HomeMy WebLinkAbout1504 10-23-2001ORDINANCE NO. 1504
AN ORDINANCE authorizing the issuance of "CITY OF EULESS, TEXAS,
MUNICIPAL DRAINAGE UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 2001'; pledging the revenues of the Drainage Utility
System to the payment of the principal of and interest on said Bonds;
enacting provisions incident and related to the issuance, payment,
security and delivery of said bonds, including the approval and
execution of a Paying Agent/Registrar Agreement and the approval and
distribution of an Official Statement pertaining thereto; providing for the
redemption of certain outstanding bonds of the City; and providing an
effective date.
WHEREAS, the City of Euless, Texas (the "City ") has duly issued and delivered, and
there is currently outstanding, the following described revenue obligations totaling in principal
amount $1,535,000 (hereinafter called the "Refunded Obligations "), payable from and secured
by a first lien on and pledge of the revenues of the City's Municipal Drainage Utility System
(the "System "), to wit: City of Euless, Texas, Municipal Drainage Utility System Revenue
Bonds, Series 1991, dated October 1, 1991, and scheduled to mature on July 15 in each of
the years 2002 through 2010; and
WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter 1207,
as amended, the City Council is authorized to issue refunding bonds and deposit the proceeds
of sale directly with the place of payment for the Refunded Obligations, 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 Obligations; and
WHEREAS, the City Council hereby finds and determines that refunding bonds should
be issued at this time to refund the Refunded Obligations, and such refunding will result in a
gross dollar savings of approximately $140,517.50 and provide a present value savings of
approximately $114,058.25; and
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 $1,630,000 to be designated and bear the title "CITY OF EULESS, TEXAS, MUNICIPAL
DRAINAGE UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2001" (hereinafter
referred to as the "Bonds "), for the purpose of providing funds for the discharge and final
payment of certain outstanding obligations of the City (identified in the preamble hereof and
referred to as the "Refunded Obligations "), and paying costs of issuance, in conformity with
the Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code,
Section 402.051, as amended, and V.T.C.A., Government Code, Chapter 1207.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Date. The Bonds shall be issued as fully registered obligations, without
coupons, shall be dated October 15, 2001 (the "Issue Date ") and, other than the single fully
registered Initial Bond referenced in Section 8 hereof, shall be in denominations of $5,000 or
any integral multiple thereof (within a Stated Maturity), shall be numbered consecutively from
One (1) upward and shall become due and payable on July 15 in each of the years and in
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principal amounts (the "Stated Maturities ") and bear interest at per annum rates in accordance
with the following schedule:
Year of
Principal
Interest
Stated Maturity
Amount
Rate
2002
$170,000
3.00 %
2003
160,000
3.00%
2004
165,000
3.00%
2005
170,000
3.50%
2006
180,000
3.25%
2007
185,000
3.50%
2008
190,000
3.70%
2009
200,000
3.80%
2010
210,000
4.00%
The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at
the rate(s) per annum shown in the above schedule (calculated on the basis of a 360 -day year
of twelve 30 -day months). Interest on the Bonds shall be payable on January 15 and July 15
in each year, commencing January 15, 2002.
SECTION 3: Terms of Payment- Paving Agent/Registrar. The principal of, premium,
if any, and the interest on the Bonds, due and payable by reason of maturity or otherwise,
shall be payable only to the registered owners or holders of the Bonds (hereinafter called the
"Holders ") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar and all such payments shall be in 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 First Union National Bank, Houston, Texas to serve
as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and
records relating to the registration, payment, exchange and transfer of the Bonds (the
"Security Register') shall at all times be kept and maintained on behalf of the City by the
Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of
a "Paying Agent /Registrar Agreement ", substantially in the form attached hereto as Exhibit A,
and such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor and City Secretary are hereby authorized to execute and deliver such
Agreement in connection with the delivery of the Bonds. The City covenants to maintain and
provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any
successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other
entity qualified and authorized to serve in such capacity and perform the duties and services of
Paying Agent /Registrar. Upon any change in the Paying Agent /Registrar for the Bonds, the
City agrees to promptly cause a written notice thereof to be sent to each Holder by United
States Mail, first class postage prepaid, which notice shall also give the address of the new
Paying Agent /Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated
Maturities, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at
its designated office in Charlotte, North Carolina (the "Designated Payment/Transfer Office ").
Interest on the Bonds shall be paid to the Holders whose names appear in the Security
Register at the close of business on the Record Date (the last business day of the month next
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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 on which banking institutions in the City where the Paying Agent /Registrar is
located are authorized by law or executive order to close, then the date for such payment shall
be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on
which banking institutions are authorized to close; and payment on such date shall have the
same force and effect as if made on the original date payment was due.
In the event of a non - payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment
for such maturity or maturities (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 of such maturity or maturities 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: Non Optional. The Bonds shall not be subject to redemption prior to
maturity at the option of the City.
SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name
and address of each 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 (other than the Initial Bonds authorized in Section 8
hereof) 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 (other than the Initial Bonds authorized in Section 8
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as
the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment/Transfer Office of the Paying Agent /Registrar. Whenever any Bonds are
surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to
the Holder requesting the exchange.
All Bonds issued in a transfer or exchange of Bonds shall be delivered to the Holders
at the Designated Payment/Transfer Office of the Paying Agent /Registrar or sent by United
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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 30
hereof and such new replacement Bond shall be deemed to evidence the same obligation as
the mutilated, lost, destroyed, or stolen Bond.
SECTION 6: Book -Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, redemption, 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 operational arrangements referenced in the
Blanket Issuer Letter of Representation by and between the City and DTC (the "Depository
Agreement').
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 ") and,
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
to cause Bonds to be printed in definitive form and provide for the Bond certificates to be
issued and delivered to DTC Participants and Beneficial Owners, as the case may be.
Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall
be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signatures of individuals who are or were the proper
officers of the City on the Issue Date shall be deemed to be duly executed on behalf of the
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City, notwithstanding that such individuals or either of them shall cease to hold such offices at
the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered
in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A.,
Government Code, Chapter 1201, as amended.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of
registration substantially in the form provided in Section 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 upon any Bond duly signed shall be conclusive evidence, and the only
evidence, that such Bond has been duly certified, registered and delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount shown in Section 1
hereof with principal installments to become due and payable as provided in Section 2 hereof
and numbered T -1, or (ii) as multiple fully registered bonds, being one bond for each year of
maturity in the applicable principal amount and denomination and to be numbered
consecutively from T -1 and upward (hereinafter called the "Initial Bond(s)") and, in either case,
the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee
thereof. The Initial Bond(s) shall be the 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 Certificate of Registration, 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 in the event the Bonds are
purchased with insurance and any reproduction of an opinion of counsel) thereon as may,
consistently herewith, be established by the City or determined by the officers executing such
Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bonds 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.
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B. Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS,
MUNICIPAL DRAINAGE UTILITY SYSTEM
REVENUE REFUNDING BOND, SERIES 2001
Issue Date: Interest Rate: Stated Maturity: CUSIP NO:
October 15, 2001
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, 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, without right of prior redemption, and to pay interest
(computed on the basis of a 360 -day year of twelve 30 -day months) on the unpaid Principal
Amount hereof from the Issue Date at the per annum rate of interest specified above; such
interest being payable on January 15 and July 15 of each year, commencing January 15,
2002. Principal of this Bond is payable at its Stated Maturity to the registered owner hereof,
upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying
Agent/Registrar executing the registration certificate appearing hereon, or its successor.
Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds,
as defined in the Ordinance hereinafter referenced) whose name appears on the "Security
Register" maintained by the Paying Agent/ Registrar at the close of business on the 'Record
Date ", which is the last business day of the month next preceding each interest payment date
and interest shall be paid by the Paying Agent/ Registrar by check sent United States Mail,
first class postage prepaid, to the address of the registered owner recorded in the Security
Register or by such other method, acceptable to the Paying Agent /Registrar, requested by,
and at the risk and expense of, the registered owner. All payments of principal of, premium, if
any, and interest on this Bond shall be without exchange or collection charges to the owner
hereof and in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $1,630,000 (herein referred to as the 'Bonds ") for the purpose of refunding certain
outstanding obligations, and paying costs of issuance, under and in strict conformity with the
Constitution and laws of the State of Texas, including V.T.C.A., Local Government Code,
Section 402.051, as amended, and V.T.C.A., Government Code, Chapter 1207, as amended,
and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as
the "Ordinance ").
The Bonds are special obligations of the City, payable solely from and equally and
ratably secured by a first lien on and pledge of the Revenues (as defined in the Ordinance) of
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the City's Municipal Drainage Utility System (as defined in the Ordinance and hereinafter
referred to as 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
Revenues. The holder hereof shall never have the right to demand payment of this obligation
out of any funds raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has
reserved the right to issue additional revenue obligations payable from and equally and ratably
secured by a parity lien on and pledge of the Revenues of the System, in the same manner
and to the same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is on file in the
Designated Payment/Transfer Office of the Paying Agent /Registrar, and to all of the provisions
of which the Holder by the acceptance hereof hereby assents, for definitions of terms; a
description of and the nature and extent of the security for the Bonds, including the Revenues
pledged to the payment of the Bonds and the lien and pledge securing the payment of the
Bonds; conditions for the issuance of additional revenue obligations; rights and conditions
relating to transferability 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; provisions relating to the
defeasance and discharge of the liens, pledges, charges and covenants contained in the
Ordinance at or prior to the maturity of this Bond; and for other terms and provisions contained
therein. Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to 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 and (iii) on any other
date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar,
or any agent of either, shall be affected by notice to the contrary. In the event of non - payment
of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date
for such interest payment (a "Special Record Date ") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from
the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least
five (5) business days prior to the Special Record Date by United States Mail, first class
postage prepaid, to the address of each Holder appearing on the Security Register at the
close of business on the last business day next preceding the date of mailing of such notice.
It is hereby certified, recited, represented and covenanted that the City is a duly
organized and legally existing municipal corporation under and by virtue of the Constitution
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and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that
all acts, conditions and things required to exist and be done precedent to and in the issuance
of the Bonds to render the same lawful and valid obligations of the City have been properly
done, have happened and have been performed in regular and due time, form and manner as
required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds
do not exceed any constitutional or statutory limitation; and that due provision has been made
for the payment of the principal of and interest on the Bonds by a pledge of the 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 Issue Date.
ATTEST:
City Secretary
(Seal)
45095337.1
In
CITY OF EULESS, TEXAS
Mayor
C. `Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Bond only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
REGISTER NO.
OF PUBLIC ACCOUNTS )
STATE OF TEXAS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the
Comptroller of Public Accounts of the State of Texas.
(SEAL)
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
*NOTE TO PRINTER: Do not print on definitive bonds
D. Form of Certificate of Paving Agent/Registrar to Appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within - mentioned Ordinance; the bond or bonds of
the above entitled and designated series originally delivered having been approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts,
as shown by the records of the Paying Agent /Registrar.
The designated offices of the Paying Agent /Registrar in Charlotte, North Carolina is the
"Designated Payment/Transfer Office" for this Bond.
Registration date:
45095337.1
FIRST UNION NATIONAL BANK
Houston, Texas,
as Paying Agent/Registrar
0
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 number:)
the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints a ttorney to transfer the within
Bond on the books kept for registration thereof, with full power of substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every particular.
F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section, except
that the form of a 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:
The City of Euless (hereinafter referred to as the "City "), a body corporate and
municipal corporation in the County of Tarrant, State of Texas, for value received, hereby
promises to pay to the order of the Registered Owner named above, or the registered assigns
thereof, solely from the revenues hereinafter identified, the Principal Amount hereinabove
stated on July 15 in each of the years and in principal installments in accordance with the
following schedule:
YEAR OF PRINCIPAL INTEREST
MATURITY INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(without right of prepayment prior to maturity) and to pay interest, computed on the basis of a
360 -day year of twelve 30 -day months, on the unpaid principal amounts hereof from the Issue
Date at the per annum rates of interest specified above; such interest being payable on
January 15 and July 15 in each year, commencing January 15, 2002. Principal installments of
this Bond are payable in the year of maturity to the registered owner hereof by First Union
National Bank, Houston, Texas (the "Paying Agent /Registrar "), upon presentation and
surrender, at its designated offices in Charlotte, North Carolina (the "Designated
Payment/Transfer Office "). Interest is payable to the registered owner of this Bond whose
name appears on the "Security Register" maintained by the Paying Agent/Registrar at the
close of business on the "Record Date ", which is the last business day of the month next
preceding each interest payment date, and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address
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of 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 to the payment of the Bonds, the following definitions are provided:
"Act" - Subchapter C of Chapter 402 of the Local Government Code, as amended.
"Additional Bonds" - Revenue bonds or other evidences of indebtedness issued or
entered into, as the case may be, in the future in accordance with the terms and conditions
provided in Section 18 hereof and, by their terms, are equally and ratably secured by a parity
lien on and pledge of the Revenues of the System.
"Average Annual Debt Service" -An amount which, at the time of computation, is
derived by dividing the total amount of Debt Service to be paid over a period of years as the
same is scheduled to become due and payable by the number of years taken into account in
determining the total Debt Service. Capitalized interest payments provided from bond
proceeds shall be excluded in making the aforementioned computation.
"Bonds" - The "City of Euless, Texas, Municipal Drainage Utility System Revenue
Refunding Bonds, Series 2001" authorized by this Ordinance.
"Bonds Similarly Secured" - Collectively, the Bonds and Additional Bonds.
"City" - The incorporated municipality known as the City of Euless located in Tarrant
County, Texas.
"Debt Service" - As of any particular date of computation, with respect to any
obligations and with respect to any period, the aggregate of the amounts to be paid or set
aside by the City as of such date or in such period for the payment of the principal of,
premium, if any, and interest (to the extent not capitalized) on such obligations; assuming, in
the case of obligations without a fixed numerical rate, that such obligations bear, or would
have borne, interest at the highest rate of (i) the actual rate on the date of calculation, or if the
indebtedness is not yet outstanding, the initial rate (if established and binding), (ii) if the
indebtedness has been outstanding for at least twelve months, the average rate over the
twelve months immediately preceding the date of calculation and (iii) (A) if interest on the
indebtedness is excludable from gross income under the applicable provisions of the Internal
Revenue Code, the most recently published Bond Buyer 'Revenue Bond Index" (or
comparable index if no longer published) plus 50 basis points, or (B) if interest is not so
excludable, the interest rate on direct U. S. Treasury Obligations with comparable maturities
plus 50 basis points; provided, however, that for purposes of any rate covenant measuring
actual debt service during a test period, variable rate indebtedness shall be deemed to bear
interest at the actual rate per annum applicable during the test period..
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"Fiscal Year'- The twelve month financial accounting period used by the City in
connection with the operation of the System which may be any twelve consecutive month
period established by the City.
"Government Obligations" - (i) direct noncallable obligations of the United States of
America, including obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, (ii) noncallable obligations of an agency or
instrumentality of the United States, including obligations unconditionally guaranteed or
insured by the agency or instrumentality and on the date of their acquisition or purchase by the
City are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and on
the date of their acquisition or purchase by the City, are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent.
"Outstanding" - When used in this Ordinance with respect to Bonds or Bonds Similarly
Secured, as the case may be, means, as of the date of determination, all Bonds and Bonds
Similarly Secured theretofore sold, issued and delivered by the City, except:
(1) Bonds or Bonds Similarly Secured canceled or delivered to the transfer
agent or registrar for cancellation in connection with the exchange or transfer of such
obligations;
(2) Bonds or Bonds Similarly Secured paid or deemed to be paid in
accordance with the provisions of Section 28 hereof; and
(3) Bonds or Bonds Similarly Secured that have been mutilated, destroyed,
lost, or stolen and replacement bonds have been registered and delivered in lieu thereof.
"Required Reserve" - The total amount required to be accumulated and maintained in
the Reserve Fund under the provisions of Section 14 hereof.
"Revenues" - All income, receipts and revenues of every nature derived or received
from the operation and ownership (excluding impact fees and gifts restricted as to use and
federal or state grants for construction of drainage system facilities) of the System, including
earnings and income derived from the investment or deposit of moneys in any special funds or
accounts established and maintained for the payment and security of the Bonds Similarly
Secured and other obligations payable solely from and secured only by a lien on and pledge of
the Revenues of the System.
"Municipal Drainage Utility System" or "System" - All land, easements and interest in
land, together with all structures, equipment and facilities used in draining benefited property
(within the meaning of the Act), including, but not limited to, bridges, catch basins, channels,
conduits, creeks, culverts, detention ponds, ditches, draws, flumes, pipes, pumps, sloughs,
treatment works, and appurtenances to those items, whether natural or artificial, or using force
or gravity, that are used to draw off surface water from land, carry the water away, collect,
store, or treat the water, or divert the water into natural or artificial watercourses.
SECTION 11: Pledge. The City hereby covenants and agrees that the Revenues of
the System, with the exception of those in excess of the amounts required for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged, to the payment and
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security of the Bonds and Additional Bonds, if issued, including the establishment and
maintenance of the special funds created and established by this Ordinance, all as hereinafter
provided, and it is hereby ordained that such pledge of the Revenues securing the payment of
the Bonds Similarly Secured and interest thereon shall constitute a first lien on such Revenues
in accordance with the terms hereof and be valid and binding and fully perfected from and
after the date of adoption of this Ordinance without physical delivery or transfer or transfer of
control of the Revenues, the filing of this Ordinance or any other act; all as provided in Chapter
1208 of the Texas Government Code.
SECTION 12: System Fund. The City hereby covenants and agrees that the
Revenues of the System (excluding earnings and income derived from investments held in the
Bond Fund and Reserve Fund) shall be deposited as collected to the credit of a fund
maintained at an official depository of City funds, and known on the books and records of the
City as the "Drainage Utility System Fund" (herein called the "System Fund "). All revenues
deposited in the System Fund shall be pledged and appropriated to the extent required for the
following uses and in the order of priority shown:
First: To the payment of the amounts required to be deposited in the
Bond Fund for the payment of Debt Service on the Bonds Similarly Secured as
the same becomes due and payable.
Second: To the payment of the amounts required to be deposited in
the Reserve Fund to establish and maintain the Required Reserve in
accordance with the provisions of this Ordinance or any other ordinance
relating to issuance of Bonds Similarly Secured.
Revenues remaining in the System Fund after satisfying the foregoing payments, or
making adequate and sufficient provision for the payment thereof, may be transferred to the
City's general fund or used for any other purpose now or hereafter permitted by law.
SECTION 13: Bond Fund. For purposes of providing funds to pay the principal of and
interest on the Bonds Similarly Secured as the same becomes due and payable, the City
agrees to establish and maintain a special account on the books and records of the City
known as the "City of Euless Drainage Utility System Revenue Bond Interest and Sinking
Fund" (the "Bond Fund "), and all monies deposited to the credit of such Fund shall be held in a
fund or account maintained at an official depository of the City. The City covenants that there
shall be deposited into the Bond Fund prior to each principal and interest payment date from
the Revenues an amount equal to one hundred per centum (100 %) of the interest on and the
principal of the Bonds then falling due and payable by reason of maturity or redemption, and
such deposits to pay principal and accrued interest on the Bonds shall be made in
substantially equal monthly installments on or before the 10th day of each month, beginning
the month next following the delivery of the Bonds to the initial purchaser(s).
The required monthly deposits to the Bond Fund for the payment of principal of and
interest on the Bonds shall continue to be made as provided above until (i) the total amount on
deposit in the Bond Fund and 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.
Accrued interest and premium, if any, received from the purchaser(s) of the Bonds, as
well as earnings derived from the investment of moneys in the Bond Fund, shall be deposited
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to the credit of the Bond Fund and taken into consideration and reduce the amount of the
required monthly deposits to be deposited in the Bond Fund from the Revenues in the System
Fund.
SECTION 14: Reserve Fund. (a) For purposes of providing a reserve for the payment
of the Bonds Similarly Secured, the City agrees and covenants to establish and maintain a
special fund or account on its books and records known as the "City of Euless Drainage Utility
System Revenue Bond Reserve Fund" (the 'Reserve Fund "). All moneys deposited to the
credit of such Fund shall be held in a fund or account maintained at an official depository of
City funds. All funds deposited to the credit of the Reserve Fund (excluding investment or
deposit earnings and income which may be transferred to either or both the System Fund
established in Section 12 hereof or Bond Fund established in Section 13 hereof during such
periods as there is on deposit in the Reserve Fund the Required Reserve) shall be used solely
(1) to pay the principal of and interest on the Bonds Similarly Secured when (whether at
maturity, upon a mandatory redemption date or any interest payment date) other funds
available for such purposes are insufficient, (ii) to pay the principal of and interest on Bonds
Similarly Secured held by an Insurer, or evidenced by an instrument of assignment entitling an
Insurer to payment of principal of and interest on Bonds Similarly Secured, as a result of
payments or draws made on a surety bond or insurance policy held for the account of the
Reserve Fund and such payments will result in (x) the principal of and /or interest on such
Bonds Similarly Secured to be paid and (y) the restoration and replenishment of the surety
bond or insurance policy coverage representing all or a portion of the Required Reserve, and
(iii) to pay, or provide for the payment of, the final principal amount of a series of Bonds
Similarly Secured so that such series of Bonds Similarly Secured is no longer deemed to be
"Outstanding" as such term is defined herein, and following such payment or use, the amount
remaining in the Reserve Fund will equal or exceed the Required Reserve for the Bonds
Similarly Secured then Outstanding as recalculated and determined in the manner described
below for the issuance of Additional Bonds using the date such payment is made or occurs as
the date for determining the Average Annual Requirement for the Bonds Similarly Secured
then Outstanding.
By reason of the issuance of the Bonds, the total amount required to be accumulated
and maintained in said Fund is hereby determined to be $213,670 (the 'Required Reserve ")
which amount is hereby found to equal or exceed the Average Annual Debt Service for the
Bonds (calculated on a Fiscal Year basis as of the date the Bonds are to be delivered). The
Required Reserve shall be established and maintained with Revenues of the System, the
proceeds of sale of Bonds Similarly Secured or by depositing to the credit of the Reserve
Fund, to the extent permitted by law, one or more surety bonds or insurance policies issued by
a company or institution having a rating in the highest rating category by two nationally
recognized rating agencies or services, or any combination thereof. The City covenants and
agrees the Required Reserve shall be initially funded in full on the date of the delivery of the
Bonds with funds currently on deposit to the credit of the reserve fund maintained for the
payment of the Refunded Obligations.
As and when Additional Bonds are delivered or incurred, the Required Reserve shall
be increased, if required, to an amount equal to the lesser of (i) the Average Annual Debt
Service (calculated on a Fiscal Year basis) for all Bonds Similarly Secured then Outstanding,
as determined on the date each series of Additional Bonds is delivered or incurred, as the
case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be
invested without restriction as to yield pursuant to Subsection (d) of Section 148 of the Internal
Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any additional
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amount required to be maintained in the Reserve Fund shall be so accumulated (1) by
depositing to the credit of the Reserve Fund (immediately after the delivery of the then
proposed Additional Bonds) cash or an additional surety bond or insurance policy or revised
surety bond or revised insurance policy with coverage in an amount sufficient to provide for the
new Required Reserve to be fully or partially funded, or (ii) at the option of the City, by making
monthly deposits from funds in the System Fund on or before the 10'h day of each month
following the month of delivery of the then proposed Additional Bonds, of not less than 1 160th
of the additional amount to be maintained in said Fund by reason of the issuance of the
Additional Bonds then being issued (or 1 /60th of the balance of the additional amount not
deposited immediately in cash or provided by a surety bond or insurance policy).
While the cash and investments in the Reserve Fund and /or coverage afforded by a
surety bond or insurance policy held for the account of the Reserve Fund total not less than
the Required Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and
when the Reserve Fund at any time contains less than the Required Reserve (or so much
thereof as shall then be required to be contained therein if Additional Bonds have been issued
and the City has elected to accumulate all or a portion of the Required Reserve with
Revenues), the City covenants and agrees to cause monthly deposits to be made to the
Reserve Fund on or before the 10`h day of each month (beginning the month next following the
month the deficiency in the Required Reserve occurred by reason of a draw on the Reserve
Fund or as a result of a reduction in the market value of investments held for the account of
the Reserve Fund) from Revenues of the System in an amount equal to either (i) 1/12th of the
Required Reserve until the total Required Reserve then required to be maintained in said
Fund has been fully restored or (ii) the amounts to pay principal of and interest on Bonds
Similarly Secured held by an Insurer, or evidenced by an instrument of assignment entitling an
Insurer to payment of principal of and interest on Bonds Similarly Secured, as a result of
payments or draws made on a surety bond or insurance policy held for the account of the
Reserve Fund and such payments will result in (x) the principal of and /or interest on such
Bonds Similarly Secured to be paid and (y) the restoration and replenishment of the surety
bond or insurance policy coverage representing all or a portion of the Required Reserve. The
City further covenants and agrees that, subject only to payments to be made to the Bond
Fund, the Revenues of the System shall be applied and appropriated and used to establish
and maintain the Required Reserve and to cure any deficiency in such amounts as required by
the terms of this Ordinance and any other ordinance pertaining to the issuance of Additional
Bonds.
During such time as the Reserve Fund contains the total Required Reserve, the City
may, at its option, withdraw all surplus in the Reserve Fund resulting from the investment of
the Required Reserve and deposit such investment earnings to the credit of the System Fund
(to the extent such earnings are a result of investment of funds other than the proceeds of sale
of Bonds Similarly Secured) or the Bond Fund (irrespective of the source of the funds invested
resulting in such earnings). The City hereby designates its depository bank or banks as the
custodian of the Reserve Fund.
SECTION 15: Deficiencies; Excess Revenues. (a) If on any occasion there shall not
be sufficient Revenues of the System to make the required deposits into the Bond Fund and
the Reserve Fund, then such deficiency shall be cured as soon as possible from the next
available Revenues of the System, or from any other sources available for such purpose.
(b) Subject to making the required deposits to the Bond Fund and the Reserve
Fund in accordance with the provisions of this Ordinance, or any ordinance authorizing the
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issuance of Additional Bonds, the excess Revenues may be transferred to the City's general
operating fund or used by the City for any lawful purpose.
SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the
Director of Fiscal and Administrative Services (or other designated financial officer of the City)
shall cause to be transferred to the Paying Agent /Registrar, from funds on deposit in the Bond
Fund, and, if necessary, in the Reserve 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 last business day next preceding the date of
payment for the Bonds.
SECTION 17: Investments - Security of Funds. (a) Money in any Fund established
pursuant to this Ordinance may, at the option of the City, be invested in funds and obligations
authorized and identified in the Public Funds Investment Act (V.T.C.A., Government Code,
Chapter 2256) or other applicable law; provided, however, the investment of moneys held in
the Bond Fund and Reserve Fund shall be restricted to time deposits or certificates of deposit
secured (to the extent not insured by the Federal Deposit Insurance Corporation) by
obligations of the type hereinafter described, or be invested, including investments held in
book -entry form, in direct obligations of the United States of America and obligations
guaranteed or insured by the United States of America, which, in the opinion of the Attorney
General of the United States, are backed by its full faith and credit or represent its general
obligations; provided that all such deposits and investments shall be made in such a manner
that the money required to be expended from any Fund will be available at the proper time or
times and provided further the maximum stated maturity for any investment acquired with
money in the Reserve Fund shall be limited to five (5) years from the date of the investment of
such money. Such investments (except State and Local Government Series investments held
in book entry form, which shall at all times be valued at cost) shall be valued in terms of
current market value within 45 days of the close of each Fiscal Year and, with respect to
investments held for the account of the Reserve Fund, within 30 days of the date of passage
of each ordinance authorizing the issuance of Additional Bonds. All interest and income
derived from deposits and investments in the Bond Fund immediately shall be credited to, and
any losses debited to, the Bond Fund. All interest and interest income derived from deposits
in and investments of the Reserve Fund shall, subject to the limitations provided in Section 14
hereof, be credited to and deposited in the System Fund. All such investments shall be sold
promptly when necessary to prevent any default in connection with the Bonds.
(b) To the extent amounts deposited to the credit of any Funds referenced herein
are not invested, such uninvested amounts 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.
SECTION 18: Issuance of Additional Obligations. Subject to the provisions hereinafter
appearing as to conditions precedent which must be satisfied, the City reserves the right to
issue, from time to time as needed, Additional Bonds for any authorized purpose, including the
issuance of refunding bonds. Such Additional Bonds may be issued in such form and manner
as now or hereafter authorized by the laws of the State of Texas for the issuance of evidences
of indebtedness or other instruments, and should new methods or financing techniques be
developed that differ from those now available and in normal use, the City reserves the right to
employ the same in its financing arrangements provided only that the following conditions
precedent for the authorization and issuance of the same are satisfied, to wit:
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(1) The officer of the City then having the primary responsibility for
the financial affairs of the City shall have executed a certificate stating (a) that,
to the best of her knowledge and belief, the City is not then in default as to any
covenant, obligation or agreement contained in any ordinance or other
proceeding relating to any obligations of the City payable from and secured by
a lien on and pledge of the Revenues of the System that would materially affect
the security or payment of such obligations and (b) either (i) payments into all
special Funds maintained for the payment and security of all outstanding
obligations payable from and secured by a lien on and pledge of the Revenues
of the System have been made and that the amounts on deposit in such special
Funds equal or exceed the amounts then required to be on deposit therein or
(ii) the application of the proceeds of sale of such obligations then being issued
will cure any such deficiency.
(2) The Additional Bonds shall be scheduled to mature or be
payable as to principal on January 15 or July 15 (or both) in each year the
same are to be outstanding or during the term thereof.
(3) The City has secured a certificate or opinion of a Certified Public
Accountant to the effect that, according to the books and records of the City,
the Revenues for the last completed Fiscal Year, or for 12 consecutive months
out of the 18 months, immediately preceding the date of issuance of the
Additional Bonds (the date of issuance being the date of delivery of all or a
portion of the Additional Bonds to the initial purchasers) are at least equal to (i)
1.25 times the Average Annual Debt Service for all Outstanding Bonds Similarly
Secured after giving effect to the issuance of the Additional Bonds then being
issued and (ii) 1.10 times the maximum annual Debt Service payment to be
paid in a Fiscal Year for the Outstanding Bonds Similarly Secured after giving
effect to the issuance of the Additional Bonds then being issued. In making a
determination of the Revenues, the Accountant may take into consideration a
change in the charges for services afforded by the System that became
effective at least sixty (60) days prior to the last day of the period for which
Revenues are determined and, for purposes of satisfying the above Revenues
test, make a pro forma determination of the Revenues of the System for the
period of time covered by his certification or opinion based on such change in
charges being in effect for the entire period covered by the certificate or opinion
of the Accountant.
SECTION 19: Refunding Bonds. The City reserves the right to issue refunding bonds
to refund all or any part of the Bonds Similarly Secured (pursuant to any law then available)
upon such terms and conditions as the City Council of the City may deem to be in the best
interest of the City and its inhabitants, and if less than all such Bonds Similarly Secured then
outstanding are refunded, the conditions precedent prescribed (for the issuance of Additional
Bonds) set forth in subparagraph (3) of Section 18 hereof shall be satisfied and thecertificate
or opinion of the Accountant required in subparagraph (3) shall give effect to the Debt Service
of the proposed refunding bonds (and shall not give effect to the Debt Service of the Bonds
Similarly Secured being refunded following their cancellation or provision being made for their
payment).
SECTION 20: Obligations of Inferior Lien and Pledge. The City hereby reserves the
right to issue obligations payable from and secured by a lien on and pledge of the Revenues of
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the System, junior and subordinate in rank and dignity to the lien and pledge securing the
payment of the Bonds Similarly Secured, as may be authorized by the laws of the State of
Texas.
SECTION 21: Drainage Charges. For the benefit of the Holders of the Bonds and in
accordance with the provisions of the Act and other applicable laws of the State of Texas, the
City hereby expressly stipulates and agrees, while any of the Bonds are Outstanding, to
establish, maintain and impose drainage charges for services afforded by the System that are
reasonably expected, on the basis of available information and experience and with due
allowance for contingencies, to produce Revenues in each Fiscal Year:
(1) sufficient to pay the principal of and interest on the Bonds
Similarly Secured and the amounts required to be deposited in any reserve or
contingency fund created for the payment and security of the Bonds Similarly
Secured, and other obligations or evidences of indebtedness issued or incurred
that are payable only from and secured solely by a lien on and pledge of the
Revenues of the System,
(2) in an amount equivalent to at least 1.25 times the annual Debt
Service for the Fiscal Year on the Bonds Similarly Secured then Outstanding,
and
(3) to pay all other indebtedness payable from and /or secured in whole
or in part by a lien on and pledge of the Revenues of the System.
SECTION 22: Insurance. In regard to the operations and properties of the System, the
City also agrees to carry and maintain liability and property damage insurance of the kind and
in the amounts customarily carried by municipal corporations in Texas on such kind of
properties; provided, however, the City in lieu of and /or in combination with carrying such
insurance may self- insure against such perils and risks by establishing self- insurance
reserves. Annually each year not later than the end of each Fiscal Year, the City shall prepare
or cause to be prepared by a person competent and knowledgeable in such matters a written
evaluation of the adequacy of such self- insurance and /or insurance coverage and of any
recommended changes in regard to the City's insurance /self- insurance policies, practices and
procedures.
SECTION 23: Sale or Lease of Properties. The City, to the extent and in the manner
authorized by law, may sell or exchange for consideration representing the fair value thereof,
as determined by the City Council of the City, any property of the System which is obsolete,
damaged or worn out or otherwise unsuitable. The proceeds of any sale of properties of the
System shall be deposited in the System Fund.
SECTION 24: Records and Accounts. The City hereby covenants and agrees that
while any Bonds remain Outstanding, it will keep and maintain separate and complete records
and accounts pertaining to the receipt and disbursement of Revenues of the System in
accordance with generally accepted accounting principles, as well as an inventory or list of
System properties. The Holders of any Bonds or any duly authorized agent or agents of such
Holders shall have the right at all reasonable times to inspect such records, accounts and data
relating thereto and the inventory of System properties. The City further agrees that annually
an audit of the books and accounts of the System shall be made by an independent firm of
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Certified Public Accountants. Each such audit, in addition to whatever other matters may be
thought proper by the accountant, shall particularly include the following:
(1) A statement of the receipts and disbursements of the System for
such Fiscal Year.
(2) A balance sheet for the System as of the end of such Fiscal
Year.
(3) The Accountant's comments regarding the manner in which the
City has carried out the requirements of this Ordinance and any other ordinance
authorizing the issuance of Additional Bonds and his recommendations for any
changes or improvements in the operations, records and accounts of the
System.
Copies of each annual audit shall be furnished to the Executive Director of the
Municipal Advisory Council of Texas at his office in Austin, Texas, and, upon request, to the
initial purchasers of the Bonds and subsequent Holders of 15% or more in principal amount of
said Bonds. Such required annual audit of the financial records and accounts of the City shall
be completed, insofar as possible, within 120 days following the close of each Fiscal Year and
may be a part of the annual audit made of all City records and accounts.
SECTION 25: Special Covenants. The City further covenants and agrees by and
through this Ordinance as follows:
(1) It has the lawful power to pledge the Revenues of the System to
the payment of the Bonds to the extent provided herein and has lawfully
exercised said power under the Constitution and laws of the State of Texas,
including the Act, and that the Bonds issued hereunder, together with the
Additional Bonds, shall be ratably secured in such manner that no one bond
shall have preference over any other bond of said issues.
(2) The Revenues of the System have not been in any manner
pledged or encumbered to the payment of any debt or obligation of the City or
the System, save and except for the Bonds.
(3) To exercise and pursue with due diligence available remedies
provided by law for the collection of delinquent drainage charges, including the
power under Section 402.050 of the Act to discontinue all utility services,
particularly water and sewer services provided by the City to a user of benefited
property who is delinquent in the payment of drainage charges.
SECTION 26: Remedy in Event of Default. In addition to all 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 the 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 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 and its officers 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
45095337.1
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to be a waiver of any such default or acquiescence therein, and every such right and power
may be exercised from time to time and as often as may be deemed expedient.
The specific remedy herein provided shall be cumulative of all other existing remedies
and the specification of such remedy shall not be deemed to be exclusive.
SECTION 27: Special Obligations. The Bonds are special obligations of the City
payable from the pledged Revenues and the Holders thereof shall never have the right to
demand payment thereof out of funds raised or to be raised by taxation.
SECTION 28: Satisfaction of Obligation of Citv. 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 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 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) non - callable Government
Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or
an authorized escrow agent, which Government Obligations have been certified by an
independent accounting firm to mature as to principal and interest in such amounts and at
such times as will insure the availability, without reinvestment, of sufficient money, together
with any moneys deposited therewith, if any, to pay when due the principal of and interest on
such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof.
The City covenants that no deposit of moneys or Government Obligations will be made under
this Section and no use made of any such deposit which would cause the Bonds to be treated
as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986,
as amended, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar
or an authorized escrow agent, pursuant to this Section which is not required for the payment
of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the
City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the
principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity of the Bonds such moneys were deposited and are held in trust to
pay shall, upon the request of the City, be remitted to the City against a written receipt
therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying
Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the
State of Texas.
SECTION 29: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended
or repealed by the City while 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
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Holders, to cure any ambiguity, inconsistency, or formal defect or omission herein and to
provide additional security for the payment of the Bonds Similarly Secured. In addition, the
City may, with the written consent from the Bond Insurer and owners holding a majority in
aggregate principal amount of the Bonds Similarly Secured then Outstanding (excluding
Bonds Similarly Secured acquired by or held for the account of the City) affected thereby,
amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the
written consent of all Holders of Bonds then Outstanding, no such amendment, addition, or
rescission shall (1) extend the time or times of payment of the principal of, premium, if
any, and interest on the Bonds, reduce the principal amount thereof, 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 or Bonds Similarly Secured, as the case
may be, required to be held for consent to any such amendment, addition, or rescission.
Notice of any amendment requiring the consent of the Bond Insurer and all Holders of
the Bonds shall be furnished to any rating agency rating the Bonds at least 15 days prior to the
execution or adoption of such amendment.
SECTION 30: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond
shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and
deliver a replacement Bond of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstanding, in exchange and substitution for such mutilated
Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the
approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/
Registrar of evidence satisfactory to the Paying Agent/ Registrar of the destruction, loss or
theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the
Paying Agent /Registrar of indemnification in an amount satisfactory to hold the City and the
Paying Agent /Registrar harmless. All expenses and charges associated with such indemnity
and with the preparation, execution and delivery of a replacement Bond shall be borne by the
Holder of the Bond mutilated, or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed,
lost, or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or
not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated,
destroyed, lost, or stolen Bonds.
SECTION 31: Covenants to Maintain Tax - Exempt Status. (a) Definitions. When used
in this Section, the following terms shall have the following meanings:
"Closing Date" means the date on which the Bonds are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if
any, effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148 -1(b) of the Regulations.
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"Gross Proceeds" means any proceeds as defined in Section 1.148 -1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148 -1(c) of the
Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148 -1(b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to
carry out the governmental purposes of the Bonds.
'Rebate Amount' has the meaning set forth in Section 1.148 -1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148 -5 of the
Regulations; and (2) the Bonds has the meaning set forth in Section 1.148 -4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the
use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the
acquisition, construction or improvement of which is to be financed or
refinanced directly or indirectly with Gross Proceeds of the Bonds (including
property financed with Gross Proceeds of the Refunded Obligations), and not
use or permit the use of such Gross Proceeds (including all contractual
arrangements with terms different than those applicable to the general public)
or any property acquired, constructed or improved with such Gross Proceeds in
any activity carried on by any person or entity (including the United States or
any agency, department and instrumentality thereof) other than a state or local
government, unless such use is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is
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to be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with Gross Proceeds of the Refunded Obligations),
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code
and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
For purposes of the foregoing covenant, such Gross Proceeds are considered to be 'loaned"
to a person or entity if: (1) property acquired, constructed or improved with such Gross
Proceeds is sold or leased to such person or entity in a transaction which creates a debt for
federal income tax purposes; (2) capacity in or service from such property is committed to
such person or entity under a take -or -pay, output or similar contract or arrangement; or (3)
indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any
property acquired, constructed or improved with such Gross Proceeds are otherwise
transferred in a transaction which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds
(or with money replaced thereby), whether then held or previously disposed of, exceeds the
Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take
any action which would cause the Bonds to be federally guaranteed within the meaning of
section 149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by section
149(e) of the Code with the Secretary of the Treasury on Form 8038 -G or such other form and
in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof)
and shall retain all records of accounting for at least six years after the day on
which the last Outstanding Bond is discharged. However, to the extent
permitted by law, the City may commingle Gross Proceeds of the Bonds with
other money of the City, provided that the City separately accounts for each
receipt and expenditure of Gross Proceeds and the obligations acquired
therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall
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maintain such calculations with its official transcript of proceedings relating to
the issuance of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States out of the Bond Fund or its
general fund, as permitted by applicable Texas statute, regulation or opinion of
the Attorney General of the State of Texas, the amount that when added to the
future value of previous rebate payments made for the Bonds equals (i) in the
case of a Final Computation Date as defined in Section 1.148- 3(e)(2) of the
Regulations, one hundred percent (100 %) of the Rebate Amount on such date;
and (ii) in the case of any other Computation Date, ninety percent (90 %) of the
Rebate Amount on such date. In all cases, the rebate payments shall be made
at the times, in the installments, to the place and in the manner as is or may be
required by section 148(f) of the Code and the Regulations and rulings
thereunder, and shall be accompanied by Form 8038 -T or such other forms and
information as is or may be required by Section 148(f) of the Code and the
Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors
are made in the calculations and payments required by paragraphs (2) and (3),
and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred
eighty (180) days after discovery of the error), including payment to the United
States of any additional Rebate Amount owed to it, interest thereon, and any
penalty imposed under Section 1.148 -3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to
the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection H of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
(j) Elections. The City hereby directs and authorizes the City Manager and
Director of Fiscal and Administrative Services, individually or jointly, to make elections
permitted or required pursuant to the provisions of the Code or the Regulations, as they deem
necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption
or similar or other appropriate certificate, form or document.
(k) Bonds Not Hedge Bonds. At the time the original bonds refunded by the Bonds
were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of
such bonds within three years after such bonds were issued and not more than 50% of the
proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose
Investments having a substantially guaranteed Yield for a period of 4 years or more.
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(1) Current Refunding. The Bonds are issued exclusively to refund the Refunded
Obligations, and the Bonds will be issued less than 90 days before the redemption of the
Refunded Obligations.
SECTION 32: Sale of Bonds. The Bonds authorized by this Ordinance are hereby
sold by the City to SWS Securities Inc. (herein referred to as the "Purchasers ") in accordance
with the Purchase Contract, dated October 23, 2001, attached hereto as Exhibit B 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 declares that the
representations, warranties and agreements of the City contained in the Purchase Contract
are true and correct in all material respects and shall be honored and performed by the City.
SECTION 33: Control and Custody of Bonds. The Mayor shall be and is hereby
authorized to take and have charge of all necessary orders and records pending investigation
by the Attorney General of the State of Texas, including the printing and supply of definitive
Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval
thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts
and the delivery thereof to the initial purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City Manager, and Director of
Fiscal and Administrative Services, any one or more of said officials, are hereby authorized
and directed to furnish and execute such agreements, documents and certifications relating to
the City and the issuance, sale and delivery 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 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 34: Official Statement. The use of the Preliminary Official Statement, dated
October 18, 2001, in the offering and sale of the Bonds is hereby ratified, confirmed and
approved in all respects, and the City Council hereby finds that the information and data
contained in said Preliminary Official Statement pertaining to the City and its financial affairs is
true and correct in all material respects and no material facts have been omitted therefrom
which are necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading. The final Official Statement, which reflects the terms of sale
(together with such changes approved by the Mayor, City Manager, City Secretary, or Director
of Fiscal and Administrative Services, 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 23, 2001, in the reoffering, sale and delivery of the
Bonds to the public.
SECTION 35: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale in the sum of (i) $1,573,638.90 shall be deposited to with The Chase
Manhattan Bank to be used to redeem the Refunded Obligations on December 6, 2001, and
(ii) $7,643.32 shall be deposited to the credit of the Bond Fund. The balance of the proceeds
of sale of the Bonds shall be expended to pay costs of issuance, including municipal bond
45095337.1
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insurance premium, and any excess amount budgeted for such purpose shall be deposited to
the credit of the Bond Fund.
SECTION 36:. Redemption of Refunded Obligations. The bonds of that series known
as "City of Euless, Texas, Municipal Drainage Utility System Revenue Bonds, Series 1991",
dated October 1, 1991, maturing in the years 2002 through 2015, and aggregating in principal
amount $1,535,000, shall be redeemed and the same are hereby called for redemption on
December 6, 2001, at the price of par and accrued interest to the date of redemption. The City
Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a
suggested form of notice of redemption to be sent to bondholders, with The Chase Manhattan
Bank, or its successor (successor paying agent/registrar to Ameritrust Texas, National
Association), in accordance with the redemption provisions applicable to such bonds; such
suggested form of notice of redemption being attached hereto as Exhibit C and incorporated
herein by reference as a part of this Ordinance for all purposes.
The redemption of the obligations described above being associated with the advance
refunding of such obligations, the approval, authorization and arrangements herein given and
provided for the redemption of such obligations on the redemption dates designated therefor
and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds;
and the City Secretary is hereby authorized and directed to make all arrangements necessary
to notify the holders of such obligations of the City's decision to redeem such obligations on
the dates and in the manner herein provided and in accordance with the ordinances
authorizing the issuance of the obligations and this Ordinance.
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 as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to
receive such notice, either before or after the event with respect to which such notice is given,
and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be
filed with the Paying Agent /Registrar, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
SECTION 38: Cancellation. All Bonds surrendered for payment, transfer or exchange,
if surrendered to the Paying Agent /Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent /Registrar. The City may at any
time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the City.
SECTION 39: Legal Opinion. The obligation of the Purchasers to accept delivery of
the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P.,
Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated
and delivered as of the date of delivery and payment for such Bonds. A true and correct
45095337.1
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reproduction of said opinion or an executed counterpart thereof is hereby authorized to be
either printed on definitive printed obligations or deposited with DTC along with the global
certificates for the implementation and use of the Book Entry Only System used in the
settlement and transfer of the Bonds.
SECTION 40: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving said Bonds as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 41: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 42: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 43: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 44: Severabilitv. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the Council hereby
declares that this Ordinance would have been enacted without such invalid provision.
SECTION 45: 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: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
WSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be
a nationally recognized municipal securities information repository within the meaning of the
Rule from time to time.
45095337.1
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
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"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state
information depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2001) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by this Ordinance, being the
information described in Exhibit D hereto. Financial statements to be provided shall be (1)
prepared in accordance with the accounting principles described in Exhibit D hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the
City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR
and any SID with the financial information and operating data and will file the annual audit
report when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific reference to
any document (including an official statement or other offering document, if it is available from
the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the
SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR
or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if
such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non- payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax - exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds; and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely
manner, of any failure by the City to provide financial information or operating data in
accordance with subsection (b) of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an 'obligated person" with respect to the Bonds within the meaning of the Rule,
45095337.1
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except that the City in any event will give the notice required by subsection (c) hereof of any
Bond calls and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to
update any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or warranty concerning
such information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH
PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH
SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of
this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt
to changed circumstances resulting from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as
such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b)
a Person that is unaffiliated with the City (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Bonds. The provisions of this Section may also be amended from
time to time or repealed by the City if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if
and to the extent that reservation of the City's right to do so would not prevent underwriters of
the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such
offering. If the City so amends the provisions of this Section, it shall include with any amended
financial information or operating data filed with each NRMSIR and SID pursuant to subsection
(b) of this Section an explanation, in narrative form, of the reasons for the amendment and of
the impact of any change in the type of financial information or operating data so provided.
45095337.1
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SECTION 47: FSA Insurance. The Bonds have been sold with the principal of and
interest thereon being insured by Financial Security Assurance Inc. (hereinafter called "FSA ")
pursuant to an Insurance Policy. In accordance with the terms and conditions applicable to
insurance provided by FSA, the City covenants and agrees that, in the event the principal and
interest due on the Bonds shall be paid by FSA pursuant to the policy referred to this Section,
the assignment and pledge of all funds and all covenants, agreements and other obligations of
the City to the Holders shall continue to exist and FSA shall be subrogated to the rights of
such Holders; and furthermore, the City covenants and agrees that:
(a) FSA shall be included as a third party beneficiary to this Ordinance.
(b) FSA shall be deemed to be a Holder for purposes of Section 26 of this
Ordinance.
(c) No amendment or supplement to this Ordinance may become effective without
prior notice to FSA.
Copies of any modification or amendment to this Ordinance shall be sent to Standard &
Poor's Ratings Services and Moody's Investors Service, Inc..
(d) The rights granted to FSA under this Ordinance to request, consent to or direct
any action are rights granted to FSA in consideration of its issuance of the Insurance Policy.
Any exercise by FSA of such rights is merely an exercise of the FSA's contractual rights and
shall not be construed or deemed to be taken for the benefit or on behalf of the Holders nor
does such action evidence any position of FSA, positive or negative, as to whether Holder
consent is required in addition to consent of FSA.
(e) Claims upon the Insurance Policy and Payments by and to FSA. If, on the
business day prior to the related scheduled interest payment date or principal payment date or
the date to which bond maturity has been accelerated ( "Payment Date ") there is not on deposit
with the Paying Agent/Registrar, after making all transfers and deposits required under this
Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due on such
Payment Date, the Paying Agent shall make a claim under the Insurance Policy and shall give
notice to FSA and to its designated agent (if any) (the "Insurer's Fiscal Agent ") by telephone or
telecopy of the amount of such deficiency and the allocation of such deficiency between the
amount required to pay interest on the Bonds and the amount required to pay principal of the
Bonds, confirmed in writing to FSA and the Insurer's Fiscal Agent by 12:00 noon, New York
City time, on such business day by filling in the form of Notice of Claim and Certificate
delivered with the Insurance Policy.
In the event the claim to be made is for a mandatory sinking fund redemption
installment, upon receipt of the moneys due, the Paying Agent/Registrar shall authenticate and
deliver to affected Holders who surrender their Bonds a new Bond or Bonds in an aggregate
principal amount equal to the unredeemed portion of the Bond surrendered. The Paying
Agent/Registrar shall designate any portion of payment of principal on Bonds paid by FSA,
whether by virtue of mandatory sinking fund redemption, maturity or other advancement of
maturity, on its books as a reduction in the principal amount of Bonds registered to the then
current Holder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond
to FSA, registered in the name of Financial Security Assurance Inc., in a principal amount
equal to the amount of principal paid (without regard to authorized denominations); provided
that the Paying Agent/Registrar's failure to so designate any payment or issue any
45095337.1
-30-
replacement Bond shall have no effect on the amount of principal or interest payable by the
City on any Bond or the subrogation rights of FSA.
The Paying Agent/Registrar shall keep a complete and accurate record of all funds
deposited by FSA into the Policy Payments Account and the allocation of such funds to
payment of interest on and principal paid in respect of any Bond. FSA shall have the right to
inspect such records at reasonable times upon reasonable notice to the Paying
AgenURegistrar.
Upon payment of a claim under the Insurance Policy the Paying Agent/Registrar shall
establish a separate special purpose trust account for the benefit of Holders referred to herein
as the "Policy Payments Account" and over which the Paying Agent/Registrar shall have
exclusive control and sole right of withdrawal. The Paying Agent/Registrar shall receive any
amount paid under the Insurance Policy in trust on behalf of Holders and shall deposit any
such amount in the Policy Payments Account and distribute such amount only for purposes of
making the payments for which a claim was made. Such amounts shall be disbursed by the
Paying Agent /Registrar to Holders in the same manner as principal and interest payments are
to be made with respect to the Bonds under the sections hereof regarding payment of Bonds.
It shall not be necessary for such payments to be made by checks or wire transfers separate
from the check or wire transfer used to pay debt service with other funds available to make
such payments.
Funds held in the Policy Payments Account shall not be invested by the Paying
Agent/Registrar and may not be applied to satisfy any costs, expenses or liabilities of the
Paying Agent /Registrar.
Any funds remaining in the Policy Payments Account following a payment date for a
Bon shall promptly be remitted to FSA.
(f) FSA shall, to the extent it makes any payment of principal or interest on the
Bonds, become surrogate to the rights of the recipients of such payments in accordance with
the terms of the Insurance Policy.
(g) FSA shall be entitled to pay principal or interest on the Bonds that shall become
Due for Payment but shall be unpaid by reason of Nonpayment by the City (as such terms are
defined in the Insurance Policy) and any amounts due on the Bonds as a result of acceleration
of the maturity thereof in accordance with this Ordinance, whether or not FSA has received a
Notice (as defined in the Insurance Policy) of Nonpayment or a claim upon the Insurance
Policy.
(h) The notice address of FSA is: Financial Security Assurance Inc., 350 Park
Avenue, New York, New York 10022 -6022, Attention: Managing Director -- Surveillance. - -Re:
Policy No. , Telephone: (212) 826 -0100; Telecopier: (212) 339 -3529. In each case in
which notice or other communication refers to an Event of Default then a copy of such notice
or other communication shall also be sent to the attention of General Counsel and shall be
marked to indicate 'URGENT MATERIAL ENCLOSED."
45095337.1
FSA shall be provided with the following information
-31-
(I) Annual audited financial statements within 120 days after the
end of the City's fiscal year and the City's annual budget within 30 days after
the approval thereof;
(ii) Notice of any draw upon the Reserve Fund within two business
days after knowledge thereof other than (i) withdrawals of amounts in excess of
the Reserve Requirement and (ii) withdrawals in connection with a refunding of
Bonds;
(iii) Notice of any default within five business days after knowledge
thereof;
(iv) Prior notice of the advance refunding or redemption of any of the
Bonds, including the principal amount, maturities and CUSIP numbers thereof;
(v) Notice of the resignation or removal of the Paying
Agent/Registrar and the appointment of, and acceptance of duties by, any
successor thereto;
(vi) the commencement of any proceeding by or against the City
commenced under the United States Bankruptcy Code or any other applicable
bankruptcy, insolvency, receivership, rehabilitation or similar law (an
"Insolvency Proceeding ");
(vii) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer of any payment of
principal of, or interest on, the Bonds;
(viii) A full original transcript of all proceedings relating to the execution
of any amendment or supplement to this Ordinance; and
(ix) All reports, notices and correspondence to be delivered under
the terms of this Ordinance.
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 V.T.C.A., Government Code, Chapter
551, as amended.
45095337.1
-32-
SECTION 49: Effective Date. This Ordinance shall take effect and be in force
immediately from and after its passage, and it is so ordained.
PASSED AND ADOPTED, this October 23, 2001.
ATTEST:
i
City Secretary
(City Seal)
,WM
45095337.1
-33-
CITY OF EULESS, TEXAS
I
46 /kt -
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of October 23, 2001 (this "Agreement "), by and
between the City of Euless, Texas (the "Issuer "), and First Union National Bank, Houston,
Texas, a banking association duly organized and existing under the laws of the United States of
America (the "Bank ").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Euless, Texas, Municipal Drainage Utility System Revenue Refunding Bonds, Series 2001" (the
"Securities ") in the aggregate principal amount of $1,630,000, which Securities are scheduled to
be delivered to the initial purchasers on or about December 4, 2001; and
WHEREAS, the Issuer has selected and the Bank has agreed to serve as Paying
Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest
on said Securities and with respect to the registration, transfer and exchange thereof by the
registered owners; and
WHEREAS, the Bank represents it has full power and authority to perform and serve as
Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution."
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
45095655.1
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any
Security which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the principal office of the Bank as indicated in Section 3.01
hereof. The Bank will notify the Issuer in writing of any change in location of the Bank
Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Director of Fiscal
and Administrative Services or City Secretary, any one or more of said officials, and
delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or government or
any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by such
particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed,
or stolen Security for which a replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the Resolution).
"Redemption Date" when used with respect to any Security to be redeemed
means the date fixed for such redemption pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the Chairman
or Vice - Chairman of the Board of Directors, the Chairman or Vice - Chairman of the
Executive Committee of the Board of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
45095655.1 2 _
EXHIBIT A
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of
the Bank customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principal of
a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms 'Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent /Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following office:
First Union National Bank
Customer Information Center
1525 West W. T. Harris Blvd.
Charlotte, North Carolina 28288
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and /or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first
class, postage prepaid, to the address appearing on the Security Register or (2) by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and
expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
45095655.1 3 _
EXHIBIT A
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register - Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register ") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register. The Bank represents and warrants its office
in Houston, Texas will at all times have immediate access to the Security Register by electronic
or other means and will be capable at all times of producing a hard copy of the Security Register
at its Houston office for use by the Issuer.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re- registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent /Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
45095655.1 _ 4 _
EXHIBIT A
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up -to -date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of Section 30 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as
to the truth of the statements and correctness of the opinions expressed therein, on certificates
or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
45095655.1 5 _
EXHIBIT A
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank - Fiduciary Account/Col lateral ization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities
shall be continuously collateralized by securities or obligations which qualify and are eligible
under both the laws of the State of Texas and the laws of the United States of America to
secure and be pledged as collateral for fiduciary accounts to the extent such money is not
insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary
account shall be made by check drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
45095655.1
EXHIBIT A
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where either
the Bank Office or the administrative offices of the Issuer is located, and agree that service of
process by certified or registered mail, return receipt requested, to the address referred to in
Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank
further agree that the Bank has the right to file a Bill of Interpleader in any court of competent
jurisdiction to determine the rights of any Person claiming any interest herein.
Section 5.08. DT Services. It is hereby represented and warranted that, in the event the
Securities are otherwise qualified and accepted for "Depository Trust Company' services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements," which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
45095655.1
EXHIBIT A
Section 6.06. Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09. Counterpart s. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
45095655.1 _ 8 _
EXHIBIT A
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
FIRST UNION NATIONAL BANK,
Houston, Texas
BY
[SEAL] Title:
Attest:
Address: 5847 San Felipe, Suite 1050
Title: Houston. Texas 77057
(CITY SEAL)
Attest:
City Secretary
CITY OF EULESS, TEXAS
BY
Mayor
Address: 201 North Ector Drive
Euless, Texas 76039
45095655.1 9 _
EXHIBIT A
4
q/y /�j /�
as 8
$1,630,000
CITY OF EULESS TEXAS
MUNICIPAL DRAINAGE UTILITY SYSTEM REVENUE REFUNDING BONDS,
SERIES 2001
BOND PURCHASE AGREEMENT
The Honorable Mayor and Members of the City Council
City of Euless
210 N.Ector
Euless, TX 76039
October 23, 2001
Ladies and Gentlemen:
The undersigned, SWS Securities Inc. (the "Underwriter offers to enter into the following
agreement with the City of Euless, Texas (the "Issuer ") which, upon the Issuer's written acceptance of this
offer, will be binding upon the Issuer and upon the Underwriter. This offer is made subject to the Issuer's
written acceptance hereof on or before 10:00 p.m., Central time, on October 23, 2001, and, if not so
accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Issuer at any time
prior to the acceptance hereof by the Issuer. Terms not otherwise defined in this Contract shall have the
same meanings set forth in the Ordinance (as defined herein) or in the Official Statement (as defined
herein).
1. Purchase and Sale of the Certificates. Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to
purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriter, all, but not
less than all, of the Issuer's $1,630,000 City of Euless, Texas Municipal Drainage Utility System Revenue
Refunding Bonds, Series 2001 (the " Bonds "). Inasmuch as this purchase and sale represents a negotiated
transaction, the Issuer understands, and hereby confirms, that the Underwriter is not acting as a fiduciary
of the Issuer, but rather is acting solely in its capacity as underwriter for its own account.
The Bonds shall be as described in and shall be issued and secured under and pursuant to the
provisions of the Ordinance adopted by the Issuer on the date hereof (the "Ordinance "), and shall bear
interest at the rates per annum and have the maturities described in the Ordinance and in the Official
Statement (defined below).
The purchase price for the Bonds shall be $1,613,821.53 (being the par amount of the Bonds, plus
a reoffering premium of $5,535, and less an original issue discount of $4,896.65, for a net reoffering
premium of $638.35, and less an underwriting discount of $16,816.82), plus interest accrued from the
dated date of the Bonds to the Closing Date (as hereinafter defined).
Delivered to the Issuer herewith is a corporate check of the Underwriter, payable to the order of
the Issuer in an amount equal to $32,000. The Issuer agrees to hold such check uncashed until the
Closing to ensure the performance by the Underwriter of its obligation to purchase, accept delivery of and
pay for the Bonds at the Closing. Concurrently with the payment by the Underwriter of the purchase
490414_21
price of the Bonds, the Issuer shall return such check uncashed to the Underwriter as provided in Section
5 hereof. Should the Issuer fail to deliver the Bonds at the Closing, or should the Issuer be unable to
satisfy the conditions to the obligation of the Underwriter to purchase, accept delivery of and pay for the
Bonds, as set forth in this Contract (unless waived by the Underwriter), or should such obligation of the
Underwriter be terminated for any reason permitted by this Contract, such check shall immediately be
returned to the Underwriter as provided in Section 6 hereof. In the event the Underwriter fails (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 Issuer as and for full liquidated damages for such
failure of the Underwriter and for any defaults hereunder on the part of the Underwriter. The Underwriter
hereby agrees not to stop or cause payment on said check to be stopped unless the Issuer has breached any
of the terms of this Contract.
2. Public Offering. The Underwriter agrees to make a bona fide public offering of all of the
Bonds at a price not to exceed the public offering price set forth on the cover of the Official Statement
and may subsequently change such offering price without any requirement of prior notice. The
Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into
investment trusts) and others at prices other than the public offering price stated on the cover of the
Official Statement; provided however that at least ten percent (10 %) of each maturity of Bonds must be
sold at public offering price shown on cover page of Official Statement.
3. The Official Statement. (a) Attached hereto as Exhibit A is the Preliminary Official
Statement dated October 18, 2001 (the "Preliminary Official Statement), including the cover page and
Appendices thereto, of the Issuer relating to the Bonds. Such Preliminary Official Statement, as amended
to reflect the changes marked or otherwise indicated on Exhibit A hereto, is hereinafter called the
"Official Statement."
(b) The Preliminary Official Statement has been prepared for use in connection with the
public offering, sale and distribution of the Bonds by the Underwriter. The Issuer hereby represents and
warrants that the Preliminary Official Statement was deemed final by the Issuer as of its date, except for
omission of such information which is dependent upon the final pricing of the Bonds for completion, all
as permitted to be excluded by Section (b)(1) of Rule 15c2 -12 under the Securities Exchange Act of 1934
(the "Rule ").
(c) The Issuer hereby authorizes the Official Statement and the information therein contained
to be used by the Underwriter in connection with the public offering and the sale of the Bonds. The
Issuer consents to the use by the Underwriter prior to the date hereof of the Preliminary Official
Statement in connection with the public offering of the Bonds. The Issuer shall provide, or cause to be
provided, to the Underwriter as soon as practicable after the date of the Issuer's acceptance of this
Contract (but, in any event, not later than within seven (7) business days after the Issuer's acceptance of
this Contract and in sufficient time to accompany any confirmation that requests payment from any
customer) copies of the Official Statement which is complete as of the date of its delivery to the
Underwriter in such quantity as the Underwriter shall request in order for the Underwriter to comply with
Section (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board.
(d) If, after the date of this Contract to and including the date the Underwriter is no longer
required to provide an Official Statement to potential customers who request the same pursuant to the
Rule (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in Rule) or (ii) the
time when the Official Statement is available to any person from a nationally recognized municipal
securities repository, but in no case less than 25 days after the "end of the underwriting period" for the
Bonds), the Issuer becomes aware of any fact or event which might or would cause the Official
Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit
490414_21 2 EXHIBIT d
to state a material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances then existing 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 Issuer will notify
the Underwriter (and for the purposes of this clause provide the Underwriter with such information as it
may from time to time request), and if, in the opinion of the Underwriter, such fact or event requires
preparation and publication of a supplement or amendment to the Official Statement, the Issuer will
forthwith prepare and furnish, at the Issuer's own expense (in a form and manner approved by the
Underwriter), 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
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 light of the circumstances then existing when the Official
Statement is delivered to a purchaser, not misleading or so that the Official Statement will comply with
law. If such notification shall be subsequent to the Closing, the Issuer shall furnish such legal opinions,
certificates, instruments and other documents as the Underwriter may deem necessary to evidence the
truth and accuracy of such supplement or amendment to the Official Statement.
(e) The Underwriter hereby agrees to file the Official Statement with a nationally recognized
municipal securities information repository. Unless otherwise notified in writing by the Underwriter, the
Issuer can assume that the "end of the underwriting period" for purposes of the Rule is the date of the
Closing.
4. Representations, Warranties, and Covenants of the Issuer. The Issuer hereby represents
and warrants to and covenants with the Underwriter that:
(a) The Issuer is a duly and lawfully incorporated home -rule city and municipal corporation
of the State of Texas (the "State ") duly created, organized and existing under the laws of the State, and
has full legal right, power and authority (i) to enter into, execute and deliver this Contract and the
Ordinance and all documents required hereunder and thereunder to be executed and delivered by the
Issuer, the Ordinance and the other documents referred to in this clause (i) are hereinafter referred to as
the "Issuer Documents," (ii) to sell, issue and deliver the Bonds to the Underwriter as provided herein,
and (iii) to carry out and consummate the transactions contemplated by the Issuer Documents and the
Official Statement, and the Issuer has compiled, and will at the Closing be in compliance in all respects,
with the terms of the Issuer Documents as they pertain to such transactions;
(b) By all necessary official action of the Issuer prior to or concurrently with the acceptance
hereof, the Issuer has duly authorized all necessary action to be taken by it for (i) the adoption of the
Ordinance and the issuance and sale of the Bonds, (ii) the approval, execution and delivery of, and the
performance by the Issuer of the obligations on its part, contained in the Bonds and the Issuer Documents,
and (iii) the consummation by it of all other transactions contemplated by the Official Statement, and the
Issuer Documents and any and all such other agreements and documents as may be required to be
executed, delivered and/or received by the Issuer in order to carry out, give effect to, and consummate the
transactions contemplated herein and in the Official Statement;
(c) The Bonds, when issued, delivered and paid for, in accordance with the Ordinance and
this Contract, will constitute legal, valid and binding obligations of the Issuer entitled to the benefits of
the Ordinance and enforceable against the Issuer in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or
affecting the enforcement of creditors' rights; upon the issuance, authentication and delivery of the Bonds
as aforesaid, the Ordinance will provide, for the benefit of the holders, from time to time, of the Bonds,
the legally valid and binding pledge of and lien it purports to create as set forth in the Ordinance;
490414_21 3
EXHIBIT B
(d) The Issuer is not in breach of or default in any material respect under any applicable
constitutional provision, law or administrative regulation of the State or the United States or any
applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or
other instrument to which the Issuer is a party or to which the Issuer is or any of its property or assets are
otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of
time or the giving of notice, or both, would constitute a default or event of default by the Issuer under any
of the foregoing; and the execution and delivery of the Bonds, the Issuer Documents and the adoption of
the Ordinance and compliance with the provisions on the Issuer's part contained therein, will not conflict
with or constitute a material breach of or default under any constitutional provision, administrative
regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other
instrument to which the Issuer is a parry or to which the Issuer is or to which any of its property or assets
are otherwise subject nor will any such execution, delivery, adoption or compliance result in the creation
or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon
any of the property or assets of the Issuer to be pledged to secure the Bonds or under the terms of any
such law, regulation or instrument, except as provided by the Bonds and the Ordinance;
(e) All authorizations, approvals, licenses, permits, consents and orders of any governmental
authority, legislative body, board, agency or commission having jurisdiction of the matter which are
required for the due authorization of, which would constitute a condition precedent to, or the absence of
which would materially adversely affect the due performance by the Issuer of its obligations under the
Issuer Documents and the Bonds have been duly obtained, except for approval of the Bonds by the
Attorney General of Texas and registration of the Bonds by the Comptroller of Public Accounts of the
State of Texas;
(f) The Bonds and the Ordinance conform to the descriptions thereof contained in the
Official Statement under the captions "THE BONDS" and "SELECTED PROVISIONS OF THE
ORDINANCE ", and the Issuer's obligations under Section 46 of the Ordinance (the "Undertaking ")
conform to the description thereof contained in the Official Statement under the caption "OTHER
INFORMATION - Continuing Disclosure of Information;"
(g) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, government agency, public board or body, pending or, to the best
knowledge of the Issuer after due inquiry, threatened against the Issuer, affecting the existence of the
Issuer or the titles of its officers, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or
delivery of the Bonds or the levy, charge or collection of revenues pledged to the payment of principal of
and interest on the Bonds pursuant to the Ordinance or in any way contesting or affecting the validity or
enforceability of the Bonds, the Issuer Documents, or contesting the exclusion from gross income of
interest on the Bonds for federal income tax purposes, or contesting in any way the completeness or
accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment
thereto, or contesting the powers of the Issuer or any authority for the issuance of the Bonds, the adoption
of the Ordinance or the execution and delivery of the Issuer Documents, nor, to the best knowledge of the
Issuer, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially
adversely affect the validity or enforceability of the Bonds or the Issuer Documents;
(h) As of the date thereof, the Preliminary Official Statement did 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;
(1) At the time of the Issuer's acceptance hereof and (unless the Official Statement is
amended or supplemented pursuant to paragraph (d) of Section 3 of this Contract) at all times subsequent
490414_21 4
EXHIBIT B
thereto during the period up to and including the date of Closing, the Official Statement does not and will
not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading;
0) If the Official Statement is supplemented or amended pursuant to paragraph (d) of
Section 3 of this Contract, at the time of each supplement or amendment thereto and (unless subsequently
again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the
period up to and including the date of Closing the Official Statement as so supplemented or amended will
not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which made, not
misleading;
(k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Bonds as
provided in and subject to all of the terms and provisions of the Ordinance, and will not take or omit to
take any action which action or omission will adversely affect the exclusion from gross income for federal
income tax purposes of the interest on the Bonds;
(1) The Issuer will furnish such information and execute such instruments and take such action in
cooperation with the Underwriter as the Underwriter may reasonably request (A) to (y) qualify the Bonds
for offer and sale under the Blue Sky or other securities laws and regulations of such states and other
jurisdictions in the United States as the Underwriter may designate and (z) determine the eligibility of the
Bonds for investment under the laws of such states and other jurisdictions, and (B) to continue such
qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the
Issuer will not be required to qualify as a foreign corporation or to file any general or special consents to
service of process under the laws of any jurisdictions and will advise the Underwriter immediately of
receipt by the Issuer of any notification with respect to the suspension of the qualification of the Bonds
for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose;
(m) The financial statements of, and other financial information regarding the Issuer, in the
Official Statement fairly present the financial position of the Issuer as of the dates and for the periods
therein set forth. Prior to the Closing, to the best knowledge of the Issuer, there will be no adverse change
of a material nature in such financial position, results of operations or condition, financial or otherwise, of
the Issuer. The Issuer is not a party to any litigation or other proceeding pending or, to its knowledge,
threatened which, if decided adversely to the Issuer, would have a materially adverse effect on the
financial condition of the Issuer;
(n) Prior to the Closing, the Issuer will not offer or issue any Bonds, notes or other
obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or
secured by any of the revenues or assets which will secure the Bonds without the prior approval of the
Underwriter;
(o) The Issuer has complied in all material respects with all continuing disclosure agreements
made in accordance with the Rule; and
(p) Any certificate signed by any official of the Issuer authorized to do so in connection with
the transactions contemplated by this Contract shall be deemed a representation and warranty by the
Issuer to the Underwriter as to the statements made therein.
5. Closin . (a) At 10:00 a.m., Central time, on December 4, 2001, or at such other time and date
as shall have been mutually agreed upon by the Issuer and the Underwriter (the "Closing "), the Issuer
490414_21 5 EXHIBIT B
will, subject to the terms and conditions hereof, deliver the Bonds to the Underwriter duly executed and
authenticated, together with the other documents hereinafter mentioned, and the Underwriter will, subject
to the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds as set
forth in Section 1 of this Contract in immediately available funds by a federal funds check or wire transfer
to or for the account of the Issuer. Delivery and payment for the Bonds as aforesaid shall be made at the
offices of Fulbright & Jaworski L.L.P., 2200 Ross Avenue, Suite 2800, Dallas, Texas 75201, or such
other place as shall have been mutually agreed upon by the Issuer and the Underwriter. Concurrently
with such payment by the Underwriter the Issuer shall return to the Underwriter the check referenced in
Section 1 hereof.
(b) The Bonds shall be typewritten; shall be prepared and delivered as fully registered Bonds in
authorized denominations thereof, shall be registered in the name of Cede & Co.; and shall be made
available to the Underwriter at least one (1) business day before the Closing for purpose of inspection.
6. Closing Conditions. The Underwriter has entered into this Contract in reliance upon the
warranties and agreements of the Issuer contained herein, and in reliance upon the representations,
warranties and agreements to be contained in the documents and instruments to be delivered at the
Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof
and as of the date of the Closing. Accordingly, the Underwriter's obligation under this Contract to
purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the
Issuer 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 additional conditions, including the delivery by
the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to
the Underwriter:
(a) The representations and warranties of the Issuer contained herein shall be true, complete and
correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing;
(b) The Issuer shall have performed and complied with all agreements and conditions required
by this Contract to be performed or complied with by it prior to or at the Closing;
(c) At the time of the Closing, (i) the Issuer Documents and the Bonds shall be in full force and
effect in the form heretofore approved by the Underwriter and shall not have been amended, modified or
supplemented, and the Official Statement shall not have been supplemented or amended, except in any
such case as may have been agreed to by the Underwriter; and (ii) all actions of the Issuer required to be
taken by the Issuer shall be performed in order for Bond Counsel and Underwriter's Counsel to deliver
their respective opinions referred to hereafter;
(d) At the time of the Closing, all official action of the Issuer relating to the Bonds and the
Issuer Documents shall be in full force and effect and shall not have been amended, modified or
supplemented;
(e) At or prior to the Closing, the Ordinance shall have been duly executed and delivered by
the Issuer and the Issuer shall have duly executed and delivered and the Paying Agent /Registrar shall have
duly authenticated the Bonds;
(f) At the time of the Closing, there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or in the revenues or operations
of the Issuer, from that set forth in the Official Statement that in the judgment of the Underwriter, is
material and adverse and that makes it, in the judgment of the Underwriter, impracticable to market the
Bonds on the terms and in the manner contemplated in the Official Statement;
490414_21 6 EXHIBIT B
(g) The Issuer shall not have failed to pay principal or interest when due on any of its
outstanding obligations for borrowed money;
(h) All steps to be taken and all instruments and other documents to be executed, and all
other legal matters in connection with the transactions contemplated by this Contract shall be reasonably
satisfactory in legal form and effect to the Underwriter;
(i) At or prior to the Closing, the Underwriter shall have received copies of each of the
following documents:
(1) The Official Statement, and each supplement or amendment thereto, if any,
executed on behalf of the Issuer by its Mayor, or such other official as may have been agreed to
by the Underwriter, and the reports and audits referred to or appearing in the Official Statement;
(2) The Ordinance with such supplements or amendments as may have been agreed
to by the Underwriter;
(3) The Ordinance shall contain the Undertaking which satisfies the requirements of
section (b)(5)(i) of the Rule;
(4) The approving opinions of Bond Counsel with respect to the Bonds, in substantially
the form described in the Official Statement;
(5) a supplemental opinion of Bond Counsel addressed to the Underwriter, substantially
to the effect that:
(i) the Bonds are exempted securities under the Securities Act of 1933, as
amended (the "1933 Act "), and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act ") and it is not necessary, in connection with the offering and sale of the
Bonds, to register the Bonds under the 1933 Act or to qualify the Ordinance under the
Trust Indenture Act; and
(ii) the statements and information contained in the Official Statement under the
captions "PLAN OF FINANCING," "THE BONDS" (exclusive of the sub - caption
"Book -Entry- Only - System "), "SELECTED PROVISIONS OF THE ORDINANCE,"
"TAX MATTERS ", "OTHER INFORMATION - "Registration and Qualification of
Bonds for Sale," - "Legal Matters ", - "Legal Investments and Eligibility to Secure Public
Funds in Texas," and "Continuing Disclosure of Information," fairly and accurately
summarize the matters purported to be summarized therein.
(6) An opinion, dated the date of the Closing and addressed to the Underwriter, of
Underwriter's Counsel, to the effect that:
(i) the Bonds are exempt securities under the 1933 Act and the Trust Indenture
Act and it is not necessary, in connection with the offering and sale of the Bonds to
register the Bonds under the 1933 Act and the Ordinance need not be qualified under the
Trust Indenture Act; and
(ii) based upon their participation at conferences at which the Official Statement
was discussed, but without having undertaken to determine independently the accuracy,
490414_21 7 EXHIBIT B
completeness or fairness of the statements contained in the Official Statement as of its
date and as of the date of such opinion, such counsel has no reason to believe that the
Official Statement 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 (except for any financial, forecast, technical
and statistical statements and data included in the Official Statement, as to which no view
need be expressed);
(7) A certificate dated the date of Closing, of the Issuer to the effect that (i) the
representations and warranties of the Issuer contained herein, or in any certificate or document
delivered by the Issuer pursuant to the provisions hereof, are true and correct on and as of the date
of Closing as if made on the date of Closing; (ii) all agreements or conditions to be performed or
complied with by the Issuer hereunder on or prior to the date of Closing have been performed or
complied with; (iii) except to the extent disclosed in the Official Statement, no litigation is
pending or, to its knowledge, threatened in any court to restrain or enjoin the issuance or delivery
of the Bonds, or the levy, collection or pledge of the Revenues to the payment of the Bonds, or in
any way contesting or affecting the validity of the Bonds, the Ordinance, or this Contract, or
contesting the powers of the Issuer to issue the Bonds, or contesting authorization of the Bonds,
the Ordinance, or contesting in any way the accuracy, completeness or fairness of the Preliminary
Official Statement, if applicable, or the Official Statement; (iv) to the best of such persons'
knowledge, no event affecting the Issuer has occurred since the date of the Official Statement
which should be disclosed therein for the purpose for which it is to be used or which is necessary
to be disclosed therein in order to make the statements and information therein not misleading in
any material respect; and (v) there has not been any materially adverse change in the financial
condition of the Issuer since September 30, 2000, the latest date as of which audited financial
information is available.
(8) A certificate of the Issuer in form and substance satisfactory to Bond Counsel
and Underwriter's Counsel (a) setting forth the facts, estimates and circumstances in existence
on the date of the Closing, which establish that it is not expected that the proceeds of the Bonds
will be used in a manner the would cause the Bonds to be "arbitrage bonds" within the meaning
of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "), and any
applicable regulations (whether final, temporary or proposed), issued pursuant to the Code, and
(b) certifying that to the best of the knowledge and belief of the Issuer there are no other facts,
estimates or circumstances that would materially change the conclusions, representations and
expectations contained in such certificate;
(9) A copy of the policy of bond insurance acquired by the Issuer covering the Bonds
and evidence satisfactory to the Underwriter that the Bonds have been rated "Aaa" by Moody's
Investors Service, Inc. ( "Moodys ") and "AAA" by Standard & Poor's Ratings Services, A
Division of The McGraw -Hill Companies, Inc. ( "S &P "), and of underlying ratings of "" and
"_" by Moody's and S &P, respectively, and that such ratings are in effect as of the date of
Closing;
(10) Such additional legal opinions, certificates, instruments and other document as the
Underwriter or Underwriter's Counsel may reasonably request to evidence the truth and accuracy,
as of the date hereof and as of the date of the Closing, of the Issuer's representations and
warranties contained herein and of the statements and information contained in the Official
Statement and the due performance or satisfaction by the Issuer on or prior to the date of the
Closing of all the respective agreements then to be performed and conditions then to be satisfied
by the Issuer;
490414_21 8 EXHIBIT B
(11) The approving opinion of the Attorney General of the State of Texas with respect
to the Initial Bonds; and
(12) The registration certificate of the Comptroller of Public Accounts of the State of
Texas with respect to the Initial Bonds.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Contract shall be deemed to be in compliance with the provision hereof if, but only if,
they are in form and substance satisfactory to the Underwriter.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter to
purchase, to accept delivery of and to pay for the Bonds contained in this Contract, or if the obligations of
the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any
reason permitted by this Contract, this Contract shall terminate and neither the Underwriter nor the Issuer
shall be under any further obligation hereunder, except that the check referred to in Section 1 hereof shall
be immediately returned to the Underwriter.
7. Termination. The Underwriter shall have the right to cancel its obligation to purchase the
Bonds if, between the date of this Contract and the Closing, the market price or marketability of the
Bonds shall be materially adversely affected, in the sole judgment of the Underwriter, by the occurrence
of any of the following:
(a) legislation shall be enacted by or introduced in the Congress of the United States or
recommended to the Congress for passage by the President of the United States, or the Treasury
Department of the United States or the Internal Revenue Service or any member of the Congress or the
State legislature or favorably reported for passage to either House of the Congress by any committee of
such House to which such legislation has been referred for consideration, a decision by a court of the
United States or of the State or the United States Tax Court shall be rendered, or an order, ruling,
regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf
of the Treasury Department of the United States, the Internal Revenue Service or other governmental
agency shall be made or proposed, the effect of any or all of which would be to impose, directly or
indirectly, federal or state income taxation upon interest received on obligations of the general character
of the Bonds of the interest on the Bonds as described in the Official Statement, or other action or events
shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal
income tax consequences or State income tax consequences of any of the transactions contemplated
herein;
(b) legislation introduced in or enacted (or resolution passed) by the Congress or an order,
decree, or injunction issued by any court of competent jurisdiction, or an order ruling, regulation (final,
temporary, or proposed), press release or other form of notice issued or made by or on behalf of the
Securities and Exchange Commission, or any other governmental agency having jurisdiction of the
subject matter, to the effect that obligations of the general character of the Bonds, including any or all
underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act,
that the Ordinance is not exempt from qualification under or other requirements of the Trust Indenture
Act, or that the issuance, offering, or sale of obligations of the general character of the Bonds, including
any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is
or would be in violation of the federal securities law as amended and then in effect;
(c) a general suspension of trading in securities on the New York Stock Exchange or the
American Stock Exchange, the establishment of minimum prices on either such exchange, the
490414 21 9 EXHIBIT B
establishment of material restrictions (not in force as of the date hereof) upon trading securities generally
by any governmental authority or any national securities exchange, a general banking moratorium
declared by federal, State of New York, or State officials authorized to do so;
(d) the New York Stock Exchange or other national securities exchange or any governmental
authority, shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any
material restrictions not now in force, or increase materially those now in force, with respect to the
extension of credit by, or the charge to the net capital requirements of the Underwriter;
(e) any amendment to the federal or State Constitution or action by any federal or State court,
legislative body, regulatory body, or other authority materially adversely affecting the tax status of the
Issuer, its property, or the validity or enforceability of the establishment, charge and collection of the
rates and charges pledged to pay principal of and interest on the Bonds;
(i) any event occurring or information becoming known which, in the judgment of the
Underwriter, makes untrue in any material respect any statement or information contained in the Official
Statement, or has the effect that the Official Statement contains any untrue statement of material fact or
omits 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;
(g) there shall have occurred since the date of this Contract any materially adverse change in
the affairs or financial condition of the Issuer, except for changes which the Official Statement discloses
are expected to occur;
(h) the United States shall have become engaged in hostilities which have resulted in a
declaration of war or a national emergency or there shall have occurred any other outbreak or escalation
of hostilities or a national or international calamity or crisis, financial or otherwise;
(i) any fact or event shall exist or have existed that, in the Underwriter's judgment, requires or
has required an amendment of or supplement to the Official Statement;
0) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by
the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law,
governmental authority, board, agency or commissions and such prohibition to purchase the Bonds is not
a result of any act or failure to act by the Underwriter.
8. Expenses. (a) The Underwriter shall be under no obligation to pay, and the Issuer shall pay,
any expenses incident to the performance of the Issuer's obligations hereunder, including, but not limited
to (i) the cost of preparation and printing of the Bonds, (ii) the fees and disbursements of Bond Counsel,
(iii) the fees and disbursements of any other accountants, and other experts, consultants or advisers
retained by the Issuer, (iv) the costs of preparing, printing and mailing the Preliminary Official Statement
and the Official Statement; (v) the fees and expenses of the Paying Agent /Registrar; (vi) the fees of the
Attorney General of Texas and (vii) the cost of obtaining credit enhancement, if any; and (iii) the cost of
obtaining credit ratings
(b) The Underwriter shall pay (i) all advertising expenses in connection with the public offering
of the Bonds, (ii) the fees and expenses of Underwriter's Counsel, and (iii) all other expenses incurred by
it in connection with the public offering of the Bonds.
9. Notices. Any notice or other communication to be given to the Issuer under this Contract
may be given by delivering the same in writing to City of Euless, Texas, 210 N. Ector, Euless, Texas
490414_21 10 EXHIBIT 13
76039 and any notice or other communication to be given to the Underwriter under this Contract may be
given by delivering the same in writing to SWS Securities Inc., Attention: Mr. John L. Martin, Jr., 1201
Elm Street, Suite 3500, Dallas, Texas 75270.
10. Parties in Interest. This Contract as heretofore specified shall constitute the entire
agreement between the parties hereto and is made solely for the benefit of the Issuer and the Underwriter
(including successors or assigns of the Underwriter) and no other person shall acquire or have any right
hereunder or by virtue hereof. This Contract may not be assigned by the Issuer. All of the Issuer's
representations, warranties and agreements contained in this Contract shall remain operative and in full
force and effect regardless of (i) any investigations made by or on behalf of any of the Underwriter; (ii)
delivery of and payment for the Bonds pursuant to this Contract; and (iii) any termination of this
Contract.
11. Effectiveness. This Contract shall become effective upon the acceptance hereof by the
Issuer and shall be valid and enforceable at the time of such acceptance.
12. Choice of Law. This Contract shall be governed by and construed in accordance with the
laws of the State of Texas.
13. Severability. If any provision of this Contract shall be held or deemed to be or shall, in fact,
be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute,
rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of
mandating any other provision or provisions of this Contract invalid, inoperative or unenforceable to any
extent whatever.
14. Business Day. For purposes of this Contract, "business day" means any day on which the
New York Stock Exchange is open for trading.
15. Section Headings. Section headings have been inserted in this Contract as a matter of
convenience of reference only, and it is agreed that such section headings are not a part of this Contract
and will not be used in the interpretation of any provisions of this Contract.
16. Counterparts. This Contract may be executed in several counterparts each of which shall be
regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same
document) and all of which shall constitute one and the same document.
490414_21 11 EXHIBIT B
If you agree with the foregoing, please sign the enclosed counterpart of this Contract and return it
to the Underwriter. The Contract shall become a binding agreement between you and the Underwriter
when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties
hereto.
Accepted and agreed to this
October 23, 2001.
CITY OF EULESS, TEXAS
M
Mayor
Very truly yours,
SWS SECURITIES INC.
By:
John L. Martin, Jr.,
Senior Vice President
490414_21 12
EXHIBIT 13
EXHIBIT "A"
[Marked POS per Section 3(a) to reflect pricing and any changes]
A_I EXHIBIT 3
EXHIBIT C
NOTICE OF REDEMPTION
CITY OF EULESS, TEXAS,
MUNICIPAL DRAINAGE UTILITY SYSTEM REVENUE BONDS
SERIES 1991
DATED OCTOBER 1, 1991
NOTICE IS HEREBY GIVEN that all bonds of the above series maturing on and after
July 15, 2002 and aggregating in principal amount $1,535,000 have been called for redemption
on December 6, 2001 at the redemption price of par and accrued interest to the date of
redemption, such bonds being identified as follows:
Principal
Year of Maturity Amount Outstanding
2002
$130,000
2003
140,000
2004
145,000
2005
155,000
2006
170,000
2007
180,000
2008
190,000
2009
205,000
2010
220,000
CUSIP Number
ALL SUCH BONDS shall become due and payable on December 6, 2001, and interest
thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said bonds shall be paid to the registered owners of the bonds only upon
presentation and surrender of such bonds to The Chase Manhattan Bank (successor paying
agent/registrar to Ameritrust Texas, National Association) at its designated offices at the
following address: 1201 Main Street, One Main Place, 18th Floor, Dallas, Texas 75201,
Attention: Corporate Trust Services.
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
Euless, Texas.
THE CHASE MANHATTAN BANK
Address: 600 Travis, Suite 1150
Houston, Texas 77002
45095337.1
Exhibit D
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 46 of this Ordinance
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2. The information under Tables 1 through 6 in the Official Statement
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
45095337.1