indebtedness and further
provide present value savings of approximately$287,279.93; and
WHEREAS, the Council further finds and determines that such revenue bonds can and
should be issued on a parity with the outstanding and unpaid revenue bonds of the City
(hereinafter identified and defined as "Previously Issued Bonds")payable from and secured by a
first lien on and pledge of the Net Revenues of the System in that (i) the City is not now in
default as to any covenant, condition or obligation contained in the ordinances authorizing the
issuance of the outstanding Previously Issued Bonds, (ii) the laws of the State of Texas now in
force provide for the issuance of the bonds herein authorized to be issued,(iii)each of the special
Funds created and reaffirmed by the ordinances authorizing the Previously Issued Bonds
contains the amount of money now required to be on deposit therein; (iv) the "Net Revenues" of
95469579.1/11111507
the System for the fiscal year next preceding the month of the adoption of this Ordinance, as
shown by a report of a Certified Public Accountant or licensed public accountant, are equal to at
least one and one-fourth (11/4) times the average annual principal and interest requirements of all
bonds secured by a first lien on and pledge of the Net Revenues of the System, and which will be
outstanding upon the issuance of the bonds herein authorized; (v) this Ordinance provides that
the amount to be accumulated and maintained in the Bond Reserve Fund shall be increased to an
amount equal to not less than the average annual principal and interest requirements.of all bonds
payable from and secured by a first lien on and pledge of the Net Revenues of the System(after
giving effect to the issuance of the bonds herein authorized) and any additional amount to be
maintained in said Fund shall be accumulated within not more than five (5) years and one (1)
month from the date of the passage of this Ordinance; and (vi) the bonds herein authorized shall
mature on July 15 in each year;now,therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EULESS:
SECTION 1: Authorization - Designation - Principal Amount - Purpose. Revenue
bonds of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $3,340,000 to be designated and bear the title "CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2012"
(hereinafter referred to as the "Bonds"), for the purpose of refunding certain outstanding
obligations payable from the revenues of the City's Waterworks and Sewer System(identified in
the preamble hereof as the "Refunded Bonds") and paying the costs of issuance, in conformity
with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code,
Chapter 1207, as amended.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Bond Date - Interest Rates. The Bonds shall be issued as fully registered
obligations,without coupons, shall be dated March 1,2012 (the"Bond Date") and,other than the
single fully registered Initial Bond referenced in Section 7 hereof, shall be in denominations of
$5,000 or any integral multiple thereof (within a Stated Maturity), shall be numbered
consecutively from One (I)upward and shall become due and payable on July 15 in each of the
years and in the principal amounts (the "Stated Maturities") and bear interest at the per annum
rate(s)in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
2013 $235,000 2.03 %
2014 345,000 2.03
2015 350,000 2.03
2016 355,000 2.03
2017 365,000 2.03
2018 375,000 2.03
2019 385,000 2.03
2020 395,000 2.03
2021 130,000 2.03
2022 130,000 2.03
2023 140,000 2.03
2024 135,000 2.03
95469579.1/11111507 2
The Bonds shall bear interest on the unpaid principal amounts from the date of their
delivery to the initial purchasers (anticipated, March 29, 2012) at the rate(s)per annum shown in
the above schedule(calculated on the basis of a 360-day year of twelve 30-day months). Interest
on the Bonds shall be payable on January 15 and July 15 in each year, commencing July 15,
2012,until maturity or prior redemption.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, premium,
if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of
America which at the time of payment is legal tender for the payment of public and private debts,
and shall be without exchange or collection charges to the Holders.
The selection and appointment of BOKF,NA dba Bank of Texas, Fort Worth, Texas (the
"Paying Agent/Registrar") to serve as Paying Agent/Registrar for the Bonds is hereby approved
and confirmed. Books and records relating to the registration,payment, transfer and exchange of
the Bonds (the "Security Register") shall at all times be kept and maintained on behalf of the
City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and
provisions of a"Paying Agent/Registrar Agreement", substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City
may prescribe. The Mayor or Mayor Pro Tern and the City Secretary are authorized to execute
and deliver such Paying Agent/Registrar Agreement in connection with the delivery of the
Bonds. The City covenants to maintain and provide a Paying Agent/Registrar at all times until
the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a
commercial bank, trust company, financial institution or other entity qualified and authorized to
serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any
change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written
notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which
notice shall also give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds, shall be payable at the Stated Maturities
or on a date of earlier redemption thereof only upon presentation and surrender of the Bonds to
the Paying Agent/Registrar at its designated offices, initially in Fort Worth, Texas, or, with
respect to a successor Paying Agent/Registrar, at the designated offices of such successor (the
"Designated Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders
whose names appear in the Security Register at the close of business on the Record Date(the last
business day of the month next preceding each interest payment date) and shall be paid by the
Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the
address of the Holder recorded in the Security Register or (ii) by such other method, acceptable
to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the
date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a
legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to
95469579.1/11111507 3
close; and payment on such date shall have the same force and effect as if made on the original
date payment was due.
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 City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest(which shall be 15 days after the Special Record Date) shall
be sent at least five (5) business days prior to the Special Record Date by United States Mail,
first class postage prepaid, to the address of each Holder appearing on the Security Register at
the close of business on the last business day next preceding the date of mailing of such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds may be redeemed
prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts
of$5,000 or any integral multiple thereof(and if within a Stated Maturity by lot by the Paying
Agent/Registrar), at the redemption price of par, together with accrued interest to the date of
redemption, plus the Prepayment Fee as of the date of redemption.
The Prepayment Fee is calculated by multiplying:
(1) any decrease in yield in the Reference Rate between the date of
delivery of the Bonds and the prepayment date,by
(2) the number of years or partial years remaining in the portion of the
Bond being redeemed,by
(3) the average balance remaining through maturity of the portion of
the Bond being redeemed.
"Interest Rate Swap Rate" is defined as the interest rate swap rate for the term closest in
time to the remaining term of the Bond as such rate has most recently been published by the
Federal Reserve Bank on its website under Federal Reserve Statistical Release H.15, as the
International Swaps and Derivatives Association ("ISDA") mid-market par swap rate. In the
event the Federal Reserve Board fails to publish information from the ISDA concerning the mid-
market par swap rate, the parties shall refer to the source of such information (as set forth in
footnote 15 of the Federal Reserve Statistical Release H.15 as published on October 2, 2000) in
order to determine the Interest Rate Swaps Rate.
"LIBOR Rate" is defined as the London Interbank Offered Rate (LIBOR) established by
the British Banker's Association for deposits in US dollars for the term closest in time to the
remaining term of the Bond.
"Reference Rate" is defined as (a) the LIBOR rate when the remaining term of the Bond
is 12 months or less, or(b) the Interest Rate Swap Rate when the remaining term of the Bond is
greater than 12 months.
(b) Exercise of Redemption Option. At least forty-five (45) days prior to a
redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the
95469579.1/11111507 4
Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Bonds, the principal amount of each Stated Maturity to be optionally redeemed, and the
date of redemption therefor. The decision of the City to exercise the right to optionally redeem
Bonds shall be entered in the minutes of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall
treat such Bonds as representing the number of Bonds Outstanding, which is obtained by
dividing the principal amount of such Bonds by $5,000, and shall select the Bonds to be
redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty(30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be
redeemed in whole or in part at the address of the Holder appearing on the Security Register at
the close of business on the business day next preceding the date of mailing such notice, and any
notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state
that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due
and payable on the redemption date specified, and the interest thereon, or on the portion of the
principal amount thereof to be redeemed, shall cease to accrue from and after the redemption
date, and(v) specify that payment of the redemption price for the Bonds, or the principal amount
thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying
Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject
by its terms to prior redemption and has been called for redemption and notice of redemption
thereof has been duly given as hereinabove provided, such Bond(or the principal amount thereof
to be redeemed) shall become due and payable and interest thereon shall cease to accrue from
and after the redemption date therefor; provided moneys sufficient for the payment of such Bond
(or of the principal amount thereof to be redeemed) at the then applicable redemption price are
held for the purpose of such payment by the Paying Agent/Registrar.
(e) Conditional Notice of Redemption. With respect to any optional redemption of
the Bonds, unless moneys sufficient to pay the principal of and premium, if any, and interest on
the Bonds to be redeemed shall have been received by the Paying Agent/Registrar prior to the
giving of such notice of redemption, such notice may state that said redemption is conditional
upon the receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for
such redemption, or upon the satisfaction of any prerequisites set forth in such notice of
redemption; and, if sufficient moneys are not received, such notice shall be of no force and
effect, the City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in
the manner in which the notice of redemption was given, to the effect that the Bonds have not
been redeemed.
95469579.1/11111507 5
SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of this
Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be transferred or
exchanged for Bonds of other authorized denominations upon the Security Register by the
Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying
Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for
exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the
Paying Agent/Registrar.
Upon surrender for transfer of any Bond (other than the Initial Bonds authorized in
Section 7 hereof) at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Bonds, executed on behalf of, and furnished by, the City of
authorized denominations and having the same Stated Maturity and of a like aggregate principal
amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial Bonds authorized in Section 7
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the
Bonds surrendered for exchange,upon surrender of the Bonds to be exchanged at the Designated
Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered
for exchange, the Paying Agent/Registrar shall register and deliver new Bonds, executed on
behalf of, and furnished by,the City,to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be
valid obligations of the City, evidencing the same obligation to pay, and entitled to the same
benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that the
Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange
of any tax or other governmental charges required to be paid with respect to such transfer or
exchange.
Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be"Predecessor Bonds,"evidencing all or a portion, as the case may be,of
the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 30 hereof and such new replacement
Bond shall be deemed to evidence the same obligation as the mutilated,lost, destroyed, or stolen
Bond.
95469579.1/11111507 6
Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange
any Bond called for redemption, in whole or in part, within 45 days of the date fixed for
redemption of such Bond; provided, however, such limitation of transfer shall not be applicable
to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part.
SECTION 6: Execution - Registration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Bond Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the
time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government
Code, Chapter 1201, as amended.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 8(c), manually executed by the Comptroller of
Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 8(d), manually executed by an authorized officer,
employee or representative of the Paying Agent/Registrar, and either such certificate upon any
Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been
duly certified,registered and delivered.
SECTION 7: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the aggregate principal amount of the Bonds with
principal installments to become due and payable as provided in Section 2 hereof and numbered
T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity in the
applicable principal amount and denomination and to be numbered consecutively from T-1 and
upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be
registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s)
shall be the Bond(s) submitted to the Office of the Attorney General of the State of Texas for
approval, certified and registered by the Office of the Comptroller of Public Accounts of the
State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written instructions
from the initial purchaser(s), or the designee thereof, and such other information and
documentation as the Paying Agent/Registrar may reasonably require.
SECTION 8: Forms. (a) Forms Generally. The Bonds, the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in this Section with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance and may have
95469579.1/11111507 7
such letters, numbers, or other marks of identification(including identifying numbers and letters
of the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends in the event the
Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be established by the City or
determined by the officers executing such Bonds as evidenced by their execution thereof. Any
portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
(b) Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND
SERIES 2012
Bond Date: Interest Rate: Stated Maturity:
March 1,2012 2.03% July 15,20_
Registered Owner:
Principal Amount:
The City of Euless(hereinafter referred to as the "City"), a body corporate and municipal
corporation in the County of Tarrant, State of Texas, for value received, hereby promises to pay
to the Registered Owner named above, or the registered assigns thereof, solely from the revenues
hereinafter identified, on the Stated Maturity date specified above the Principal Amount stated
above(or so much thereof as shall not have been paid upon prior redemption) and to pay interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid Principal
Amount hereof from the date of delivery to the initial purchasers (March 29, 2012) at the per
annum rate of interest specified above; such interest being payable on January 15 and July 15 of
each year, commencing July 15, 2012,until maturity or prior redemption. Principal of this Bond
is payable at its Stated Maturity or redemption to the registered owner hereof,upon presentation
and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar
executing the registration certificate appearing hereon, or its successor. Interest is payable to the
registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance
hereinafter referenced)whose name appears on the"Security Register"maintained by the Paying
Agent/Registrar at the close of business on the "Record Date", which is the last business day of
the month next preceding each interest payment date and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
95469579.1/11111507 8
the registered owner recorded in the Security Register or by such other method, acceptable to the
Paying Agent/Registrar,requested by, and at the risk and expense of, the registered owner. If the
date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a
legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day when 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. All payments of principal of, premium, if any, and interest on this Bond
shall be without exchange or collection charges to the owner hereof and in any coin or currency
of the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of$3,340,000 (herein referred to as the "Bonds") for the purpose of refunding certain
outstanding obligations payable from the revenues of the City's Waterworks and Sewer System
(the "System") and paying costs of issuance, under and in strict conformity with the Constitution
and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1207, as
amended, and pursuant to an Ordinance adopted by the City Council of the City(herein referred
to as the"Ordinance").
The Bonds may be redeemed prior to their Stated Maturities, at the option of the City, in
whole or in part in principal amounts of$5,000 or any integral multiple thereof(and if within a
Stated Maturity by lot by the Paying Agent/Registrar), at the redemption price of par, together
with accrued interest to the date of redemption, plus the Prepayment Fee as of the date of
redemption.
The Prepayment Fee is calculated by multiplying:
(1) any decrease in yield in the Reference Rate between the date of
delivery of the Bonds and the prepayment date,by
(2) the number of years or partial years remaining in the portion of the
Bond being redeemed,by
(3) the average balance remaining through maturity of the portion of
the Bond being redeemed.
"Interest Rate Swap Rate" is defined as the interest rate swap rate for the term closest in
time to the remaining term of the Bond as such rate has most recently been published by the
Federal Reserve Bank on its website under Federal Reserve Statistical Release H.15, as the
International Swaps and Derivatives Association ("ISDA") mid-market par swap rate. In the
event the Federal Reserve Board fails to publish information from the ISDA concerning the mid-
market par swap rate, the parties shall refer to the source of such information (as set forth in
footnote 15 of the Federal Reserve Statistical Release H.15 as published on October 2, 2000) in
order to determine the Interest Rate Swaps Rate.
95469579.1/11111507 9
"LIBOR Rate" is defined as the London Interbank Offered Rate (LIBOR) established by
the British Banker's Association for deposits in US dollars for the term closest in time to the
remaining term of the Bond.
"Reference Rate" is defined as (a)the LIBOR rate when the remaining term of the Bond
is 12 months or less, or(b) the Interest Rate Swap Rate when the remaining term of the Bond is
greater than 12 months.
At least thirty days prior to the date fixed for any redemption of Bonds, the City shall
cause a written notice of such redemption to be sent by United States Mail, first class postage
prepaid, to the registered owners of each Bond to be redeemed at the address shown on the
Security Register and subject to the terms and provisions relating thereto contained in the
Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date such
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor, provided
moneys for the payment of the redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar.
In the event a portion of the principal amount of a Bond is to be redeemed, payment of
the redemption price of such principal amount shall be made to the registered owner only upon
presentation and surrender of such Bond to the Designated Payment/Transfer Office of the
Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any
authorized denominations provided by the Ordinance for the then unredeemed balance of the
principal sum thereof will be issued to the registered owner, without charge. If a Bond is
selected for redemption, in whole or in part,the City and the Paying Agent/Registrar shall not be
required to transfer such Bond to an assignee of the registered owner within 45 days of the
redemption date therefor; provided, however, such limitation on transferability shall not be
applicable to an exchange by the registered owner of the unredeemed balance of a Bond
redeemed in part.
With respect to any optional redemption of the Bonds, unless moneys sufficient to pay
the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been
received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such
notice may state that said redemption is conditional upon the receipt of such moneys by the
Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon the satisfaction
of any prerequisites set forth in such notice of redemption; and, if sufficient moneys are not
received, such notice shall be of no force and effect, the City shall not redeem such Bonds and
the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption
was given,to the effect that the Bonds have not been redeemed.
The Bonds are special obligations of the City and, together with the outstanding
Previously Issued Bonds, are payable solely from and equally and ratably secured by a first lien
on and pledge of the Net Revenues of the System. The Bonds do not constitute a legal or
equitable pledge, charge, lien or encumbrance upon any property of the City or the System,
95469579.1/11111507 10
except with respect to the Net Revenues. The holder hereof shall never have the right to demand
payment of this obligation out of any funds raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has reserved
the right to issue additional revenue obligations payable from and equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System, in the same manner and to the
same extent as the Previously Issued Bonds and the Bonds.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the Bonds; the properties constituting the System; the
Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature
and extent and manner of enforcement of the lien and pledge securing the payment of the Bonds;
the terms and conditions for the issuance of additional revenue obligations; the terms and
conditions relating to the transfer or exchange of this Bond; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and
provisions upon which the liens,pledges, charges and covenants made therein may be discharged
at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no longer
Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized
terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds
of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and
of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the
designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date as
the owner entitled to payment of interest hereon, (ii)on the date of surrender of this Bond as the
owner entitled to payment of principal hereof at its Stated Maturity or its redemption,in whole or
in part, and(iii)on any other date as the owner for all other purposes, and neither the City nor the
Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the
event of non-payment of interest on a scheduled payment date and for thirty(30) days thereafter,
a new record date for such interest payment (a"Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five(5)
business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
95469579.1/11111507 11
It is hereby certified,recited,represented and covenanted that the City is a duly organized
1 re p
and legally existing municipal corporation under and by virtue of the Constitution and laws of
the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts,
conditions and things required to exist and be done precedent to and in the issuance of the Bonds
to render the same lawful and valid obligations of the City have been properly done, have
happened and have been performed in regular and due time, form and manner as required by the
Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any
constitutional or statutory limitation; and that due provision has been made for the payment of
the principal of and interest on the Bonds by a pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any application thereof shall be invalid,illegal,
or unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of
this Bond and the Ordinance shall be construed in accordance with and shall be governed by the
laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Bond Date.
CITY OF EULESS,TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(City Seal)
95469579.1/11111507 12
(c) Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Bond(s)only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
(d) Form of Certificate of Paying Agent/Registrar to Appear on Definitive Bonds
only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within-mentioned Ordinance; the bond or bonds of the
above entitled and designated series originally delivered having been approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by
the records of the Paying Agent/Registrar.
The designated offices of the Paying Agent/Registrar in Fort Worth, Texas, is the
"Designated Payment/Transfer Office"for this Bond.
BOKF,NA DBA BANK OF TEXAS,
Fort Worth, Texas,
as Paying Agent/Registrar
Registration date:
By:
Authorized Signature
95469579.1/11111507 13
(e) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print
or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power
of substitution in the premises.
DATED:
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it appears
on the face of the within Bond in every
particular.
(f) The Initial Bond(s) shall be in the form set forth in paragraph(b) of this Section
except that the form of the single fully registered Initial Bond shall be modified as follows:
Heading and first paragraph shall read as follows:
REGISTERED REGISTERED
NO.T-1 $3,340,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS,TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND
SERIES 2012
Bond Date: March 1,2012
Registered Owner:
Principal Amount: THREE MILLION THREE HUNDRED FORTY THOUSAND DOLLARS
The City of Euless (hereinafter referred to as the"City"), a body corporate and municipal
corporation in the County of Tarrant, State of Texas,for value received, hereby promises to pay
to the Registered Owner named above, or the registered assigns thereof, solely from the revenues
hereinafter identified, the Principal Amount hereinabove stated on July 15 in each of the years
and in principal installments in accordance with the following schedule:
95469579.1/11111507 14
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
•
(Information to be inserted from schedule in Section 2 hereof)
(or so much principal thereof as shall not have been redeemed prior to maturity) and to pay
interest, computed on the basis of a 360-day year of twelve 30-day months, on the unpaid
principal amounts hereof from the date of delivery to the initial purchasers (March 29, 2012) at
the per annum rates of interest specified above; such interest being payable on January 15 and
July 15 in each year, commencing July 15, 2012, until maturity or prior redemption. Principal
installments of this Bond are payable in the year of maturity or on a redemption date to the
registered owner hereof by BOKF, NA dba Bank of Texas, Fort Worth, Texas (the "Paying
Agent/Registrar"), upon its presentation and surrender at its designated offices, initially in Fort
Worth, Texas, or, with respect to a successor paying agent/registrar, at the designated office of
such successor(the "Designated Payment/Transfer Office"). Interest is payable to the registered
owner of this Bond whose name appears on the "Security Register" maintained by the Paying
Agent/Registrar at the close of business on the "Record Date", which is the last business day of
the month next preceding each interest payment date and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to the
Paying Agent/Registrar,requested by, and at the risk and expense of, the registered owner. If the
date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a
legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day when 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. All payments of principal of, premium, if any, and interest on this Bond
shall be without exchange or collection charges to the owner hereof and in any coin or currency
of the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
SECTION 9: Definitions. For all purposes of this Ordinance and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds,the following definitions are provided:
(a) The term "Additional Bonds" shall mean the additional parity revenue bonds the
City reserves the right to issue in accordance with the terms and conditions prescribed in
Section 22 hereof.
(b) The term "Bonds" shall mean the "City of Euless, Texas, Waterworks and Sewer
System Revenue Refunding Bonds, Series 2012"authorized by this Ordinance.
(c) The term "Bonds Similarly Secured"shall mean the Previously Issued Bonds, the
Bonds and Additional Bonds.
95469579.1/11111507 15
(d) The term "Fiscal Year" shall mean the twelve-month operating period for the
System ending September 30 of each year.
(e) The term"Net Revenues"shall mean and include the gross revenues derived from
the operation of the System, less reasonable expenses of operation and maintenance, including
all salaries, labor, materials, repairs and extensions necessary to render efficient service,
provided, however, that only such repairs and extensions as in the judgment of the Council,
reasonably and fairly exercised, are necessary to keep the System in operation and render
adequate service to the areas served thereby and the inhabitants thereof, or such as might be
necessary to meet some physical accident or condition which would otherwise impair the
security of any bonds payable from and secured by a lien on the Net Revenues of the System
shall be deducted in determining"Net Revenues."
(f) The term "Previously Issued Bonds" shall mean the outstanding and unpaid
revenue bonds,payable from and secured by a first lien on and pledge of the Net Revenues of the
System, of the following issues or series,identified as follows:
(1) City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2004, dated June 15, 2004, and issued in the original principal
amount of$2,145,000; and
(2) City of Euless, Texas, Waterworks and Sewer System Revenue
Refunding Bonds, Series 2006, dated January 1, 2006, and issued in the original
principal amount of$2,530,000.
(g) The term "Government Obligations" shall mean (i) direct noncallable obligations
of the United States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
agency or instrumentality of the United States, including obligations unconditionally guaranteed
or insured by an agency or instrumentality of the United States of America and, on the date of
their acquisition or purchase by the City, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, (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 of their acquisition or purchase by the City,
are rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent and (iv) any other then authorized securities or obligations that may be
used to defease obligations such as the Bonds under the then applicable laws of the State of
Texas.
(h) The term "Outstanding" when used in this Ordinance with respect to Bonds
means, as of the date of determination, all Bonds theretofore issued and delivered under this
Ordinance, except:
(1) those Bonds canceled by the Paying Agent/Registrar or delivered
to the Paying Agent/Registrar for cancellation;
(2) those Bonds deemed to be paid by the City in accordance with the
provisions of Section 28 hereof; and
95469579.1/11111507 16
(3) those Bonds that have been mutilated,destroyed, lost, or stolen and
replacement Bonds have been registered and delivered in lieu thereof as provided
in Section 30 hereof.
•
(i) The term "System" shall mean the City's combined Waterworks and Sanitary
Sewer System, including all present and future additions, extensions, replacements and
improvements thereto, whether situated within or without the corporate limits of the City.
SECTION 10: Pledge. The City hereby covenants and agrees that all of the Net
Revenues derived from the operation of the System, with the exception of those in excess of the
amounts required to establish and maintain the special Funds created for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged for the payment of the
Previously Issued Bonds, the Bonds, and Additional Bonds, if issued, and the interest thereon,
and it is hereby ordained that the Previously Issued Bonds, the Bonds and Additional Bonds, if
issued, and the interest thereon, shall constitute a first lien on the Net Revenues of the System in
accordance with the terms and provisions hereof and be valid and binding and fully perfected
from and after the date of adoption of this Ordinance without physical delivery or transfer or
transfer of control of the Net Revenues, the filing of this Ordinance or any other act; all as
provided in Chapter 1208 of the Texas Government Code, as amended("Chapter 1208").
Chapter 1208 applies to the issuance of the Bonds and the pledge of the Net Revenues of
the System granted by the City under this Section 10, and such pledge is therefore valid,
effective and perfected. If Texas law is amended at any time while the Bonds are Outstanding
such that the pledge of the Net Revenues of the System granted by the City under this Section 10
is to be subject to the filing requirements of Chapter 9, Texas Business and Commerce Code,
then in order to preserve to the registered owners of the Bonds the perfection of the security
interest in said pledge, the City agrees to take such measures as it determines are reasonable and
necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas
Business and Commerce Code and enable a filing to perfect the security interest in said pledge to
occur.
SECTION 11: Rates and Charges. The City hereby covenants and agrees with the
Holders of the Bonds that rates and charges for water and sewer services afforded by the System
will be established and maintained to provide revenues sufficient at all times to pay:
(a) all operating, maintenance, depreciation, replacement, betterment and other costs
deductible in determining Net Revenues as herein defined;
(b) the interest on and principal of the Bonds Similarly Secured and the amounts
required to be deposited into the special Funds created and established for the payment and
security of the Bonds Similarly Secured; and
(c) any other legally incurred indebtedness payable from the revenues of the System
and/or secured by a lien on the System or the revenues thereof.
SECTION 12: Segregation of Revenues/Fund Designations. All revenues and income
derived from the operation and ownership of the System shall be kept separate from other funds
of the City and deposited from day to day, as collected in the "System Fund" (created and
95469579.1/11111507 17
established in connection with the issuance of the Previously Issued Bonds), which Fund is
hereby reaffirmed and shall continue to be kept and maintained at an official depository bank of
the City while the Bonds remain Outstanding. Furthermore, the special funds or accounts
created and established in connection with the issuance of the Previously Issued Bonds are
hereby reaffirmed for the benefit of the Bonds,to wit:
(a) Bond Fund, which Fund is kept and maintained at the City's official depository
bank, and moneys deposited in said Fund shall be used only for the purpose of paying the
principal of and interest on the Bonds Similarly Secured.
(b) Emergency Fund, which Fund is kept and maintained at the City's official
depository bank, and moneys deposited in said Fund shall be used, upon proper order of the
Council, to pay any special or extraordinary repairs or replacements to the System necessitated
by the occurrence of an emergency and for payment of which no other funds are available and
additionally for the payment of the principal and/or interest requirements of the Bonds Similarly
Secured to prevent a default in the payment thereof when moneys in the Bond Fund and/or Bond
Reserve Fund are deficient.
(c) Bond Reserve Fund, which Fund is kept and maintained at the City's official
depository bank, and moneys deposited in said Fund shall be used to pay the principal of and
interest on the Bonds Similarly Secured falling due at any time when there is insufficient money
available in the Bond Fund for such purpose.
SECTION 13: System Fund. The City hereby reaffirms its covenant to the Holders of the
Previously Issued Bonds and agrees with the Holders of the Bonds that the moneys deposited in
the System Fund shall be used first for the payment of the reasonable and proper expenses of
operating and maintaining the System,as identified in Section 9(e)hereof. All moneys deposited
in the System Fund in excess of the amounts required to pay operating and maintenance
expenses of the System, as hereinabove provided, shall be applied and appropriated,to the extent
required and in the order of priority prescribed,as follows:
(a) To the payment of the amounts required to be deposited in the Bond Fund for the
payment of principal of and interest on the Bonds Similarly Secured as the same become due and
payable;
(b) To the payment of the amounts, if any required to be deposited in the Emergency
Fund to accumulate and/or restore the total amount required to be maintained therein; and
(c) To the payment of the amounts required to deposited in the Bond Reserve Fund to
accumulate and maintain the reserve amount as security for the payment of the principal of and
interest on the Bonds Similarly Secured.
SECTION 14: Bond Fund. In addition to the required deposits to the Bond Fund for the
payment of principal of and interest on the Previously Issued Bonds, the City hereby agrees and
covenants to deposit to the Bond Fund an amount equal to one hundred percentum (100%)of the
amount required to fully pay the interest on and principal of the Bonds falling due on or before
each maturity and interest payment date, such payments to be made in substantially equal
95469579.1/11111507 18
monthly installments on or before the 10th day of each month beginning on or before the 10th
day of the month next following the month the Bonds are delivered to the initial purchaser.
The required monthly deposits to the Bond Fund for the payment of principal of and
interest on the Bonds shall continue to be made as hereinabove provided until such time as (i)the
total amount on deposit in the Bond Fund and Bond Reserve Fund is equal to the amount
required to fully pay and discharge all outstanding Bonds Similarly Secured (principal and
interest) or(ii)the Bonds are no longer outstanding, i.e., fully paid as to principal and interest or
all the Bonds have been refunded.
Accrued interest, if any, received from the purchaser of the Bonds shall be deposited in
the Bond Fund, and shall be taken into consideration and reduce the amount of the monthly
deposits hereinabove required which would otherwise be required to be deposited in the Bond
Fund from the Net Revenues of the System. Furthermore, a transfer of funds from the Bond
Reserve Fund and Emergency Fund, as hereinafter prescribed, shall be taken into consideration
and reduce the amount of the monthly deposits otherwise required to be deposited in the Bond
Fund from the Net Revenues.
SECTION 15: Emergency Fund. In accordance with the provisions of the ordinances
authorizing the issuance of the Previously Issued Bonds, the amount required to be accumulated
and maintained in the Emergency Fund is $100,000.00, which amount is currently on deposit
therein, and no additional amount shall be required to be deposited in said Fund by reason of the
issuance of the Bonds. As long as the sum of$100,000.00 is on deposit in said Fund, no further
amounts shall be required to be deposited therein; provided, however, should the amount on
deposit in said Fund ever be less than$100,000.00, the City covenants and agrees to immediately
resume, and cause to be made to said Fund, monthly deposits in the amount of $1,000 on or
before the 10th day of each month until the total amount required to be maintained in said Fund
has been fully restored. Monthly deposits to said Fund shall be made with available Net
Revenues of the System in the System Fund and be subject only to the required deposits to the
Bond Fund. Furthermore,when the amount on deposit in the Emergency Fund equals or exceeds
the total amount required to be maintained therein,moneys realized from the investment of funds
in the Emergency Fund in excess of the balance required to be maintained therein may be
transferred to the Bond Fund.
SECTION 16: Bond Reserve Fund. The City reaffirms its covenant to the holders of the
Previously Issued Bonds and agrees with the Holders of the Bonds that there shall be
accumulated and maintained in the Bond Reserve Fund an amount equal to at least the average
annual principal and interest requirement of the outstanding Bonds Similarly Secured.
In accordance with the ordinances authorizing the issuance of the Previously Issued
Bonds, there is currently on deposit to the credit of the Bond Reserve Fund an amount equal to
not less than $369,884 (the "Current Reserve"). By reason of the issuance of the Bonds, the
amount to be maintained in said Fund, subject to adjustment as hereinafter provided in this
Section, shall be $327,050 (the "Required Reserve"), which amount totals not less than the
average annual principal and interest requirement of the outstanding Bonds Similarly Secured
after giving effect to the issuance of the Bonds. The Required Reserve is less than the Current
95469579.1/11111507 19
Reserve and, therefore, no additional deposits are required to be made to the Reserve Fund by
reason of the issuance of the Bonds.
Notwithstanding the provisions of the preceding paragraph relating to the Required
Reserve, the total amount to be accumulated and maintained in the Bond Reserve Fund may, at
the option of the City, be recomputed and adjusted to an amount equal to the average annual
principal and interest requirements of the Bonds Similarly Secured at any time outstanding, and
such adjustment is particularly anticipated at such time as Bonds Similarly Secured may be
redeemed and retired prior to their stated maturity. Furthermore, when the amount on deposit in
the Bond Reserve Fund equals or exceeds the total amount required to be maintained therein,
moneys realized from the investment of funds in the Bond Reserve Fund in excess of the balance
required to be maintained in said Fund may be transferred to the Bond Fund.
SECTION 17: Investments. Moneys on deposit in the Bond Reserve Fund and the
Emergency Fund may be invested as follows:
(a) Bond Reserve Fund in direct obligations of or obligations unconditionally
guaranteed by the United States of America having maturities not in excess of ten (10) years
from the making of such investment as the Council may direct. Such obligations shall be held by
the custodian bank where said Fund is maintained, and if at any time uninvested funds shall be
insufficient to permit payment of principal and interest at maturity of the Bonds Similarly
Secured, the custodian bank of said Fund shall sell on the open market such amount of the
securities as is required to pay such Bonds Similarly Secured and interest thereon when due and
shall give notice thereof to the City Manager.
(b) Emergency Fund in direct obligations of or obligations unconditionally
guaranteed by the United States of America having maturities not in excess of five(5) years from
the making of such investment as the Council may direct. Such investment securities shall be
held by the custodian bank where said Fund is maintained and if at any time it becomes
necessary to liquidate same to provide sums for any purpose for which such Fund was created,
the City shall notify the custodian bank of said Fund who shall promptly sell on the open market
such amount thereof as may be required,making the proceeds immediately available. Should the
purpose be for meeting bond requirements, the City agrees promptly to accomplish the required
transfers to the paying agent bank for the Bonds Similarly Secured.
SECTION 18: Payment of Bonds. While any of the Bonds are Outstanding, the Mayor,
Mayor Pro Tern, City Manager,Deputy City Manager, Director of Finance and City Secretary of
the City, individually or jointly, are hereby authorized to transfer or cause to be transferred to the
Paying Agent/Registrar therefor, from funds on deposit in the Bond Fund and, if necessary, in
the Bond Reserve Fund and Emergency Fund, amounts sufficient to fully pay and discharge
promptly as each installment of interest and principal of the Bonds accrues or matures or comes
due by reason of redemption prior to maturity, such transfer of funds to be made in such manner
as will cause immediately available funds to be deposited with the Paying Agent/Registrar for
the Bonds at the close of the business day next preceding the date of payment for the Bonds. The
Paying Agent/Registrar shall cancel or destroy all paid Bonds, and furnish the City with an
appropriate certificate of cancellation or destruction.
95469579.1/11111507 20
SECTION 19: Deficiencies in Funds. If in any month the City shall, for any reason, fail
to pay into the Bond Fund, the Emergency Fund or Bond Reserve Fund, the full amounts above
stipulated, amounts equivalent to such deficiencies shall be set apart and paid into said Funds
from the first available and unallocated Net Revenues of the System in the following month or
months and such payments shall be in addition to the amounts hereinabove provided to be
otherwise paid into said Funds during such month or months.
SECTION 20: Excess Revenues. Any surplus Net Revenues of the System remaining
after all payments have been made into the Bond Fund, Emergency Fund and Bond Reserve
Fund, and after all deficiencies in making deposits to said Funds have been remedied, may be
transferred and used for any lawful general or special purpose, as permitted by the terms of
V.T.C.A., Government Code, Article 1502.059; including the use thereof either for the
retirement in advance of maturity of the Bonds Similarly Secured, according to the provisions
made for their prior redemption, or for the purchase of any of such Bonds Similarly Secured on
the open market at not exceeding the market value thereof. Nothing herein, however, shall be
construed as impairing the right of the City to pay, in accordance with the provisions thereof, any
junior lien bonds legally issued by it and payable out of the Net Revenues of the System.
SECTION 21: Security of Funds. Moneys on deposit in the special Funds referred to in
this Ordinance(except any amounts as may be properly invested) shall be secured in the manner
and to the fullest extent required by the laws of the State of Texas for the security of public
funds,and moneys on deposit in such special Funds shall be used only for the purposes permitted
by this Ordinance and the ordinances authorizing the issuance of the Previously Issued Bonds.
SECTION 22: Issuance of Additional Bonds. In addition to the right to issue bonds of
inferior lien as authorized by the laws of the State of Texas, the City hereby reserves the right to
issue Additional Bonds which, when duly authorized and issued in compliance with the terms
and conditions hereinafter appearing, shall be on a parity with the Previously Issued Bonds and
the Bonds,payable from and equally secured by a first lien on and pledge of the Net Revenues of
the System. The Additional Bonds may be issued in one or more installments, provided,
however,that none shall be issued unless and until the following conditions have been met:
(a) The City is not then in default as to any covenant, condition or obligation
contained in the ordinances authorizing the issuance of the then outstanding Bonds Similarly
Secured;
(b) The laws of the State of Texas in force at such time provide for the issuance of
such Additional Bonds;
(c) Each of the special Funds created for the payment, security and benefit of the
Bonds Similarly Secured contains the amount of money then required to be on deposit therein;
(d) The Net Revenues of the System for the twelve-month period or for the fiscal year
next preceding the month of the adoption of the ordinance authorizing the issuance of the
Additional Bonds, as shown by a report of a certified public accountant or licensed public
accountant, are equal to at least one and one-fourth (1'4) times the average annual principal and
interest requirements of all bonds which will be secured by a first lien on and pledge of the Net
95469579.1/11111507 21
Revenues of the System, and which will be outstanding upon the issuance of the Additional
Bonds. The term "Net Revenues" as used in this Section shall mean the gross revenues after
deducting the expenses of operation and maintenance but not deducting expenditures which,
under standard accounting procedures, should be charged to capital expenditures.
(e) The Additional Bonds are made to mature on July 15 of each of the years in
which they are scheduled to mature; and
(f) The ordinance authorizing the issuance of Additional Bonds provides that the
amount to be accumulated and maintained in the Bond Reserve Fund shall be increased to an
amount equal to not less than the average annual principal and interest requirements of all bonds
payable from and secured by a first lien on and pledge of the Net Revenues of the System(after
giving effect to the issuance of the proposed Additional Bonds). The additional amount to be
accumulated in said Fund shall be deposited therein in not more than five (5) years and one (1)
month from the date of the passage of the ordinance authorizing the issuance of the Additional
Bonds.
SECTION 23: Maintenance and Operation - Insurance. The City hereby covenants and
agrees that the System shall be operated on a Fiscal Year basis and shall be maintained in good
condition and operated in an efficient manner and at reasonable cost. So long as any of the
Bonds are Outstanding, the City agrees to maintain insurance for the benefit of the Holder or
Holders of such Bonds of the kinds and in the amounts which are usually carried by private
companies engaged in a similar type of business. Nothing in this Ordinance shall be construed
as requiring the City to expend any funds which are derived from sources other than the
operation of the System,but nothing herein shall be construed as preventing the City from doing
so.
SECTION 24: Records-Accounts -Accounting Reports. The City hereby covenants and
agrees so long as any of the Bonds or any interest thereon remain outstanding and unpaid, it will
keep and maintain a proper and complete system of records and accounts pertaining to the
operation of the System and its component parts separate and apart from all other records and
accounts of the City in accordance with generally accepted accounting principles prescribed for
municipal corporations, and complete and correct entries shall be made of all transactions
relating to said System, as provided by V.T.C.A., Government Code, Article 1502.066. The
Holder or Holders of any Bonds, or any duly authorized agent or agents of such Holders, shall
have the right at all reasonable times to inspect all such records, accounts and data relating
thereto and to inspect the System and all properties comprising same. The City further agrees
that as soon as possible following the close of each Fiscal Year, it will cause an audit of such
books and accounts to be made by an independent fiun of Certified Public Accountants or
Licensed Public Accountants. Each such audit, in addition to whatever other matters may be
thought proper by the Accountant, shall particularly include the following:
(a) A detailed statement of the income and expenditures of the System for such Fiscal
Year;
(b) A balance sheet as of the end of such Fiscal Year;
95469579.1/11111507 22
(c) The Accountant's comments regarding the manner in which the City has
complied with the covenants and requirements of this Ordinance and his recommendations for
any changes or improvements in the operation,records and accounts of the System;
(d) A list of the insurance policies in force at the end of the Fiscal Year on the System
properties, setting out as to each policy the amount thereof, the risk covered, the name of the
insurer, and the policy's expiration date;
(e) A list of the securities which have been on deposit as security for the money in the
Bond Fund, the Emergency Fund and the Bond Reserve Fund throughout the Fiscal Year, a list
of the securities, if any, in which the Emergency Fund and Bond Reserve Fund has been
invested, and a statement of the manner in which money in the System Fund has been secured in
such Fiscal Year; and
(f) The total number of customers connected with the components of the System at
the end of the Fiscal Year.
Expenses incurred in making the audits above referred to are to be regarded as
maintenance and operating expenses of the System and paid as such. Copies of the aforesaid
annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas, and, upon written request, to the original
purchasers and any subsequent Holder of the Bonds.
SECTION 25: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City(a)defaults in payments to be made to the Bond Fund or Bond Reserve Fund as
required by this Ordinance, or (b)defaults in the observance or performance of any other of the
covenants, conditions or obligations set forth in this Ordinance, the Holder or Holders of any of
the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction
compelling and requiring the Council and other officers of the City to observe and perform any
covenant, condition or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right or power may be exercised from time to time and as
often as may be deemed expedient. The specific remedies herein provided shall be cumulative of
all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive.
SECTION 26: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the revenues supporting this issue of Bonds and
has lawfully exercised said power under the Constitution and laws of the State of Texas,
including V.T.C.A. Government Code, Chapter 1502.052; that the Previously Issued Bonds, the
Bonds, and the Additional Bonds, when issued, shall be ratably secured under said pledge of
income in such manner that one bond shall have no preference over any other bond or said
issues.
95469579.1/11111507 23
(b) Other than for the payment of the Previously Issued Bonds, the Bonds and the
outstanding "City of Euless, Texas, Tax and Waterworks and Sewer System Surplus Revenue
Certificates of Obligation, Series 2004", dated June 15, 2004, and "City of Euless, Texas, Tax
and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series
2011", dated January 15, 2011, the Net Revenues of the System have not in any manner been
pledged to the payment of any debt or obligation of the City or of the System.
(c) So long as any of the Bonds or any interest thereon remain outstanding, the City
will not sell, lease or encumber the System or any substantial part thereof; provided, however,
this covenant shall not be construed to prohibit the sale of such machinery, or other properties or
equipment which has become obsolete or otherwise unsuited to the efficient operation of the
System, and, also, with the exception of the Additional Bonds expressly permitted by this
ordinance to be issued, it will not encumber the Net Revenues of the System unless such
encumbrance is made junior and subordinate to all of the provisions of this Ordinance.
(d) No free service of the System shall be allowed, and should the City or any of its
agencies or instrumentalities make use of the services and facilities of the System, payment of
the reasonable value thereof shall be made by the City out of funds from sources other than the
revenues and income of the System.
(e) To the extent that it legally may, the City further covenants and agrees so long as
any of the Bonds or any interest thereon are outstanding no franchise shall be granted for the
installation or operation of any competing waterworks and sanitary sewer system other than
those owned by the City, and the operation of any such system by anyone other than the City is
hereby prohibited.
SECTION 27: Bonds are Special Obligations. The Bonds are special obligations of the
City payable from the pledged Net Revenues and the Holders thereof shall never have the right
to demand payment thereof out of funds raised or to be raised by taxation.
SECTION 28: Satisfaction of Obligation of City. If the City shall pay or cause to be
paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the manner stipulated in this Ordinance,then the pledge
of the Net Revenues of the System under this Ordinance and all other obligations of the City to
the Holders shall thereupon cease,terminate, and become void and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when(i)money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in trust
by the Paying Agent/Registrar, or an authorized escrow agent, or (ii)Government Obligations
shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized
escrow agent, which Government Obligations have been certified by an independent accounting
firm to mature as to principal and interest in such amounts and at such times as will insure the
availability, without reinvestment, of sufficient money, together with any moneys deposited
therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal
amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has
95469579.1/11111507 24
been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying
Agent/Registrar have been made) the redemption date thereof. The City covenants that no
deposit of moneys or Government Obligations will be made under this Section and no use made
of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the
meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations
adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the City.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the Bonds and remaining unclaimed for a period of three(3)years after the Stated
Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held
in trust to pay shall,upon the request of the City, be remitted to the City against a written receipt
therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying
Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the
State of Texas.
SECTION 29: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Holders from time to time,be binding on the City, and shall not be amended or
repealed by the City so long as any Bond remains Outstanding except as permitted in this
Section. The City, may, without the consent of or notice to any Holders, from time to time and
at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders,
including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In
addition, the City may, with the written consent of Holders holding a majority in aggregate
principal amount of the Bonds Similarly Secured then outstanding, amend, add to, or rescind any
of the provisions of this Ordinance; provided that, without the consent of all Holders of the
Bonds then outstanding, no such amendment, addition, or rescission shall (1)extend the time or
times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the
principal amount thereof, the redemption price therefor, or the rate of,interest thereon, or in any
other way modify the terms of payment of the principal of, premium, if any, or interest on the
Bonds, (2)give any preference to any Bond over any other Bond, or (3)reduce the aggregate
principal amount of Bonds required to be held by Holders for consent to any such amendment,
addition,or rescission.
SECTION 30: Mutilated - Destroyed- Lost and Stolen Bonds. In case any Bond shall be
mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence
satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of
indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
95469579.1/11111507 25
execution and delivery of a replacement Bond shall be borne by the Holder of the Bond
mutilated,or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not
the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost,or stolen Bonds.
SECTION 31: Notices to Holders -Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 32: Cancellation. All Bonds surrendered for payment,redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the City.
SECTION 33: Covenants to Maintain Tax-Exempt Status. (a)Definitions. When used in
this Section 33,the following terms have the following meanings:
"Closing Date"means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1(b) of
the Regulations.
95469579.1/11111507 26
"Gross Proceeds"means any proceeds as defined in Section 1.148-1(b)of
the Regulations, and any replacement proceeds as defined in Section 1.148-1(c)of
the Regulations,of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
Section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code,
and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds.
Any reference to any specific Regulation shall also mean, as appropriate, any
proposed, temporary or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
"Yield"of(1)any Investment has the meaning set forth in Section 1.148-5
of the Regulations and(2) the Bonds has the meaning set forth in Section 1.148-4
of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in Section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal'income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds (including property financed with
Gross Proceeds of the Refunded Bonds), and not use or permit the use of such
Gross Proceeds (including all contractual arrangements with terms different than
those applicable to the general public) or any property acquired, constructed or
improved with such Gross Proceeds in any activity carried on by any person or
entity(including the United States or any agency, department and instrumentality
95469579.1/11111507 27
thereof) other than a state or local government, unless such use is solely as a
member of the general public;and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with Gross Proceeds of the Refunded Bonds), other
than taxes of general application within the City or interest earned on investments
acquired with such Gross Proceeds pending application for their intended
purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income tax
purposes; (2) capacity in or service from such property is committed to such person or entity
under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed
or improved with such Gross Proceeds are otherwise transferred in a transaction which is the
economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced
thereby),whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of
Section 149(b)of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by
Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in
Section 148(f)of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross proceeds (including all
receipts, expenditures and investments thereof) on its books of account separately
and apart from all other funds (and receipts, expenditures and investments
thereof) and shall retain all records of accounting for at least six years after the
95469579.1/11111507 28
day on which the last Outstanding Bond is discharged. However, to the extent
permitted by law, the City may commingle Gross proceeds of the Bonds with
other money of the City, provided that the City separately accounts for each
receipt and expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in Section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchaser and the loan of the money represented thereby and in order to induce
such purchase by measures designed to insure the excludability of the interest
thereon from the gross income of the owners thereof for federal income tax
purposes, the City shall pay to the United States from an appropriate fund, or if
permitted by applicable Texas statute, regulation or opinion of the Attorney
General of the State of Texas, the Bond Fund the amount that when added to the
future value of previous rebate payments made for the Bonds equals (i)in the case
of a Final Computation Date as defined in Section 1.148-3(3)(2) of the
Regulations, one hundred percent (100%) of the Rebate Amount on such date;
and (ii) in the case of any other Computation Date, ninety percent (90%) of the
Rebate Amount on such date. In all cases, the rebate payments shall be made at
the times, in the installments, to the place and in the manner as is or may be
required by Section 148(f) of the Code and the Regulations and rulings
thereunder, and shall be accompanied by Form 8038-T or such other forms and
information as is or may be required by Section 148(f) of the Code and the
Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors
are made in the calculations and payments required by paragraphs (2) and(3), and
if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter(and in all events within one hundred eighty
(180) days after discovery of the error),including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h)of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or fmal payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
(j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
City Manager,Deputy City Manager and Director of Finance, either or any combination of them,
95469579.1/11111507 29
to make elections permitted or required pursuant to the provisions of the Code or the
Regulations, as they deem necessary or appropriate in connection with the Bonds, in the
Certificate as to Tax Exemption or similar or other appropriate certificate, form or document.
(k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the
Bonds were issued,the City reasonably expected to spend at least 85%of the spendable proceeds
of such bonds within three years after such bonds were issued and (2) not more than 50% of the
proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments
having a substantially guaranteed Yield for a period of 4 years or more.
(1) Current Refunding of the Series 2006 Refunded Bonds. The Bonds are a current
refunding of the Series 2006 Refunded Bonds in that the Series 2006 Refunded Bonds are to be
paid and redeemed in full within 90 days of the delivery date of the Bonds.
(m) Qualified Advance Refunding of the Series 2004 Refunded Bonds. The Bonds
are issued in part to refund the Series 2004 Refunded Bonds, and the Bonds will be issued more
than 90 days before the redemption of the Series 2004 Refunded Bonds. The City represents as
follows:
(1) The Bonds are the first advance refunding of the Series 2004
Refunded Bonds within the meaning of Section 149(d)(3)of the Code.
(2) The Series 2004 Refunded Bonds are being called for redemption,
and will be redeemed not later than the earliest date on which such bonds may be
redeemed and on which the City will realize present value debt service savings
(determined without regard to administrative expenses)on the issue.
(3) The initial temporary period under Section 148(c) of the Code will
end: (i) with respect to the proceeds of the Bonds not later than 30 days after the
date of issue of the Bonds; and (ii) with respect to proceeds of the Series 2004
Refunded Bonds on the Closing Date if not ended prior thereto.
(4) On and after the date of issue of the Bonds, no proceeds of the
Series 2004 Refunded Bonds will be invested in Nonpurpose Investments having
a Yield in excess of the Yield on the Series 2004 Refunded Bonds.
(5) The Bonds are being issued for the purposes stated in the preamble
of this Ordinance. There is a present value savings associated with the refunding.
In the issuance of the Bonds the City has neither: (i)overburdened the tax-exempt
bond market by issuing more bonds, issuing bonds earlier or allowing bonds to
remain outstanding longer than reasonably necessary to accomplish the
governmental purposes for which the Bonds were issued; (ii) employed on
"abusive arbitrage device" within the meaning of Section 1.148-10(a) of the
Regulations; nor (iii) employed a "device" to obtain a material financial
advantage based on arbitrage, within the meaning of Section 149(d)(4) of the
Code, apart from savings attributable to lower interest rates and reduced debt
service payments in early years.
95469579.1/11111507 30
SECTION 34: Sale of Bonds. The offer of BOKF, NA dba Bank of Texas, Houston,
Texas (the "Purchaser") to purchase the Bonds in accordance with a purchase letter, dated as of
February 28, 2012 (the"Purchase Letter"), attached hereto as Exhibit B and incorporated herein
by reference as a part of this Ordinance for all purposes, is hereby accepted and the sale of the
Bonds to the Purchaser is hereby approved and authorized, and the City has determined and does
determine that the terms of such Purchase Letter are in the City's best interests. The Mayor or
Mayor Pro Tern and City Secretary are hereby authorized and directed to sign the acceptance
clause of the Purchase Letter for and on behalf of the City and as the act and deed of this
Council. Delivery of the Bonds to the Purchaser shall occur as soon as possible upon payment
being made therefor in accordance with the terms of sale.
SECTION 35: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the Purchaser.
SECTION 36: Redemption of Refunded Bonds.
(a) The Series 2004 Refunded Bonds shall be redeemed and the same are hereby
called for redemption on July 15, 2013, at the price of par plus accrued interest to such date of
redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to bondholders,
with U.S. Bank National Association (successor paying agent/registrar to Wachovia Bank,
National Association), in accordance with the redemption provisions applicable to such bonds;
such suggested form of notice of redemption being attached hereto as Exhibit D and
incorporated herein by reference as a part of this Ordinance for all purposes.
(b) The Series 2006 Refunded Bonds shall be redeemed and the same are hereby
called for redemption on April 30, 2012, at the price of par plus accrued interest to such date of
redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to bondholders,
with JPMorgan Chase Bank,National Association, in accordance with the redemption provisions
applicable to such bonds; such suggested form of notice of redemption being attached hereto as
Exhibit E and incorporated herein by reference as a part of this Ordinance for all purposes.
The redemption of the obligations described above being associated with the refunding of
such obligations, the approval, authorization and arrangements herein given and provided for the
redemption of such obligations on the respective redemption dates designated therefor and in the
manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City
Secretary is hereby authorized and directed to make all arrangements necessary to notify the
holders of such obligations of the City's decision to redeem such obligations on the dates and in
the manner herein provided and in accordance with the ordinances authorizing the issuance of
the Refunded Bonds and this Ordinance.
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SECTION 37: Special Escrow Agreement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement") by and between the City and U.S. Bank National
Association, Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C and incorporated
herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form
and content, and such Agreement in substantially the form and substance attached hereto,
together with such changes or revisions as may be necessary to accomplish the refunding or
benefit the City, is hereby authorized to be executed by the Mayor or Mayor Pro Tern and City
Secretary for and on behalf of the City and as the act and deed of this Council; and such
Agreement as executed by said officials shall be deemed approved by this Council and constitute
the Agreement herein approved.
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
escrowed securities referenced in the Agreement and the delivery thereof to the Escrow Agent on
the day of delivery of the Bonds to the Purchaser for deposit to the credit of the"SPECIAL 2012
CITY OF EULESS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (the
"Escrow Fund"); all as contemplated and provided in V.T.C.A., Government Code,
Chapter 1207, as amended,this Ordinance and the Agreement.
SECTION 38: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale (less amounts to pay costs of issuance) shall be deposited to the credit of the
Escrow Fund. The balance of the proceeds of sale of the Bonds shall be expended to pay costs of
issuance and any excess amount budgeted for such purpose shall be deposited to the credit of the
Bond Fund.
Additionally, on or immediately prior to the date of delivery of the Bonds to the
Purchaser, the Director of Finance shall cause to be transferred in immediately available funds
to the Escrow Agent the sum of$237,774.57 from moneys on deposit in the interest and sinking
fund(s)maintained for the payment of the Refunded Bonds to accomplish the refunding.
SECTION 39: Legal Opinion. The obligation of the Purchaser to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion is hereby authorized to be printed on the definitive Bonds.
SECTION 40: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the defmitive Bonds shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving said Bonds as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 41: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,is
intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
95469579.1/11111507 32
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 42: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 43: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 44: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this Council hereby
declares that this Ordinance would have been enacted without such invalid provision.
SECTION 45: Further Procedures. Any one or more of the Mayor, Mayor Pro Tem, City
Manager, Deputy City Manager, Director of Finance and City Secretary of the City 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 on
behalf of the City all agreements, instruments, certificates or other documents, whether
mentioned herein or not, as may be necessary or desirable in order to carry out the terms and
provisions of this Ordinance and the issuance, sale and delivery of the Bonds. In addition,prior
to the delivery of the Bonds, the Mayor, Mayor Pro Tem, City Manager, Deputy City Manager
and Director of Finance of the City or Bond Counsel to the City are each hereby authorized and
directed to approve any changes or corrections to this Ordinance or to any of the documents
authorized and approved by this Ordinance: (i) in order to cure any ambiguity, formal defect, or
omission in this Ordinance or such other document, or (ii) as requested by the Attorney General
of the State of Texas or his representative to obtain the approval of the Bonds by the Attorney
General. In the event that any officer of the City whose signature shall appear on any document
shall cease to be such officer before the delivery of such document, such signature nevertheless
shall be valid and sufficient for all purposes the same as if such officer had remained in office
until such delivery.
SECTION 46: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 47: Effect of Headings. The Section headings herein are for convenience of
reference only and shall not affect the construction hereof
SECTION 48: Incorporation of Findings and Determinations. The findings and
determinations of this Council contained in the preamble hereof are hereby incorporated by
reference and made a part of this Ordinance for all purposes as if the same were restated in full in
this Section.
95469579.1/11111507 33
SECTION 49: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance,was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended.
SECTION 50: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028.
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95469579.1/11111507 34
PASSED AND ADOPTED,this February 28, 2012.
CITY OF EULESS,TEXAS
t ..,A0
Mayor / V
ATTEST:
i ecretary
(City Seal)
APPROVED AS TO FORM:
I
City Attorney
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