HomeMy WebLinkAboutOrdinance 10538Y .i
ORDINANCE NO . /C"
AN ORDINANCE approving and authorizing the issuance of
short term obligations in an aggregate principal amount
not to exceed $75,000,000 to provide interim financing
to pay Project Costs for Eligible Projects; authorizing
such short term obligations to be issued, sold and
delivered in various forms, including commercial paper
notes, fixed rate notes and variable rate notes, a
revolving credit note and term notes,, and prescribing
the terms, features and characteristics of such
instruments; approving and authorizing certain authorized
officers and employees to act on behalf of the City in
the selling and delivery of such short term obligations,
within the limitations and procedures specified herein;
making certain covenants and agreements in connection
therewith; resolving other matters incident and related
to the issuance, sale, security and delivery of such
short term obligations, including the approval of an
Issuing and Paying Agent Agreement, Credit Agreement and
Dealer Agreement; approving the use of an Offering
Memorandum in connection with said sale; and providing
an effective date.
THE STATE OF TEXAS
COUNTIES OF TARRANT AND DENTON
CITY OF FORT WORTH
WHEREAS, the City of Fort Worth, Texas (the "City") is a
"Home-Rule City", acting as such under the Constitution and laws
of the State of Texas, and has a population in excess of 90,000;
and
WHEREAS, the City Council of the City hereby determines to
issue its short term obligations pursuant to the provisions of
Article 717q, V.A.T.C.S. (the "Act"), to provide interim financing
for additions, improvements and extensions to the City's combined
water and sewer system (the "System"); and
WHEREAS, the City has heretofore issued, and there are
currently outstanding, three classes of obligations supported by
a pledge of and lien on the net revenues of the System, the first
such class being revenue bonds (hereinafter defined as the "Prior
Lien Bonds") payable from and secured by a first lien on and pledge
of the net revenues of the System; the second such class being
revenue bonds secured by a lien on and pledge of the net revenues
of the System subordinate to the pledge of and lien on the net
revenues securing the Prior Lien Bonds and other obligations issued
thereafter (the "Subordinate Lien Bonds"); and the third such class ,~
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being certificates of obligation payable from and secured by ad
valorem taxes and a subordinate lien on and limited pledge of the
System's net revenues (hereinafter defined as "Subordinate Lien
Obligations"); and
WHEREAS, such short term obligations proposed to be issued
constitute bond anticipation notes which the City intends to fund
through the issuance of its revenue bonds; and
WHEREAS, arrangements relating to such interim financing have
been settled and the City Council hereby finds and determines that
the issuance of short term obligations, including commercial paper
notes, variable rate notes, fixed rate notes, a revolving note, and
term notes subject to the terms, conditions and limitations
hereinafter prescribed, should be approved and authorized at this
time; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
ARTICLE I
DEFINITIONB
Section 1.01. Definitions. Unless the context shall indicate
a contrary meaning or intent, the terms below defined, for all
purposes of this ordinance or any ordinance amendatory or
supplemental hereto, shall be construed, are used and are intended
to have the following meanings, to-wit:
"Advance" shall mean a loan made under and subject to the
conditions set forth in the Agreement.
"Agreement" shall mean the Credit Agreement approved and
authorized to be entered into by Section 2.17 hereof, as from time
to time amended or supplemented, or other credit facility provided
in lieu thereof in accordance with the provisions of Section 4.05
hereof.
"Authorized Representative" shall mean one or more of the
following officers or employees of the City, acting in concert or
individually, to-wit: the City Manager, any Assistant City Manager,
the Director of Finance, the City Treasurer, the Financial Planning
Officer, or such other officer or employee of the City authorized
by the City Council to act as an Authorized Representative.
"Bank" shall mean The Mitsui Bank, Limited, or any subsequent
party to the Agreement.
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"Bank Note" shall mean a promissory note or notes issued
pursuant to the provisions of this Ordinance and the Agreement
(including specifically the Revolving Credit Note and the Term
Notes as defined in the Agreement) in evidence of Advances and term
loans made by the Bank under the Agreement, having the terms and
characteristics contained therein and issued in accordance
therewith.
"Bond Counsel" shall mean Messrs. McCall, Parkhurst & Horton,
or any other firm of nationally recognized Bond Counsel selected
by the City.
"Bonds" shall mean a series or issue of bonds, notes or
similar obligations (other than the Notes or the Agreement
(including any Bank Note)) issued by the City subsequent to the
date of passage of this Ordinance, which bonds, notes or similar
obligations are payable from and secured solely by a lien on and
pledge of the Net Revenues of the System, prior in rank and
dignity, on a parity in rank and dignity, or subordinate in rank
and dignity to the lien and pledge securing the payment of the
Prior Lien Bonds.
"Business Day" shall mean any day (a) when banks are not
authorized to be closed in the City and (b) when banks or the New
York Stock Exchange are not authorized to be closed in New York,
New York.
"City" shall mean the City of Fort Worth, Texas.
"City Council" shall mean the governing body of the City.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commercial Paper Note" shall mean a note issued pursuant to
the provisions of this Ordinance, having the terms and
characteristics specified in Section 2.03 hereof and in the form
described in Section 2.07(a) hereof.
"Dealer" shall mean the entity so designated in Section 3.04
hereof.
"Dealer Agreement" shall mean the Dealer Agreement approved
and authorized to be entered into by Section 3.04 hereof, as from
time to time amended or supplemented.
"Eligible Investments" shall mean any or all of the authorized
investments described in the Public Funds Investment Act of 1987,
Article 842a-2, V.A.T.C.S., as amended, in which the City may
purchase, sell and invest its funds and funds under its control.
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"Eligible Project" shall mean the acquisition or construction
of improvements, additions or extensions for the System, including
capital assets and facilities incident and related to the
operation, maintenance and administration thereof, all as provided
in the Act.
"Fiscal Year" shall mean the fiscal year used by the City in
connection with the operation of the System.
"Fixed Rate Note" shall mean a note issued pursuant to the
provisions of this Ordinance, having the terms and characteristics
contained in Section 2.05 hereof and issued in substantially the
form described in Section 2.07 (b) hereof.
"Gross Revenues of the System" and "Gross Revenues" shall mean
all revenues and income of every nature derived or received by the
City from the operation and ownership of the System (other than
moneys which may be subject to rebate to the United States of
America in accordance with Sectioa 4.08 hereof).
"Holder" or "Noteholder" shall mean any person, firm,
association, or corporation who is in possession of any Note drawn,
issued or endorsed to such person, firm, association or corporation
or to the order of such person, firm, association or corporation
or to bearer or in blank.
"Issuing and Paying Agent", "Paying Agent/Registrar" or
"Registrar" shall mean the agent appointed pursuant to Section 2.02
hereof, or any successor to such agent.
"Issuing and Paying Agent Agreement" shall mean the agreement
approved and authorized to be entered into by Section 3.03 hereof,
as from time to time amended or supplemented.
"Maximum Interest Rate" shall mean the maximum net effective
interest rate permitted by law to be paid on obligations issued or
incurred by the City in the exercise of its borrowing powers
(currently prescribed by Article 717k-2, V.A.T.C.S., as amended,
or any successor provision).
"Maximum Maturity Date" shall mean twenty years following the
date of passage of this Ordinance.
"Net Revenues" and "Net Revenues of the System" shall mean all
Gross Revenues after deducting and paying the current expenses of
operation and maintenance of the System, as required by Article
1113, V.A.T.C.S., including all salaries, labor, materials,
repairs, and extensions necessary to render efficient service;
provided, however, that only such repairs and extensions, as in the
judgment of the City Council, reasonably and fairly exercised by
the adoption of appropriate resolution, are necessary to keep the
System in operation and render adequate service to said City and
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the inhabitants thereof, or such as might be necessary to meet some
physical accident or condition which would otherwise impair the
Prior Lien Bonds or any Bank Note, shall be deducted in deter-
mining "Net Revenues". Payments made by the City for water supply
or treatment of sewage which constitute under the iaw operation and
maintenance expense shall be considered herein as expenses incurred
in the operation and maintenance of the System. Depreciation and
amortization shall never be considered as an expense of operation
and maintenance in determining Net Revenues.
"Note" or "Notes" shall mean the evidences of indebtedness
authorized to be issued and at any time outstanding pursuant to
this Ordinance and shall include Commercial Paper Notes, Fixed Rate
Notes, Variable Rate Notes or Bank Notes, as appropriate.
"Outstanding Prior Lien Bonds" shall mean the outstanding and
unpaid bonds of the following series, to-wit: City of Fort Worth,
Texas Water and Sewer System Revenue Refunding Bonds, Series 1984
and Series 1986-A; City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 1985; Series 1986; Series 1987 and Series
1988.
"Pledged Revenues" and "Pledged Revenues of the System" shall
mean (1) the Net Revenues, plus (2) any additional revenues,
income, or other resources, including, without limitation, any
grants, donations, or income received or to be received from the
United States Government, or any other public or private source,
whether pursuant to an agreement or otherwise, which in the future
may, at the option of the City, be pledged to the payment of the
Prior Lien Bonds and any Bank Note.
"Prior Lien Bond Ordinance" shall mean collectively the
ordinances authorizing the Outstanding Prior Lien Bonds.
"Prior Lien Bonds" shall mean collectively the Outstanding
Prior Lien Bonds and any bonds issued on a parity therewith.
"Project Costs" shall mean all costs and expenses incurred in
relation to Eligible Projects, including without limitation design,
planning, engineering and legal costs, acquisition costs of land,
interests in land, right-of-way and easements, construction costs,
costs of machinery, equipment, and other capital assets incident
and related to the operation, maintenance, and administration of
an Eligible Project, financing costs, including interest during
construction and thereafter, underwriter's discount and/or fees for
legal, financial, and other professional services, and
reimbursement for such Project Costs attributable to Eligible
Projects incurred prior to the issuance of any Project Notes.
"Project Note" shall mean, as appropriate, a Note or all the
Notes other than any Bank Note.
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"Series A Note Construction Account" shall mean the account
so designated in Section 2.14 hereof.
"Series A Note Payment Fund" shall mean the fund so designated
in Section 2.11 hereof.
"Subordinate Lien Bonds" shall mean the outstanding City of
Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue
Bonds, Series 1989, dated November 1, 1989 and originally issued
in the aggregate principal amount of $33,300,000.
"Subordinate Lien Obligations" shall mean the presently
outstanding City of Fort Worth, Texas Certificates of Obligation,
Series 1989, dated August 1, 1989 originally issued in the
aggregate principal amount of $10,700,000.
"System" shall mean the City's combined existing water and
sewer system, together with all future extensions, improvements,
enlargements, and additions thereto, and all replacements thereof;
provided that, notwithstanding the foregoing, and to the extent now
or hereafter authorized or permitted by law, the term System shall
not include any water or sewer facilities which are declared not
to be a part of the System and which are acquired or constructed
by the City with the proceeds from the issuance of "Special
Facilities Bonds", which are hereby defined as being special
revenue obligations of the City which are not secured by or payable
from the Pledged Revenues as defined herein, but which are secured
by and payable solely from special contract revenues or payments
received from any other legal entity in connection with such
facilities; and such revenues or payments shall not be considered
as or constitute Gross Revenues of the System, unless and to the
extent otherwise provided in the ordinance or ordinances
authorizing the issuance of such "Special Facilities Bonds".
"Variable Rate Note" shall mean a note issued pursuant to the
provisions of this Ordinance, having the terms and characteristics
specified in Section 2.04 hereof and in substantially the form
described in Section 2.07(c) hereof the interest rate on which is
adjusted from time to time.
Section 1.02. Construction of Terms Utilized in this
Ordinance. 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.
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ARTICLE II
AIITHORIZATION OF NOTES
Section 2.01. General Authorization. Pursuant to authority
conferred by and in accordance with the provisions of the
Constitution and laws of the State of Texas, particularly the Act,
Project Notes shall be and are hereby authorized to be issued in
an aggregate principal amount not to exceed SEVENTY-FIVE MILLION
DOLLARS ($75,000,000) at any one time outstanding for the purpose
of financing Project Costs of Eligible Projects; and to refinance,
renew or refund Notes issued pursuant to the provisions hereof; and
a Revolving Credit Note shall be and is hereby authorized to be
issued in the initial aggregate principal amount of FIFTY-THREE
MILLION SIX HUNDRED NINETY EIGHT THOUSAND SIX HUNDRED AND FIFTY
DOLLARS ($53,698,650) at any one time outstanding for the purpose
of evidencing Advances to retire Project Notes; all in accordance
with and subject to the terms, conditions and limitations contained
herein and, with respect to the Revolving Credit Note, the
Agreement. For purposes of this Section 2.01, any portion of
outstanding Notes to be paid from money on deposit in the Series
A Note Payment Fund and from the available proceeds of Notes or
Bonds on the day of calculation shall not be considered
outstanding. The authority to issue Project Notes from time to
time under the provisions of this Ordinance shall exist until the
Maximum Maturity Date, regardless of whether prior to the Maximum
Maturity Date there are at any time no Project Notes outstanding.
Until such time as the "Commitment" under the Agreement is
increased as provided in Section 2.17 hereof, Project Notes shall
not be issued to exceed at any one time outstanding $50,000,000 in
principal amount.
Section 2.02. Terms Applicable to Notes - General. Subject
to the limitations contained herein, Project Notes herein
authorized shall be dated as of their date of issuance or prior
thereto, but within 30 days of the date of issuance (the "Note
Date"), as determined by an Authorized Representative; shall bear
no interest or bear interest at such rate or rates (either fixed,
variable or floating) per annum computed on the basis of either
actual days elapsed or twelve 30-day months whichever is
applicable, and on a 365-day or 366-day year, or a 360-day year,
whichever is applicable (but in no event in any case to exceed the
Maximum Interest Rate in effect on the date of issuance thereof)
as may be determined by an Authorized Representative and all
Project Notes authorized herein shall mature on or prior to the
Maximum Maturity Date.
Subject to the Maximum Interest Rate limitation, Project Notes
authorized to be issued hereunder without a fixed numerical rate
of interest for the term thereof shall bear interest in accordance
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with any clearly stated formula or method of calculation as
determined by an Authorized Representative and such formula or
method of calculation shall be set forth in the Project Note.
Project Notes issued hereunder inay contain terms and
provisions for the redemption or prepayment thereof prior to
maturity, subject to any applicable limitations contained herein,
as shall be determined by an Authorized Representative.
Subject to applicable terms, limitations and procedures
contained herein, Project Notes may be sold in such manner at
public or private sale and at par or at such discount (within the
interest rate and yield restrictions provided herein) as an
Authorized Representative shall approve at the time of the sale
thereof.
The Project Notes shall be issued in registered form, without
coupons, provided, however, Project Notes maturing not more than
one year from the date of issuance thereof (the "Note Date") may
be registered to bearer. The principal of, premium, if any, and
interest on the Project Notes shall be payable in lawful money of
the United States of America, without exchange or collection
charges to the Holder of the Project Note; the principal thereof
to be payable upon presentation and surrender of the Project Note
at the principal corporate office of the Paying Agent/ Registrar
and interest thereon to be payable to the registered owner thereof
(when registered other than to bearer) either (i) by check sent by
United States Mail, first class, postage prepaid, to the address
of the registered owner appearing on the Registration Books of the
City maintained by the Paying Agent/Registrar or (ii) by such other
method, acceptable to the Issuing and Paying Agent, requested by
the Holder, but interest on a Project Note registered to bearer
shall be payable only upon presentation of the Project Note at the
principal corporate office of the Paying Agent/ Registrar.
The selection and appointment of Mitsui Finance Trust Company
of New York, to serve as Issuing and Paying Agent, Paying
Agent/Registrar and Registrar for the Project Notes is hereby
confirmed and the City covenants and agrees to keep and maintain
at the principal corporate office of the Paying Agent/Registrar
books and records (the "Registration Books") for the registration,
payment, transfer and exchange of the Project Notes, all as
provided herein and such reasonable rules and regulations as the
Paying Agent/Registrar may prescribe. The City covenants to
maintain and provide a Paying Agent/Registrar at all times while
the Project Notes are outstanding, which shall be a national or
state banking association or corporation or trust company organized
and doing business under the laws of the United States of America
or of any State and authorized under such laws to exercise trust
powers. Should a change in the Paying Agent/Registrar for the
Project Notes occur, the City agrees to promptly cause a written
notice thereof to be (i) sent to each registered owner of the
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Project Notes then outstanding by United States Mail, first class,
postage prepaid and (ii) published in a financial newspaper or
journal of general circulation in The City of New York, New York,
once during each calendar week for at least two calendar weeks,
provided, however, the publication of such notice shall not be
required if notice is sent to each Holder of the Project Notes.
Such notice shall give the address of the successor Paying
Agent/Registrar. A successor Paying Agent/Registrar may be
appointed without the consent of the Holders.
A copy of the Registration Books and any change thereto shall
be provided to the City by the Paying Agent/Registrar, by means of
telecommunications equipment or such other means as may be mutually
agreeable thereto, within two Business Days of the opening of such
Registration Books or any change therein, as the case may be.
The City and the Paying Agent/Registrar may treat the bearer
(in the case of Project Notes so registered) or the registered
payee thereof as the absolute owner of any Project Note for the
purpose of receiving payment thereof and for all purposes, and the
City and the Paying Agent/Registrar shall not be affected by any
notice or knowledge to the contrary.
Section 2.03. Commercial Paper Notes. Under and pursuant to
the authority granted hereby and subject to the limitations
contained herein, Commercial Paper Notes to be designated "City of
Fort Worth, Texas Water and Sewer System Commercial Paper Notes,
Series A" are hereby authorized to be issued and sold and delivered
from time to time in such principal amounts as determined by an
Authorized Representative in denominations of $100,000 or more,
numbered in ascending consecutive numerical order in the order of
their issuance and to mature and become due and payable on such
dates as an Authorized Representative shall determine at the time
of sale; provided, however, that no Commercial Paper Note shall (i)
mature after the Maximum Maturity Date or (ii) have a term in
excess of two hundred seventy (270) days.
Interest, if any, on Commercial Paper Notes shall be payable
at maturity with principal.
Section 2.04. Variable Rate Notes. Under and pursuant to
authority granted hereby and subject to the limitations contained
herein, Variable Rate Notes to be designated "City of Fort Worth,
Texas Water and Sewer System Variable Rate Notes, Series A", are
hereby authorized to be issued and sold and delivered from time to
time in such principal amounts as determined by an Authorized
Representative, such Variable Rate Notes to be in denominations of
no less than $5,000 or any integral multiple thereof, to be
numbered in ascending consecutive numerical order in the order of
their issuance and to mature and become due and payable on such
dates as an Authorized Representative shall determine at the time
of sale; provided, however, that no Variable Rate Note shall mature
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after the Maximum Maturity Date. Variable Rate Notes may be made
to be payable on demand and may include such provisions for the
redemption thereof on any date prior to maturity under such terms
and conditions and at such redemption price or prices as shall be
determined by an Authorized Representative; provided, however, any
premium associated with a redemption prior to maturity of a
Variable Rate Note shall not exceed three percent (3$) of the
principal amount thereof.
Variable Rate Notes are hereby authorized to be .issued bearing
interest at a variable or floating rate not to exceed the Maximum
Interest Rate and interest thereon shall be payable at maturity and
at such intervals prior to maturity all as determined by an
Authorized Representative.
Section 2.05. Fixed Rate .Notes. Under and pursuant to
authority granted hereby and subject to the limitations contained
herein, Fixed Rate Notes to be designated "City of Fort Worth,
Texas Water and Sewer System Fixed Rate Notes, Series A" are hereby
authorized to be issued and sold and delivered from time to time
in such principal amounts as determined by an Authorized
Representative, such Fixed Rate Notes to be in denominations of
$5,000 or any integral multiple thereof, to be numbered in
ascending consecutive numerical order in the order of their
issuance and to mature and become due and payable on such dates as
an Authorized Representative shall determine at the time of sale;
provided, however, that no Fixed Rate Note shall mature after the
Maximum Maturity Date.
Fixed Rate Notes shall bear interest. at a fixed rate of
interest per annum, such interest to be payable at maturity and at
such intervals prior to maturity as determined by an Authorized
Representative. Fixed Rate Notes may include such provisions for
the redemption thereof on any date prior to maturity under such
terms and conditions and at such redemption price or prices as
shall be determined by an Authorized Representative; provided,
however, any premium associated with a redemption prior to maturity
of a Fixed Rate Note shall not exceed three percent (3~) of the
principal amount thereof.
Section 2.06. Bank Note. Under and pursuant to authority
granted hereby and subject to the limitations contained herein and
in the Agreement, a Revolving Credit Note to be designated "City
of Fort Worth, Texas Water and Sewer System Credit Agreement
Revolving Credit Note" and a Term Note (one or more) to be
designated "City of Fort Worth, Texas Water and Sewer System Credit
Agreement Term Note" (with such other designation as may be
determined by the Bank and approved by an Authorized
Representative, so as to distinguish among such Term Notes, if any)
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are hereby authorized and approved in accordance with the terms of
this Ordinance, the Agreement and the forms thereof set forth in
the Agreement.
Section 2.07. Forms of Project Notes. The Project Notes and
the Certificate of Authentication to appear on each of the Project
Notes shall be substantially in the forms set forth in this Section
with such appropriate insertions, omissions, substitutions and
other variations as are permitted or required by this Ordinance and
may have such letters, numbers or other marks of identification
(including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American Banks
Association) and such legends and endorsements thereon as may,
consistently herewith, be approved by an Authorized Representative.
Any portion of the text of any Project Notes may be set forth on
the reverse thereof, with an appropriate reference thereto on the
face of the Project Notes.
The Notes shall be printed, lithographed, or engraved or
produced in any other similar manner, or typewritten, all as
determined and approved by an Authorized Representative.
(a) Form of Commercial Paper Note:
UNITED STATES OF AMERICA
STATE OF TEXA5
CITY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM
COMMERCIAL PAPER NOTE,
SERIES A
No.: Note Date:
Principal Amount: Maturity Date:
Interest to Maturity: Number of Days:
Due at Maturity: Interest Rate (~):
Owner:
The City of Fort Worth (the "City"), in Tarrant and Denton
Counties, State of Texas, FOR VALUE RECEIVED, hereby promises to
pay, solely from the sources hereinafter identified and as
hereinafter stated, to the order of the party specified above on
the maturity date specified above, the principal sum specified
above and to pay interest, if any, on said principal amount at said
maturity date, from the above specified note date to said maturity
date at the per annum interest rate shown above (computed on the
basis of actual days elapsed and a 365-day or 366-day year, as may
be applicable); both principal and interest on this Note being
payable in lawful money of the United States of America at the
principal corporate trust office of the Issuing and Paying Agent
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executing the "Certificate of Authentication" endorsed hereon and
appearing below, or its successor at the address specified above.
No interest will accrue on the principal amount hereof after said
maturity date.
This Note is one of an issue of commercial paper notes (the
"Commercial Paper Notes") which, together with other forms of short
term obligations, including the below referenced Revolving Credit
Note and one or more Term Notes (such other short term obliga-
tions, excluding the Revolving Credit Note and Term Notes, and the
Commercial Paper Notes being hereinafter collectively referred to
as the "Notes"), has been duly authorized and issued in accordance
with the provisions of an ordinance (the "Ordinance") passed by the
City Council of the City for the purpose of financing Project Costs
of Eligible Projects (as defined in the Ordinance) for the City's
Combined Water and Sewer System (the "System"); and to refinance,
renew or refund the Notes issued pursuant to the provisions of the
Ordinance; all in accordance and in strict conformity with the
provisions of Article 717q, V.A.T.C.S., as amended (the "Act").
This Commercial Paper Note, together with the other Notes, is
payable from and equally secured by a lien on and pledge of (i) the
proceeds from (a) the sale o'f other Notes issued for such purpose
and (b) the sale of a series or issue of Bonds (as defined in the
Ordinance) to be issued by the City for such purpose, (ii) advances
under and pursuant to the Credit Agreement between the City and The
Mitsui Bank, Limited (the "Bank") pursuant to which the Bank has
agreed to provide credit to the City under the terms and conditions
set forth therein, which advances are to be evidenced by a
Revolving Credit Note and, if applicable under the Credit
Agreement, one or more Term Notes (each as defined in said Credit
Agreement), and (iii) amounts in certain funds established pursuant
to the Ordinance.
This Commercial Paper Note, together with the other Notes, is
payable solely from the sources hereinabove identified securing the
payment thereof, and the Commercial Paper Notes do not constitute
a legal or equitable pledge, charge, lien or encumbrance upon any
other property of the City or the System. The holder hereof shall
never have the right to demand payment of this obligation from any
sources or properties of the City except as identified above.
It is hereby certified and recited that all acts, conditions
and things required by law and the Ordinance to exist, to have
happened and to have been performed precedent to and in the
issuance of this Commercial Paper Note, do exist, have happened
and have been performed in regular and in due time, form and manner
as required by law and that the issuance of this Commercial Paper
Note, together with all other Notes, is not in excess of the
principal amount of Notes permitted to be issued under the
Ordinance.
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This Commercial Paper Note has all the qualities and incidents
of a negotiable instrument under the laws of the State of Texas.
This Commercial Paper Note shall not be entitled to any
benefit under the Ordinance or be valid or become obligatory for
any purpose until this Commercial Paper Note shall have been
authenticated by the execution by the Issuing and Paying Agent of
the Certificate of Authentication hereon.
IN TESTIMONY WHEREOF, the City
caused this Commercial Paper Note to
the manual or facsimile signature of
by the manual or facsimile signatures
Secretary and its official seal to
thereof to be printed hereon.
COUNTERSIGNED:
City Secretary,
City of Fort Worth, Texas
APPROVED AS TO FORM AND
LEGALITY:
City Attorney,
City of Fort Worth, Texas
(SEAL)
Council has authorized and
be executed on its behalf by
the Mayor and countersigned
of the City Attorney and City
be impressed or a facsimile
Mayor,
City of Fort Worth, Texas
ISSUING AND PAYING AGENT'S
CERTIFICATE OF AUTHENTICATION
This Commercial Paper Note is one of the Commercial Paper
Notes delivered pursuant to the within mentioned Ordinance.
as Issuing and Paying Agent
By
Authorized Signatory
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(b) Form of Fixed Rate Note:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM
FIXED RATE NOTE, SERIES A
Note Interest Note Maturity
Number Rate Date Date
Principal
Amount
The City of Fort Worth ("City"), in Tarrant and Denton
Counties, State of Texas, FOR VALUE RECEIVED, hereby promises to
pay, solely from the sources hereinafter identified and as
hereinafter stated, to the order of
on the Maturity Date specified above, the principal sum specified
above and to pay interest, if any, on said principal amount at said
Maturity Date, from the above specified Note Date to said Maturity
Date at the per annum Interest Rate shown above (computed on the
basis of twelve 30-day months and a 360-day year ). The principal
of, premium, if any, and interest on this Note are payable in
lawful money of the United States of America; the principal hereof
and premium, if any, being payable upon presentation and surrender
of this Note at the principal corporate office of the Paying
Agent/Registrar executing the Certificate of Authentication
appearing hereon, or its successor, and the interest hereon to be
payable either (i) by check sent by United States Mail, first class
postage prepaid, to the address of the registered owner hereof
appearing on the registration and transfer books (the "Registra-
tion Books") maintained by the Paying Agent/Registrar or (ii) by
such other method, acceptable to the Paying Agent/ Registrar,
requested by the registered owner hereof, and if registered to
bearer, upon presentation of this Note at the principal corporate
trust office of the Paying Agent/Registrar.
This Note is one of an issue of notes (the "Fixed Rate Notes")
which, together with other forms of short term obligations,
including the below referenced Revolving Credit Note and one or
more Term Notes (such other short term obligations, excluding the
Revolving Credit Note and Term Notes, and the Fixed Rate Notes
being hereinafter collectively referred to as the "Notes"), has
been duly authorized and issued in accordance with the provisions
of an ordinance (the "Ordinance") passed by the City Council of the
City for the purpose of financing Project Costs of Eligible
Projects (as defined in the Ordinance) for the City's combined
Water and Sewer System (the "System"); and to refinance, renew or
14
refund the Notes issued pursuant to the provisions of the
Ordinance; all in accordance with the provisions of Article 717q,
V.A.T.C.S., as amended (the "Act").
This Fixed Rate Note, together with the other Notes, is
payable from and equally secured by a lien on and pledge of (i) the
proceeds from (a) the sale of other Notes issued for such purpose
and (b) the sale of a series or issue of Bonds (as defined in the
Ordinance) to be issued by City for such purpose, (ii) advances
under and pursuant to the Credit Agreement between the City and
The Mitsui Bank, Limited (the "Bank") pursuant to which the Bank
has agreed to provide credit to the City under the terms and
conditions set forth therein, which advances are to be evidenced
by a Revolving Credit Note and, if applicable under the Credit
Agreement, one or more Term Notes (each as defined in said Credit
Agreement) and (iii) amounts in certain funds established pursuant
to the Ordinance.
This Fixed Rate Note, together with the other Notes, is
payable solely from the sources hereinabove identified securing the
payment thereof and the Fixed Rate Notes do not constitute a legal
or equitable pledge, charge, lien or encumbrance upon any other
property of City or the System. The holder hereof shall never have
the right to demand payment of this obligation from any sources or
properties of City except as identified above.
[Insert - Redemption Provisions, if any]
This Fixed Rate Note may be transferred only upon the
Registration Books maintained by the Registrar under the Ordinance
upon surrender thereof at the principal corporate trust office of
the Registrar with an assignment duly executed by the registered
owner or his duly authorized attorney, but only in the manner,
subject to the limitations and upon payment of the charges provided
in the Ordinance, and upon surrender and cancellation of this Fixed
Rate Note. Upon any such transfer, there shall be executed in the
name of the transferee, and the Registrar shall deliver, a new
registered note or notes in the same aggregate principal amount and
maturity and interest rate of the authorized denominations as the
surrendered Fixed Rate Note.
It is hereby certified and recited that all acts, conditions
and things required by law and the Ordinance to exist, to have
happened and to have been performed precedent to and in the
issuance of this Fixed Rate Note, do exist, have happened and have
been performed in regular and in due time, form and manner as
required by law and that the issuance of this Fixed Rate Note,
together with all other Notes, is not in excess of the principal
amount of Notes permitted to be issued under the Ordinance.
15
This Note is and has all the qualities and incidents of a
negotiable instrument under the laws of the State of Texas.
This Fixed Rate Note shall not be entitled to any benefit
under the Ordinance or be valid or become obligatory for any
purpose until this Fixed Rate Note shall have been authenticated
by the execution by the Paying Agent/Registrar of the Certificate
of Authentication hereon.
IN TESTIMONY WHEREOF, the City Council has authorized and
caused this Fixed Rate Note to be executed on its behalf by the
manual or facsimile signature of the Mayor and countersigned by the
manual or facsimile signatures of the City Attorney and City
Secretary and its official seal to be impressed or a facsimile
thereof to be printed hereon.
COUNTERSIGNED:
City Secretary, Mayor,
City of Fort Worth, Texas City of Fort Worth, Texas
APPROVED AS TO FORM AND
LEGALITY:
City Attorney,
City of Dallas, Texas
(SEAL)
PAYING AGENT/REGISTRAR'S
CERTIFICATE OF AUTHENTICATION
This Fixed Rate Note is one of the Fixed Rate Notes delivered
pursuant to the within mentioned Ordinance.
as
Paying Agent/Registrar
By
Authorized Signatory
Registered This Date:
16
,...
(c) Form of Variable Rate Note:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM
VARIABLE RATE NOTE, SERIES A
Note
Number
Note
Date
Maturity Principal
Date Amount
The City of Fort Worth ("City"), in Tarrant and Denton
Counties, State of Texas, FOR VALUE RECEIVED, hereby promises to
pay, solely from the sources hereinafter identified and as
hereinafter stated, to the order of
on the Maturity Date specified above [or on demand (after
business days from the receipt of a written demand for payment as
provided below)] the principal sum specified above and to pay
interest, if any, on said principal amount from the above
specified Note Date to said Maturity Date or the date of payment
pursuant to a demand for payment at the rate per annum (computed
on the basis of actual days elapsed and a 365-day or 366-day year
as applicable) equal to [insert formula or method of calculation
for determining variable or floating rate of interest], such
interest being payable on the day of
Principal of, premium, if any, and interest
on this Note are payable in lawful money of the United States of
America; the principal hereof and premium, if any, being payable
upon presentation and surrender of this Note at the principal
corporate trust office of the Paying Agent/Registrar executing the
Certificate of Authentication appearing hereon, or its successor,
and the interest hereon to be payable either (i) by check sent by
United States Mail, first class postage prepaid, to the address of
the registered owner hereof appearing on the registration and
transfer books (the "Registration Books") maintained by the Paying
Agent/Registrar or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by the registered owner hereof,
and, if registered to bearer, upon presentation of the Note at the
principal corporate office of the Paying Agent/Registrar.
This Note is one of an issue of variable rate notes (the
"Variable Rate Notes") which, together with other forms of short
term obligations, including the below referenced Revolving Credit
Note and one or more Term Notes (such other short term obligations,
excluding the Revolving Credit Note and Term Note, and the Variable
17
Rate Notes being hereinafter collectively referred to as the
"Notes"), has been duly authorized and issued in accordance with
the provisions of an ordinance (the "Ordinance") passed by the City
Council of the City for the purpose of financing Project Costs of
Eligible Projects (as defined in the Ordinance) for the City's
combined Water and Sewer System (the "System"); and to refinance,
renew or refund the notes issued pursuant to the provisions of the
Ordinance; all in accordance with the provisions of Article 717q,
V.A.T.C.S., as amended (the "Act").
This Variable Rate Note, together with the other Notes, is
payable from and equally secured by a lien on and pledge of (i)
the proceeds from (a) the sale of other Notes issued for such
purpose and (b) the sale of a series or issue of Bonds (as defined
in the Ordinance) to be issued by the City for such purpose, (ii)
advances under and pursuant to the Credit Agreement between the
City and The Mitsui Bank, Limited (the "Bank") pursuant to which
the Bank has agreed to provide credit to the City under the terms
and conditions set forth therein, which advances are to be
evidenced by a Revolving Credit Note and, if applicable under the
Credit Agreement, one or more Term Notes (each as defined in the
Agreement), and (iii) amounts in certain funds established pursuant
to the Ordinance.
This Variable Rate Note, together with the other Notes, is
payable solely from the sources hereinabove identified securing the
payment thereof and the Variable Rate Notes do not constitute a
legal or equitable pledge, charge, lien or encumbrance upon any
other property of City or the System. The holder hereof shall
never have the right to demand payment of this obligation from any
sources or properties of City except as identified above.
(Optional Paragraph if Note payable on Demand - Demand for
payment of this Variable Rate Note shall be made in writing to the
City at the office of , , Texas.
(Insert statement of dates or periods on which or in which demand
for payment may be made). Such demand shall be irrevocable. Upon
a demand for payment of this Variable Rate Note being made in
accordance with the provisions hereinabove recited, this Note shall
become due and payable on the business day next following the
receipt of the written demand for payment).
This Variable Rate Note may be transferred only upon the
Registration Books of the Registrar under the Ordinance upon
surrender thereof at the principal corporate trust office of the
Paying Agent/Registrar with an assignment duly executed by the
registered owner or his duly authorized attorney, but only in the
manner, subject to the limitations and upon payment of the charges
provided in the Ordinance, and upon surrender and cancellation of
this Variable Rate Note. Upon any such transfer, there shall be
executed in the name of the transferee, and the Registrar shall
18
deliver, a new registered note or notes in the same aggregate
principal amount, maturity date and interest rate and in the
authorized denominations as the surrendered Variable Rate Note.
[Insert - Redemption Provisions, if any]
It is hereby certified and recited that all acts, conditions
and things required by law and the Ordinance to exist, to have
happened and to have been performed precedent to and ,in the
issuance of this Variable Rate Note, do exist, have happened and
have been performed in regular and in due time, form and manner as
required by law and that the issuance of this Variable Rate Note,
together with all other Notes, is not in excess of the principal
amount of Notes permitted to be issued under the Ordinance.
This Note is and has all the qualities and incidents of a
negotiable instrument under the laws of the State of Texas.
This Variable Rate Note shall not be entitled to any benefit
under the Ordinance or be valid or become obligatory for any
purpose until this Variable Rate Note shall have been authenticated
by the execution by the Paying Agent/Registrar of the Certificate
of Authentication hereon.
IN TESTIMONY WHEREOF, the City Council has authorized and
caused this Variable Rate Note to be executed on its behalf by the
manual or facsimile signature of the Mayor and countersigned by the
manual or facsimile signatures of the City Secretary and City
Attorney, and its official seal to be impressed or a facsimile
thereof to be printed hereon.
COUNTERSIGNED:
City Secretary,
City of Fort Worth, Texas
Mayor,
City of Fort Worth, Texas
APPROVED AS TO FORM AND
LEGALITY:
City Attorney,
City of Fort Worth, Texas
(SEAL)
19
PAYING AGENT/REGISTRAR'S
CERTIFICATE OF AUTHENTICATION
This Variable Rate Note is one of the Variable Rate Notes
delivered pursuant to the within mentioned Ordinance.
as
Paying Agent/Registrar
Registered This Date: By
Authorized Signatory
Section 2.08. Execution - Authentication. The Notes shall
be executed on behalf of the City by the Mayor, approved as to form
and legality by the City Attorney and attested by the City
Secretary under its seal reproduced or impressed thereon, all as
provided in Section 2.07 hereof. The signature of said officers
on the Notes may be manual or facsimile. Notes bearing the manual
or facsimile signatures of individuals who are or were the proper
officers of the City on the date of passage 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 the initial sale and delivery
of Notes authorized to be issued hereunder and with respect to
Notes delivered in subsequent sales, exchanges and transfers, all
as authorized and provided in the Bond Procedures Act of 1981, as
amended (Article 717k-6, V.A.T.C.S.).
No Project Note shall be entitled to any right or benefit
under this Ordinance, or be valid or obligatory for any purpose,
unless there appears on such Project Note a certificate of
authentication substantially in the forms provided in Section 2.07
hereof, executed by the Paying Agent/Registrar by manual signature,
and such certificate upon any Project Note shall be conclusive
evidence, and the only evidence, that such Project Note has been
duly certified or registered and delivered.
Section 2.09. Notes Mutilated, Lost, Destroyed or Stolen.
If any Note shall become mutilated, the City, at the expense of the
Holder of said Note, shall execute and deliver a new Note of like
tenor and number in exchange and substitution for the Note so
mutilated, but only upon surrender to the City of the Note so
mutilated. If any Note shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the
City and, if such evidence be satisfactory to it and indemnity
satisfactory to it shall be given, the City, at the expense of the
owner, shall execute and deliver a new Note of like tenor in lieu
of and in substitution for the Note so lost, destroyed or stolen.
Neither the City nor the Paying Agent/Registrar shall be required
to treat both the original Note and any duplicate Note as being
20
outstanding for the purpose of determining the principal amount of
Notes which may be issued hereunder, but both the original and the
duplicate Note shall be treated as one and the same.
Section 2.10. Negotiability. Registration and
Exchan eability. The obligations issued hereunder shall be, and
shall have all of the qualities and incidents of, a negotiable
instrument under the laws of the State of Texas, and each
successive holder, in accepting any of the obligations, shall be
conclusively deemed to have agreed that such obligations shall be
and have all of the qualities and incidents of a negotiable
instrument under the laws of the State of Texas.
The Registration Books relating to the registration, payment
and transfer or exchange of the Project Notes shall at all times
be kept and maintained by the City at the principal corporate
office of the Registrar, and the Registrar shall obtain, record and
maintain in the Registration Books the name and address of each
registered owner of the Project Notes, except for Project Notes
registered to bearer, issued under and pursuant to the provisions
of this Ordinance, and the Registrar further shall provide such
information to the City as described in Section 2.02 hereof. Any
Project Note may, in accordance with its terms and the terms
hereof, be transferred or exchanged for Project Notes of like tenor
and character and of other authorized denominations upon the
Registration Books by the Holder in person or by his duly
authorized agent, upon surrender of such Project Note to the
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 Registrar.
Upon surrender for transfer of any Project Note at the
principal office of the Registrar, the Registrar shall register and
deliver, in the name of the designated transferee or transferees
(or to bearer, as appropriate), one or more new Project Notes
executed on behalf of, and furnished by, the City of like tenor and
character and of authorized denominations and having the same
maturity, bearing interest at the same rate and of a like aggregate
principal amount as the Project Note or Project Notes surrendered
for transfer.
Furthermore, Project Notes may be exchanged for other Project
Notes of like tenor and character and of authorized denominations
and having the same maturity, bearing the same rate of interest and
of like aggregate principal amount as the Project Notes surrendered
for exchange, upon surrender of the Project Notes to be exchanged
at the principal office of the Registrar. Whenever any Project
Notes are so surrendered for exchange, the Registrar shall register
and deliver new Project Notes of like tenor and character as the
Project Notes exchanged, executed on behalf of, and furnished by,
the City to the Holder requesting the exchange.
21
The City and the Registrar may charge the Noteholder a sum
sufficient to reimburse them for any expenses incurred in making
any exchange or transfer after the first such exchange or transfer.
The Registrar ar the City may also require payment from the Holder
of a sum sufficient to cover any tax, fee or other governmental
charge that may be imposed in relation thereto. Such charges and
expenses shall be paid before any such new Project Note shall be
delivered.
The City and the Paying Agent/Registrar shall not be required
(a) to issue, transfer or exchange any Project Note during a period
beginning at the opening of business on the 15th day next preceding
either any interest payment date of such Project Note or any date
of possible selection of such Project Note or parts thereof to be
redeemed and ending at the close of business on the interest
payment date or day on which the applicable notice of redemption
is given, or (b) to transfer or exchange any Project Note selected,
called or being called for redemption in whole or in part.
New Project Notes delivered upon any transfer or exchange
shall be valid special obligations of the City, evidencing the same
debt as the Project Notes surrendered, shall be secured by this
Ordinance and shall be entitled to all of the security and benefits
hereof to the same extent as the Project Notes surrendered.
The City reserves the right to change the above registration
and transferability provisions of the Project Notes at any time on
or prior to the delivery thereof in order to comply with applicable
laws and regulations of the United States in effect at the time of
issuance thereof.
Section 2.11. Series A Note Payment Fund. There is hereby
created and established with the Issuing and Paying Agent a
separate and special fund to be designated as the "City of Fort
Worth, Texas Water and Sewer System Series A Note Payment Fund"
(the "Series A Note Payment Fund"). Moneys on deposit in the
Series A Note Payment Fund shall be used to pay principal of,
premium, if any, and interest on Project Notes at the respective
interest payment, maturity or redemption dates of each issue of
such Notes as provided herein and the repayment of any Advances and
term loans made pursuant to the Agreement (evidenced by any Bank
Note). Amounts remaining in the Series A Note Payment Fund not
then necessary for the purposes thereof may be transferred to the
Series A Note Construction Account (created pursuant to Section
2.14 hereof) upon request of an Authorized Representative.
Additionally all proceeds of Advances shall be deposited into
the Series A Note Payment Fund and used to pay the principal of,
premium., if any, and interest on the Project Notes.
22
Pending the expenditure of moneys in the Series A Note Payment
Fund for authorized purposes, moneys deposited in said Fund may be
invested at the direction of the Director of Finance or the
designee thereof in Eligible Investments. Any income received from
such investments shall be deposited, as received, into the Revenue
Fund, as hereinafter defined and shall not, for purposes of this
Ordinance, be considered an amount held in the Series A Note
Payment Fund.
Section 2.12. Pledge; Payments. The Notes are special
obligations of the City payable from and secured solely by the
funds pledged therefor pursuant to this Ordinance. The City agrees
to make payments into the Series A Note Payment Fund at such times
and in such amounts as are necessary to provide for the full
payment of the principal"of, premium, if any, and the interest on
the Notes when due.
To provide security for the payment of the principal of and
interest on the Notes and any other amounts due under the Agreement
as the same shall become due and payable, there is hereby granted
a lien on and pledge of, subject only to the provisions of this
Ordinance permitting the application thereof for purposes and on
the terms and conditions set forth herein, (i) the proceeds from
(a) the sale of the Bonds issued for such purpose and (b) the sale
of Project Notes issued pursuant to this Ordinance for such
purpose, (ii) Advances, (iii) the amounts held in the Series A Note
Payment Fund until the amounts deposited therein are used for
authorized purposes, provided, however, amounts in the Series A
Note Payment Fund attributable to and derived from Advances shall
be used only to pay, prior to any application to the payment of the
Bank Note, the principal of and interest on the Project Notes in
full, and (iv) the amounts remaining on deposit in the Series A
Note Construction Account after the payment of all Project Costs,
and it is hereby resolved and declared the principal of and
interest on the Notes and any other amounts due under the Agreement
shall be and are hereby equally and ratably secured by and payable
from a lien on and pledge of the sources hereinabove identified in
clauses (i), (ii), (iii) and (iv) subject and subordinate only to
the exceptions noted therein. Additionally, to provide security for
the payment of the principal of and interest on the Bank Note and
other amounts due under the Agreement as the same shall become due
and payable, there is hereby granted a lien on and pledge of,
subject only to the provisions of this Ordinance permitting the
application thereof for purposes and on the terms and conditions
set forth herein, the Pledged Revenues, such lien on and pledge of
Pledged Revenues to the Bank Notes and other amounts due under the
Agreement, however, being subordinate only to the lien and pledge
of the Pledged Revenues securing the payment of Prior Lien
Obligations. Unless a Bank Note is paid from the proceeds of
Project Notes or Bonds issued for such purposes, or amounts
available in the Series A Note Payment Fund or the Series
23
A Note Construction Fund, all as described above, such payments are
to be made from Pledged Revenues on deposit in the "Bank Note
Account" in accordance with Section 4.04 hereof.
Section 2.13. Application of Prior Covenants. The covenants
and agreements (to the extent the same are not inconsistent
herewith) contained in the Prior Lien Bond Ordinance are hereby
incorporated herein and shall be deemed to be for the benefit and
protection of the Bank Notes and the Holder thereof in like manner
as applicable to the Prior Lien Bonds, provided, however, in the
event of any conflict between the terms, covenants and agreements
contained herein and the terms, covenants and agreements contained
in the Prior Lien Bond Ordinance, the provisions of the Prior Lien
Bond Ordinance shall control over the provisions hereof.
Section 2.14. Series A Note Construction Account. There is
hereby created and established a separate account hereby designated
as the "City of Fort Worth, Texas Water and Sewer System Series A
Note Construction Account" (the "Series A Note Construction
Account"). The Series A Note Construction Account shall be held
by the City with a depository of the City. Moneys deposited in the
Series A Note Construction Account shall remain therein until from
time to time expended to pay for Project Costs, and shall not be
used for any other purposes whatsoever, except as otherwise
provided below, and pending such expenditure, moneys in said
Account may be invested at the direction of the Director of Finance
or the designee thereof in Eligible Investments. Any income
received from such investments (except as otherwise required to be
rebated to the United States of America in accordance with the
provisions of Section 4.08 hereof) shall be deposited, as received,
into the Revenue Fund and shall not, for purposes of this
ordinance, be considered an amount held in the Series A Note
Construction Account.
Any amounts on deposit in the Series A Note Construction
Account designated by an Authorized Representative as eligible to
pay interest during construction and thereafter may be transferred
from time to time at the direction of an Authorized Representative
to' the credit of the Series A Note Payment Fund for use in
accordance with the terms of Sectioa 2.11 hereof. Any amounts
remaining in the Series A Note Construction Account after the
payment of all Project Costs shall be paid into the Series A Note
Payment Fund and used for the payment of such maturities of the
Project Notes coming due at such times as may be selected by an
Authorized Representative or for the payment of the Bank Notes, as
the case may be . In the event no Project Notes are outstanding
and there are no outstanding Advances, any amounts in the Series
A Note Construction Account not anticipated to be needed to pay
Project Costs shall be transferred to the Interest and Sinking Fund
established by the Prior Lien Bond Ordinance or the debt service
fund to be established for the payment of the Bonds, when issued.
24
Section 2.15. Cancellation. All Project Notes which at
maturity are surrendered to the Paying Agent/Registrar for the
collection of the principal and interest thereof or are surrendered
for transfer or exchange pursuant to the provisions hereof shall,
upon payment or issuance of new Project Notes, be cancelled by the
Paying Agent/Registrar, and the Paying Agent/Registrar forthwith
shall transmit to the City a certificate identifying such Project
Notes and that such Project Notes have been duly cancelled and
destroyed.
Section 2.16. Fiscal and Other Agents. In furtherance of the
purposes of this Ordinance, the City may from time to time appoint
and provide for the payment of such additional fiscal, paying or
other agents or trustees as it may deem necessary or appropriate
in connection with the Notes.
Section 2.17. Credit Agreement. The Agreement, substantially
in the form attached hereto as Exhibit A, is hereby approved, and
shall be entered into with the Bank. The forms of the Revolving
Credit Note and the Term Note contained in the Agreement are also
approved, including the interest rate to be determined as set forth
therein. Upon the approval thereof by the City Attorney, whose
approval shall be evidenced by executing the Agreement, the City
Manager is hereby authorized to execute and deliver the Agreement
and any other documents called for thereunder, the Mayor is hereby
authorized to execute and deliver any Bank Note, and the City
Secretary is authorized to place the City seal on such instruments.
In addition, in the event that the "Commitment" (as defined in the
Agreement) is increased by the Bank to enable the City to issue and
have at any one time outstanding Project Notes in an, amount in
excess of $50,000,000, but no greater than $75,000,000, upon (i}
the approval by the City Attorney of any amendment to the Agreement
evidencing such an increase in the amount of the Commitment the
City Manager is hereby authorized to execute and deliver said
amendment, and the City Secretary is authorized to place the City
seal on such amendment, without further action being taken by this
City Council and (ii) the delivery to the Bank and the Dealer of
an approving opinion of Bond Counsel governing the issuance of
Project Notes in excess of $50,000,000, addressing the matters
described in the first sentence of Section 4.10 hereof.
Section 2.18. Funds Secured. That moneys in all such Funds,
to the extent not invested as permitted hereunder, shall be secured
in the manner prescribed by law for securing funds of the City.
25
ARTICLE III
ISSIIE AND SALE OF NOTES
Section 3.01. Issuance and Sale of Notes. (a) The Commercial
Paper Notes shall be completed and delivered by the Issuing and
Paying Agent in accordance with telephonic, computer or written
instructions of the Director of Finance or the designee thereof and
in the manner specified below and in the Issuing and Paying Agent
Agreement. To the extent such instructions are not written, they
shall be confirmed in writing by the Director of Finance or the
designee thereof within 24 hours. Said instructions shall specify
such principal amounts, dates of issue, maturities, rates of
discount or interest, and other terms and conditions which are
hereby authorized and permitted to be fixed by the Director of
Finance or the designee thereof at the time of sale of the
Commercial Paper Notes. Such instructions shall include the
purchase price of the Commercial Paper Notes, and a request that
the Issuing and Paying Agent authenticate such Commercial Paper
Notes by counter signature of its authorized officer or employee
and deliver them to the named purchaser or purchasers thereof upon
receipt of payment in accordance with the custom then prevailing
in the New York financial market in regard to such Commercial Paper
Notes. The rules of the New York Clearinghouse shall apply
thereto. Such instructions shall also contain provisions
representing that all action on the part of the City necessary for
the valid issuance of the Commercial Paper Notes then to be issued
has been taken, that all provisions of Texas and federal law
necessary for the valid issuance of such Commercial Paper Notes
with provision for interest exemption from federal income taxation
have been complied with, and that such Commercial Paper Notes in
the hands of the Holders thereof will be valid and enforceable
obligations of the City according to their terms, subject to the
exercise of judicial discretion in accordance with general
principles of equity and bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
heretofore or hereafter enacted to the extent constitutionally
applicable and that, based upon the advice of Bond Counsel, the
stated interest on the Commercial Paper Notes is exempt from
federal income taxation. Such instructions shall also certify
that:
(i) no Event of Default under Section 5.01 hereof has
occurred and is continuing as of the date of such Certificate;
(ii) the City is in compliance with the covenants set forth
in Article IV hereof as of the date of such instructions;
26
(iii) the City has been advised by Bond Counsel that the
projects to be financed with the proceeds of the Commercial Paper
Notes will constitute Eligible Projects, and, further, that the
proposed expenditure of the proceeds of such Commercial Paper Notes
for such projects will not cause the City to be in violation of its
covenants set forth in Section 4.08 hereof; and
(iv) the sum of the interest payable on such Commercial Paper
Note will not exceed a yield (calculated on the principal amount
of the .Commercial Paper Note on the basis of a 365-day or 366-day,
as may be applicable, year and actual number of days elapsed) to
the maturity date of such Commercial Paper Note in excess of the
Maximum Interest Rate in effect on the date of issuance of such
Commercial Paper Note.
(b) The Revolving Credit Note shall be or has been delivered
to the Bank and indebtedness may be incurred thereunder in
accordance with the terms of the Agreement.
(c) Variable Rate Notes and Fixed Rate Notes shall be issued
and sold at public or private sale in the same manner provided for
the issuance and sale of Commercial Paper Notes in subsection (a)
of this Section 3.01.
Section 3.02. Proceeds of Sale of Project_Notes. The
proceeds of the sale of any Project Notes (net of all expenses and
costs of sale and issuance) shall be applied for any or all of the
following purposes as directed by an Authorized Representative:
(i) Proceeds to be used for the payment and redemption of
outstanding Project Notes at or before maturity and the repayment
of any borrowings (evidenced by any Bank Note) or other amounts
due under the Agreement shall be retained in the Series A Note
Payment Fund, and expended therefor; and
(ii) Proceeds not retained in the Series A Note Payment Fund
as provided in subparagraph (i) above shall be transferred and
deposited to the Series A Note Construction Account and used and
applied in accordance with the provisions of Section 2.14 hereof.
Section 3.03. Issuing, and Paying Agent Agreement. The
Issuing and Paying Agent Agreement by and between the City and the
Issuing and Paying Agent, relating to the Commercial Paper Notes,
attached hereto as Exhibit B, is hereby approved as to form and
content and, upon the approval thereof by the City Attorney, whose
approval shall be evidenced by executing the Issuing and Paying
Agent Agreement, the City Manager is hereby authorized and directed
to execute the same for and on behalf of the City and the City
Secretary is authorized to place the City seal on such instrument.
The City Manager is hereby authorized to enter into any
supplemental agreements with the Issuing and Paying Agent or with
27
any successor Issuing and Paying Agent in order to implement the
functions of Paying Agent/Registrar or Registrar with respect to
the Project Notes.
Section 3.04. Dealer Agreement. The Dealer Agreement in the
form attached hereto as Exhibit C with Shearson Lehman Hutton Inc.
(the "Dealer") pertaining to the sale, from time to time, of
Commercial Paper Notes or the purchase of Commercial Paper Notes
from the City, all for a fee as set forth in said Dealer Agreement,
is hereby approved as to form and content and, upon the approval
thereof by the City Attorney, whose approval shall be evidenced by
executing said Dealer Agreement, the City Manager is hereby
authorized and directed to execute the same for and on behalf of
the City and the City Secretary is authorized to place the City
seal on such instrument.
ARTICLE IV
COVENANTS OF T8E CITY
Section 4.01. Limitation on Issuance. Unless this Ordinance
is amended and modified by the City Council and in accordance with
the provisions of Section 6.01 hereof, the City covenants that
there will not be issued and outstanding at any time under this
Ordinance more than $75,000,000 in principal amount of Project
Notes. For purposes of this Section 4.01 any portion of
outstanding Project Notes to be paid on a particular day from
moneys on deposit in the Series A Note Payment Fund and available
proceeds of Notes or Bonds shall not be considered outstanding on
such day.
Additionally, the City covenants and agrees that the total
principal amount of all Project Notes outstanding at any one time
and the total amount of interest accrued or to accrue thereon shall
not exceed the "Commitment" (as defined in the Agreement).
Section 4.02. Rates and Charges. The City hereby agrees and
reaffirms its covenants to the holders of the Prior Lien Bonds and
covenants to the Holder of the Bank Note that it will at all times
maintain rates and charges for the services furnished, provided,
and supplied by the System which shall comply with the provisions
of the Prior Lien Bond Ordinance, be reasonable and non-
discriminatory and produce income and revenues sufficient to pay:
(a) all maintenance and operating expenses,
depreciation, replacement and betterment expenses and other
costs as may be required by law (including specifically
Article 1113, V.A.T.C.S.);
28
(b) the interest on and principal of all Prior Lien
Bonds, as and when the same shall become due, and to maintain
the Funds and Accounts created and established for the payment
and security of the Prior Lien Bonds;
(c) to the extent the same are reasonably anticipated
to be paid with Pledged Revenues, the interest on and
principal of the Bank Notes and other amounts due the Bank
under the Agreement, as and when the same shall become due;
and
(d) any legal debt or obligation of the System as and
when the same shall become due.
Section 4.03. Revenue Fund. Pursuant to Section 2.13 hereof,
the City hereby reaffirms its covenant to the holders of the Prior
Lien Bonds, and hereby covenants with respect to the Holder of the
Bank Notes, that all Gross Revenues shall be deposited as received
in the "City of Fort Worth, Texas Water and Sewer System Revenue
Fund" (hereinafter referred to as "Revenue Fund"), which shall be
kept separate and apart from all other funds of the City. Revenues
received for the Revenue Fund shall be deposited from time to time
as received in such bank or banks as may be selected by the City
in accordance with applicable laws relating to the selection of
City depositories.
Section 4.04. Prioritv of DeDOSits and Payments From Revenue
Fund. The City shall make the deposits and payments from the Net
Revenues in the Revenue Fund when and as required by the Prior Lien
Bond Ordinance and such deposits shall be made in the order and
with the priorities set forth in the Prior Lien Bond Ordinance.
There is hereby created and there shall be established and
maintained a separate account within the "Interest and Sinking
Fund" created by the Prior Lien Bond Ordinance to be known as the
"Bank Note Account" for the sole benefit of the Bank Notes. After
satisfying the requirements of the Prior Lien Bond Ordinance with
respect to payment of principal, premium, if any, and interest on
the Prior Lien Bonds and the respective reserve fund requirements
therefor, there shall be deposited by the City to the Bank Note
Account the amounts required by Section 2.12 hereof for the payment
of the Bank Notes.
Section 4.05. Maintenance of Available Credit Facilities
Requirement. The City agrees and covenants that at all times up
to and including the Maximum Maturity Date, unless the Project
Notes are no longer outstanding it will maintain credit facilities
with banks in amounts such that, assuming that all then outstanding
Project Notes were to become due and payable immediately, the
amount available for borrowing under the credit facilities would
be sufficient at that time to pay principal and interest of all
Project Notes. No Project Note shall be issued which if, after
giving effect to the issuance thereof and, if applicable, the
29
immediate application of the proceeds thereof to retire other
Project Notes secured by the credit facility, the aggregate
principal amount of all Project Notes secured by the credit
facility would exceed the amount of the credit commitment under the
credit facility. The availability for borrowing of such amounts
under the credit facilities may be subject to reasonable conditions
precedent, including but not limited to, bankruptcy of the City.
In furtherance of the foregoing covenant, the City agrees that it
will not issue any Project Notes or make any borrowings which will
result in a violation of such covenant, will not amend the
Agreement in a manner which will cause a violation of such covenant
and, if and to the extent necessary to maintain compliance with
such covenant, will arrange for new credit facilities prior to, or
contemporaneously with, the expiration of the Agreement.
Section 4.06. Bonds. The City hereby acknowledges that the
Project Notes are being issued as bond anticipation notes, and
therefore the City in good faith shall endeavor to sell a
sufficient principal amount of the Bonds in order to have funds
available, together with other moneys available therefor, to pay
the Notes and the interest thereon, or any renewals thereof, as the
same shall become due and other amounts due under the Agreement.
Section 4.07. Punctual. Payment. The City will punctually pay
or cause to be paid the principal of and interest, if any, on the
Notes (but only from the sources pledged herein), in conformity
with the Notes, this Ordinance and the Agreement.
Section 4.08. -Notes to Remain Tax Exempt. The City covenants
to take any action to assure, or refrain from any action which
would adversely affect, the treatment of the Project Notes as
obligations described in section 103 of the Code, the interest on
which is not includable in the "gross income" of the holder for
purposes of federal income taxation. In furtherance thereof, the
City covenants as follows:
(a) to take any action to assure that no more than 10
percent of the proceeds of the Project Notes (less amounts
deposited to a reserve fund, if any) are used for any "private
business use", as defined in section 141(b) (6) of the Code or,
if more than 10 percent of the proceeds are so used, that
amounts, whether or not received by the City, with respect to
such private business use, do not, under the terms of this
Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10
percent of the debt service on the Project Notes, in
contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that
the "private business use" described in subsection (a) hereof
exceeds 5 percent of the proceeds of the Project Notes (less
amounts deposited into a reserve fund, if any). then the amount
30
in excess of 5 percent is used for a "private business use"
which is "related" and not "disproportionate", within the
meaning of section 141(b)(3) of the Code, to the governmental
use;
(c) to take any action to assure that no amount which
is greater than the lesser of $5,000,000, or 5 percent of the
proceeds of the Project Notes (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to
finance loans to persons, other than state or local
governmental units, in contravention of section 141(c) of the
Code;
(d) to refrain from taking any action which would
otherwise result in the Project Notes being treated as
"private activity bonds" within the meaning of section 141(b)
of the Code;
(e) to refrain from taking any action that would result
in the Project Notes being "federally guaranteed" within the
meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds
of the Project Notes, directly or indirectly, to acquire or
to replace funds which were used, directly or indirectly, to
acquire investment property (as defined in section 148(b)(2)
of the Code) which produces a materially higher yield over the
term of the Project Notes, other than investment property
acquired with --
(1) proceeds of the Praject Notes invested for a
reasonable temporary period of 3 years or less until such
proceeds are needed for the purpose for which the
Obligations are issued,
(2) amounts invested in a bona fide debt service
fund, within the meaning of section 1.103-13(b)(12) of
the Treasury Regulations, and
(3) amounts deposited in any reasonably required
reserve or replacement fund to the extent such amounts
do not exceed 10 percent of the proceeds of the Project
Notes;
(g} to otherwise restrict the use of the proceeds of the
Project Notes or amounts treated as proceeds of the Project
Notes, as may be necessary, so that the Project Notes do not
otherwise contravene the requirements of section 148 of the
Code (relating to arbitrage) and, to the extent applicable,
section 149(d) of the Code (relating to advance refundings);
31
(h) to pay to the United States of America at least once
during each five-year period (beginning on the date of
delivery of the Project Notes) an amount that is at least
equal to 90 percent of the "Excess Earnings", within the
meaning of section 148 (f ) of the Code and to pay to the United
States of America, not later than 60 days after the Project
Notes have been paid in full, 100 percent of the amount then
required to be paid as a result of Excess Earnings under
section 148(f) of the Code;
(i) to maintain such records as will enable the City to
fulfill its responsibilities under this section and section
148 of the Code and to retain such records for at least six
years following the final payment of principal and interest
on the Project Notes; and
(j) to execute and deliver to the Issuing and paying
Agent a No-Arbitrage Certificate in the form prescribed by
Bond Counsel in connection with the first issuance of the
Project Notes, and that in connection with each subsequent
issuance of Project Notes, to execute and deliver to the
Issuing and. Paying Agent a confirmation that the facts,
estimates, circumstances and reasonable expectations contained
therein continue to be accurate as of such issue date.
The City represents and covenants that it will not expend, or
permit to be expended, the proceeds of any Project Notes in any
manner inconsistent with its reasonable expectations as certified
in the No-Arbitrage Certificates to be executed from time to time
with respect to the Project Notes; provided, however, that the City
may expend Project Note proceeds in any manner if the City first
obtains an unqualified opinion of Bond Counsel that such
expenditure will not impair the exemption from federal income
taxation of interest paid on the Project Notes. The City
represents that it has not been notified of any listing or proposed
listing by the Internal Revenue Service to the effect that it is
an issuer whose arbitrage certifications may not be relied upon.
It is the understanding of the City that the covenants
contained herein are intended to assure compliance with the Code
and any regulations or rulings promulgated by the U.S. Department
of the Treasury pursuant thereto. In the event that regulations
or rulings are hereafter promulgated which modify, or expand
provisions of the Code, as applicable to the Project Notes, the
City will not be required to comply with any covenant contained
herein to the extent that such modification or expansion, in the
opinion of Bond Counsel, will not adversely affect the exemption
from federal income taxation of interest on the Project Notes under
section. 103 of the Code. In the event that regulations or rulings
are hereafter promulgated which impose additional requirements
which are applicable to the Project Notes, the City agrees to
comply with the additional requirements to the extent necessary,
32
in the opinion of Bond Counsel, to preserve the exemption from
federal income taxation of interest on the Project Notes under
section 103 of the Code.
Section 4.09. Supplemental Ordinances. Other than as
permitted herein with respect to the issuance of additional
obligations of the City secured by the Net Revenues of the System,
the City will not adopt any supplemental ordinances with respect
to the Pledged Revenues of the System, pursuant to the Prior Lien
Bond Ordinance or otherwise, without the consent of the Bank.
Section 4.10. Opinion of Bond Counsel. The City shall cause
the legal opinion of Bond Counsel as to the validity of the Notes
and as to the exemption of interest on the Notes from federal
income taxation to be furnished to any Noteholder without cost.
In addition, a copy of said opinion may be printed on each of the
Project Notes. In addition, in connection with the annual updating
of the Offering Memorandum (as provided in accordance with Section
6.08 hereof) as required by the Dealer Agreement, there shall be
provided an annual updated opinion of Bond Counsel, at the cost of
the City or the Dealer as agreed to in the Dealer Agreement.
Section 4.11. Compliance With Prior Lien Bond Ordinance and
Other Documents. The City will comply with the terms and
provisions of the Prior Lien Bond Ordinance and any other ordinance
or contract to which the City is a party, the non-compliance with
which would materially adversely affect the ability of the City to
make payments on the Notes when due.
Section 4.12. Reservation of Right to Issue Prior Lien Bonds
and Obligations of Inferior Lien. In accordance with Section 4.09
hereof, the City hereby expressly reserves the right to hereafter
issue Prior Lien Bonds in accordance with the provisions of the
Prior Lien Bond Ordinance, payable from and secured by a lien on
and pledge of the Pledged Revenues of the System prior in right and
claim to the lien and pledge securing the payment of the Bank
Notes. In accordance with Section 4.09 hereof, the City also
retains the right to issue bonds, notes, or other evidences of
indebtedness or to incur contractual obligations secured by a lien
on and pledge of the Pledged Revenues of the System junior and
subordinate to the lien and pledge securing the Bank Notes,
including, without limitation, indebtedness on a parity with the
Subordinate Lien Bonds.
33
~.
ARTICLE V
EVENTS OF DEFAIILT AND REMEDIES OF NOTEHOLDERS
Section 5.01. Events of Default. If one or more of the
following events shall occur, that is to say:
(a) if default shall be made in the due and punctual
payment of any installment of principal of any Project Note
when and as the same shall become due and payable, whether at
maturity as therein expressed, by declaration or otherwise;
(b) if the City shall fail to make due and punctual
payment of any installment of interest on any Project Note
when and as such interest installment shall become due and
payable and such failure shall continue for 5 Business Days;
(c) if the principal of any Bank Note (and interest
accrued thereon) shall become due and payable prior to the
maturity thereof under such Bank Note and the Agreement;
(d) if default shall be made by the City in the
performance or observance of any other of the covenants,
agreements or conditions on its part in this Ordinance or in
the Project Notes contained, and such default shall continue
for a period of sixty (60) days after written notice thereof;
provided, however, if such default cannot be cured within the
sixty (60) day period but corrective action to cure such
default is commenced and diligently pursued until the default
is corrected no such Event of Default shall be deemed to have
occurred;
(e) if there shall occur the dissolution (without a
successor being named to assume the rights and obligations)
or liquidation of the City or the filing by the City of a
voluntary petition in bankruptcy, or adjudication of the City
as a bankrupt, or assignment by the City for the benefit of
its creditors, or the entry by the City into an agreement of
composition with its creditors, or the approval by a court of
competent jurisdiction with its creditors, or the approval by
a court of competent jurisdiction of a petition applicable to
the City in any proceeding for its reorganization instituted
under the provisions of the Bankruptcy Code, as amended, or
under any similar act in any jurisdiction which may now be in
effect or hereafter enacted; or
(f) if an order or decree shall be entered, with the
consent or acquiescence of the City, appointing a receiver or
receivers of the System, or any part thereof, or of the rents,
fees, charges or other revenues therefrom, or if such order
34
~.
or decree, having
acquiescence of the
or stayed within 90
been entered without the consent or
City shall not be vacated or discharged
days after the entry thereof;
then such event as described above shall constitute an "Event of
Default" under this Ordinance.
Section 5.02. Suits at Law or in Equity and Mandamus. In
case one or more Events of Default shall occur, then and in every
such case the Holder of any Note at the time outstanding shall be
entitled to proceed to protect and enforce such H`older's rights by
such appropriate judicial proceeding as such Holder shall deem most
effectual to protect and enforce any such right, either by suit in
equity or by action at law, whether for the specific performance
of any covenant or agreement contained in this Ordinance, or in aid
of the exercise of any power granted in this Ordinance, or to
enforce any other legal or equitable right vested in the Holders
of Notes by this Ordinance or the Notes or by law. The provisions
of this Ordinance shall be a contract with each and every Holder
of Notes and the duties of the City shall be enforceable by any
Noteholder by mandamus or other appropriate suit, action or
.proceeding in any court of competent jurisdiction.
Section 5.03. Remedies Not Exclusive. No remedy herein
conferred upon or reserved to the Holders of Notes is intended to
be exclusive of any other remedy, and every such remedy shall be
cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing, at law or in equity or by
statute or otherwise, and may be exercised at any time or from time
to time, and as often as may be necessary, by the Holder of any one
or mare of the Notes.
ARTICLE ~I
MISCELLANEOIIS
Bection 6.01. Amendments or Modifications Without Consent of
Holders of Notes. This Ordinance and the rights and obligations
of the City and of the Holders of Notes may be modified or amended
at any time by a supplemental ordinance, without notice to or the
consent of any Noteholders, but only to the extent permitted by
law, and, subject to the rights of the holders of the Notes, only
for any one or more of the following purposes --
(1) to add to the covenants and agreements of the City
in this Ordinance contained, other covenants and agreements
thereafter to be observed, or to surrender any right or power
herein reserved to or conferred upon the City;
35
(2) to cure any ambiguity or inconsistency, or to cure
or correct any defective provision contained in this
Ordinance, upon receipt by the City of an approving opinion
of Bond Counsel selected by the City, that the same is needed
for such purpose, and will more clearly express the intent of
this Ordinance; or
(3) to supplement the security for the Notes, replace
or provide additional credit facilities, or change the form
of the Notes or make such other changes in the provisions
hereof as the City may deem necessary or desirable and which
shall not materially adversely affect the interests of the
Holders of the Notes;
provided, however, that nothing herein contained shall permit or
be construed to permit the amendment of the terms and conditions
of this Ordinance or of the Project Notes so as to:
(1) Make any change in the maturity of any of the
outstanding Project Notes;
(2) Reduce the rate of interest borne by any of the
outstanding Project Notes;
(3) Reduce the amount of the principal payable on any
of the outstanding Project Notes;
(4) Modify the terms of payment of principal of or
interest on the outstanding Project Notes, or impose any
conditions with respect to such payment;
(5) Affect the rights of the Holders of less than all
of the outstanding Project Notes; or
(6) Reduce or restrict the pledge made pursuant to
Section 2.12 hereof for payment of the Project Notes;
and provided, further, that no change, modification or amendment
shall be made in this Ordinance or become valid and effective
without the approval of such change, modification or amendment by
the Attorney General of the State of Texas, to the extent required
by the Act and without the consent of the Bank.
Section 6.02. Additional Actions. The Mayor, the City
Manager, the City Secretary, the Authorized Representatives and the
other officers of the City are hereby authorized and directed,
jointly and severally, to do any and all things and to execute and
deliver any and all documents which they may deem necessary or
advisable in order to consummate the issuance, sale and delivery
of the Notes and otherwise to effectuate the purposes of this
Ordinance, the Agreement, the Dealer Agreement, the Offering
Memorandum and the Issuing and Paying Agent Agreement.
36
Specifically, by the adoption of this Ordinance, the City Council
hereby authorizes the payment of the fees and expenses incurred and
to be paid by the City in connection with the issuance, sale and
delivery of the Notes and the execution and delivery of the
Agreement, the Dealer Agreement and the Issuing and Paying Agent
Agreement.
Section 6.03. Ordinance to Constitute a Contract; Equal
Security. In consideration of the acceptance of the Notes, the
issuance of which is authorized hereunder, by those who shall hold
the same from time to time, this Ordinance shall be deemed to be
and shall constitute a contract between the City and the Holders
from time to time of the Notes and the pledge made in this
Ordinance by the City and the covenants and agreements set forth
in this Ordinance to be performed by the City shall be for the
equal and proportionate benefit, security and protection of all
Holders of the Notes, without preference, priority or distinction
as to security or otherwise of any of the Notes authorized
hereunder over any of the others by reason of time of issuance,
sale or maturity thereof or otherwise for any cause whatsoever,
except as expressly provided in or permitted by this Ordinance or,
with respect to the Bank Notes, the Agreement.
Section 6.04. Severability of Invalid Provisions. If any one
or more of the covenants, agreements or provisions herein contained
shall be held contrary to any express provisions of law or contrary
to the policy of express law, though not expressly prohibited, or
against public policy, or shall for any reason whatsoever be held
invalid, then such covenants, agreements or provisions shall be
null and void and shall be deemed separable from the remaining
covenants, agreements or provisions and shall in no way affect the
validity of any of the other provisions hereof or of the Notes
issued hereunder.
Section 6.05. Payment and Performance on Business Davs.
Whenever under the terms of this Ordinance or the Project Notes,
the performance date of any provision hereof or thereof, including
the payment of principal of or interest on the Project Notes, shall
occur on a day other than a Business Day, then the performance
thereof, including the payment of principal of and interest on the
Project Notes, need not be made on such day but may be performed
or paid, as the case may be, on the next succeeding Business Day
with the same force and effect as if made on the date of
performance or payment.
Section 6.06. Defeasance. If, when all or any portion of the
Project Notes shall have become due and payable in accordance with
their terms or otherwise as provided in this Ordinance, the entire
principal and interest so due and payable upon said Project Notes
shall be paid, or if at or prior to the date said Project Notes
have become due and payable, sufficient moneys or direct
obligations of, or obligations guaranteed by, the United States of
37
America the principal of and interest on which will provide
sufficient moneys for such payment, shall be held in trust by the
Issuing and Paying Agent and provision shall also be made for
paying all other sums payable hereunder by the City with respect
to said Project Notes, the pledge herein created with respect to
said Project Notes shall thereupon cease, terminate and become
discharged and said Project Notes shall no longer be deemed
outstanding for purposes of this Ordinance and all the provisions
of this Ordinance relating to the Project Notes, including all
covenants, agreements, liens and pledges made herein for the
benefit thereof, shall be deemed duly discharged, satisfied and
released.
Section 6.07. Limitation of Benefits with Respect to the
Ordinance. With the exception of the rights or benefits herein
expressly conferred, nothing expressed or contained herein or
implied from the provisions of this Ordinance or the Notes is
intended or should be construed to confer upon or give to any
person other than the City, the Holders of the Notes, the Issuing
and Paying Agent/Registrar and the parties to the Dealer Agreement
and the Agreement, any legal or equitable right, remedy or claim
under or by reason of or in respect to this Ordinance or any
covenant, condition, stipulation, promise, agreement or provision
herein contained. This Ordinance and all of the covenants, condi-
tions, stipulations, promises, agreements and provisions hereof are
intended to be and shall be for and inure to the sole and exclusive
benefit of the City, the Holders of the Notes, the Issuing and
Paying Agent/Registrar and the parties to the Dealer Agreement and
the Agreement as herein and therein provided.
Section 6.08. Use of Offering Memorandum.. The use by the
Dealer of the Offering Memorandum, substantially in the form
attached hereto as Exhibit D, prepared by the Dealer in connection
with the sale of Commercial Paper Notes, and the distribution of
the Offering Memorandum by the Dealer, is hereby approved and
authorized.
Section 6.09. Approval of Attorney General. No Notes herein
authorized to be issued shall be sold or delivered by an Authorized
Representative until the Attorney General of the State of Texas
shall have approved this Ordinance, the Agreement and other
agreements and proceedings as may be required in connection
therewith, all as is required by the Act.
Section 6.10. Preamble. The preamble to this Ordinance shall
be considered an integral part of this Ordinance, and is herein
incorporated as part of the body of this Ordinance for all
purposes.
38
Section 6.11. Immediate Effect. This Ordinance shall be
effective immediately from and after its passage in accordance with
the provisions of Section 2 of Chapter 25 of the City Charter, and
it is accordingly so ordained.
ADOPTED this 8th day of March, 1
Mayor
ATTEST:
Cit Secretary
(SEAL
A ROVED AS T O D I,~GALITY:
City Attorney
s ''
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1
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39
R&W DRAFT
3/7/90
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
CREDIT AGREEMENT
between
CITY OF FORT WORTH, TEXAS
and
THE MITSUI BANK, LIMITED
Dated as of March _, 1990
relating to
City of Fort Worth, Texas
Water and Sewer System
Commercial Paper Notes, Series A
TABLE OF CONTENTS
PAGE
RECITALS 1
§ 1. Certain Definitions. 1
§ 2. Credit Facility. 7
A. The Commitment 7
B. Use of Proceeds. 7
C. Manner of Borrowing. 7
D. Disbursement of Advances 8
,E. Revolving Credit Note. 8
F. Repayment of Principal; Conversion to Term Loan. 8
G. Payment of Interest. 9
H . Prepayment 10
§ 3 . Fees ; Payments ; Etc . 10
A. Fees. 10
B. Payments 10
C. Extension of Payments. 11
D. Computation of Interest and Fees 11
E. Reduction of the Commitment. 11
F. Extension of Final Date. 11
G . Bank Records 12
H. Change in Law. 12
§ 4. Conditions Precedent 13
A. Initial Conditions Precedent 13
B. Conditions Precedent to Each
Credit Event 14
C. No-Issuance Notices. 14
§ 5. Representations and Warranties 15
A. Organization 15
B. Authorization of Agreement and Related
Documents . 15
C. Compliance of Agreement and Related Documents. 15
D. Regulatory Approvals 15
E. Compliance with Law and Related Documents 16
F. Financial Statements 16
G. Litigation 16
H. Accuracy and Completeness of Other Information 16
I. Pledged Property 16
J . No Usury .. 17
- i -
§ 6 . Affirmative Covenants . 17
A. Maintenance of Existence 17
B. Related Documents 17
C. Inspection of Books. 17
D. Reporting Requirements 17
E. Notice of Certain Events 18
F. Compliance with Laws, Etc. 18
G. Further Assurance. 18
H. Maintenance of Issuing and Paying Agent. 18
§ 7. Negative Covenants 18
A. Other Agreements 19
B. Related Documents. 19
C. Additional Liens. 19
D. Total Outstandings 19
§ 8. Events of Default. 19
§ 9. Miscellaneous. 21
A. Notices. 21
B. Survival of Covenants; Successors and Assigns. 22
C. Indemnification. 22
D. Expenses and Taxes 23
E. Right of Setoff. 23
F. Applicable Law 24
G. No Waiver. 24
H. Modification, Amendment, Waiver, Etc. 24
I Dealings with the City, the Issuing and
Paying Agent and/or the Dealer 24
J. Severability 24
K. Counterparts 24
L. Table of Contents; Headings. 25
M. Special Obligation 25
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Revolving Credit Note
EXHIBIT C - Form of Term Note
- ii -
CREDIT AGREEMENT dated as of March _, 1990 between
the CITY OF FORT WORTH, TEXAS (the "City"), and THE MITSUI BANK,
LIMITED, a banking corporation organized under the laws of Japan
(the "Bank").
W I T N E S S E T H•
WHEREAS, the City intends to issue its Commercial
Paper Notes for the purpose of obtaining interim financing for
additions, improvements and extensions to the City's combined
water and sewer system. The aggregate principal amount of such
notes that may be outstanding at any one time shall not exceed
$50,000,000;
WHEREAS, the City has requested the Bank to provide
it with a line of credit which may be utilized by the City in
the event it is unable to issue Commercial Paper Notes; and
WHEREAS, the Bank is willing to provide such line of
credit upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and
covenants herein contained, the parties hereto agree as follows:
§ 1. CERTAIN DEFINITIONS. As used herein, the
following terms shall have the following respective meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Act" shall mean Article 717q, V.A.T.C.S., as amended.
"Advance" shall mean each Advance made or deemed made
by the Bank to the City pursuant to this Agreement.
"Agreement" shall mean this Credit Agreement as
amended, modified or supplemented from time to time, in
accordance with the provisions hereof.
"Applicable Law" shall mean all applicable provisions
of all constitutions, statutes, rules, regulations, ordinances
and orders of all governmental and non-governmental bodies,
including, without limitation, the Act, all Governmental
Approvals and all orders, judgments and decrees of all courts
and arbitrators of competent jurisdiction. Whenever the
Applicable Law of a particular jurisdiction is referred to in
this Agreement, such reference shall be deemed to include the
Applicable Law of all political subdivisions of such
jurisdiction.
"Authorized Representative" shall mean one or more of
the following officers or employees of the City, acting in
concert or individually: the City Manager, any Assistant City
Manager, the Director of Finance, the Financial Planning
Officer, the City Treasurer or such other officer or employee of
the City authorized by the City Council to act as an Authorized
Representative.
"Bankruptcy Code" shall mean 11 U.S.C. § 101, et
sea•, as amended, and any comparable statute of any other
jurisdiction.
"Business Day" shall mean any day other than (i) a
Saturday, Sunday or other day on which commercial banks in New
York, New York or Fort Worth, Texas are authorized or required
by law or executive order to close or (ii) a day on which the
New York Stock Exchange is closed.
"Code" shall mean the Internal Revenue Code of 1986,
as amended, or any applicable corresponding provisions of any
future laws of the United States of America relating to federal
income taxation, and except as otherwise provided herein or
required by the context hereof, includes interpretations thereof
contained or set forth in the applicable regulations of the
Department of the Treasury (including applicable final
regulations and temporary regulations), the applicable rulings
of the Internal Revenue Service (including published Revenue
Rulings and private letter rulings) and applicable court
decisions.
"Commercial Paper Notes" shall mean those Project
Notes issued from time to time pursuant to the provisions of the
Ordinance, which have the terms and characteristics specified in
Section 2.03 thereof.
"Commitment" shall mean $53,698,650, or such lesser
amount as may be determined in accordance with the provisions of
this Agreement.
"Credit Event" shall mean each issuance of Commercial
Paper Notes, each making of an Advance, and each conversion of
an Advance to a Term Loan.
"Dealer" shall mean Shearson Lehman Hutton Inc., or
any successors or assigns permitted under the Dealer Agreement
or any other dealer for the Commercial Paper Notes appointed by
the City.
"Dealer Agreement" shall mean the agreement by and
between Shearson Lehman Hutton Inc., as the initial Dealer, and
the City, dated as of March _, 1990.
2 1361n
"Debt" of the City shall mean at any date (without
duplication) all of the following to the extent the same are
secured, in whole or in part, by the Pledged Revenues: (a) all
obligations of the City for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments; (b) all
obligations of the City to pay the deferred purchase price of
property or services, except trade accounts payable under normal
trade terms and which arise in the ordinary course of business;
(c) all obligations of the City as lessee under capitalized
leases; and (d) all indebtedness of other Persons to the extent
guaranteed by the City.
"Default" shall mean an Event of Default or any other
event which with notice or lapse of time or both would become an
Event of Default.
"Default Rate" shall mean, in respect of any day, the
sum of the Prime Rate in effect on such day plus 2% per annum.
"Event of Default" shall have the meaning assigned to
such term in Section 9 hereof.
"Extension Date" shall mean March _, 1994 and
March _ in every year thereafter so long as this Agreement is
extended pursuant to Section 3.F hereof.
"Fed Funds Rate" shall me.
weighted average of the rates on
transactions with members of the Federal
by Federal funds brokers, as published
day is not a Business Day, for the next
by the Federal Reserve Bank of New York.
~n, for any day, the
overnight Federal funds
Reserve System arranged
for such day (or, if such
preceding Business Day)
"Final Date" shall mean March _, 1995, or, if
extended pursuant to Section 3.F hereof, then the date as so
extended.
"Governmental Approval" shall mean an authorization,
consent, approval, license or exemption of, registration or
filing with, or report to, any governmental body or regulatory
authority having competent jurisdiction, including without
limitation any approval of the Attorney General of the State of
Texas pursuant to the Act.
"Gross Revenues of the System" and "Gross Revenues"
shall have the meaning assigned to such terms in the Ordinance.
"Hereunder", "herein", "hereof" and the like shall
mean and refer to this Agreement as a whole and not merely to
the specific section, paragraph or clause in which the
respective word appears.
3 1361n
"Issuing and Paying Agent" shall mean the agent
appointed pursuant to Section 2.02 of the Ordinance, initially
Mitsui Finance Trust Company of New York.
"Issuing and Paying Accent Agreement" shall mean the
issuing and paying agent agreement by and between the City and
the Issuing and Paying Agent.
"Lien", as applied to the property or assets (or the
income or profits therefrom) of any Person, shall mean (in each
case, whether the same is consensual or non-consensual or arises
by contract, operation of law, legal process or otherwise):
(a) any mortgage, lien, pledge, attachment, charge, lease
evidencing a capitalized lease obligation, conditional sale or
other title retention agreement, or other security interest or
encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; or (b) any
arrangement, expressed or implied, under which any property of
such Person is transferred, sequestered or otherwise identified
for the purpose of subjecting or making available the same for
the payment of debt or performance of any other obligation in
priority to the payment of the general, unsecured creditors of
such Person.
"Maturity Value" shall mean (i) with respect to any
Commercial Paper Note which bears interest at a stated rate, the
principal amount thereof plus all interest which will accrue on
such Commercial Paper Note to its stated maturity and (ii) with
respect to any Commercial Paper Note which is issued at a
discount, the face amount thereof.
"Net Revenues" and "Net Revenues of the System" shall
have the meaning assigned to such terms in the Ordinance.
"No-Issuance Notice" shall have the meaning given to
that term in Section 4.C hereof.
"Notice of Borrowing" shall mean an irrevocable
notice, substantially in the form of Exhibit A hereto, given to
the Bank by the City pursuant to Section 2.C hereof.
"Offering .Memorandum" shall mean the offering
memorandum dated as of March _, 1990 relating to the Notes, and
all appendices thereto.
"Ordinance" shall mean Ordinance No. by the City
Council of the City of Fort Worth, Texas, duly adopted on
March 8, 1990, as such Ordinance may from time to time be
amended, modified or supplemented.
4 1361n
"Outstanding" shall mean, (i) with respect to
Commercial Paper Notes, all Commercial Paper Notes issued at any
time under the Ordinance, except Commercial Paper Notes which
have been paid through the Issuing and Paying Agent or matured
Commercial Paper Notes which are to be paid from the proceeds of
Commercial Paper Notes or Advances being issued or made on the
maturity date thereof or which have not been presented for
payment but funds for the payment of which are on deposit in the
Series A Note Payment Fund and are available for payment of such
Commercial Paper Notes; (ii) with respect to Advances, all
Advances advanced by the Bank pursuant hereto and not repaid by
the City, except Advances to be repaid or prepaid from the
proceeds of Commercial Paper Notes being issued or from new
Advances being made on the date such Advances are repaid or
prepaid and (iii) with respect to Term Loans, all Term Loans
made by the Bank pursuant hereto and not repaid by the City,
except Term Loans to be repaid from the proceeds of Commercial
Paper Notes being issued on the date of 'such repayment.
"Outstanding Prior Lien Bonds" shall mean the
outstanding and unpaid bonds of the following series, to wit:
City of Fort Worth, Texas Water and Sewer System Revenue
Refunding Bonds, Series 1984 and Series 1986-A; City of Fort
Worth, Texas Water and Sewer System Revenue Bonds, Series 1985;
Series 1986; Series 1987 and Series 1988.
"Person" shall mean a natural person, corporation
(which shall be deemed to include a business trust),
unincorporated organization, a government or any department or
agency thereof, association, company, partnership or any other
entity.
"Pledged Property" shall mean (i) the proceeds from
(a) the sale of the Bonds (as defined in the Ordinance) issued
for such purpose and (b) the sale of Project Notes issued
pursuant to the Ordinance for such purpose, (ii) Advances,
(iii) the amounts held in the Series A Note Payment Fund until
the amounts deposited therein are used for authorized purposes,
provided, however, amounts in the Series A Note Payment Fund
attributable to and derived from Advances shall be used only to
pay, prior to any application to the payment of any Advances,
the principal of, premium, if any, and interest on the Project
Notes in full, (iv) the amounts remaining on deposit in the
Series A Note Construction Account after the payment of all
Project Costs and (v) the Pledged Revenues.
"Pledged Revenues" shall mean (1) Net Revenues, plus
(2) any additional revenues, income or other resources,
including, without limitation, any grants, donations or income
received or to be received from the United States Government, or
5 1361n
any other public or private source, whether pursuant to an
agreement or otherwise, which in the future may, at the option
of the City, be pledged to the payment of the Prior Lien Bonds
and the Advances and the Term Loans.
"Prime Rate" shall mean the rate of interest from
time to time established by the Bank as its U.S. dollar prime
commercial lending rate. Each change in the Prime Rate shall be
effective for purposes of this Agreement on the date on which
such change is made by the Bank.
"Prior Lien Bonds" shall mean collectively the
Outstanding Prior Lien Bonds and any bonds issued on a parity
therewith.
"Project Note" shall mean any and all evidences of
indebtedness authorized to be issued and at any time outstanding
pursuant to the Ordinance and shall include the Commercial Paper
Notes and the Fixed Rate Notes and Variable Rate Notes (as
defined in the Ordinance), but shall not include the Revolving
Credit Note or any Term Note.
"Related Documents" shall mean the Revolving Credit
Note, each Term Note, the Ordinance, the Dealer Agreement and
the Issuing and Paying Agent Agreement.
"Revolving Credit Note" shall mean a promissory note
of the City, substantially in the form of Exhibit B hereto,
evidencing the Advances made under this Agreement.
"Series A Note Construction Account" shall mean the
City of Fort Worth, Texas Water and Sewer System Series A Note
Construction Account held by the City with a depository of the
City pursuant to the Ordinance.
"Series A Note Payment Fund" shall mean the City of
Fort Worth, Texas Water and Sewer System Series A Note Payment
Fund established with the Issuing and Paying Agent pursuant to
the Ordinance.
"System" shall mean the City's combined existing
water and sewer system, together with all future extensions,
improvements, enlargements, and additions thereto, and all
replacements thereof; provided that, notwithstanding the
foregoing, and to the extent now or hereafter authorized or
permitted by law, the term System shall not include any water or
sewer facilities which are declared not to be a part of the
System and which are acquired or constructed by the City with
the proceeds from the issuance of "Special Facilities Bonds",
which are defined in the Ordinance as being special revenue
6 1361n
obligations of the City which are not secured by or payable from
the Pledged Revenues as defined herein, but which are secured by
and payable solely from special contract revenues or payments
received from any other legal entity in connection with such
facilities; and such special contract revenues or payments shall
not be considered as or constitute Gross Revenues of the System,
unless and to the extent otherwise provided in the ordinance or
ordinances authorizing the issuance of such "Special Facilities
Bonds".
"Term Loan" shall have the meaning assigned to such
term in Section 2.F(ii) hereof.
"Term Note" shall mean each promissory note of the
City, substantially in the form of Exhibit C hereto, evidencing
a Term Loan made under this Agreement.
"Unused Commitment" shall mean, at any time, an
amount equal to (i) the Commitment less (ii) the sum of the
aggregate Maturity Value of all Outstanding Commercial Paper
Notes and the aggregate principal amount of all Outstanding Term
Loans at such time.
§ 2. CREDIT FACILITY
A. The Commitment. On the terms and subject to
the conditions of this Agreement, the Bank shall make Advances
to the City, from time to time prior to the Final Date, in an
aggregate principal amount at any one time Outstanding not to
exceed the Commitment, less the sum of all Outstanding
Commercial Paper Notes and all Outstanding Term Loans. Within
such limit, the City may borrow, prepay, repay and reborrow
pursuant to this Section 2. Each Advance shall be in the
minimum amount of $100,000.
B. Use of Proceeds. The City will use the
proceeds of the Advances only for the purpose of paying the
principal of or interest on maturing Commercial Paper Notes or
Advances. No Advance may be borrowed for the purpose of making
any payment of the principal of or interest on any Term Loan.
C. Manner of Borrowings. An Authorized
Representative shall give the Bank a duly completed Notice of
Borrowing for each Advance not later than 11:00 A.M. (New York
time) on the date of such Advance. Each such Notice of
Borrowing shall specify the amount and date of such Advance. In
addition, if the proceeds of any Advance are to be used to repay
or prepay principal of Outstanding Advances or to pay interest
~ 1361n
thereon, then the Notice of Borrowing shall so specify and shall
direct the Bank to use such proceeds for such purpose.
D. Disbursement of Advances. Subject to the
conditions of this Agreement, each Advance shall be made
available to the City by transferring the amount thereof no
later than 3:00 p.m. (New York time) on the date of borrowing to
the Series A Note Payment Fund; provided, however, that if the
proceeds of such Advance or any portion thereof are to be used
for the purposes described in the last sentence of Section 2.C
hereof, then the Bank shall apply such proceeds for such purpose
to the extent necessary and transfer the balance to the City.
E. Revolving Credit Note. The Advances shall be
evidenced by a single Revolving Credit Note payable to the order
of the Bank. The date and amount of each Advance and each
repayment or prepayment of principal shall be endorsed by the
Bank on the schedule annexed to and constituting a part of the
Revolving Credit Note, provided that the failure to make or any
error in making any such endorsement on such schedule shall not
limit, extinguish or in any way modify the obligation of the
City to repay the Advances.
F. Repayment of Principal; Conversion to Term Loan.
(i) The City shall repay the principal amount
of each Advance on the date which is 60 days from the date
on which such Advance is made.
(ii) The City may request the Bank to convert
any Advance to a term loan (a "Term Loan") on any Business
Day on or before the maturity date of such Advance,
provided that (a) the City shall give the Bank not less
than three Business Days' irrevocable prior notice thereof,
(b) the amount so converted shall be in the minimum amount
of $100,000, (c) the conditions set forth in Section 4.B
are satisfied as of the conversion date and (d) the City
shall deliver to the Bank, on or before the conversion
date, a duly completed and executed Term Note evidencing
its obligation to repay such Term Loan. Subject to the
foregoing, such Advance shall be so converted on the date
specified by the City in such notice. For purposes of this
Agreement, such Term Loan shall be deemed to have been made
on such date of conversion.
(iii) The principal amount of each Term Loan
shall be repaid in five equal installments, the first of
which shall be due and payable on the first anniversary of
the date on which the Advance which is converted into such
Term Loan was made, and each subsequent installment of
which shall be due and payable on each subsequent
anniversary of such date.
8 1361n
G. Payment of Interest.
(i) The City shall pay interest on the
unpaid principal amount of each Advance in respect of each
day from and including the date of such Advance to but not
including the date on which such Advance is paid in full at
a rate equal to the Fed Funds Rate for each day plus .75%
per annum. Accrued interest on each Advance shall be
payable monthly in arrears on the last day of each month,
on the maturity of such Advance, and thereafter on demand.
(ii) The City shall pay interest on the unpaid
principal amount of each Term Loan in respect of each day
from and including the date such Term Loan is made to but
not including the date such Term Loan is paid in full at a
rate equal to the Prime Rate from time to time in effect.
Accrued interest on each Term Loan shall be payable monthly
in arrears on the last day of each month, on the maturity
date of such Term Loan, and thereafter on demand.
(iii) Notwithstanding any provision in this
Agreement to the contrary, it is hereby agreed that in no
event shall the amount of interest (as defined and
calculated in accordance with Applicable Law) contracted
for, charged, reserved, received or taken in connection
with this Agreement exceed the amount of interest which
could have been contracted for, charged, reserved, received
or taken in accordance with Applicable Law. If,
notwithstanding the intent of the parties hereto, any
amount called for or otherwise contracted for, charged,
reserved, received or taken in connection with any Advance
or Term Loan under this Agreement exceeds the amount
permissible under Applicable Law, then, (i) the Bank shall
have the right to require the City to prepay, on the fifth
Business Day following notice from the Bank, such Advance
or Term Loan, together with all accrued interest thereon to
the date of prepayment, and (ii) notwithstanding anything
to the contrary contained in this Agreement, the provisions
of this Agreement shall immediately be deemed reformed and
the amounts thereafter collectable hereunder reduced,
without the necessity of the execution of any new document,
so as to comply with such Applicable Law, but so as to
permit the recovery of the fullest amount otherwise called
for hereunder. All sums paid or agreed to be paid to the
Bank pursuant to this Agreement shall, to the extent
permitted by Applicable Law, be authorized, prorated,
allocated and spread throughout the full term of this
Agreement until payment in full so that the rate or amount
of interest charged in connection with this Agreement does
not exceed the usury ceiling from time to time in effect
and applicable to this Agreement for so long as this
Agreement is in effect.
9 1361n
A'
H. Prepayment. The City may prepay any Advance or
Term Loan in whole or in part at any time, provided that (i) the
City shall give the Bank not less than one Business Day's
irrevocable prior notice of each prepayment of an Advance and
not less than five Business Day's irrevocable prior notice of
such prepayment of a Term Loan, (ii) any partial prepayment must
be in the minimum amount of $100,000, or any integral multiple
thereof, and (iii) no such prepayment shall result in the
principal amount of any Advance or Term Loan remaining
outstanding after giving effect to such prepayment being less
than $100,000 and (iv) each prepayment must be accompanied by
the payment of accrued interest on the amount prepaid to the
date of prepayment. Any prepayment of a Term Loan shall be
applied to the installments thereof in inverse order of
maturity. Any Advance or Term Loan prepaid under this Section
2.H may be reborrowed under Section 2.A hereof.
§ 3. FEES; PAYMENTS; ETC.
A. Fees. (i) For the period from and including
the date hereof to and including the Final Date, the City hereby
agrees to pay the Bank a usage fee on the daily average Maturity
Value of the Outstanding Commercial Paper Notes, determined as
of the end of each day, at a rate equal to 0.05% per annum.
Such fee shall be payable quarterly in arrears on the last day
of each March, June, September and December, commencing March
31, 1990, and on the Final Date.
(ii) For the period from and including
the date hereof to and including the Final Date, the City hereby
agrees to pay the Bank a commitment fee on the daily average
amount of the Unused Commitment, determined as of the end of
each day, at a rate equal to 0.01% per annum. Such fee shall be
payable quarterly in arrears on the last day of each March,
June, September and December, commencing March 31, 1990, and on
the Final Date. `
(iii) The City shall notify the Bank, or
cause the Bank to be notified, of the amount of Commercial Paper
Notes from time to time Outstanding and of the interest rate, if
any, applicable thereto so as to enable the Bank to compute the
fees payable pursuant to this Section 3.A.
B. Payments. All payments by the City to the Bank
under this Agreement shall be made by wire transfer in United
States dollars and immediately available funds, so that the same
is received not later than 3:00 p.m., New York City time, on the
due date therefor. Any payment hereunder received after such
time shall be deemed received on the next succeeding Business
10 1361n
Day and interest shall accrue to such succeeding Business Day,
as herein provided. Each payment hereunder shall be made
without reduction by reason of set-off, counterclaim or
otherwise, and free and clear of, and without deduction for, any
taxes, duties, levies, imposts or other charges of a similar
nature; provided, however, that no payment by the City to the
Bank pursuant to this Section 3.B shall be deemed a waiver of
any rights the City may have against the Bank. The Bank shall
have the right to determine the order in which amounts paid by
the City are applied to the amounts then due and payable
hereunder, regardless of any application designated by the City.
C. Extension of Payments. If any payment under
this Agreement shall become due on a day which is not a Business
Day, the due date thereof shall be extended to the next
following day which is a Business Day, and such extension shall
be taken into account in computing the amount of any interest or
fees then due and payable hereunder.
D. Computation of Interest and Fees. All interest
and fees payable under this Agreement shall be computed on the
basis of a year of 360 days and the actual number of days
elapsed.
E. Reduction of the Commitment. The City may,
upon not less than three Business Days' irrevocable prior notice
to the Bank, reduce all or any portion of the Commitment,
provided that (a) any partial reduction of the Commitment must
be in the minimum amount of $1,000,000, or a higher integral
multiple of $100,000 and (b) no such reduction shall result in
the Commitment being less than the sum of the aggregate Maturity
Value of Commercial Paper Notes Outstanding at such time plus
the aggregate principal amount of Advances and Term Loans
Outstanding at such time. The City shall promptly give the
'Dealer and the Issuing and Paying Agent notice of any such
reduction of the Commitment.
F. Extension of Final Date. Commencing on the
first Extension Date to occur hereunder and on each subsequent
Extension Date to occur hereunder, the Final Date shall be
extended one calendar year from the then current Final Date
(i) if the City shall request the Bank to make such extension
not more than 90 days and not less than 30 days preceding such
Extension Date and (ii) if the Bank shall consent thereto on or
prior to such Extension Date. Such consent may be given or
withheld in the sole discretion of the Bank. The City shall
give prompt notice of any such extension to the Dealer and to
the Issuing and Paying Agent.
11 1361n
G. Bank Records. The date and amount of each
Advance and each Term Loan, and all payments made on account
thereof, shall be recorded by the Bank on its books, which books
shall be conclusive as to amounts payable by the City hereunder,
absent manifest error.
H. Change in Law. In the event that any
requirement, restriction, limitation or guideline is imposed
upon, or determined. or held to be applicable to, the Bank by any
court or administrative or governmental authority charged with
the administration thereof, under or pursuant to any Applicable
Law or any interpretation thereof not in effect on the date
hereof, or any change in Applicable Law or interpretation
thereof as in effect on the date hereof, shall either impose,
modify or deem applicable any tax, reserve, special deposit,
capital adequacy, insurance premium or similar requirement
against or with respect to or measured by reference to
commitments issued or to be issued or reinstated by the Bank or
impose upon the Bank any other condition relating, directly or
indirectly to this Agreement, the Revolving Credit Note, any
Term Note, the Advances or the Term Loans and the result shall
be to increase the cost to the Bank of making Advances or Term
Loans or maintaining its obligation hereunder to make Advances
or Term Loans or otherwise performing its obligations hereunder
or (in the case of any capital adequacy requirement) to reduce
the rate of return on the Bank's capital as a consequence of its
obligations under this Agreement to a level below that which the
Bank could have achieved but for the imposition of such
requirement (taking into account the Bank's capital adequacy
policies) or reduce any amount receivable by the Bank hereunder
or under the Revolving Credit Note or any Term Note (which
increase in cost, reduction in rate of return or reduction in
amount receivable, shall be the result of the Bank's reasonable
allocation of the aggregate of such increases or reductions
resulting from such event), then, within 30 days of the Bank's
request therefor, the City agrees to pay to the Bank, from time
to time as specified by the Bank, such additional amounts as
shall be sufficient to compensate the Bank for such increased
costs or reductions from the date of such change. A statement
as to such increased costs or reductions incurred by the Bank,
submitted by the Bank to the City, shall be conclusive as to the
amount thereof, absent manifest error. The Bank will promptly
notify the City of the occurrence of any event of which an
officer of the New York Branch has actual knowledge which will
entitle the Bank to compensation under this Section 3.H.
Notwithstanding the foregoing, the City shall not be obligated
to pay the Bank any amount under this Section 3.H. arising from
any implementation of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement and
12 1361n
Capital Standards" (the "Report"), except for amounts resulting
from modification or amendment of the Report after the date
hereof.
§ 4. CONDITIONS PRECEDENT.
A. Initial Conditions Precedent. The obligation
of the Bank to make the initial Advance hereunder is subject to
the satisfaction of each of the following conditions precedent
on or before the date of such Advance:
(i) Action. Thy
copies of all action taken
execution and delivery by the
the Related Documents to which
case certified as complete
Closing Date.
Bank shall have received
by the City approving the
City of this Agreement and
the City is a party, in each
and correct on and as of the
(ii) Incumbency of Officers. The Bank shall
have received an incumbency certificate of the City in
respect of each of the officers who is authorized to sign
this Agreement and the Related Documents to which it is a
party on behalf of the City.
(iii) Opinion of City Attorney. The Bank shall
have received a written opinion of the City Attorney
covering matters relating to the transactions contemplated
by this Agreement and the Related Documents, in form and
substance satisfactory to the Bank.
(iv) Opinion of Bond Counsel. The Bank shall
have received a letter from bond counsel authorizing the
Bank to rely on the final approving opinion of bond counsel
delivered to the City in respect of the Commercial Paper
Notes as if such opinion were addressed to the Bank.
(v) Commercial Paper Notes. The Bank shall
have received a photocopy of the form of the Commercial
Paper Notes.
(vi) Related Documents. The Bank shall have
received copies of each of the Related Documents duly
executed by the parties thereto.
(vii) Officer's Certificate. The Bank shall
have received a certificate from an officer of the City
certifying that (i) no Default has occurred and is
continuing and (ii) the representations and warranties made
by the City in Section 5 hereof are true and correct in all
material respects.
13 1361n
(viii) Other Documents. The Bank shall have
received such other documents, certificates and opinions as
the Bank or its counsel shall have reasonably requested.
B. Conditions Precedent to Each Credit Event. As
a condition precedent to the occurrence of each Credit Event
hereunder, including the initial Credit Event, the following
conditions shall be satisfied on the date of such Credit Event:
(i) no Event of Default shall have occurred
and be continuing;
(ii) the representations and warranties made
by the City in Section 5A, B, C, D, F(i), I and J hereof
shall be true and correct in all material respects on and
as of such date, as if made on and as of such date;
(iii) in the case of a Credit Event consisting
of the issuance of a Commercial Paper Note, the Issuing and
Paying Agent shall not be in default in the performance of
its obligations under the Issuing and Paying Agency
Agreement, and the Dealer shall not be in default in the
performance of its obligations under the Dealer Agreement;
(iv) in the case of a Credit Event consisting
of the making of an Advance or the conversion of an Advance
to a Term Loan, (a) the City and the Dealer shall have
reasonably determined that, due to circumstances affecting
the U.S. commercial paper market, the City is not able to
issue Commercial Paper Notes on such date, and (b) no Debt
shall then be rated or below by Moody's Investors
Service, Inc. or or below by Standard & Poor's
Corporation.
On the occurrence of each Credit Event, the City shall be deemed
to have represented and warranted that the foregoing conditions
precedent have been satisfied.
C. No-Issuance Notices. The Bank may, but is not
required to, deliver a notice to the Issuing and Paying Agent
instructing the Issuing and Paying Agent to cease issuing
Commercial Paper Notes (a "No-Issuance Notice") at any time that
the Bank shall have determined that the conditions precedent to
the issuance of Commercial Paper Notes set forth in Section 4.B
hereof are not satisfied. Upon receipt of such notice, the
Issuing and Paying Agent shall cease authenticating Commercial
Paper Notes, unless and until such No-Issuance Notice is
rescinded. Any such notice received after P.M. (New York
City time) shall be deemed to have been received on the next
following Business Day. The Bank shall not incur any liability
14 1361n
as a result of the Bank's giving of any No-Issuance Notice
which, in its good faith judgment, the Bank determines to be in
accordance with this Section 4.C. The Bank shall concurrently
furnish a copy of any No-Issuance Notice to the City and the
Dealer, but the failure to so provide such copy shall not render
ineffective any such No-Issuance Notice.
§ 5. REPRESENTATIONS AND WARRANTIES. The City
represents and warrants to the Bank that:
A. Organization. The City is a duly organized
public body corporate and politic under the Constitution and
laws of the State of Texas and is validly existing and in good
standing under the laws of the State of Texas and has the power
and authority to carry on all material aspects of its municipal
affairs.
B. Authorization of Agreement and Related
Documents. The City has the power and has taken all necessary
action to authorize the execution, delivery and performance of
the City's obligations under this Agreement and each of the
Related Documents to which it is a party in accordance with
their respective terms. This Agreement has been duly executed
and delivered by the City and is, and each of the Related
Documents to which it is a party when executed and delivered
will be, legal, valid and binding obligations of the City
enforceable against the City in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency,
reorganization or moratorium applicable to the City and general
equitable principles regarding the availability of specific
performance.
C Compliance of Agreement and Related Documents.
The execution, delivery and performance by the City of this
Agreement and each of the Related Documents to which it is a
party in accordance with their respective terms do not and will
not (i) contravene any Applicable Law of the United States or of
the State of Texas in effect on the date hereof, (ii) require
any consent or approval of any creditor of the City or
(iii) conflict with, result in a breach of or constitute a
default under, or accelerate the performance required by, any
contract, indenture or agreement to which the City is a party or
by which it or any of its properties may be bound.
D. Regulatory Approvals. All authorizations and
approvals, including Governmental Approvals, necessary for the
City to enter into this Agreement and the Related Documents to
which it is a party and to perform its obligations hereunder and
thereunder have been obtained and remain in full force and
effect and are subject to no further administrative or judicial
review.
15 1361n
E. Compliance with Law and Related Documents. The
City (i) is in compliance with all Applicable Law of the United
States or of the State of Texas material to its performance
hereunder and with all provisions of each Related Agreement to
which it is a party and (ii) has received no notice nor has it
any knowledge that a material default, after any applicable
notice and grace period, by the City exists under any material
contracts, agreements or other instruments to which it is a
party or by which it or any of its property is bound, the
violation of which could have a material adverse effect on the
financial condition, revenues (including, without limitation,
the Pledged Revenues), properties or operations of the System.
F. Financial Statements. (i) The financial
statements of the System for the year ending 19_,
copies of which have been furnished to the Bank, have been
prepared in accordance with generally accepted accounting
principles and present fairly the financial condition of the
System as of such date and the results of its operations for the
period then ended.
(ii) Since 19_, there has been no
material adverse change in the financial condition, revenues
(including, without limitation, the Pledged Revenues),
properties or operations of the System.
G. Litigation. There are no actions, suits or
proceedings pending, nor,, to the knowledge of the City, are
there any actions, suits or proceedings threatened, against the
City or any of its property in any court or before any
arbitrator of any kind or before or by any governmental or
non-governmental body, which may have a materially adverse
effect on the City's ability to perform its obligations under
this Agreement or the Related Documents or which in any way
questions the validity or enforceability of this Agreement or
any of the Related Documents.
H. Accuracy and Completeness of. Other
Information. Any written information, reports and other papers
and data prepared by the City and furnished to the Bank by the
City were, at the time the same were so furnished, complete and
correct in all material respects to the extent necessary to give
the Bank a true and accurate knowledge of the subject matter
thereof.
I. Pledged Property. The Ordinance creates and
shall be and constitute a valid continuing, irrevocable lien and
claim upon, pledge of and grant of a security interest in, the
Pledged Property of the City, to the extent provided hereunder
and in the Ordinance, to secure the full payment when due of the
16 1361n
Advances, Term Loans and other amounts owed the Bank under this
Agreement. All action necessary to perfect such lien has been
duly and validly taken, and such lien is enforceable against and
has priority over the claims of any other creditors of the City
except for the holders of the Prior Lien Bonds.
J. No Usury. The obligations of the City under
this Agreement are not subject to any law, rule or regulation of
the State of Texas prescribing a maximum rate of interest,
except for Article 717k-2, V.A.T.C.S., as amended.
§ 6. AFFIRMATIVE COVENANTS. From the date hereof
and so long as the Bank is committed to make Advances hereunder
and until the payment in full of all of the obligations of the
City under this Agreement and the Commercial Paper Notes, the
City will do all of the following:
A. Maintenance of Existence. Maintain and
preserve its existence as a public body corporate and politic.
B. Related Documents. Perform all of its
obligations under each of the Related Documents to which it is a
party and take such actions and proceedings from time to time as
shall be necessary to protect and safeguard the security for the
repayment of the amounts owing hereunder as is afforded by the
provisions of the Related Documents.
C. Inspection of Books. Permit representatives of
the Bank, from time to time, as often as may be reasonably
requested, to do the following during the regular business hours
of the City: (i) inspect its books and records and make copies
and take extracts from such books and records which relate to
the ownership and operation of the System and its performance
under this Agreement and (ii) discuss with its officers and
accountants the business, assets, liabilities, financial
condition, results of operations and business prospects of the
System.
D. Reporting Requirements. Furnish or cause to be
furnished to the Bank (i) as soon as available and in any event
not less than 30 days before the beginning of each fiscal year,
a copy of the budget of the System for such fiscal year, (ii) as
soon as available and in any event not later than 120 days after
the end of each fiscal year, a copy of the annual unaudited
financial statements of the System for such fiscal year,
together with a certificate of an officer of the City certifying
that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, describing the nature thereof
and the action the City proposes to take with respect thereto,
17 1361n
(iii) as soon as available and in any event not later than 180
days after the end of each fiscal year, a copy of the annual
audited financial statements of the System for such fiscal year;
(iv) as soon as available and in any event not later than 45
days after the end of each calendar quarter, a copy of a report
showing the cash flow of the System during such period, and
(v) promptly after a request therefor, such other information
respecting the condition or operations, financial or otherwise,
of the System as the Bank may from time to time reasonably
request.
E. Notice of Certain Events. Promptly notify the
Bank of the occurrence of (i) any Default or (ii) any litigation
or administrative proceedings against the City of which the City
has received actual notice and in which there is a reasonable
possibility of an adverse determination and which may have a
materially adverse effect on (a) the financial condition,
revenues, properties or operations of the System, (b) the
Pledged Property or (c) its ability to perform its obligations
pursuant to this Agreement or the Related Documents to which it
is a party.
F. Compliance with Laws, Etc. Comply with the
requirements of all Applicable Laws of the United States or of
the State of Texas the non-compliance with which would, singly
or in the aggregate, have a materially adverse effect on the
financial condition, revenues, properties or operations of the
System or a material adverse effect on its ability to perform
its obligations pursuant to this Agreement or the Related
Documents to which it is a party.
G. Further Assurance. Execute and deliver to the
Bank all such documents and instruments as may be necessary or
required by the Bank to enable the Bank to exercise and enforce
its rights under this Agreement and the Related Documents.
H. Maintenance of Issuing and Paying Agent.
Maintain in place an Issuing and Paying Agent under the
Ordinance and obtain the prior written consent of the Bank to
the designation of any new Issuing and Paying Agent, which
consent shall not be unreasonably withheld.
§ 7. NEGATIVE COVENANTS. From the date hereof and
so long as the Bank is committed to make Advances hereunder and
until the payment in full of all of the obligations of the City
under this Agreement and the Commercial Paper Notes, the City
will not do any of the following:
18 1361n
A. Other Agreements. Enter into any agreement
containing any provision which would be violated or breached by
the performance of its obligations hereunder or under the
Related Documents to which it is a party.
B. Related Documents. Amend or modify any
provision of, or give any consent or grant any waiver under, any
Related Document, without the prior written consent of the Bank,
which consent shall not be unreasonably withheld.
C. Additional Liens. Incur, create or permit to
exist any Lien on the Pledged Property other than (i) the Prior
Lien Bonds, (ii) the Lien created pursuant to the Ordinance and
(iii) Liens which are in all respects junior and subordinate to
the Lien created pursuant to the Ordinance.
D. Total Outstandings. Permit the aggregate
Maturity Value of Commercial Paper Notes plus the aggregate
principal amount of Advances and Term Loans Outstanding at any
time to exceed the Commitment at such time.
§ 8. EVENTS OF DEFAULT. In case of the happening
and continuance of any of the following events (herein called
"Events of Default"):
A. The City fails to pay (i) the principal of or
interest on any Advance or Term Loan when due or (ii) any fees,
expenses or other amounts payable by it to the Bank within five
Business Days of the date when due hereunder; or
B. ~ A breach or failure of performance by the City
of any covenant contained in Section 7 hereof; or
C. A breach or failure of performance by the City
of any covenant, condition or agreement on its part to be
observed or performed contained herein (other than a breach or
failure covered by paragraph A or B above) and any such breach
or failure (if capable of remedy) continues for a period of 60
days after notice thereof from the Bank to the City; or
D. Any of the City's representations or warranties
made or deemed made herein or in any statement or certificate at
any time given pursuant hereto or in connection herewith proves
at any time to have been false or misleading in any material
respect when made, or any such warranty is breached; or
E. The City fails to pay when due and payable,
after giving effect to any applicable grace period, the
principal of or interest on any of its Debt or the maturity of
any such Debt has been accelerated or such obligation is
19 1361n
required to be prepaid prior to the stated maturity thereof or
any event occurs and is continuing which, with the passage of
time or the giving of notice or both, permits any holder or
holders of such Debt, any trustee or agent acting on behalf of
such holder or holders or any other Person to accelerate the
maturity thereof; or
F. The City (i) applies for or consents to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or of a
substantial part of its property or assets, (ii) admits in
writing its inability, or is generally unable, to pay its debts
as they become due or is subject to a moratorium for the
repayment of any of its Debt, (iii) makes a general assignment
for the benefit of creditors, (iv) commences a voluntary case
under the Bankruptcy Code (as now or hereafter in effect),
(v) files a petition seeking to take advantage of any other laws
relating to bankruptcy, insolvency, reorganization, liquidation,
winding-up or composition or adjustment of debts,
(vi) acquiesces in writing to, or fails to controvert in a
timely and appropriate manner, any petition filed against it in
an involuntary case filed under the Bankruptcy Code (as now or
hereafter in effect), or (vii) takes any action for the purpose
of effecting any of the acts set forth in clauses (i) through
(vi) of this Section 8.F; or
G. Without the application or consent of the City,
a case or other proceeding is commenced in any court of
competent jurisdiction, seeking (i) the reorganization,
dissolution, winding-up, liquidation or composition or
readjustment of debts of the City, (ii) the appointment of a
trustee, receiver, custodian, liquidator~or the like of the City
or of all or any substantial part of the assets thereof, or
(iii) other like relief in respect of the City under any laws
relating to bankruptcy, insolvency, reorganization, liquidation,
winding-up or composition or adjustment of debts, and such case
or proceeding continues undismissed, or an order, judgment or
decree approving or ordering any of the foregoing is entered and
continues unstayed and in effect, for a period of 60 consecutive
days, or an order for relief in respect of the City is entered
in an involuntary case under the Bankruptcy Code (as now or
hereafter in effect); or
H. Any provision of this Agreement or any Related
Document for any reason ceases to be valid and binding on the
City in accordance with its terms, or is declared to be null and
void and such change respecting such provision has a materially
adverse effect on the Bank's rights under this Agreement or any
Related Document, as the case may be, or the validity or
enforceability thereof is contested by the City or a proceeding
20 1361n
is commenced by the City seeking to establish the invalidity or
unenforceability thereof; or
I. Any "Event of Default" under and as defined in
the Ordinance shall occur and be continuing:
THEREUPON, the Bank may, by notice to the City and
the Issuing and Paying Agent, take one or more of the following
actions: (i) reduce the Commitment to zero, (ii) give a
No-Issuance Notice, (iii) declare all amounts payable by the
City to the Bank hereunder and under the Revolving Credit Note
and each Term Note to be forthwith due and payable, whereupon
such amounts shall immediately become due and payable, without
presentment, demand, protest or any other notice of any kind,
all of which are expressly waived hereby, and/or (iv) pursue any
other remedy available to it at law or in equity; provided,
however, that upon the occurrence of any Event of Default
described in Section 8.F or 8.G hereof, the Commitment shall be
automatically reduced to zero and all amounts payable by the
City to the Bank hereunder and under the Revolving Credit Note
and each Term Note shall become automatically immediately due
and payable, without presentment, demand, protest or any notice
of any kind, all of which are expressly waived hereby. Any
amount owing hereunder and under the Revolving Credit Note and
each Term Note (whether of principal, interest, commission or
otherwise) which is not paid when due shall, to the extent
permitted by law, bear interest, payable on demand, at the
Default Rate.
§ 9. MISCELLANEOUS.
A. Notices. All notices and other communications
provided for hereunder shall (i) be in writing (which shall
include communications by telecopy), (ii) be (a) sent by
registered or certified mail, postage prepaid, return receipt
requested, or by prepaid telecopy, or (b) delivered by hand, and
(iii) be given to the Person to whom addressed at the following
respective addresses or telecopy numbers:
If to the Bank, at
The Mitsui Bank, Limited
New York Branch
277 Park Avenue
New York, New York 10172-0121
Attention: Public Finance Group
Telephone: (212) 644-3653
Telecopy: (2.12) 888-7651
21 1361n
If to the City, at
City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76102
Attention: Director of Finance
Telephone: (817) 870-8185
Telecopy: (817) 870-8440
If to the Issuing and Paying Agent, at
Mitsui Finance Trust Company of New York
277 Park Avenue
New York, New York 10172-0121
Attention: Trust Department
Telephone• (212) 6.44-5322
Telecopy: (212) 888-7651
Notices hereunder may be addressed to such other address or
telecopy number as the addressee may hereafter specify for such
purpose in a notice to the other party hereto specifically
captioned "Notice of Change of Address Pursuant to
Section 9.A." Notices shall be effective (i) if given by mail,
on the fifth Business Day after such communication is deposited
in the mail, addressed as above provided, (ii) if given by
telecopy, when such communication is transmitted and receipt is
acknowledged, and (iii) if given by hand delivery, when
delivered to the addressee at the address provided above,
provided that a Notice of Borrowing will be effective only upon
actual receipt thereof by the Bank.
B. Survival of Covenants; Successors and Assigns.
All covenants, agreements, representations and warranties made
herein and in the certificates delivered pursuant hereto shall
survive the making of any Advance hereunder and shall continue
in full force and effect and until all obligations of the City
hereunder and under the Commercial Paper Notes shall have been
paid in full. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall, subject to the last
sentence of this Section 9.B, be deemed to include the
successors and assigns of such party, and all covenants,
promises and agreements by or on behalf of the City which are
contained in this Agreement shall inure to the benefit of the
successors and assigns of the Bank. The City may not transfer
its rights or obligations under this Agreement without the prior
written consent of the Bank.
C. Indemnification. To the extent permitted by
Applicable Law, the City shall indemnify the Bank against, and
on demand reimburse the Bank for, any and all claims, damages,
22 1361n
losses, liabilities, reasonable costs and expenses which the
Bank may incur (or which may be, claimed against the Bank by any
Person) by reason of or in connection with the performance of
this Agreement; provided, that the Bank shall not be so
indemnified and reimbursed for any claims, damages, losses,
liabilities, reasonable costs and expenses to the extent, but
only to the extent, caused by (a) the negligence or willful
misconduct of the Bank in connection with the Bank's execution,
delivery or performance of this Agreement, or (b) an untrue
statement contained in any written material provided by the Bank
to the City or the Dealer expressly for inclusion in the
Offering Memorandum.
D. Expenses and Taxes. The City will pay on
demand (i) the reasonable costs and expenses of the Bank in
connection with the negotiation, preparation, execution and
delivery of this Agreement and any other documents which may be
delivered in connection with this Agreement including the fees
and disbursements of special New York and Japanese counsel to
the Bank (provided that the fees of such special New York and
Japanese counsel do not exceed $ in the aggregate),
(ii) the reasonable costs and expenses of any amendment,
modification or waiver of any of the terms of this Agreement or
any of the Related Documents, including the _fees and
disbursements of counsel to the Bank and (iii) all reasonable
costs and expenses, if any, in connection with the enforcement
of this Agreement and any other documents which may be delivered
in connection herewith or therewith, including the fees and
disbursements of counsel to the Bank. In addition, the City
shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement and the
security contemplated by the Ordinance and any related documents
and agrees to save the Bank harmless, to the extent permitted by
Applicable Law, from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
E. Right of Setoff. Upon the occurrence and
during the continuance of any Event of Default, the Bank is
hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by the, Bank at any of its branches or offices to or for the
credit or the account of the City against any and all of the
obligations of the City now or hereafter existing under this
Agreement, the Revolving Credit Note and each Term Note,
irrespective of whether or not the Bank shall have made any
demand hereunder and although such obligations may be contingent
or unmatured.
23 1361n
4
F. Applicable Law. This Agreement shall be
governed by and construed in accordance with the law of the
State of Texas.
G. No Waiver. Neither any failure nor any delay
on the part of the Bank in exercising any right, power or
privilege hereunder or under the Revolving Credit Note or any
Term Note, nor any course of dealing with respect to any cf the
same, shall operate as a waiver thereof, nor shall a singly or
partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
The remedies herein provided are cumulative, and not exclusive
of any remedies provided by law.
H. Modification, Amendment, Waiver, Etc. No
modification, amendment or waiver of any provision of this
Agreement or the Revolving Credit Note or any Term Note, and no
consent to any departure by the City herefrom or therefrom,
shall be effective unless the same shall be in writing and
signed by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the purpose for
which given. No notice to or demand on the City shall entitle
the City to any other or further notice or demand in the same,
similar or other circumstances.
I. Dealinqs with the City, the Issuing and Paving
Agent and/or the Dealer. The Bank and its affiliates may accept
deposits from, extend credit to and generally engage in any kind
of banking, trust or other business with the City, the Issuing
and Paying Agent and/or the Dealer, regardless of the capacity
of the Bank hereunder.
J. Severability. Any provision of this Agreement
or the Revolving Credit Note or any Term Note which is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction, and
the remaining portion of such provision and all other remaining
provisions hereof will be construed to render them enforceable
to the fullest extent.
K. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an
original, but when taken together shall constitute but one
agreement and any of the parties hereto may execute this
Agreement by signing any such counterpart.
24 1361n
L. Table of Contents; Headings. The tab'e of
contents and the section and subsection headings used herein
have been inserted for convenience of reference only and do not
constitute matters to be considered in interpretinc; this
Agreement.
M. Special Obligation. The obligation of the City
under this Agreement to repay all amounts owing to the Bank,
shall not constitute a general obligation or indebtedness ~f the
City or a legal or equitable pledge of, or lien or encumbrance
upon., any of the assets or property of the City or upon any of
its income, receipts or revenues, except the Pledged Property as
provided in the Ordinance. The full faith and credit of the
City are not pledged, either expressly or by implication, for
the payment of the amounts owing hereunder and the Bank shall
never have the right to require or compel the exercise of any ad
valorem taxing power in any form on property to pay the amounts
owing hereunder.
IN WITNESS
executed this Credit
written.
(SEAL)
ATTEST:
City Secretary
APPROVED AS TO FORM AND
LEGALITY:
City Attorney
WHEREOF, the parties hereto have duly
Agreement as of the date first above
CITY OF FORT WORTH, TEXAS
By:
City Manager, City of
Fort Worth, Texas
THE MITSUI BANK, LIMITED
By:
Name:
Title:
25 1361n
EXHIBIT B To Credit Agreement
FORM OF REVOLVING CREDIT NOTE
Fort Worth, Texas
March 1990
FOR VALUE RECEIVED, the undersigned CITY OF FORT
WORTH, TEXAS (the "City") promises to pay to the order of THE
MiTSUI BANK, LIMITED (the "Bank"), a banking corporation
organized under the laws of Japan with a New York branch office
at 277 Park Avenue, New Yor!:, New York 10172, the sum of
Dollars ($ ) or,
if less, the aggregate principal amount of all Advances made
under the Credit Agreement dated as of Marcr. , 1990 by and
between the City and the Bank (the "Credit Agreement"). All
capitalized terms used herein but not defined in this Revolving
Note shall have the meanings ascribed to them in the Credit
Agreement.
Each Advance made by the Bank to the City shall be
recorded by the Bank on its books and, prior to any transfer
hereof, endorsed on the grid attached hereto and made a part
hereof. The principal amount of each Advance shall be repaid in
full on the date which is 60 days from the date on which such
Advance is made, unless such Advance is converted to a Term Loan
in accordance with the provisions of the Credit Agreement. The
City shall have the right to prepay this Revolving Note only in
accordance with and subject to the provisions of Section 2.H of
the Credit Agreement.
Subject to Section 2.G of the Credit Agreement, the
City shall pay interest on the unpaid principal amount of each
Advance in respect of each day from and including the date of
such Advance to but not including the date on which such Advance
is paid in full at a rate equal to the Fed Funds Rate for each
date plus .75$ per annum, calculated on the basis of a year of
360 days and the actual number of days elapsed. Accrued
interest on each Advance shall be payable monthly in arrears on
the last day of each month, on the maturity of such Advance, and
thereafter on demand.
Any amount owing hereunder which is not paid when due
shall, to the extent permitted by law, bear interest, payable on
demand, at the Default Rate.
All payments of principal and interest shall be
received by the Bank not later than 3:00 P.M. (New York City
time) on the day when due by wire transfer in United States
dollars and immediately available funds at such place as the
holder of this Revolving Note may require from time to time in
writing. If any payment to the Bank hereunder shall become due
on a day which is not a Business Day, the due date thereof shall
be extended to the next following day which is a Business Day,
and such extension shall be taken into account in computing the
amount of any interest due and payable hereunder.
Upon the occurrence and during the continuance of any
Event of Default, the holder hereof may, without limiting any
other remedies that such holder may have under the Credit
Agreement or pursuant to Applicable Law, declare the entire
unpaid principal amount of this Revolving Note and all
obligations of the undersigned to the holder hereby of the
immediately due and payable without presentment, demand, protest
or other notice of any kind; provided, however, that if an
Event of Default occurs as described in Section 8.F or 8.G of
the Credit Agreement, all amounts payable by the City to the
Bank under the Credit Agreement shall become automatically
immediately due and payable, without presentment, demand,
protest or any notice of any kind.
This Revolving Note is the Revolving Note of the City
referred to in Section 2.E of the Credit Agreement. It shall be
entitled to the benefit of all the terms and conditions and the
security of all security interests, liens and rights granted by
the undersigned to the Bank under and pursuant to the Credit
Agreement.
The undersigned hereby waives presentment for payment,
notice of dishonor, protest and notice of protest and other
notices of every kind in connection with this Revolving Note.
This Revolving Note may not be changed orally, but
only by an agreement in writing which is signed by the party or
parties against whom enforcement of any waiver, change,
modification or discharge is sought.
THIS REVOLVING NOTE AND THE RIGHTS AND OBLIGATIONS OF
THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
The obligation of the City under the Credit Agreement
and this Revolving Note to repay all amounts owing to the Bank,
shall not constitute a general obligation or indebtedness of the
City or a legal or equitable pledge of, or lien or encumbrance
upon, any of the assets or property of the City or upon any of
its income, receipts or revenues, except the Pledged Property as
2
~ i
provided in the Ordinance. The full faith and credit of the
City are not pledged, either expressly or by implication, for
the payment of the amounts owing hereunder and the Bank shalt
never have the right to require or compel the exercise of any ad
valorem taxing power in any form on property to pay the amounts
owing hereunder. The obligation of the City to repay all
amounts owing to the Bank as evidenced by this Revolving Note
from the Pledged Property shall commence only upon the making of
an Advance by the Bank under the terms of the Credit Agreement.
CITY OF FORT WORTH, TEXAS
(seal)
By:
Mayor, City of
Fort Worth, Texas
Attest
City Secretary
Approved as to Form and
Legality:
ity Attorney
3
AttachMent
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
ADVANCES OF PRINCIPAL
Anount Aggregate
of Outstanding Notation
Principal Principal Made
Date Advanced Balance By
4
.~~ ~ ~~
EXHIBIT C to Credit Agreement
FORM OF TERM NOTE
Fort Worth, Texas
19
FOR VALUE RECEIVED, the undersigned CITY OF FORT
WORTH, TEXAS (the "City") promises to pay to the order of THE
MITSUI BANK, LIMITED (the "Bank"), a banking corporation
organized under the laws of Japan with a New York branch office
at 277 Park Avenue, New York, New York 10172, the principal sum
of Dollars
($ ), as provided herein and under the Credit
Agreement dated as of March 1990 by and between the City
and the Bank (the "Credit Agreement"). All capitalized terms
used herein but not defined in this Term Note shall have the
meanings ascribed to them in the Credit Agreement.
The City shall repay to the Bank the principal amount
of this Note in five equal installments, the first of which
shall be due and payable on the first anniversary of the date
hereof, and each subsequent installment of which shall be due
and payable on each subsequent anniversary of such date. The
City shall have the option to prepay this Term Note only in
accordance with and subject to the provisions of Section 2.H of
the Credit Agreement.
Subject to Section 2.G of the Credit Agreement, the
City shall pay interest on the unpaid principal amount of the
Term Loan in respect of each day from and including the date
hereof but not including the date the Term Loan is paid in full
at a rate equal to the Prime Rate from time to time in effect,
calculated on the basis of a year of 360 days and the actual
number of days elapsed. Accrued interest on the Term Loan shall
be payable monthly in arrears on the last day of each month, on
the maturity date hereof, and thereafter on demand.
Any amount owing hereunder which is not paid when due
shall, to the extent permitted by law, bear interest, payable on
demand, at the Default Rate.
All payments of principal and interest shall be
received by the Bank not later than 3:00 P.M. (New York City
time) on the day when due by wire transfer in United States
dollars and immediately available funds at such place as the
holder of this Term Note may require from time to time in
writing. If any payment to the Bank hereunder shall become due
on a day which is not a Business Day, the due date thereof shall
be extended to the next following day which is a Business Day,
and such extension shall be taken into account in computing the
amount of any interest due and payable hereunder.
Upon the occurrence and during the continuance of any
Event of Default the holder hereof may, without limiting any
other remedies that such holder may have under the Credit
Agreement or pursuant to Applicable Law, declare the entire
unpaid principal amount of this Term Note and all obligations of
the the undersigned to the holder hereof to be immediately due
and payable without presentment, demand, protest or other notice
of any kind; provided, however, that if an Event of Default
occurs as described in Section 8.F or 8.G of the Credit
Agreement, all amounts payable by the City to the Bank under the
Credit Agreement shall become automatically immediately due and
payable, without presentment, demand, protest or any notice of
any kind.
This is one of the Term Notes referred to in Section
2.F (ii) of the Credit Agreement. It shall be entitled to the
benefit of all the terms and conditions and the security of all
security interests, liens and rights granted by the undersigned
to the Bank under and pursuant to the Credit Agreement.
The undersigned hereby waives presentment for payment,
notice of dishonor, protest and notice of protest and other
notice of every kind in connection with this Term Note..
This Term Note may not be changed orally, but only by
an agreement in writing which is signed by the party or parties
against whom enforcement of any waiver, change, modification or
discharge is sought.
THIS TER1K NOTE AND THE RIGHTS AND OBLIGATIONS OF THE
UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
The obligation of the City under the Credit Agreement
and this Term Note to repay all. amounts owing to the Bank, shall
not constitute a general obligation or indebtedness of the City
or a legal or equitable pledge of, or lien or encumbrance upon,
any of the assets or property of the City or upon any of its
income, receipts or revenues, except the Pledged Property as
2
provided in the Ordinance. The full faith and credit of the
City are not pledged, either expressly or by implication, for
the payment of the amounts owing hereunder and the Bank shall
never have the right to require or compel the exercise of any ad
valorem taxing power in any form on property to pay the amounts
owing hereunder.
CITY OF FORT WORTH, TEXAS
(seal) By:
Mayor, City of
Fort Worth, Texas
Attest:
ty Secretary
Approved as to Form and
Legality:
City Attorney
3
ISSUING AND PAYING AGENT AGREEMENT
This Agreement dated as of March 1, 1990 between THE CITY OF
FORT WORTH, TEXAS (the "Issuer") and MITSUI FINANCE TRUST COMPANY
OF NEW YORK ("Mitsui") in connection with the issuance and payment
of the Notes referred to in this Agreement.
WITNESSETH
1. Appointment of Mitsui. The Issuer proposes to issue
short-term commercial paper notes (the "Notes") and will place the
Notes through the services of Shearson Lehman Hutton Inc. (the
"Dealer"). The Issuer hereby requests Mitsui to act, on the terms
and conditions specified herein, as issuing and paying agent for
the Notes which the Issuer shall from time to time deliver of cause
to be delivered to Mitsui.
2. Supply of Notes.
(a) The Issuer will from time to time furnish Mitsui
with an adequate supply of Notes, which will be serially numbered,
and will have been executed by manual or facsimile signature of
authorized officers of the Issuer, with the principal amount,
payee, date of issue, maturity date, amount of interest (if an
interest-bearing Note), maturity value and place of payment left
blank.
(b) When any such supply of Notes is delivered by the
Issuer to Mitsui, Mitsui will acknowledge receipt by returning a
receipt form to the Issuer. All Notes delivered to Mitsui shall
be held in safekeeping in accordance with Mitsui's customary
practices.
3. Authorized Representatives. From time to time the Issuer
will furnish Mitsui with a certificate of the Issuer, certifying
the incumbency and specimen signatures of officers of the Issuer
authorized to execute Notes on behalf of the Issuer by manual or
facsimile signature. Until Mitsui receives a subsequent incumbency
certificate of the Issuer, Mitsui shall be entitled to rely on the
last such certificate delivered to it for purposes of determining
such officers. Mitsui shall not have any responsibility to the
Issuer to determine by whom or by what means a facsimile signature
may have been affixed on the Notes, or to determine whether any
facsimile or manual signature is genuine, if such facsimile or
manual signature resembles the specimen signature(s) filed with
Mitsui by a duly authorized officer of the Issuer. Any Note
thereon bearing manual or facsimile signature of a person who is
an authorized officer on the date such signature is affixed shall
bind the Issuer after the completion thereof by Mitsui
notwithstanding that such person shall have died or shall have
otherwise ceased to hold his office on the date such Note is
countersigned or delivered by Mitsui.
4. Completion, authentication and delivery of Notes.
(a) All instructions shall be given via computer
terminal directly to Mitsui's computer; provided that instructions
may be given by telephone or in writing if the system is
inoperative. Instructions given by telephone or in writing shall
be given by an Authorized Representative (as hereinafter defined)
of the Issuer or by any person, including any employee or partner
of the Dealer, who has been designated by an Authorized
Representative in writing to Mitsui for the limited purpose of
designating such employee of the Dealer as a person authorized to
give such instructions hereunder. Upon receipt of instructions as
described in the preceding sentences, Mitsui shall withdraw the
necessary Note(s) from safekeeping and, in accordance with such
intructions, Mitsui shall:
(1) complete each Note as to principal amount
(minimum $100,000), payee, date of issue, maturity date,
amount of interest (if any), maturity value and place of
apyment; and
(2) manually countersign each Note by any one of the
officers or employees of Mitsui duly authorized and designated
by it for this purposes; and
(3) deliver the Note(s) to the Dealer or the
designated consignee, which delivery shall be against receipt
for payment as herein provided or as otherwise provided in
such instructions.
(b) Instructions given via the time-sharing terminal should
be entered as prescribed in the user documentation provided by
Mitsui and must be entered by 12:30 PM New York time and
instructions delivered by telephone or in writing must be received
by Mitsui at 12:30 PM New York time, if the Note(s) are to be
delivered the same day. Telephone instructions shall be confirmed
in writing the same day.
(c) The Issuer understands that although Mitsui is instructed
to deliver Note(s) against payment, delivery of the Notes will, in
accordance with the custom prevailing in the commercial paper
market, be made before receipt of payment in immediately available
funds. Therefore, once Mitsui has delivered a Note to the Dealer
or the designated consignee, the Issuer shall bear the risk that
the Dealer or such designated consignee fails to remit payment for
the Note or return the Note to Mitsui. It is understood that each
delivery of Notes of the Issuer hereunder shall be subject to the
rules of the New York Clearing House in effect at the time of such
delivery.
5. Proceeds of sale of the Notes. Funds received in payment
for the Note(s) are to be credited to a special purpose account of
the Issuer numbered (the "Special Account") on the
records of Mitsui. From time to time, upon telephonic or written
instructions received by Mitsui from an Authorized Representative
of the Issuer, or by any person who has been designated by an
Authorized Representative in writing to Mitsui as a person
authorized to give such instructions hereunder, amounts equal to
the proceeds of a sale of Note(s) may, if Mitsui consents, prior
to the time that such proceeds are received, be deposited by Mitsui
in an account of the Issuer maintained at Mitsui, be used in
payment of Note(s) presented for payment upon maturity, or be
transferred to the account of the Issuer at another bank. If
Mitsui makes such a deposit, payment or transfer of funds before
Mitsui receives the proceeds of the sale in immediately available
funds, such deposit, payment or transfer shall represent an advance
by it to the Issuer to be repaid from such proceeds of the sale or
by the Issuer in the event that such proceeds are not received by
Mitsui. It is intended that any advance be for no longer than 24
hours. Interest on each such unpaid advance shall be at a rate
negotiated between The Mitsui Bank, Ltd., New York Branch and the
Issuer and shall begin to accrue on the day of the advance.
6. Payment of matured Notes. Unless Mitsui is otherwise
directed, when any matured Note is presented to Mitsui for payment
by the holder thereof, payment by Mitsui shall be made from and
charged to the Special Account to the extent funds sufficient to
effect such payment are available in said account, or to the extent
that Mitsui may make credit available to the Issuer for the purpose
of such payment. Anything in the foregoing to the contrary
notwithstanding, if Mitsui elects to pay matured Note(s) when there
are not sufficient fund's in the special account of the Issuer, such
payment shall be deemed to be an advance by Mitsui to the Issuer,
which shall be repaid by the Issuer.
7. Reliance on instructions. Mitsui shall incur no liability
to the Issuer in acting hereunder upon telephonic or other
instructions comtemplated hereby which the recipient thereof
believed in good faith to have been given by an Authorized
Representative of the Issuer. In the event a discrepancy exists
between the telephonic instructions and the written confirmation,
or in the absence of receiving a written confirmation, the
telephonic instructions as recorded and understood by Mitsui will
be deemed the controlling and proper instructions. It is
understood that all telephonic instructions will be recorded by
Mitsui, and the Issuer hereby consents to such recording.
8. Cancellation of Notes. Mitsui will in due course cancel
Note(s) presented for payment and return them to the Issuer.
Promptly upon the written request of the Issuer, Mitsui agrees to
cancel and return to the Issuer all Notes in its possession at the
time of such request.
9. Representation and Warranties. Each instruction given to
Mitsui in accordance with paragraph 4 hereof shall constitute a
representation and warranty to Mitsui by the Issuer that the
issuance and delivery of the Notes have been duly and validly
authorized by the Issuer and that the Notes when completed,
countersigned and delivered pursuant hereto, will constitute the
legal, valid and binding obligations of the Issuer, and that
Mitsui's appointment to act for the Issuer hereunder has been duly
authorized by all necessary corporate action of the Issuer.
10. Notices. Notices and other communications hereunder
shall (except to the extent otherwise expressly provided) be in
writing and shall be addressed as follows, or to such other address
as the party receiving such notice shall have previously specified
to the party sending such notice:
if to the Issuer:
1000 Throckmorton
Fort Worth, Texas 76102
Attn: Director of Finance
Telephone: (817) 870-8185
Telecopier: (817) 870-
if to Mitsui:
277 Park Avenue
New York, N.Y. 10172-0121
Attn: Trust Department
Telephone: (212) 644-5322
Telefax: (212) 888-7651
Telex: ITT 420560, MFTNY UI
11. Information furnished by Mitsui. Upon the request of
the Issuer, given at any time and from time to time, Mitsui shall
promptly provide the Issuer with information with respect to the
Note(s) issued and paid hereunder. Such request shall be in
written form and shall include the serial number/note number,
principal amount, date of issue, maturity date, amount of interest
and place of payment of each Note which has been issued or paid by
Mitsui, and for which the request is being made. Mitsui and the
Issuer shall discuss from time to time the extent to which such
information is reasonably available and the times at which Mitsui
can reasonably furnish such information.
12. Liability. Neither Mitsui nor its officers or employees
shall be liable for any act or omission hereunder except in the
case of negligence or willful misconduct. The duties and
obligations of Mitsui, its officers and employees shall be
determined by the express provisions of this Agreement and they
shall not be liable except for the performance of such duties and
obligations as are specifically set forth herein and no implied
covenants shall be read into this Agreement against them. Neither
Mitsui nor its officers or employees shall be required to ascertain
whether any issuance or sale of Note(s) (or any amendment or
termination of this Agreement) has been duly authorized or is in
compliance with any other agreement to which the Issuer is a party
(whether or not Mitsui is also a party to such other agreement).
13. Judgment Currency. The obligation of the Issuer to make
payment in lawful currency of the United States of America
("Dollars") of any and all amounts due hereunder or under the Notes
shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment in any currency other than Dollars, except
to the extent that such tender or recovery shall result in the
actual receipt by Mitsui in New York or the holders of Notes of the
full amount of Dollars expressed to be payable hereunder or under
the Notes, as the case may be, and shall be enforceable as an
alternative or additional cause of action for the purpose of
recovering in Dollars the amount, if any by which such actual
receipt shall fall short of the full amount of Dollars so expressed
to be payable.
14. Authorized Representative. The persons designated by the
Issuer as Authorized Representatives, and a true and correct copy
of the signatures of said persons, are set forth in Exhibit A to
this Agreement.
15. Benefit of Agreement. This Agreement is solely for the
benefit of the parties hereto and no other person shall acquire or
have any right under or by virtue hereof.
16. Termination. This Agreement may be terminated at any
time by any party by written notice to the other parties but such
termination shall not affect the respective liabilities of the
parties hereunder arising prior to such termination.
17. Governing Law. This Agreement is to be delivered and
performed in, and shall be construed and enforced in accordance
with the law of the State of Texas; provided, that the standard of
care of Mitsui in performing its duties under this Agreement shall
be determined in accordance with the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on their behalf by officers duly
authorized thereunto, all as of the day and year first-above
written.
MITSUI FINANCE TRUST COMPANY
OF NEW YORK
By:
Title
CITY OF FORT WORTH, TEXAS
BY=
ATTEST:
City Secretary
APPROVED AS TO FORM:
City Attorney
CITY OF FORT WORTH TEXAS
Commercial Paper Notes
$50,000,000 Maximum Aggregate
Principal Amount Outstanding At Any Time
DEALER AGREEMENT
As of , 1990
City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76102
Gentlemen.
This is to confirm the agreement between the undersigned, Shearson Lehman
Hutton Inc. ("Shearson Lehman" or "Dealer"), and the City of Fort Worth, a body corporate
and politic {the "City") for Shearson Lehman to act as exclusive dealer for the City in
connection with the offering, issuance and sale by the City of its Commercial Paper Notes
(the "CP Notes"). The CP Notes shall be issued by the City under and pursuant to the
provisions of Article 717q, Texas Revised Civil Statutes, as amended (the "Enabling
Legislation") and an ordinance adopted by the City on March 8, 1990 (the "Ordinance")
The Ordinance provides for the issuance of Project Notes (as defined in the Ordinance),
which include the CP Notes, in an aggregate principal amount outstanding at any time not
to exceed $50,000,000
1 Appointment of Dealer; Responsibilities of Dealer. (a) Subject to the terms
and conditions herein contained, the City hereby appoints Shearson Lehman, and Shearson
Lehman hereby accepts such appointment, as exclusive dealer for the City in connection
with the offering, issuance and sale of the CP Notes.
(b) In its capacity as dealer, Shearson Lehman shall exercise its best efforts
to solicit purchases of the CP Notes; on such terms and conditions, including maturity
dates and interest rates, as may prevail from time to time in the commercial paper
market, so as to enable the sale of the CP Notes at their par value On or before 12 30
P.M , New York time, on each day on which CP Notes, the purchase of which has been
solicited by Shearson Lehman, are to be issued, Shearson Lehman will notify the
designated Authorized Representative of the City of the amounts and terms and conditions
of such CP Notes with respect to which Shearson Lehman has received indications of
interest from potential purchasers. Such amounts and terms and conditions shall be
subject to the approval of the City The receipt by Shearson Lehman of such indications
of interest from potential purchasers of CP Notes shall not constitute legal and binding
commitments of such purchasers, and the giving by Shearson Lehman of notice of such
indications of interest from potential purchasers of CP Notes pursuant to this paragraph
shall not constitute, or be construed as constituting, notice of the receipt by Shearson
Lehman of legal and binding commitments of such purchasers.
(c) It is understood and agreed that Shearson Lehman's responsibilities
hereunder will include (i) the soliciting of purchases of CP Notes from investors that
customarily purchase commercial paper or tax-exempt securities in denominations of
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$100,000 or greater, (ii} effecting and processing such purchases, (iii) causing the
furnishing by mail or otherwise (at the City's expense), of such materials as are described
in Section 3 hereof, (iv) billing and receiving payment for CP Notes purchased, and (v)
performing such other related functions as may be requested by the City and agreed to by
Shearson Lehman.
(d} Notices pursuant to, or contemplated by, the provisions of this Section
shall be given by telephonic or other electronic communication between or among
authorized representatives of the parties to this Dealer Agreement and shall be confirmed
in writing and mailed, telegraphed or delivered to such parties on the later of the business
day following the settlement, if any, of the respective transactions to which such notices
relate or the business day following the telephonic communication.
(e) Shearson Lehman acknowledges that the covenants made in this Section
1 apply to both the initial sale of CP Notes and any rollovers of CP notes as may occur
from time to time.
2 The CP Notes. As more fully described in the Ordinance, the CP Notes will
be issuable in minimum denominations of $100,000 and integral multiples of $1,000 in
excess of such amount and will have maturities of not more than 270 days from their
respective dates of issuance The CP Notes will be issuable in registered form registered
to bearer unless otherwise requested by a purchaser thereof The CP Notes will be issued
as interest-bearing obligations, payable at maturity and maturing at such times as the
City, by itself or through its authorized representative or authorized representatives, may
designate upon authorizing the issuance thereof Principal of and interest on all CP Notes
will be payable at maturity in immediately available funds at the offices of the Issuing and
Paying Agent
3 Furnishing of Memorandum. (a) The City agrees to furnish Shearson Lehman
with as many copies as Shearson Lehman may reasonably request of the Offering
Memorandum dated March 8, 1990, each Annual Memorandum and each Supplement (as
such terms are hereinafter defined) and any related material prepared for use by the City
in connection with the offering of the CP Notes. Such Offering Memorandum (including
the cover page and all summary statements, appendices and other materials included or
incorporated therein by reference or attached thereto or furnished for distribution
therewith), as it may be amended or supplemented from time to time by a Supplement or
Supplements (as such term is hereinafter defined), is hereinafter referred to as the
"Annual Memorandum (1990)" Shearson Lehman will furnish the Annual Memorandum
(1990) to each offeree of the CP Notes at or prior to the date on which such offeree is
first offered the CP Notes.
(b) As promptly as practicable, but in no event more than 90 days, following
receipt of the annual audited financial statements of the City for the fiscal year ended
September 30, 1990, the City shall update the Annual Memorandum (1990), if required, or
if required by Shearson Lehman. Such updated Memorandum, as it may be supplemented
or amended from time to tune by a Supplement or Supplements (as such term is
hereinafter defined), will be furnished by the Dealer to each offeree of CP Notes to be
offered at least one full business day subsequent to the receipt by the Dealer of such
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-3-
updated Memorandum. Such updated Memorandum (including the cover page and al]
summary statements, appendices and other materials included or incorporated therein by
reference or attached thereto or furnished for distribution therewith), as it may be
amended or supplemented from time to time by a Supplement or Supplements (as such
term is hereinafter defined), is hereinafter referred to as an "Annual Memorandum."
(c) Each Annual Memorandum shall be revised in the same manner and
within the same period after the end of each fiscal year of the City as is provided in
paragraph (b) of this Section with respect to the Annual Memorandum (1990). The most
current Annual Memorandum (or the Annual Memorandum (1990) if no Annual
Memorandum has been delivered to Shearson Lehman) is hereinafter referred to as the
"Memorandum "
(d) If, during and prior to such time as any Memorandum is used in
connection with the offering and sale of the CP Notes, any event or condition known to
the City relating to or affecting the City, the Ordinance, the Credit Agreement (as such
term is hereinafter defined) or the CP Notes shall occur which might materially adversely
affect the properties, business, condition (financial or otherwise) or results of operations
of the City's Water and Sewer System or the interests of holders of the CP Notes, or
which might affect the correctness or completeness of any statement of a material fact
contained in such Memorandum, the City will promptly notify Shearson Lehman in writing
of the circumstances and details of such event. If, as a result of such event or condition
or any other event or condition, it is necessary, or advisable in the opinion of Shearson
Lehman, to amend or supplement such Memorandum in light of such event or condition,
the City will forthwith cooperate with Shearson Lehman in the prompt preparation of a
supplement to such Memorandum (a "Supplement"), in form and substance satisfactory to
Shearson Lehman, which will so amend or supplement such Memorandum
4 Representations, Warranties, Covenants and Agreements of the City. The
City, by its acceptance hereof, represents, warrants, covenants and agrees with Shearson
Lehman as follows.
(a) The City is a political subdivision and body corporate and politic, duly
organized and existing under the constitution and laws of the State of Texas, and is
authorized by the Enabling Legislation to offer, issue, sell and deliver the CP Notes for
the purposes specified in the Ordinance and to enter into and perform its obligations under
this Dealer Agreement, the CP Notes, the Ordinance, the Credit Agreement and any other
instrument or agreement to which the City is a party and which has been executed in
connection with the transactions contemplated by the foregoing documents in order to
accomplish the foregoing actions;
(b) The City has full power and authority to take all actions required or
permitted to be taken by the City by or under and to perform and observe the covenants
and agreements on its part contained in, this Dealer Agreement, the CP Notes, the
Ordinance, the Credit Agreement and any other instrument or agreement relating thereto
to which the City is a party, and the City has complied with all provisions of applicable
law, including the Enabling Legislation, in all matters related to such actions,
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(c) The City has, on or before the date hereof, duly taken all action
necessary to be taken by it or on its behalf prior to such date for• (i) the offering,
issuance, sale and delivery of the CP Notes upon the terms and conditions and- for the
purposes described herein and in the Memorandum, (ii) the adoption of the Ordinance, (iii)
the execution, delivery and performance of this Dealer Agreement, the CP Notes, the
Credit Agreement between the City and The Mitsui Bank, Limited (the "Credit
Agreement"), and any other instrument or agreement to which the City is a party and
which has been or will be executed in connection with the transactions contemplated by
the foregoing documents, (iv) the approval, execution, delivery and distribution of the
Memorandum, and (v) the carrying out, giving effect to, consummation and performance of
the transactions and obligations contemplated hereby and by the Ordinance and the
Memorandum. The City will have, on or before the date on which any CP Notes are
issued, duly taken all action required to be taken by it or on its behalf prior to such date
for the offering, issuance, sale and delivery of such CP Notes upon the terms set forth in
the Ordinance;
(d) The Ordinance has been duly adopted by the City and is in full force and
effect, and this Dealer Agreement, the Ordinance, the Credit Agreement and any other
instrument or agreement to which the City is a party and which has been or will be
executed in connection with the consummation of the transactions contemplated by the
foregoing documents, when executed and delivered by the parties hereto and thereto, will
constitute valid and binding obligations of the City, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws, judicial decisions or principles of equity relating to or affecting
the enforcement of creditors' rights or contractual obligations generally;
(e) The execution and delivery of this Dealer Agreement, the Ordinance,
the CP Notes, the Credit Agreement and any other instrument or agreement to which the
City is a party and which has been or will be executed in connection with the
consummation of the transactions contemplated by the foregoing documents, the
compliance with the terms, conditions or provisions hereof and thereof, and the
consummation of the transactions herein and therein contemplated do not and will not
conflict with or constitute a breach of or a default under or result in a violation of (i) the
Enabling Legislation, (ii) the Ordinance, (iii) any agreement or other instrument to which
the City is a party or by which the City or any of its properties is bound, or (iv) any
constitutional or statutory provision or order, rule, regulation, decree or ordinance of any
court, government or governmental authority having jurisdiction over the City or any of
its properties,
(f) On and as of the first date on which CP Notes are to be sold pursuant to
the terms of the Ordinance and this Dealer Agreement (the "Closing Date"), all
authorizations, consents and approvals of, notices to, registrations or filings with, or
actions in respect of any governmental body, agency or other instrumentality or court
required in connection with the execution, delivery and performance by the City of this
Dealer Agreement, the CP Notes, the Ordinance, the Credit Agreement and any other
agreement or instrument to which the City is a party and which has been or will be
executed in connection with the consummation of the transactions contemplated by the
foregoing documents will have been obtained, given or taken and will be in full force and
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effect, provided that no representation is made with respect to compliance with the
securities or "Blue Sky" laws of the various states of the United States,
(g) There is no action, suit, proceeding, inquiry or investigation at law or in
equity or before or by any court, public board or body pending or, to the knowledge of the
City, threatened against or affecting the City (or, to the knowledge of the City, is there
any basis therefor) wherein an unfavorable decision, ruling or finding would adversely
affect (i} the validity of the Ordinance, (ii} the validity or enforceability of, or the
authority or ability of the City to perform its obligations under, this Dealer Agreement,
the CP Notes, the Ordinance, the Credit Agreement or any other agreement or instrument
to which the City is a party and which has been or will be executed in connection with the
consummation of the transactions contemplated by the foregoing documents, or (iii) the
transactions contemplated by this Dealer Agreement and the Memorandum,
(h) When executed, issued, delivered and paid for, as provided herein and in
the Ordinance, the CP Notes will be duly authorized, executed, issued and delivered and
will constitute valid and binding obligations of the City enforceable in accordance with
their terms and the terms of the Ordinancq~ except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws, judicial decisions or principles of
equity relating to or affecting the enforcement of creditors' rights or contractual
obligations generally;
(i) The City will apply the proceeds from the sale of the CP Notes for the
purposes specified in the Ordinance,
(j) Except as required by law, the City will not take or omit to take any
action which will adversely affect the exemption from federal income taxation of the
interest on the CP Notes under the Internal Revenue Code of 1986, as amended,
The City will cooperate with the Dealer in the qualification of the CP
Notes for offering and sale and the determination of the eligibility of the CP Notes for
investment under the laws of such juris fictions as the Dealer shall designate and will use
its best efforts to assist the Dealer in he efforts of the Dealer to continue any such
qualification in effect so long as require for the distribution of the CP Notes by the
Dealer, provided that the City shall not be required to take any action action which would
subject it to general service of process in any jurisdiction where it is not now so subject.
It is understood that the City is not responsible for compliance with or the consequences
of failure to comply with applicable Blue Sky laws,
(1) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that the City is a bond issuer whose arbitrage
certifications may not be relied upon;
(m) The City is not in default in the payment of principal of, premium, if
any, or interest on any bonds, notes, or other obligations which it has issued, assumed or
guaranteed as to the payment of principal, premium, if any, or interest, and, other than
the Credit Agreement, the City has not entered into any contract or arrangement of any
kind which might give rise to any lien or encumbrance on the assets, funds and interests
pledged pursuant to, or subject to the lien of, the Credit Agreement,
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(n} The information contained in each Memorandum, as of the date on
which such Memorandum is furnished to prospective purchasers of the CP Notes, will not
contain any untrue statement of a material fact and will not omit to state a material fact
necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading, provided that no representation is made with
respect to any information furnished in writing to the City by or on behalf of the Dealer or
The Mitsui Bank, Limited (the "Bank") for inclusion in any Memorandum, and
(o) Any certificate authorized by official action of the City, signed by any
authorized official or officials of the City and delivered to Shearson Lehman, shall be
deemed a representation by the City to Shearson Lehman as to the statements made
therein.
(p} The City agrees to provide the
Date an updated opinion of Bond Counse
5 Conditions To Shearson Cabman's Obligations. The obligations of Shearson
Lehman under this Dealer Agreement have been undertaken in reliance on, and shall be
subject to, the due performance by the City of its obligations and agreements to be
performed hereunder and under the Ordinance and Credit Agreement and to the accuracy
of and compliance with the respective representations, warranties, covenants and
agreements of the City contained herein and therein, in each case on and as of the date of
delivery of this Dealer Agreement and on and as of each date on which CP Notes are to be
issued. The obligations of Shearson Lehman hereunder with respect to each date on which
CP Notes are to be issued are also subject, in the discretion of Shearson Lehman, to the
following further conditions.
(a) The Ordinance and the Credit Agreement shall be in full force and
effect and shall not have been amended, modified or supplemented, except as may have
been agreed to in writing by Shearson Lehman, and there shall be in full force and effect
such additional resolutions, agreements and certificates (including such certificates as
may be required by regulations of the U.S. Treasury Department in order to establish the
tax exempt character of interest on the CP Notes) and such opinions of counsel, which
resolutions, agreements, certificates and opinions shall be satisfactory in form and
substance to bond counsel to the City and to counsel to Shearson Lehman, and there shall
have been taken in connection therewith and in connection with the issuance of the CP
Notes all such action as shall, in the opinion of the aforesaid counsel, be necessary, in
connection with the transactions contemplated hereby;
(b) There shall have been no material adverse change in the properties,
business, condition (financial or other) or results of operations of the City's Water and
Sewer System since the date of the Memorandum relating to CP Notes being sold on such
date, and no Event of Default as such term is defined in the Ordinance shall have occurred
and be continuing and no event shall have occurred and be continuing which, with the
passage of time or giving of notice or both, would constitute such an Event of Default, and
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(c) At or prior to the Closing Date, Shearson Lehman shall have received.
(i) Executed copies of the Credit Agreement; a copy of the Ordinance
certified by the City Secretary; and a transcript of all proceedings relating to the
authorization of the CP Notes, certified by the City Secretary;
(ii} Opinions dated as of such date of (a) McCall, Parkhurst & Horton,
bond counsel to the City, {b) the City Attorney, (c} Rogers & Wells, counsel to the
Bank, and (d) Kelly, Hart & Hallman, P C., counsel to Shearson Lehman (each of
such opinion in form and substance as previously agreed to by each such counsel and
Shearson Lehman);
(iii) A certificate of the City, executed by any duly authorized official
of the City, dated as of such date, to the effect that each of the City's
representations and warranties contained herein are true and correct in all material
respects on and as of such date with the same effect as if made on such date, and
that the conditions to Dealer's obligations set forth in Section 5(a) and (b) have
been satisfied;
(iv) An unqualified approving opinion, dated on or prior to the Closing
Date of the Attorney General of Texas, as required by law, and
(v) Copies of all documents required by, and delivered pursuant to,
Section 3 Ol of the Ordinance and Section 4 of the Credit Agreement
6 Term and Termination of Dealer Agreement.
(a) This Dealer Agreement may be cancelled by Shearson Lehman or the
City at any time on written notice To be effective, such written notice must be given no
less than 60 days prior to such cancellation date
(b) In addition to the provisions of paragraph (a) of this Section, either part
to this Dealer Agreement may terminate its obligations under this Dealer Agreement at
any time by notifying the other party to this Dealer Agreement in writing or by telegram
of its election to do so, if.
(i) A tentative decision with respect to legislation shall be reached by
a committee of the House of Representatives or the Senate of the Congress of the
United States or legislation shall be favorably reported by such a committee or be
introduced, by amendment or otherwise, in, or be enacted by, the House of
Representatives or the Senate, or be recommended to the Congress of the United
States for passage by the President of the United States, or a decision by a court
established under Article III of the Constitution of the United States, or the Tax
Covet of the United States, shall be rendered or a ruling, regulation or order of the
'Treasury Department of the United States or the Internal Revenue Service shall be
made or proposed having the purpose or effect of imposing federal income taxation,
or any other event shall have occurred which results in the imposition of federal
income taxation, upon revenues other income of the general character to
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LE~-~VIAN
HUTTON
-8-
be derived by the City (or by any similar body) or upon interest received on
obligations of the general character of the CP Notes, or
(ii) Legislation shall be introduced, by amendment or otherwise, in, or
be enacted by, the House of Representatives or the Senate of the Congress of the
United States, or a decision by a court of the United States shall be rendered, or a
stop order, ruling, regulation or official statement by, or on behalf of the United
States Securities and Exchange Commission or other governmental agency having
jurisdiction of the subject matter shall be made or proposed, to the effect that the
issuance, offering or sale of obligations of the general character of the CP Notes,
as contemplated hereby, is or would be in violation of any provision of the
Securities Act of 1933, as amended and as then in effect, or the Securities
Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act
of 1939, as amended and as then in effect, or with the purpose or effect of
otherwise prohibiting the issuance, offering or sale of obligations of the general
character of the CP Notes, or the CP Notes, as contemplated hereby
(c) In addition, Shearson Lehman may terminate its obligations under this
Dealer Agreement at any time by notifying the City in writing or by telegram of its
election to do so, if.
(i) Any event shall have occurred, or information becomes known,
which, in Shearson Lehman's reasonable opinion, makes untrue, incorrect or
misleading in any material respect any statement or information contained in any
Memorandum, and the City shall fail to supplement any Memorandum in a manner
satisfactory to Shearson Lehman within a reasonable period of time after requested
to do so by Shearson Lehman,
(ii} Any legislation, resolution, ordinance, rule or regulation shall be
introduced in, or be enacted by any governmental body, department or agency of
the United States, the State of Texas, or the City of Fort Worth, or a decision by
any court of competent jurisdiction within the United States or the City of Fort
Worth shall be rendered which, in Shearson Lehman's reasonable opinion, materially
adversely affects the marketability of the CP Notes,
(iii} Additional material restrictions not in force as of the date hereof
shall have been imposed upon trading in securities generally by any governmental
authority or by any national securities exchange,
(iv) Any governmental authority shall impose, as to the CP Notes, or
obligations of the general character of the CP Notes, any material restrictions not
now in force, or increase materially those now in force;
(v) A general banking moratorium shall have been established by
Federal, Texas or New York authorities;
(vi) Any rating of the CP Notes shall have been downgraded or
withdrawn by a national rating service, which, in Shearson Lehman's reasonable
opinion, materially adversely affects the marketability of the CP Notes, or
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HUTTON
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(vii) A war involving the United States shall have been declared, or any
existing conflict involving the armed forces of the United States shall have
escalated, or any other national emergency relating to the effective operation of
government or the financial community shall have occurred, which, in Shearson
Lehman's reasonable opinion, adversely affects the marketability of the CP Notes.
7. Purchase of Notes by Dealer.
(a) Dealer further agrees that, upon request of the City, but subject to the
terms and conditions hereof, Dealer will purchase CP Notes, on the terms provided in this
Section ?, at or prior to 4 00 p.m ,New York City time, on any day on which CP Notes are
maturing (a "Refunding Date") in an aggregate principal amount (the "Refunding Amount")
up to the difference between the sum of the amount available in the Series A Note
Payment Fund at 9 00 a.m ,New York City time, on such Refunding Date (as reported to
Dealer by the Issuing and Paying Agent) and the principal of and interest on all CP Notes
maturing on such Refunding Date CP Notes to be purchased by Dealer pursuant to this
Section 7 are herein referred to as "Dealer Notes" Dealer hereby agrees to purchase on
any Refunding Date Dealer Notes which bear interest at such rate or rates as may be
agreed upon by the City and Dealer, on such Refunding Date, and which mature on such
dates, not later thar~,Q_days from such Refunding Date, as may be requested by City;
provided that the Dealer shall have no obligation to purchase Dealer Notes on such date (i)
with an aggregate principal amount of dollar-days usage in excess of the Dealer
Commitment on such date or (ii) under circumstances in which such Dealer Notes would be
outstanding during any period during which there are or may be outstanding tax-exempt
obligations by the City (other than the CP Notes and unsecured revocable bank lines of
credit} (A) having an interest rate equal to or higher than that of the CP Nvtes and
maturing, or directly or indirectly redeemable by, or as to which payment may be obtained
at the option of, the holder thereof., within 180 days after the date of issuance of such
Dealer Notes, and (B) either issued or reissued, or priced or repriced within 180 days of the
date of issuance of such Dealer Notes. As used herein, the term "dollar-days usage"
means, in the case of each Dealer Note, the principal amount of such Dealer Note
multiplied by the number of days from its date of issuance to and including the date of its
stated maturity As used herein, the term "Dealer Commitment" means, as of any date,
I~$1.500,00~,000,00 reduced by the aggregate dollar-days usage of all Dealer Notes
previously issued (whether or not outstanding}
(b) If the City offers hereunder any CP Notes the principal of which is to be
applied other than to the payment of the principal of or principal of and interest on
maturing GP Notes, .Shearson Lehman shall, if it cannot locate a purchaser for such CP
Notes by 12:30 p.m., New York time, on the date of their offer, purchase such CP Notes
for its own account, the consummation of such purchase to occur by 2:00 p.m New York
time on such date ~ CP Notes so pwchased by Shearson Lehman shall have a maturity of at
least one day and shall bear interest at such rate as shall be agreed upon by the City and
Shearson Lehman.
8 Indemnification and Equitable Contribution. (a} To the extent it legally may,
;the City assumes liability for, and will indemnify and hold the Dealer harmless from and
against, any liabilities, claims, damages, costs, and expenses {including legal fees and
". a ;: r
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`~ SHEARSON
~~ ~--~~ LEHM.~N
~~ HUTTON
-10-
expenses) ("Liabilities") arising out of or in connection with the issuance and sale of the
CP Notes, including without limitation, Liabilities arising out of or related to an actual or
alleged untrue statement of a material fact contained in any Memorandum or otherwise
made in connection with the issuance and sale of the CP Notes or an actual or alleged
omission of a material fact necessary in order to make any statement contained in any
Memorandum or otherwise made in connection with the issuance and sale of the CP Notes,
in light of the circumstances in which such statements were made, not misleading;
provided, however, that the foregoing indemnity shall not extend to any Liabilities to the
extent they arise from (i) any untrue statement by the Dealer of a material fact relating
to the Dealer's sale of the CP Notes or an omission by the Dealer of a material fact
`relating to the Dealer's sale of the CP Notes necessary in order to make any statement, in
light' of the circumstances in which such statement was made, not misleading ii an
- - - -- '^--~- -r
or viii) the
negligence of the Dealer in the performance ~ or failure to perform its obligations
hereunde~
(b) The Dealer assumes liability for, and will indemnify and hold the City
harmless from and against, any Liabilities arising out of or in connection with the
negligence of the Dealer in the performance of or failure to perform its obligations
hereunder
~c In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in subparagraphs (a) or b of this Section is for
any reason (other than those set forth in the proviso clause of subparagraph (a) of this
Section) held to be unavailable to the Dealer, the City and the Dealer shall contribute to
the aggregate Liabilities to which the city and the Dealer may be subject, in such
proportion that the Dealer shall be responsible for that percentage of such Liabilities
equal to the percentage that any fees and commissions payable to the Dealer bears to the
aggregate principal amount of the CP Notes sold and the balance of such Liabilities shall
be the responsibility of the City; provided that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933) shall
be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The indemnity and contribution provisions contained in this Section 8
shall survive termination of this Dealer Agreement.
9 Payment of Fees and Expenses. ~ In consideration of the services to be
performed by Shearson Lehman under this Dealer Agreement, the City shall compensate
Shearson Lehman at the rate of 1/10 of 1.00% per annum of the outstanding aggregate
principal amount of CP Notes. Alt is understood and agreed that (i) Qavment of such fee
_Notes outstanding prior to such termination or cancellation. In addition, to compensate
Shearson Lehman for the initial start-up costs (including the fees of counsel to Shearson
Lehman) associated with the initial issuance of the CP Notes, the City agrees to pay
Shearson Lehman $ from the proceeds of the initial sale of CP Notes.
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SHEARSON
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10 Miscellaneous.
(a) Except as otherwise specifically provided in this Dealer Agreement, all
notices, demands and formal actions under this Dealer Agreement shall be in writing and
mailed, telegraphed or delivered to:
Shearson Lehman.
Shearson Lehman Hutton Inc.
Two World Trade Center
100th Floor
New York, New York 10048-0100
Attention: Short-Term Municipal Desk
The City•
City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76102
Attention. Director of Finance
The Dealer and the City may, by notice given under this Dealer Agreement,
designate other addresses to which subsequent notices, requests, reports or other
communications shall be directed.
(b) This Dealer Agreement will inure to the benefit of and be binding upon
the City and Shearson Lehman and their respective successors and assigns, and will not
confer any rights upon any other person, partnership, association or corporation. The
terms "successors" and "assigns" shall not include any purchaser of any of the CP Notes
merely because of such purchase.
(c) All of the representations, warranties and covenants of the City and
Shearson Lehman in this Dealer Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of Shearson Lehman, or (ii)
delivery of and any payment for any CP Notes hereunder
(d) Section headings have been inserted in this Dealer Agreement as a
matter of convenience of reference only, and it is agreed that such section headings are
not a part of this Dealer Agreement and will not be used in the interpretation of any
provisions of this Dealer Agreement.
(e) If any provision of this Dealer Agreement shall be held or deemed to be
or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case
in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any
provisions of any constitution, statute, rule of public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or of rendering any other
provision ar provisions of this Dealer Agreement invalid, inoperative or unenforceable to
any extent whatsoever
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SHEAIZSON
LE~-~MAN
HUTTON
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(f) This Dealer Agreement may be executed in several counterparts, each
of which shall be regarded as an original and all of which shall constitute one and the same
document.
(g) This Dealer Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
Very truly yours,
SHEARSON LEHMAN HUTTON INC
By:
Title:
Accepted and agreed to as of
the date first above
written.
CITY OF FORT WORTH
By•
ATTEST
City Secretary
(SEAL)
APPROVED AS TO FORM AND
LEGALITY
City Attorney
32520
City Manager
SHEARSON
L
HUTTON
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF FORT WORTH
I, the undersigned, City Secretary of the City of Fort Worth,
in the State of Texas, do hereby certify that I have compared the
attached and foregoing excerpt from the minutes of the regular
meeting of the City Council of the City of Fort Worth, Texas which
was held on March 8; 1990 and of an ordinance which was duly passed
at said meeting, and that said copy is a true and correct copy of
said excerpt and the whole of said ordinance. Said meeting was
open to the public, and public notice of the time, place and
purpose of said meeting was given, all in accordance with Vernon's
Annotated Civil Statutes, Article 6252-17, as amended.
In testimony whereof, I have set my hand and have hereunto
affixed the seal of said City of Fort Worth, this 8th day of March,
1990.
C'ty Secretary of the City of
Fort Worth, Texas
~ (SEAL)r
` ~, ,~•
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r
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF FORT WORTH
On the 8th day of March, 1990 the City Council of the
City of Fort Worth, Texas, met in regular, open, public meeting in
the City Council Chamber in the City Hall with the following
members present, to-wit:
Bob Bolen,
Garey Gilley,
Virginia Nell Webber:
William N. Garrison
David Chappell
Kay Granger
Eugene McCray
Louis J. Zapata
(vacancy)
David A. Ivory,
Wade Adkins,
Ruth Howard,
A. Judson Bailiff,
Linda Patterson,
Mayor,
Mayor Pro-Tem,
Councilmembers,
City Manager,
City Attorney,
City Secretary,
Director of Finance,
City Treasurer.
with more than a quorum present; and after the City Council had
transacted certain business, the following business was transacted,
to-wit:
introduced an ordinance and moved
its passage. The motion was seconded by Councilmember
The ordinance was read by the City Secretary. The motion, carrying
with it the passage of the ordinance prevailed unanimously. T h e
ordinance as passed is as follows: