HomeMy WebLinkAbout2185 03-13-2018 ORDINANCE NO. 2185
AUTHORIZING THE ISSUANCE OF
CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE BONDS,
SERIES 2018
Adopted: March 13, 2018
29585451.4/1000318981
TABLE OF CONTENTS
Page
SECTION1: Definitions .........................................................................................2
SECTION 2: Authorization - Designation - Principal Amount - Purpose .................3
SECTION 3: Fully Registered Obligations -Authorized Denominations -
Stated Maturities - Bond Date - Interest Rates ..................................3
SECTION 4: Terms of Payment - Paying Agent/Registrar......................................4
SECTION5: Redemption.......................................................................................5
SECTION 6: Registration - Transfer- Exchange of Bonds - Predecessor
Bonds................................................................................................6
SECTION 7: Book-Entry-Only Transfers and Transactions....................................7
SECTION 8: Execution - Registration ....................................................................8
SECTION 9: Initial Bond(s) ....................................................................................8
SECTION10: Forms................................................................................................8
SECTION11: Pledge...............................................................................................9
SECTION 12: Rates and Charges ...........................................................................9
SECTION 13: Segregation of Revenues/Fund Designations..................................10
SECTION14: System Fund...................................................................................10
SECTION15: Bond Fund.......................................................................................10
SECTION 16: Emergency Fund.............................................................................11
SECTION 17: Bond Reserve Fund ........................................................................11
SECTION 18: Investments.....................................................................................12
SECTION 19: Payment of Bonds...........................................................................12
SECTION 20: Deficiencies in Funds ......................................................................12
SECTION 21: Excess Revenues............................................................................13
SECTION 22: Security of Funds ............................................................................13
SECTION 23: Issuance of Additional Bonds ..........................................................13
SECTION 24: Maintenance and Operation - Insurance..........................................14
SECTION 25: Records - Accounts -Accounting Reports.......................................14
SECTION 26: Remedies in Event of Default..........................................................15
SECTION 27: ' Special Covenants ..........................................................................15
SECTION 28: Bonds are Special Obligations.........................................................16
SECTION 29: Satisfaction of Obligation of City......................................................16
SECTION 30: Ordinance a Contract - Amendments ..............................................17
SECTION 31: Mutilated - Destroyed - Lost and Stolen Bonds................................17
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TABLE OF CONTENTS
(continued)
Page
SECTION 32: Notices to Holders - Waiver.............................................................17
SECTION 33: Cancellation ....................................................................................18
SECTION 34: Covenants to Maintain Tax-Exempt Status......................................18
SECTION 35: Confirmation of Sale........................................................................21
SECTION 36: Control and Custody of Bonds.........................................................21
SECTION 37: Proceeds of Sale.............................................................................21
SECTION 38: Legal Opinion..................................................................................22
SECTION 39: CUSIP Numbers..............................................................................22
SECTION 40: Benefits of Ordinance......................................................................22
SECTION 41: Inconsistent Provisions....................................................................22
SECTION 42: Continuing Disclosure Undertaking..................................................23
SECTION 43: Compliance with Rules and Regulations of the Texas Water
DevelopmentBoard.........................................................................25
SECTION 44: Governing Law................................................................................28
SECTION 45: Severability......................................................................................28
SECTION 46: Further Procedures .........................................................................28
SECTION 47: Construction of Terms.....................................................................28
SECTION 48: Effect of Headings...........................................................................28
SECTION 49: Incorporation of Findings and Determinations .................................28
SECTION 50: Public Meeting.................................................................................29
SECTION 51: Effective Date..................................................................................29
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ORDINANCE NO. 2185
ANORDINANCE bythe City Council ofthe City nfEuless, Texas authorizing the
issuance of "CITY OF EULESS, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BONDS. SERIES 2018"; pledging the net revenues
of the City's waterworks and sewer System to the security of and the
payment of the principal of and interest on such obligations; specifying
the terms and conditions of such Bonds; resolving Other [n8[t8rs incident
and related to the iSSVanoe, payment, security, sale, and delivery Ofsuch
Bonds, including the approval and execution of Paying Agent/Registrar
Agreement and 8OEscrow Agreement; and providing aOeffective date.
VVHERE/\8, pursuant toan application filed with the Texas Water Development Board
(the "Board"), the City Of EU|eSS' Texas /the "City") has received a loan COnlnnit[nen{ from the
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Board for financial assistance in the amount Of $3.258.300 to finance the costs of constructing
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improvements and extensions to the City's vvoS(evvatar 8yshern` and such financial @oniotgnDe is
to be evidenced by the Board's purchase of $2,785,000 of bonds payable from a pledge of and
first lien on the Net Revenues (as herein defined) of the City's waterworks and sewer System
(the "Syst8nO") and principal forgiveness iOthe amount 0f$473.30O; and
WHEREAS, pursuant to the authority granted to the City byTexas Government COde,
Chapter 1502. as amended, the City Council of the Qty (the "City Council") further finds and
determines that $2.785.000 in principal amount ofrevenue bonds should be issued and sold at
this time for improving and extending the City's wastewater system; and
WHEREAS, the City Council of the City (the "Council") further finds and determines that
such revenue bonds can and should be issued on o parity with the outstanding and unpaid
revenue bonds of the City (hereinafter identified and defined as "Previously Issued Bonds")
payable from and secured by a first lien on and pledge of the Net Revenues of the System in
that (i) the City isnot now indefault aatoany covenant, condition orobligation contained \nthe
ordinances authorizing the issuance ofthe outstanding Bonds Sinoi|arySeCun5d. (ii) the laws of
the State of Texas now in force provide for the issuance of the bonds herein authorized to be
issued, (iii) each of the special Funds created and reaffirmed by the ordinances authorizing the
Bonds Simoi|orySeuuFed contains the amount ofmoney now required to be on deposit therein;
(iv) the Net Revenues of the System for the hwa|va-noVn<h period for the fiscal year next
preceding the month of the adoption of this {]ndinance, as shown by o report of Certified
Public Accountant orlicensed public acoountant, are equal to at least one and one-fourth (11/4)
times the average annual principal and interest requirements of all bonds secured by a first lien
on and pledge of the Net Revenues of the System, and which will be outstanding upon the
issuance of the bonds herein authorized; (v) this Ordinance provides that the amount to be
accumulated and maintained in the Bond Reserve Fund shall be increased to an amount equal
to not |ema than the average annual principal and interest requirements of all bonds payable
from and secured by8first lien onand pledge ofthe Net Revenues ofthe System (after giving
effect to the issuance of the bonds herein authorized) and any additional amount to be
maintained in such Fund aho|| beaccumulated within not more than five /5\ years and one (1)
month from the date of the passage of this Ordinance; and (vi) the bonds herein authorized shall
mature onJuly 15 iDeach year; now, therefnna.
WHEREAS, the City Council has found and determined and does hereby find and
determine that it is necessary and in the bent interest of the City and its citizens to issue the
Bonds and make the improvements and extensions to the wastewater system authorized bythis
Ordinance; now, therefore,
29585451.4/1080318e81
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EULESS:
SECTION 1: Definitions. For all purposes of this Ordinance and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
(a) The term "Additional Bonds" shall mean the additional parity revenue bonds the
City reserves the right to issue in accordance with the terms and conditions prescribed in
Section 23 hereof.
(b) The term "Bonds" shall mean the "City of Euless, Texas, Waterworks and Sewer
System Revenue Bonds, Series 2018" authorized by this Ordinance.
(c) The term "Bonds Similarly Secured" shall mean the Previously Issued Bonds, the
Bonds, the Bonds, and any Additional Bonds.
(d) The term "Fiscal Year" shall mean the twelve-month operating period for the
System ending September 30 of each year.
(e) The term "Government Securities" shall mean (i) direct noncallable obligations of
the United States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
agency or instrumentality of the United States, including obligations unconditionally guaranteed
or insured by an agency or instrumentality of the United States of America and, on the date of
their acquisition or purchase by the City, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, (iii) noncallable obligations
of a state or an agency or a county, municipality, or other political subdivision of a state that
have been refunded and that, on the date of their acquisition or purchase by the City, are rated
as to investment quality by a nationally recognized investment rating firm not less than AAA or
its equivalent and (iv) any other then authorized securities or obligations that may be used to
defease obligations such as the Bonds under the then applicable laws of the State of Texas.
(f) The term "Net Revenues" shall mean and include the gross revenues derived
from the operation of the System, less reasonable expenses of operation and maintenance,
including all salaries, labor, materials, repairs and extensions necessary to render efficient
service, provided, however, that only such repairs and extensions as in the judgment of the
Council, reasonably and fairly exercised, are necessary to keep the System in operation and
render adequate service to the areas served thereby and the inhabitants thereof, or such as
might be necessary to meet some physical accident or condition which would otherwise impair
the security of any bonds payable from and secured by a lien on the Net Revenues of the
System shall be deducted in determining "Net Revenues."
(g) The term "Outstanding" when used in this Ordinance with respect to Bonds
means, as of the date of determination, all Bonds theretofore issued and delivered under this
Ordinance, except:
(1) those Bonds canceled by the Paying Agent/Registrar or delivered
to the Paying Agent/Registrar for cancellation;
(2) those Bonds deemed to be paid by the City in accordance with the
provisions of Section 29 hereof; and
29585451.4/1000318981 2
(3) those Bonds that have been mutilated, destroyed, lost, or stolen
and replacement Bonds have been registered and delivered in lieu thereof as
provided in Section 31 hereof.
(h) The term "Previously Issued Bonds" shall mean the outstanding and unpaid
revenue bonds, payable from and secured by a first lien on and pledge of the Net Revenues of
the System, of the following issues or series, identified as follows:
(1) City of Euless, Texas, Waterworks and Sewer System Revenue
Refunding Bonds, Series 2012, dated March 1, 2012, and issued in the original
principal amount of $3,340,000; and
(2) City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2013, dated June 15, 2013, and issued in the original principal
amount of$1,585,000; and
(3) City of Euless, Texas, Waterworks and Sewer System Revenue
Bonds, Series 2015A, dated June 15, 2015, and issued in the original principal
amount of$4,685,000; and
(4) City of Euless, Texas, Waterworks and Sewer Sytem Revenue
Bonds, Series 2015B, dated June 15, 2015, and issued in the original principal
amount of$2,380,000.
(i) The term "System" shall mean the City's combined Waterworks and Sanitary
Sewer System, including all present and future additions, extensions, replacements and
improvements thereto, whether situated within or without the corporate limits of the City.
SECTION 2: 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 $2,785,000 to be designated and bear the title "CITY OF EULESS, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 2018" (hereinafter
referred to as the "Bonds"), for the purpose of improving and extending the City's wastewater
system and paying the costs of issuance, in conformity with the Constitution and laws of the
State of Texas, including Texas Government Code, Chapter 1502, as amended.
SECTION 3: FullyRegistered Obligations - Authorized Denominations - Stated
Maturities - Bond Date - Interest Rates. The Bonds shall be issued as fully registered
obligations, without coupons, shall be dated April 15, 2018 (the "Bond Date") and shall be in
denominations of $5,000 or any integral multiple thereof (within a Stated Maturity), and shall
become due and payable on July 15 in each of the years and in the principal amounts (the
"Stated Maturities") and bear interest at the per annum rates in accordance with the following
schedule:
Year of Principal Interest
Stated Maturity Amount ($) Rates
2019 125,000 0.00
2020 130,000 0.00
2021 130,000 0.08
2022 130,000 0.24
2023 130,000 0.41
2024 135,000 0.54
29585451.4/1000318981 3
2025 135,000 0.67
2026 135,000 0.81
2027 135,000 0.94
2028 135,000 1.02
2029 140,000 1.11
2030 140,000 1.17
2031 140,000 1.22
2032 145,000 1.27
2033 145,000 1.32
2034 145,000 1.37
2035 150,000 1.41
2036 150,000 1.44
2037 155,000 1.47
2038 155,000 1.49
The Bonds shall bear interest on the unpaid principal amounts from the date of delivery
to the initial purchaser (anticipated to be April 15, 2018) at the rates per annum shown in the
above schedule (calculated on the basis of a 360-day year of twelve 30-day months). Interest
on the Bonds shall be payable on January 15 and July 15 in each year, commencing January
15, 2019 until maturity or prior redemption.
SECTION 4: Terms of Payment - Paying Agent/Registrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar. Any such payment shall be payable, without echange or collection charges, to
the Holder 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.
The selection and appointment of U.S. Bank National Association, Dallas, Texas (the
"Paying Agent/Registrar"), or its assigns, 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, all 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, Mayor Pro
Tem, City Manager and the City Secretary are authorized to execute and deliver such Paying
Agent/Registrar Agreement in connection with the delivery of the Bonds. The City covenants to
maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and
discharged, and any successor Paying Agent/Registrar shall be a commercial bank, trust
company, financial institution or other entity duly qualified and legally 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 only upon presentation
and surrender of the Bonds to the Paying Agent/Registrar at its designated offices, initially in St.
Paul, Minnesota or, with respect to a successor Paying Agent/Registrar, at the designated
offices of such successor (the "Designated Payment/Transfer Office"). Interest on the Bonds
29585451.4/1000318981 4
shall be paid only 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
on the Record Date or (ii) by such other method, acceptable to the Paying Agent/Registrar,
requested by, and at the risk and expense of, the Holder. Provided, however, while the Board is
the registered owner of the Bonds, payments on the Bonds shall be made by wire transfer
without expense to the Holder. If the date for the payment of the principal of or interest on the
Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the
city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are
authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking
institutions are authorized to close; and payment on such date shall have the same force and
effect as if made on the original date payment was due.
In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
mail, first-class, postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 5: Redemption.
(a) Optional Redemption. The Bonds having Stated Maturities on and after July 15,
2029 shall be subject to redemption prior to maturity at the option of the City, in whole or in part,
(in inverse order of Stated Maturity, if less than all the Outstanding Bonds are to be redeemed),
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, 2028, or any date thereafter at the redemption
price of par, together with interest accrued to the redemption date.
(b) Excercise 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 optionally redeemed, and the
date of redemption therefor.
(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 last business day next preceding the date of mailing such notice,
29585451.4/1000318981 5
and any notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds,
(ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or
the principal amount thereof to be redeemed) shall become due and payable and interest
thereon shall cease to accrue from and after the specified redemption date therefor; provided
moneys sufficient for the payment of such Bond (or of the principal amount thereof to be
redeemed) at the then applicable redemption price are held for the purpose of such payment by
the Paying Agent/Registrar.
(d) Conditional Notice of Redemption. With respect to any optional redemption of
the Bonds, unless moneys sufficient to pay the principal of and premium, if any, and interest on
the Bonds to be redeemed shall have been received by the Paying Agent/Registrar prior to the
giving of such notice of redemption, such notice may state that such redemption is conditional
upon the receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for
such redemption, or upon the satisfaction of any prerequisites set forth in such notice of
redemption; and, if sufficient moneys are not received, such notice shall be of no force and
effect, the City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in
the manner in which the notice of redemption was given, to the effect that the Bonds have not
been redeemed.
SECTION 6: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. A
Security Register relating to the registration, payment, and transfer or exchange of the Bonds
shall at all times be kept and maintained by the City at the Designated Payment/Transfer Office
of the Paying Agent/Registrar and at a place within the State of Texas, as provided herein and
in accordance with the provisions of an agreement with the Paying Agent/Registrar and such
rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Paying
Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of
this Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be
transferred or exchanged for Bonds of other authorized denominations upon the Security
Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond
to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer
or request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond (other than the Initial Bond(s) authorized in
Section 9 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.
29585451.4/1000318981 6
At the option of the Holder, Bonds (other than the Initial Bond(s) authorized in Section 9
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, at his or her request, risk, and expense and,
upon the delivery thereof, the same shall be valid obligations of the City, evidencing the same
obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds
surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 31 hereof and such new
replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange
any Bond called for redemption, in whole or in part, within 45 days of the date fixed for
redemption of such Bond; provided, however, such limitation of transfer shall not be applicable
to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in
part.
SECTION 7: Book-Entry-Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 4, 5, and 6 relating to the payment and transfer/exchange of
the Bonds, the City hereby approves and authorizes the use of the "Book-Entry-Only" securities
clearance, settlement, and transfer system provided by The Depository Trust Company, a
limited purpose trust company organized under the laws of the State of New York ("DTC'), in
accordance with the operational arrangements referenced in the Blanket Issuer Letter of
Representation, by and between the City and DTC (the "Depository Agreement') relating to the
Bonds.
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold such Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants.
29585451.4/1000318981 7
In the event DTC determines to discontinue serving as securities depository for the
Bonds or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Bonds, the City covenants and agrees with the Holders of
the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to
be issued and delivered to DTC Participants and Beneficial Owners, as the case may be.
Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall
be made in accordance with the provisions of Sections 4, 5 and 6 hereof.
SECTION 8: 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 such officers and the seal of the City 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 date of the adoption of this Ordinance shall be
deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either
of them shall cease to hold such offices at the time of delivery of the Bonds to the initial
purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as
authorized and provided in Texas Government Code, Chapter 1201, as amended.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Exhibit B, 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 Exhibit B, 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 9: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the aggregate principal amount of the Bonds with
principal installments to become due and payable as provided in Section 3 hereof and
numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity
in the applicable principal amount and denomination and to be numbered consecutively from T-
1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall
be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s)
shall be the Bond(s) submitted to the Office of the Attorney General of the State of Texas for
approval, certified and registered by the Office of the Comptroller of Public Accounts of the
State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written
instructions from the initial purchaser(s), or the designee thereof, and such other information
and documentation as the Paying Agent/Registrar may reasonably require.
SECTION 10: Forms. Forms Generally. The Bonds, the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in Exhibit B with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance and may have
29585451.4/1000318981 8
such letters, numbers, or other marks of identification (including identifying numbers and letters
of the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends in the event the
Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be established by the City or
determined by the officers executing such Bonds as evidenced by their execution thereof. Any
portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
SECTION 11: Pledge. The City hereby covenants and agrees that all of the Net
Revenues derived from the operation of the System, with the exception of those in excess of the
amounts required to establish and maintain the special Funds created for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged for the payment of the
Previously Issued Bonds, the Bonds, and Additional Bonds, if issued, and the interest thereon,
and it is hereby ordained that the Previously Issued Bonds, the Bonds and Additional Bonds, if
issued, and the interest thereon, shall constitute a first lien on the Net Revenues of the System
in accordance with the terms and provisions hereof and be valid and binding and fully perfected
from and after the date of adoption of this Ordinance without physical delivery or transfer or
transfer of control of the Net Revenues, the filing of this Ordinance or any other act; all as
provided in Texas Government Code, Chapter 1208, as amended ("Chapter 1208").
Chapter 1208 applies to the issuance of the Bonds and the pledge of the Net Revenues
of the System granted by the City under this Section 11, and such pledge is therefore valid,
effective and perfected. If Texas law is amended at any time while the Bonds are Outstanding
such that the pledge of the Net Revenues of the System granted by the City under this Section
11 is to be subject to the filing requirements of Texas Business and Commerce Code, Chapter
9, as amended, then in order to preserve to the registered owners of the Bonds the perfection of
the security interest in such 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 Texas
Business and Commerce Code, Chapter 9, as amended, and enable a filing to perfect the
security interest in such pledge to occur.
SECTION 12: Rates and Charges. The City hereby covenants and agrees with the
Holders of the Bonds that rates and charges for water and sewer services afforded by the
System will be established and maintained to provide revenues sufficient at all times to pay:
(a) all operating, maintenance, depreciation, replacement, betterment and other
costs deductible in determining Net Revenues as herein defined;
(b) the interest on and principal of the Bonds Similarly Secured and the amounts
required to be deposited into the special Funds created and established for the payment and
security of the Bonds Similarly Secured; and
(c) any other legally incurred indebtedness payable from the revenues of the System
and/or secured by a lien on the System or the revenues thereof.
SECTION 13: Segregation of Revenues/Fund Designations. All revenues and income
derived from the operation and ownership of the System shall be kept separate from other funds
29585451.4/1000318981 9
of the City and deposited from day to day, as collected in the "System Fund" (created and
established in connection with the issuance of the Previously Issued Bonds), which Fund is
hereby reaffirmed and shall continue to be kept and maintained at an official depository bank of
the City while the Bonds remain Outstanding. Furthermore, the special funds or accounts
created and established in connection with the issuance of the Previously Issued Bonds are
hereby reaffirmed for the benefit of the Bonds, to wit:
(a) Bond Fund, which Fund is kept and maintained at the City's official depository
bank, and moneys deposited in such 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
al
depository bank
p y and moneys deposited in such Fund shall be used u proper Y p upon p p er
order of the
Council, to pay any special or extraordinary repairs or replacements to the System necessitated
by the occurrence of an emergency and for payment of which no other funds are available and
additionally for the payment of the principal and/or interest requirements of the Bonds Similarly
Secured to prevent a default in the payment thereof when moneys in the Bond Fund and/or
Bond Reserve Fund are deficient.
(c) Bond Reserve Fund, which Fund is kept and maintained at the City's official
depository bank, and moneys deposited in such Fund shall be used to pay the principal of and
interest on the Bonds Similarly Secured falling due at any time when there is insufficient money
available in the Bond Fund for such purpose.
SECTION 14: System Fund. The City hereby reaffirms its covenant to the Holders of
the Previously Issued Bonds and agrees with the Holders of the Bonds that the moneys
deposited in the System Fund shall be used first for the payment of the reasonable and proper
expenses of operating and maintaining the System, as identified in Section 1(f) hereof. All
moneys deposited in the System Fund in excess of the amounts required to pay operating and
maintenance expenses of the System, as hereinabove provided, shall be applied and
appropriated, to the extent required and in the order of priority prescribed, as follows:
(a) To the payment of the amounts required to be deposited in the Bond Fund for the
payment of principal of and interest on the Bonds Similarly Secured as the same become due
and payable;
(b) To the payment of the amounts, if any, required to be deposited in the
Emergency Fund to accumulate and/or restore the total amount required to be maintained
therein; and
(c) To the payment of the amounts required to deposited in the Bond Reserve Fund
to accumulate and maintain the reserve amount as security for the payment of the principal of
and interest on the Bonds Similarly Secured.
SECTION 15: Bond Fund. In addition to the required deposits to the Bond Fund for the
payment of principal of and interest on the Previously Issued Bonds, the City hereby agrees and
covenants to deposit to the Bond Fund an amount equal to one hundred percent (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(s).
29585451.4/1000318981 10
The required monthly deposits to the Bond Fund for the payment of principal of and
interest on the Bonds shall continue to be made as hereinabove provided until such time as (i)
the total amount on deposit in the Bond Fund and Bond Reserve Fund is equal to the amount
required to fully pay and discharge all outstanding Bonds Similarly Secured (principal and
interest) or (ii) the Bonds are no longer outstanding, i.e., fully paid as to principal and interest or
all the Bonds have been refunded.
Accrued interest, if any, received from the initial purchaser(s) of the Bonds shall be
deposited in the Bond Fund, and shall be taken into consideration and reduce the amount of the
monthly deposits hereinabove required which would otherwise be required to be deposited in
the Bond Fund from the Net Revenues of the System. Furthermore, a transfer of funds from the
Bond Reserve Fund and Emergency Fund, as hereinafter prescribed, shall be taken into
consideration and reduce the amount of the monthly deposits otherwise required to be
deposited in the Bond Fund from the Net Revenues.
SECTION 16: Emergency Fund. In accordance with the provisions of the ordinances
authorizing the issuance of the Previously Issued Bonds, the amount required to be
accumulated and maintained in the Emergency Fund is $100,000.00, which amount is currently
on deposit therein, and no additional amount shall be required to be deposited in such Fund by
reason of the issuance of the Bonds. As long as the sum of $100,000.00 is on deposit in such
Fund, no further amounts shall be required to be deposited therein; provided, however, should
the amount on deposit in such Fund ever be less than $100,000.00, the City covenants and
agrees to immediately resume, and cause to be made to such 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 such Fund has been fully restored. Monthly deposits to such Fund shall be made
with available Net Revenues of the System in the System Fund and be subject only to the
required deposits to the Bond Fund. Furthermore, when the amount on deposit in the
Emergency Fund equals or exceeds the total amount required to be maintained therein, moneys
realized from the investment of funds in the Emergency Fund in excess of the balance required
to be maintained therein may be transferred to the Bond Fund.
SECTION 17: Bond Reserve Fund. The City reaffirms its covenant to the holders of the
Previously Issued Bonds and agrees with the Holders of the Bonds that there shall be
accumulated and maintained in the Bond Reserve Fund an amount equal to at least the average
annual principal and interest requirements of the outstanding Bonds Similarly Secured.
In accordance with the ordinances authorizing the issuance of the Previously Issued
Bonds, there is currently on deposit to the credit of the Bond Reserve Fund an amount equal to
not less than $ (the "Current Reserve"). By reason of the issuance of the
Bonds, the amount to be maintained in such Fund, subject to adjustment as hereinafter
provided in this Section, shall be $ (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 additional amount
to be accumulated in the reserve fund to meet the Required Reserve after the issuance of the
Bonds shall be deposited in not more than five years and one month from the date of adoption
of this Ordinance.
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
29585451.4/1000318981 11
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 such Fund may be transferred to the Bond Fund.
SECTION 18: Investments. Moneys on deposit in the Bond Reserve Fund and the
Emergency Fund may be invested as follows:
(a) Bond Reserve Fund in direct obligations of or obligations unconditionally
guaranteed by the United States of America having maturities not in excess of ten (10) years
from the making of such investment as the Council may direct. Such obligations shall be held
by the custodian bank where such 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 such Fund shall sell on the open market such amount of the
securities as is required to pay such Bonds Similarly Secured and interest thereon when due
and shall give notice thereof to the City Manager.
(b) Emergency Fund in direct obligations of or obligations unconditionally
guaranteed by the United States of America having maturities not in excess of five (5) years
from the making of such investment as the Council may direct. Such investment securities shall
be held by the custodian bank where such 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 such Fund who shall promptly sell on the open market
such amount thereof as may be required, making the proceeds immediately available. Should
the purpose be for meeting bond requirements, the City agrees promptly to accomplish the
required transfers to the paying agent bank for the Bonds Similarly Secured.
SECTION 19: Payment of Bonds. While any of the Bonds are Outstanding, the Mayor,
Mayor Pro Tem, City Manager, Deputy City Manager, Assistant Director of Finance, Finance
Director and City Secretary of the City, individually or jointly, are hereby authorized to transfer or
cause to be transferred to the Paying Agent/Registrar therefor, from funds on deposit in the
Bond Fund and, if necessary, in the Bond Reserve Fund and Emergency Fund, amounts
sufficient to fully pay and discharge promptly as each installment of interest and principal of the
Bonds accrues or matures or comes due by reason of redemption prior to maturity; such
transfer of funds to be made in such manner as will cause immediately available funds to be
deposited with the Paying Agent/Registrar for the Bonds at the close of the business day next
preceding the date of payment for the Bonds. The Paying Agent/Registrar shall cancel or
destroy all paid Bonds, and furnish the City with an appropriate certificate of cancellation or
destruction.
SECTION 20: Deficiencies in Funds. If in any month the City shall, for any reason, fail
to pay into the Bond Fund, the Emergency Fund or Bond Reserve Fund, the full amounts above
stipulated, amounts equivalent to such deficiencies shall be set apart and paid into such 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 such Funds during such month or months.
SECTION 21: Excess Revenues. Any surplus Net Revenues of the System remaining
after all payments have been made into the Bond Fund, Emergency Fund and Bond Reserve
Fund, and after all deficiencies in making deposits to such Funds have been remedied, may be
transferred and used for any lawful general or special purpose, as permitted by the terms of
Texas Government Code, Section 1502.059, as amended; including the use thereof either for
29585451.4/1000318981 12
the retirement in advance of maturity of the Bonds Similarly Secured, according to the
provisions made for their prior redemption, or for the purchase of any of such Bonds Similarly
Secured on the open market at not exceeding the market value thereof. Nothing herein,
however, shall be construed as impairing the right of the City to pay, in accordance with the
provisions thereof, any junior lien bonds legally issued by it and payable out of the Net
Revenues of the System.
SECTION 22: Security of Funds. Moneys on deposit in the special Funds referred to in
this Ordinance (except any amounts as may be properly invested) shall be secured in the
manner and to the fullest extent required by the laws of the State of Texas for the security of
public funds, and moneys on deposit in such special Funds shall be used only for the purposes
permitted by this Ordinance and the ordinances authorizing the issuance of the Previously
Issued Bonds.
SECTION 23: Issuance of Additional Bonds. In addition to the right to issue bonds of
inferior lien as authorized by the laws of the State of Texas, the City hereby reserves the right to
issue Additional Bonds which, when duly authorized and issued in compliance with the terms
and conditions hereinafter appearing, shall be on a parity with the Previously Issued Bonds and
the Bonds, payable from and equally secured by a first lien on and pledge of the Net Revenues
of the System. The Additional Bonds may be issued in one or more installments, provided,
however, that none shall be issued unless and until the following conditions have been met:
(a) The City is not then in default as to any covenant, condition or obligation
contained in the ordinances authorizing the issuance of the then outstanding Bonds Similarly
Secured;
(b) The laws of the State of Texas in force at such time provide for the issuance of
such Additional Bonds;
(c) Each of the special Funds created for the payment, security and benefit of the
Bonds Similarly Secured contains the amount of money then required to be on deposit therein;
(d) The Net Revenues of the System for the twelve-month period or for the fiscal
year next preceding the month of the adoption of the ordinance authorizing the issuance of the
Additional Bonds, as shown by a report of a certified public accountant or licensed public
accountant, are equal to at least one and one-fourth (1'/4) times the average annual principal
and interest requirements of all bonds which will be secured by a first lien on and pledge of the
Net Revenues of the System, and which will be outstanding upon the issuance of the Additional
Bonds. The term "Net Revenues" as used in this Section shall mean the gross revenues after
deducting the expenses of operation and maintenance but not deducting expenditures which,
under standard accounting procedures, should be charged to capital expenditures.
(e) The Additional Bonds are made to mature on July 15 of each of the years in
which they are scheduled to mature; and
(f) The ordinance authorizing the issuance of Additional Bonds provides that the
amount to be accumulated and maintained in the Bond Reserve Fund shall be increased to an
amount equal to not less than the average annual principal and interest requirements of all
bonds payable from and secured by a first lien on and pledge of the Net Revenues of the
System (after giving effect to the issuance of the proposed Additional Bonds). The additional
amount to be accumulated in such Fund shall be deposited therein in not more than five (5) }
29585451.4/1000318981 13
years and one (1) month from the date of the passage of the ordinance authorizing the issuance
of the Additional Bonds.
SECTION 24: Maintenance and Operation - Insurance. The City hereby covenants and
agrees that the System shall be operated on a Fiscal Year basis and shall be maintained in
good condition and operated in an efficient manner and at reasonable cost. So long as any of
the Bonds are Outstanding, the City agrees to maintain insurance for the benefit of the Holder or
Holders of such Bonds of the kinds and in the amounts which are usually carried by private
companies engaged in a similar type of business. Nothing in this Ordinance shall be construed
as requiring the City to expend any funds which are derived from sources other than the
operation of the System, but nothing herein shall be construed as preventing the City from doing
so.
SECTION 25: Records - Accounts - Accounting Reports. The City hereby covenants
and agrees so long as any of the Bonds or any interest thereon remain outstanding and unpaid,
it will keep and maintain a proper and complete system of records and accounts pertaining to
the operation of the System and its component parts separate and apart from all other records
and accounts of the City in accordance with generally accepted accounting principles prescribed
for municipal corporations, and complete and correct entries shall be made of all transactions
relating to such System, as provided by Texas Government Code, Section 1502.066, as
amended. 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 or her
recommendations for any changes or improvements in the operation, records and accounts of
the System;
(d) A list of the insurance policies in force at the end of the Fiscal Year on the
System properties, setting out as to each policy the amount thereof, the risk covered, the name
of the insurer, and the policy's expiration date;
(e) A list of the securities which have been on deposit as security for the money in
the Bond Fund, the Emergency Fund and the Bond Reserve Fund throughout the Fiscal Year, a
list of the securities, if any, in which the Emergency Fund and Bond Reserve Fund has been
invested, and a statement of the manner in which money in the System Fund has been secured
in such Fiscal Year; and
(f) The total number of customers connected with the components of the System at
the end of the Fiscal Year.
29585451.4/1000318981 14
Expenses incurred in making the audits above referred to are to be regarded as
maintenance and operating expenses of the System and paid as such. Copies of the aforesaid
annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas, and, upon written request, to the original
purchaser(s) and any subsequent Holder of the Bonds.
SECTION 26: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City (a) defaults in payments to be made to the Bond Fund or Bond Reserve Fund as
required by this Ordinance, or (b) defaults in the observance or performance of any other of the
covenants, conditions or obligations set forth in this Ordinance, the Holder or Holders of any of
the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction
compelling and requiring the Council and other officers of the City to observe and perform any
covenant, condition or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right or power may be exercised from time to time and as
often as may be deemed expedient. The specific remedies herein provided shall be cumulative
of all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive.
SECTION 27: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the revenues supporting this issue of Bonds and
has lawfully exercised such power under the Constitution and laws of the State of Texas,
including Texas Government Code, Chapter 1502.052, as amended; that the Previously Issued
Bonds, the Bonds, and the Additional Bonds, when issued, shall be ratably secured under such
pledge of income in such manner that one bond shall have no preference over any other bond
or such 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 2011", dated January 15, 2011, the outstanding "City
of Euless, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 2014", dated October 15, 2014, the outstanding "City of
Euless, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates
of Obligation, Series 2015", dated October 15, 2015, and the outstanding "City of Euless, Texas,
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation,
Series 2016", dated January 1, 2016, the Net Revenues of the System have not in any manner
been pledged to the payment of any debt or obligation of the City or of the System.
(c) So long as any of the Bonds or any interest thereon remain outstanding, the City
will not sell, lease or encumber the System or any substantial part thereof; provided, however,
this covenant shall not be construed to prohibit the sale of such machinery, or other properties
or equipment which has become obsolete or otherwise unsuited to the efficient operation of the
System, and, also, with the exception of the Additional Bonds expressly permitted by this
ordinance to be issued, it will not encumber the Net Revenues of the System unless such
encumbrance is made junior and subordinate to all of the provisions of this Ordinance.
(d) No free service of the System shall be allowed, and should the City or any of its
agencies or instrumentalities make use of the services and facilities of the System, payment of
29585451.4/1000318981 15
the reasonable value thereof shall be made by the City out of funds from sources other than the
revenues and income of the System.
(e) To the extent that it legally may, the City further covenants and agrees so long as
any of the Bonds or any interest thereon are outstanding no franchise shall be granted for the
installation or operation of any competing waterworks and sanitary sewer system other than
those owned by the City, and the operation of any such system by anyone other than the City is
hereby prohibited.
SECTION 28: Bonds are Special Obligations. The Bonds are special obligations of the
City payable from the pledged Net Revenues and the Holders thereof shall never have the right
to demand payment thereof out of funds raised or to be raised by taxation.
SECTION 29: Satisfaction of Obligation of City. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the
Net Revenues of the System under this Ordinance and all other obligations of the City to the
Holders shall thereupon cease, terminate, and become void and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in
trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Securities 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 the applicable fees and expenses of the Paying
Agent/Regsitrar in connection with the defeasance of the Bonds and 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
Securities 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 Securities held in trust by the Paying Agent/Registrar or
an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the
City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the
principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request of the City, be remitted to the City
against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of
funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed
property laws of the State of Texas.
29585451.4/1000318981 16
SECTION 30: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City so long as any Bond remains Outstanding except as permitted in this
Section and in Section 42 hereof. The City, may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the City may, with the written consent of Holders holding
a majority in aggregate principal amount of the Bonds then outstanding, amend, add to, or
rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders
of the Bonds then outstanding, no such amendment, addition, or rescission shall (1) extend the
time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce
the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in
any other way modify the terms of payment of the principal of, premium, if any, or interest on the
Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate
principal amount of Bonds required to be held by Holders for consent to any such amendment,
addition, or rescission.
SECTION 31: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence
satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of
indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be borne by the Holder of the Bond
mutilated, or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not
the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 32: Notices to Holders - Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States mail, first-class, postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
29585451.4/1000318981 17
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 33: Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the City.
SECTION 34: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in
this Section, the following terms shall have the following meanings:
"Closing Date" means the date on which the Bonds are first authenticated
and delivered to the initial purchaser(s) against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, effective on or before the Closing Date.
"Computation Date"has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b)
of the Regulations, and any replacement proceeds as defined in Section 1.148-
1(c) of the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment" means any investment property, as defined in
Section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested
and which is not acquired to carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the
Regulations.
"Regulations" means any proposed, temporary, or final Income Tax
Regulations issued pursuant to Sections 103 and 141 through 150 of the Code,
and 103 of the Internal Revenue Code of 1954, which are applicable to the
Bonds. Any reference to any specific Regulation shall also mean, as
appropriate, any proposed, temporary or final Income Tax Regulation designed
to supplement, amend or replace the specific Regulation referenced.
"Yield"of(1) any Investment has the meaning set forth in Section 1.148-5
of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148-
4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
29585451.4/1000318981 18
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on (1)
any Bond issued hereunder or (2) any series of bonds or obligations issued or incurred by the
Board or the Texas Water Resources Finance Authority to become includable in the gross
income, as defined in Section 61 of the Code, of the owner thereof for federal income tax
purposes. Without limiting the generality of the foregoing, unless and until the City receives a
written opinion of counsel nationally recognized in the field of municipal bond law to the effect
that failure to comply with such covenant will not adversely affect the exemption from federal
income tax of the interest on any Bond, the City shall comply with each of the specific covenants
in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
than those applicable to the general public) or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds, other
than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
29585451.411000318981 19
M 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
Purchaser (defined below) and the loan of the money represented thereby and in
order to induce such purchase by measures designed to insure the excludability
of the interest thereon from the gross income of the owners thereof for federal
income tax purposes, the City shall pay to the United States from an appropriate
fund, or if permitted by applicable Texas statute, regulation or opinion of the
Attorney General of the State of Texas, the Bond Fund the amount that when
added to the future value of previous rebate payments made for the Bonds
equals (i) in the case of a Final Computation Date as defined in Section 1.148-
3(e)(2) of the Regulations, one hundred percent (100°/x) of the Rebate Amount
on such date; and (ii) in the case of any other Computation Date, ninety percent
(90%) of the Rebate Amount on such date. In all cases, the rebate payments
shall be made at the times, in the installments, to the place and in the manner as
is or may be required by Section 148(f) of the Code and the Regulations and
rulings thereunder, and shall be accompanied by Form 8038-T or such other
forms and information as is or may be required by Section 148(f) of the Code and
the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no
errors are made in the calculations and payments required by paragraphs (2) and
(3), and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
29585451.4/1000318981 20
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, Mayor Pro Tem,
City Manager, Deputy City Manager and Finance Direcotr, either or any combination of them, to
make elections permitted or required pursuant to the provisions of the Code or the Regulations,
as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax
Exemption or similar or other appropriate certificate, form or document.
SECTION 35: Confirmation of Sale. The sale of the Bonds to the Texas Water
Development Board (the "Purchasers" or the "Board") at the price of par, less an origination fee
of 1.75%, which shall be paid via wire transfer at no expense to the Board, pursuant to a loan
commitment received from the Purchasers is hereby confirmed. Delivery of the Bonds shall be
made to the Purchasers as soon as may be after the adoption of this Ordinance, upon payment
therefor in accordance with the terms of sale, which terms of sale the City has determined and
does determine to be in the best interests of the City. The Private Placement Memorandum
prepared in connection with the sale of the Bonds to the Board is hereby approved.
SECTION 36: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the Purchaser.
Furthermore, the Mayor, City Manager, City Secretary, Assistant Director of Finance,
and Finance Director, any one or more of such officials, are hereby authorized and directed to
furnish and execute such documents relating to the City and its financial affairs as may be
necessary for the issuance of the Bonds, the approval of the Attorney General, and the
registration by the Comptroller of the Public Accounts, 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 Purchaser and the initial exchange thereof for the
definitive Bonds.
SECTION 37: Proceeds of Sale. Immediately following the delivery of the Bonds to the
Board, the proceeds of sale (less any amounts used to pay costs of issuance) shall be
deposited in an account to be maintained at U.S. Bank National Association (the "Escrow
Agent") and held in escrow pending written authorization to release such moneys. An Escrow
Deposit Agreement (the "Escrow Agreement") by and between the City and the Escrow Agent
providing for the deposit, safekeeping and administration of such funds pending their release
from escrow is attached hereto as Exhibit C and incorporated herein by reference as a part of
this Ordinance for all purposes, and such Escrow Agreement is hereby approved as to form and
content. The Mayor, Mayor Pro Tem, City Manager, Assistant Director of Finance, or Finance
29585451.4/1000318981 21
Director and City Secretary of the City are hereby authorized and directed to execute the
Escrow Agreement for and on behalf of the City and as the act and deed of the City Council.
Upon the release of funds from such escrow account maintained pursuant to the Escrow
Agreement, the released amount shall be deposited to the credit of the Construction Fund (as
hereinafter defined). Pending expenditure for authorized projects and purposes, such proceeds
of sale may be invested in authorized investments in accordance with the provisions of Texas
Government Code, Chapter 2256, as amended, including specifically guaranteed investment
contracts permitted in Texas Government Code, Section 2256.015, et seq., as amended, and
any investment earnings realized may be expended for such authorized projects and purposes
or deposited in the Bond Fund as shall be determined by the City Council.
SECTION 38: Legal Opinion. The Purchaser's obligation to accept delivery of the
Bonds is subject to being furnished a final opinion of Norton Rose Fulbright US LLP, Dallas,
Texas, approving the Bonds as to their validity, such opinion to be dated and delivered as of the
date of delivery and payment for the Bonds. An executed counterpart of such opinion shall
accompany the global certificates deposited with DTC. In reliance upon representations and
certifications of the City, the opinion shall also state that (1) the Bonds are not "private activity
bonds" within the meaning of Section 141(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and (2) interest on the Bonds for federal income tax purposes will be
excludable from gross income, as defined in section 61 of the Code, of the owners thereof. An
executed counterpart of such opinion shall accompany the global certificates deposited with
DTC.
SECTION 39: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards to the
legality thereof and neither the City nor attorneys approving such Bonds as to legality are to
be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 40: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 41: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 42: Continuing Disclosure Undertaking.
(a) Definitions. As used in this Section, the following terms have the meanings
ascribed to such terms below:
WSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
29585451.4/1000318981 22
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports. The City shall provide annually to the MSRB (1) within six
months after the end of each fiscal year, beginning in or after 2018, financial information and
operating data with respect to the City of the general type described in Exhibit D hereto, and
(2) if not provided as part of such financial information and operating data, audited financial
statements of the City, when and if available. Any financial statements so provided shall be
prepared in accordance with the accounting principles described in Exhibit D hereto, or such
other accounting principles as the City may be required to employ from time to time pursuant to
state law or regulation, and audited, if the City commissions an audit of such statements and the
audit is completed within the period during which they must be provided. If the audit of such
financial statements is not available at the required time, the City shall provide financial
statements by the required time and audited financial statements when and if they become
available.
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document available to the public on the MSRB's Internet Web site or filed with the SEC.
(c) Notice of Certain Events. The City shall provide notice of any of the following
events with respect to the Bonds to the MSRB in a timely manner and not more than 10
business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB), or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City, which shall
occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the City or
the sale of all or substantially all of its assets, other than in the ordinary course of
business, the entry into of a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
(14) Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
29585451.4/1000318981 23
For these purposes, any event described in the immediately preceding subsection
(c)(12) is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy
Code or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the City, or
if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the City.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with subsection (b) of this Section by the
time required by such Section.
(d) Filings with the MSRB. All financial information, operating data, financial
statements, notices and other documents provided to the MSRB in accordance with this Section
shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by
identifying information as prescribed by the MSRB.
(e) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the City in any event will give the notice required by subsection (c) of this
Section of any Bond calls and defeasance that cause the City to be no longer such an
"obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section. Except as expressly
provided within this Section, the City does not undertake to provide any other information
whether or not it may be relevant or material to a complete presentation of the City's financial
results, condition, or prospects; nor does the City undertake to update any information provided
in accordance with this Section or otherwise. Furthermore, the City does not make any
representation or warranty concerning such information or its usefulness to a decision to invest
in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
29585451.4/1000318981 24
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances that arise from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or
type of operations of the City, but only if (1) the provisions of this Section, as so amended,
would have permitted an underwriter to purchase or sell Bonds in the primary offering of the
Bonds in compliance with the Rule, taking into account any amendments or interpretations of
the Rule to the date of such amendment, as well as such changed circumstances, and (2) either
(a) the Holders of a majority in aggregate principal amount (or any greater amount required by
any other provision of this Ordinance that authorizes such an amendment) of the Outstanding
Bonds consent to such amendment or (b) a person that is unaffiliated with the City (such as
nationally recognized bond counsel) determines that such amendment will not materially impair
the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section
may also be amended from time to time or repealed by the City if the SEC amends or repeals
the applicable provisions of the Rule or a court of final jurisdiction determines that such
provisions are invalid, but only if and to the extent that reservation of the City's right to do so
would not prevent an underwriter of the initial public offering of the Bonds from lawfully
purchasing or selling Bonds in such offering. If the City so amends the provisions of this
Section, it shall include with any amended financial information or operating data next provided
in accordance with subsection (b) of the Section an explanation, in narrative form, of the
reasons for the amendment and of the impact of any change in the type of financial information
or operating data so provided.
SECTION 43: Compliance with Rules and Regulations of the Texas Water Development
Board. In compliance with the State Revolving Loan Fund Permanent Rules of the Board, the
City agrees and covenants:
(a) to keep and maintain full and complete records and accounts pertaining to the
construction of the project financed with the proceeds of sale of the Bonds, including the
construction fund account created below, in accordance with the standards set forth by the
Government Accounting Standards Board;
(b) to create and establish at an official depository of the City a "Special 2018 City of
Euless Loan Construction Fund" (the "Construction Fund") for the receipt and disbursement of
all proceeds from the sale of the Bonds and all other funds acquired by the City in connection
with the planning and construction of the projects financed, in whole or in part, by the Board
P 9 P J
pursuant to a loan evidenced by the Bonds and all funds deposited to the credit of the
Construction Fund shall be held at a designated State depository institution or other properly
chartered and authorized institution in accordance with the Public Funds Investment Act, Texas
Government Code, Chapter 2256, as amended, and the Public Funds Collateral Act, Texas
Government Code, Chapter 2257, as amended, and shall be disbursed in a timely and
expeditious manner only for the payment of costs and expenses incurred in connection with the
planning and building of such projects as approved by the Board in accordance a project
schedule approved by the Executive Administrator of the Board (which schedule will not be
altered except for good cause shown and only with the written approval of the Executive
Administrator of the Board) and as otherwise allowed by the rules;
(c) upon completion of the construction of the projects financed, in whole or in part,
by the loan evidenced by the Bonds:
(1) To the extent there are unused funds remaining and
enhancements to the projects financed are needed or deserived to be paid with
29585451.4/1000318981 25
the proceeds of the Bonds, the City shall request such enhancements be
authorized by the Executive Administrator, or
(2) If the City determines that no enhancements are needed or if no
enhancements are authorized by the Executive Administrator, the City agrees to
provide to the Board a final accounting of the total costs of the projects. If the
projects as finally completed were built at a total cost less than the amount of
available funds for building the approved projects, then the City may use such
surplus proceeds of the Bonds remaining after completion of the projects for the
following purposes as approved by the Executive Administrator: (1) to redeem
Bonds owned by the Board, in inverse annual order of stated maturities, (2) to
deposit into the Bond Fund or other debt service account for the payment of
capitalized interest or principal on the Bonds or (3) deposit into a reserve fund.
In determining the amount of available funds for building the project, the City
agrees to account for all amounts deposited to the credit of the Construction
Fund, including all loan funds extended by the Board, all other funds available
from the projects as described in the project engineer's or fiscal representative's
sufficiency of funds statement and all interest earned by the City on money in the
Construction Fund;
(d) to comply with the requirements set forth in 33 U.S.C. § 1382 et seq. related to
maintaining project accounts containing financial assistance for planning, design, acquisition, or
construction, as applicable, in accordance with generally accepted accounting principles;
(e) to maintain adequate insurance coverage customarily maintained by municipal
corporations on the projects financed with the proceeds of the Bonds, in an amount sufficient to
protect the Board's interest in the project;
(f) to maintain current, accurate and complete records and accounts necessary to
demonstrate compliance with financial assistance related legal and contractual provisions;
(g) to submit outlay reports with sufficient documentation on costs on a quarterly or
monthly basis in accordance with the Board's outlay report guidelines;
(h) to comply with any special conditions specified by the Board's environmental
determination until all financial obligations to the State have been discharged;
(i) to abide by the Board's rules and relevant state statutes, including the Texas
Water Code, Chapters 15, 16 and 17, as amended;
(j) to annually review its water and sewer rates to ensure that such rates are
sufficient to produce required revenues;
(k) that proceeds of the Bonds shall not be used by the City when sampling, testing,
removing or disposing of contaminated soils and/or media at the project. To the extent permitted
by law, the City agrees to indemnify, hold harmless and protect the Board from any and all
claims, causes of action or damages to the person or property of third parties arising from the
sampling, analysis, transport, storage, treatment and disposition of any contaminated sewage
sludge, contaminated sediments and/or contaminated media that may be generated by the City,
its contractors, consultants, agents, officials and employees as a result of activities relating to
the project;
29585451.4/1000318981 26
(1) that all laborers and mechanics employed by contractors and subcontractors for
projects shall be paid wages at rates not less than those prevailing on projects of a similar
character in the locality in accordance with the Davis-Bacon Act, and the U.S. Department of
Labor's implementing regulations; the City and all contractors and sub-contractors retained by
the City with respect to the project financed by the Certificates shall require that that all project
contracts mandate compliance with Davis-Bacon Act. All contracts and subcontracts for the
construction of the project carried out in whole or in part with financial assistance made
available from the Board as provided herein shall insert in full in any contract in excess of
$2,000 the contracts clauses as provided by the Board;
(m) it will not use Bond proceeds to acquire or replace funds which were used,
directly or indirectly, to acquire Nonpurpose Investments which produce a yield materially higher
than the yield on the Board's bonds that were issued to provide financing for the loan of the
Board (the "Source Series Bonds") to the City, evidenced by the Bonds, other than Nonpurpose
Investments acquired with:
(1) proceeds of Source Series Bonds invested for a reasonable
temporary period of up to three (3) years (reduced by the period of investment by
the Board) until such proceeds are needed for the facilities to be financed;
(2) amounts invested in a bona fide debt service fund, within the
meaning of§1.148-1(b) of Regulations (as defined in Section 34 hereof);
(3) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed the least of
maximum annual debt service on the Bonds, 125% of average annual debt
service on the Bonds, or 10 percent of the stated principal amount (or, in the
case of a discount, the issue price) of the Bonds;
(n) neither the City nor a related party will acquire any of the Source Series Bonds in
an amount related to the amount of the Bonds to be acquired from the City by the Board;
(o) the City shall provide the Board with all information required to be reported in
accordance with the Federal Funding Accountability and Transparency Act of 2006, Pub. L.
109-282, as amended by Pub. L. 110-252 (the "FFATA Act") and the City shall obtain a Data
Universal Numbering System ("DUNS") Number and shall register with the System for Award
Management ("SAM"), and maintain current registration at all times while the Bonds are
outstanding;
(p) all loan proceeds will be timely and expeditiously used, as required by 40 CFR §
35.3135(d) and the City shall adhere to the approved project schedule;
(q) the City will abide by all applicable construction contract requirements related to
the use of iron and steel products produced in the United States, as required by the 31 TAC §
375.3, 33 U.S.C. § 1388, and related State Revolving Fund Policy Guidelines;
(r) the Board may exercise all remedies available to it in law or equity, and any
provision of the Bonds that restricts or limits the Board's full exercise of these remedies shall be
of no force and effect; and
(s) the City will not use any portion of the proceeds of the Bonds in a manner that
would cause the Bonds to become "private activity bonds" within the meaning of Section 141 of
29585451.4/1000318981 27
the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated
thereunder.
SECTION 44: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 45: 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 46: Further Procedures. Any one or more of the Mayor, Mayor Pro Tem, City
Manager, Deputy City Manager, Finance Director, Assitant Director of Finance, and City
Secretary of the City are hereby expressly authorized, empowered and directed from time to
time and at any time to do and perform all such acts and things and to execute, acknowledge
and deliver in the name and on behalf of the City all agreements, instruments, certificates or
other documents, whether mentioned herein or not, as may be necessary or desirable in order
to carry out the terms and provisions of this Ordinance and the issuance, sale and delivery of
the Bonds. In addition, prior to the delivery of the Bonds, the Mayor, Mayor Pro Tem, City
Manager, Deputy City Manager, Assitant Director of Finance and Finance Director of the City or
Bond Counsel to the City are each hereby authorized and directed to approve any changes or
corrections to this Ordinance or to any of the documents authorized and approved by this
Ordinance: (i) in order to cure any ambiguity, formal defect, or omission in this Ordinance or
such other document, or (ii) as requested by the Attorney General of the State of Texas or his
representative to obtain the approval of the Bonds by the Attorney General. In the event that
any officer of the City whose signature shall appear on any document shall cease to be such
officer before the delivery of such document, such signature nevertheless shall be valid and
sufficient for all purposes the same as if such officer had remained in office until such delivery.
SECTION 47: 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 48: Effect of Headings. The Section headings herein are for convenience of
reference only and shall not affect the construction hereof.
SECTION 49: Incorporation of Findings and Determinations. The findings and
determinations of the Council contained in the preamble hereof are hereby incorporated by
reference and made a part of this Ordinance for all purposes as if the same were restated in full
in this Section.
SECTION 50: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 Texas Government Code, Chapter 551,
as amended.
SECTION 51: Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below in accordance with Texas Government Code,
Section 1201.028, as amended.
[remainder of page intentionally left blank]
29585451.4/1000318981 28
I
PASSED AND ADOPTED, this March 13, 2018.
CITY OF EULESS, TEXAS
r
ATTEST:
IQ
14,01-If j
Secretary
(City Seal)
APPROVED AS TO FORM:
City Attorney
29585451.4/1000318981 S-1
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
29585451.4/1000318981 A-1
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of March 13, 2018 (this "Agreement"), by and
between U.S. Bank National Association, a banking association duly organized and existing
under the laws of the United States of America, or its successors (the "Bank") and the City of
Euless, Texas (the "Issuer"),
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Euless, Texas, Waterworks and Sewer System Revenue Bonds, Series 2018" (the "Securities"),
dated April 15, 2018, such Securities scheduled to be delivered to the initial purchasers thereof
on or about April 15, 2018; and
WHEREAS, the Issuer has selected the Bank 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
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and 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 "Authorizing Document" (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 Authorizing Document.
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
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
29587866.3/1000318981
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, if any, 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.
"Authorizing Document" means the resolution, order, or ordinance of the
governing body of the Issuer pursuant to which the Securities are issued, as the
same may be amended or modified, including any pricing certificate related
thereto, certified by the secretary or any other officer of the Issuer and delivered
to the Bank.
"Bank Office" means the designated office of the Bank at the address
shown in Section 3.01 hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Holder" and "Security Holder' each means the Person in whose name a
Security is registered in the Security Register.
"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
Authorizing Document).
"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
Authorizing Document.
"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, 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.
29587866.3/1000318981 2
"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 Authorizing Document
the principal of a Security is scheduled to be due and payable.
Section 2.02 Other Definitions. The terms "Bank," "Issuer," and "Securities
(Security)" have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01 Duties of Paying Agent. As Paying Agent, the Bank shall pay, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, 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:
U.S. Bank National Association
Attention: Bond Operations
111 Fillmore Avenue East
St. Paul, Minnesota 55107-1402
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 (as defined in the Authorizing Document). 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 paying agent 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 on the dates specified in the Authorizing Document.
ARTICLE FOUR
REGISTRAR
Section 4.01 Security Register- Transfers and Exchanges. The Bank agrees to
keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and the Bank may prescribe. The Bank represents and warrants its
office in Dallas, Texas will at all times have immediate access to the Security Register by
29587866.3/1000318981 3
electronic or other means and will be capable at all times of producing a hard copy of the
Security Register at its Dallas office for use by the Issuer. All transfers, exchanges and
replacements of Securities shall be noted in the Security Register.
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, such written instrument to be in a form satisfactory to the Bank and 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 Securities. The Issuer shall provide additional Securities when needed
to facilitate transfers or exchanges thereof. The Bank covenants that such additional Securities,
if and when provided, 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
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
29587866.3/1000318981 4
Section 4.05 Return of Cancelled Securities. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, all 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 Authorizing Document, 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, 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 mutilated, 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,
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.
(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,
29587866.3/1000318981 5
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 the
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.
(g) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the Securities in the manner disclosed in the closing memorandum or letter as
prepared by the Issuer, Issuer's financial advisor or other agent. The Bank may act on a
facsimile or e-mail transmission of the closing memorandum or letter acknowledged by the
Issuer, the Issuer's financial advisor or other agent as the final closing memorandum or letter.
The Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from
the Bank's reliance upon and compliance with such instructions.
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 - Paying Agent Account/Collateralization. A
paying agent account shall at all times be kept and maintained by the Bank for the receipt,
safekeeping, and disbursement of moneys received from the Issuer under this Agreement 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 paying agent accounts to
the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments
made from such paying agent account shall be made by check drawn on such account unless
the owner of the Securities shall, at its own expense and risk, request an alternative method of
payment.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal of, premium (if any), or interest on any
Security and remaining unclaimed for three years after final maturity of the Security has become
29587866.3/1000318981 6
due and payable will be held by the Bank and disposed of only in accordance with Title 6 of the
Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in
compliance with this provision.
The Bank is not obligated to pay interest on any money received by it under this
Agreement.
This Agreement relates solely to money deposited for the purposes described herein,
and the parties agree that the Bank may serve as depository for other funds of the Issuer, act as
trustee under indentures authorizing other bond transactions of the Issuer, or act in any other
capacity not in conflict with its duties hereunder.
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 office 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 DTC 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 the signature page(s) hereof.
29587866.3/1000318981 7
Section 6.04 Effect of Headings. The Article and Section headings herein are for
convenience of reference 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.
Section 6.07 Merger, Conversion, Consolidation, or Succession. Any corporation
or association into which the Bank may be merged or converted or with which it may be
consolidated, or any corporation or association resulting from any merger, conversion, or
consolidation to which the Bank shall be a party, or any corporation or association succeeding
to all or substantially all of the corporate trust business of the Bank shall be the successor of the
Bank as Paying Agent under this Agreement without the execution or filing of any paper or any
further act on the part of either parties hereto.
Section 6.08 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 6.09 Entire Agreement. This Agreement and the Authorizing Document
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 Authorizing
Document, the Authorizing Document shall govern.
Section 6.10 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 6.11 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 has been given to the Holders of the Securities of the appointment of a successor
Paying Agent/Registrar. However, if the Issuer fails to appoint a successor Paying
Agent/Registrar within a reasonable time, the Bank may petition a court of competent
jurisdiction within the State of Texas to appoint a successor. Furthermore, the Bank and the
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 the 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.
29587866.3/1000318981 8
Section 6.12 No Boycott of Israel. To the extent this Agreement is a contract for
goods or services within the meaning of Section 2270.002 of the Texas Government Code, as
amended, the Bank hereby verifies that the Bank does not boycott Israel and will not boycott
Israel through the term of this Agreement. For purposes of this verification, "boycott Israel"
means refusing to deal with, terminating business activities with, or otherwise taking any action
that is intended to penalize, inflict economic harm on, or limit commercial relations specifically
with Israel, or with a person or entity doing business in Israel or in an Israeli-controlled territory,
but does not include an action made for ordinary business purposes.
Section 6.13 Iran, Sudan and Foreign Terrorist Organizations. Pursuant to
Subchapter F, Chapter 2252, Texas Government Code, to the extent applicable to this
agreement, the Bank represents that it is not a company (as defined in Section 2270.0001(2),
Texas Government Code) engaged in business with Iran, Sudan, or a foreign terrorist
organization (as defined in Section 2252.151(2), Texas Government Code) and that it is not on
a list prepared and maintained by the Comptroller of Public Accounts of the State of Texas
under Sections 2270.0201 or 2252.153, Texas Government Code.
Section 6.14 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
[Remainder of page left blank intentionally.]
29587866.3/1000318981 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
U. S. BANK NATIONAL ASSOCIATION
By:
Title:
ATTEST: Address: 13737 Noel Road, Suite 800
Dallas, Texas 75240
By:
Title:
[signature page to Paying AgenbRegistrar Agreement- signatures continue on next page]
S-1
CITY OF EULESS, TEXAS
By:
Mayor
Address: 201 North Ector Drive
Euless, Texas 76039
Attest:
City Secretary
[signature page to Paying Agent/Registrar Agreement]
S-2
ANNEX A
29587866.3/1000318981 A-1
EXHIBIT B
FORM OF BOND
(a) Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND,
SERIES 2018
Bond Date: Interest Rate: Stated Maturity: CUSIP No.:
April 15, 2018 % July 15, 20_
Registered Owner:
Principal Amount:
The City of Euless (hereinafter referred to as the "City"), a body corporate and municipal
corporation in the County of Tarrant, State of Texas, for value received, hereby promises to pay
to the Registered Owner named above, or the registered assigns thereof, solely from the
revenues hereinafter identified, on the Stated Maturity date specified above the Principal
Amount stated above (or so much thereof as shall not have been paid upon prior redemption)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the
unpaid Principal Amount hereof from the date of delivery to the initial purchaser at the per
annum rate of interest specified above; such interest being payable on January 15 and July 15
of each year, commencing January 15, 2019 until maturity or prior redemption. Principal of this
Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon
presentation and surrender, at the Designated Payment/Transfer Office of the Paying
Agent/Registrar executing the registration certificate appearing hereon, or its successor.
Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as
defined in the Ordinance hereinafter referenced) whose name appears on the "Security
Register" maintained by the Paying Agent/Registrar at the close of business on the "Record
Date", which is the last business day of the month next preceding each interest payment date
and interest shall be paid by the Paying Agent/Registrar by check sent United States mail, first-
class, postage prepaid, to the address of the registered owner recorded in the Security Register
or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the
risk and expense of, the registered owner. If the date for the payment of the principal of or
interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking
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
z
29585451.4/1000318981 B-1
collection charges to the owner hereof and in any coin or currency of the United States of
America which at the time of payment is legal tender for the payment of public and private
debts.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $2,785,000 (herein referred to as the "Bonds") for the purpose of providing funds for
improving and extending the City's wastewater system and paying costs of issuance, under and
in strict conformity with the Constitution and laws of the State of Texas, including Texas
Government Code, Chapter 1502, as amended, and pursuant to an Ordinance adopted by the
City Council of the City (herein referred to as the "Ordinance").
The Bonds maturing on and after July 15, 2029, may be redeemed prior to their Stated
Maturities, at the option of the City, in whole or in part, (in inverse order of maturity, if less than
all Outstanding Bonds are to be redeemed), 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,
2028, or on any date thereafter, at the redemption price of par, together with accrued interest to
the date of redemption.
At least thirty (30) days prior to the date fixed for any redemption of Bonds, the City shall
cause a written notice of such redemption to be sent by United States mail, first-class, postage
prepaid, to the registered owners of each Bond to be redeemed, in whole or in part, at the
address shown on the Security Register and subject to the terms and provisions relating thereto
contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been duly
called for redemption and notice of such redemption duly given, then upon such redemption
date such Bond (or the portion of its principal sum to be redeemed) shall become due and
payable, and interest thereon shall cease to accrue from and after the redemption date therefor;
provided moneys for the payment of the redemption price and the interest on the principal
amount to be redeemed to the date of redemption are held for the purpose of such payment by
the Paying Agent/Registrar.
In the event a portion of the principal amount of a Bond is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided by
the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to
the registered owner, without charge. If a Bond is selected for redemption, in whole or in part,
the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an
assignee of the registered owner within forty-five (45) days of the redemption date therefor;
provided, however, such limitation on transferability shall not be applicable to an exchange by
the registered owner of the unredeemed balance of a Bond redeemed in part.
With respect to any optional redemption of the Bonds, unless moneys sufficient to pay
the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been
received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such
notice may state that such redemption is conditional upon the receipt of such moneys by the
Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon the satisfaction
of any prerequisites set forth in such notice of redemption; and, if sufficient moneys are not
received or such prerequisites are not satisfied, such notice shall be of no force and effect, the
City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in the
29585451.4/1000318981 B-2
manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
The Bonds are special obligations of the City and, together with the outstanding
Previously Issued Bonds, are payable solely from and equally and ratably secured by a first lien
on and pledge of the Net Revenues of the City's Waterworks and Sewer System (the "System").
The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any
property of the City or the System, except with respect to the Net Revenues. The holder hereof
shall never have the right to demand payment of this obligation out of any funds raised or to be
raised by taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has reserved
the right to issue additional revenue obligations payable from and equally and ratably secured
by a parity lien on and pledge of the Net Revenues of the System, in the same manner and to
the same extent as the Previously Issued Bonds and the Bonds.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the Bonds; the properties constituting the System; the
Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature
and extent and manner of enforcement of the lien and pledge securing the payment of the
Bonds; the terms and conditions for the issuance of additional revenue obligations; the terms
and conditions relating to the transfer or exchange of this Bond; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and
provisions upon which the liens, pledges, charges and covenants made therein may be
discharged at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no
longer Outstanding thereunder; and for the other terms and provisions contained therein.
Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the
contrary. In the event of non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received from the City. Notice of the Special Record Date and of the
29585451.4/1000318981 B-3
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
invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining
provisions and applications shall not in any way be affected or impaired thereby. The terms and
provisions of this Bond and the Ordinance shall be construed in accordance with and shall be
governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Bond Date.
CITY OF EULESS, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(City Seal)
(b) 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 )
29585451.4/1000318981 B-4
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)
(c) Form of Certificate of Paving Agent/Registrar to Appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within-mentioned Ordinance; the bond or bonds of the
above entitled and designated series originally delivered having been approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts, as shown
by the records of the Paying Agent/Registrar.
The designated offices of the Paying Agent/Registrar in St. Paul, Minnesota, is the
"Designated Payment/Transfer Office" for this Bond.
U.S. BANK NATIONAL ASSOCIATION
Dallas, Texas as Paying Agent/Registrar
Registration date:
By:
Authorized Signature
(d) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
29585451.4/1000318981 B-5
DATED:
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it
appears on the face of the within Bond in
every particular.
(e) The Initial Bond(s) shall be in the form set forth in paragraph (a) of this Exhibit
except that the form of the single fully registered Initial Bond shall be modified as follows:
Heading and first paragraph shall read as follows:
REGISTERED REGISTERED
NO. T-1
$2,785,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF EULESS, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 2018
Bond Date: April 15, 2018
Registered Owner: TEXAS WATER DEVELOPMENT BOARD
Principal Amount: TWO MILLION SEVEN HUNDRED EIGHTY-FIVE THOUSAND DOLLARS
The City of Euless (hereinafter referred to as the "City"), a body corporate and municipal
corporation in the County of Tarrant, State of Texas, for value received, hereby promises to pay
to the Registered Owner named above, or the registered assigns thereof, solely from the
revenues hereinafter identified, the Principal Amount hereinabove stated on July 15 in each of
the years and in principal installments in accordance with the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 3 hereof)
(or so much principal thereof as shall not have been redeemed prior to maturity) and to pay
interest, computed on the basis of a 360-day year of twelve 30-day months, on the unpaid
principal amounts hereof from the date of delivery to the initial purchaser 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, 2019, until maturity or prior redemption. Principal installments of this
Bond are payable in the year of maturity or on a redemption date to the registered owner hereof
by U.S. Bank National Association, Dallas, Texas (the "Paying Agent/Registrar'), upon its
presentation and surrender at its designated offices, initially in St. Paul, Minnesota or, with
respect to a successor paying agent/registrar, at the designated office of such successor (the
"Designated Payment/Transfer Office"). Interest is payable to the registered owner of this Bond
whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at
29585451.4/1000318981 B-6
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.
29585451.4/1000318981 B-7
EXHIBIT C
ESCROW AGREEMENT
29585451.4!1000318981 C'1
| of Euless authorized the issuance of$2,78S,000 City of Euless, Texas, Waterworks and Sewer
The Escrow Accounts shall be entitled "CITY OF EULESS, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BONDS, SERIES 2018 and Texas Water Development Board L1000737
Escrow Account" (Bond Escrow Account) and "CITY OF EULESS, TEXAS PRINCIPAL
FORGIVENESS AGREEMENT and Texas Water Development Board LF1000738 Escrow
Account" (Principal Forgiveness Escrow Account) and shall not be subject to warrants, drafts
or checks drawn by the City but shall be disbursed or withdrawn to pay the costs of the Project
for which the Obligations were issued or other purposes in accordance with the Ordinance and
the Principal Forgiveness Agreement and solely upon written authorization from the Executive
Administrator or his/her designated representative. Proceeds received from TWDB
Commitment Number L1000737 shall be deposited into the Bond Escrow Account and
Proceeds received from TWDB Commitment Number LF1000738 shall be deposited into the
Principal Forgiveness Escrow Account. The Escrow Agent shall provide to the City and to the
TWDB the Escrow Accounts bank statements upon request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow Accounts and any
accrued interest in excess of the amounts insured by the FDIC and remaining uninvested under
the terms of this Agreement shall be continuously secured by a valid pledge of direct
obligations of the United States of America or other collateral meeting the requirements of the
Public Funds Collateral Act, Texas Government Code, Chapter 2257.
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow, the Escrow Agent shall
only invest escrowed Proceeds in investments that are authorized by the Public Funds
Investment Act, Texas Government Code, Chapter 2256 (PFIA). It is the City's responsibility to
direct the Escrow Agent to invest all public funds in a manner that is consistent not only with
the PFIA but also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement from the
Escrow Accounts, or any portion thereof, unless and until it has been supplied with written
approval and consent by the Executive Administrator or his/her designated representative.
However, no written approval and consent by the Executive Administrator shall be required if
the disbursement involves transferring Proceeds from one investment to another within the
Escrow Accounts provided that all such investments are consistent with the PFIA
requirements.
SECTION 5: UNEXPENDED FUNDS. Any Proceeds remaining unexpended in the Escrow
Accounts after completion of the Project and after the final accounting has been submitted to
and approved by the TWDB shall be disposed of pursuant to the provisions of the Ordinance
and Principal Forgiveness Agreement. The City shall deliver a copy of such TWDB approval of
the final accounting to the Escrow Agent together with instructions concerning the
disbursement of unexpended Proceeds hereunder. The Escrow Agent shall have no obligation
to ensure that such unexpended Proceeds are used as required by the provisions of the
Ordinance and Principal Forgiveness Agreement, that being the sole obligation of the City.
2
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and rely upon
the certifications and documents furnished to the Escrow Agent by the City and shall not be
liable for the payment of any funds made in reliance in good faith upon such certifications or
other documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law, the Escrow
Agent shall not be liable for any act done or step taken or omitted by it or any mistake of fact
or law, except for its negligence or default or failure in the performance of any obligation
imposed upon it hereunder. The Escrow Agent shall not be responsible in any manner for any
proceedings in connection with the Obligations or any recitation contained in the Obligations.
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of record and
account relating to the receipts, disbursements, allocations and application of the money
deposited to the Escrow Account, and investments of the Escrow Account and all proceeds
thereof. The records shall be available for inspection and copying at reasonable hours and
under reasonable conditions by the City and the TWDB.
SECTION 9: MERGER/CONSOLIDATION. In the event that the Escrow Agent merges or
consolidates with another bank or sells or transfers substantially all of its assets or corporate
trust business, then the successor bank shall be the successor Escrow Agent without the
necessity of further action as long as the successor bank is a state or national bank designated
by the Texas Comptroller as a state depository institution in accordance with Texas
Government Code, Chapter 404, Subchapter C, or is a designated custodian of collateral in
accordance with Texas Government Code Chapter 404, Subchapter D. The Escrow Agent must
provide the TWDB with written notification within 30 days of acceptance of the merger,
consolidation, or transfer. If the merger, consolidation or other transfer has occurred between
state banks,the newly-created entity shall forward the certificate of merger or exchange issued
by the Texas Department of Banking as well as the statement filed with the pertinent chartering
authority, if applicable, to the TWDB within five business days following such merger,
consolidation or exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time as
necessary with the written consent of the City and the TWDB, but no such amendments shall
increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without its
consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by either the
City or by the Escrow Agent, the Escrow Agent must report said termination in writing to the
TWDB within five business days of such termination. The City is responsible for ensuring that
the following criteria are satisfied in selecting the successor escrow agent and notifying the
TWDB of the change in escrow agents: (a) the successor escrow agent must be an FDIC-insured
state or national bank designated by the Texas Comptroller as a state depository; (b) the
successor escrow agent must be retained prior to or at the time of the termination; (c) an
escrow agreement must be executed by and between the City and the successor escrow agent
3
and must contain the same or substantially similar terms and conditions as are present in this
Agreement; and (d) the City must forward a copy of the executed escrow agreement with the
successor escrow agent within five business days of said termination. No funds shall be
released by the TWDB until it has received,reviewed and approved the escrow agreement with
the successor escrow agent. If the City has not appointed a successor escrow agent within
thirty (30) days of the notice of termination, the Escrow Agent may petition any court of
competent jurisdiction in Texas for the appointment of a successor escrow agent or for other
appropriate relief,and any such resulting appointment shall be binding upon the City. Whether
appointed by the City or a court, the successor escrow agent and escrow agreement must be
approved by the TWDB for the appointment to be effective. The Escrow Agent is responsible
for performance under this Agreement until a successor has been approved by the TWDB and
has signed an acceptable escrow agreement.
SECTION 12: No Boycott Israel. To the extent this Agreement is a contract for goods or
services within the meaning of Section 2270.002 of the Texas Government Code, as amended,
the Escrow Agent hereby verifies that the Escrow Agent does not boycott Israel and will not
boycott Israel through the term of this Agreement. For purposes of this verification, "boycott
Israel" means refusing to deal with, terminating business activities with, or otherwise taking
any action that is intended to penalize, inflict economic harm on, or limit commercial relations
specifically with Israel, or with a person or entity doing business in Israel or in an Israeli-
controlled territory, but does not include an action made for ordinary business purposes.
SECTION 13: Iran, Sudan and Foreign Terrorists Organizations. To the extent this
Agreement is a governmental contract, within the meaning of Section 2252.151 of the Texas
Government Code, as amended, the Escrow Agent hereby acknowledges that (a) the Escrow
Agent does not engage in business with Iran,Sudan, or any"foreign terrorist organization" and
(b) the Escrow Agent is not listed by the Texas Comptroller as described in Section 2252.152
of the Texas Government Code. For purposes of this verification, the phrase "foreign terrorist
organization" means an organization designated as a foreign terrorist organization by the
United States Secretary of State as authorized by 8 U.S.C. Section 1189.
SECTION 14: EXPIRATION. This Agreement shall expire upon final transfer of the funds in the
Escrow Accounts to the City.
SECTION 13: POINT OF CONTACT. The points of contact for the Escrow Agent and the TWDB
are as follows:
U.S. Bank National Association Executive Administrator
13737 Noel Road, Suite 800 Texas Water Development Board
Dallas,Texas 75240 1700 North Congress Avenue
Phone Number: (972) 581-1622 Austin, Texas 78701
Fax Number: (972) 581-1670
Email Address: kristel.richards@usbank.com
Attention: Kristel D. Richards
4
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by the
applicable laws of the State of Texas. Venue for disputes shall be in the District Court of Travis
County, Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the parties hereto,
in whole or in part, and any attempted assignment shall be void and of no force and effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow Agreement
between the Escrow Agent and the City and supersedes any other agreements,whether oral or
written, between the parties regarding the Proceeds or the Escrow Accounts. No modification
or amendment of this Agreement shall be valid unless the same is in writing and is signed by
the City and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term,covenant,condition or provision of this
Agreement is held by a court of competent jurisdiction to be invalid,void or unenforceable,the
remainder of the provisions shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent shall be entitled
to compensation for its services as stated in Exhibit A,which compensation shall be paid by the
City but may not be paid directly from the Escrow Accounts.
[Remainder of Page Intentionally Left Blank]
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective upon
signature of both parties.
CITY OF EULESS
By:
Authorized Representative
Date:
(Seal)
Address: 201 North Ector Drive
Euless, Texas 76039
U.S. Bank National Association
as Escrow Agent
By:
Title:
Date:
Address: 13737 Noel Road, Suite 800
Dallas, Texas 75240
(Bank Seal)
6
EXHIBIT A
Fee Schedule
EXHIBIT D
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 43 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 annual financial statements of the City for the most recently concluded fiscal year.
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.
29585451,4/1000318981 D-1