HomeMy WebLinkAboutOrdinance 15100ORDINANCE NO ~~~~
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE BONDS, SERIES 2002,
AND ORDAINING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS
COUNTIES OF TARRANT AND DENTON
CITY OF FORT WORTH
WHEREAS, the City adopted an ordinance on October 17 1989 (the Subordinate Lien
Revenue Bond Ordinance') authorizing the issuance of City of Fort Worth, Texas Water and Sewer
System Subordinate Lien Revenue Bonds, Series 1989 in the aggregate principal amount of $33,300,000
(the Series 1989 Subordinate Lien Obligations') and
WHEREAS, the City reserved the right in the Subordinate Lien Revenue Bond Ordinance to
issue obligations payable from a lien on the 'Pledged Revenues of the combined Water and Sewer
System on a parity with the Series 1989 Subordinate Lien Obligations, and
WHEREAS, pursuant to such reservation of authority the City heretofore has issued its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1991 in the
aggregate principal amount of $16,155,000 (the Series 1991 Subordinate Lien Obligations') its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1992, in the
aggregate principal amount of $12,000 000 (the Series 1992 Subordinate Lien Obligations') rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1995, in the
aggregate principal amount of $18,880 000 (the Series 1995 Subordinate Lien Obligations') rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1996, in the
aggregate principal amount of $17 120 000 (the Series 1996 Subordinate Lien Obligations') rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1998, in the
aggregate principal amount of $60 980 000 (the Series 1998 Subordinate Lien Obligations') rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1999 in the
aggregate principal amount of $38,000,000 (the Senes 1999 Subordinate Iaen Obligations ') its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1999A, in the
aggregate pnncrpal amount of $61,750,000 (the 'Senes 1999A Subordinate Lien Obligations ') and its
Cityof Fort Worth, Texas Water and Sewer System Subordinate Lren Revenue Bonds, Senes 2001, in
the aggregate principal amount of $8,080,000 (the 'Senes 2001 Subordinate Lien Obligations ') and
WHEREAS the Senes 1989 Subordinate Lien Obligations no longer are outstanding; and
WI~REAS, the Senes 1991 Subordinate Lien Obligations, the Senes 1992 Subordinate Lren
Obligations, the Senes 1995 Subordinate Iaen Obligations, the Senes 1996 Subordinate L,ren
Obligations, the Senes 1998 Subordinate Lien Obligations, the Senes 1999 Subordinate Lren
Obligations, the Senes 1999A Subordinate Lien Obligations and the Senes 2001 Subordinate Lien
Obligations are hereinafter referred to as the 'PrevrouslyIssued Subordinate Lien Obligations and
WHEREAS, the hen on and pledge of the Pledged Revenues securing the Previously Issued
Subordinate Lien Obligations >s subordinate to the lien on and pledge of the Pledged Revenues securing
other outstanding obligations of the City srmilarly secured, and
WI-~REAS, the City deems rt necessary and advisable to issue bonds on a panty with the
Previously Issued Subordinate Lien Obligations,
WHEREAS, the bonds hereinafter authorized are to be >ssued and delivered pursuant to
Chapter 1502, Texas Government Code, and other applicable laws, for the purpose of extending and
improving the Cit~s combined Water and Sewer System, as further described in th>s Ordinance; and
WHEREAS, the Texas Water Development Board has committed to purchase the bonds
hereinafter authorized pursuant to Subchapter J of Chapter 15 Texas Water Code.
BE IT ORDAINED BY THE QTY COUNCIL OF THE QTY OF FORT WORTH,
TEXAS:
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Section 1 BONDS AUTHORIZED That the City's bonds (the Obligations ') are hereby
authorized to be issued rn the aggregate principal amount of $34,310,000 for the purpose of extending
and improving the City's combined water and sewer system, to-wit: extending and unprovuig the City's
sewer system. The Obligations shall be designated as the Cityof Fort Worth, Texas Water and Sewer
System Subordinate Lien Revenue Bonds, Series 2002"
Section 2. DATE AND MATURITIES That the Obligations shall be dated May 15, 2002,
shall be in the denomination of $5,000 each, or any integral multiple thereof shall be numbered
consecutively from R 1 upward, and shall mature on the maturity date, in each of the years, and in the
amounts, respectively as set forth m the following schedule:
MATURITY DATE MARCH 1
YE.ABS
2003 AC'7CTRF.C,A
PRTNCTP T.
AMOt TNTS (~1
1,275,000
yEA$S
2013 AC'7C'TRF(',ATF
PRT_NC'iPAT.
AMnt TNTS ($1
1,675,000
2004 1,290,000 2014 1,740,000
2005 1,315,000 2015 1,805,000
2006 1,345,000 2016 1,875,000
2007 1,380,000 2017 1,950,000
2008 1420,000 2018 2,035,000
2009 1,465,000 2019 2,120,000
2010 1,510,000 2020 2,210,000
2011 1,565,000 2021 2,310,000
2012 1,615,000 2022 2,410,000
The Texas Water Development Board ("TWDB ') will purchase the Obligations m the manner
described m Section 27 of this Ordinance.
Section 3 RIGHT OF PRIOR REDEMPTION. The City reserves the right to redeem the
Obligations maturing on and after March 1 2013 on September 1 2012, or on any date thereafter m
whole or ui part, and ~ ul part, in inverse order of maturity for the principal amount thereof and
accrued interest thereon to the date fixed for redemption, and without premium.
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At least 30 days prior to the date fixed for any such redemption a written nonce of such
redemption shall be given to the registered owner of each Obligation or a portion thereof being called
for redemption bydepositing such notice in the United States mail, postage prepaid, addressed to each
such registered owner at his address shown on the registration books of the Paying Agent/Registrar
By the date fixed for any such redemption due provision shall be made by the City with the Paying
Agent/Registrar forthe payment of the required redemption price forthe Obligations or the portions
thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption.
If such written nonce of redemption is given, and if due provision for such payment >s made, all as
provided above, the Obligations, or the portions thereof which are to be so redeemed, thereby
automaticallyshall beredeemed pnor to their scheduled maturities, and shall not bear interest after the
date fixed for their redemption, and shall not be regarded as being outstanding except for the right of
the registered owner to receive the redemption pace plus accrued interest to the date fixed for
redemption from the Paying Agent/Registrar out of the funds provided f or such payment. The Paying
Agent/Registrar shall record in the Registration Books all such redemptions of principal of the
Obligations or any portion thereof If a portion of any Obligation shall be redeemed a substitute
Obligation or Obligations having the same maturity date, bearing interest at the same rate, in any
denomination or denominations in any integral multiple of $5 000 at the written request of the
registered owner, and in an aggregate principal amount equal to the unredeemed portion thereof will
be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the
City all as provided iii this Ordinance.
Section 4 INTEREST That the Obligations shall bear interest at the following rates per
annum:
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maturities 2003 1.100% maturities 2013 3.600%
maturities 2004 1.700% maturities 2014 3.700%
maturities 2005 2.150% maturities 2015 3.800%
maturities 2006, 2.400% maturities 2016, 3 950%
maturities 2007 2.700% maturities 2017 4 050%
maturities 2008, 2.950% maturities 2018, 4150%
maturities 2009 3 150% maturities 2019 4.200%
maturities 2010, 3.250% maturities 2020, 4.250%
maturities 2011 3.350% maturities 2021, 4.300%
maturities 2012, 3 450% maturities 2022, 4.350%
Interest on the Obligations shall be calculated on the basis of a 360-dayyear consisting of twelve 30-day
months. Said interest shall be payable to the registered owner of anysuch Obligation in the manner
provided and on the dates stated m the FORM OF BOND
Section 5 C~ IARACI'ER15TICS OF TI-~ OBLIGATIONS. (a) The Cityshall keep or cause
to be kept at the designated corporate mist office in Dallas, Texas (the 'Designated Trust Office') of
JPMorgan Chase Bank, or such other bank, trust company financial institution, or other agencynamed
uz accordance with the provisions of (g) of this Section hereof (the 'Paying Agent/Registrar") books
or records of the registration and transfer of the Obligations (the 'Registration Books ') and the City
hereby appouits the Payuig Agent/Registrar as its registrar and transfer agent to keep such books or
records and make such transfers and registrations under such reasonable regulations as the City and
Paying Agent/Registrar mayprescribe; and the Paying Agent/Registrar shall make such transfers and
registrations as herein provided. It shall be the dutyof the Paying Agent/Registrar to obtain from the
registered owner and record iii the Registration Books the address to which payments with respect to
the Obhgations owned by any such registered owner thereof shall be mailed as herein provided. The
Cityor its designee shall have the right to inspect the Registration Books during regular business hours
of the PayingAgent/Registrar at its Designated Trust Office, but otherwise the Paying Agent/Registrar
shall keep the Registration Books confidential and, unless otherwise required bylaw shall not permit
theu-inspection byanyother entity Registration of each Obligation maybe transferred in the Registra-
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tion Books only upon presentation and surrender thereof to the Paying Agent/Regrstrar at its
Designated Tnist Office for transfer of registration and cancellation, together with proper wntten
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar evidencing the assignment thereof, or anyportion thereof in anyintegral multiple of
$5,000, to the assignee or assignees thereof and the nght of such assignee or assignees to have the
Obligation or anysuch ponion thereof registered in the name of such assignee or assignees. Upon the
assignment and transfer of anyObligation or anypoivon thereof, a newsubstitute bond or bonds shall
be issued in exchange therefor in the manner herein provided.
(b) The entityin whose name any Obligation shall be registered in the Registration Books at
anytime shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or
not such bond shall be overdue, and the City and the Paying Agent/Registrar shall not be affected by
any notice to the contrary and payment of, or on account of the pnncipal of preiruum, if any and
interest on any such bond shall be made onlyto such registered owner. All such payments shall be
valid and effectual to satisfy and discharge the liability upon such bond to the extent of the sum or
sums so paid.
(c) The Cityherebyfuitherippoints the PayingAgent/Registrar to act as the paying agent for
paying the principal of and interest on the Obligations, and to act as its agent to exchange or replace
Obligations, all as provided in th>s Ordinance. The Paying Agent/Registrar shall keep proper records
of all payments made bythe Cityand the Paying Agent/Registrarwith respect to the Obligations, and
of all exchanges of such bonds, and all replacements of such bonds, as provided in this Ordinance.
(d) Each Obligation maybe exchanged for fully registered bonds in the manner set forth
herein. Each bond issued and delivered pursuant to th>s Ordinance, to the extent of the unpaid or
unredeemed principal amount thereof may upon surrender of such bond at the Designated Trust
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Office of the Paying Agent/Registrar together with a written request therefor duly executed by the
registered owner or the assignee or assignees thereof or iu or thee- duly authorized attorneys or
representatives, with guarantee of signatures satisfactoryto the Paying Agent/Registrar, at the option
of the registered owner orsuch assignee or assignees, as appropriate, be exchanged forfullyregistered
bonds, without interest coupons, in the form prescribed in the FORM OF BOND in the denomina-
tion of $5,000 or anyintegral multiple thereof (subject to the requu-ement hereinafter stated that each
substitute bond shall have a single stated maturity date) as requested in writing by such registered
owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or unre-
deemed principal amount of any Obligation or Obligations so surrendered, and payable to the
appropriate registered owner, assignee, or assignees, as the case maybe. If a portion of anyObligation
shall be redeemed priorto its scheduled maturityas provided herein, a substitute bond or bonds having
the same maturitydate, bearing interest at the same rate, in the denomination or denominations of any
integral multiple of $5,000 at the request of the registered owner and in an aggregate principal amount
equal to the unredeemed portion thereof will be issued to the registered owner upon surrender thereof
for cancellation. If anyObhgation orportion thereof is assigned and transferred, each bond issued in
exchange therefor shall have the same principal maturity date and bear interest at the same rate as the
bond f or which it is being exchanged. Each substitute bond shall bear a letter and/or number to distin-
guish it from each other bond. The Paying Agent/Registrar shall exchange or replace Obligations as
provided herein, and each fullyregistered bond or bonds delivered in exchange for or replacement. of
any Obligation or portion thereof as perirutted or required by any provision of this Ordinance shall
constitute one of the Obligations for all purposes of this Ordinance, and may again be exchanged or
replaced. It u specificallyprovided, however that anyObhgation delivered in exchange for orreplace-
merit of another Obligation prior to the first scheduled interest payment date on the Obligations (as
stated on the face thereof) shall be dated the same date as such Obligation, but each substitute bond
so delivered on or after such fast scheduled rrrterest payment date shall be dated as of the rnterest
payment date preceding the date on which such substitute bond u delivered, unless such substitute
bond rs delivered on an rnterest payment date, rn which case rt shall be dated as of such date of delivery
provided, however, that ~ at the tune of dehveryof anysubstituxe bond the interest on the Obligation
for which rt rs being exchanged has not been paid, then such substitute bond shall be dated as of the
date to which such interest has been paid u1 full. On each substitute bond issued ii exchange for or
replacement of any Obligation issued under thrs Ordrrrance there shall be pruned thereon a Paying
Agent/Registrar's Authentication Certificate, rn the form herernafter set forth. An authonzed
representative of the Paying Agent/Regrstrarshall,befnre the deliveryof anysuch substitute bond, date
such substitute bond ul the manner set forth above, and manuallysrgn and date such Certificate, and
no such substitute bond shall be deemed to be issued or outstandrng unless such Certrficate rs so ex
ecuted. The Paying Agent/Regrstrar promptlyshall cancel all Obligations surrendered for exchange
or replacement. No additional ordinances, orders, or resolutions need be passed or adopted bythe City
Council or any other body or person so as to accomplish the foregoing exchange or replacement of
anyObligationorporuonthereof andthePayrrrgAgent/Regrstrarshallprovrdeforthepnntrrrg,execu-
Iron, and deliveryof the substitute bonds rn the manner prescribed herein, and said bonds shall be of
type composrtion punted on paper wrth lithographed or steel engraved borders of customarywerght
and strength. Pursuant to Chapter 1206, Texas Government Code, the duty of exchange or
replacement of anyObhgations as aforesard rs herebyrmposed upon the Paying Agent/Regrstr~r and,
upon the execution of the above-described Payrng Agent/Regrtrar's Authentrcation Certrficate, the
exchanged or replaced bond shall be valid, incontestable, and enforceable rn the same manner and wrth
the same effect as the Obhgatrons which ongrnallywere dehveredpursuant to thrs Ordrrrance, approved
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bythe AttorneyGeneral, and registered bythe Comptroller of Public Accounts. Neither the Citynor
the Paying Agent/Registrar shall be required (1) to issue, transfer, or exchange any bond dunng a
penod beginning at the opening of business 30 days before the day of the fast mailing of a nonce of
redemption of bonds and ending at the close of business on the dayof such maiing, or (2) to transfer
or exchange any bond so selected for redemption in whole when such redemption is scheduled to
occur within 30 calendar days.
(e) All Obligations issued m exchange or replacement of anyother Obligation orportion there-
of (i) shall be issued iii fullyregistered form, without interest coupons, with the principal of and interest
on such Obligations to be payable only to the registered owners thereof, (u) maybe redeemed pnor
to their scheduled matunties, (iii) maybe transferred and assigned, (iv) maybe exchanged for other
Obligations, (v) shall have the characteristics, (vr) shall be signed and sealed, and (vu) the pnncipal of
and interest on the Obligations shall be payable, all as provided, and in the manner required or
indicated, in the FORM OF BOND
The Paying Agent/Registrar shall complete the 'Date of Dehver~' on each installment of
Obligations initially delivered to the TWDB upon the satisfaction of the conditions described in
Section 27 of this Ordinance..
(f) The Cityshallpaythe Paying Agent/Registrar's reasonable and customaryfees and charges
formakiig transfers of Obligations, but the registered owner of anyObligation requesting such transf er
shall pay any taxes or other governmental charges required to be paid wrth respect thereto. The
registered owner of any Obligation requesting' any exchange shall pay the Paying Agent/Registrar's
reasonable and standard or customary fees and charges for exchanging any such bond or portion
thereof, together with anytaxes or governmental charges required to be paid with respect thereto, all
as a condition precedent to the exercise of such privilege of exchange, except, however that in the case
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of the exchange of an assigned and transferred bond or bonds or anyportion or portions thereof in
any integral multiple of $5,000, and in the case of the exchange of the unredeemed portion of an
Obligation which has been redeemed in part prior to maturity as provided in this Ordinance, such fees
and charges will be paid bythe City In addition, the Cityherebycovenants with the registered owners
of the Obligations that it will pay (i) the reasonable and standard or customaryfees and charges of the
Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on
the Obligations, when due, and (u) the fees and charges of the PayingAgent/Registrar for services with
respect to the transfer or registration of Obligations solely to the extent above provided, and with
respect to the exchange of Obligations solelyto the extent above provided.
(g) The City covenants with the registered owners of the Obligations that at all tunes while the
Obligations are outstanding the City will provide a competent and legally qualified bank or tnut
companyto act as and perform the services of Paying Agent/Registrar for the Obligations under this
Ordinance, and that the Paying Agent/Registrar will be one entity The Cityreserves the right to, and
may at its option, change the Paying Agent/Registrar upon not less than 60 days written notice to the
Paying Agent/Registrar In the event that the entity at anytune acting as Paying Agent/Registrar (or
its successor bymerger, acquisition, or other method) should resign or otherwise cease to act as such,
the Citycovenants that promptlyit will appoint to act as Paying Agent/Registrar under this Ordinance
a competent and legally qualified national or state banking institution which shall be a corporation
organized and doing business under the laws of the United States of America or of anystate, authorized
under such laws to exercise trust powers, subject to supervision or examuiation by federal or state
authority and whose qualifications are substantially sunilar to the previous Paying Agent/Registrar
Upon anychange in the Paying Agent/Registrar the previous Paying Agent/Registrarprpmptlyshall
transfer and deliver the Registration Books (or a copy thereof) along with all other pertinent books
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and records relating to the Obligations, to the new Paying Agent/Registrar designated and appointed
by the City Upon any change in the Paying Agent/Registrar, the City promptly will cause a written
nonce thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Obligations, byUrited States mail, postage prepaid, which nonce also shall give the address of the new
Paying Agent/Registrar Byacceptirig the position and performing as such, each Paying Agent/Reg-
istrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar
(h) The Obligations issued in exchange for the Obligations iutially issued to the purchaser
specified herein shall be iutially issued in the form of a separate single fully registered Obligation for
each of the maturities thereof. Upon iutial issuance, the ownership of each such Obligation shall be
registered m the name of Cede & Co., as nominee of The Depository Tnut Company of New York
("DTC") and except as provided irr subsection () hereof, all of the outstanding Obligations shall be
registered ii the name of Cede & Co., as nominee of DTC.
With respect to Obligations registered m the name of Cede & Co., as nominee of DTC, the
Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on
whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance and
settlement of securities transactions amongDTCParticipants onto anyperson on behalf of whomsuch
a DTC Participant holds an interest in the Obligations. Without limiting the unmediatelyprecedmg
sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation with
respect to (i) the accuracyof the records of DTC, Cede & Co. or anyDTC Participant with respect to
anyownership interest m the Obligations, (u) the dehveryto anyDTC Participant or anyother person,
other than a registered owner of Obligations, as shown on the Registration Books, of any notice with
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respect to the Obligations, or (iu, the payment to anyDTC Participant or anyotherperson, other than
a registered owner of Obligations, as shown in the Registration Books of anyamount with respect to
principal of or interest on the Obligations. Notwithstanding any other provision of this Ordnance to
the contrary the Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the
person in whose name each Obligation >s registered n the Registration Books as the absolute owner
of such Obligation for the purpose of payment of principal and interest with respect to such
Obligation, for the purpose of registering transfers with respect to such Obligation, and for all other
purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the
Obligations onlyto or upon the order of the registered owners, as shown in the Registration Books
as provided in this Ordnance, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fullysatisfyand discharge the Issuer's obligations with respect
to payment of principal of and interest on the Obligations to the extent of the sum or sums so paid.
No person other than a registered owner, as shown in the Registration B ooks, shall receive a Obligation
evidencing the obligation of the Issuer to make payments of principal and interest pursuant to this
Ordinance. Upon deliverybyDTC to the Paying Agent/Registrar of written nonce to the effect that
DTC has determined to substitute a newnominee in place of Cede & Co., and subject to the provisions
in this Ordinance with respect to interest checks being mailed to the registered owner at the close of
business on the record date, the words 'Cede & Co. in this Ordnance shall ref er to such newnominee
of DTC. In connection with the initial establishment of the foregoing book-entrysystem with DTC,
the Issuer heretofore has executed a 'Blanket Letter of Representations prepared byDTC n order
to unplement the book-entrysystem described above.
(i) In the event that the Issuer determnes that DTC >s incapable of discharging its
responsibilities described herein and in the representation letter of the Issuer to DTC or that it >s in
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the best interest of the beneficial owners of the Obligations that they be able to obtaui certificated
Obligations, the Issuer shall (i) appoint a successor securities depository qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934 as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Obligations to such successor securities depositoryor (u, notifyDTC and DTC Participants
of the availabihtythroughDTC of Obligations and transfer one ormore separate Obligations to DTC
Participants having Obligations credited to their DTC accounts. In such event, the Obligations shall
no longer be restricted to being registered in the Registration Books in the name of Cede & Co., as
nominee of DTC, but maybe registered u7 the name of the successor securities depository or its
nominee, orinwhatevername ornames registered owners transfernng or exchanging Obligations shall
designate, in accordance with the provisions of this Ordinance. The foregoing notwithstanduig, for
so long as TWDB u an owner of anyoutstanding Obligation, the Citywill not discontinue the DTC
book entry system without the consent of TWDB
(j) Notwithstanding any other provision of this Ordinance to the contrary so long as any
Obligation >s registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
prYricipal of and interest on such Obligation and all notices with respect to such Obligation shall be
made and given, respectively in the marulerprovided in the representation letter of the Issuerto DTC.
Section 6 The form of all Obligations, including the form of the Paying Agent/Registrar's
Certificate, the Form of Assignment, and the form of the Comptroller's Registration Certificate to
accompanythe Obligations on the uutial dehverythereof shall be, respectively substantiallyas set forth
in Exhibit A to this Ordinance, with such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance.
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Section 7 DEFINITIONS. That the definitions set forth m the Master Ordinance are hereby
incorporated byreference and made a part hereof for all purposes. In addrtion, as used in this Ordn-
nance, the following terms shall have the meanings set forth below unless the text hereof specrfically
indicates othenwlse:
(a) The term Addrtional Obligations shall mean the revenue bonds, notes or otheroblrgations
which the City reserves the nght to nssue nn the future on a panty with the Previously Issued
Subordinate Lnen Obligations and the Obligations, as provided uz thrs Ordinance.
(b) The term 'Master Ordinance shall mean the Ordinance establishing the City's Water and
Sewer System Revenue Financing Program, adopted on December 10, 1991
(c) The term 'MSRB means the Municipal Secuntnes Rulemaking Board.
(d) The term 'NRMSIR means each person whom the SEC or its staff has determined to be
a natnonallyrecogrized muricnpalsecuntnes informatron reposntonywithnn the meaning of the Rule from
tune to tune.
(e) The term 'Obhgations shall mean the Cityof Fort Worth, Texas Water and Sewer System
Subordinate Lien Revenue Bonds, Senes 2002, authonzed byth~s Ordinance.
(f) The term 'Previously Issued Subordinate Lien Obligations shall have the same meaning
given said term nn the preamble to th>s Ordrnance.
(g) The term 'PnorLnenBonds shallmeantheI'reviouslyIssuedPantyBondsandanybonds
hereafter issued on a pantytherewith pursuant to the terms of the Master Ordinance.
(h) The term 'Pnor Lien Obhgatrons shall mean the Pnor Lien Bonds and any System
Obligations.
(i) The term 'Requrred Reserve Amount" shall mean, with respect to Subordinate I.nen
Obligations, an amount equal to the greater of (i) 50% of the average Annual Debt Service
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Requirements of the.Subordmate Lien Obligations then Outstanding or (u, 37.5% of the Annual Debt
Service Requirements of the Subordinate Lien Obligations to be Outstanding in the Year dunrig which
such Annual Debt Service Requirements are scheduled to be the greatest.
(j) The term 'Rule means SEC Rule 15c2 12, as amended from tune to tune.
(l~ The term 'SEC" means the United States Securities and Exchange Commission.
(1) The term 'SID means any person designated by the State of Texas or an authorized
department, officer or agency thereof as, and determined by the SEC or its staff to be, a state
information depositorywithin the meaning of the Rule from tune to tune.
(m) The term 'Subordinate Lien Obligations shallmeantlie Obligations, the PreviouslyIssued
Suborduiate Lien Obligations, and any Additional Obligations.
(n) The term 'Suborduiate Lien Revenue Bond Ordinance shall have the same meaning graven
said team in the preamble to the Ordinance.
(o) The term 'System shall mean and include the City's combined existing water and sewer
system, together with all future extensions, unprovements, enlargements, and additions thereto, and
all replacements thereof; provided that, notwithstanding the foregoing, and to the extent now or
hereafter authorized or permitted bylaw the term System shall not include anywater or sewer facilities
which are declared by the City not to be ~ part of the System and which are acquired or constructed
bythe Citywith the proceeds from the issuance of 'Special Facilities Bonds which are herebydefined
as being special revenue obligations of the Citywhich are not secured byorpayable from the Pledged
Revenues as defined herein, but which are secured byand payable solelyfrom special contract revenues
or payments received from any other legal entity iri 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
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(p) The teim 'System Obligations shall mean (a) the lute of credit securing the Water and
Sewer System Commercial Paper Notes, Series A, and (b) anyobligations of the Cityhereafter issued
or incurred by the City secured by a hen on and pledge of the Pledged Revenues superior to the
PreviouslyIssued Subordinate Lien Obligations and the Obligations but subordinate to the Prior Lien
Bonds.
(q) The term 'TWDB shall mean the Texas Water Development Board, or any successor
agency thereto.
(r) The term year" shall mean the regular fiscal year used bythe Cityin connection with the
operation of the System, which maybe anytwelve consecutive months period established bythe City
Section 8. MASTER ORDINANCE That the provisions of the Master Ordinance are hereby
incorporated by reference; and by approving this Ordinance and by issuing the commitment to
purchase the Obligations as described in the preamble to this Ordinance, TWDB shall be deemed to
have accepted such provisions and such provisions shall apply and govern the Previously Issued
Subordinate Lien Obligations, the Obligations, and any Additional Obligations hereafter issued on a
pantytherewith, including, without limitation, the use of Reserve Fund Obligations (as defined in the
Master Ordinance) to provide for the Required Reserve Amount.
Section 9 PLEDGE (a) That the Obligations are and shall be secured byand payable from
a lien on and pledge of the Pledged Revenues, provided, however, that said hen on and pledge of the
Pledged Revenues shall be~unior and subordinate to the hen on and pledge of the Pledged Revenues
to the Prior Lien Obligations. In addition, the Pledged Revenues are further pledged to the establish-
merit and maintenance of the Debt Service Fund and the Subordinate Lien Reserve Fund as hereinafter
provided. The Obligations are and will be secured byand payable onlyfrom the Pledged Revenues in
the manner described above, and are not secured by or payable from a mortgage or deed of trust on
anyproperties, whether real, personal, or mixed, constituting the System,
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(b) Chapter 1208, Texas Government Code, applies to the issuance of the Senes 2002 Bonds
and the pledge of the Pledged Revenues granted bythe Cityunder subsection (a) of this Section, and
such pledge is therefore valid, effective, and perfected. If Texas lawn amended at anytune while the
Obligations are outstanding and unpaid such that the pledge of the Pledged Revenues granted by the
Cityis to be subject to the filing requirements of Chapter 9 Texas Business & Commerce Code, then
in order to preserve to the registered owners of the Obligations the perfection of the secuntyinterest
irisaidpledge, the Cityagrees to take such measures as it detemziries are reasonable and necessaryunder
Texas law to complywith the applicable provisions of Chapter 9 Texas Business & Commerce Code
and enable a filing to perfect the secuntyinterest iri said pledge to occur.
Section 10. DEBT SERVICE FUND That for the sole purpose of paying the pnncipal of
and interest on all Subordinate Lien Obligations, as the same come due, there has been created, and
established and maintained on the books of the City the Debt Service Fund. Monies m said Fund shall
be maintained at an official depositorybank of the City
Section 11 RESERVE FUND That there has been created, and established and maintained
on the books of the City a separate fund to be entitled the 'City of Fort Worth, Texas Water and
Sewer System Revenue Bonds Subordinate Lien Reserve Fund (hereinafter called the 'Subordinate
Lien Reserve Fund') Reserve Fund Obligations shall be maintained in the Subordinate Lien Reserve
Fund in amounts equal to the Required Reserve Amount.
Section 12. PROJECT FUND (a) That there is hereby created, established and maintained
on the books of the City a separate fund to be entitled the City of Fort Worth, Texas Water and
Sewer System Senes 2002 Subordinate Lien Revenue Bonds Project Fund (hereinafter called the
'Project Fund') Monies in said Fund shall be maintained at an official depository bank of the City
(b) Except as otherwise provided in Section 15(a) hereof, the proceeds of the Obligations shall
be deposited into the Project Fund and used by the City for payment of the costs of extending and
17
improving the System, and the payment of costs associated therewith, including any costs for engi-
neering, financing, financial consultation, administrative, auditing and legal expenses.
(c) Any surplus proceeds, including the investment earnings denved from the investment of
monies on deposit in the Project Fund, from the Obligations remaining on deposit in the Project Fund
after completing the improvements and extensions to the System and upon the completion of the final
accounting as described in Section 22(c) hereof, shall be transferred to the Debt Service Fund to
redeem, in inverse order of matunty the Obligations owned byTWDB The foregoing notwithstand-
ing, it is further provided, however that anyiriterest earnings on monies on deposit in the Project Fund
which are required to be rebated to the United States of Amenca pursuant to Section 25 hereof in
orderto prevent the Obligations from being arbitrage bonds shall be transferred to the 'Rebate Fund
hereinafter established and shall not be considered as interest earnings forpurposes of this subsection.
(d) If required by TWDB as a condition to the purchase of the Obligations, the City
Manager or the designee thereof may approve, execute and deliver an appropriate escrow agreement
or establish an appropnate trust and agencyfund on the books of the City In either case, proceeds
of the Obligations required to be deposited under an escrow agreement orinto a mist and agencyfund
shall be disbursed in accordance with the TWDB Rules Relating to Financial Programs or as otherwise
authorized and directed by TWDB
Section 13 DEPOSITS OF PLEDGED REVENUES, INVESTMENTS (a) That the
Pledged Revenues shall be deposited in the Debt Service Fund and the Subordinate Lien Reserve Fund
when and as required by this Ordinance.
(b) That money in either the Debt Service Fund, the Subordinate Lien Reserve Fund or the
Project Fund may at the option of the City be invested in Eligible Investments, provided that all such
deposits and investments shall have a par value (or market value when less than par) exclusive of
accrued interest at all tines at least equal to the amount of money credited to such Funds, and shall be
~s-
made in such manner that the money required to be expended from anyFund will be available at the
proper tune or tunes, and provided, further, that Eligible Investmenu shall consist of only those
unvestmenu permitted bythe Public Funds Investment Act (Chapter 2256, Texas Government Code)
and the Cites investment policy Moneyin the Subordinate Lien Reserve Fund shall not be invested
un securities maturing laterthan the final matuntyof the Subordinate Lien Obligations secured thereby
Such investmenu shall be valued ui terms of current market value as of the last dayof each year except
that du-ect obligations of the United States (State and Local Government Serves) in book entryform
shall be continuously valued at their par or face principal amount. Such investmenu shall be sold
promptlywhen necessaryto prevent anydefault in connection with anySubordinate Lien Obligations.
Section 14 FUNDS SECURED That moneyin all such Funds, to the extent not invested,
shall be secured in the manner prescribed bylaw for securing funds of the City
Section 15 DEBT SERVICE REQUIREMENTS. (a) That promptly after the delivery of
anyinstallment of the Obligations the Cityshall cause to be deposited to the credit of the Debt Service
Fund any accrued interest received from the sale and delivery thereof, and any such deposit shall be
used to paypart of the interest next coming due on the Obligations.
(b) That in addition to all amounu heretofore required to be deposited to the credit of the
Debt Service Fund, the Cityshall transfer from the Pledged Revenues and deposit to the credit of the
Debt Service Fund the amounu, at the tunes, as follows.
(1) such amounu, deposited in approxunatelyequal monthlyinstallmenu on or before
the 25th day of each month hereafter commencing with the month during which the
Obligations are delivered, orthe month thereafterif dehveryis made afterthe 25th daythereof
as will be sufficient, together with other amounu, if any then on hand in the Debt Service
Fund and available for such purpose, to paythe interest scheduled to accrue and come due on
the Obligations on the next succeeding interest payment date; and
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(2) such amounts, deposited in approxrmatelyequalmonthlyirstallrrients on orbefore
the 25th day of each month hereafter commencing wrth the month during which the
Obligations are delivered, orthe month thereafterrf deliveryrs made afterthe 25th daythereof
as will be sufficient, together with other amounts, rf any then on hand in the Debt Service
Fund and available for such purpose, to paythe prnrrcrpal scheduled to mature and come due
on the Obligations on the next succeeding pnncrpal payment date.
SECTION 16. RESERVE REQUIREMENTS. That the City covenants, subject to the
covenants set forth in Section 25 hereof relatung to the tax exempt status of the Obligations, that the
Subordinate Lien Reserve Fund shall be maintained in an amount no less than the Requi-ed Reserve
Amount applicable to the outstanding PrevrouslyIssued Subordinate Lren Obligations, Obhgatrons and
Addrtronal Obligations, to be funded in the mariner described below if not fully funded on the date
of delivery of the Obligations. On orbefore the 25th day of each month hereafter commencing on
the 25th day of the month of the initial delivery of the Obhgatrons, or if the uutral delivery of any of
the Obligations occurs on or after the 25th day of such month, on the 25th day of the month next
succeeding such iutral delivery there shall be deposited into the Subordinate Lien Reserve Fund,
1/60th of the Required Reserve Amount, until the Subordinate Lien Reserve Fund contains the Re-
qui-ed Reserve Amount. When and so long as the money and investments in the Subordunate Lien
Reserve Fund are not less than the Required Reserve Amount, no deposits need be made to the crecht
of the Subordinate Iaen Reserve Fund. When and of the Subordinate Lien Reserve Fund at anytime
contains less than the Required Reserve Amount due to anycause or condition other than the issuance
of Additional Obligations, then, subject and subordinate to making the requi-ed deposits to the credit
of the Debt Service Fund, such deficrencyshall be made up as soon as possible from the next available
Pledged Revenues, or from any other sources available for such purpose. The Citymay at its option,
withdraw and use for any lawful purpose, all surplus in the Subordinate Lien Reserve Fund over the
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Requu-ed Reserve Amount. The Cityhereby covenants that from available moneys it shall deposit to
the credit of the Subordinate Lien Reserve Fund such amounts as shall be necessary to maintain the
Subordinate Lien Reserve Fund in an amount equal to the Required Reserve Amount. For purposes
of this Section 16, 'Required Reserve Amount shall have the same meaning given said term in the
Master Ordinance, substituting 'Subordinate Iaen Obligations for 'Panty Obligations and the
Reserve Fund maybe funded with Reserve Fund Obligations, as rented in Secuon 8 of this Ordinance.
Secuon 17 DEFICIENCIES EXCESS PLEDGED REVENUES. (a) That if on any
occasion there shall not be sufficient Pledged Revenues to make the required deposits into the Debt
Service Fund and the Subordinate Lien Reserve Fund, then such deficiencyshall be made up as soon
as possible from the next available Pledged Revenues, or from any other sources available for such
purpose.
(b) That, subject to making the required deposits to the credit of the Debt Service Fund and
the Subordinate Lien Reserve Fund when and as required by this Ordinance, or any ordinance
authorizing the issuance of Additional Obligations, the excess Pledged Revenues maybe used by the
Cityfor anylawful purpose not inconsistent with the City's Charter.
Secuon 18. PAYMENT That on orbefore September 1, 2002, and semianriuallyon orbefore
each March 1 and September 1 thereafter while any of the Previously Issued Subordinate Lien
Obligations, the Obligations orAddiuonal Obligations are outstanding and unpaid, the Cityshall make
available to the Paying Agent/Registrar therefor out of the Debt Service Fund (and the Subordinate
Lien Reserve Fund, if necessary] money sufficient to paysuch interest on and such principal of the
Previously Issued Subordinate Lien Obligations, the Obligations (if necessary) and Additional
Obligations as shall become due and mature on such dates, respectively at maturityor byredemption
prior to maturity The Paying Agent/Registrar shall destroy all paid Obligations and furivsh the City
with an appropriate certificate of cancellation or destruction.
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Section 19 FINAL DEPOSITS, DEFEASANCE OBLIGATIONS. (a) That any
Subordinate Lien Obligation shall be deemed to be paid, reared and no longer outstanding within the
meaning of this Ordinance when payment of the principal of, redemption premium, if any on such
Subordinate Lien Obligation, plus interest thereon to the due date thereof (whether such due date
be by reason of maturity upon redemption, or otherwise) either (~ shall have been made or caused to
be made in accordance with the teams thereof (including the giving of any required notice of
redemption) or (u) shall have been provided for by irrevocably depositing with, or making available
to, a paying agent (or escrow agent) therefor, in mist and irrevocablyset aside exclusivelyfor such pad
merit, (1) moneysufficient tomake such payment or (2) Defeasance Obligations, as hereinafter defined
in this Section, certified by an independent public accounting firm of national reputation, to mature
as to principal and interest in such amounts and at such tunes as will insure the availability without rein-
vestment, of sufficient moneyto make suchpayment, andallnecessaryandproperfees,compensation,
and expenses of such paying agent pertairirig to the Subordinate Lien Obligations with respect to
which such deposit is made shall have been paid orthe payment thereof provided forto the satisfaction
of such paying agent. At such time as a Subordinate Lien Obligation shall be deemed to be paid
.hereunder as aforesaid, it shall no longer be secured by or entitled to the benefit of this Ordinance or
a lien on and pledge of the Pledged Revenues, and shall be entitled to payment solelyfrom such money
or Defeasance Obligations.
(b) That anymoneys so deposited with a paying agent may at the direction of the City also
be invested m Defeasance Obligations, maturing in the amounts and tunes as hereinbefore set forth,
and all income from all Defeasance Obligations in the hands of the paying agent pursuant to this
Section which is not required for the payment of the Subordinate Lien Obligations, the redemption
premium, if any and interest ther-eon, wrth respect to which such moneyhas been so deposited, shall
be remitted to the City
22
(c) That the Citycovenants that no deposit will be made or accepted under clause (a) (u) of this
Section and no use made of any such deposit which would cause such Subordinate Lren Obligations
to be treated as arbitrage bonds within the meaning of section 148 of the Code.
(d) That for the purpose of this Section, the term 'Defeasance Obligations shall mean (i,
direct, noncallable obligations of the United States of Amenca, including obligations that are
unconditionally guaranteed by the United States of Amenca, (u) noncallable obligations of an agency
or instrurrientahty of the United States of Amenca, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date the City adopts or
approves proceedings authorizing the issuance of refunding bonds or ~ such defeasance is not in
connection with the issuance of refunding bonds, on the date the Cityprovides forthe funding of an
escrow to effect the defeasance of the Obligations, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its egrivalent, and (iii) noncallable obligations
of a state or an agency or a county municipality or other political subdivision of a state that have been
refunded and that, on the date the City adopts or approves proceedings authonzing the issuance of
refunding bonds or if such defeasance is not in connection with the issuance of refunding bonds, on
the date the Cityprovides for the funding of an escrowto effect the defeasance of the Obligations, are
rated as to investment quality by a nationally recognized investment rating firm not less than AAA or
its equivalent.
(e) That notwithstanding anyotlierprovisions of this Ordinance, all moneyor eligible secunues
set aside and held in trust pursuant to the provisions of this Secuon for the payment of Previously
Issued Subordinate Lien Obligations, Obligations and Additional Obligations, the redempuonpremium,
if any and interest thereon, shall. be applied to and used for the payment of such Previously Issued
Subordinate Lien Obligations, Obligations andAdditional Obligations, the redempuonpremium, if any
and interest thereon.
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Section 20 ADDITIONAL OBLIGATIONS (a) That the City shall have the right and
power at anytune and from tune to tune and in one or more series or issues, to authorize, issue, and
deliver Prior Lien Obligations, in the manner and f or the purposes described in the Master Ordinance.
(b) That the Cityshiall have the right and power at anytune and from tune to tune and in one
or more senes or issues, to authorize, issue and deliver Additional Obligations, in accordance with law
in any amounts, for purposes of extending, unprovuig or repairing the System or for the purpose of
refunding anyof the PreviouslyIssued Subordinate Lien Obligations, Obligations, Additional Obliga-
tions or other obligations of the Cityincurred in connection with the ownership or operation of the
System Such Additional Obligations, if and when authorized, issued and delivered in accordance with
this Ordinance, shall be secured byand made payable equallyand ratablyon a paritywith the Previously
Issued Subordinate Iaen Obligations, and the Obligations, and all other outstanding Additional
Obligations, from a lien on and pledge of the Pledged Revenues.
(c) That the Debt Service Fund and the Subordinate Iaen Reserve Fund established by thus
Ordinance shall secure and be used to pay all Additional Obligations as well as the PreviouslyIssued
Subordinate Lien Obligations and the Obligations. However, each ordinance under which Additional
Obligations are issued shall provide and require that, in addition to the amounts required by the
provisions of this Orduiance and the provisions of any other ordinance or ordinances authorizing
Additional Obligations to be deposited to the credit of the Debt Service Fund, the Cityshall deposit
to the credit of the Debt Service Fund at least such amounts as are required for the payment of all
principal of and interest on said Additional Obligations then being issued, as the same come due; and
that the aggregate amount to be accumulated and maintained in the Subordinate Lien Reserve Fund
shall be increased (if and to the extent necessary) to an amount not less than the Required Reserve
Amount of all PreviouslyIssued Subordinate Lien Obligations, Obligations and Additional Obligations
which will be outstanding after the issuance and deliveryof the then proposed Additional Obligations,
24-
and that the required additional amount shall be so accumulated bythe deposit in the Subordinate Lien
Reserve Fund of all or anypart of said required additional amount iri cash unmediatelyafterthe delivery
of the then proposed Additional Obligations, or, at the option of the City by the deposit of said
required additional amount (or any balance of said required additional amount not deposited in cash
as permitted above) ui monthlyinstallments, made on or before the 25th dayof each month following
the delivery of the then proposed Additional Obligations, of not less than 1/60 of said required
additional amount (or 1/60 of the balance of said required additional amount not deposited m cash as
permitted above)
(d) That all calculations of the Required Reserved Amount made pursuant to this Section shall
be made as of and from the date of the Additional Obligations then proposed to be issued.
Section 21 FURTHER REQUIREMENTS FOR ADDITIONAL OBLIGATIONS. That
Additional Obligations shall be issued onlyui accordance with this Ordinance, but notwithstanding any
provisions of this Ordinance to the contrary no installment, Series or issue of Additional Obligations
shall be issued or delivered unless:
(a) The Mayor and the CitySecretaryof the Citysign a written certificate to the effect that the
City is not in default as to any covenant, condition or obligation ui connection with all outstanding
Prior Lien Obligations; Previously Issued Subordinate Lien Obligations, Obligations and Additional
Obligations, and the ordinances authorizing same, and that the Debt Service Fund and the Subordinate
Lien Reserve Fund each contains the amount then required to be therein.
(b) An independent certified public accountant, or independent firm of certified public
accountants, signs a written certificate to the effect that, during either the next preceding year, or any
twelve consecutive calendar month period ending not more than runetydays prior to the date of the
then proposed Additional Obligations, the Net Revenues were, in the opinion thereof at least equal
to (1) 1.25 tunes the average annual principal and interest requu-ements and (2) 1 10 tunes the principal
25-
and interest requirements for the year during which such requirements are scheduled to be the greatest
(each computed on a fiscal yearbasis) of allPrior Lien Obligations, PreviouslyIssued Subordinate Lien
Obligations, Obligations and Additional Obligations to be outstanding after the issuance of the then
proposed Additional Obligations, reasonably anticipated to be paid from the Pledged Revenues.
Section 22. GENERAL COVENANTS. That the Cityfurther covenants and agrees that in
accordance with and to the extent required or permtted by law
(a) Further Emxr~r~i-anc~. It, while the Previously Issued Subordinate Lien Obligations, the
Obligations or anyAdditional Obligations are outstanduig and unpaid, will not addtionallyencumber
the Pledged Revenues in any manner, except iri the manner permitted by the Master Ordinance with
respect to obligations of the Citywith a lien on and pledge of the Pledged Revenues superior to that
securing the Subordinate Lien Obligations and except as permitted in this Ordinance ui connection
with Additional Obligations, unless said encumbrance >s made~unior and subordinate ui all respects to
the liens, pledges, covenants and agreements of this Ordinance; but the right of the City to issue
revenue bonds payable from a lien on the Pledged Revenues ~uruor and subordinate ul all respects to
the PreviouslyIssued Subordinate Lien Obligations., the Obligations and any Additional Obligations
>s specifically recogivzed and retained.
(b) Audits For so long as the State of Texas owns any of the Subordinate Lien Obligations,
the City shall mail a copy of the audit required by the Master Ordinance to the TWDB In addition,
monthly operating statements for the System shall be delivered to the TWDB as long as the State of
Texas owns any of the Subordinate Lien Obligations, and the monthly operating statement shall be in
such detail as requested by the Development Fund Manager of the TWDB until this requirement is
waived thereby
26-
(c) FrrralAcr~xrrnmg. The Cityshall render a final accounting to the TWDB in reference to the
total cost incurred bythe Cityfor unprovements and extensions to the System which were financed
bythe issuance of the Obligations, togetherwith a copyof as built plans of such unprovements and
extensions upon completion.
(d) C~lran~ zerth the Tacos WaterDer~lop~rern Baxrd's Rarles a~Regr~latrores The City covenants
to comply with the rules and regulations of the TWDB and to maintain insurance on the System in
such amount as may be required by TWDB
(e) Razes and C~iar~s to Mgt Deli Seruc~ Consistent with the provisions of the Master
Ordinance, the City iri connection with the issuance of the Obligations, hereby covenants and agrees
that it will at all tunes maintain rates and charges for the services furnished, provided, and supplied by
the System which shall complywith the provisions of the Master Ordinance, be reasonable and non-
discnminatoryand produce income and revenues sufficient to pay
(a) all current Operating Expenses,
(b) to produce Net Revenues f or each Fiscal Year at least equal to the Annual Debt Service
Requirements dunng such Fiscal Year of the then Outstanding Pnor Lien Obligations and Subordinate
Lien Obligations, and
(c) to payall otherfinancial obligations of the System and reasonablyanticipated to be paid
from Gross Revenues.
Section 23 AMENDMENT OF ORDINANCE (a) That the owners of PreviouslyIssued
Subordinate Lien Obligations, the Obligations and Additional Obligations aggregating in principal
amount 51% of the aggregate principal amount of then outstanding PreviouslyIssued Subordinate Lien
Obligations, the Obligations and Additional Obligations shall have the nght from tune to tune to
approve any amendment to this Ordinance which maybe deemed necessary or desirable by the City
27
provided, however that without the consent of the owners of all of the PreviouslyIssuedStibordinate
Lien Obligations, the Obligations and Additional Obligations at the tune outstanding, nothing herein
contained shall permit or be construed to permit the amendment of the ten-ns and conditions in this
Ordinance or m the Previously Issued Subordinate Lien Obligations, the Obligations or Additional
Obligations so as to:
(1) Make anychange m the matuntyof the outstanding PreviouslyIssued Subordinate Lien
Obligations, the Obligations or Additional Obligations,
(2) Reduce the rate of interest borne by any of the outstanding Previously Issued
Subordinate Lien Obligations, Obligations or Additional Obligations,
(3) Reduce the amount of the pnncipal payable on the outstanding Previously Issued
Suborduiate Lien Obligations, Obligations or Additional Obligations,
(4) Modifythe terms of payment of pnncipal of or interest on the outstanding Previously
Issued Subordinate Lien Obligations, Obligations orAdditional Obligations, or unpose
any conditions with respect to such payment;
(5) Affect the nghts of the owners of less than all of the PreviouslyIssued Subordinate
Lien Obligations, Obligations and Additional Obligations then outstanding;
(6) Affect the nghts of the owners of the Pnor Lien Obligations,
(~ Change the mininium percentage of the principal amount of Previously Issued
Subordinate Lien Obligations, Obligations. and Additional Obligations necessary.for
consent to such amendment.
(b) That if at anytune the Cityshall desire to amend the Ordinance underthis Section, the City
shall cause notice of the proposed amendment to be published in a financial newspaper or~ournal
published in The City of New York, New York, once dunng each calendar week for at least two
28-
successive calendar weeks. Such nonce shall bneflyset forth the nature of the proposed amendment
and shall state that a copythereof is on file at the principal office of the Paying Agent/Registrar for
inspection by all holders of Pnor Lien Obligations, Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations. Such publication is not requu-ed, however, ~ notice in venting
u given to each holder of Pnor Lien Obligations, Previously Issued Subordinate Iaen Obligations,
Obligations and Additional Obligations.
(c) That whenever at anytune not less than thirtydays, and within one year, from the date of
the fast publication of said notice or otherservice of wntten notice the Cityshall receive an instrument
or instn.unents executed bythe owners of at least 51% in aggregate pnncipal amount of all Previously
Issued Subordinate Lien Obligations, Obligations and Additional Obligations then outstanding, which
instrument or instruments shall refer to the proposed amendment described in said notice and which
specificallyconsent to and approve such amendment in substantiallythe form of the copythereof on
file with the Paying Agent/Registrar, the City Council may pass the amendatory ordinance ul
substantiallythe same form.
(d) That upon the passage of any amendatory ordinance pursuant to the provisions of this
Section, th>s Ordinance shall be deemed to be amended in accordance with such amendatoryordinance,
and the respective nghts, duties and obligations under this Ordinance of the City and all the owners
of then outstanding Previously Issued Subordinate Lien Obligations, Obligations and Additional
Obligations and all future Additional Obligations shall thereafter be deterrruried,exercised and enforced
hereunder, subject iri all respects to such amendments.
(e) That anyconsent given bythe owner of a PreviouslyIssued Subordinate Lien Obligation,
Obligation or Additional Obligation pursuant to the provisions of this Section shall be irrevocable for
a penod of six months from the date of the fast publication of the notice provided for in this Section,
29-
and shall be conclusive and binding upon all future owners of the same PreviouslyIssuedStibordinate
Iaen Obligation, Obligation or Additional Obligation during such period. Such consent may be
revoked at anytune after six months from the date of the first publication of such nonce bythe owner
who gave such consent, or by a successor thereto in title, by filing nonce thereof with the Paying
Agent/Registrar and the City but such revocation shall not be effective if the owners of 51% in
aggregate principal amount of the then outstanding Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations as in this Section defined have, prior to the attempted revoca-
tion, consented to and approved the amendment.
(f) That for the purpose of this Section, the ownership of PreviouslyIssued Subordinate Lien
Obligations, Obligations or Additional Obligations shall be as shown bythe registration books of the
registrar therefor.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for anyone or more of the following purposes:
(1) To add to the covenants and agreements of the Cityin this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or remedies
to bondholders or to surrender restrict or limit any right or power herein reserved to or
conferred upon the City
(2) To make such provisions for the purpose of curing any ambiguity or curing,
correcting or supplementing anydefective provision contained in this Ordinance, or in regard
to clarifying matters or questions arising under this Ordinance, as are necessaryor desirable and
not contrary to or inconsistent with this Ordinance and which shall not adversely affect the
interests of the owners of the Prior Lien Obligations, the Obligations or Additional
Obligations,
30-
(3) To modify any of the provisions of this Ordinance m any other respect whatever
provided that (i) such modification shall be, and be expressed to be, effective only after all
Obligations and each serves of Additional Obligations outstanding at the date of the adoption
of such modification shall cease to be outstanding, and (u) such modification shall be specifi-
cally ref erred to ui the text of all Additional Obligations issued after the date of the adoption
of such modification.
Section 24 DAMAGED MUITLATED LOST STOLEN, OR DESTROYED BONDS.
(a) Replacr'~rern Borx~s In the event any outstanding Obligation >s damaged, mutilated, lost, stolen, or
destroyed, the Paying Agent/Registrarsliall cause to be printed, executed, and delivered, a new bond
of the same principal amount, maturity and interest rate, as the damaged, mutilated, lost, stolen, or
destroyed Obligation, in replacement for such Obligation in the manner hereinafter provided.
(b) AppluatrorcfarReplac~m~n Bwads Application for replacement of damaged, mutilated, lost,
stolen, or destroyed Obligations shall be made to the Paying Agent/Registrar In every case of loss,
theft, or destruction of an Obligation, the applicant for a replacement bond shall furnish to the City
and to the Paying Agent/Registrar such secuntyor indemrutyas maybe required bythem to save each
of them~harmless from anyloss or damage with respect thereto. Also, in every case of loss, theft, or
destruction of an Obligation, the applicant shall furnish to the City and to the Paying Agent/Registrar
evidence to theirsatisfaction of the loss, theft, or destruction of such Obligation, as the case maybe.
In every case of damage or mutilation of an Obligation, the applicant shall surrender to the Paying
Agent/Registrar for cancellation the Obligation so damaged or mutilated.
(c) NoDefarlt Qxzmz~ Notwithstanding the foregoing provisions of this Section, iii the event
anysuch damaged, mutilated, lost, stolen or destroyed Obligation shall have matured, and no default
has occurred which >s then contuiuing in the payment of the principal of, redemption premium, if any
31
or interest on the Obligation, the City may authorize the payment of the same (without surrender
thereof except m the case of a damaged or mutilated Obligation) instead of issuing a replacement
Obligation, provided secuntyor iridemrityis furnished as above provided in this Section.
(d) Chaff for Issattng Replace Bonds Prior to the issuance of any replacement bond, the
Paying Agent/Registrar shall charge the owner of such Obligation with all legal, pnritirig, and other
expenses m connection therewith. Everyreplacementborid issued pursuant to the provisions of this
Section by virtue of the fact that any Obligation is lost, stolen, or destroyed shall constitute a
contractual obligation of the City whether or not the lost, stolen, or destroyed Obligation shall be
found at any tune, or be enforceable by anyone, and shall be entitled to all the benefits of this
Ordinance equallyand proportionatelywith anyand all other Obligations dulyissued under this Ordi-
nance.
(e) Au~horityfrn-IssurngRepla~rrer~tBorx~s In accordance with Chapter 1206, Texas Government
Code, this Section of this Ordinance shall constitute authorityforthe issuance of anysuch replacement
bond without necessity of further action by the governing body of the City or any other body or
pennon, and the duty of the replacement of such bonds u hereby authorized and iriposed upon the
Paying Agent/Registrar and the Paying Agent/Registrar shall authenticate and deliver such bonds m
the form and manner and with the effect, as provided ii Section 5(d) of this Ordinance for Obligations
issued ii exchange for other Obligations.
Section 25 TAX COVENANTS The Issuer covenants to take anyaction to assure, or refrain
from anyaction which would advernelyaff ect,the treatment of the Obligations as obligations described
m section 103 of the Code, the interest on which >s not includable it the gross income of the holder
for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows.
32
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Obligations (less amounts deposited to a reserve fund, ~ anyj are used for any pnvate
busuiess use as defined ii section 141(6)(6) of the Code or, ~ more than 10 percent of the
proceeds are so used, that amounts, whether ornot received bythe Issuer, with respect to such
pnvate business use, do not, underthe terms of thrs Ordinance oranyunderlying arrangement,
directly or indi-ectly secure or provide for the payment of more than 10 percent of the debt
service on the Obligations, ul contravention of secuon 141(6)(2) of the Code;
(b) to take any action to assure that in the event that the pnvate business use
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Obligations (less
amounts deposited into a reserve fund, if any) then the amount un excess of 5 percent u used
fora pnvate business use which u reeated and not disproportionate v~nthm the meaning
of section 141(6)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which u greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Obligations (less amounts deposited into a
reserve fund, if any) is directly or indi-ectly used to finance loans to persons, other than state
or local governmental units, iz contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the
Obligations being treated as pnvate activitybonds within the meaning of section 141(6) of
the Code;
(e) to refrain from takuig any action that would result in the Obligations being
federally guaranteed withun the meanung of section 149(6) of the Code;
(fJ to refrain from usiig anyportion of the proceeds of the Obligations, di-ectly
or indi-ectly to acquire or to replace funds which were used, directly or indirectly to acquire
investment property (as defined m section 148(6) (2) of the Code) which produces a matenally
higher yield over the term of the Obligations, other than investment property acquired with
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(1) proceeds of the Obligations mvestedfora reasonable temporarypenod
of 3 years or less until such proceeds are needed for the purpose for which the
Obligations are issued,
(2) amounts invested m a bona fide debt service fund, within the meaning
of section 1 148-1(b) of the Treasury Regulations, and
(3) amounts deposited iz any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Obligations,
(g) to otherwise restnct the use of the proceeds of the Obligations or amounts
treated as proceeds of the Obligations, as may be necessary so that the Obligations 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 refundmgs) and
(h) to payto the United States of Amenca at least once dunng each five-yearpenod
(begiuung on the date of delivery of the Obligations) an amount that >s at least equal to 90
percent of the 'Excess Earrings within the meaning of section 148(f) of the Code and to pay
to the United States .of Amenca, not later than 60 days after the Obligations have been paid in
full, 100 percent of the amount then requu-ed to be paid as a result of Excess Earnings under
section 148(f) of the Code.
For purposes of the foregoing clauses (a) and (b) above, the Issuer understands that the term
proceeds includes disposition proceeds as defined ii the TreasunyRegulations and, in the case of
a refunding bond, transferred proceeds (if anyj and proceeds of the refunded bonds expended pnor
to the date of the issuance of the Bonds. It >s the understanding of the Issuer that the covenants
contained herein are intended to assure compliance with the Code and any regulations or rulings
promulgated bythe US Department of the Treasurypursuant thereto. In the event that regulations
or rulings are hereafterpromulgated which modifyorexpand provisions of the Code, as applicable to
34-
the Bonds, the Issuerwill not be required to complywith anycovenant contained herein to the extent
that such failure to comply in the opiuon of nationall~recogruzed bond counsel, will not adversely
affect the exemption from federal income taxation of interest on the Bonds 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 Bonds, the Issuer agrees to comply with the additional
requirements to the extent necessary iri the opiuon ofnationally-recognized bond counsel, to preserve
the exemption from federal income taxation of interest on the Bonds under section 103 of the Code.
In furtherance of the foregoing, the Mayor, the City Manager, any Assistant City Manager, and the
Director of Finance may execute any certificates or other reports required by the Code and to make
such elections, on behalf of the City which maybe permitted bythe Code as are consistent with the
purpose for the issuance of the Bonds. In order to facilitate compliance with the above clause (h) a
'Rebate Fund >s hereby established bythe Cityforthe sole benefit of the United States of Amenca,
and such Rebate Fund shall not be subject to the claim of any other person, iricludirig without
limitation the registered owners of the Bonds. The Rebate Fund >s established for the additional
purpose of compliance with section 148 of the Code.
Furthermore,. the Issuer will take all reasonable actions specified in any wntten uistructions
provided to the Issuer by TWDB to assure that the interest on said bonds, or any bonds issued to
refund said bonds, shall be excludable from the gross income of the holders thereof forfederal income
tax purposes.
Section 26. APPROVAL AND REGISTRATION OF BONDS. That the proper officials of
the City are hereby authorized to have control of the Obligations and all necessary records and
proceedings pertaiung to the Obligations pending their delivery and their uivestigation, examuiation
and approval bythe Attorney General of the State of Texas, and their registration bythe Comptroller
of Public Accounts of the State of Texas. Upon registration of the Obligations, said Comptroller of
35-
Public Accounts (or a deputy designated iri writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate accompanying the Obhgauons, and the seal of said Comptroller
shall be impressed, or placed in facsimile, on each such certificate.
Section 27 SALE (a) The Obhgauons are herebysold to TWDB for the price of par, less
an onguiation fee payable to TWDB of $623,206.02. The Obhgauons maybe delivered to TWDB in
accordance with the schedule set forth in Secuon 2 of this Ordinance, and paid for in whole, or in
installments at such tunes as shall be approved bythe CityManager provided none of the Obligations
shall be so delivered without the City's receiving full payment therefor The Obligauons initially
delivered shall be registered in the name of the Texas Water Development Board.
(b) The Cityherebyauthonzes the CityManagerto approve and execute such documents
necessaryto effect the dehveryof the Obligations.
(c) The Paying Agent/Registrar shall complete the 'Date of Dehver~' on each Obligation
delivered to TWDB as provided in Secuon 5(e) of this Ordinance, and interest on the Obhgauons so
delivered shall commence from such date.
(d) It is the intent of the parties to the sale of the Obligations that if TWDB ever
determines .to sell all or a part of the Obligations, it shall notifythe city at least 60 days prior to the sale
of the Obhgauons of the decision to so sell the Obligations.
(e) In connecuon withthe issuance of the Obligauons, the Cityherebydeclares its intention
to fund the Reserve Fund with a municipal bond debt service reserve policy (the 'Reserve Policy") to
be provided by Ambac Assurance Corporation (the 'Provider") so that upon the issuance of the
Obligations the aggregate amount of the Reserve Fund Obligations on deposit in the Reserve Fund
shall be no less than the Required Reserve Amount, as calculated in accordance with the provisions of
Section 16 hereof. The Reserve Policyshall be deposited to the credit of the Reserve Fund at the tine
of the issuance and dehveryof the Obligations. The CityManager and anyAssistant CityManagershall
36-
have the authonry to execute any documents to effect the issuance of the Reserve Policy by the
Provider including, without limitation, an Insurance Agreement between the City and the Provider in
substantiallytheforin attached to the commitment issued bythe Provider with respect to the Reserve
Policy (the 'Reserve Policy Commitment") In addition, the conditions applicable to the issuance of
the Reserve Policy as set forth in the Reserve PohcyCommitment >ssued bythe Provider are hereby
incorporated by reference into this Ordinance.
(f) To the extent that the provisions of this Ordinance are incons>stent or conflict with the
provisions of the ordinances authonzing the Previously Issued Subordinate Lien Obligations, the
provisions of this Ordinance shall control, including, without limitation, that the City shall have the
abihry to fund the Requi-ed Reserve Amount for the Obligations over a. 24 month penod, and by
issuing its cominnitment to purchase the Obligations, TWDB shall be deemed to have consented to the
applicability of such provisions set forth in this Ordinance to the Subordinate Lien Obligations.
(g) The purchase of a municipal bond iuurance policy (the 'Bond Insurance Pohc}~')
from the Provider as additional secunry for the Obligations u hereby approved. The pnnting of a
legend on the Obligations describing the Bond Insurance Policy>s herebyauthornzed. The payment
of the premium to the Provider in consideration for the issuance of the Bond Insurance Pohcy>s
herebyapproved. In addition, the conditions applicable to the issuance of the Bond Insurance Policy
as set forth in the Insurance Comimitment issued bythe Providerwith respect to the Bond Insurance
Policy attached to this Ordinance, are hereby incorporated by reference into this Ordinance.
Section 28. COMPLIANCE WITH RULE 15c2 12. (a) Arousal Reports. (i) The City shall
provide annually to each NRMSIR and any SID within six months after the end of each fiscal year
financial information and operatung data with respect to the City of the general type included in the
final Application submitted to TWDB and submitted to the NRMSIRs and the SID with respect to the
Pnor Lien Bonds. Anyfinancial statements to be so provided shall be (1) prepared in accordance with
37
the accountuig principles generally applicable to cities such as the City or such other accounting
principles as the Citymaybe required to employfrom tune to tune thereafter pursuant tostate law or
regulation, and (2) audited, if the City commissions an audit of such statements and the audit >s
completed within the period dunrig which they must be provided. If the audit of such financial
statements is not complete within such penod, then the City shall provide unaudited financial
statemenu within such penod and shall provide audited financial statements for the applicable fiscal
yearto each NRMSIR and anySID when and if the audit report on such statements become available.
(u) If the City changes its fiscal year, it will notify each I`1RMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date bywhich the City otherwise would
be required to provide financial information and operating data pursuant to this Section. The City
agrees to provide financial information and operating data of a nature consistent with that provided
bythe Cityin connection with the issuance of Additional PriontyObhgations to which the Rule applies.
The financial information and operating data to be provided pursuant to this Section may be set forth
in full in one ormore documents ormaybe included byspecific reference to anydocument (including
an official statement or other offering document, if it is available from the MSRB) that theretofore has
been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Ezent Nis. The City shall notify any SID and either each NRMSIR or the
MSRB in a tunelymaruier, of anyof the following events with respect to the Obligations, if such event
is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies,
2. Non-payment related defaults,
3 Unscheduled draws on debt service reserves reflectumg financial difficulties,
4 Unscheduled draws on credit enhancements reflecting financial difficulties,
5 Substitution of credit or ligrudityprovideis, or their failure to perform,
6. Adverse tax opuuons or events affecting the tax-exempt status of the
Obligations,
7 Modifications to rights of holders of the Obligations,
8. Obligation calls,
38-
9 Defeasances,
10. Release, substitution, orsale of properrysecunng repayment of the Obligations,
and
11. Rating changes.
The Ciryshall notify any SID and either each NRMSIR or the MSRB nn a timelymanner of anyf ailure
bythe Ciryto provide financial information or operating data in accordance with subsection (a) of this
Section bythe tune required bysuch subsection.
(c) Lzrnxazwns, Dzsdararers, andArrerad~n~s. (i) The City shall be obligated to observe and
perform the covenants specified in this .Article for so long as, but onlyfor so long as, the Ciryremains
an obligated person with respect to the Obligations within the meaning of the Rule, except that the
Cityiri anyevent will give notice of anydeposit made in accordance with this Ordinance or applicable
law that causes Obligations no longer to be outstanding.
(u) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Obligations and the beneficial owners of TWDB's bonds underthe Rule, and
nothing in this Section, express orinphed, shall give anybenefit or anylegal or egtutable nght, remedy
orclaunhereunderto anyotherperson. The Ciryundertakes to provide onlythe financial nnformation,
operating data, financial statements, and notices which it has expressly agreed to provide pursuant to
this Section and does not herebyundertake to provide anyother information that maybe relevant or
maternal to a complete presentation of the City's financial results, condition, or prospects or hereby
undertake to update anyinfonnation provided in accordance wrath this Section or otherwise, except as
expresslyprovided herein. The City does not make any representation or warranty concernirng such
information or its usefulness to a decision to invest in or sell Obligations at any future date.
(iu) UNDER NO CdRCUMSTANCES SI-iALL THE QTY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON,INCONITZACTORTORT FORDAMAGESRESULTINGINWHOLE ORINPART
39-
FROM ANY BREACH BY THE QTY WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART OF ANY COVENANT SPECSFIED IN THIS ARTICLE BUT EVERY RIGHT AND
RE ME DY OF ANY S UCH PE RS ON, IN CONTRACT OR TORT FOR OR ON ACCOUNT OF
ANYSUCHBREACHSHALLBELIMITED TOANACTIONFORMANDAMLJS ORSPECIFIC
PERFORMANCE
(iv) No default bythe Cityin observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Orduiarice. Nothing in this Section >s intended or shall act to disclaim, waive, or otherwise limit the
dunes of the Cityunder federal and state securities laws.
(v) The provisions of this Section maybe amended bythe Cityfrom tune to tune to adapt to
changed circumstances that arise from a change ui legal requirements, a change in law or a change in
the identity nature, status, or type of operations of the City but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Obligations in the
priinaryoffering of the Obligations in compliance with the Rule, taking into account anyamendments
or interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the reg>stered owners of a ma~orityin aggregate principal amount (or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstaridirig
Obligations consent to such amendment or (b) a person that >s unaffiliated with the City (such as
nationally recognized bond counsel) deterinines that such amendment will not materially unpair the
interest of the registered owners and beneficial owners of the Obligations. If the Cityso amends the
provisions of this Section, it shall include with any amended financial uzforination or operating data
next provided in accordance with subsection (a) of this Section an explanation, in narrative form, of
the reason for the amendment and of the unpact of anychange in the type of financial uiformation or
operating data so provided. The City may also amend or repeal the provisions of this continuing
-40-
duclosure agreement ~ the SEC amends or repeals the applicable provision of the Rule or a court of
final jrinsdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwater from lawfullypurchasing
or selling Obligations in the prunary offering of the Obligations.
Section 29 ALLOCATION OF AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT That the City covenants to account for on its books and records the expenditure of
proceeds from the sale of the Obligations and any investment earnings thereon to be used for the
improvement and extension of the System (referred to herein and Section 30 hereof as a 'Project') by
allocating proceeds to expenditures within 18 months of the later of the date that (a) the expenditure
on a Project >s made or (b) each such Project >s completed. The foregoing notwithstanding, the City
shall not expend such proceeds or investment earnings more than 60 days after the later of (a) the fifth
anniversaryof the date of deliveryof the Obligations or (b) the date the Obligations are retired, unless
the Cityobtains an opinion of nationally:recognizedbotid counsel substantiallyto the effect that such
expenditure will not adversely affect the tax exempt status of the Obligations. For purposes of this
Section, the City shall not be obligated to comply with this covenant if it obtains an option of
nationally:recognizedbotid counsel to the effect that such failure to complywill not adversely affect
the excludabihtyforfedeml income tax purposes from gross income of the interest.
Section 30. DISPOSITION OF PROJECT That the City covenants that the property
constituting a Project will not be sold or otherwise disposed iii a transaction resulting in the receipt by
the City of cash or other compensation, unless the City obtains an opinion of nationall~recogiuzed
bond counsel substantiallyto the effect that such sale or other disposition will not adverselyaffect the
tax exempt status of the Obligations. For purposes of this Section, the portion of the property
comprising personal propertyand deposed of in the ordinary course of business shall not be treated
as a transaction resulting in the receipt of cash or other compensation. For purposes of this Section,
-41
the Issuer shall not be obligated to comply with thu covenant if it obtains an opuuon of nationally-
recogmzed bond counsel to the effect that such failure to comply will not adversely affect the
excludabilityforfedeml income tax purposes from gross ncome of the nterest.
Section 31 RULES OF CONSTRUCTION. For all purposes of thu Ordinance, unless the
context requu-es otherwLSe, all references to designated Sections and other subdivisions are to the
Sections and othersubdzv~sions of this Ordnance. The words 'herein 'hereof and 'hereunder" and
other words of sunilar unport refer to thu Ordnance as a whole and not to anyparticular Section or
other subdivision. Except where the context otherwise requires, terms defined n this Ordnance to
unpart the sngular numbershall be considered to nclude the pluialnumberand vice versa. References
to anynamed person means that partyand its successors and assigns. References to anyconstitutional,
statutoryor regulatoryprov~sion means such provision as it exists on the date this Ordinance is adopted
bythe Cityand anyfuture amendments thereto orsuccessorprovisions thereof Anyreference to the
payment of principal ul this Ordnance shall be deemed to include the payment of mandatory snkng
fund redemption payments. Any reference to 'FORM OF BOND shall refer to the form of the
Bonds set forth n Exhibit A to this Ordnance.
Section 32. FURTHERPROCEDURES. That the CityManager, anyAssistant CityManager
the Director of Finance and all other officers, employes, and agents of the City and each of them,
shall be and they are hereby expressly authorized, empowered, and directed from tune to tune and at
anytune to do and perform all such acts and thugs and to execute, acknowledge, and deliver ui the
name and under the corporate seal and on behalf of the City all such instruments, whether or not
herein mentioned, as may be necessary or desirable n order to carry out the terns and provisions of
th>s Ordnance, and the sale and delivery of the Bonds and fixung all details n connection therewith.
Section 33 PREAMBLE That the preamble to this Ordnance >s ncorporated byreference
and made a part hereof for all purposes.
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Section 34 IMMEDIATE EFFECT That this Ordinance shall be effective immediately from
and after its passage in accordance with the provisions of Section 1201 028, Texas Government Code.
ADOPTED this 21st day of May 2002.
c.Q,~
Mayor
ATTEST
City Secretary
APPROVED AS TO FORM AND LEGALITY
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-43-
EXHIBIT A
NO
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF TA,RRANT AND DENTON
QTY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE BOND
SERIES 2002
INTEREST RATE. DATE OFD .T.T RY Ci 1SII'
Registered Owner.
Principal Amount:
ON THE MATURITY DATE SPECIFIED ABOVE THE QTY OF FORT WORTI-~
TEXAS (the 'Issuer') herebypromises to payto the registered owner set forth above, or registered
assigns hereof (hereinafter called the registered owner") the principal amount set forth above and to
payinterest thereon,. from the Date of Deliveryas set forth above, to the date of its scheduled maturity
or the date of its redemption prior to scheduled maturity at the rate of interest per annum specified
above,.with said interest being payable on September 1, 2002, and semiannually on each March 1 and
September 1 thereafter except that if the Paying Agent/Registrar's Authentication Certificate appearing
on the face of this Bond is dated later than September 1 2002, such interest is payable semiannually
on each March 1 and September 1 following such date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
Unted States of America, without exchange or collection charges. The principal of this Bond shall be
paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or upon
the date fixed for its redemption prior to maturity at the designated corporate trust office in Dallas,
Texas (the 'Designated Trust Office ') of JPMorgan Chase Bank, which is the 'Paying Agent/Registrar"
forthis Bond. The payment of interest on this Bond shall be made bythe Paying Agent/Registrar to
the registered owner hereof as shown by the Reg>stration Books kept by the Paying Agent/Registrar
at the close of business on the 15th day of the month next preceding such interest payment date (the
record date ') bycheck drawn bythe Paying Agent/Registrar on, and payable solelyfrom, funds of the
Issuer required to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
provided, and such check shall be sent by the Paying Agent/Registrar by United States mail, postage
prepaid, on each such interest payment date, to the registered owner hereof at its address as it appears
on the Registration Books kept bythe Paying Agent/Registrar as hereinafter described. In the event
of anon-payment of interest on a scheduled payment date, and for 30 days thereafter anew record
date for such interest payment (a 'Special Record Date') will be estabkshed by the Paying
Agent/Registrar, if and when funds forthe payment of such interest have been received from the City
Notice of the Special Record Date and of the scheduled payment date of the past due interest (the
'Special Payment Date which shall be 15 days after the Special Record Date) shall be sent at least five
business days pnorto the Special Record Date byUnited States mail, fast class, postage prepaid, to the
address of each registered owner of a Bond appearing on the books of the Paying Agent/Registrar at
the close of business on the last business daynext preceding the date of mailuig of such notice. The
foregoing notwithstanding, solong asthe Texas Water Development Board >s the registered owner of
100% in aggregate principal amount of the Bonds then outstanding, payment of principal and interest
on the Bonds shall be made thereto bywire transfer, at no expense to the Texas Water Development
Board. The Issuer covenants with the registered owner of this Bond that no later than each principal
payment date and interest payment date for this Bond it will make available to the 'Paying
Agent/Registrar the amounts requu-ed to provide for the payment, in immediately available funds; of
all principal of and interest on the Bonds, when due.
IF THE DATE f or the payment of the principal of or interest on this B and shall be a Saturday
Sunday a legal holiday or a day on which banking institutions in the cirywhere the Designated Trust
Office of the PayingAgent/Registrar is located are authorized bylaw or executive order to close, then
the date for such payment shall be the next succeeding daywhich is not such a Saturday Sunday legal
holiday or day on which banking institutions are authorized to close; and payment on such date shall
have the same force and effect as if made on the original date payment was due.
THIS BOND u one of a series of bonds, dated May 15 2002 of like tenor and effect except
as to number, principal amount, interest rate, maturity and right of prior redemption, aggregating
$34,310,000 (herein sometimes called the 'Bonds ') issued for the purpose of extending and improving
the Issuer's combined water and sewer system, to-wit. extending and inproviig the Issuer's sewer
system.
THE OUTSTANDING BONDS of this Series maturing on and after March 1 2013 maybe
redeemed prior to their scheduled maturities, at the option of the Issuer ui whole, or in part, and if in
part, in inverse order of maturity on September 1, 2012, or on any date thereafter for the principal
amount thereof and accrued interest thereon to the date fixed for redemption, and without premium.
The f oregoing notwithstanding, during anyperiod in which owneislip of the Bonds is deteriririeci only
by a book entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same
maturiryand bearing the same interest rate are to be redeemed, the particular Bonds of such maturity
and bearing such interest rate shall be selected in accordance with the arrangements between the Issuer
and the securities depository
AT LEAST 30 days pnorto the date fixed for any such redemption a written notice of such
redemption shall be given to the registered owner of each Bond or a portion thereof being called for
redemption by depositing such notice in the United States mail, postage prepaid, addressed to each
such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar
Bythe date fixed for anysuch redemption due provision shall be made bythe Issuer with the Paying
Agent/Registrarforthepayment of the required redemptionprice forthis Bond orthe portion hereof
which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such
written notice of redemption is given, and if due provision for such payment >s made, all as provided
above, this Bond, or the portion hereof which >s to be so redeemed, thereby automatically shall be
redeemed prior to its scheduled maturity and shall not bear interest after the date fixed for its
redemption, and shall not be regarded as being outstanding except forthe right of the registered owner
to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying
Agent/Registrar out of the funds provided f or such payment. The Paying Agent/Registrar shall record
in the Registration Books all such redemptions of principal of this Bond or anyportion hereof If a
portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date,
bearing interest at the same rate, in any denomination or denominations in any integral multiple of
$5,000, at the written request of the registered owner and in aggregate principal amount equal to the
unredeemed portion thereof will be issued to the registered owner upon the surrender thereof for
cancellation, at the expense of the Issuer, all as provided in the ordinance authorizuig the Bonds (the
'Ordinance ')
ALL BONDS OF THIS SERIES are issuable solelyas fullyregistered bonds, without interest
coupons, in the denomination of anyintegral multiple of $5,000. As provided in the Ordinance, this
Bond, or any unredeemed portion hereof, may at the request of the registered owner or the assignee
or assignees hereof be assigned, transferred, and exchanged for a like aggregate principal amount of
fullyregistered bonds, without interest coupons, payable to the appropriate registered owner, assignee,
or assignees, as the case maybe, having the same rnatuntydate, and bearing interest at the same rate,
in any denomination or denominations in any integral multiple of $5,000 as requested in writing bythe
appropriate registered owner, assignee, or assignees, as the case maybe, upon surrender of this Bond
to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all ul accordance with the
foam and procedures set forth in the Ordinance. Among other requu-ements for such assignment and
transfer this Bond must be presented and surrendered to the Paying Agent/Registrar together with
proper instruments of assignment, in form and with guarantee of signatures satisfactoryto the Paying
Agent/Registrar, evidencing assignment Of this Bond Or anyportion Or portions hereof in anyiritegral
multiple of $5,000 to the assignee or assignees in whose name or names this Bond or anysuch portion
or portions hereof >s or are to be transferred and registered. The form of Assignment printed or
endorsed on this Bond maybe executed by the registered owner to evidence the assignment hereof
but such method is not exclusive, and other instruments of assignment satisfactory to the Paying
Agent/Registrar maybe used to evidence the assignment of this Bond or any portion or portions
hereof from tune to tune by the registered owner The one requesting such exchange shall pay the
Paying Agent/Registrar's reasonable standard or customaryfees and charges for exchanging anyBond
orportion thereof. The foregoing notwithstanding, in the case of the exchange of a portion of a Bond
which has been redeemed prior to maturity as provided herein, and in the case of the exchange of an
assigned and transferred Bond or Bonds or anyportion or portions thereof such fees and charges of
the Paying Agent/Registrarwill be paid bythe Issuer. In anycircumstance, anytaxes or governmental
charges required to be paid with respect thereto shall be paid bythe one requesting such assignment,
transfer, or exchange as a condition precedent to the exercise of such privilege. In anycu-cumstance,
neither the Issuer nor the Paying Agent/Registrar shall be required (1) to make any transfer or
exchange during a period beginriirig at the opening of business 30 days before the day of the first
mailing of a nonce of redemption of bonds. and ending at the close of business on the day of such
mailing, or (2) to transfer or exchange any Bonds so selected for redemption in whole when such
redemption is scheduled to occur within 30 calendar days.
IN THE E VENT anyPaying Agent/Registrar for the Bonds >s changed bythe Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Ordinance that it promptlywill
appoint a competent and legally qualified substitute therefor whose qualifications substantially are
similar to the previous Paying Agent/Registrar it >s replacing, and promptly will cause written notice
thereof to be mailed to the registered owners of the Bonds.
WHENEVER the beneficial ownership of thus Bond u determined by a book entry at a
securities depositoryfor the Bonds, the foregoing requu-ements of holding, dehveririg or transferring
thus Bond shall be modified to require the appropriate person or entityto meet the requirements of the
securities depository as to registering or transfemng the book entryto produce the same effect.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the teams and provisions of the Ordinance, agrees to be bound bysuch terms and
provisions, acknowledges that the Ordinance >s dulyrecorded and available forinspection in the official
minutes and records of the Issuer and agrees that the terms and provisions of this Bond and the
Ordinance constitute a contract between each registered owner hereof and the Issuer
THE ISSUER has reserved the right, subject to the restrictions stated, and adopted by
reference, in the Ordinance, to issue (1) Prior Lien Obligations (as defined in the Ordinance) secured
by a hen on and pledge of the Pledged Revenues (as defined in the Ordinance) superior to such hen
and pledge securing the Bonds, and (2) additional panty revenue bonds which also maybe made
payable from, and secured bya lien on and pledge of the Pledged Revenues securing the Bonds.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of
this obligation out of anyfunds raised or to be iaised bytaxation, orfrom anysource whatsoever other
than the aforesaid Pledged Revenues.
IT IS HEREBY certified and covenanted that thus Bond has been dulyand validlyauthorized,
issued and delivered, that all acts, conditions and things required orproperto be performed, exist and
be done precedent to or in the authorization, issuance and deliveryof thus Bond have been performed,
existed and been done in accordance with law• that thus Bond u a special obligation, and that the prin-
cipal of and interest on this Bond, together with other bonds of the Issuer now or hereafter
outstanding on a paritytherewith, are payable from, and secured bya lien on and pledge of, the Pledged
Revenues (as defined in the Ordinance) and which include the Net Revenues of the Issuer's combined
Water and Sewer System, however the lien on and pledge of the Pledged Revenues shall be~urior and
subordinate to the Prior Lien Obligations (as defined in the Ordinance) which consist of the Prior Lien
Bonds (as defined in the Ordinance) and anySystem Obligations (as defined in the Ordinance)
IN WITNESS WHEREOF this Bond has been signed with the iripririted or lithographed
facsuile signature of the Mayor of said City attested by the unprYrited or lithographed facsimile
signature of the CitySecretary and approved as to form and legalitybythe iriprinted or lithographed
facsimile signature of the City Attorney and the official seal of said City has been affixed to or
irriprinted on this Bond.
QTY OF FORT WORTH, TEXAS
By~~. ~,L,
Mayor
ATTEST
City Secre ry
APPROVED AS TO FORM AND LEGALITY
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FORM ()F PAYINCT AC',ENT/RF(,,ISTRAR'S AiTTT-IFNTTC'ATInN C'FR FIC'ATF.
PAYING AGENT/REGISTRAR'S AUIT~NTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described on the face of this Bond, and that this Bond has been issued in exchange for or replacement
of a bond, bonds, or a portion of a bond or bonds of an issue which onginallywas approved bythe
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the
State of Texas.
Dated JPMORGAN C~IASE BANK
Paying Agent/Registrar
By
Authorized Representative
FORM OF COMPTROLLER'S CERTIFICATE ATTAC~D TO
THF. BnNDS T TPON NiTT AT DF T .T Y THE F nF.
OFFICE OF COMPTROLLER
STATE OF TEXAS
REGISTER NO.
I hereby certify that there is on file and of record iri my office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been examined byhim as required bylaw
and that he finds that it has been issued u1 confornutywlth the Constitution and laws of the State of
Texas, and that it is a valid and binding special obligation of the cityof Fort Worth, Texas, payable iri
the manner provided by and in the ordinance authonzuig same, and said Bond has this day been
registered by me.
WITNESS MY HAND and seal of office at Austin, Texas
Comptroller of Public Accounts of
the State of Texas
(SEAL)
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name-and address, including
zip code of Transferee)
the within Bond and all rights thereunder and hereby irrevocably constitutes and appoints
attorneyto register
the transfer of the within Bond on the books kept for registration thereof with full power of
substitution in the premises.
Dated.
Signature Guaranteed.
NOTICE Signature(s) must
be guaranteed by a member
firm of the New York Stock
Exchange or a commercial
bank or trust company
NOTICE The signature above
must correspond with the name
of the Registered Owner as it
appears upon the front of this
Bond in everyparticular
without alteration or erilarge-
ment or any change whatsoever
r
THE STATE OF TEXAS
COUNTIES OF TARRANT AND DENTON
QTY 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 muiutes of the regular
meeting of the City Council of the City of Fort Worth, Texas which was held on May21, 2002, and of
an ordinance which was dulypassed at said meeting, and that said copy>s a true and correct copy of
said excerpt and the whole of said ordinance. Saud meeting was open to the public, and public nonce
of the tune, place and purpose of said meeting was given, all in accordance with Chapter 551, Texas
Government Code.
In testunon whereof, I have set my hand and have hereunto affixed the seal of said City of
Fort Worth, this day of May 2002.
'ty Secretary t e City of
Fort rth, Texas
(SEAL)
THE STATE OF TEXAS
COUNTIES OF TARRANT AND DENTON
CITY OF FORT WORTH
On the 21st day of May, 2002, 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:
Kenneth Barr, Mayor
Jim Lane,
Chuck Silcox,
Becky Haskin,
Frank Moss,
Clyde Picht, ala-tt' Councilmembers,
Jeff Wentworth,
Ralph McCloud,
Wendy Davis,
Gary Jackson, City Manager,
David Yett, City Attorney,
Gloria Pearson, City Secretary,
Jim Keyes, Director of Finance
with more than a quorum present; and after the City Council had transacted certain business, the
following business was transacted, to-wit:
Councilmember J_Xpaint roduced 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 by a vote of YEAS,QNAYS. The
ordinance as passed is as follows: