HomeMy WebLinkAbout1717 01-10-2006ORDINANCE NO. 1717
AN ORDINANCE authorizing the issuance of "CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING
BONDS, SERIES 2006 "; pledging the net revenues of the City's
Waterworks and Sewer System to the payment of the principal of and
interest on said Bonds; enacting provisions incident and related to the
issuance, payment, security and delivery of said bonds, including the
approval and execution of a Paying Agent/Registrar Agreement, a
Purchase Agreement and a Special Escrow Agreement; providing for the
redemption of the bonds being refunded; and providing an effective date.
WHEREAS, the City of Euless, Texas (the "City ") has duly issued and delivered
obligations, payable from and secured by a lien on and pledge of the net revenues of the City's
Waterworks and Sewer System (hereinafter called the "System "), to wit: City of Euless, Texas,
Waterworks and Sewer System Revenue Bonds, Series 2000, dated March 15, 2000,
scheduled to mature on July 15 in each of the years 2009 through 2020, and aggregating in
principal amount $2,445,000 (hereinafter referred to as the "Refunded Bonds'); 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 thereof directly with the place of payment for the Refunded Bonds, or other authorized
depository, and such deposit, when made in accordance with said statute, shall constitute the
making of firm banking and financial arrangements for the discharge and final payment of the
Refunded Bonds; and
WHEREAS, the City Council hereby finds and determines that refunding bonds should
be issued at this time to refund the Refunded Bonds, and such refunding will result in the City
saving approximately $292,586.62 in debt service payments on such indebtedness and further
provide present value savings of approximately $182,814.34; and
WHEREAS, the City Council further finds and determines that such revenue bonds can
and should be issued on a parity with the outstanding and unpaid revenue bonds of the City
(hereinafter called and defined as "Previously Issued Bonds ") payable from and secured by a
first lien on and pledge of the Net Revenues of the City's combined Waterworks and Sewer
System (the "System ") in that (i) the City is not now in default as to any covenant, condition or
obligation contained in the ordinances authorizing the issuance of the outstanding Previously
Issued Bonds, (ii) the laws of the State of Texas now in force provide for the issuance of the
bonds herein authorized to be issued, (iii) each of the Funds created and reaffirmed by the
ordinances authorizing the Previously Issued Bonds contains the amount of money now
required to be on deposit therein; (iv) the "Net Revenues" of the System for the fiscal year next
preceding the month of the adoption of this Ordinance, as shown by a report of a Certified
Public Accountant or licensed public accountant, are equal to at least one and one - fourth (1'/4)
times the average annual principal and interest requirements of all bonds secured by a first lien
on and pledge of the Net Revenues of the System, and which will be outstanding upon the
issuance of the bonds herein authorized; (v) this Ordinance provides that the amount to be
accumulated and maintained in the Bond Reserve Fund shall be increased to an amount equal
to not less than the average annual principal and interest requirements of all bonds payable
from and secured by a first lien on and pledge of the Net Revenues of the System (after giving
effect to the issuance of the bonds herein authorized) and any additional amount to be
maintained in said Fund shall be accumulated within not more than five (5) years and one (1)
45697689.2110513781
months from the date of the passage of this Ordinance; and (vi) the bonds herein authorized
shall mature on July 15 in each year; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EULESS, TEXAS:
SECTION 1: Authorization - Designation- Principal Amount - Purpose. Revenue bonds
of the City shall be and are hereby authorized to be issued in the aggregate principal amount of
$2,530,000 to be designated and bear the title "CITY OF EULESS, TEXAS, WATERWORKS
AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2006" (hereinafter referred
to as the "Bonds "), for the purpose of refunding certain outstanding obligations payable from the
revenues of the City's Waterworks and Sewer System (identified in the preamble hereof as the
"Refunded Bonds ") and paying the costs of issuance, in conformity with the Constitution and
laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1207, as amended.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons,
shall be dated January 1, 2006 (the "Bond Date ") and, other than the single fully registered
Initial Bond referenced in Section 7 hereof, shall be in denominations of $5,000 or any integral
multiple thereof (within a Stated Maturity), shall be numbered consecutively from One (1)
upward and shall become due and payable on July 15 in each of the years and in principal
amounts (the "Stated Maturities ") and bear interest at per annum rates in accordance with the
following schedule:
Year of
Principal
Interest
Stated Maturity
Amount
Rate (s)
2007
$ 15,000
3.88%
2008
15,000
3.88%
2009
160,000
3.88%
2010
170,000
3.88%
2011
180,000
3.88%
2012
185,000
3.88%
2013
190,000
3.88%
2014
205,000
3.88%
2015
210,000
3.88%
2016
215,000
3.88%
2017
230,000
3.88%
2018
240,000
3.88%
2019
250,000
3.88%
2020
265,000
3.88%
The Bonds shall bear interest on the unpaid principal amounts from the date of their
delivery to the initial purchasers (anticipated, January 30, 2006) at the rate(s) per annum shown
in the above schedule (calculated on the basis of a 360 -day year of twelve 30 -day months).
Interest on the Bonds shall be payable on January 15 and July 15 in each year, commencing
July 15, 2006.
SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders ") appearing on the registration and transfer books maintained by the Paying
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Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of
America, which at the time of payment is legal tender for the payment of public and private
debts, and shall be without exchange or collection charges to the Holders.
The selection and appointment of JPMorgan Chase Bank, National Association to serve
as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records
relating to the registration, payment, transfer and exchange of the Bonds (the "Security
Register ") shall at all times be kept and maintained on behalf of the City by the Paying
Agent/Registrar, as provided herein and in accordance with the terms and provisions of a
"Paying Agent/Registrar Agreement ", substantially in the form attached hereto as Exhibit A,
and such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor and City Secretary are 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
or upon the earlier redemption thereof, only upon presentation and surrender of the Bonds to
the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated
Payment/Transfer Office "). Interest on the Bonds shall be paid to the Holders whose names
appear in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the city where the Designated Payment/Transfer
Office of the Paying Agent/Registrar is located are authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was
due.
In the event of a 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: Redemption. (a) Optional Redemption. The Bonds having Stated
Maturities on and after July 15, 2012, shall be subject to redemption prior to maturity, at the
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option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on July 15, 2011 or
on any date thereafter at the redemption price of par plus accrued interest to the date of
redemption.
(b) Exercise of Redemption Option. At least forty -five (45) days prior to a
redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the
Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of
redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be
entered in the minutes of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar
shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by
dividing the principal amount of such Bonds by $5,000 and shall select the Bonds to be
redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be
redeemed in whole or in part at the address of the Holder appearing on the Security Register at
the close of business on the business day next preceding the date of mailing such notice, and
any notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given or waived as herein provided, such Bond
(or the principal amount thereof to be redeemed) shall become due and payable, and interest
thereon shall cease to accrue from and after the redemption date therefor, provided moneys
sufficient for the payment of such Bonds (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of
this Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be
transferred or exchanged for Bonds of other authorized denominations upon the Security
Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond
to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer
45697689.2/10513781 4
or request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond (other than the Initial Bonds authorized in
Section 7 hereof) at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Bonds, executed on behalf of, and furnished by, the City of
authorized denominations and having the same Stated Maturity and of a like aggregate principal
amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial Bonds authorized in Section 7
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the
Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are
surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds,
executed on behalf of, and furnished by, the City, to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be
valid obligations of the City, evidencing the same obligation to pay, and entitled to the same
benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 30 hereof and such new
replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange
any Bond called for redemption, in whole or in part, within 45 days of the date fixed for
redemption of such Bond; provided, however, such limitation of transfer shall not be applicable
to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in
part.
SECTION 6: Execution - Registration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Bond Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the
45697689.2/10513781 5
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.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 8(c), manually executed by the Comptroller of
Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 8(d), manually executed by an authorized officer,
employee or representative of the Paying Agent/Registrar, and either such certificate upon any
Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been
duly certified, registered and delivered.
SECTION 7: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount referenced 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 8: 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, or any
maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel)
thereon as may, consistently herewith, be established by the City or determined by the officers
executing such Bonds as evidenced by their execution thereof. Any portion of the text of any
Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face
of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
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(b) Form of Definitive Bond.
REGISTERED
NO.
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND
SERIES 2006
Bond Date: Interest Rate: Stated Maturity: CUSIP NO:
January 1, 2006 July 15, 20
Registered Owner:
Principal Amount:
The City of Euless (hereinafter referred to as the "City "), a body corporate and municipal
corporation in the County of Tarrant, State of Texas, for value received, hereby promises to pay
to the Registered Owner named above, or the registered assigns thereof, solely from the
revenues hereinafter identified, on the Stated Maturity date specified above the Principal
Amount stated above (or so much thereof as shall not have been paid upon prior redemption)
and to pay interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the
unpaid Principal Amount hereof from the date of delivery to the initial purchasers (January 30,
2006) at the per annum rate of interest specified above; such interest being payable on January
15 and July 15 of each year, commencing July 15, 2006. Principal of this Bond is payable at its
Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender,
at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the
registration certificate appearing hereon, or its successor. Interest is payable to the registered
owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter
referenced) whose name appears on the "Security Register" maintained by the Paying
Agent/Registrar at the close of business on the "Record Date ", which is the last business day of
the month next preceding each interest payment date and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to
the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner.
If the date for the payment of the principal of or interest on the Bonds shall be a Saturday,
Sunday, a legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original
date payment was due. All payments of principal of, premium, if any, and interest on this Bond
shall be without exchange or collection charges to the owner hereof and in any coin or currency
of the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
45697689.2/10513781 7
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $2,530,000 (herein referred to as the "Bonds ") for the purpose of refunding certain
outstanding obligations payable from the revenues of the City's Waterworks and Sewer System
(identified in the Ordinance) and paying costs of issuance, under and in strict conformity with the
Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter
1207, as amended, and pursuant to an Ordinance adopted by the City Council of the City
(herein referred to as the "Ordinance ").
The Bonds maturing on and after July 15, 2012, may be redeemed prior to their Stated
Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on
July 15, 2011 or on any date thereafter at the redemption price of par plus accrued interest
thereon to the redemption date.
At least thirty days prior to the date fixed for any redemption of Bonds, the City shall
cause a written notice of such redemption to be sent by United States Mail, first class postage
prepaid, to the registered owners of each Bond to be redeemed at the address shown on the
Security Register and subject to the terms and provisions relating thereto contained in the
Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date such
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor, provided
moneys for the payment of the redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar.
In the event a portion of the principal amount of a Bond is to be redeemed, payment of
the redemption price of such principal amount shall be made to the registered owner only upon
presentation and surrender of such Bond to the Designated Payment/Transfer Office of the
Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any
authorized denominations provided by the Ordinance for the then unredeemed balance of the
principal sum thereof will be issued to the registered owner, without charge. If a Bond is
selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be
required to transfer such Bond to an assignee of the registered owner within 45 days of the
redemption date therefor; provided, however, such limitation on transferability shall not be
applicable to an exchange by the registered owner of the unredeemed balance of a Bond
redeemed in part.
The Bonds are special obligations of the City and, together with the outstanding
"Previously Issued Bonds" (identified and defined in the Ordinance), are payable solely from and
equally and ratably secured by a first lien on and pledge of the Net Revenues (as defined in the
Ordinance) of the City's combined Waterworks and Sewer System (the "System "). The Bonds
do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any property of
the City or the System, except with respect to the Net Revenues. The holder hereof shall never
have the right to demand payment of this obligation out of any funds raised or to be raised by
taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has reserved
the right to issue additional revenue obligations payable from and equally and ratably secured
by a parity lien on and pledge of the Net Revenues of the System, in the same manner and to
the same extent as the Previously Issued Bonds and the Bonds.
45697689.2/10513781 8
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the Bonds; the properties constituting the System; the
Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature
and extent and manner of enforcement of the lien and pledge securing the payment of the
Bonds; the terms and conditions for the issuance of additional revenue obligations; the terms
and conditions relating to the transfer or exchange of this Bond; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and
provisions upon which the liens, pledges, charges and covenants made therein may be
discharged at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no
longer Outstanding thereunder; and for the other terms and provisions contained therein.
Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, may treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the
contrary. In the event of non - payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date ") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the City. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States Mail, first class postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of
mailing of such notice.
It is hereby certified, recited, represented and covenanted that the City is a duly
organized and legally existing municipal corporation under and by virtue of the Constitution and
laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all
acts, conditions and things required to exist and be done precedent to and in the issuance of the
Bonds to render the same lawful and valid obligations of the City have been properly done, have
happened and have been performed in regular and due time, form and manner as required by
the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not
exceed any constitutional or statutory limitation; and that due provision has been made for the
payment of the principal of and interest on the Bonds by a pledge of the Net Revenues of the
System as aforestated. In case any provision in this Bond or any application thereof shall be
45697689.2/10513781 9
invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining
provisions and applications shall not in any way be affected or impaired thereby. The terms and
provisions of this Bond and the Ordinance shall be construed in accordance with and shall be
governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Bond Date.
CITY OF EULESS, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(Seal)
(c) *Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Bond(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*NOTE TO PRINTER: Do not print on definitive bonds
45697689.2/10513781 10
(d) Form of Certificate of Paying Agent/Registrar to Appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within - mentioned Ordinance; the bond or bonds of the
above entitled and designated series originally delivered having been approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts, as shown
by the records of the Paying Agent/Registrar.
The designated offices of the Paying Agent /Registrar in Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Bond.
Registration date:
(e) Form of Assignment.
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Paying Agent/Registrar
By
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
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:
45697689.2/10513781 11
REGISTERED
NO. T -1
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND
SERIES 2006
Bond Date: January 1, 2006
Registered Owner:
Principal Amount:
The City of Euless (hereinafter referred to as the "City "), a body corporate and municipal
corporation in the County of Tarrant, State of Texas, for value received, hereby promises to pay
to the Registered Owner named above, or the registered assigns thereof, solely from the
revenues hereinafter identified, the Principal Amount hereinabove stated on July 15 in each of
the years and in principal installments in accordance with the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid 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 Bond 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, 2005.
Principal installments of this Bond are payable in the year of maturity or on a prepayment date
to the registered owner hereof by JPMorgan Chase Bank, National Association (the "Paying
Agent/Registrar"), upon presentation and surrender, at its designated offices in Dallas, Texas
(the "Designated Payment/Transfer Office "). Interest is payable to the registered owner of this
Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar
at the close of business on the "Record Date ", which is the last business day of the month next
preceding each interest payment date and interest shall be paid by the Paying Agent/Registrar
by check sent United States Mail, first class postage prepaid, to the address 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. If the date
for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the city where the Designated Payment/Transfer
Office of the Paying Agent/Registrar is located are authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was
due. All payments of principal of, premium, if any, and interest on this Bond shall be without
exchange or collection charges to the owner hereof and in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and
private debts.
45697689.2/10513781 12
SECTION 9: Definitions. For all purposes of this Ordinance and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
(a) The term "Additional Bonds" shall mean the additional parity revenue bonds the
City reserves the right to issue in accordance with the terms and conditions prescribed in
Section 22 hereof.
(b) The term "Bonds" shall mean the "City of Euless, Texas, Waterworks and Sewer
System Revenue Refunding Bonds, Series 2006" authorized by this Ordinance.
(c) The term "Bonds Similarly Secured" shall mean the Previously Issued Bonds, the
Bonds and Additional Bonds.
(d) The term "Fiscal Year" shall mean the twelve -month operating period for the
System ending September 30 of each year.
(e) The term "Net Revenues" shall mean and include the gross revenues derived
from the operation of the System, less reasonable expenses of operation and maintenance,
including all salaries, labor, materials, repairs and extensions necessary to render efficient
service, provided, however, that only such repairs and extensions as in the judgment of the City
Council, reasonably and fairly exercised, are necessary to keep the System in operation and
render adequate service to the areas served thereby and the inhabitants thereof, or such as
might be necessary to meet some physical accident or condition which would otherwise impair
the security of any bonds payable from and secured by a lien on the Net Revenues of the
System shall be deducted in determining "Net Revenues."
(f) The term "Previously Issued Bonds" shall mean the outstanding and unpaid
revenue bonds, payable from and secured by a first lien on and pledge of the Net Revenues of
the System, of the following issues or series, identified as follows:
(1) City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2000, dated March 15, 2000, and issued in the original principal
amount of $3,260,000; and
(2) City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2004, dated June 15, 2004, and issued in the original principal
amount of $2,145,000 (the "Series 2004 Bonds ");
(g) The term "Government Obligations" shall mean (i) direct noncallable obligations
of the United States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
agency or instrumentality of the United States, including obligations unconditionally guaranteed
or insured by an agency or instrumentality of the United States of America and on the date of
their acquisition or purchase by the City are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent 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.
45697689.2/10513781 - 13
(h) The term "Outstanding" when used in this Ordinance with respect to Bonds
means, as of the date of determination, all Bonds theretofore issued and delivered under this
Ordinance, except:
(1) those Bonds canceled by the Paying Agent/Registrar or delivered
to the Paying Agent /Registrar for cancellation;
(2) those Bonds deemed to be paid by the City in accordance with the
provisions of Section 28 hereof; and
(3) those Bonds that have been mutilated, destroyed, lost, or stolen
and replacement Bonds have been registered and delivered in lieu thereof as
provided in Section 30 hereof.
(i) The term "System" shall mean the City's combined Waterworks and Sanitary
Sewer System, including all present and future additions, extensions, replacements and
improvements thereto, whether situated within or without the corporate limits of the City.
SECTION 10: Pledge. The City hereby covenants and agrees that all of the Net
Revenues derived from the operation of the System, with the exception of those in excess of the
amounts required to establish and maintain the special Funds created for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged for the payment of the
Previously Issued Bonds, the Bonds, and the Additional Bonds, if issued, and the interest
thereon, and it is hereby ordained that the Previously Issued Bonds, the Bonds and the
Additional Bonds, if issued, and the interest thereon, shall constitute a first lien on the Net
Revenues of the System in accordance with the terms and provisions hereof and be valid and
binding and fully perfected from and after the date of adoption of this Ordinance without physical
delivery or transfer or transfer of control of the Net Revenues, the filing of this Ordinance or any
other act; all as provided in Chapter 1208 of the Texas Government Code.
Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the
pledge of the Net Revenues of the System granted by the City under this Section 10, and such
pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the
Bonds are Outstanding such that the pledge of the Net Revenues of the System granted by the
City under this Section 10 is to be subject to the filing requirements of Chapter 9, Texas
Business & Commerce Code, then in order to preserve to the registered owners of the Bonds
the perfection of the security interest in said pledge, the City agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Texas Business & Commerce Code and enable a filing to perfect the
security interest in said pledge to occur.
SECTION 11: Rates and Charges. The City hereby covenants and agrees with the
Holders of the Bonds that rates and charges for water and sewer services afforded by the
System will be established and maintained to provide revenues sufficient at all times to pay:
(a) all operating, maintenance, depreciation, replacement, betterment and other
costs deductible in determining Net Revenues as herein defined;
(b) the interest on and principal of the Bonds Similarly Secured and the amounts
required to be deposited into the special Funds created and established for the payment and
security of the Bonds Similarly Secured; and
45697689.2/10513781 14
(c) any other legally incurred indebtedness payable from the revenues of the System
and /or secured by a lien on the System or the revenues thereof.
SECTION 12: Segregation of Revenues /Fund Designations. All revenues and income
derived from the operation and ownership of the System shall be kept separate from other funds
of the City and deposited from day to day, as collected in the "System Fund" (created and
established in connection with the issuance of the Previously Issued Bonds), which Fund is
hereby reaffirmed and shall continue to be kept and maintained at an official depository bank of
the City while the Bonds remain Outstanding. Furthermore, the special funds or accounts
created and established in connection with the issuance of the Previously Issued Bonds are
hereby reaffirmed for the benefit of the Bonds, to wit:
(a) Bond Fund, which Fund is kept and maintained at First National Bank Mid - Cities,
and moneys deposited in said Fund shall be used only for the purpose of paying the principal of
and interest on the Bonds Similarly Secured.
(b) Emergency Fund, which Fund is kept and maintained at the City's official
depository bank, and moneys deposited in said Fund shall be used, upon proper order of the
City Council, to pay any special or extraordinary repairs or replacements to the System
necessitated by the occurrence of an emergency and for payment of which no other funds are
available and additionally for the payment of the principal and /or interest requirements of the
Bonds Similarly Secured to prevent a default in the payment thereof when moneys in the Bond
Fund and /or Bond Reserve Fund are deficient.
(c) Bond Reserve Fund, which Fund is kept and maintained at Deutsche Bank, and
moneys deposited in said Fund shall be used to pay the principal of and interest on the Bonds
Similarly Secured falling due at any time when there is insufficient money available in the Bond
Fund for such purpose.
SECTION 13: System Fund. The City hereby reaffirms its covenant to the Holders of
the Previously Issued Bonds and agrees with the Holders of the Bonds that the moneys
deposited in the System Fund shall be used first for the payment of the reasonable and proper
expenses of operating and maintaining the System, as identified in Section 9(e) hereof. All
moneys deposited in the System Fund in excess of the amounts required to pay operating and
maintenance expenses of the System, as hereinabove provided, shall be applied and
appropriated, to the extent required and in the order of priority prescribed, as follows:
(a) To the payment of the amounts required to be deposited in the Bond Fund for the
payment of principal of and interest on the Bonds Similarly Secured as the same become due
and payable;
(b) To the payment of the amounts, if any, required to be deposited in the
Emergency Fund to accumulate and /or restore the total amount required to be maintained
therein; and
(c) To the payment of the amounts required to deposited in the Bond Reserve Fund
to accumulate and maintain the reserve amount as security for the payment of the principal of
and interest on the Bonds Similarly Secured.
SECTION 14: Bond Fund. In addition to the required deposits to the Bond Fund for the
payment of principal of and interest on the Previously Issued Bonds, the City hereby agrees and
45697689.2/10513781 15
covenants to deposit to the Bond Fund an amount equal to one hundred percentum (100 %) of
the amount required to fully pay the interest on and principal of the Bonds falling due on or
before each maturity and interest payment date, such payments to be made in substantially
equal monthly installments on or before the 10th day of each month beginning on or before the
10th day of the month next following the month the Bonds are delivered to the initial purchaser.
The required monthly deposits to the Bond Fund for the payment of principal of and
interest on the Bonds shall continue to be made as hereinabove provided until such time as (i)
the total amount on deposit in the Bond Fund and Bond Reserve Fund is equal to the amount
required to fully pay and discharge all outstanding Bonds Similarly Secured (principal and
interest) or (ii) the Bonds are no longer outstanding, i.e., fully paid as to principal and interest or
all the Bonds have been refunded.
Accrued interest, if any, received from the purchaser of the Bonds shall be deposited in
the Bond Fund, and shall be taken into consideration and reduce the amount of the monthly
deposits hereinabove required which would otherwise be required to be deposited in the Bond
Fund from the Net Revenues of the System. Furthermore, a transfer of funds from the Bond
Reserve Fund and Emergency Fund, as hereinafter prescribed, shall be taken into
consideration and reduce the amount of the monthly deposits otherwise required to be
deposited in the Bond Fund from the Net Revenues.
SECTION 15: Emergency Fund. In accordance with the provisions of the ordinances
authorizing the issuance of the Previously Issued Bonds, the amount required to be
accumulated and maintained in the Emergency Fund is $100,000.00, which amount is currently
on deposit therein, and no additional amount shall be required to be deposited in said Fund by
reason of the issuance of the Bonds. As long as the sum of $100,000.00 is on deposit in said
Fund, no further amounts shall be required to be deposited therein; provided, however, should
the amount on deposit in said Fund ever be less than $100,000.00, the City covenants and
agrees to immediately resume, and cause to be made to said Fund, monthly deposits in the
amount of $1,000 on or before the 10th day of each month until the total amount required to be
maintained in said Fund has been fully restored. Monthly deposits to said Fund shall be made
with available Net Revenues of the System in the System Fund and be subject only to the
required deposits to the Bond Fund. Furthermore, when the amount on deposit in the
Emergency Fund equals or exceeds the total amount required to be maintained therein, moneys
realized from the investment of funds in the Emergency Fund in excess of the balance required
to be maintained therein may be transferred to the Bond Fund.
SECTION 16: Bond Reserve Fund. The City reaffirms its covenant to the holders of the
Previously Issued Bonds and agrees with the Holders of the Bonds that there shall be
accumulated and maintained in the Bond Reserve Fund an amount equal to at least the
average annual principal and interest requirement of the outstanding Bonds Similarly Secured.
In accordance with the ordinances authorizing the issuance of the Previously Issued
Bonds, there is currently on deposit to the credit of the Bond Reserve Fund an amount equal to
not less than $405,068.53 (the "Current Reserve "). By reason of the issuance of the Bonds, the
amount to be maintained in said Fund, subject to adjustment as hereinafter provided in this
Section, shall be $369,884.00 (the "Required Reserve "), which amount totals not less than the
average annual principal and interest requirement of the outstanding Bonds Similarly Secured
after giving effect to the issuance of the Bonds. The Required Reserve is less than the Current
Reserve and, therefore, no additional deposits are required to be made to the Reserve Fund by
reason of the issuance of the Bonds.
45697689.2/10513781 16
Notwithstanding the provisions of the preceding paragraph relating to the Required
Reserve, the total amount to be accumulated and maintained in the Bond Reserve Fund may, at
the option of the City, be recomputed and adjusted to an amount equal to the average annual
principal and interest requirements of the Bonds Similarly Secured at any time outstanding, and
such adjustment is particularly anticipated at such time as Bonds Similarly Secured may be
redeemed and retired prior to their stated maturity. Furthermore, when the amount on deposit in
the Bond Reserve Fund equals or exceeds the total amount required to be maintained therein,
moneys realized from the investment of funds in the Bond Reserve Fund in excess of the
balance required to be maintained in said Fund may be transferred to the Bond Fund.
SECTION 17: Investments. Moneys on deposit in the Bond Reserve Fund and the
Emergency Fund may be invested as follows:
(a) Bond Reserve Fund in direct obligations of or obligations unconditionally
guaranteed by the United States of America having maturities not in excess of ten (10) years
from the making of such investment as the City Council may direct. Such obligations shall be
held by the custodian bank where said Fund is maintained, and if at any time uninvested funds
shall be insufficient to permit payment of principal and interest at maturity of the Bonds Similarly
Secured, the custodian bank of said Fund shall sell on the open market such amount of the
securities as is required to pay such Bonds Similarly Secured and interest thereon when due
and shall give notice thereof to the City Manager.
(b) Emergency Fund in direct obligations of or obligations unconditionally
guaranteed by the United States of America having maturities not in excess of five (5) years
from the making of such investment as the City Council may direct. Such investment securities
shall be held by the custodian bank where said Fund is maintained and if at any time it becomes
necessary to liquidate same to provide sums for any purpose for which such Fund was created,
the City shall notify the custodian bank of said Fund who shall promptly sell on the open market
such amount thereof as may be required, making the proceeds immediately available. Should
the purpose be for meeting bond requirements, the City agrees promptly to accomplish the
required transfers to the paying agent bank for the Bonds Similarly Secured.
SECTION 18: Payment of Bonds. While any of the Bonds are Outstanding, the proper
officers of the City are hereby authorized to transfer or cause to be transferred to the Paying
Agent/Registrar therefor, from funds on deposit in the Bond Fund and, if necessary, in the Bond
Reserve Fund and Emergency Fund, amounts sufficient to fully pay and discharge promptly as
each installment of interest and principal of the Bonds accrues or matures or comes due by
reason of redemption prior to maturity; such transfer of funds to be made in such manner as will
cause immediately available funds to be deposited with the Paying Agent/Registrar for the
Bonds at the close of the business day next preceding the date of payment for the Bonds. The
Paying Agent/Registrar shall cancel or destroy all paid Bonds, and furnish the City with an
appropriate certificate of cancellation or destruction.
SECTION 19: Deficiencies in Funds. If in any month the City shall, for any reason, fail
to pay into the Bond Fund, the Emergency Fund or Bond Reserve Fund, the full amounts above
stipulated, amounts equivalent to such deficiencies shall be set apart and paid into said Funds
from the first available and unallocated Net Revenues of the System in the following month or
months and such payments shall be in addition to the amounts hereinabove provided to be
otherwise paid into said Funds during such month or months.
45697689.2/10513781 17
SECTION 20: Excess Revenues. Any surplus Net Revenues of the System remaining
after all payments have been made into the Bond Fund, Emergency Fund and Bond Reserve
Fund, and after all deficiencies in making deposits to said Funds have been remedied, may be
transferred and used for any lawful general or special purpose, as permitted by the terms of
V.T.C.A., Government Code, Article 1502.059; including the use thereof either for the retirement
in advance of maturity of the Bonds Similarly Secured, according to the provisions made for
their prior redemption, or for the purchase of any of such Bonds Similarly Secured on the open
market at not exceeding the market value thereof. Nothing herein, however, shall be construed
as impairing the right of the City to pay, in accordance with the provisions thereof, any junior lien
bonds legally issued by it and payable out of the Net Revenues of the System.
SECTION 21: Security of Funds. Moneys on deposit in the special Funds referred to in
this Ordinance (except any amounts as may be properly invested) shall be secured in the
manner and to the fullest extent required by the laws of the State of Texas for the security of
public funds, and moneys on deposit in such special Funds shall be used only for the purposes
permitted by this Ordinance and the ordinances authorizing the issuance of the Previously
Issued Bonds.
SECTION 22: Issuance of Additional Bonds. In addition to the right to issue bonds of
inferior lien as authorized by the laws of the State of Texas, the City hereby reserves the right to
issue Additional Bonds which, when duly authorized and issued in compliance with the terms
and conditions hereinafter appearing, shall be on a parity with the Previously Issued Bonds and
the Bonds, payable from and equally secured by a first lien on and pledge of the Net Revenues
of the System. The Additional Bonds may be issued in one or more installments, provided,
however, that none shall be issued unless and until the following conditions have been met:
(a) The City is not then in default as to any covenant, condition or obligation
contained in the ordinances authorizing the issuance of the then outstanding Bonds Similarly
Secured;
(b) The laws of the State of Texas in force at such time provide for the issuance of
such Additional Bonds;
(c) Each of the Special Funds created for the payment, security and benefit of the
Bonds Similarly Secured contains the amount of money then required to be on deposit therein;
(d) The Net Revenues of the System for the twelve -month period or for the fiscal
year next preceding the month of the adoption of the ordinance authorizing the issuance of the
Additional Bonds, as shown by a report of a certified public accountant or licensed public
accountant, are equal to at least one and one - fourth (1 %) times the average annual principal
and interest requirements of all bonds which will be secured by a first lien on and pledge of the
Net Revenues of the System, and which will be outstanding upon the issuance of the Additional
Bonds. The term "Net Revenues" as used in this Section shall mean the gross revenues after
deducting the expenses of operation and maintenance but not deducting expenditures which,
under standard accounting procedures, should be charged to capital expenditures.
(e) The Additional Bonds are made to mature on July 15 of each of the years in
which they are scheduled to mature; and
(f) The ordinance authorizing the issuance of Additional Bonds provides that the
amount to be accumulated and maintained in the Bond Reserve Fund shall be increased to an
45697689.2/10513781 18
amount equal to not less than the average annual principal and interest requirements of all
bonds payable from and secured by a first lien on and pledge of the Net Revenues of the
System (after giving effect to the issuance of the proposed Additional Bonds). The additional
amount to be accumulated in said Fund shall be deposited therein in not more than five (5)
years and one (1) month from the date of the passage of the ordinance authorizing the issuance
of the Additional Bonds.
SECTION 23: Maintenance and Operation— Insurance. The City hereby covenants and
agrees that the System shall be operated on a Fiscal Year basis and shall be maintained in
good condition and operated in an efficient manner and at reasonable cost. So long as any of
the Bonds are Outstanding, the City agrees to maintain insurance for the benefit of the Holder or
Holders of such Bonds of the kinds and in the amounts which are usually carried by private
companies engaged in a similar type of business. Nothing in this Ordinance shall be construed
as requiring the City to expend any funds which are derived from sources other than the
operation of the System, but nothing herein shall be construed as preventing the City from doing
so.
SECTION 24: Records — Accounts — Accounting Reports. The City hereby covenants and
agrees so long as any of the Bonds or any interest thereon remain outstanding and unpaid, it
will keep and maintain a proper and complete system of records and accounts pertaining to the
operation of the System and its component parts separate and apart from all other records and
accounts of the City in accordance with generally accepted accounting principles prescribed for
municipal corporations, and complete and correct entries shall be made of all transactions
relating to said System, as provided by V.T.C.A., Government Code, Article 1502.066. The
Holder or Holders of any Bonds, or any duly authorized agent or agents of such Holders, shall
have the right at all reasonable times to inspect all such records, accounts and data relating
thereto and to inspect the System and all properties comprising same. The City further agrees
that as soon as possible following the close of each Fiscal Year, it will cause an audit of such
books and accounts to be made by an independent firm of Certified Public Accountants or
Licensed Public Accountants. Each such audit, in addition to whatever other matters may be
thought proper by the Accountant, shall particularly include the following:
(a) A detailed statement of the income and expenditures of the System for such
Fiscal Year;
(b) A balance sheet as of the end of such Fiscal Year;
(c) The Accountant's comments regarding the manner in which the City has
complied with the covenants and requirements of this Ordinance and his recommendations for
any changes or improvements in the operation, records and accounts of the System;
(d) A list of the insurance policies in force at the end of the Fiscal Year on the
System properties, setting out as to each policy the amount thereof, the risk covered, the name
of the insurer, and the policy's expiration date;
(e) A list of the securities which have been on deposit as security for the money in
the Bond Fund, the Emergency Fund and the Bond Reserve Fund throughout the Fiscal Year, a
list of the securities, if any, in which the Emergency Fund and Bond Reserve Fund has been
invested, and a statement of the manner in which money in the System Fund has been secured
in such Fiscal Year; and
45697689.2/10513781 19
M The total number of customers connected with the components of the System at
the end of the Fiscal Year.
Expenses incurred in making the audits above referred to are to be regarded as
maintenance and operating expenses of the System and paid as such. Copies of the aforesaid
annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas, and, upon written request, to the original
purchasers and any subsequent Holder of the Bonds.
SECTION 25: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City (a) defaults in payments to be made to the Bond Fund or Bond Reserve Fund as
required by this Ordinance, or (b) defaults in the observance or performance of any other of the
covenants, conditions or obligations set forth in this Ordinance, the Holder or Holders of any of
the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction
compelling and requiring the City Council and other officers of the City to observe and perform
any covenant, condition or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right or power may be exercised from time to time and as
often as may be deemed expedient. The specific remedies herein provided shall be cumulative
of all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive.
SECTION 26: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the revenues supporting this issue of Bonds and
has lawfully exercised said power under the Constitution and laws of the State of Texas,
including V.T.C.A. Government Code, Chapter 1502.052; that the Previously Issued Bonds, the
Bonds, and the Additional Bonds, when issued, shall be ratably secured under said pledge of
income in such manner that one bond shall have no preference over any other bond or said
issues.
(b) Other than for the payment of the Previously Issued Bonds, the Bonds, the
outstanding "City of Euless, Texas, Tax and Waterworks and Sewer System (Limited Pledge)
Revenue Certificates of Obligation, Series 1998 ", dated February 15, 1998, "City of Euless,
Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Taxable Series 2000 ", dated March 1, 2000, "City of Euless, Texas, Tax and
Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series
2000A ", dated May 1, 2000, "City of Euless, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2001 ", dated April 1, 2001, and the "City of
Euless, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of
Obligation, Series 2004 ", dated June 15, 2004, the Net Revenues of the System have not in any
manner been pledged to the payment of any debt or obligation of the City or of the System.
(c) So long as any of the Bonds or any interest thereon remain outstanding, the City
will not sell, lease or encumber the System or any substantial part thereof; provided, however,
this covenant shall not be construed to prohibit the sale of such machinery, or other properties
or equipment which has become obsolete or otherwise unsuited to the efficient operation of the
System, and, also, with the exception of the Additional Bonds expressly permitted by this
45697689.2/10513781 20
ordinance to be issued, it will not encumber the Net Revenues of the System unless such
encumbrance is made junior and subordinate to all of the provisions of this Ordinance.
(d) No free service of the System shall be allowed, and should the City or any of its
agencies or instrumentalities make use of the services and facilities of the System, payment of
the reasonable value thereof shall be made by the City out of funds from sources other than the
revenues and income of the System.
(e) To the extent that it legally may, the City further covenants and agrees so long as
any of the Bonds or any interest thereon are outstanding no franchise shall be granted for the
installation or operation of any competing waterworks and sanitary sewer system other than
those owned by the City, and the operation of any such system by anyone other than the City is
hereby prohibited.
SECTION 27: Bonds are Special Obligations. The Bonds are special obligations of the
City payable from the pledged Net Revenues and the Holders thereof shall never have the right
to demand payment thereof out of funds raised or to be raised by taxation.
SECTION 28: Satisfaction of Obligation of City. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the
Net Revenues of the System under this Ordinance and all other obligations of the City to the
Holders shall thereupon cease, terminate, and become void and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in
trust by the Paying Agent /Registrar, or an authorized escrow agent, or (ii) Government
Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Obligations have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the
principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Obligations will be made under this Section and no
use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or
regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the
City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the
principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request of the City, be remitted to the City
45697689.2/10513781 21
against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of
funds from the Paying Agent /Registrar to the City shall be subject to any applicable unclaimed
property laws of the State of Texas.
SECTION 29: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City so long as any Bond remains Outstanding except as permitted in this
Section and in Section 45 hereof. The City, may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the City may, with the written consent of Holders holding
a majority in aggregate principal amount of the Bonds Similarly Secured then outstanding,
amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the
consent of all Holders of the Bonds then outstanding, no such amendment, addition, or
rescission shall (1) extend the time or times of payment of the principal of, premium, if any,
and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or
the rate of interest thereon, or in any other way modify the terms of payment of the principal of,
premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other
Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for
consent to any such amendment, addition, or rescission.
SECTION 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: 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
45697689.2/10513781 22
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 32: Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent /Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the City.
SECTION 33: Covenants to Maintain Tax - Exempt Status. (a) Definitions. When used
in this Section 33, the following terms have the following meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
"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.
45697689.2/10513781 23
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-
5 of the Regulations and (2) the Bonds has the meaning set forth in Section
1.148 -4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in Section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds (including property financed with
Gross Proceeds of the Refunded Bonds), and not use or permit the use of such
Gross Proceeds (including all contractual arrangements with terms different than
those applicable to the general public) or any property acquired, constructed or
improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with Gross Proceeds of the Refunded Bonds), other
than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
45697689.2/10513781 24
(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 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 from an appropriate fund, or
if permitted by applicable Texas statute, regulation or opinion of the Attorney
General of the State of Texas, the Bond Fund the amount that when added to the
future value of previous rebate payments made for the Bonds equals (i) in the
case of a Final Computation Date as defined in Section 1.148- 3(3)(2) of the
Regulations, one hundred percent (100 %) of the Rebate Amount on such date;
and (ii) in the case of any other Computation Date, ninety percent (90 %) of the
Rebate Amount on such date. In all cases, the rebate payments shall be made
at the times, in the installments, to the place and in the manner as is or may be
required by Section 148(f) of the Code and the Regulations and rulings
thereunder, and shall be accompanied by Form 8038 -T or such other forms and
45697689.2/10513781 25
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 Mayor, City Secretary, City
Manager and Director of Finance, 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. (1) At the time the original bonds refunded by the
Bonds were issued, the City reasonably expected to spend at least 85% of the spendable
proceeds of such bonds within three years after such bonds were issued and (2) not more than
50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose
Investments having a substantially guaranteed Yield for a period of 4 years or more.
(1) Qualified Advance Refunding. The Bonds are issued to refund the Refunded
Bonds, and the Bonds will be issued more than 90 days before the redemption of the Refunded
Bonds. The City represents as follows:
(1) The Bonds are the first advance refunding of the Refunded Bonds,
within the meaning of section 149(d)(3) of the Code.
(2) The Refunded Bonds are being called for redemption, and will be
redeemed not later than the earliest date on which such bonds may be
redeemed.
(3) The initial temporary period under section 148(c) of the Code will
end: (i) with respect to the proceeds of the Bonds not later than 30 days after the
date of issue of such Bonds; and (ii) with respect to proceeds of the Refunded
Bonds on the Closing Date if not ended prior thereto.
(4) On and after the date of issue of the Bonds, no proceeds of the
Refunded Bonds will be invested in Nonpurpose Investments having a Yield in
excess of the Yield on such Refunded Bonds.
45697689.2/10513781 26
(5) The Bonds are being issued for the purposes stated in the
preamble of this Ordinance. There is a present value savings associated with
the refunding. In the issuance of the Bonds the City has neither: (i)
overburdened the tax exempt bond market by issuing more bonds, issuing bonds
earlier or allowing bonds to remain outstanding longer than reasonably
necessary to accomplish the governmental purposes for which the Bonds were
issued; (ii) employed on "abusive arbitrage device" within the meaning of Section
1.148 -10(a) of the Regulations; nor (iii) employed a "device" to obtain a material
financial advantage based on arbitrage, within the meaning of section 149(d)(4)
of the Code, apart from savings attributable to lower interest rates and reduced
debt service payments in early years.
SECTION 34: Sale of Bonds. The offer of JPMorgan Chase Bank, National Association
(herein referred to as the "Purchasers ") to purchase the Bonds in accordance with a purchase
agreement, dated as of January 10, 2006, attached hereto as Exhibit B and incorporated herein
by reference as a part of this Ordinance for all purposes is hereby accepted and the sale of the
Bonds to said Purchasers is hereby.approved and authorized. The Mayor or Mayor Pro Tern
and City Secretary are hereby authorized and directed to sign the acceptance clause of said
letter for and on behalf of the City and as the act and deed of this City Council. Delivery of the
Bonds to the Purchasers shall occur as soon as possible upon payment being made therefor in
accordance with the terms of sale.
SECTION 35: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the Underwriter.
Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City Manager and Director of
Finance, any one or more of said officials, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the City and the issuance of the Bonds,
including certifications as to facts, estimates, circumstances and reasonable expectations
pertaining to the use, expenditure and investment of the proceeds of the Bonds, as may be
necessary for the approval of the Attorney General, their registration by the Comptroller of
Public Accounts and the delivery of the Bonds to the Underwriter, and, together with the City's
financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary
arrangements for the delivery of the Initial Bond(s) to the Underwriter and the initial exchange
thereof for definitive Bonds.
SECTION 36: Redemption of Refunded Bonds. The bonds of that series known as "City
of Euless, Texas, Waterworks and Sewer System Revenue Bonds, Series 2000 ", dated
March 15, 2000, maturing in the years 2009 through 2020, and aggregating in principal amount
$2,445,000, shall be redeemed and the same are hereby called for redemption on July 15,
2008, at the price of par plus accrued interest to such date of redemption. The City Secretary is
hereby authorized and directed to file a copy of this Ordinance, together with a suggested form
of notice of redemption to be sent to bondholders, with The Bank of New York Trust Company,
N.A. (successor paying agent/registrar to The Bank of New York), in accordance with the
redemption provisions applicable to such bonds; such suggested form of notice of redemption
being attached hereto as Exhibit D and incorporated herein by reference as a part of this
Ordinance for all purposes.
45697689.2/10513781 27
The redemption of the obligations described above being associated with the refunding
of such obligations, the approval, authorization and arrangements herein given and provided for
the redemption of such obligations on the redemption date 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 date and in
the manner herein provided and in accordance with the ordinance authorizing the issuance of
the obligations and this Ordinance.
SECTION 37: Special Escrow Agreement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement ") by and between the City and U. S. Bank, National
Association, Houston, Texas (the "Escrow Agent "), attached hereto as Exhibit C and
incorporated herein by reference as a part of this Ordinance for all purposes, is hereby
approved as to form and content, and such Agreement in substantially the form and substance
attached hereto, together with such changes or revisions as may be necessary to accomplish
the refunding or benefit the City, is hereby authorized to be executed by the Mayor or Mayor Pro
Tern and City Secretary for and on behalf of the City and as the act and deed of this City
Council; and such Agreement as executed by said officials shall be deemed approved by the
City Council and constitute the Agreement herein approved.
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
escrowed securities referenced in the Agreement and the delivery thereof to the Escrow Agent
on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL
2006 CITY OF EULESS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (the
"Escrow Fund "); all as contemplated and provided in V.T.C.A., Government Code, Chapter
1207, as amended, this Ordinance and the Agreement.
SECTION 38: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale (less amounts to be pay costs of issuance) shall be deposited to the credit of
the Escrow Fund. The balance of the proceeds of sale of the Bonds shall be expended to pay
costs of issuance and any excess amount budgeted for such purpose shall be deposited to the
credit of the Bond Fund.
Additionally, on or immediately prior to the date of delivery of the Bonds to the
Purchasers, the Director of Finance shall cause to be transferred in immediately available
funds to the Escrow Agent (1) the sum of $22,418.80 from moneys on deposit in the interest
and sinking fund and (2) the sum of $35,184.00 from the reserve fund maintained for the
payment of the Refunded Bonds to accomplish the refunding.
SECTION 39: Legal Opinion. The obligation of the Underwriter to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion is hereby authorized to be printed on the definitive Bonds.
SECTION 40: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the 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.
45697689.2/10513781 28
SECTION 41: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed
Agent/Registrar and the Holders,
reason of this Ordinance or any
intended to be and being for
Agent/Registrar and the Holders.
to confer upon any person other than the City, the Paying
any right, remedy, or claim, legal or equitable, under or by
provision hereof, this Ordinance and all its provisions being
the sole and exclusive benefit of the City, the Paying
SECTION 42: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 43: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 44: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the Council hereby
declares that this Ordinance would have been enacted without such invalid provision.
SECTION 45: 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.
"Rule" means SEC Rule 15c2 12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an
authorized department, officer, or agency thereof as, and determined by the SEC
or its staff to be, a state information depository within the meaning of the Rule
from time to time.
(b) Annual Reports. 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, 2005) financial information and operating data with respect to the City of the
general type being provided in connection with the Series 2004 Bonds and being the information
described in Exhibit E hereto. Financial statements to be provided shall be (1) prepared in
accordance with the accounting principles described in Exhibit E 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.
45697689.2/10513781 29
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, 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
45697689.2/10513781 30
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances 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
included 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.
SECTION 46: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 47: 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.
45697689.2/10513781 31
SECTION 48: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028.
[remainder of page left blank intentionally]
45697689.2/10513781 32
PASSED AND ADOPTED, this January 10, 2006.
CITY OF EULESS, TEXAS
ATTEST:
Ci y Secreta
(City Seal)
APPROVED AS TO FORM:
/f City Attorney
45697689.2/10513781 S -1
EXHIBIT A
PAYING AGENT /REGISTRAR AGREEMENT
45697689.2/10513781
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of January 10, 2006 (this "Agreement "), by and
between the City of Euless, Texas (the "Issuer "), and JPMorgan Chase Bank, National
Association, 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, Waterworks and Sewer System Revenue Refunding Bonds, Series 2006" (the
"Securities "), dated January 1, 2006, which Securities are scheduled to be delivered to the initial
purchasers on or about January 30, 2006; 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
45700251.1/10513781
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 Finance,
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,
45700251.1/10513781 2
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 Paving 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 address: P. O. Box 2320, Dallas, Texas 75221 -2320 or 2001 Bryan
Street, 9th Floor, Dallas, Texas 75201, Attention: Operations.
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.
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
45700251.1110513781 3
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
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
45700251.1/10513781 4
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 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.
(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.
45700251.1110513781 cJ
(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/Collateralization. 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
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.
45700251.1110513781 6
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 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 in the State
of Texas 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.
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.
45700251.1/10513781 7
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. Counterparts. 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.
45700251.1/10513781 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
BY:_
Title:
Attest:
Title:
Attest:
City Secretary
45700251.1/10513781 9
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
CITY OF EULESS, TEXAS
BY
Mayor
Address: 201 North Ector Drive
Euless, Texas 76039
ANNEX A
FEES AND CHARGES
NONE
45700251.1/10513781 A -1
EXHIBIT B
PURCHASE AGREEMENT
45697689.2/10513781
[Letterhead of JPMorganChase Bank, National Association]
January 10, 2006
City of Euless, Texas
201 North Ector Drive
Euless, Texas 76039
Fulbright & Jaworski L.L.P.
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
First Southwest Company
325 N. St. Paul Street, Suite 800
Dallas, Texas 75201
I, the undersigned, being an authorized officer of JPMorgan Chase Bank, National
Association, Dallas, Texas (the "Bank "), being a financial institution, to -wit: a bank within the
definition of section 3(a)(2) of the Securities Act of 1933, engaged in the business of investing in
securities such as the Obligation described below (the "Obligation "), acknowledge that the City of
Euless, Texas(the "Issuer ") is issuing its Waterworks and Sewer System Revenue Refunding Bonds,
Series 2006, in the aggregate principal amount of $2,530,000 to refund certain outstanding
obligations of the Issuer. The Obligation is to be issued under the authority of V.T.C.A.,
Government Code, Chapter 1207 (the "Act ").
The Bank understands that the Obligation is payable from, and secured by a lien on and
pledge of, the net revenues of the Issuer's combined Waterworks and Sewer System. The Bank
hereby acknowledges receipt of the Ordinance authorizing the issuance and sale of the Obligation
(the "Ordinance ").
The Bank further understands that the Obligation will be sold for cash, will be approved by
the Attorney General of the State of Texas, and will be delivered in the form of one fully- registered
45701575.110513781
Obligation in the denomination of the aggregate principal amount thereof. The Obligation will
initially be made payable to the order of the Bank.
In connection with the Obligation, the Bank agrees as follows:
A. The Bank will purchase the Obligation, which shall be delivered to the Bank on or about
January 30, 2006, subject to Paragraph F, below. The interest rate on the Obligation shall be
3.88% per annum. The first interest payment date for the Obligation shall be July 15, 2006,
with interest payable on each January 15 and July 15 thereafter until maturity. Principal of
the Obligation will be payable in annual installments under the terms and conditions
described below. The purchase price for the Obligation shall be the principal amount thereof.
Interest on the Obligation will accrue interest from the date of initial delivery. Annual
principal installment payments shall be made to the registered owner of the Obligation on the
dates and in the amounts shown below:
Payment Date
Principal Installment
Payment Date
Principal Installment
7 -15 -2007
$ 15,000
7 -15 -2014
$ 205,000
7 -15 -2008
15,000
7 -15 -2015
210,000
7 -15 -2009
160,000
7 -15 -2016
215,000
7 -15 -2010
170,000
7 -15 -2017
230,000
7 -15 -2011
180,000
7 -15 -2018
240,000
7 -15 -2012
185,000
7 -15 -2019
250,000
7 -15 -2013
190,000
7 -15 -2020
265,000
B. It is understood and agreed that the principal installments of the Obligation are subject to
redemption at the option of the Issuer prior to their scheduled payment dates as provided in
the Ordinance.
C. The Obligation will be fully registered as to principal and interest, and the Bank shall serve
as the initial paying agent and registrar for the Obligation without charge to the Issuer, except
for the reimbursement of any reasonable expenditures incurred by the Bank in the capacity of
paying agent and registrar.
D. In regard to its purchase of the Obligation, the Bank acknowledges that no prospectus or
other offering document has been prepared; however, the Issuer has furnished the Bank with
all information necessary and requested by the Bank to permit the Bank to make an informed
decision concerning its purchase of the Obligation, and the Bank has made such inspections
and investigations as it has deemed necessary to determine the investment quality of the
Obligation and to assess all risk factors associated with the purchase and ownership of the
45701575.110513781
Obligation. The Bank hereby acknowledges and represents that it is familiar with the
financial condition of the Issuer and the ability of the Issuer to timely pay the principal of and
interest on the Obligation. The Bank is not relying on Fulbright & Jaworski L.L.P., the
Issuer's Bond Counsel, or First Southwest Company, the Issuer's Financial Advisor, as to the
completeness or accuracy of any financial information provided to the Bank by the Issuer in
connection with its determination to make an investment in the Obligation.
E. The Obligation is being purchased by the Bank for the account of the Bank as evidence of a
loan (and not on behalf of another), and the Bank has no present intention of reselling such
Obligation or dividing its interest therein (including participations), either currently or after
the passage of a fixed or determinable period of time or upon the occurrence or
nonoccurrence of any predetermined event or circumstance; provided, however that the Bank
reserves the right to sell, pledge, transfer, convey, hypothecate, participate interests in or
dispose of the Obligation at some future date, but only to persons who have been provided
sufficient information with which to make an informed decision to invest in the Obligation.
The Obligation may be transferred and registered in the name of the new registered owner in
whole but not in part.
F. Delivery of the Obligation is to be made to the Bank at the Bank, within 60 days from the
date hereof (the "Closing "), it being understood that the delivery date may be extended by
mutual consent of the Bank and the Issuer.
G. The Bank acknowledges that the Obligation will not be rated. In addition, the Bank
acknowledges that the Obligation will not be listed on any securities exchange. Further, no
trading market now exists in the Obligation, and none may exist in the future. Accordingly,
the Bank understands that it may need to bear the risks of this investment for an indefinite
time, since any sale prior to the maturity for the Obligation may not be possible or may be at
a price below that which the Bank is paying for the Obligation.
H. It is understood and agreed that the Bank is buying the Obligation in a private placement by
the Issuer to the Bank. The Obligation is exempt from any federal securities registration
requirements by virtue of Section 3(a)(2) of the Securities Act of 1933. The private
placement of the Obligation is exempt from the provisions of Rule 15c2 -12 of the Securities
and Exchange Commission (the "Rule "); consequently the Issuer has not undertaken to make
any on -going disclosures for the benefit of the registered owner of the Obligation in
accordance with the Rule.
I. This agreement shall be terminated by delivery of $2,530,000 in principal amount of the
Obligation to the Bank at the date of Closing, provided that the representations of the Bank in
E. above, shall survive the termination hereof.
45701575.110513781
3
J. The Issuer will not designate the Obligation as a "qualified tax - exempt obligation" within the
meaning of section 265(b) of the Internal Revenue Code.
K. In consideration for the purchase of the Obligation by the Bank, the Issuer agrees as follows:
The Issuer will provide the Bank with audited annual financial statements of the
Issuer within one hundred eighty (180) days after the Issuer's fiscal year end;
2. The Issuer will provide the Bank with the annual budget of the Issuer within forty -
five (45) days after such budget is adopted; and
3. The Issuer agrees to deliver to the Bank any other financial information regarding the
Issuer that the Bank may reasonably request from time to time.
L. As a condition to the purchase of the Obligation, the Bank shall receive at the Closing an
opinion of Bond Counsel in substantially the form attached hereto as Exhibit A. In addition,
the Bank shall receive, at the Closing, an opinion of the Attorney General of the State of
Texas to the effect that the Obligation has been lawfully issued by the Issuer and is a valid
and binding special obligation of the Issuer under applicable laws of the State of Texas.
M. By executing the acceptance page of this letter, the Issuer acknowledges the agreements
made above by the Bank. In addition, the Issuer acknowledges that the Bank has engaged the
law firm of Winstead Sechrest & Minick P.C. as counsel to the Bank ('Bank Counsel ") in
connection with the purchase of the Obligation; that such engagement does not create a
relationship between Bank Counsel and the Issuer; and that such engagement shall not be
considered by the Issuer to cause any conflict of interest with respect to future transactions
involving Bank Counsel and the Issuer.
[Execution pages follow]
45701575.1/10513781
4
Respectfully submitted,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
Lo
Title:
45701575.110513781
ACCEPTANCE
ACCEPTED pursuant to the Ordinance adopted by the City Council of the City of Euless,
Texas, this the 10th day of January, 2006.
Mayor
City of Euless, Texas
45701575.110513781
Exhibit A
Form of Opinion of Bond Counsel
(Date)
IN REGARD to the authorization and issuance of the "City of Euless, Texas, Waterworks and Sewer
System Revenue Refunding Bonds, Series 2006" (the "Bonds "), dated January 1, 2006, in the principal
amount of $2,530,000, we have examined into the legality and validity of the issuance thereof by the City of
Euless, Texas (the "City "), which Bonds are issuable in fully registered form only. The Bonds have stated
maturities of July 15 in each of the years specified in the ordinance authorizing the issuance of the Bonds (the
"Ordinance "), unless redeemed prior to maturity in accordance with the terms stated on the Bonds, and
interest thereon accrues from the dates, at the rates, and in the manner and is payable on the dates, all as
provided the Ordinance.
WE HAVE SERVED AS BOND COUNSEL for the City solely to pass upon the legality and validity of
the issuance of the Bonds under the Constitution and laws of the State of Texas, and with respect to the
exclusion of the interest on the Bonds from gross income for federal income tax purposes and none other.
We have not been requested to investigate or verify,'and have not independently investigated or verified, any
records, data or other material relating to the financial condition or capabilities of the City. Our examinations
into the legality and validity of the Bonds included a review of the applicable and pertinent provisions of the
Constitution and laws of the State of Texas, a transcript of certified proceedings of the City relating to the
authorization and issuance of the Bonds, including the Ordinance, customary certifications and opinions of
officials of the City and other pertinent showings, and an examination of the Bond executed and delivered
initially by the City, which we found to be in due form and properly executed.
BASED ON OUR EXAMINATIONS, IT IS OUR OPINION that, under applicable law of the United
States of America and the State of Texas now in force and effect that:
1. The Bonds have been duly authorized by the City and the Bonds issued in
compliance with the provisions of the Ordinance are valid, legally binding and enforceable
special obligations of the City, in accordance with the terms thereof, and, together with the
Previously Issued Bonds (identified and defined in the Ordinance), are payable solely from
and equally and ratably secured by a lien on and pledge of the Net Revenues (as defined in
the Ordinance) of the City's combined Waterworks and Sewer System as provided in the
Ordinance, except to the extent that the enforceability thereof may be affected by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights or the
exercise of judicial discretion in accordance with general principles of equity. The Ordinance
provides certain conditions for the issuance of additional obligations bythe City payable from
the same source and secured in the same manner as the Bonds.
2. Pursuant to section 103 of the Internal Revenue Code of 1986, as amended
to the date hereof (the "Code "), and existing regulations, published rulings, and court
decisions thereunder, and assuming continuing compliance after the date hereof by the
Issuer with the provisions of the Ordinance relating to sections 141 through 150 of the Code,
interest on the Bonds will be excludable from the gross income, as defined in section 61 of
the Code, of the owners thereof for federal income tax purposes, and such interest will not be
included in computing the alternative minimum taxable income of the owners thereof who are
individuals for federal income tax purposes.
45701575.110513781
INTEREST ON all tax - exempt obligations, such as the Bonds, owned by a corporation, other than an
"S" corporation, or a qualified mutual fund, real estate mortgage investment conduit, real estate investment
trust or a financial asset securitization investment trust, will be included in such corporation's adjusted current
earnings for purposes of calculating the alternative minimum taxable income of such corporation. A
corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed
by section 55 of the Code is computed.
WE EXPRESS NO OTHER OPINION with respect to any other federal, state, or local tax
consequences under present law or any proposed legislation resulting from the receipt or accrual of interest
on, or the acquisition or disposition of, the Bonds. Ownership of tax - exempt obligations such as the Bonds
may result in collateral federal tax consequences to, among others, financial institutions, life insurance
companies, property and casualty insurance companies, certain foreign corporations doing business in the
United States, "S" corporations with subchapter "C" earnings and profits, owners of interests in a financial
asset securitization investment trust, individual recipients of Social Security or Railroad Retirement benefits,
individuals otherwise qualifying for the earned income tax credit, and taxpayers who may be deemed to have
incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses
allocable to, tax - exempt obligations.
OUR OPINIONS ARE BASED on existing law, which is subject to change. Such opinions are further
based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our
opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any
changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee
of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal
judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon
the representations and covenants referenced above.
45701575.110513781
EXHIBIT C
SPECIAL ESCROW AGREEMENT
45697689.2/10513781
SPECIAL ESCROW AGREEMENT
THE STATE OF TEXAS §
COUNTY OF TARRANT §
THIS SPECIAL ESCROW AGREEMENT (the "Agreement "), made and entered into as
of January 10, 2006, by and between the City of Euless, Texas, a duly incorporated municipal
corporation in Tarrant, Texas (the "City ") acting by and through the Mayor and City Secretary,
and U. S. Bank, National Association, Houston, Texas, a banking association organized and
existing under the laws of the United States of America, or its successors or assigns hereunder
(the "Bank "),
WITNESSETH:
WHEREAS, the City Council of the City of Euless, Texas (the "City ") has heretofore
issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal
amount $2,445,000 (the "Refunded Bonds ") more particularly described as follows: City of
Euless, Texas, Waterworks and Sewer System Revenue Bonds, Series 2000, dated March 15,
2000, scheduled to mature on July 15 in each of the years 2009 through 2020; and
WHEREAS, in accordance with the provisions of V.T.C.A., Government Code, Chapter
1207, as amended (the "Act "), the City is authorized to sell refunding bonds in an amount
sufficient to provide for the payment of obligations to be refunded, deposit the proceeds of such
refunding bonds with any place of payment for the obligations being refunded, or other
authorized depository, and enter into an escrow or similar agreement with such depository for
the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon
such terms and conditions as the parties may agree, provided such deposits may be invested
only in (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 (hereinafter called "Governmental Securities ") that mature
and/or bear interest payable at such times and in such amounts as will be sufficient to provide
for the scheduled payment of the Refunded Bonds; and
WHEREAS, the Refunded Bonds are scheduled to mature, or be redeemed, and interest
thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and
incorporated herein by reference as a part of this Agreement for all purposes; and
WHEREAS, the City on the 10`h day of January, 2006, pursuant to an ordinance (the
"Bond Ordinance ") finally passed and adopted by the City Council, authorized the issuance of
bonds known as "City of Euless, Texas, Waterworks and Sewer System Revenue Refunding
Bonds, Series 2006" (the "Bonds "), and such Bonds are being issued to refund, discharge and
make final payment of the principal of and interest on the Refunded Bonds; and
45700262.1/10513781
WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other
available funds of the City to be deposited with the Bank, are to be used in part to purchase the
Governmental Securities listed and identified in Exhibit B attached hereto and incorporated
herein by reference as a part of this Agreement for all purposes (together with substituted
securities therefor in accordance with the provisions of Section 11 hereof hereinafter referred to
as the "Escrowed Securities ") ; and
WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Bank in accordance with this
Agreement; and
WHEREAS, the Escrowed Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Bonds and the
accrued interest thereon, as the same shall become due in accordance with the terms of the
ordinance authorizing the issuance of the Refunded Bonds and as set forth in Exhibit A attached
hereto; and
WHEREAS, the City has completed all arrangements for the purchase of the Escrowed
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Bank is a banking association organized and existing under the laws of
the United States of America, possessing trust powers and is fully qualified and empowered to
enter into this Agreement and authorized to do business in the State of Texas; and
WHEREAS, in Section 37 of the Bond Ordinance, the City Council duly approved and
authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action
necessary to call, pay, redeem and retire said Refunded Bonds in accordance with the
provisions thereof, including, without limitation, all actions required by the ordinance authorizing
the Refunded Bonds, the Act, the Bond Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and
to secure the payment of the principal of and the interest on the Refunded Bonds as the same
shall become due, the City and the Bank hereby mutually undertake, promise and agree as
follows:
SECTION 1: Receipt of Refunded Bond Ordinance. Receipt of a copy of the ordinance
authorizing the issuance of the Refunded Bonds and the Bond Ordinance are hereby
acknowledged by the Bank. Reference herein to or citation herein of any provision of said
documents shall be deemed an incorporation of such provision as a part hereof in the same
manner and with the same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation /Funding. There is hereby created by the City with
the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2006 CITY OF
EULESS, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (hereinafter called the
"Escrow Fund ") for the benefit of the holders of the Refunded Bonds, and, immediately following
the delivery of the Bonds, the City agrees and covenants to cause to be deposited with the Bank
the following amounts:
45700262.1/10513781 2
$2,543,728.00 For the purchase of Escrowed Securities identified in Exhibit B to
be held for the account of the Escrow Fund
$ 1.00 For deposit in the Escrow Fund as a beginning cash balance.
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and
credited to the Escrow Fund for application and disbursement for the purposes and in the
manner provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the
cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the
credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on
the Refunded Bonds as the same shall become due and payable, and such Refunded Bonds,
and the interest thereon, are to mature or be redeemed and shall be paid at the times and in the
amounts set forth and identified in Exhibit A attached hereto.
SECTION 4: Pledge of Escrow. The Bank agrees that all cash and Escrowed
Securities, together with any income or interest earned thereon, held in the Escrow Fund shall
be and is hereby irrevocably pledged to the payment of the principal of and interest on the
Refunded Bonds which will mature and become due on and after the date of this Agreement,
and such funds initially deposited and to be received from maturing principal and interest on the
Escrowed Securities in the Escrow Fund shall be applied solely in accordance with the
provisions of this Agreement.
SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, the funds
on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A
attached hereto, as the same becomes due and payable, the City shall make timely deposits to
the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be immediately given by the Bank
to the City by the fastest means possible, but the Bank shall in no manner be responsible for the
City's failure to make such deposits.
SECTION 6: Escrow Fund Securities /Segregation. The Bank shall hold said Escrowed
Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for
the benefit of the holders of the Refunded Bonds, wholly segregated from other moneys and
securities on deposit with the Bank; shall never commingle said Escrowed Securities and
moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets
therein only as set forth herein. Nothing herein contained shall be construed as requiring the
Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical,
but moneys of an equal amount, except to the extent such are represented by the Escrowed
Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow
agent; and a special account evidencing such facts shall at all times be maintained on the books
of the Bank.
SECTION 7: Escrow Fund Collections /Payments. The Bank shall from time to time
collect and receive the principal of and interest on the Escrowed Securities as they respectively
mature and become due and credit the same to the Escrow Fund. On or before each principal
and/or interest payment date or redemption date, as the case may be, for the Refunded Bonds
shown in Exhibit A attached hereto, the Bank, without further direction from anyone, including
the City, shall cause to be withdrawn from the Escrow Fund the amount required to pay the
45700262.1/10513781 3
accrued interest on the Refunded Bonds due and payable on said payment date and the
principal of the Refunded Bonds due and payable on said payment date or redemption date, as
the case may be, and the amount withdrawn from the Escrow Fund shall be immediately
transmitted and deposited with the paying agent for the Refunded Bonds to be paid with such
amount. The paying agent for the Refunded Bonds is The Bank of New York Trust Company,
N.A., Dallas, Texas. The Bank does not act as a depository for the District.
SECTION 8: Escrow Fund Encumbrance. The escrow created hereby shall be
irrevocable and the holders of the Refunded Bonds shall have an express lien on all moneys
and Escrowed Securities in the Escrow Fund until paid out, used and applied in accordance with
this Agreement.
Unless disbursed in payment of the Refunded Bonds, all funds and the Escrowed
Securities received by the Bank for the account of the City hereunder shall be and remain the
property of the Escrow Fund and the City and the owners of the Refunded Bonds shall be
entitled to a preferred claim and shall have a first lien upon such funds and Escrowed Securities
enjoyed by a trust beneficiary. The funds and Escrowed Securities received by the Bank under
this Agreement shall not be considered as a banking deposit by the City and the Bank and the
City shall have no right or title with respect thereto, except as otherwise provided herein. Such
funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City.
SECTION 9: Absence of Bank Claim /Lien on Escrow Fund. The Bank shall have no
lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for
payment of services rendered hereunder, services rendered as paying agent/registrar for the
Refunded Bonds, or for any costs or expenses incurred hereunder and reimbursable from the
City.
SECTION 10: Substitution of Investments /Reinvestments. (a) The Bank shall be
authorized to accept initially and temporarily cash and/or substituted Escrowed Securities
pending the delivery of the Escrowed Securities identified in the Exhibit B attached hereto, or
shall be authorized to redeem the Escrowed Securities and reinvest the proceeds thereof,
together with other moneys held in the Escrow Fund in Governmental Securities provided such
early redemption and reinvestment of proceeds does not change the repayment schedule of the
Refunded Bonds appearing in Exhibit A and the Bank receives the following:
(1) an opinion by an independent certified public accountant to the effect
that (i) the initial and /or temporary substitution of cash and /or securities for one or
more of the Escrowed Securities identified in Exhibit B pending the receipt and
delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the
Escrowed Securities and the reinvestment of such funds in one or more
Governmental Securities, together with the interest thereon and other available
moneys then held in the Escrow Fund, will, in either case, be sufficient, without
reinvestment, to pay, as the same become due in accordance with Exhibit A, the
principal of, and interest on, the Refunded Bonds which have not previously been
paid, and
(2) with respect to an early redemption of Escrowed Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Bonds to be included in the gross
income for federal income tax purposes, under the Code and related regulations
45700262.1/10513781 4
as in effect on the date of such investment, or otherwise make the interest on the
Bonds or the Refunded Bonds subject to Federal income taxation and (b) such
reinvestment complies with the Constitution and laws of the State of Texas and
with all relevant documents relating to the issuance of the Refunded Bonds and
the Bonds.
(b) If on the date and in the amount shown in Exhibit C attached hereto there exists
cash in the Escrow Fund, the Bank and the City agree at least fifteen (15) days prior to such
date, to subscribe for the purchase of United States Treasury Securities - State and Local
Government Series (SLGS) bearing zero interest (0 %) and on such date, in the amount and
scheduled to mature as provided in Exhibit C and subscription forms prepared therefor as may
be then required by the United States Department of the Treasury; provided that the then
existing rules and regulations and policy of United States Department of the Treasury permit
and authorize such investments. Should the policy, rules and regulations of the United States
Department of Treasury not permit or authorize the purchase of such SLGS at such time or
times, such cash balance or balances shall remain uninvested and held in trust for the benefit of
the holders of the Refunded Bonds and used for the payment of the Refunded Bonds on the
dates and in the amount such moneys would have been expended had such SLGS been
acquired and matured.
SECTION 11: Restriction on Escrow Fund Investments - Reinvestment. Except as
provided in Section 10 hereof, moneys in the Escrow Fund will be invested only in the Escrowed
Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys
deposited in the Escrow Fund except as specifically provided by this Agreement.
SECTION 12: Excess Funds. If at any time through redemption or cancellation of the
Refunded Bonds there exists or will exist excesses of interest on or maturing principal of the
Escrowed Securities in excess of the amounts necessary hereunder for the Refunded Bonds,
the Bank may transfer such excess amounts to or on the order of the City, provided that the City
delivers to the Bank the following:
(1) an opinion by an independent certified public accountant that after
the transfer of such excess, the principal amount of securities in the Escrow
Fund, together with the interest thereon, and other available monies then held in
the Escrow Fund, will be sufficient to pay, as the same become due and without
reinvestment, in accordance with Exhibit A, the principal of, and interest on, the
Refunded Bonds which have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transfer will not cause interest on the Bonds or
the Refunded Bonds to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded Bonds
subject to Federal income taxation, and (b) such transfer complies with the
Constitution and laws of the State of Texas and with all relevant documents
relating to the issuance of the Refunded Bonds or the Bonds.
SECTION 13: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Escrowed Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
45700262.1/10513781 5
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 14: Absence of Bank's Liability for Investments. The Bank shall not be liable
or responsible for any loss resulting from any investment made in the Escrowed Securities or
substitute securities as provided in Section 10 hereof.
SECTION 15: Bank's Compensation - Escrow Administration /Settlement of Paving
Agent's Charges. The City agrees to pay the Bank for the performance of services hereunder
and as reimbursement for anticipated expenses to be incurred hereunder the amount of
$2,500.00 and, except for reimbursement of costs and expenses incurred by the Bank pursuant
to Sections 3, 10 and 18 hereof, the Bank hereby agrees said amount is full and complete
payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the effective date of this Agreement,
the sum of $2,250.00, which represents the total charges due the paying agent for the Refunded
Bonds and the City acknowledges and agrees such amount is and represents the total amount
of compensation due The Bank of New York Trust Company, N.A. for services rendered as
paying agent for the Refunded Bonds. Furthermore, the Bank agrees to transmit to the paying
agent for the Refunded Bonds the amount included in such deposit for paying agent services to
be rendered for the Refunded Bonds in accordance with the City's instructions
SECTION 16: Escrow Agent's Duties / Responsibilities /Liability. The Bank shall not be
responsible for any recital herein, except with respect to its organization and its powers and
authority. As to the existence or nonexistence of any fact relating to the City or as to the
sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall
be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor
and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank
may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution
or other instrument in the form therein set forth has been adopted by the City Council of the
City, as conclusive evidence that such resolution or other instrument has been duly adopted and
is in full force and effect.
The duties and obligations of the Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement;
but notwithstanding any provision of this Agreement to the contrary, in the case of any such
certificate or opinion or any evidence which by any provision hereof is specifically required to be
furnished to the Bank, the Bank shall be under a duty to examine the same to determine
whether it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent facts.
45700262.1/10513781 6
The Bank shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the holders of not less than a majority in
aggregate principal amount of all said Refunded Bonds at the time outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Bank not
in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Bonds have concurred in
any such direction, Refunded Bonds owned by any obligor upon the Refunded Bonds, or by any
person directly or indirectly controlling or controlled by or under direct or indirect common
control with such obligor, shall be disregarded, except that for the purposes of determining
whether the Bank shall be protected in relying on any such direction only Refunded Bonds
which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and
include the Chairman of the Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons who at the time shall be officers,
respectively, or to whom any corporate trust matter is referred, because of his knowledge of and
familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 17: Limitation Re: Bank's Duties /Responsibilities /Liabilities to Third Parties.
The Bank shall not be responsible or liable to any person in any manner whatever for the
sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect
to the City, or for the identity or authority of any person making or executing this Agreement for
and on behalf of the City. The Bank is authorized by the City to rely upon the representations of
the City with respect to this Agreement and the deposits made pursuant hereto and as to the
City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in
any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the
City and the holders of the Refunded Bonds. Neither the City nor the Bank shall assign or
attempt to assign or transfer any interest hereunder or any portion of any such interest. Any
such assignment or attempted assignment shall be in direct conflict with this Agreement and be
without effect.
SECTION 18: Interpleader. In the event conflicting demands or notices are made upon
the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(1) Withhold and stop all further proceedings in, and performance of,
this Agreement with respect to the issue in question and of all instructions
received hereunder in regard to such issue; and
(2) File a suit in interpleader and obtain an order from a court of
appropriate jurisdiction requiring all persons involved to interplead and litigate in
such court their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in connection with this Section, the
City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result
thereof. The obligations of the Bank under this Agreement shall be performable at the corporate
office of the Bank in the City of Houston, Texas.
45700262.1/10513781 7
The Bank may advise with legal counsel in the event of any dispute or question
regarding the construction of any of the provisions hereof or its duties hereunder, and in the
absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the
Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting
in accordance with the opinion and instructions of legal counsel that is knowledgeable and has
expertise in the field of law addressed in any such legal opinion or with respect to the
instructions given.
SECTION 19: Accounting - Annual Report. Promptly after September 30th of each
year, commencing with the year 2006, while the Escrow Fund is maintained under this
Agreement, the Bank shall forward to the City, to the attention of the Director of Finance, or
other designated official of the City, a statement in detail of the Escrowed Securities and monies
held, and the current income and maturities thereof, and the withdrawals of money from the
Escrow Fund for the preceding 12 month period ending September 30th of each year.
SECTION 20: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
CITY OF EULESS, TEXAS
201 North Ector Drive
Euless, Texas 76039
Attention: Director of Finance
U. S. BANK, NATIONAL ASSOCIATION
5847 San Felipe, Suite 1050
Houston, Texas 77057
Attention: Corporate Trust Department
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 21: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Bonds, shall be a Sunday or a legal holiday or a day on which the
Bank is authorized by law to close, then the performance thereof, including the payment of
principal of and interest on the Refunded Bonds, need not be made on such date but may be
performed or paid, as the case may be, on the next succeeding business day of the Bank with
the same force and effect as if made on the date of performance or payment and with respect to
a payment, no interest shall accrue for the period after such date.
SECTION 22: Warranty of Parties Re: Power to Execute and Deliver Escrow
Agreement. The City covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in any and every said
45700262.1/10513781 8
Refunded Bond as executed, authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Bonds shall have been modified as provided in this Agreement. The
City covenants that it is duly authorized under the Constitution and laws of the State of Texas to
execute and deliver this Agreement, that all actions on its part for the payment of said Refunded
Bonds as provided herein and the execution and delivery of this Agreement have been duly and
effectively taken and that said Refunded Bonds and coupons in the hands of the holders and
owners thereof are and will be valid and enforceable obligations of the City according to the
import thereof as provided in this Agreement.
SECTION 23: Severability. If any one or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Agreement. In the event
any covenant or agreement contained in this Agreement is declared to be severable from the
other provisions of this Agreement, written notice of such event shall immediately be given to
each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch
Investors Service) which has rated the Refunded Bonds on the basis of this Agreement.
SECTION 24: Termination. This Agreement shall terminate when the Refunded Bonds,
including interest due thereon, have been paid and discharged in accordance with the
provisions of this Agreement. If any Refunded Bonds are not presented for payment when due
and payable, the nonpayment thereof shall not prevent the termination of this Agreement.
Funds for the payment of any nonpresented Refunded Bonds and accrued interest thereon shall
upon termination of this Agreement be held by the Bank for such purpose in accordance with
Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow Fund at termination
and not needed for the payment of the principal of or interest on any of the Refunded Bonds
shall be paid or transferred to the City.
SECTION 25: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Bank by this Agreement.
SECTION 26: Successors /Assigns. (a) Should the Bank not be able to legally
serve or perform the duties and obligations under this Agreement, or should the Bank be
declared to be insolvent or closed for any reason by federal or state regulatory authorities or a
court of competent jurisdiction, the City, upon being notified or discovering the Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Bonds, to such successor and (ii) assign all rights, duties and obligations under this
Agreement to such successor. If the City should fail to appoint such a successor within ninety
(90) days from the date the City discovers, or is notified of, the event or circumstance causing
the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of the
Refunded Bonds, may apply to a court of competent jurisdiction to appoint a successor or
assigns of the Bank and such court, upon determining the Bank is unable to continue to serve,
shall appoint a successor to serve under this Agreement and the amount of compensation, if
any, to be paid to such successor for the remainder of the term of this Agreement for services to
be rendered both for administering the Escrow Fund and for paying agent duties and
responsibilities for the Refunded Bonds.
45700262.1/10513781 9
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this Agreement upon notifying the City in writing of its intention to resign
and requesting the City to appoint a successor. No such resignation shall take effect until a
successor has been appointed by the City and such successor has accepted such appointment
and agreed to perform all duties and obligations hereunder for a total compensation equal to the
unearned proportional amount paid the Bank under Section 16 hereof for the administration of
this Agreement and the unearned proportional amount of the paying agents fees for the
Refunded Bonds due the Bank.
Any successor to the Bank shall be a bank, trust company or other financial institution
that is duly qualified under applicable law (the Act or other appropriate statute) to serve as
escrow agent hereunder and authorized and empowered to perform the duties and obligations
contemplated by this Agreement and organized and doing business under the laws of the
United States or the State of Texas, having its principal office and place of business in the State
of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the
supervision or examination by Federal or State authority.
Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City
and the Bank, or its successor or assigns, an instrument accepting such appointment
hereunder, and the Bank shall execute and deliver an instrument transferring to such successor,
subject to the terms of this Agreement, all the rights, powers and trusts created and established
and to be performed under this Agreement. Upon the request of any such successor Bank, the
City shall execute any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used
herein shall be the Bank and its legal assigns and successor hereunder.
SECTION 27: Escrow Agreement - Amend ment/Modification. This Agreement shall be
binding upon the City and the Bank and their respective successors and legal representatives
and shall inure solely to the benefit of the holders of the Refunded Bonds, the City, the Bank
and their respective successors and legal representatives. Furthermore, no alteration,
amendment or modification of any provision of this Agreement shall (1) alter the firm financial
arrangements made for the payment of the Refunded Bonds or (2) be effective unless (i) prior
written consent of such alteration, amendment or modification shall have been obtained from
the holders of all Refunded Bonds outstanding at the time of such alteration, amendment or
modification and (ii) such alteration, amendment or modification is in writing and signed by the
parties hereto; provided, however, the City and the Bank may, without the consent of the
holders of the Refunded Bonds, amend or modify the terms and provisions of this Agreement to
cure in a manner not adverse to the holders of the Refunded Bonds any ambiguity, formal
defect or omission in this Agreement. If the parties hereto agree to any amendment or
modification to this Agreement, prior written notice of such amendment or proposed
modification, together with the legal documents amending or modifying this Agreement, shall be
furnished to each national rating service (Standard & Poor's Corporation, Moody's Investors
Service or Fitch Investors Service) which has rated the Refunded Bonds on the basis of this
Agreement, prior to such amendment or modification being executed.
SECTION 28: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 29: Executed Counterparts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
45700262.1/10513781 10
SECTION 30: Governing Law. This Agreement shall be governed by the laws of the
State of Texas and shall be effective as of the date of the delivery of the Bonds.
(Remainder of Page Left Blank Intentionally)
45700262.1/10513781 11
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
CITY OF EULESS, TEXAS
Mayor
ATTEST:
City Secretary
(City Seal)
U. S. BANK, NATIONAL ASSOCIATION,
Houston, Texas,
as Escrow Agent
Title:
ATTEST:
Authorized Signer
45700262.1/10513781 S -1
EXHIBIT D
NOTICE OF REDEMPTION
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BONDS
SERIES 2000
DATED MARCH 15, 2000
NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after
July 15, 2009, and aggregating in principal amount $2,445,000 have been called for redemption
on July 15, 2008 at the redemption price of par and accrued interest to the date of redemption,
such bonds being identified as follows:
Year of
CUSIP
Year of
CUSIP
Maturity
Principal Amount Number
Maturity
Principal Amount Number
2009
$145,000
2015
$205,000
2010
$155,000
2016
$215,000
2011
$165,000
2017
$230,000
2012
$170,000
2018
$245,000
2013
$180,000
2019
$260,000
2014
$195,000
2020
$280,000
ALL SUCH BONDS shall become due and payable on July 15, 2008, 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 thereof to The Bank of New York Trust Company, N.A., Dallas,
Texas (successor paying agent/registrar to The Bank of New York) at its designated offices at
the following addresses:
By Hand:
Debt Processing Group
The Bank of New York
111 Sanders Creek Parkway
East Syracuse, New York 13057
By Mail:
Debt Processing Group
The Bank of New York
P. O. Box 396
East Syracuse, New York 13057
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 BANK OF NEW YORK TRUST COMPANY,
N.A., Dallas, Texas,
as Paying Agent/Registrar
Address: Plaza of the Americas,
North Tower, Suite 420
600 North Pearl Street
Dallas, Texas 75201
45697689.2/10513781
Exhibit E to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 45 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified below:
1. The financial statements of the City for the most recently
concluded fiscal year.
2. The information contained in Tables 1 through 13 of the Official
Statement relating to the Series 2004 Bonds.
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.
45697689.2/10513781