HomeMy WebLinkAbout1999 06-25-2013CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF EULESS
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I, the undersigned, City Secretary of the City of Euless, Texas, DO HEREBY CERTIFY
as follows:
1. On the 25 1h day of June, 2013, 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
LEON HOGG
TIM STINNEFORD
LINDA MARTIN
LINDA EILENFELDT
GLENN PORTERFIELD
PERRY BYNUM
)
)
)
)
)
)
MAYOR
MAYOR PRO-TEM
COUNCIL MEMBERS
and all of said persons were present at said meeting, except the following:
None . 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 BONDS, SERIES
2013'; pledging net revenues of the City's Waterworks and Sewer System
to the security of and the payment of the principal of and interest on such
obligations; providing for the sale and delivery thereof, including the
approval and execution of a Paying Agent/Registrar Agreement and a
Purchase Contract, and the approval and distribution of a Preliminary
Official Statement and an Official Statement pertaining thereto; enacting
provisions incident and related to the purposes and subject of this
ordinance; 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:
7 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.
2. The attached ordinance is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the Council on the date of
the aforesaid meeting are those persons shown above and, according to the records of my
office, advance notice of the time, place and purpose of the meeting was given to each member
of the Council; and that said meeting and the deliberation of the aforesaid public business was
open to the public and written notice of said meeting, including the subject of the above entitled
ordinance, was posted and given in advance thereof in compliance with the provisions of
V.T.C.A., Government Code, Chapter 551, as amended.
57173756.1/11307057
IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal
of said City, this the 251h day of June, 2013.
(City Seal)
57173756.1/11307057 S-1
ORDINANCE NO. 1999
AN ORDINANCE authorizing the issuance of "CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES
2013"; pledging net revenues of the City's Waterworks and Sewer System
to the security of and the payment of the principal of and interest on such
obligations; providing for the sale and delivery thereof, including the
approval and execution of a Paying Agent/Registrar Agreement and a
Purchase Contract, and the approval and distribution of a Preliminary
Official Statement and an Official Statement pertaining thereto; enacting
provisions incident and related to the purposes and subject of this
ordinance; and providing an effective date.
WHEREAS, under the provisions of V.T.C.A., Government Code, Chapter 1502, as
amended, the City of Euless, Texas (the "City") is authorized to issue waterworks and sewer
system revenue bonds for the purpose of providing money for constructing improvements and
extensions to the City's Waterworks and Sewer System (the "System"); and
WHEREAS, the City Council of the City (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 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 (1 X) 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,
WHEREAS, the Council has found and determined and does hereby find and determine
that it is necessary and in the best interest of the City and its citizens to issue the Bonds and
·make the improvements and extensions to the System authorized by this Ordinance; 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 $1,585,000 to be designated and bear the title "CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 2013" (hereinafter
referred to as the "Bonds"), for the construction, acquisition, purchase, renovation, enlargement,
57126087.1/11307057
equipment and improvement of waterworks and sewer system properties and facilities, including
the acquisition of land and rights-of-way therefor 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 1502, 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 June 15, 2013 (the "Bond Date") and, other than
the single fully registered Initial Bond referenced in Section 8 hereof, shall be in denominations
of $5,000 or' any integral multiple thereof (within a Stated Maturity), shall be numbered
consecutively from One (1) 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 Rates
2014 $ 60,000 2.000%
2015 60,000 2.000
2016 . 60,000 2.000
2017 60,000 3.000
2018 65,000 3.000
*** *** ***
2020 130,000 3.000
*** *** ***
2023 215,000 3.625
*** *** ***
2026 235,000 4.000
*** *** ***
2029 270,000 4.500
*** *** ***
2033 430,000 5.000
The Bonds shall bear interest on the unpaid principal amounts from the date of their
delivery to the initial purchaser(s) (anticipated, July 25, 2013) 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
January 15, 2014, 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 U.S. Bank National Association, Dallas, 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
57126087.1/11307057 2
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 St. Paul, Minnesota, 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 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 City reserves the right and option to redeem the
Bonds maturing on and after July 15, 2026, in whole or in part, before their respective
scheduled maturity dates, on July 15, 2023, or on any date thereafter at a price equal to the
principal amount of the Bonds so called for redemption plus accrued interest from the most
recent interest payment date on which interest has been paid or duly provided for to the date
fixed for redemption.
At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter
notification period shall be satisfactory to the 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
57126087.1/11307057 3
City to exercise the right to optionally redeem Bonds shall be entered in tlie minutes of the
governing body of the City.
(b) Mandatory Redemption. The Bonds maturing on July 15 in each of the years
2020, 2023, 2026, 2029 and 2033 (the "Term Bonds") shall be subject to mandatory redemption
in part prior to maturity at the redemption price of par and accrued interest to the date of
redemption on the respective dates and in principal amounts as follows:
Term Bonds due July 15, 2020 Term Bonds due July 15, 2023
Redemption Date ·Principal Amount Redemption Date Principal Amount
July 15, 2019 $ 65,000 July 15, 2021 $70,000
July 15, 2020· 65,000 July 15, 2022 70,000
July 15, 2023. 75,000
Term Bonds due July 15, 2026 Term Bonds due July 15, 2029
Redemption Date Principal Amount Redemption Date Principal Amount
July 15, 2024 $ 75,000 July 15, 2027 $ 85,000
July 15, 2025 80,000
July 15, 2026* 80,000
July 15, 2028 90,000
July 15, 2029* 95,000
Term Bonds due July 15, 2033
Stated maturity.
Redemption Date
July 15, 2030
July 15, 2031
July 15, 2032
July 15, 2033.
Principal Amount
$ 100,000
105,000
110,000
115,000
Approximately forty-five (45) days prior to each mandatory redemption date for the Term
Bonds, the Paying Agent/Registrar shall select by lot the numbers of the Term Bonds within the
applicable Stated Maturity to be redeemed on the next following July 15 from moneys set aside
for that purpose in the Bond Fund (as hereinafter defined). Any Term Bond not selected for
prior redemption shall be paid on the date of their Stated Maturity.
The principal amount of the Term Bonds for a Stated Maturity required to be redeemed
on a mandatory redemption date may be reduced, at the option of the City, by the principal
amount of Term Bonds of like Stated Maturity which, at least 50 days prior to the mandatory
redemption date, (1) shall have been acquired by the City at a price not exceeding the principal
amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered
to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the
optional redemption provisions set forth in paragraph (a) of this Section and not theretofore
credited against a mandatory redemption requirement.
(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
57126087.1/11307057 4
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 Paymentrrransfer
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.
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 Bond(s) authorized in
Section 8 hereof) at the Designated Paymentrrransfer 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.
57126087.1/11307057 5
At the option of the Holder, Bonds (other than the Initial Bond(s) authorized in Section 8
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 31 hereof and such new
replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
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: Book-Entry-Only Transfers and Transactions. Notwithstanding the
provisions contained in this Ordinance relating to the payment and transfer/exchange of the
Bonds, the City hereby approves and authorizes the use of the "Book-Entry-Only" securities
clearance, settlement, and transfer system provided by The Depository Trust Company, a
limited purpose trust company organized under the laws of the State of New York ("DTC"), in
accordance with the requirements and procedures identified in the DTC Operational
Arrangements memorandum, as amended, the Blanket Issuer Letter of Representations, by and
between the City and DTC, and the Letter of Representations from the Paying Agent/Registrar
to DTC (collectively, the "Depository Agreement") relating to the Bonds.
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants.
57126087.1/11307057 6
In the event DTC determines to discontinue serving as securities depository for the
Bonds or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Bonds, the City covenants and agrees with the Holders of
the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to
be issued and delivered to DTC Participants and Beneficial Owners, as the case may be.
Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall
be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: 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 9(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 9(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 8: 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 9: 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
57126087.1/11307057 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. $ ___ _
Bond Date:
June 15, 2013
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 2013
Interest Rate:
% ----
Stated Maturity: CUSIP No.:
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 purchaser(s) (July 25,
2013) at the per annum rate of interest specified above; such interest being payable on January
15 and July 15 of each year, commencing January 15, 2014, 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 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
57126087.1/11307057 8
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 $1,585,000 (herein referred to as the "Bonds") for the construction, acquisition,
purchase, renovation, enlargement, equipment and improvement of waterworks and sewer
system properties and facilities, including the acquisition of land and rights-of-way therefor 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 1502, as amended, and
pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the
"Ordinance").
The Bonds maturing on the dates hereinafter identified (the "Term Bonds") are subject to
mandatory redemption prior to maturity with funds on deposit in the Bond Fund established and
maintained for the payment thereof in the Ordinance, and shall be redeemed in part prior to
maturity at the price of par and accrued interest thereon to the date of redemption, and without
premium, on the dates and in the principal amounts as follows:
Term Bonds due July 15, 2020 Term Bonds due July 15, 2023
Redemption Date Principal Amount Redemption Date Principal Amount
July 15, 2019 $ 65,000
July 15, 2020· 65,000
July 15, 2021 $70,000
July 15, 2022 70,000
July 15, 2023* 75,000
Term Bonds due July 15, 2026 Term Bonds due July 15, 2029
Redemption Date Principal Amount Redemption Date Principal Amount
July 15, 2024 . $75,000 July 15, 2027 $85,000
July 15, 2025 80,000
July 15, 2026* 80,000
July 15, 2028 90,000
July 15, 2029* 95,000
Term Bonds due July 15, 2033
Stated maturity.
Redemption Date
July 15, 2030
July 15, 2031
July 15, 2032
July 15, 2033*
Principal Amount
$ 100,000
105,000
110,000
115,000
The particular Term Bonds of a stated maturity to be redeemed on each redemption date
shall be chosen by lot by the Paying Agent/Registrar; provided, however, that the principal
amount of Term Bonds for a stated maturity required to be redeemed on a mandatory
redemption date may be reduced, at the option of the City, by the principal amount of Term
Bonds of like stated maturity which, at least 50 days prior to the mandatory redemption date, (1)
shall have been acquired by the City at a price not exceeding the principal amount of such Term
57126087.1/11307057 9
Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional
redemption provisions appearing below and not theretofore credited against a mandatory
redemption requirement.
The Bonds maturing on and after July 15, 2026, 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), on
July 15, 2023, or on any date thereafter, at the redemption price of par, together with accrued
interest to the date of redemption.
At least thirty (30) 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, in whole or in part, 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 and the
registered owner is someone other than Cede & Co., 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 forty-five (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 City's Waterworks and Sewer System (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, 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.
57126087.1/11307057 10
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
Paymentrrransfer 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
Paymentrrransfer 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.
It is hereby certified, recited, represented and covenanted that the City is a duly
organized 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
57126087.1/11307057 11
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)
(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
THE STATE OF TEXAS
)
) REGISTER NO. ------
)
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 _______ _
(SEAL)
57126087.1/11307057
Comptroller of Public Accounts
of the State of Texas
12
(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 St. Paul, Minnesota, is the
"Designated Payment/Transfer Office" for this Bond.
Registration date:
(e) Form of Assignment.
U.S. BANK NATIONAL ASSOCIATION,
Dallas, Texas,
as Paying Agent/Registrar
By: ________________________ _
Authorized Signature
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:
Signature guaranteed:
57126087.1/11307057
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every particular.
13
(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
NO. T-1
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 2013
Bond Date: Jt.me 15, 2013
Registered Owner:
REGISTERED
$1,585,000
Principal Amount: ONE MILLION FIVE HUNDRED EIGHTY-FIVE 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:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
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 purchaser(s) (July 25, 2013) at
the per annum rates of interest specified above; such interest being payable on January 15 and
July 15 in each year, commencing January 15, 2014, 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 U.S. Bank National Association, Dallas, Texas (the "Paying
AgenURegistrar"), upon its presentation and surrender at its designated offices, initially in St.
Paul, Minnesota, 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
57126087.1/11307057 14
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 10: 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 23 hereof.
(b) The term "Bonds" shall mean the "City of Euless, Texas, Waterworks and Sewer
System Revenue Bonds, Series 2013" authorized by this Ordinance.
(c) The term "Bonds Similarly Secured" shall mean the Previously Issued Bonds, the
Bonds and Additional Bonds.
(d) The term "Fiscal Year" shall mean the twelve-month operating period for the
System ending September 30 of each year.
(e) 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.
(f) 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."
(g) 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:
57126087.1/11307057 15
(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 29 hereof; and
(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 31 hereof.
(h) 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 2012, dated March 1, 2012, and issued in the original
principal amount of $3,340,000.
(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 11: 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 11, 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
11 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 12: 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:
57126087.1/11307057 16
(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 13: 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
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 14: 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 1 O(f) 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
57126087.1/11.307057 17
(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 15: 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 (1 00%) 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 monthly installments on or before the 1Oth day of each month beginning on or before the
1Oth day of the month next following the month the Bonds are delivered to the initial
purchaser(s).
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 initial purchaser(s) 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 16: 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 1Oth 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 17: 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 requirements 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 $304,998.62 (the "Current Reserve"). By reason of the issuance of the Bonds, the
57126087.1/11307057 18
amount to be maintained in said Fund, subject to adjustment as hereinafter provided in this
Section, shall be $296,261.04 (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. Because the Required Reserve is less than the
Current Reserve, no additional deposit to the Reserve Fund is necessary.
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 18: 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 (1 0) 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 19: 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.
SECTION 20: 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
57126087.1/11307057 19
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 21: 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 22: 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 23: 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 qne 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 ar;nount 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 %) 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 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.
57126087.1/11307057 20
(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 24: 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 25: 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
r~lating 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 firm 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;
(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
57126087.1/11307057 21
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
purchaser(s) and any subsequent Holder of the Bonds.
SECTION 26: 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 27: 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.
(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.
57126087.1/11307057 22
(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 28: 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 29: 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 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.
57126087.1/11307057 23
SECTION 30: 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 and in Section 42 hereof. 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 31: 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,
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 32: 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
57126087.1/11307057 24
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 33: 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 34: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in
this Section, the following terms have the following meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchaser(s) 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.
"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
57126087.1/11307057 25
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, 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
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, 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
57126087.1/11307057 26
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 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 (defined below) 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 (1 00%) 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.
57126087.1/11307057 27
(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 final 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.
U) 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,
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.
SECTION 35: Sale of Bonds -Official Statement Approval. The Bonds authorized by
this Ordinance are hereby sold by the City to SAMCO Capital Markets, Inc. (the "Purchaser") in
accordance with the Purchase Contract, dated June 25, 2013 (the "Purchase Contract"),
attached hereto as Exhibit 8 and incorporated herein by reference as a part of this Ordinance
for all purposes, and the City has determined and does determine that the terms of such
Purchase Contract are in the City's best interests. The Mayor or Mayor Pro Tem are hereby
authorized and directed to execute said Purchase Contract for and on behalf of the City and as
the act and deed of the Council, and in regard to the approval and execution of the Purchase
Contract, the Council hereby finds, determines, and declares that the representations,
warranties, and agreements of the City contained therein are true and correct in all material
respects and shall be honored and performed by the City.
Furthermore, the use of the Preliminary Official Statement by the Purchaser in
connection with the public offering and sale of the Bonds is hereby ratified, confirmed and
approved in all respects. The final Official Statement, which reflects the terms of sale (together
with such changes approved by the Mayor, Mayor Pro Tem, City Manager, Deputy City
Manager and Director of Finance of the City, any one or more of said officials), shall be and is
hereby in all respects approved and the Purchaser is hereby authorized to use and distribute
said final Official Statement, dated June 25, 2013, in the reoffering, sale and delivery of the
Bonds to the public.
SECTION 36: 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 37: Proceeds of Sale. Immediately following the delivery of the Bonds, the
proceeds of sale thereof (less costs of issuance) shall be deposited into the construction fund to
be used for the purposes specified in Section 1 hereof. Pending expenditure for authorized
projects and purposes, such proceeds of sale may be invested in authorized investments in
accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, as amended,
including specifically guaranteed investment contracts permitted in V.T.C.A., Section 2256.015,
et seq., and any investment earnings realized may be expended for such authorized projects
and purposes or deposited in the Bond Fund as shall be determined by the Council. All surplus
proceeds of sale of the Bonds, including investment earnings, remaining after completion of all
authorized projects or purposes shall be deposited to the credit of the Bond Fund.
57126087.1/11307057 28
SECTION 38: Legal Opinion. The obligation of the Purchaser to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski LLP, 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 or an executed counterpart thereof shall accompany the global Bonds deposited with
DTC, or a reproduction thereof may be printed on or attached to the definitive Bonds in the
event the book-entry-only system shall be discontinued.
SECTION 39: 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 definitive 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 40: 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
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 41: 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 42: Continuing Disclosure Undertaking.
(a) Definitions. As used in this Section, the following terms have the meanings
ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports. The City shall provide annually to the MSRB (1) within six
months after the end of each fiscal year, beginning in or after 2013, financial information and
operating data with respect to the City of the general type included in the Official Statement and
described in Exhibit C hereto, and (2) if not provided as part of such financial information and
operating data, audited financial statements of the City, when and if available. Any financial
statements so provided shall be prepared in accordance with the accounting principles
described in Exhibit C hereto, or such other accounting principles as the City may be required
to employ from time to time pursuant to state law or regulation, and audited, if the City
commissions an audit of such statements and the audit is completed within the period during
which they must be provided.
57126087.1/11307057 29
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document available to the public on the MSRB's Internet Web site or filed with the SEC.
(c) Notice of Certain Events. The City shall provide notice of any of the following
events with respect to the Bonds to the MSRB in a timely manner and not more than 1 0
business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB), or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(1 0) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City, which shall
occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the City or
the sale of all or substantially all of its assets, other than in the ordinary course of
business, the entry into of a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
(14) Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
For these purposes, any event described in the immediately preceding subsection
. (c)(12) is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy
Code or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the City, or
if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the City.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with subsection (b) of this Section by the
time required by such Section.
57126087.1/11307057 30
(d) Filings with the MSRB. All financial information, operating data, financial
statements, notices and other documents provided to the MSRB in accordance with this Section
shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by
identifying information as prescribed by the MSRB.
(e) Limitations. Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the City in any event will give the notice required by subsection (c) of this
Section of any Bond calls and defeasance that cause the City to be no longer such an
"obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances that arise from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or
type of operations of the City, but only if (1) the provisions of this Section, as so amended,
would have permitted an underwriter to purchase or sell Bonds in the primary offering of the
Bonds in compliance with the Rule, taking into account any amendments or interpretations of
the Rule to the date of such amendment, as well as such changed circumstances, and (2) either
(a) the Holders of a majority in aggregate principal amount (or any greater amount required by
any other provision of this Ordinance that authorizes such an amendment) of the Outstanding
Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as
nationally recognized bond counsel) determines that such amendment will not materially impair
the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section
may also be amended from time to time or repealed by the City if the SEC amends or repeals
the applicable provisions of the Rule or a court of final jurisdiction determines that such
provisions are invalid, but only if and to the extent that reservation of the City's right to do so
57126087.1/11307057 31
would not prevent an underwriter of the initial public offering of the Bonds from lawfully
purchasing or selling Bonds in such offering. If the City so amends the provisions of this
Section, it shall include with any amended financial information or operating data next provided
in accordance with subsection (b) of the Section an explanation, in narrative form, of the
reasons for the amendment and of the impact of any change in the type of financial information
or operating data so provided.
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 the 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 the Council contained in the preamble hereof are hereby incorporated by
reference ahd made a part of this Ordinance for all purposes as if the same were restated in full
in this Section.
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.
57126087.1/11307057 32
PASSED AND ADOPTED, this June 25, 2013.
CITY OF EULESS, TEXAS
Mayor
ATTEST:
(City Seal)
APPROVED AS TO FORM:
C1ty .A:ttorney
57126087.1/11307057 S-1
57126087.1/11307057
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
See Tab 2
A-1
57126087.1/11307057
EXHIBIT B
PURCHASE CONTRACT
See Tab 3
B-1
EXHIBIT C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 42 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified below:
1. Financial information of the general type included in the Official Statement
as Appendix B for the most recently concluded fiscal year.
2. The information contained in Tables 1 through 13 in the Official
Statement.
Accounting Principles
The accounting principles referred to in such Section are generally those described in
Appendix B to the Official Statement, as such principles may be changed from time to time to
comply with state law or regulation.
57126087.1/11307057 C-1