HomeMy WebLinkAbout1062 10-08-1991ORDINANCE NO. 1062
AN ORDINANCE authorizing the issuance of 'CITY OF
EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 1991 "; specifying
the terms and features of said bonds; pledging
the net revenues of the City's Waterworks and
Sanitary Sewer System to the payment of the
principal of and interest on said Bonds;
resolving other matters incident and relating to
the issuance, payment, security, sale and
delivery of said bonds, including the approval
and execution of a Purchase Contract and a
Special Escrow Agreement and the approval and
distribution of an Official Statement pertaining
thereto; and providing an effective date.
WHEREAS, the City of Euless, Texas (the "City ") has
previously issued and delivered the following obligations
(hereinafter referred to as the "Refunded Bonds "), to wit:
"City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 1983 ", dated May 15, 1983, being those bonds
scheduled to mature on July 15, 1994 through July 15, 2002, and
aggregating in the principal amount of $2,075,000; and
WHEREAS, pursuant to the provisions of Article 717k,
V.A.T.C.S., as amended, the City Council is authorized to issue
refunding bonds and deposit the proceeds of sale thereof
directly with the place of payment for the Refunded Bonds, and
such deposit, when made in accordance with said statute, shall
constitute the making of firm banking and financial
arrangements for the discharge and final payment of the
Refunded Bonds; and
WHEREAS, the City Council hereby finds and determines that
the Refunded Bonds are scheduled to mature, or are subject to
being redeemed, not more than twenty (20) years from the date
of the refunding bonds herein authorized; and
WHEREAS, the Council further finds and determines that the
Refunded Bonds should be refunded at this time by the issuance
of refunding bonds in order to achieve a debt service savings
of approximately $202,233.81; and
WHEREAS, the City Council further finds and determines
that such revenue refunding bonds can and should be issued on
a parity with the outstanding and unpaid revenue bonds of the
City (hereinafter called and defined as "Previously Issued
Bonds ") payable from and secured by a first lien on and pledge
of the Net Revenues of the City's combined Waterworks and
Sanitary Sewer System (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 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
twelve -month period 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 -1/4) times the average annual principal
and interest requirements of all bonds secured by a first lien
on and pledge of the Net Revenues of the System, and which will
be outstanding upon the issuance of the bonds herein
authorized; (v) this Ordinance provides that the amount to be
accumulated and maintained in the Bond Reserve Fund shall be
increased to an amount equal to not less than the average
annual principal and interest requirements of all bonds payable
from and secured by a first lien on and pledge of the Net
Revenues of the System (after giving effect to the issuance of
the bonds herein authorized) and any additional amount to be
maintained in said Fund shall be accumulated within not more
than five (5) years and one (1) month from the date of the
passage of this Ordinance; and (vi) the bonds herein authorized
shall mature on July 15 in each year; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EULESS,
TEXAS:
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
$2,335,000, to be designated and bear the title "City of
Euless, Texas, Waterworks and Sewer System Revenue Refunding
Bonds, Series 1991" (hereinafter referred to as the "Bonds "),
for the purpose of refunding certain outstanding obligations of
the City (identified in the preamble hereof as the "Refunded
Bonds ") and paying costs of issuance, in conformity with the
Constitution and laws of the State of Texas, including
Article 717k, V.A.T.C.S., as amended.
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SECTION 2
rized Denon
Reaistered Obligations - Bond Date -
The Bonds shall be issued as fully registered obligations only,
shall be dated October 1, 1991 (the "Bond Date "), shall be in
denominations of $5,000 or any integral multiple (within a
Stated Maturity) thereof, and shall become due and payable on
July 15 in each of the years and in principal amounts (the
"Stated Maturities ") and bear interest at the rate(s) per annum
in accordance with the following schedule:
YEAR OF
PRINCIPAL
INTEREST
MATURITY
INSTALLMENTS
RATE
1992
$ 75,000
4.60%
1993
35,000
4.80%
1994
290,000
5.10%
1995
205,000
5.30%
1996
230,000
5.50%
1997
225,000
5.60%
1998
245,000
5.70°%
1999
265,000
5.80°%
2000
255,000
5.90%
2001
275,000
6.00%
2002
235,000
6.00%
The Bonds shall bear interest on the unpaid principal
amounts from the Bond Date at the rate(s) per annum shown above
in this Section (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,
1992.
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 (the "Security
Register ") 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 AMERITRUST TEXAS
NATIONAL ASSOCIATION to serve as Paying Agent /Registrar for the
Bonds is hereby approved and confirmed. 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 bank, trust company,
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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 the redemption thereof,
only upon presentation and surrender of the Bonds to the Paying
Agent /Registrar at its principal offices in Dallas, Texas (the
"Designated Payment /Transfer Office "). Interest on the Bonds
shall be paid to the Holders whose name appears 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
Bonds having Stated Maturities on and after July 15, 2000,
shall be subject to redemption prior to maturity, at the option
of the City, in whole or in part in principal amounts of $5,000
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or any integral multiple thereof (and if within a Stated
Maturity by lot by the Paying Agent /Registrar), on July 15,
1999 or on any date thereafter at the redemption price of par
plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option At least
forty -five (45) days prior to a redemption date for the Bonds
(unless a shorter notification period shall be satisfactory to
the 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 redeemed, and the date of
redemption therefor. The decision of the City to exercise the
right to redeem Bonds shall be entered in the minutes of the
governing body of the City.
(c) Selection of Bonds for Redemption. If less than
all Outstanding Bonds of the same Stated Maturity are to be
redeemed on a redemption date, the Paying Agent /Registrar shall
treat such Bonds as representing the number of Bonds
Outstanding which is obtained by dividing the principal amount
of such Bonds by $5,000 and shall select the Bonds to be
redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30)
days prior to a redemption date for the Bonds, a notice of
redemption shall be sent by United States Mail, first class
postage prepaid, in the name of the City and at the City's
expense, to each Holder of a Bond to be redeemed in whole or in
part at the address of the Holder appearing on the Security
Register at the close of business on the business day next
preceding the date of mailing such notice, and any notice of
redemption so mailed shall be conclusively presumed to have
been duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of
redemption for the Bonds, (ii) identify the Bonds to be
redeemed and, in the case of a portion of the principal amount
to be redeemed, the principal amount thereof to be redeemed,
(iii) state the redemption price, (iv) state that the Bonds, or
the portion of the principal amount thereof to be redeemed,
shall become due and payable on the redemption date specified,
and the interest thereon, or on the portion of the principal
amount thereof to be redeemed, shall cease to accrue from and
after the redemption date, and (v) specify that payment of the
redemption price for the Bonds, or the principal amount thereof
to be redeemed, shall be made at the Designated
Payment /Transfer Office of the Paying Agent /Registrar only upon
presentation and surrender thereof by the Holder. If a Bond is
subject by its terms to prior redemption and has been called
for redemption and notice of redemption thereof has been duly
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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.
SECTION 5: Registration - Transfer - Exchange of Bonds -
Predecessor Bonds. A Security Register relating to the
registration, payment, and transfer or exchange of the Bonds
shall at all times be kept and maintained by the City at the
Designated Payment /Transfer Office of the Paying
Agent /Registrar, as provided herein and in accordance with the
provisions of an agreement with the Paying Agent /Registrar and
such rules and regulations as the Paying Agent /Registrar and
the City may prescribe. The Paying Agent /Registrar shall
obtain, record, and maintain in the Security Register the name
and address of each and every owner of the Bonds issued under
and pursuant to the provisions of this Ordinance, or if
appropriate, the nominee thereof. Any Bond may be transferred
or exchanged for Bonds of other authorized denominations by the
Holder, in person or by his duly authorized agent, upon
surrender of such Bond to the Designated Payment /Transfer
office of 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 of any Bond for transfer at the
Designated Payment /Transfer Office of the Paying Agent/
Registrar, one or more new Bonds shall be registered and issued
to the assignee or transferee of the previous Holder; such
Bonds to be in authorized denominations, of like Stated
Maturity and of a like aggregate principal amount as the Bond
or Bonds surrendered for transfer.
At the option of the Holder, Bonds 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
to the Holder requesting the exchange.
All Bonds issued in any
shall be delivered to the
Payment /Transfer Office of the
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transfer or exchange of Bonds
Holders at the Designated
Paying Agent /Registrar or sent
by United States Mail, first class, postage prepaid to the
Holders, and, upon the registration and delivery thereof, the
same shall be the 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 new 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 the provisions of
Section 29 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 issue or transfer to an assignee of a Holder any
Bond called for redemption, in whole or in part, within 45 days
of the date fixed for the redemption of such Bond; provided,
however, such limitation on transferability 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 Sections 3, 4 and 5
hereof relating to the payment and transfer /exchange of the
Bonds, the City hereby approves and authorizes the use of
"Book -Entry Only" securities clearance, settlement and transfer
system provided by The Depository Trust Company (DTC), a
limited purpose trust company organized under the laws of the
State of New York, in accordance with the requirements and
procedures identified in the Letter of Representation, by and
between the City, the Paying Agent /Registrar and DTC (the
"Depository Agreement ") relating to the Bonds.
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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.
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 S 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 the
Bond Procedures Act of 1981, 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 9C,
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
9D, manually executed by an authorized officer, employee or
representative of the Paying Agent /Registrar, and either such
certificate duly signed upon any Bond shall be conclusive
evidence, and the only evidence, that such Bond has been duly
certified, registered and delivered.
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SECTION 8: Initial Bond(s). The Bonds herein
authorized shall be initially issued either (i) as a single
fully registered bond in the total principal amount of
$2,335,000 in principal installments to become due and payable
as provided in Section 2 hereof and numbered T -1, or (ii) as
eleven (11) 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 Bonds 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 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 acknowledging the Bonds were 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. 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.
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The definitive Bonds and the Initial Bond(s) shall be
printed, lithographed, or 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 Bonds.
REGISTERED
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BOND,
SERIES 1991
Bond Date: Interest Rate
October 1, 1991 _%
Registered Owner:
Principal Amount:
Stated Maturity: CUSIP NO:
DOLLARS
REGISTERED
The City of Euless (hereinafter referred to as the
"City "), a body corporate and political subdivision in the
County of Tarrant, State of Texas, for value received, hereby
promises to pay to the order of 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 on the unpaid Principal Amount hereof from the
Bond Date at the per annum rate of interest specified above
computed on the basis of a 360 -day year of twelve 30 -day
months; such interest being payable on January 15 and July 15
in each year, commencing January 15, 1992. 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
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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. All payments of principal of, premium, if any, and
interest on this Bond shall be without exchange or collection
charges to the holder 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 $2,335,000 (herein
referred to as the "Bonds ") for the purpose of refunding
certain outstanding obligations of the City (identified in the
Ordinance), and paying costs of issuance, under and in strict
conformity with the Constitution and laws of the State of
Texas, including Article 717k, V.A.T.C.S., 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 and after July 15, 2000, 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,
1999, or on any date thereafter,at the redemption price of par,
together with accrued interest to the date of redemption, and
upon 30 days prior written notice being given by United States
Mail, first class postage prepaid, to registered owners of the
Bonds to be redeemed, and subject to the terms and provisions
relating thereto contained in the Ordinance. If this Bond (or
any portion of the principal sum hereof) shall have been duly
called for redemption and notice of such redemption duly given,
then upon such redemption date this Bond (or the portion of the
principal sum hereof 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 of a partial redemption of the principal
amount of this Bond, payment of the redemption price of such
principal amount shall be made to the registered owner only
upon presentation and surrender of this Bond to the Designated
Payment /Transfer Office of the Paying Agent /Registrar, and
there shall be issued to the registered owner hereof, without
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charge, a new Bond or Bonds of like maturity and interest rate
in any authorized denominations provided in the Ordinance for
the then unredeemed balance of the principal sum hereof. If
this Bond is called for redemption, in whole or in part, the
City and the Paying Agent /Registrar shall not be required to
transfer this Bond to an assignee of the registered owner
within 45 days of the redemption date therefor; provided,
however, such limitation on transferability shall not be
applicable to an exchange by the registered owner of the
unredeemed balance hereof in the event of its redemption in
part.
The Bonds are special obligations of the City, and,
together with certain outstanding Previously Issued Bonds
(identified and defined in the Ordinance), are payable solely
from and equally and ratably secured by a first lien on and
pledge of the Net Revenues (as defined in the Ordinance) of the
City's waterworks and Sanitary 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.
Subject to satisfying the terms and conditions prescribed
therefor, the City has reserved the right to issue additional
revenue obligations payable from, and together with the Bonds
and Previously Issued Bonds equally and ratably secured by a
parity lien on and pledge of, the Net Revenues of the System.
Reference is hereby made to the Ordinance, a copy of which
is on file in the Designated Payment /Transfer Office of the
Paying Agent /Registrar, and to all of the provisions of which
the owner or holder of this Bond by the acceptance hereof
hereby assents, for definition of terms; the description of and
the nature and extent of the security for the payment of 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
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Outstanding thereunder; and for other terms and provisions
contained therein. Capitalized terms used herein have the same
meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the
Ordinance, may be transferred on the Security Register only
upon its presentation and surrender at the Designated
Payment /Transfer Office of the Paying Agent /Registrar, with the
Assignment hereon duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Paying
Agent /Registrar duly executed by, the registered owner hereof,
or his duly authorized agent. When a transfer on the Security
Register occurs, one or more new fully registered Bonds of the
same Stated Maturity, of authorized denominations, bearing the
same rate of interest, and of the same aggregate principal
amount will be issued by the Paying Agent /Registrar to the
designated transferee or transferees.
The City and the Paying Agent /Registrar, and any agent of
either, may 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. 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 body corporate and politicial
subdivision duly organized and legally existing 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
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and due time, form and manner as required by the Constitution
and laws of the State of Texas, and the Ordinance; that the
Bonds do not exceed any constitutional or statutory limitation;
and that due provision has been made for the payment of the
principal of and interest on the Bonds by a pledge of the Net
Revenues of the System as aforestated. In case any provision
in this Bond or any application thereof shall be invalid,
illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions and applications
shall not in any way be affected or impaired thereby. The
terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws
of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has
caused this Bond to be duly executed under the official seal of
the City as of the Bond Date.
COUNTERSIGNED:
CITY OF EULESS, TEXAS
Mayor
City Secretary
(SEAL)
C. Form of Registration Certificate of
of Public Accounts to Appear on Initia
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
( REGISTER NO.
THE STATE OF TEXAS
trol
only.
I HEREBY CERTIFY that this Bond has been examined,
certified as to validity and approved by the Attorney General
of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office
this
Comptroller of Public Accounts
(SEAL) of the State of Texas
-14-
D. Form of Certificate of Paying Agent /Regist
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 principal offices of the Paying Agent /Registrar in
Dallas, Texas, is the "Designated Payment /Transfer Office" for
this Bond.
Registration Date: AMERITRUST TEXAS NATIONAL
ASSOCIATION,
as Paying Agent /Registrar
By
Authorized Signature
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns, and transfers unto (Print or typewrite name,
address, and zip code of transferee:) .....................
......... ...............................
(Social Security or other identifying
..) the within Bond and
and hereby irrevocably constitutes an
......... ...............................
attorney to transfer the within Bond
registration thereof, with full power
premises.
DATED:
....................
number: .............
all rights thereunder,
3 appoints ...........
....................
on the books kept for
of substitution in the
NOTICE: The signature on this
Signature guaranteed: assignment must correspond with
the name of the registered owner
.......................... as it appears on the face of the
within Bond in every particular.
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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:
(i)
immediately
under
the name of the bond the
headings
"Interest
Rate
and
"Stated
Maturity
"
shall both be omitted;
(ii)
Paragraph one shall
read as follows:
Registered Owner:
Principal Amount:
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,
acknowledges itself indebted to and hereby promises to pay to
the order of the Registered Owner named above, or the
registered assigns thereof, solely from the revenues
hereinafter identified, on July 1,5 in each of the years and in
principal installments in accordance with the following
schedule:
YEAR OF PRINCIPAL INTEREST
MATURITY INSTALLMENTS RATE
(Information to be inserted from
schedule in Section 2 hereof).
(or so much principal thereof as shall not have been prepaid
prior to maturity) and to pay interest on the unpaid Principal
Amount hereof from the Bond Date at the per annum rates of
interest specified above computed on the basis of a 360 -day
year of twelve 30 -day months; such interest being payable on
January 15 and July 15 in each year, commencing January 15,
1992. Principal installments of this Bond are payable in the
year of maturity or on a prepayment date to the registered
owner hereof by Ameritrust Texas National Association (the
"Paying Agent /Registrar "), upon presentation and surrender, at
its principal offices in Dallas, Texas (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
-16-
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. 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 therefor, 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
Refunding Bonds, Series 1991" 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 "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 City
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 ".
-17-
(f) The term "Previously Issued Bonds" shall
mean the outstanding and unpaid revenue bonds,
payable from and secured by a first lien on and
pledge of the Net Revenues of the System, of the
following issues or series, identified as follows:
(1) City of Euless, Texas, Waterworks and Sewer
System Revenue Bonds, Series 1965, dated
July 15, 1965 and issued in the original
principal amount of $3,600,000,
(2) City of Euless, Texas, Waterworks and Sewer
System Revenue Refunding Bonds, Series
1967, dated January 15, 1967, and issued in
the original principal amount of
$2,200,000; and
(3) City of Euless, Texas, Waterworks and Sewer
System Revenue Bonds, Series 1983, dated
May 15, 1983, and issued in the original
principal amount of $3,000,000.
(g) The term "Government Obligations" shall
mean direct obligations of the United States of
America, including obligations the principal of and
interest on which are unconditionally guaranteed by
the United States of America, and United States
Treasury obligations such as its State and Local
Government Series in book -entry form.
(h) The term "Outstanding" when used in this
Ordinance with respect to Bonds means, as of the date
of determination, all Bonds theretofore issued and
delivered under this Ordinance, except:
(1) those Bonds cancelled 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 30 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 29 hereof.
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(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 the 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
without further action by the City and without any filing or
recording except for the filing of this Ordinance in the
records of the City.
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:
(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
-19-
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:
(i) Bond Fund, which Fund is kept and
maintained at the Bankers Trust Company, New York,
New York, 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.
(ii) 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 City 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.
(iii) Bond Reserve Fund, which Fund is kept and
maintained at the Bankers Trust Company, New York,
New York, 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 10(e) hereof. All moneys
deposited in the System Fund in excess of the amounts required
to pay operating and maintenance expenses of the System, as
hereinabove provided, shall be applied and appropriated, to the
extent required and in the order of priority prescribed, as
follows:
(i) 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,
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(ii) 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
(iii) 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 (100 %) of the amount required to fully
pay the interest on and principal of the Bonds falling due on
or before each maturity and interest payment date, such
payments to be made in substantially equal monthly installments
on or before the 10th day of each month beginning on or before
the 10th day of the month next following the month the Bonds
are delivered to the initial purchaser.
The required monthly deposits to the Bond Fund for the
payment of principal of and interest on the Bonds shall
continue to be made as hereinabove provided until such time as
(i) the total amount on deposit in the Bond Fund and Bond
Reserve Fund is equal to the amount required to fully pay and
discharge all outstanding Bonds Similarly Secured (principal
and interest) or (ii) the Bonds are no longer outstanding,
i.e., fully paid as to principal and interest or all the Bonds
have been refunded.
Accrued interest and premium, if any, received from the
purchaser of the Bonds shall be deposited in the Bond Fund, and
shall be taken into consideration and reduce the amount of the
monthly deposits hereinabove required which would otherwise be
required to be deposited in the Bond Fund from the Net Revenues
of the System. Furthermore, a transfer of funds from the Bond
Reserve Fund and Emergency Fund, as hereinafter prescribed,
shall be taken into consideration and reduce the amount of the
monthly deposits otherwise required to be deposited in the Bond
Fund from the Net Revenues.
SECTION 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
-21-
amount shall be required to be deposited in said Fund by reason
of the issuance of the Bonds. As long as the sum of
$100,000.00 is on deposit in said Fund, no further amounts
shall be required to be deposited therein; provided, however,
should the amount on deposit in said Fund ever be less than
$100,000.00, the City covenants and agrees to immediately
resume, and cause to be made to said Fund, monthly deposits in
the amount of $1,000 on or before the 10th day of each month
until the total amount required to be maintained in said Fund
has been fully restored. Monthly deposits to said Fund shall
be made with available Net Revenues of the System in the System
Fund and be subject only to the required deposits to the Bond
Fund. Furthermore, when the amount on deposit in the Emergency
Fund equals or exceeds the total amount required to be
maintained therein, moneys realized from the investment of
funds in the Emergency Fund in excess of the balance required
to be maintained therein may be transferred to the Bond Fund.
SECTION 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
requirement of the outstanding Bonds Similarly Secured.
In accordance with the ordinances authorizing the issuance
of the Previously Issued Bonds, there is currently on deposit
to the credit of the Bond Reserve Fund an amount equal to not
less than the average annual principal and interest
requirements for the Previously Issued Bonds. By reason of the
issuance of the Bonds, the amount to be maintained in said
Fund, subject to adjustment as hereinafter provided in this
Section, shall be $444,183 (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. No
additional deposits to the Bond Reserve Fund shall be required
by reason of the issuance of the Bonds as the Required Reserve
is less than the amount currently on deposit in the Reserve
Fund.
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
-22-
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 (10) years from the making of such
investment as the City 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 City 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 proper officers of the City 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
-23-
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 the coupons, if any, appertaining thereto, 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
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 Article 1113a,
V.A.T.C.S.; 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.
-24-
SECTION 23: Issuance of Additional Parity 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 herein authorized,
payable from and equally secured by a first lien on and pledge
of the Net Revenues of the System. The Additional Bonds may be
issued in one or more installments, provided, however, that
none shall be issued unless and until the following conditions
have been met:
(a) The City is not then in default as to any
covenant, condition or obligation contained in the
ordinances authorizing the issuance of the then
outstanding Bonds Similarly Secured;
(b) The laws of the State of Texas in force at
such time provide for the issuance of such Additional
Bonds;
(c) Each of the Special Funds created for the
payment, security and benefit of the Bonds Similarly
Secured contains the amount of money then required to
be on deposit therein;
(d) The Net Revenues of the System for the
twelve -month period 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 -1/4) times the average annual principal and
interest requirements of all bonds which will be
secured by a first lien on and pledge of the Net
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 23 shall mean
the gross revenues after deducting the expenses of
operation and maintenance but not deducting
expenditures which, under standard accounting
procedures, should be charged to capital expenditures;
(e) The Additional Bonds are made to mature on
July 15 of each of the years in which they are
scheduled to mature; and
-25-
(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.
At such time as the Series 1965 and Series 1967 bonds
identified in Section 10(f) (1) and (2) of this Ordinance have
been paid off, refunded or cancelled and are no longer
outstanding, the City may issue Additional Bonds secured by a
first lien on and pledge of the Net Revenues of the System on a
parity with the Bonds Similarly Secured then outstanding,
provided all conditions above set forth in this Section have
been met, except that the test for subparagraph (d) of this
Section shall then be as follows:
(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 -1/4) times the average annual
principal and interest requirements of all bonds
which will be secured by a first lien on and pledge
of the Net 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.
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
-26-
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 relating to said System, as provided by Article
1113, V.A.T.C.S. 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 list of the securities,
if any, in which the Emergency Fund and Bond Reserve
_27-
Fund has been invested, and a statement of the manner
in which money in the System Fund has been secured in
such Fiscal Year;
(f) The total number of customers connected with
the components of the System at the end of the Fiscal
Year.
Expenses incurred in making the audits above referred to
are to be regarded as maintenance and operating expenses of the
System and paid as such. Copies of the aforesaid annual audit
shall be immediately furnished to the Executive Director of the
Municipal Advisory Council of Texas at his office in Austin,
Texas, and, upon written request, to the original purchasers
and any subsequent holder of the Bonds.
SECTION 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 City 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 Articles
717k and 1111 et seq., V.A.T.C.S.; 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.
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(b) Other than for the payment of the Previously
Issued Bonds, the Bonds, the outstanding "City of
Euless, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation,
Series 1989 ", dated May 1, 1989 and the outstanding
"City of Euless, Texas, Tax and Waterworks and Sewer
System (Limited Pledge) Revenue Certificates of
Obligation, Series 1990 ", dated August 1, 1990, the
Net Revenues of the System have not in any manner
been pledged to the payment of any debt or obligation
of the City or of the System.
(c) So long as any of the Bonds or any interest
thereon remain outstanding, the City will not sell,
lease or encumber the System or any substantial part
thereof; provided, however, this covenant shall not
be construed to prohibit the sale of such machinery,
or other properties or equipment which has become
obsolete or otherwise unsuited to the efficient
operation of the System, and, also, with the
exception of the Additional Bonds expressly permitted
by this ordinance to be issued, it will not encumber
the Net Revenues of the System unless such
encumbrance is made junior and subordinate to all of
the provisions of this Ordinance.
(d) No free service of the System shall be
allowed, and should the City or any of its agencies
or instrumentalities make use of the services and
facilities of the System, payment of the reasonable
value thereof shall be made by the City out of funds
from sources other than the revenues and income of
the System.
(e) To the extent that it legally may, the City
further covenants and agrees so long as any of the
Bonds or any interest thereon are outstanding no
franchise shall be granted for the installation or
operation of any competing waterworks and sanitary
sewer system other than those owned by the City, and
the operation of any such system by anyone other than
the City is hereby prohibited.
SECTION 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.
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SECTION 29: 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 replacement Bond issued pursuant to this Section
shall be a valid and binding obligation, and shall be entitled
to all the benefits of this Ordinance equally and ratably with
all other Outstanding Bonds; notwithstanding the enforceability
of payment by anyone of the destroyed, lost, or stolen 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 30: 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
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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 four (4) years after the Stated Maturity, or
applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request
of the City, be remitted to the City against a written receipt
therefor. Notwithstanding the above and foregoing, any
remittance of funds from the Paying Agent /Registrar to the City
shall be subject to any applicable unclaimed property laws of
the State of Texas.
SECTION 31: Ordinance a Contract - Amendments. This
Ordinance shall constitute a contract with the Holders from
time to time, be binding on the City, and shall not be amended
or repealed by the City so long as any Bond remains Outstanding
except as permitted in this Section. The City, may, without
the consent of or notice to any Holders, from time to time and
at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any
ambiguity, inconsistency, or formal defect or omission herein.
In addition, the City may, with the written consent of Holders
holding a majority in aggregate principal amount of the Bonds
Similarly Secured then Outstanding affected thereby, amend, add
to, or rescind any of the provisions of this Ordinance;
provided that, without the consent of all Holders of
Outstanding Bonds, no such amendment, addition, or rescission
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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 32: Covenants to Maintain Tax - Exempt Status.
(a) Definitions. When used in this Section, the
following terms shall have the following meanings:
"Code" means the Internal Revenue Code of 1986,
as amended by all legislation, if any, enacted on or
before the Issue Date.
"Computation Date" has the meaning stated in
Treas. Reg. § 1.148- 8T(b)(1).
"Gross Proceeds" has the meaning stated in
Treas. Reg. § 1.148- 8T(d).
"Investment" has the meaning stated in Treas.
Reg. § 1.148- 8T(e).
"Nonpurpose Investment" means any Investment in
which Gross Proceeds of the Bonds are invested and
which is not acquired to carry out the governmental
purpose of the Bonds. Obligations acquired with
proceeds of the Bonds that are to be used to
discharge the Refunded Bonds are Nonpurpose
Investments.
"Yield of"
(1) any Investment shall be computed in
accordance with Treas. Reg. §1.148 -2T, and
(2) the Bonds has the meaning stated in
Treas. Reg. § 1.148 -3T.
(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,
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construction, or improvement of which is to be financed
directly or indirectly with Gross Proceeds) in a manner which,
if made or omitted, respectively, would cause the interest on
any Bond to become includable in the gross income, as defined
in section 61 of the Code, of the owner thereof for federal
income tax purposes. Without limiting the generality of the
foregoing, unless and until the City shall have received 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 directly or
indirectly with Gross Proceeds of the Bonds
(including property financed with Gross Proceeds of
the Refunded Bonds) and not use or permit the use of
such Gross Proceeds or any property acquired,
constructed, or improved with such Gross Proceeds
(including all contractual arrangements with terms
different than those applicable to the general
public) in any activity carried on by any person or
entity other than a state or local government, unless
such use is solely as a member of the general public,
or
(2) not directly or indirectly impose or accept
any charge or other payment for use of Gross Proceeds
of the Bonds or any property the acquisition,
construction, or improvement of which is to be
financed directly or indirectly with such Gross
Proceeds (including property financed with Gross
Proceeds of the Refunded Bonds), other than taxes of
general application within the City or interest
earned on investments acquired with such Gross
Proceeds pending application for their intended
purposes.
(d) No Private Loan. Except to the extent permitted by
section 141 of the Code and the regulations and rulings
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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 of the Bonds in any Investment (or use
such Gross Proceeds to replace money so invested) , if as a
result of such investment the Yield of all Investments allocated
to such Gross Proceeds whether then held or previously disposed
of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent
permitted by section 149(b) of the Code and the regulations and
rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed
within the meaning of Section 149(b) of the Code and the
regulations and rulings thereunder.
(g) Information Report. The City shall timely file with
the Secretary of the Treasury the information required by
section 149(e) of the Code with respect to the Bonds on such
form and in such place as such Secretary may prescribe.
(h) No Rebate Required. The City warrants and represents
that it satisfies the requirements of paragraphs (2) and (3) of
section 148(f) of the Code with respect to the Bonds without
making the payments to the United States described in such
section. Specifically, the City warrants and represents that
(1) the City is
general taxing powers;
(2) at least 95%
Bonds will be used
activities of the City;
a governmental unit with
of the Gross Proceeds of the
for the local governmental
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(3) the aggregate face amount of all tax- exempt
obligations issued or expected to be issued by the
City (and all subordinate entities thereof) in the
calendar year in which the Bonds are issued is not
reasonably expected to exceed $5,000,000;
(4) the average maturity date of the Bonds is
not later than the average maturity date of the
Refunded Bonds, both as calculated in accordance with
section 147(b)(2)(A) of the Code;
(5) no Bond has a maturity date which is later
than 30 years from the date of issuance of the
Refunded Bonds;
(6) no Refunded Bond was an industrial
development bond, as defined in section 103(b)(2) of
the Internal Revenue Code of 1954 (the "1954 Code ")
as amended to October 22, 1986 (but without regard to
subparagraph (B) of section 103(b)(3)) or a private
loan bond, as defined in section 103(o)(2)(A) of the
1954 Code (but without regard to any exception from
such definition other than section 103(o)(2)(C); and
(7) the aggregate amount of all tax exempt
obligations issued by the City (and all subordinate
entities thereof) in the calendar year in which the
Refunded Bonds were issued did not exceed $5,000,000.
(i) Qualified Advance Refunding. The Bonds are being
issued exclusively to refund the Refunded Bonds, and the Bonds
will be issued more than 90 days before the redemption of the
Refunded Bonds. The City represents that:
(1) None of the Refunded Bonds are "private
activity bonds," within the meaning of section 141 of
the Code. Specifically, the covenants set forth in
subsection (c) and (d) of this Section are true,
correct, and complete with respect to the Refunded
Bonds, their proceeds, and the facilities financed
therewith.
(2) The Bonds are the first advance refunding
(within the meaning of section 149(d)(5) of the Code)
of the Refunded Bonds.
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(3) The Refunded Bonds are being called for
redemption, and will be redeemed, not later than the
earliest date on which each such issue may be
redeemed at par or at a premium of 3 percent or less.
(4) The initial temporary period under section
148(c) of the Code will end (i) with respect to the
proceeds of the Bonds not later than 30 days after
the date of issue of such Bonds and (ii) with respect
to proceeds of the Refunded Bonds on the date of
issuance of the Bonds if not ended prior thereto.
(5) Section 148(e) of the Code did not apply to
the Refunded Bonds. On and after the date of issue
of the Bonds no proceeds of the Refunded Bonds will
be invested in Nonpurpose Investments having a Yield
in excess of the Yield on the Refunded Bonds to which
any of such proceeds relate.
(6) The debt service savings achieved by the
City are a result solely of the interest rates on the
Bonds being lower than the interest rate on the
Refunded Bonds. In the issuance of the Bonds the
City has employed no "device" to obtain a material
financial advantage (based on arbitrage), within the
meaning of section 149(d)(4) of the Code.
SECTION 33: Qualified Tax Exempt Obligations. In
accordance with the provisions of paragraph (3) of subsection
(b) of Section 265 of the Code, the City hereby designates the
Bonds to be "qualified tax exempt obligations" in that the
Bonds are not "private activity bonds" as defined in the Code
and the reasonably anticipated amount of "qualified tax exempt
obligations" to be issued by the City (including all
subordinate entities of the City) for the calendar year in
which the Bonds are issued will not exceed $10,000,000.
SECTION 34: Sale of Bonds - Official Statement Approval.
The Bonds authorized by this Ordinance are hereby sold by the
City to Smith Barney, Harris Upham & Co., Incorporated and NCNB
Capital Markets, Inc. and others (herein referred to
collectively as the "Purchasers ") in accordance with the
Purchase Contract, dated October 8, 1991, attached hereto as
Exhibit A and incorporated herein by reference as a part of
this Ordinance for all purposes. The Mayor is hereby
authorized and directed to execute said Purchase Contract for
and on behalf of the City and as the act and deed of this
Council, and in regard to the approval and execution of the
Purchase Contract, the Council hereby finds, determines and
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declares that the representations, warranties and agreements of
the City (contained in paragraph 6 thereof) are true and
correct in all material respects and shall be honored and
performed by the City.
Furthermore, the use of the Official Statement by the
Purchasers 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, attached as Exhibit A to the Purchase Contract
(together with such changes approved by the Mayor, City
Manager, Director of Finance and Human Resources, or City
Secretary, any one or more of said officials), shall be and is
hereby in all respects approved and the Purchasers are hereby
authorized to use and distribute said final Official Statement,
dated October 8, 1991, in the reoffering, sale and delivery of
the Bonds to the public. The Mayor and City Secretary are
further authorized and directed to manually execute and deliver
for and on behalf of the City copies of said Official Statement
in final form as may be required by the Purchasers, and such
final Official Statement in the form and content manually
executed by said officials shall be deemed to be approved by
the City Council and constitute the Official Statement
authorized for distribution and use by the Purchasers.
SECTION 35: Special Escrow Agreement Approval and
Execution. The "Special Escrow Agreement" (the "Agreement ") by
and between the City and Bankers Trust Company, New York, New
York (the "Escrow Agent "), attached hereto as Exhibit B and
incorporated herein by reference as a part of this Ordinance
for all purposes, is hereby approved as to form and content,
and such Agreement in substantially the form and substance
attached hereto, together with such changes or revisions as may
be necessary to accomplish the refunding or benefit the City,
is hereby authorized to be executed by the Mayor and City
Secretary for and on behalf of the City and as the act and deed
of this City Council; and such Agreement as executed by said
officials shall be deemed approved by the City Council and
constitute the Agreement herein approved.
Furthermore, the Director of Finance and Human Resources
and City Manager, either or both of said officials, in
cooperation with the Escrow Agent are hereby authorized and
directed to make the necessary arrangements for the purchase of
the Federal Securities referenced in the Agreement and the
delivery thereof to the Escrow Agent on the day of delivery of
the Bonds to the Purchasers for deposit to the credit of the
"SPECIAL CITY OF EULESS, TEXAS, REVENUE REFUNDING BOND ESCROW
FUND" (the "Escrow Fund "), including the execution of the
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subscription forms for the purchase and issuance of the "United
States Treasury Securities - State and Local Government Series"
for deposit to the Escrow Fund; all as contemplated and
provided in Article 717k, V.A.T.C.S., as amended, this
Ordinance and the Agreement.
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 Bonds
pending the approval thereof by the Attorney General, the
registration thereof by the Comptroller of Public Accounts and
the delivery thereof to the Purchasers.
Furthermore, the Mayor, City Secretary, City Manager and
Director of Finance and Human Resources, any one or more of
said officials, are hereby authorized and directed to furnish
and execute such documents and certifications relating to the
City and the issuance of the Bonds, including certifications as
to facts, estimates, circumstances and reasonable expectations
pertaining to the use, expenditure and investment of the
proceeds of the Bonds, as may be necessary for the approval of
the Attorney General, the registration by the Comptroller of
Public Accounts and the delivery of the Bonds to the
Purchasers, and, together with the City's financial advisor,
bond counsel and the Paying Agent /Registrar, make the necessary
arrangements for the delivery of the Initial Bond(s) to the
Purchasers and the initial exchange thereof for definitive
Bonds.
SECTION 37: 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 appearing in the Security Register at the close of
business on the business day next preceding the mailing of such
notice.
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
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the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Paying Agent /Registrar, but such filing
shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 38: Proceeds of Sale. Immediately following
the delivery of the Bonds, the proceeds of sale thereof (less
certain costs of issuance, and the accrued interest received
from the Purchasers of the Bonds) shall be deposited with the
Escrow Agent for application and disbursement in accordance
with the provisions of the Agreement. The proceeds of sale of
the Bonds not so deposited with the Escrow Agent for the
refunding of the Refunded Bonds shall be disbursed and
deposited for payment of costs of issuance and deposited in the
Bond Fund, all in accordance with written instructions to the
bank of delivery from the Director of Finance and Human
Resources.
SECTION 39: Cancellation. All Bonds surrendered for
payment, redemption, transfer, exchange, or replacement, 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
returned to the City.
SECTION 40: Printed Opinion. The Purchasers'
obligation to accept delivery of the Bonds is subject to being
furnished a final opinion of Fulbright & Jaworski, Attorneys,
Dallas, Texas, approving the Bonds as to their validity, said
opinion to be dated and delivered as of the date of delivery
and payment for the Bonds. Printing of a true and correct
reproduction of said opinion on the reverse side of each of the
definitive Bonds is hereby approved and authorized.
SECTION 41: 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 the Bonds as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on
the definitive Bonds.
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SECTION 42: 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 43: 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 and cancelled and the provisions of this
Ordinance shall supercede and control as to the matters
contained herein.
SECTION 44: 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 45: 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 46: Severability. If any provision of this
Ordinance or the application thereof to any circumstance shall
be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless
be valid, and this governing body hereby declares that this
Ordinance would have been enacted without such invalid
provision.
SECTION 47: Incorporation of Findings and Determinations.
The findings and determinations of the City Council contained
in the preamble hereof are hereby incorporated by reference and
made a part of this Ordinance for all purposes as if the same
were restated in full in this Section.
SECTION 48: 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 Article 6252 -17, Vernon's Texas Civil
Statutes, as amended.
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SECTION 49: Effective Date. This Ordinance shall take
effect and be in full force from and after its second reading
and final adoption on the date shown below, and it is so
ordained.
PASSED ON FIRST READING, September 24, 1991.
PASSED ON SECOND READING AND FINALLY ADOPTED, this
October 8, 1991.
ATTEST:
City y Secretary
(City Seal)
S a 9 6 5
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CITY OF EULESS, TEXAS:
Mayor
EAHINT A
CITY OF EULESS
$2,335,000
Waterworks and Sewer System
Revenue Refunding
Bonds, Series 1991
PURCHASE CONTRACT
October 8, 1991
THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS
City of Euless
201 North Ector Drive
Euless, Texas 76039
Dear Mayor and City Council Members:
The undersigned, on behalf of itself and NCNB Capital Markets, Inc. (the 'Underwriters'), offers to
enter into this Purchase Contract with the City of Euless, Texas (the 'City'). This offer is made subject to the
City's acceptance of this Purchase Contract on or before 9:00 p.m., Central Daylight Savings Time on
October 8, 1991.
1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the
representations set forth herein, the Underwriters hereby jointly and severally agree to purchase from the City,
and the City hereby agrees to sell and deliver to the Underwriters an aggregate of 52,335,000 principal amount
of City of Euless, Texas Waterworks and Sewer System Revenue Refunding Bonds, Series 1991 (the 'Bonds").
The Bonds shall be dated October 1, 1991 and shall have the maturities and bear interest from their date at
the rate or rates per annum as shown on the cover page of the Official Statement (hereinafter defined), such
interest being payable on January 15, 1992, and semi- annually thereafter on July 15 and January 15 in each
year. The purchase price for the Bonds shall be $2,303,553.60 (representing the par amount of the Bonds
of $2,335,000 less an underwriters' discount on such Bonds of $20,594.70, and less original issue discount of
$10,851.70), plus interest accrued on the Bonds from their date to the date of the payment for and delivery
of the Bonds (the 'Closing'). Exhibit A hereto is the Official Statement, including the cover page and
Appendices thereto, of the City dated October 8, 1991, with respect to the Bonds. The Official Statement,
including the cover page and Appendices thereto, as further amended only in the manner hereinafter provided,
is hereinafter called the 'Official Statement.'
2 Ordinance. The Bonds shall be as described in and shall be issued and secured under the
provisions of an ordinance adopted by the City on first reading on September 24, 1991, and on second and
final reading on October 8, 1991 (the 'Ordinance'). The Bonds shall be subject to redemption and shall be
payable as provided in the Ordinance.
3. Public Offering. It shall be a condition of the obligation of the City to sell and deliver the
Bonds to the Underwriters, and of the obligation of the Underwriters to purchase and accept delivery of the
Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered
by the City and accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make
a bona ride public offering of all of the Bonds, at not in excess of the initial public offering prices, as set forth
on the cover page of the Official Statement, plus interest accrued thereon from the date of the Bonds and
confirm in writing to the City the principal amount (or percentage of principal amount) of each maturity and
the corresponding price for each maturity (or the yield from each maturity resulting from such price) at which
the Bonds sold pursuant to such bona fide public offering. Unless otherwise notified in writing by the
Underwriters by the Closing, the City can assume that the 'end of the underwriting period" for purposes of
Rule 15c2 -12 of the federal Securities and Exchange Act of 1934 (the 'Rule') shall be the Closing. In the
event such notice is so given in writing by the Underwriters, the Underwriters agrees to notify the City in
writing following the occurrence of the 'end of the underwriting period" as defined in the Rule.
4. Security Deposit. Delivered to the City herewith is a corporate check of Smith Barney, Harris
Upham & Co, Incorporated payable to the order of the City in the amount of $23,450. The City agrees to
hold such check uncashed until the Closing to ensure the performance by the Underwriters of their obligations
to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with the payment by the
Underwriters of the purchase price of the Bonds, the City shall return such check to Smith Barney, Harris
Upham & Co., Incorporated as provided in Paragraph 7 hereof. Should the City fail to deliver the Bonds at
the Closing, or should the City be unable to satisfy the conditions of the obligations of the Underwriters to
purchase, accept delivery of and pay for the Bonds, as set forth in this Purchase Contract (unless waived by
the Underwriters), or should such obligations of the Underwriters be terminated for any reason permitted by
this Purchase Contract, such check shall immediately be returned to the Smith Barney, Harris Upham & Co.,
Incorporated. In the event the Underwriters fail (other than for a reason permitted hereunder) to purchase,
accept delivery of and pay for the Bonds at the Closing as herein provided, such check shall be retained by
the City as and for full liquidated damages for such failure of the Underwriters and for any defaults hereunder
on the part of the Underwriters. The Underwriters hereby agree not to stop or cause payment on said check
to be stopped unless the City has breached any of the terms of this Purchase Contract.
5. Official Statement. The City hereby authorizes the Escrow Agreement, hereinafter defined,
the Ordinance and the Official Statement and the information therein contained to be used by the
Underwriters in connection with the public offering and sale of the Bonds. The City hereby ratifies and
confirms the use by the Underwriters in the offering of the Bonds prior to the date hereof of the Preliminary
Official Statement for the Bonds dated September 25, 1991 and that the Preliminary Official Statement was
'deemed final' by the City, as of the date of its initial mailing within the meaning, and for the purposes, of
the Rule. The City agrees to cooperate with the Underwriters to provide a supply of final Official Statements
within seven business days of the date hereof in sufficient quantities to comply with the Underwriters'
obligations under applicable MSRB Rules and the Rule. The Underwriters will use their best efforts to assist
the City in the preparation of the final Official Statement in order to ensure compliance with the
aforementioned rules.
6. Representations, Warranties and Agreements of City. On the date hereof, the City represents,
warrants and agrees as follows:
(a) The City is a municipal corporation, a political subdivision of the State of Texas and
a body politic and corporate, and has full legal right, power and authority to enter into this Purchase
Contract, and the Escrow Agreement, between the City and the Escrow Agent named in the Official
Statement (the 'Escrow Agreement'), to adopt the Ordinance, to sell the Bonds, and to issue and
deliver the Bonds to the Underwriters as provided herein and to carry out and consummate all other
transactions contemplated by the Ordinance, the Escrow Agreement and this Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance hereof, the
City has duty adopted the Ordinance, has duly authorized and approved the execution and delivery
of, and the performance by the City of the obligations contained in the Bonds, the Escrow Agreement
and this Purchase Contract and has duly authorized and approved the performance by the City of its
obligations contained in the Ordinance, the Escrow Agreement and in this Purchase Contract;
(c) The City is not in breach of or default under any applicable law or administrative
regulation of the State of Texas or the United States or any applicable judgment or decree or any loan
agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official
Statement, to which the City is a party or is otherwise subject, which would have a material and
adverse effect upon the business or financial condition of the City, including the Waterworks and
Sewer System of the City (the "System "); and the execution and delivery of the Escrow Agreement and
this Purchase Contract by the City and the execution and delivery of the Bonds and the adoption of
the Ordinance by the City and compliance with the provisions of each thereof will not violate or
constitute a breach of or default under any existing law, administrative regulation, judgment, decree
or any agreement or other instrument to which the City is a party or is otherwise subject;
(d) All approvals, consents and orders of any governmental authority or agency having
jurisdiction of any matter which would constitute a condition precedent to the performance by the
City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the
Closing,
(e) At the time of the City's acceptance hereof and at the time of the Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(f) Between the date of this Purchase Contract and Closing, the City will not, without
the prior written consent of the Underwriters, issue any additional bonds, certificates of obligation,
notes or other obligations for borrowed money payable in whole or in part from the revenues of the
System, and the City will not incur any material liabilities, direct or contingent, relating to, nor will
there be any adverse change of a material nature in the financial position of, the City or the System;
(g) Except as described in the Official Statement, no litigation is pending or, to the
knowledge of the City, threatened in any court affecting the corporate existence of the City, the title
of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of
the Bonds, or the collection of the revenues of the System pledged or to be pledged to pay the
principal of and interest on the Bonds, or in any way contesting or affecting the issuance, execution,
delivery, payment, security or validity of the Bonds, or in any way contesting or affecting the validity
or enforceability of the Ordinance, the Escrow Agreement or this Purchase Contract, or contesting
the powers of the City, or any authority for the Bonds, the Ordinance, the Escrow Agreement, or this
Purchase Contract or contesting in any way the completeness, accuracy or fairness of the Preliminary
Official Statement or the Official Statement or materially and adversely affecting the financial
condition of the City or the System;
(h) The City will cooperate with the Underwriters in arranging for the qualification of
the Bonds for sale and the determination of their eligibility for investment under the laws of such
jurisdictions as the Underwriters designate, and will use their best efforts to continue such
qualifications in effect so long as required for distribution of the Bonds; provided, however, that the
City will not be required to execute a general consent to service of process or to qualify to do business
in connection with any such qualification in any jurisdiction;
(f) The descriptions contained in the Official Statement of the Bonds, the Escrow
Agreement and the Ordinance accurately reflect the provisions of such instruments, and the Bonds,
when validly executed, authenticated and delivered in accordance with the Ordinance and sold to the
Underwriters as provided herein, will be validly issued and outstanding special obligations of the City
entitled to the benefits of, and subject to the limitations contained in, the Ordinance;
(j) If prior to the Closing an event occurs affecting the City which is materially adverse
for the purpose for which the Official Statement is to be used and is not disclosed in the Official
Statement, the City shall notify the Underwriters, and if in the opinion of the Underwriters such event
requires a supplement or amendment to the Official Statement, the City will supplement or amend
the Official Statement in a form and in a manner approved by the Underwriters' Counsel; and
(k) If, after the Closing and until twenty-five (25) days after the end of the underwriting
period, any event shall occur as a result of which it is necessary to amend or supplement the Official
Statement in order to make the statements therein, in the light of the circumstances when the Official
Statement is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement
the Official Statement to comply with law, the City agrees to notify Smith Barney, Harris Upham &
Co., Incorporated (and for the purposes of this clause (k) to provide the Underwriters with such
information as they may from time to time request), and to forthwith prepare and furnish, at its own
expense (in a form and manner approved by Smith Barney, Harris Upham & Co., Incorporated), a
reasonable number of copies of either amendments or supplements to the Official Statement so that
the statements in the Official Statement as so amended and supplemented will not, in light of the
circumstances when the Official Statement is delivered to a purchaser, be misleading or so that the
Official Statement will comply with law.
7. Closing. At 10:00 A.M., Central Standard Time, on November 13, 1991, the City will deliver
the initial bond or bonds (as defined in the Ordinance) to the Underwriters and will have the Bonds available
at The Depository Trust Company for immediate exchange, together with the other documents hereinafter
mentioned, and the Underwriters will accept such delivery and pay the purchase price of the Bonds as set forth
in Paragraph 1 hereof in immediately available funds. Concurrently with such payment by the Underwriters,
the City shall return to Smith Ramey, Harris Upham & Co., Incorporated, the check referred to in Paragraph
4 hereof. Delivery and payment as aforesaid shall be made at the offices of Fulbright & Jaworski, 2800 Texas
Commerce Bank, 2200 Ross Avenue, Dallas, Texas 75201, or such other place, as shall have been mutually
agreed upon by the City and the Underwriters. Delivery of the Bonds in definitive form shall be made at The
Depository Trust Company, New York, New York. The Bonds shall be delivered in fully registered form
bearing CUSIP numbers without coupons with one Bond for each maturity registered in the name of CEDE
& CO. be made available to Smith Barney, Harris Upham & Co., Incorporated at least one business day before
the Closing for purposes of inspection.
& Conditions. The Underwriters have entered into this Purchase Contract in reliance upon the
representations and warranties of the City contained herein and to be contained in the documents and
instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder,
both as of the date hereof and as of the date of Closing. Accordingly, the Underwriters' obligations under this
Purchase Contract to purchase and pay for the Bonds shall be subject to the performance by the City of its
obligations to be performed hereunder and under such documents and instruments at or prior to the Closing,
and shall also be subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of Closing,
as if made on the date of Closing;
(b) At the time of the Closing, the Ordinance and the Escrow Agreement shall be in full
force and effect, and the Ordinance and the Escrow Agreement shall not have been amended, or
supplemented and the Official Statement shall not have been amended, modified or supplemented,
except as may have been agreed to by the Underwriters;
(c) At the time of the Closing, all official action of the City related to the Ordinance and
the Escrow Agreement shall be in full force and effect and shall not have been amended, modified
or supplemented;
(d) The City shall not have failed to pay principal or interest when due on any of its
outstanding obligations for borrowed money,
(e) The City will purchase the government securities necessary to provide the funds
needed to refund the City's outstanding obligations as contemplated by the Escrow Agreement;
(f) At or prior to the Closing, the Underwriters shall have received two copies of each
of the following documents:
(1) The Official Statement of the City executed on behalf of the City by the
Mayor and City Secretary of the City;
(2) The Ordinance certified by the City Secretary of the City under its seal as
having been duly adopted by the City and as being in effect, with such changes or
amendments as may have been agreed to by the Underwriters;
(3) An unqualified opinion, dated the date of Closing, of Fulbright & Jaworski,
Bond Counsel to the City, in substantially the forms and substance of Appendix C to the
Official Statement;
(4) An unqualified opinion or certificate, dated on or prior to the date of
Closing, of the Attorney General of Texas, approving the Bonds as required by law and a
certificate of the Comptroller of Public Accounts of the State of Texas regarding the
registration of the Bonds as required by law;
(5) The supplemental opinion, dated the date of Closing, of Fulbright &
Jaworski, Bond Counsel to the City, addressed to the City and the Underwriters, to the effect
that (A) in its capacity as Bond Counsel, such firm has reviewed the information in the
Official Statement under the captions,'Bond Information; (except for the subcaptions'Book-
Entry Only System,' 'Bond Insurance') and the following subcaptions under the heading
'Other Relevant Information' thereunder Tax Exemption; 'Qualified Tax - Exempt
Obligations; Tax Accounting Treatment of Discount Bonds; and 'Legal Investments and
Eligibility to Secure Public Funds in Texas' and such firm is of the opinion that the
information relating to the Bonds and the Ordinance contained under such captions in all
respects accurately and fairly reflects the provisions of the laws and instruments described
therein; (B) the Bonds are exempt from registration pursuant to the Securities Act of 1933,
as amended, and the Ordinance is exempt from qualification as an indenture pursuant to the
Trust Indenture Act of 1939, as amended; (C) in the performance of their duties as Bond
Counsel for the City, without having undertaken to determine independently the accuracy and
completeness of the statements contained in the Official Statement, nothing has come to the
attention of such counsel which would lead them to believe that the Official Statement
(excluding the financial and statistical data and forecasts included therein, all as to which no
view need be expressed) contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(6) The opinion of McCall, Parkhurst & Horton, as Underwriters' Counsel, dated
the date of the Closing addressed to the Underwriters to the effect that the Bonds are exempt
from registration pursuant to the Securities Act of 1933, as amended, and the Ordinance is
exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as
amended. The opinion of such Counsel shall also state that, based upon their participation
in the preparation of the Official Statement, such Counsel has no reason to believe that the
Official Statement (except for the financial statements and other financial and statistical data
contained therein, as to which no view need be expressed), as of the date of the Official
Statement, contained any untrue statement of a material fact or omitted to state any material
fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(7) A certificate, dated the date of Closing, signed by the City Manager and the
Director of Finance, to the effect that (i) the representations and warranties of the City
contained herein are true and correct in all material respects on and as of the date of Closing
as if made on the date of Closing; (ii) except to the extent disclosed in the Official Statement,
no litigation is pending or, to the knowledge of such persons, threatened in any court to
restrain or enjoin the issuance or delivery of the Bonds, or the collection of the Net Revenues
of the System pledged or to be pledged to pay the principal of and interest on the Bonds, or
the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the
Ordinance, the Escrow Agreement or this Purchase Contract, or contesting the powers of the
City or contesting the authorization of the Bonds or the Ordinance, or contesting in any way
the accuracy, completeness or fairness of the Preliminary Official Statement or the Official
Statement (but in lieu of or in conjunction with such certificate the Underwriters may, in
their discretion, accept certificates or opinions of the City Attorney that, in his or her
opinion, the issues raised in any such pending or threatened litigation are without substance
or that the contentions of all plaintiffs therein are without merit); and (iii) to the best of
their knowledge, no event affecting the City has occurred since the date of the Official
Statement which should be disclosed in the Official Statement for the purpose for which it
is to be used or which it is necessary to disclose therein in order to make the statements and
information therein not misleading in any respect;
(8) A certificate, dated the date of Closing, of the Director of Finance and
Human Resources of the City to the effect that there has not been any material and adverse
change in the affairs or financial condition of the City or the System since September 30,
1990, the latest date as to which audited financial information is available;
(9) A certificate, dated the date of the Closing, of an appropriate official of the
City to the effect that, on the basis of the facts, estimates and circumstances in effect on the
date of delivery of the Bonds, it is not reasonably expected that the proceeds of the Bonds
will be used in a manner that would cause the Bonds to be arbitrage bonds within the
meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended;
(10) A copy of a special report prepared by the independent Certified Public Accountants
named in the Official Statement, addressed to the City, Bond Counsel, the Underwriters and
Underwriters' Counsel verifying the arithmetical computations of the adequacy of the
maturing principal and interest on the escrowed securities and uninvested cash on hand under
6
the Escrow Agreement to pay, when due, the principal of and interest on the bonds being
refunded by the Bonds and the computation of the yield with respect to such securities and
the Bonds;
(11) Evidence of the ratings on the Bonds shall be delivered in a form acceptable
to the Underwriters; and
(12) Such additional legal opinions, certificates, instruments and other documents
as Bond Counsel or the Underwriters may reasonably request to evidence the truth, 3ccurary
and completeness, as of the date hereof and as of the date of Closing, of the City's
representations and warranties contained herein and of the statements and information
contained in the Official Statement and the due performance and satisfaction by the City at
or prior to the date of Closing of all agreements then to be performed and all conditions then
to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but
only if, they are satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase,
to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the obligations of
the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor
the City shall be under further obligation hereunder, except that: (i) the check referred to in Paragraph 4
hereof shall be immediately returned to Smith Barney, Harris Upham & Co., Incorporated by the City, and
(ii) the respective obligations of the City and the Underwriters set forth in Paragraphs 10 and 12 hereof shall
continue in full force and effect.
9. Termination. The Underwriters may terminate their obligation to purchase at any time before
the Closing if any of the following should occur:
(a) (i) Legislation (including any amendment thereto) shall have been introduced in or
adopted by either House of the Congress of the United States, or recommended to the Congress for
passage by the President of the United States or favorably reported for passage to either House of the
Congress by any Committee of such House, or (ii) a decision shall have been rendered by a court
established under Article III of the Constitution of the United States or by the United States Tax
Court, or (iii) an order, ruling or regulation shall have been issued or proposed by or on behalf of
the Treasury Department of the United States or the Internal Revenue Service or any other agency
of the United States, or (iv) a release or official statement shall have been issued by the President of
the United States or by the Treasury Department of the United States or by the Internal Revenue
Service, the effect of which, in any such case described in clause (i), (u), (iii), or (iv), would be to
impose, directly or indirectly, federal income taxation upon interest received on obligations of the
general character of the Bonds or upon income of the general character to be derived by the City,
other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the
date hereof, in such a manner as in the judgment of the Underwriters would materially impair the
marketability or materially reduce the market price of obligations of the general character of the
Bonds.
(b) Any action shall have been taken by the Securities and Exchange Commission or by
a court which would require registration of any security under the Securities Act of 1933, as amended,
or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection
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with the public offering of the Bonds, or any action shall have been taken by any court or by any
governmental authority suspending the use of the Official Statement or any amendment or supplement
thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court
or by any such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment shall
be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to
matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by or
on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status
of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in
the judgment of the Underwriters would materially affect the market price of the Bonds.
(d) (i) A general suspension of trading in securities shall have occurred on the New York
Stock Exchange, or (ii) the United States becomes engaged in any outbreak of armed hostilities
(whether or not foreseeable at the time of execution hereof) or hostilities previously commenced shall
escalate, the effect of which, in either case described in clause (i) and (ii), is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Bonds on the terms and in the manner contemplated in this
Purchase Contract and the Official Statement, including without limitation any material adverse effect
on the market price of the Bonds.
(e) An event described in Paragraph 60) hereof occurs which, in the opinion of the
Underwriters, requires a supplement or amendment to the Official Statement.
(f) A general banking moratorium shall have been declared by authorities of the United
States, the State of New York or the State of Texas.
(g) A lowering of the ratings initially assigned to the Bonds by either Moody's Investors
Service, Inc. or Standard & Poor's Corporation, respectively, shall occur prior to Closing or failure
to provide evidence of the confirmation of each rating.
(h) Any event occurs which prevents the United States Treasury Department from
delivering on the Closing Date the State and Local Government Securities subscribed for by the City
in connection with the issuance of the Bonds.
10. Expenses. (a) The Underwriters shall be under no obligation to pay, and the City shall pay,
any expenses incident to the performance of the City's obligations hereunder, including but not limited to:
(i) the cost of the preparation, printing and distribution of the Official Statement; (i) the cost of the
preparation and printing of the Bonds; (III) the fees and expenses of Bond Counsel to the City, (iv) the fees
and disbursements of the City's accountants, advisors, and of any other experts or consultants retained by the
City; and (v) fees and premiums for bond ratings and bond insurance, respectively, and any travel or other
expenses incurred incident thereto.
(b) The Underwriters shall pay: (i) all advertising expenses of the Underwriters in connection
with the offering of the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents,
including this Purchase Contract and (iii) all other expenses incurred by them in connection with their offering
and distribution of the Bonds, including the fees of Counsel to the Underwriters.
11. Notices. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing at the address for the City set forth above, and any
notice or other communication to be given to the Underwriters under this Purchase Contract may be given
by delivering the same in writing to Smith Barney, Harris Upham & Co, Incorporated, 200 Crescent Court,
Suite 1200, Dallas, Texas 75201, Attention: Mr. Jerry Pierce.
12 Parties In Interest This Purchase Contract is made solely for the benefit of the City and the
Underwriters (including the successors or assigns of any Underwriter) and no other person shall acquire or
have any right hereunder or by virtue hereof. The City's representations, warranties and agreements contained
in this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any investigations
made by or on behalf of the Underwriters and (ii) delivery of any payment for the Bonds hereunder; and the
City's representations and warranties contained in Paragraph 6 of this Purchase Contract shall remain
operative and in full force and effect, regardless of any termination of this Purchase Contract.
13. Effective Date. This Purchase Contract shall become effective upon the execution of the
acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such
acceptance.
Very truly yours,
SMITH BARNEY, HARRIS UPHAM &
CO., INCORPORATED
NCNB CAPITAL MARKETS, INC.
By
SMITH BARNEY, HARRIS UPHAM &
CO., INCORPORATED
By:
Managing Director
Accepted:
This 8th day of October, 1991
By:
Mayor,
City of Euless, Texas
(SEAL)
Attest:
City Secretary,
City of Euless, Texas
Exhibit A
OfTicial Statement
10
SPECIAL ESCROW AGREEMENT
THE STATE OF NEW YORK §
COUNTY OF §
THIS SPECIAL ESCROW AGREEMENT (the "Agreement "), made and
entered into as of October 1, 1991, by and between the City of
Euless, Texas, a duly incorporated municipal corporation in
Tarrant County, Texas (the "City ") acting by and through the
Mayor and City Secretary, and Bankers Trust Company, New York,
New York (the "Bank "), a banking corporation organized and
existing under the laws of the State of New York,
W I T N E S S E T H
WHEREAS, the City has heretofore issued and delivered, and
there is currently outstanding the following described
obligations totalling in principal amount $2,075,000
(hereinafter called the "Refunded Bonds "), to wit: City of
Euless, Texas, Waterworks and Sewer System Revenue Bonds,
Series 1983 ", dated May 15, 1983, and scheduled to mature on
July 15, 1999 through July 15, 2002; and
WHEREAS, in accordance with the provisions of Article
717k, V.A.T.C.S., as amended (the "Act "), the City is
authorized to sell refunding bonds in an amount sufficient to
provide for the payment of obligations to be refunded, deposit
the proceeds of such refunding bonds with any place of payment
for the obligations being refunded and enter into an escrow or
similar agreement with such place of payment for the
safekeeping, investment, reinvestment, administration and
disposition of such deposit, upon such terms and conditions as
the parties may agree, provided such deposits may be invested
only in direct obligations of the United States of America,
including obligations the principal of and interest on are
unconditionally guaranteed by the United States of America, and
which may be in book entry form and which shall mature and /or
bear interest payable at such times and in such amounts as will
be sufficient to provide for the scheduled payment of such
obligations; and
WHEREAS, the Refunded Bonds are scheduled to mature, or be
redeemed, and interest thereon is payable on the dates and in
the manner set forth in Exhibit A attached hereto and
incorporated herein by reference as a part of this Agreement
for all purposes; and
WHEREAS, the City on the 8th day of October, 1991,
pursuant to an ordinance (the "Bond Ordinance ") finally passed
and adopted by the City Council, authorized the issuance of
bonds known as "City of Euless, Texas, Waterworks and Sewer
System Revenue Refunding Bonds, Series 1991" (the "Bonds "), and
such Bonds are being issued to refund, discharge and make final
payment of the principal of and interest on the Refunded Bonds;
and
WHEREAS, upon the delivery of the Bonds, the proceeds of
sale, together with other available funds of the City to be
deposited with the Bank, are to be used in part to purchase
United States Treasury Securities -State and Local Government
Series (hereinafter called "SLGS" or "Federal Securities "), and
such SLGS which shall be immediately credited to and held for
the "Escrow Fund" by the Bank in accordance with this
Agreement; and
WHEREAS, a list and description of the SLGS to be
purchased and held for the account of the Escrow Fund is
attached hereto as Exhibit B which is incorporated by reference
and made a part of this Agreement for all purposes; and
WHEREAS, the Federal Securities, together with the
beginning cash balance, if any, in the Escrow Fund, shall
mature and the interest thereon shall be payable at such times
to insure the existence of monies sufficient to pay the
principal amount of the Refunded Bonds and the accrued interest
thereon, as the same shall become due in accordance with the
terms of the ordinance authorizing the issuance of the Refunded
Bonds and as set forth in Exhibit A attached hereto; and
WHEREAS, the City has completed all arrangements for the
purchase of the Federal Securities and the deposit and credit
of the same to the Escrow Fund as provided herein; and
WHEREAS, the Bank is a banking corporation organized and
existing under the laws of the State of New York, possessing
trust powers and is fully qualified and empowered to enter into
this Agreement; and
WHEREAS, in Section 35 of the Bond Ordinance, the City
Council duly approved and authorized the execution of this
Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may
be, shall take all action necessary to call, pay, redeem and
retire said Refunded Bonds in accordance with the provisions
thereof, including, without limitation, all actions required by
the ordinance authorizing the Refunded Bonds, the Act, the Bond
Ordinance and this Agreement;
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NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and to secure the payment of the principal of
and the interest on the Refunded Bonds as the same shall become
due, the City and the Bank hereby mutually undertake, promise
and agree as follows:
SECTION 1: Receipt of Refunded Bond Ordinance.
Receipt of a true and correct copy of the ordinance authorizing
the issuance of the Refunded Bonds and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or
citation herein of any provision of said documents shall be
deemed an incorporation of such provision as a part hereof in
the same manner and with the same effect as if it were fully
set forth herein.
SECTION 2: Escrow Fund Creation /Funding. There is hereby
created by the City with the Bank a special segregated and
irrevocable trust fund designated "SPECIAL CITY OF EULESS,
TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (hereinafter called
the "Escrow Fund") for the benefit of the holders of the
Refunded Bonds, and, immediately following the delivery of the
Bonds, the City agrees and covenants to cause to be deposited
with the Bank the following:
$2,243,000.00 for the purchase of the SLGS listed
in Exhibit B to be held for the
account of the Escrow Fund; and
$ -0- for deposit in the Escrow Fund as a
beginning cash balance.
The Bank hereby accepts the Escrow Fund and further agrees
to receive said moneys, apply the same as set forth herein, and
to hold the cash and Federal Securities deposited and credited
to the Escrow Fund for application and disbursement for the
purposes and in the manner provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warranty. The City
hereby represents that the cash and Federal Securities,
together with the interest to be earned thereon, deposited to
the credit of the Escrow Fund will be sufficient to pay the
principal of and premium and interest on the Refunded Bonds as
the same shall become due and payable, and such Refunded Bonds,
and the interest thereon, are to mature or be redeemed and
shall be paid at the times and in the amounts set forth and
identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of a notice of
redemption with respect to the redemption of the Refunded Bonds
on July 15, 1993, being bonds numbered 186 through 600; all in
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accordance with the provisions of the notice requirements
applicable to said Refunded Bonds and the notice requirements
contained in the ordinance authorizing the Refunded Bonds.
The Bank agrees that on the redemption date for the
Refunded Bonds, or as such obligations are presented for
payment, a notice of redemption will be given by United States
Mail, first class, postage prepaid, to the then known owners or
holders at the City's expense.
SECTION 4: Pledge of Escrow. The Bank agrees that all
cash and Federal Securities, together with any income or
interest earned thereon, held in the Escrow Fund shall be and
is hereby irrevocably pledged to the payment of the principal
of and interest on the Refunded Bonds which will mature and
become due on and after the date of this Agreement, and such
funds initially deposited and to be received from maturing
principal and interest on the Federal Securities in the Escrow
Fund shall be applied solely in accordance with the provisions
of this Agreement.
SECTION S: Escrow Insufficiency - City warranty to Cure.
If, for any reason, the funds on hand in the Escrow Fund shall
be insufficient to make the payments set forth in Exhibit A
attached hereto, as the same becomes due and payable, the City
shall make timely deposits to the Escrow Fund, from lawfully
available funds, of additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be
immediately given by the Bank to the City by the fastest means
possible, but the Bank shall in no manner be responsible for
the City's failure to make such deposits.
SECTION 6: Escrow Fund Securities /Segregation. The Bank
shall hold said Federal Securities and moneys in the Escrow
Fund at all times as a special and separate trust fund for the
benefit of the holders of the Refunded Bonds, wholly segregated
from other moneys and securities on deposit with the Bank;
shall never commingle said Federal Securities and moneys with
other moneys or securities of the Bank; and shall hold and
dispose of the assets therein only as set forth herein.
Nothing herein contained shall be construed as requiring the
Bank to keep the identical moneys, or any part thereof, in said
Escrow Fund, if it is impractical, but moneys of an equal
amount, except to the extent such are represented by the
Federal Securities, shall always be maintained on deposit in
the Escrow Fund in trust by the Bank; and a special account
evidencing such facts shall at all times be maintained on the
books of the Bank.
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SECTION 7: Escrow Fund Collections /Payments. The Bank
shall from time to time collect and receive the principal of
and interest on the Federal Securities as they respectively
mature and become due and credit the same to the Escrow Fund.
On or before each principal and /or interest payment date or
redemption date, as the case may be, for the Refunded Bonds
shown in Exhibit A attached hereto, the Bank, without further
direction from anyone, including the City, shall cause to be
withdrawn from the Escrow Fund the amount required to pay the
accrued interest on the Refunded Bonds due and payable on said
payment date and the principal of the Refunded Bonds due and
payable on said payment date or redemption date, as the case
may be, and the amount withdrawn from the Escrow Fund shall be
immediately transmitted and deposited with the paying agent for
the Refunded Bonds to be paid with such amount. The paying
agent for Refunded Bonds is the Bank and the co- paying agent
for the Refunded Bonds is Ameritrust Texas National Association
in Dallas, Texas.
If any Refunded Bond or interest coupon thereon shall not
be presented for payment when the principal thereof or interest
thereon shall have become due, and if cash shall at such times
be held by the Bank in trust for that purpose sufficient and
available to pay the principal of such Refunded Bond and
interest thereon it shall be the duty of the Bank to hold said
cash without liability to the holder of such Refunded Bond for
interest thereon after such maturity or redemption date, in
trust for the benefit of the holder of such Refunded Bond, who
shall thereafter be restricted exclusively to said cash for any
claim of whatever nature on his part on or with respect to said
Refunded Bond, including for any claim for the payment thereof
and interest thereon. All cash required by the provisions
hereof to be set aside or held in trust for the payment of the
Refunded Bonds, including interest thereon, shall be applied to
and used solely for the payment of the Refunded Bonds and
interest thereon with respect to which such cash has been so
set aside in trust.
Subject to the provisions of the last sentence of
Section 25 hereof, cash held by the Bank in trust for the
payment and discharge of any of the Refunded Bonds and interest
thereon which remains unclaimed for a period of four (4) years
after the stated maturity date or redemption date of such
Refunded Bonds shall be returned to the City. Notwithstanding
the above and foregoing, any remittance of funds from the Bank
to the City shall be subject to any applicable unclaimed
property laws of the State of Texas.
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SECTION 8: Disposal of Refunded Obligations. All
Refunded Bonds cancelled on account of payment by the Bank
shall be disposed of or otherwise destroyed by the Bank, and an
appropriate certificate of destruction furnished the City.
SECTION 9: Escrow Fund Encumbrance. The escrow created
hereby shall be irrevocable and the holders of the Refunded
Bonds shall have an express lien on all moneys and Federal
Securities in the Escrow Fund until paid out, used and applied
in accordance with this Agreement.
Unless disbursed in payment of the Refunded Bonds, all
funds and the Federal Securities received by the Bank for the
account of the City hereunder shall be and remain the property
of the Escrow Fund and the City and the owners of the Refunded
Bonds shall be entitled to a preferred claim and shall have a
first lien upon such funds and Federal Securities enjoyed by a
trust beneficiary. The funds and Federal Securities received
by the Bank under this Agreement shall not be considered as a
banking deposit by the City and the Bank and the City shall
have no right or title with respect thereto, except as
otherwise provided herein. Such funds and Federal Securities
shall not be subject to checks or drafts drawn by the City.
SECTION 10: Absence of Bank Claim /Lien on Escrow Fund.
The Bank shall have no lien whatsoever upon any of the moneys
or Federal Securities in the Escrow Fund for payment of
services rendered hereunder, services rendered as paying
agent /registrar for the Refunded Bonds, or for any costs or
expenses incurred hereunder and reimbursable from the City.
SECTION 11: Substitution of Investments. The Bank shall
be authorized to accept initially and temporarily cash and /or
substituted securities pending the delivery of the Federal
Securities identified in the Exhibit B attached hereto, or
shall be authorized to redeem the Federal Securities and
reinvest the proceeds thereof, together with other moneys held
in the Escrow Fund in noncallable direct obligations of the
United States of America provided such early redemption and
reinvestment of proceeds does not change the repayment schedule
of the Refunded Bonds appearing in Exhibit A and the Bank
receives the following:
(1) an opinion by an independent certified
public accountant to the effect that (i) the initial
and /or temporary substitution of cash and /or
securities for one or more of the Federal Securities
identified in Exhibit B pending the receipt and
delivery thereof to the Escrow Agent or (ii) the
redemption of one or more of the Federal Securities
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and the reinvestment of such funds in one or more
substituted securities (which shall be noncallable
direct obligations of the United States of America),
together with the interest thereon and other
available moneys then held in the Escrow Fund, will,
in either case, be sufficient to pay, as the same
become due in accordance with Exhibit A, the
principal of, and interest on, the Refunded Bonds
which have not previously been paid, and
(2) with respect to an early redemption of
Federal Securities and the reinvestment of the
proceeds thereof, an unqualified opinion of
nationally recognized municipal bond counsel to the
effect that (a) such investment will not cause
interest on the Bonds or Refunded Bonds to be
included in the gross income for federal income tax
purposes, under the Code and related regulations as
in effect on the date of such investment, or
otherwise make the interest on the Bonds or the
Refunded Bonds subject to Federal income taxation
and (b) such reinvestment complies with the
Constitution and laws of the State of Texas and with
all relevant documents relating to the issuance of
the Refunded Bonds and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments -
Reinvestment. Except as provided in Section 11 hereof, moneys
in the Escrow Fund will be invested only in the Federal
Securities listed in Exhibit B and neither the City nor the
Bank shall reinvest any moneys deposited in the Escrow Fund
except as specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through
redemption or cancellation of the Refunded Bonds there exists
or will exist excesses of interest on or maturing principal of
the Federal Securities in excess of the amounts necessary
hereunder for the Refunded Bonds, the Bank may transfer such
excess amounts to or on the order of the City, provided that
the City delivers to the Bank the following:
(1) an opinion by an independent certified
public accountant that after the transfer of such
excess, the principal amount of securities in the
Escrow Fund, together with the interest thereon and
other available monies then held in the Escrow Fund,
will be sufficient to pay, as the same become due, in
accordance with Exhibit A, the principal of, and
interest on, the Refunded Bonds which have not
previously been paid, and
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(2) an unqualified opinion of nationally
recognized municipal bond counsel to the effect that
(a) such transfer will not cause interest on the
Bonds or the Refunded Bonds to be included in gross
income for federal income tax purposes, under
the Code and related regulations as in effect on the
date of such transfer, or otherwise make the interest
on the Bonds or the Refunded Bonds subject to Federal
income taxation, and (b) such transfer complies with
the Constitution and laws of the State of Texas and
with all relevant documents relating to the issuance
of the Refunded Bonds or the Bonds.
SECTION 14: Collateralization. The Bank shall
continuously secure the monies in the Escrow Fund not invested
in Federal Securities by a pledge of direct obligations of the
United States of America, in the par or face amount at least
equal to the principal amount of said uninvested monies to the
extent such money is not insured by the Federal Deposit
Insurance Corporation.
SECTION 15: Absence of Bank's Liability for Investments.
The Bank shall not be liable or responsible for any loss
resulting from any investment made in the Federal Securities or
substitute securities as provided in Section 11 hereof.
SECTION 16: Bank's Compensation - Escrow Administration/
Settlement of Paying Agent's Charges. The City agrees to pay
the Bank for the performance of services hereunder and as
reimbursement for anticipated expenses to be incurred hereunder
the amount of $2,000.00 and, except for reimbursement of costs
and expenses incurred by the Bank pursuant to Sections 3, 11,
and 19 hereof, the Bank hereby agrees said amount is full and
complete payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the
effective date of this Agreement, the sum of $1,500.00 which
deposit represents the total charges due for all paying agents
for the Refunded Bonds, and the Bank acknowledges and agrees
that $1,500.00 of the above amount is and represents the total
amount of compensation due the Bank for services rendered as
paying agent for the Refunded Bonds and the City hereby
represents and warrants that the balance of the foregoing sum
is the total amount due the co- paying agent for the Refunded
Bonds. The Bank hereby agrees to pay, assume and be fully
responsible for any additional charges that it may incur in the
performance of its duties and responsibilities as paying agent
for the Refunded Bonds. However, any extraordinary expenses
not anticipated at this time will be paid by the City.
ff-M
SECTION 17: Escrow Agent's Duties / Responsibilities /
Liability. The Bank shall not be responsible for any recital
herein, except with respect to its organization and its powers
and authority. As to the existence or nonexistence of any fact
relating to the City or as to the sufficiency or validity of
any instrument, paper or proceedings relating to the City, the
Bank shall be entitled to rely upon a certificate signed on
behalf of the City by its City Manager or Mayor and /or City
Secretary of the City as sufficient evidence of the facts
therein contained. The Bank may accept a certificate of the
City Secretary under the City's seal, to the effect that a
resolution or other instrument in the form therein set forth
has been adopted by the City Council of the City, as conclusive
evidence that such resolution or other instrument has been duly
adopted and is in full force and effect.
The duties and obligations of the Bank shall be determined
solely by the express provisions of this Agreement and the Bank
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the
Bank may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the
requirements of this Agreement; but notwithstanding any
provision of this Agreement to the contrary, in the case of any
such certificate or opinion or any evidence which by any
provision hereof is specifically required to be furnished to
the Bank, the Bank shall be under a duty to examine the same to
determine whether it conforms to the requirements of this
Agreement.
The Bank shall not be liable for any error of judgment
made in good faith by a Responsible Officer or officers of the
Bank unless it shall be proved that the Bank was negligent in
ascertaining or acting upon the pertinent facts.
The Bank shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
with the direction of the holders of not less than a majority
in aggregate principal amount of all said Refunded Bonds at the
time outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Bank
not in conflict with the intent and purpose of this Agreement.
For the purposes of determining whether the holders of the
required principal amount of said Refunded Bonds have concurred
in any such direction, Refunded Bonds owned by any obligor upon
ME
the Refunded Bonds, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common
control with such obligor, shall be disregarded, except that
for the purposes of determining whether the Bank shall be
protected in relying on any such direction only Refunded Bonds
which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in
this Agreement, shall mean and include the Chairman of the
Board of Directors, the President, any Vice President and any
Assistant Vice President, the Secretary and any Assistant
Secretary, the Treasurer and any Assistant Treasurer, and every
other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons
who at the time shall be officers, respectively, or to whom any
corporate trust matter is referred, because of his knowledge of
and familiarity with a particular subject; and the term
"Responsible Officer" of the Bank, as used in this Agreement,
shall mean and include any of said officers or persons.
SECTION 18: Limitation Re: Bank's Duties /Responsibilities /
Liabilities to Third Parties. The Bank shall not be
responsible or liable to any person in any manner whatever for
the sufficiency, correctness, genuineness, effectiveness, or
validity of this Agreement with respect to the City, or for the
identity or authority of any person making or executing this
Agreement for and on behalf of the City. The Bank is
authorized by the City to rely upon the representations of the
City with respect to this Agreement and the deposits made
pursuant hereto and as to the City's right and power to execute
and deliver this Agreement, and the Bank shall not be liable in
any manner as a result of such reliance. The duty of the Bank
hereunder shall only be to the City and the holders of the
Refunded Bonds. Neither the City nor the Bank shall assign or
attempt to assign or transfer any interest hereunder or any
portion of any such interest. Any such assignment or attempted
assignment shall be in direct conflict with this Agreement and
be without effect.
SECTION 19: Interpleader. In the event of any
disagreement or controversy hereunder or if conflicting demands
or notices are made upon Bank growing out of or relating to
this Agreement or in the event that the Bank in good faith is
in doubt as to what action should be taken hereunder, the City
expressly agrees and consents that the Bank shall have the
absolute right at its election to:
(a) Withhold and stop all further proceedings
in, and performance of, this Agreement with respect
to the issue in question and of all instructions
received hereunder in regard to such issue; and
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(b) File a suit in interpleader and obtain an
order from a court of appropriate jurisdiction
requiring all persons involved to interplead and
litigate in such court their several claims and
rights among themselves.
In the event the Bank becomes involved in litigation in
connection with this Section, the City to the extent permitted
by law agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses and attorney fees suffered or
incurred by the Bank as a result thereof. The obligations of
the Bank under this Agreement shall be performable at the
principal office of the Bank in the City of New York, New York.
The Bank may advise with legal counsel in the event of any
dispute or question as to the construction of any of the
provisions hereof or its duties hereunder, and it shall incur
no liability and shall be fully protected in acting in
accordance with the opinion and instructions of such counsel.
SECTION 20: Accounting - Annual Report. Promptly after
September 30th of each year, commencing with the year 1992, so
long as the Escrow Fund is maintained under this Agreement, the
Bank shall forward by letter to the City, to the attention of
the City Manager, or other designated official of the City, a
statement in detail of the Federal Securities and monies held,
and the current income and maturities thereof, and the
withdrawals of money from the Escrow Fund for the preceding
period.
SECTION 21: Notices. Any notice, authorization, request
or demand required or permitted to be given hereunder shall be
in writing and shall be deemed to have been duly given when
mailed by registered or certified mail, postage prepaid
addressed as follows:
CITY OF EULESS, TEXAS
201 North Ector Drive
Euless, Texas 76039
Attention: City Manager
BANKERS TRUST COMPANY
Corporate Trust and Agency Group
Four Albany Street, Fourth Floor
New York, New York 10006
Attention: James Hall
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The United States Post Office registered or certified mail
receipt showing delivery of the aforesaid shall be conclusive
evidence of the date and fact of delivery.
Any party hereto may change the address to which notices
are to be delivered by giving to the other parties not less
than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms
of this Agreement the performance date of any provision hereof,
including the date of maturity of interest on or principal of
the Refunded Bonds, shall be a Sunday or a legal holiday or a
day on which the Bank is authorized by law to close, then the
performance thereof, including the payment of principal of and
interest on the Refunded Bonds, need not be made on such date
but may be performed or paid, as the case may be, on the next
succeeding business day of the Bank with the same force and
effect as if made on the date of performance or payment and
with respect to a payment, no interest shall accrue for the
period after such date.
SECTION 23: Warranty of Parties Re: Power to Execute and
Deliver Escrow Agreement. The City covenants that it will
faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this
Agreement, in any and every said Refunded Bond as executed,
authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Bonds shall have been modified as
provided in this Agreement. The City covenants that it is duly
authorized under the Constitution and laws of the State of
Texas to execute and deliver this Agreement, that all actions
on its part for the payment of said Refunded Bonds as provided
herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded Bonds
and coupons in the hands of the holders and owners thereof are
and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 24: Severability. If any one or more of the
covenants or agreements provided in this Agreement on the part
of the parties to be performed should be determined by a court
of competent jurisdiction to be contrary to law, such covenant
or agreement shall be deemed and construed to be severable from
the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions
of this Agreement.
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SECTION 25: Termination. This Agreement shall terminate
when the Refunded Bonds, including interest due thereon, have
been paid and discharged in accordance with the provisions of
this Agreement. If any Refunded Bonds are not presented for
payment when due and payable, the nonpayment thereof shall not
prevent the termination of this Agreement. Funds for the
payment of any nonpresented Refunded Bonds and accrued interest
thereon shall upon termination of this Agreement be held by the
Bank for such purpose in accordance with Section 7 hereof. Any
moneys or Federal Securities held in the Escrow Fund at
termination and not needed for the payment of the principal of
or interest on any of the Refunded Bonds shall be paid or
transferred to the City.
SECTION 26: Time of the Essence, Time shall be of the
essence in the performance of obligations from time to time
imposed upon the Bank by this Agreement.
SECTION 27: Escrow Agreement - Amendment /Modification.
This Agreement shall be binding upon the City and the Bank and
their respective successors and legal representatives and shall
inure solely to the benefit of the holders of the Refunded
Bonds, the City, the Bank and their respective successors and
legal representatives. Furthermore, no alteration, amendment
or modification of any provision of this Agreement shall (1)
alter the firm financial arrangements made for the payment of
the Refunded Bonds or (2) be effective unless (i) prior written
consent of such alteration, amendment or modification shall
have been obtained from the holders of all Refunded Bonds
outstanding at the time of such alteration, amendment or
modification and (ii) such alteration, amendment or
modification is in writing and signed by the parties hereto;
provided, however, the City and the Bank may, without the
consent of the holders of the Refunded Bonds, amend or modify
the terms and provisions of this Agreement to cure in a manner
not adverse to the holders of the Refunded Bonds any ambiguity,
formal defect or omission in this Agreement.
SECTION 28: Effect of Headings. The Section headings
herein are for convenience only and shall not affect the
construction hereof.
SECTION 29: Executed Counterparts. This Agreement may
be executed in several counterparts, all or any of which shall
be regarded for all purposes as one original and shall
constitute and be but one and the same instrument. This
Agreement shall be governed by the laws of the State of Texas
and shall be effective as of the date of the delivery of the
Bonds.
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IN WITNESS WHEREOF, the parties hereto have each caused
this Agreement to be executed by their duly authorized officers
and their corporate seals to be hereunto affixed and attested
as of the date first above written.
ATTEST:
City Secretary
(City Seal)
ATTEST:
Authorized Officer
(Bank Seal)
59055
CITY OF EULESS, TEXAS
Mayor
BANKERS TRUST COMPANY,
New York, New York,
as Escrow Agent
Authorized Officer
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