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HomeMy WebLinkAboutOrdinance 148791 2-1 ~-~ ~ r~U~ l+6 I N ORDINANCE NO . ~9 _~: ~~ NINTH SUPPLEMENTAL ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE BONDS, SERIES 2001 THE STATE OF TEXAS COUNTIES OF TARRANT AND DENTON CITY OF FORT WORTH WHEREAS, the City of Fort Worth, Texas (the "City" or the "Issuer"), a "home-rule" city operating under ahome-rule charter adopted pursuant to Section 5 of Article XI of the Texas Constitution, with a population according to the latest federal decemiah census of in excess of 50,000, has established and currently owns and operates a combined waterworks and samtary sewer system (the "System"), and WHEREAS, the City heretofore has established the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program for the purpose of providing a financing structure for revenue supported indebtedness of the System, and WHEREAS, said Program was established pursuant to the terms of a "Master Ordinance Establishing the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program" (the "Master Ordinance"); and WHEREAS, unless otherwise defined herein, terms used herein shall have the meaning given in the Master Ordinance; and WHEREAS, the Master Ordinance authonzes revenue supported indebtedness to be issued, incurred or assumed pursuant to the terms of supplemental ordinances (any such ordinance being a "Supplement"); and WHEREAS, pursuant to the terms of the Master Ordinance, the City has adopted eight Supplements (designated as the "First Supplement","Second Supplement", "Third Supplement", "Fourth Supplement", "Fifth Supplement", "Sixth Supplement", "Seventh Supplement"and "Eighth Supplement", respectively, and the "Pnor Supplements", collectively) pursuant to which (i) the Crty of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Serves 1991 A and Senes 1991B, the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Serves 1993, the Crty of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1996, the Crty of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1997, the City of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Senes 1998, the Crty of Fort Worth, Texas Water and Sewer System Revenue Bonds, Serves 2000 and the Crty of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Senes ZOOOB were issued, and (ii) the City entered into two respective ISDA Master Agreements (referred to herein as the "Swap Agreements"), one with Lehman Brothers Special Financing Inc., and the other with GBDP, L.P ,and - WHEREAS, the aforesaid Serves 1991A Bonds and the Senes 1991B Bonds issued pursuant to the teens of the First Supplement are no longer are outstanding, and the aforesaid Series 1993 Bonds, Serves 1996 Bonds, Serves 1997 Bonds, Senes 1998 Bonds, Series 2000 Bonds and Series 2000B Bonds are hereinafter referred to ~.s the "Previously Issued Panty Bonds", and WHEREAS, the Swap Agreements entered into pursuant to the terms of the Fourth Supplement by their respective teens have expired, and the City has no further obligations thereunder; and WHEREAS, the Previously Issued Panty Bonds are secured by a first lien on and pledge of the Pledged Revenues of the System, and WHEREAS, in addition to the Previously Issued Panty Bonds, the City has authorized the issuance of up to $75,000,000 of its Water and Sewer System Commercial Paper Notes, Senes A (the "Commercial Paper Notes"), for the purpose of providing a method of interim financing to improve and extend the City's Water and Sewer System, and WHEREAS, m connection with the Commercial Paper Notes, the City has procured a line of credit from Westdeutsche Landesbank Girozentrale, New York Branch (the "Bank"), and WHEREAS, the obligations of the City under the agreement with the Bank are secured by a lien on and pledge of the Pledged Revenues of the System, subordinate to the lien on and pledge of the Pledged Revenues of the System in favor of the owners of the Previously Issued Parity Bonds, and WHEREAS, the City currently does not have any Commercial Paper Notes outstanding; and WHEREAS, the City deems it appropnate to issue the hereinafter authorized bonds for the purpose of extending and improving the System, and WHEREAS, the City Council has adopted this Ninth Supplement to the Master Ordinance in accordance with the provisions of the Master Ordinance and the bonds hereinafter authorized shall hereafter constitute Panty Obligations under the Master Ordinance; and WHEREAS, the bonds hereinafter authonzed are to be issued and delivered pursuant to Chapter 1502, Texas Govenunent Code, for the purposes set forth above. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS SECTION 1 DEFINITIONS In addition to the definitions set forth in the preamble of this Ninth Supplement, the teens used in this Ninth Supplement (except in the FORM OF BOND set forth in Exhibit B to this Ninth Supplement) and not otherwise defined shall have the meanings graven in the Master Ordinance, the Prior Supplements or in Exhibit A to this Ninth Supplement. -2- Section 2 BONDS AUTHORIZED That the "City of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 2001 "are hereby authorized to be issued m the aggregate principal amount of $49,125,000, for the purpose of extending and improving the System. Section 3 DATE AND MATURITIES, INTEREST That the Bonds shall be dated December 1, 2001, shall be m the denorrunat~on of $5,000 each, or any integral multiple thereof, shall be numbered consecutively from R-1 upward, shall bear interest at the rates, and shall. mature on February 15 in each ofthe years, and m the amounts, respectively, as set forth m the following sched- ule MATURITY DATE FEBRUARY 15 YEARS PRINCIPAL ($) INTEREST RATE (%~ 2003 1,420,000 5 000 2004 1,490,000 5 000 2005 1,565,000 5 000 2006 1,645,000 5 000 2007 1,735,000 5.250 2008 1,830,000 5 250 2009 1,925,000 5.250 2010 2,030,000 5 250 2011 2,140,000 5 250 2012 2,260,000 5 500 2013 2,385,000 5 625 2014 2,525,000 5 625 2015 2,670,000 5 625 2016 2,825,000 5 625 2017 2,990,000 5 625 2018 3,165,000 5 625 2019 3,345,000 5 625 2020 3,530,000 5.250 2021 3,725,000 5.250 2022 3,925.,000 5.250 Interest on the Bonds shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Said interest shall be payable to the registered owner of any such Bond in the manner provided and on the dates stated in the FORM OF BOND set forth m this Ordinance. Section 4 RIGHT OF PRIOR REDEMPTION (a) Optional Redemption. That the City reserves the right to redeem the Bonds maturing on and after February 15, 2013 on February 15, 2012, or on any date thereafter, in whole or in part, for the principal amount thereof and accrued -3- -- interest thereon to the date fixed for redemption, and without premium. If less than all of the Bonds are to be redeemed by the City, the City shall determine the matunty or maturities and the amounts therewith to be redeemed and shall direct the Pa}nng Agent/Regnstrar to call by lot Bonds, or portions thereof, within such matunty or matuntnes and nn such principal amounts, for redemption, provided, that during any period m which ownership of the Bonds is determined only by a book entry at a secunties depository for the Bonds, if fewer than all of the Bonds of the same matunty and beanng the same interest rate are to be redeemed, the ,particular Bonds of such matunty and beanng such interest rate shall be selected nn accordance with the arrangements between the Cnty and the secunties depository (b) Notice Notice of any redemption of Bonds shall be given m the following manner, to- wrt, (i) a written notice of such redemption shall be given to the owner of each Bond or a portion thereof being called for redemption not more than 60 days nor less than 30 days pnor to the date fixed for such redemption by depositing such notice nn the United States Mail, first-class postage prepaid, addressed to each such owner at the address thereof shown on the Registration Books of the Paying Agent/Regnstrar and (ii) a notice of such redemption shall be published one time, at least 30 days pnor to the date fixed for such redemption, in a journal or publication of general circulation in the Umted States of America which carries as a regular feature notices of redemption of municipal bonds, provided, however, that the failure to send, mail, or receive such notice described in clause (i) above, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond, as publication of notice as described nn clause (ii) above shall be the only notice actually required m connection with or as a prerequisite to the redemption of any Bonds. By the date fixed for any such redemption due provision shall be made by the City with the Payng AgentlRegistrar for the payment of the required redemption pace for the Bonds or the portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment ns made, all as provided above, the Bonds, or the portions thereof which are to be so redeemed, thereby automatically shall be redeemed pnor to their scheduled maturities, and shall not bear interest after the date fixed for their redemptnon, and shall not be regarded as being outstanding except for the right of the owner to receive the redemptnon puce plus accrued nnterest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Regnstrar shall record in the Registration Books all such redemptions of princnpal of the Bonds or any portion thereof. If a portion of any Bond shall be redeemed, a substitute Bond or Bonds having the same maturity date, beanng nnterest at the same rate, in any denorrinatnon or denorrinatnons in any integral multiple of $5,000 at the wntten request of the owner, and nn an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the owner upon the surrender thereof for cancellation, at the expense of the Cnty, all as provided m this Ninth Supplement. The maturities of Bonds to be called for redemption shall be deternined by the City The Bonds or portions to be redeemed within each such matunty shall be selected by lot or other customary random method selected by the Paying AgentlRegistrar (provided that a portion of a Bond may be redeemed only nn an integral multiple of $5,000) The City shall give written notice to the Paying Agent/Registrar of any such redemption of Bonds at least 60 calendar days (or such shorter penod as is acceptable to the Paying Agent/Regnstrar) pnor to such redemption. -4- (c) Notice to Securities Depositories. (i) In addition to the manner of providing notice of redemption of Bonds as set forth above, the Paying Agent/Registrar shall give notice of redemption of Bonds by United States Mail, first-class postage prepaid, at least thirty (30) days prior to a redemption date to each registered securities depository and to any national information service that disserrunates redemption notices. In addition, in the event of a redemption caused by an advance refunding of the Bonds, the Paying Agent/Registrar shall send a second notice of redemption to the persons specified in the immediately preceding sentence at least thirty (30) days but not more than ninety (90) days prior to the actual redemption date Any notice sent to the registered securities depositories or such national information services shall be sent so that they are received at least two (2) days prior to the general mailing or publication date of such notice. The Paying Agent/Registrar shall also send a notice of prepayment or redemption to the owner of any Bond who has not sent the Bonds in for redemption sixty (60) days after the redemption date. (ii) Each redemption notice, whether required in the FORM OF BOND or otherwise by this Ninth Supplement, -shall contain a description of the Bonds to be redeemed including the complete name of the Bonds, the serves, the date of rssue, the interest rate, the maturity date, the CUSIP number, if any, the amounts called for redemption, the publication and mailing date for the notice, the date of redemption, the redemption price, the name of the Paying Agent/Registrarand the address at which the Bond may be .redeemed including a contact person and telephone number (iii) All redemption payments made by the Paying Agent/Registrar tothe registered owners of the Bonds shall include a CUSIP number relating to each amount paid to such registered owner Section 5 CHARACTERISTICS OFTHE BONDS (a) Registration, Transfer. Conversion and`Exchange, Authentication. The City shall keep or cause to be kept at the designated corporate trust office in Houston, Texas (the "Designated Trust Office") ofJPMorgan Chase Bank (the "Paying Agent/Registrar"), books or records for the registration of the transfer, conversion and exchange of the Bonds (the "Registration Books"), and the City hereby .appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers, conversions and exchanges under such reasonable regulations as the City and the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein provided. The City Manager or the designated Assistant City Manager is hereby authorized to execute a "Paying Agent/Registrar Agreement" in such form as is approved by the City Attorney The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the owner of each Bond to which payments with respect to the Bonds shall be mailed, as herein provided, but it shall be the duty of each owner to notify the Paying Agent/Registrar inwriting ofthe address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The City shall have the right to inspect at the Designated Trust Office the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrarsliall keep the Registration Books confidential and, unless otherwise required by law, shall- not permit their inspection by any other entity Except as otherwise provided in the FORM OF BOND set forth in Exhibit B to this Ninth Supplement, the owner of each Bond requesting a conversion, transfer, exchange and delivery of such Bond shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of a substitute Bond or Bonds. Registration -5- of assignments, transfers, conversions and exchanges of Bonds shall be made in the manner provided and with the effect stated in the in the FORM OF BOND set forth in Exhibit B to this Ninth Supplement. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign the "Paying Agent/Registrar's Authentication Certificate" in the form set forth in the FORM OF BOND set forth in Exhibit B to this Ninth Supplement, and, except as provided below, no such Bond shall be deemed to be issued or Outstanding unless such Certificate is so executed, the foregoing notwithstanding, such Certificate need not be executed if any such Bond is accompanied by an executed "Comptroller's Registration Certificate" in the form set forth in the FORM OF BOND set forth in Exhibit B to this Ninth Supplement. The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the govenung body of the City or any other body or person so as to accomplish the foregoing conversion and exchange of any Bond or portion thereof, and the Paying Agent/Registrarshail provide for the panting, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter 1206, Texas Government Code, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the converted and exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds which initially were issued and delivered pursuant to this Ninth Supplement, approved by the Attorney General, and registered by the Comptroller of Public Accounts. (b) Payment of Bonds and Interest. The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of, premium, if any, and interest on the Bonds, all as provided in this Ninth Supplement. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Bonds. (c) In General. The Bonds (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) maybe converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall be payable, and (viii) shall be administered and the Paying Agent/Registrararid the City shall have certain duties and responsibilities with respect to the Bonds, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF BOND set forth in Exhibit B to this Ninth Supplement. The Bonds initially issued and delivered pursuant to this Ninth Supplement are not re- quired to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for any Bond or Bonds issued under this Ninth Supplement the Pa}nng Agent/Registrar shall execute the "Paying Agent/Registrar's Authentication Certificate", in the form set forth in said FORM OF BOND (d) Substitute PayingA e~ nt/Re istrar The City covenants with the owners of the Bonds that at all times while the Bonds are Outstanding a competent and legally qualified entity shall act as and -6- perform the services of Paying AgentlR~gistrar for the Bonds under this Ninth Supplement, and that the Paying Agent/Registraz will be one entity Such entity may be the City, to the extent perntted bylaw, or a bank, trust company, financial institution, or other agency, as selected by the City The City reserves the right to, .and may, at its option, change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next pnncipal or interest payment date after such nonce. In the event that the entity at any time acting as Paying Agent/Registraz (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that promptly it will appoint a competent and Legally qualified entity to act as Paying Agent/Registrarunder tlusNinth Supplement. Upon any change m the Paying Agent/Registraz, the previous Faying Agent/Registraz promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Bonds, to the new Paying Agent/Regrstraz designated and appointed by the City Upon any change m the Paying Agent/Registrar, the City promptly will cause a wntten not- ice thereof to be sent by the new Paying Agent/Registraz to each owner of the Bonds, by United States Mail, first-class postage prepaid, which notice also shall give the address of the new Pa}nng Agent/Registrar By accepting the position and performing as such, each Paying Agent/Registraz shall be deemed to have agreed to the provisions of this Ninth Supplement, and a certified copy of this Ninth Supplement shall be delivered to each Paying AgentlRegistraz Section 6 FORM OF BONDS (a) That the form of all Bonds, including the form of the Paying Agent/Registrar's Certificate, the form of Assignment, and the form of the Comptroller's Registration Certificate to be attached only to the Bonds initially issued and delivered pursuant to this Ninth Supplement, shall be, respectively, substantially as set forth in Exhibit B, with such appropriate vanatnons, omissions, or insertions as are permitted or required by this Ninth Supplement and the Bond Purchase Agreement. (b) The pnnter of the Bonds ns hereby authonzed to pant on the Bonds the form of bond counsel's opimon relating to the Bonds, and ns hereby authonzed to pnnt on the Bonds an appropriate statement of insurance fiznushed by a mumcnpal bond insurance company providing municipal bond insurance, if any, covering all or any part of the Bonds. Section 7 ESTABLISHIVIENT OF FINANCING PROGRAM AND ISSUANCE OF PARITY OBLIGATIONS That by adoption of the Master Ordinance the City has established the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program for the purpose of providing a financing structure for revenue supported indebtedness of the System. The Master Ordinance is intended to establish a master plan under which revenue supported debt of the System can be incurred. This Ninth Supplement provides for the authorization, issuance, sale, delivery, form, charactenstics, provisions of payment and redemption, and secunty of the Bonds which are a series of Panty Obligations. The Master Ordinance is incorporated herein by reference and as such made apart hereof for all purposes, except to the extent modified and supplemented hereby, and the Bonds are hereby declared to be Panty Obligations under the Master Ordinance The City hereby determines that it will have sufficient funds to meet the financial obligations of the System, including sufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of the System and to meet all financial obligations of the City relating to the System. -7- Section 8 PLEDGE That the Bonds are and shall be secured by and payable from a first lien on and pledge of the Pledged Revenues, and the Pledged Revenues are further pledged to the establishment and maintenance of the Debt Service Fund, and to the Reserve Fund to the extent hereinafter provided. The Bonds are and, will be secured by and payable only from the Pledged Revenues, and are not secured by or payable from a mortgage or deed of trust on any properties, whether real, personal, or rruxed, constituting the System. Section 9 DEBT SERVICE FUND ACCOUNTS That with respect to the Bonds no special account need be established to facilitate the payment of debt service on the Bonds. Section 10 RESERVE FUND That deposits to the credit of the Reserve Fund shall be made in the manner described in Section 12(b) of this Ninth Supplement. Section 11 INVESTMENTS That money in the Reserve Fund created under this Ninth Supplement shall not be invested in securities with an average aggregate weighted maturity of greater than seven years The value of the Reserve Fund, in addition to the annual determination described in the Master Ordinance, shall be established at the time or times withdrawals are made therefrom. Investments shall be sold promptly when necessary to prevent any default in connection with the Bonds. Earnings denved from the investment of moneys on deposit in the various Funds and Accounts shall be credited to the Fund or Account from which moneys used to acquire such investment shall. have, corne.. Section 12 FLOW OF FUNDS That all monies in the System Fund not required for paying Operating Expenses during each month shall be applied by the City, on or before the 10th day of the following month, commencing dunng the months and in the order of prionty with respect to the Funds and Accounts that such applications are hereinafter set forth in this Section. (a) Debt Service Fund - To the credit of the Debt Service Fund, in the following order of pnonty, to-wit. (1) such amounts, deposited in approximately equal monthly installments, commencing during the month in which the Bonds are delivered, or the month thereafter if delivery is made after the 10th day thereof, as will be sufficient, together with other amounts, if any, in the Debt Service Fund available for such purpose, to pay the interest scheduled to come due on the Bonds on the next succeeding interest payment date; and (2) such amounts, deposited in approximately equal monthly installments, commencing dunng the month which shall be the later to occur of, (i) the twelfth month before the first matunty date of the Bonds, or (ii) the month in which the Bonds are delivered, or the month thereafter if delivery is made after the 10th day thereof, as will be sufficient, together with other amounts, if any, in the Debt Service Fund available for such purpose, to pay the principal (including mandatory sinking fund redemption payments, if any) scheduled to mature or come due on the Bonds on the next succeeding pnncipal payment date or mandatory sinking fund redemption date, as the case may be. -8- (b) Reserve Fund. To the credit of the Reserve Fund; there shall be obtained and deposited to the Reserve Fund a Credit Facility, nn the form of a surety bond, nn such amount that, together with other amounts, if any, nn the Reserve Fund, equal the Required Reserve Amount. When and so long as the Reserve Fund Obligations nn the Reserve Fund are not less than the Required Reserve Amount, no deposits need be made to the credit of the Reserve Fund. When and if the Reserve Fund at any time contains less than the Required Reserve Amount due to any cause or condition then, subject and subordinate to making the required deposits to the credit of the Debt Service Fund, commencing with the month durnng which such deficiency occurs, such deficiency shall be made up from the next available Pledged Revenues or from any other sources available for such purpose, nn monthly installments of not less than 1 / 12 of the Required Reserve Amount, nn the manner provided nn the Master Ordinance. Reimbursements to the provider, of any, of a Credit Facility shall constitute the making up of a deficiency to the extent that such reimbursements result nn the reinstatement, nn whole or m part, as the case maybe, of the amount of the Credit Facility Section 13 PAYMENT OF BONDS That on or before the first scheduled interest payment date, and on or before each interest payment date and principal payment date therea$°r while any of the Bonds are Outstanding and unpaid, the City shall make available to the Paying Agent/Registrar, out of the Debt Service Fund (and the Reserve Fund, if necessary) monies sufficient to pay such interest on and such principal amount of the Bonds, as shall become due on such dates, respectively, at maturity or by redemption pnor to maturity The Paying Agent/Regnstrar shall destroy all paid Bonds and furnish the Cnty with an appropriate certificate of cancellation or destruction. Section 14 COVENANTS REGARDING TAX-EXEMPTION That the Issuer covenants to refrain from any action which would adversely affect, or to take such action as to ensure, the treatment of the Bonds as obligations described in section 103 of the Code, the interest on which ns not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows. (a) to take any action to assure that no more than ten percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any "private business use", as defined in section 141(b)(6) of the Code or, if more than ten percent of the proceeds are soused, that amounts, whether or not received by the Issuer, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than ten percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds five percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used fora "pnvate business use" which is "related" and not "disproportionate", within the meaning of section 141(b)(3) of the Code, to the governmental use; -9- (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code, (d) to refrain from talung any action which would otherwise result in the Bonds being treated as "specified pnvate activity bonds" within the meaning of section 141(b) of the Code; (e). to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) ofthe Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with - (1) proceeds of the Bonds invested for a reasonable temporary period of three years or less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed for the purpose for which the Bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1 148-1(b) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed ten percent of the proceeds of the Bonds, (g) to otherwise restnct the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as maybe necessary, so that the Bonds 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 refiindings), and (h) to pay to the United States of America at least once during each five-year penod (begiriung on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the i7mted States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. For purposes of the foregoing clauses (a) and (b) above, the Issuer understands that the term "proceeds" included "disposition proceeds" as defined in the Treasury Regulations and, in the case of a refunding bond, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of the issuance of the Bonds. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U S Department of the Treasury pursuant thereto In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable -10- to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opimon of nationally-recognized 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, in the opinion 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 by the 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" is hereby established by the City for the sole benefit of the United States of America, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the registered owners of the Bonds. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code Section 15 AMENDMENT OF NINTH SUPPLEMENT (a) That the owners of a majonty in Outstanding Pnncipal Amount of the Bonds shall have the right from time to time to approve any amendment to this Ninth Supplement which may be deemed necessary or desirable by the City, provided, however, that nothing herein contained shall permit or be construed to permit the amend- ment of the teens and conditions in this Ninth Supplement or in the Bonds so as to (1) Make any change in the maturity of any of the Outstanding Bonds, (2) Reduce the rate of interest borne by any of the Outstanding Bonds, (3) Reduce the amount of the principal payable on the Outstanding Bonds, (4) Modify the terms of payment of principal of, premium, if any, or interest on the Outstanding Bonds or impose any conditions with respect to such payment; (5) Affect the rights of the owners of less than all of the Bonds then Outstanding; (6) Amend this clause (a) of this Section, or (7) Change the rririmum percentage of the pnncipal amount of Bonds necessary for consent to any amendment; unless such amendment or amendments shall be approved by the owners of all of the Bonds then Outstanding. (b) That if at any time the City shall desire to amend the Ninth Supplement under this Section, the City shall cause notice of the proposed amendment to be published in a financial newspaper or journal published in the City of New York, New York, and a newspaper of general circulation in the City, once during each .calendar week for at least two successive calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the principal office of the Paying Agent/Registrar for inspection by all owners of the Bonds. Such publication is not required, however, if notice in wasting is given to each owner of the Bonds. (c) That whenever at any time not less than 30 days, and within one year, from the date of the first publication of said notice or other service of wetter notice the City shall receive an -11- ~. instrument or instruments executed by the owners of at least a maJonty in Outstanding Principal Amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agent/Registrar, the govenung body of the City may pass such amendment in substantially the same form. (d) That upon the passage of any such amendment pursuant to the provisions of this Section, this Ninth Supplement shall be deemed to be amended in accordance with such amendment, and the respective rights, duties and obligations under this Ninth Supplement of the City and all the owners of then Outstanding Bonds shall thereafter be deterrruned, exercised and enforced hereunder, subject in all respects to such amendment. (e) That any consent given by the owners of a Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the first publication of the notice provided for m this Section, and shall be conclusive and binding upon all future owners of the same Bond during such period. Such consent maybe revoked at any time after six months from the date of the first publication of such notice by the owner who gave such consent, or by a successor in title, by filing written notice thereofwith the Paying Agent/Registrar and the City, but such revocation shall not be effective if the owners of at least a ma~onty in Outstanding Principal Amount of the Bonds have, prior to the attempted revocation, consented to and' approved the amendment. (f) The foregoing provisions of this Section notwithstanding, the City by action of the City Council may amend this Ninth Supplement without the consent of any owner of the Bonds or any other Panty Obligations, solely for any one or more of the following purposes (1) To add to the covenants and agreements of the City in this Ninth Supplement contained, other covenants and agreements thereafter to be observed, grant additional rights or remedies to the owners of the Bonds or to surrender, restrict or lirrut 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 any defective provision contained in this Ninth Supplement, or in regard to clarifying matters or questions arising under this Ninth Supplement, as are neces- sary or desirable and not contrary to or inconsistent with this Ninth Supplement and which shall not adversely affect the interests of the owners of the Bonds then Outstanding; (3) To modify any of the provisions of this Ninth Supplement in any other respect whatever, provided that such modification shall be, .and be expressed to be, effective only after the Bonds Outstanding at the date of the adoption of such modification shall cease to be Outstanding; (4) To make such amendments to this Ninth Supplement as maybe required, in the ~opimon ofBond Counsel, to ensure compliance with sections 103 and 141 through 150 ofthe Code and the regulations promulgated thereunder and applicable thereto, -12- (5) To make such changes, modifications or amendments as may be necessary or desirable in order to allow the owners of the Bonds to thereafter avail themselves of a book- entrysystem for payments, transfers and other matters relating to the Bonds, which changes, modifications or amendments are not contrary to or inconsistent with other provisions of this Ninth Supplement and which shall not adversely affect the interests of the owners of the Bonds, (6) To make such changes, modifications or amendments as may be necessary or desirable in order to obtain or maintain the granting of a rating on the Bonds by a Rating Agency or to obtain or maintain a Credit Agreement or a Credit Facility issued in support of the Bonds, and (7) To make such changes, modifications or amendments as may be necessary or desirable, which shall not adversely affect the interests of the owners of the Bonds, in order, to the extent permitted by law, to facilitate the economic and practical utilization of interest rate swap agreements, foreign currency exchange agreements, or similar type of agreements with respect to the Bonds. Notice of any such amendment may be published by the City in the manner described in clause (b) of this Section, provided, however, that the publication of such notice shall not constitute a condition precedent to the adoption of such amendatory ordinance and the failure to publish such notice shall not adversely affect the implementation of such amendment as adopted pursuant to such amendatory ordinance. (g) Ownership of the Bonds shall be established by the Registration Books maintained by the Paying Agent/Registrar, in its capacity as registrar and transfer agent for the Bonds. Section 16 DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS (a) That in the event any Outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall 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 Bond, in replacement for such Bond in the manner hereinafter provided. (b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made to the Paying AgentlRegistrar In every case of loss, theft, or destruction of a Bond, the applicant for a replacement bond shall furnish to the City and to the Paying Agent/Registrar such security or indemnity as may be required by them to save each of them harmless from any loss or damage with respect thereto Also, in every case of loss, theft, or destruction of a Bond, the applicant shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) Notwithstanding the foregoing provisions ofthis Section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal -13- -- of, redemption premium, if any, or interest on the Bond, the City may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as above provided in this Section. (d) Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the owner of such Bond with all legal, printing, and other expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits ofthis Ninth Supplement equally and proportionately with any and all other Bonds duly issued under this Ninth Supplement. (e) In accordance with Chapter 1206, Texas Government Code, this Section of this Ninth Supplement shall constitute authority for the issuance of any such replacement bond without necessity of further action by the governing body of the City or any other body or person,'and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrarshafl authenticate and deliver such bonds in the form and manner and with the effect, as provided in Section 6(a) of this Ninth Supplement for Bonds issued in exchange for other Bonds. Section 17 CONTINZJING DISCLOSURE UNDERTAKING (a) Annual Reports. (i) B,he City shall provide annually to each NRMSIR and any SID, within six months after the end of each Fiscal Year ending in or after 2001, financial information and operating data with respect to the City of the general type included in the final Official Statement authorized by Section 24 of this Ordinance, being the information described in Exhibit C hereto Any financial statements so to be provided shall be (1) prepared m accordance with the accounting principles described in Exhibit C hereto, or such other accounting principles as the City maybe required to employ from time to time pursuant to state law or regulation; and (2} audited, if the City comrrussions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide unaudited financial statements within such period and shall provide audited financial statements for the applicable Fiscal Year to each NRMSIR and any SID, when and if the audit report on such statements becomes available. (ii) Ifthe City changes its Fiscal Year, it will notify each NRMSIR and any SID ofthe change (and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or maybe included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC -14- (b) Material Event Notices The City shall notify any SID and either each NRMSIR or the MSRB, m a timely manner, of any of the following events wrth respect to the Bonds, if such event is material within the meaning. of the federal securities laws. 1 Pnncipal and interest payment delinquencies; 2 Non-payment related defaults, 3 Unscheduled draws on debt service reserves reflecting financial difficulties, 4 Unscheduled draws on credit enhancements reflecting financial difficulties, 5 Substitution of credit or liquidity providers, or their failure to perform, 6 Adverse tax opimons or events affecting the tax-exempt status of the Bonds, 7 Modifications to rights of holders of the Bonds; 8 Bond calls; 9 Defeasances, 10 Release, substitution, or sale of property securing repayment ofthe Bonds, and 11 Rating changes. The Crty shall notify any SID and either each NRMSIR or the MSRB, m a timely manner, of any failure by the City to provide financial information or operating data in accordance wrth subsection (a) of this Section by the time required by such subsection. (c) Licritations Disclaimers, and Amendments. (i) The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the Crty remains an "obligated person" wrth respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any deposit made in accordance rnnth this Ordinance or applicable law that causes Bonds no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing m this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other mforinatron that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or to update any information provided in accordance wrth this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest m or sell Bonds at any future date. (iii) UNDERNO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LMTED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE -15- (iv) No default by the City iri observing or performnng nts obligations under this Section shall comprise a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing nn this Section ns intended or shall act to disclaim, waive, or othenwnse lmm~t the duties of the City under federal and state securntnes laws. (v) The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances that arse from a change nn legal requirements, a change nn law, or a change nn the identity, nature, status, or type of operations of the City, but only of (1) the provisions of thus Section, as so amended, would have permitted an underwriter to purchase or sell Bonds nn the primary offenng of the Bonds nn compliance with the Rule, taknng into account any amendments or interpretations of the Rule since such offenng as well as such changed circumstances and (2) either (a) the Holders of a ma~onty in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that ns unaffiliated with the City (such as nationally recognized bond counsel) determnnes that such amendment will not materially impair the interest of the holders and beneficnal owners of the Bonds. If the Cnty so amends the provisions of thus Sectnon, nt shall include with any amended financial information or operating data next provided in accordance with subsectnon (a) of this Section an explanation, nn narratnve form, of the reason for the amendment and of the nmpact of any change nn the type of financial reformation or operating data so provided. Sectnon 18 NINTH SUPPLEMENT TO CONSTITUTE ACONTRACT, -EQUAL SECURITY That in consideratnon of the acceptance of the Bonds, the nssuance of whinch is authorized hereunder, by those who shall hold the same from tame to time, thus Ninth Supplement shall be deemed to be and shall constitute a contract between the City and the Holders from time to tame of the Bonds and the pledge made nn this Ninth Supplement by the City and the covenants and agreements set forth nn thus Ninth Supplement to be performed by the Cnty shall be for the equal and proportionate benefit, secunty, and protectnon of all Holders, without preference, priority, or dnstnnctnon as to secunty or othertivnse of any of the Bonds authorized hereunder over any of the others by reason of time of issuance, sale, or maturity thereof or otherwise for any cause whatsoever, except as expressly provided in or penrutted by thus Ninth Supplement. Sectnon 19 SEVERABILITY OF INVALID PROVISIONS That if any one or more of the covenants, agreements, or provisions herenn contanned shall be held contrary to any express provisions of law or contrary to the polncy of express law, though not expressly prohibited, or against public polncy, or shall for any reason whatsoever be held invalid, then such covenants, agreements, or provisions shall be null and void and shall be deemed separable from the remamm~g covenants, agreements, or provisions and shall nn no way affect the valndity of any of the other provisions hereof or of the Bonds nssued hereunder Section 20 PAYMENT AND PERFORMANCE ON BUSINESS DAYS That, except as provided to the contrary nn the FORM OF BOND set forth in Exhibnt B to thus Ninth Supplement, whenever under the teens of this Ninth Supplement or the Bonds, the performance date of any provision hereof or thereof, nncludnng the payment of pnncnpal of or nnterest on the Bonds, shall occur on a day other than a Busnness Day, then the performance thereof, nncludnng the payment of pnncnpal of and nnterest on the Bonds, need not be made on such day but may be performed or pared, as the -16- case maybe, on the next succeeding Business Day with the same force and effect as if made on the date of performance or payment. Section 21 LMTATION OF BENEFITS WITH RESPECT TO THE NINTH SUPPLEMENT That with the exception of the rights or benefits herein expressly conferred, nothing expressed or contained herein or implied from the provisions of this Ninth Supplement or the Bonds is intended or should be construed to confer upon or give to any person other than the City, the Holders, and the Paying Agent/Registrar, any legal or equitable right, remedy, or claim under or by reason of or m respect to thus Ninth Supplement or any covenant, condition, stipulation, prorruse, agreement, or provision herein contained. Thus Ninth Supplement and all of the covenants, conditions, stipulations, prorruses, agreements, and provisions hereof are intended to be and shall be for and inure to the sole and exclusive benefit of the Crty, the Holders, and the Paying Agent/Registrar as herein and therein provided. Section 22 FURTHER PROCEDURES That the Mayor, the Crty Secretary or Assistant Crty Secretary, any Designated Financial Officer, and all other officers, employees, and agents of the City, and each of them, shall be and they are hereby expressly authorzed, empowered, and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge, and deliver in the name and under the seal and on behalf of the Issuer all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of thus Ninth Supplement, the Bonds, the execution of the Guaranty Agreement with the Surety Bond Provider in connection with the issuance of a surety bond for the Reserve Fund, m substantially the form attached hereto, the offering documents prepared in connection with the sale ofthe Bonds, or the Paying Agent/Registrar Agreement described in Section 5 'hereof. In case any officer whose signature appears on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purpose the same as if he or she had remained m office until such delivery Section 23 APPROVAL AND REGISTRATION OF BONDS That the City Manager of the City is hereby authorzed to have control of the Bonds and all necessary records and proceedings pertaimng to the Bonds pending their delivery and their investigation, examination and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Bonds, said Comptroller of Public Accounts (or a deputy designated m wasting to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate accompan}nng the Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on each such certificate Section 24 SALE OF BONDS (a) That the sale of the Bonds to the Underwriters is hereby authonzed. The Bond Purchase Agreement, in substantially the form attached to thus Ninth Supplement, which shall set forth the teens of the sale of the Bonds to the Underwriters, is hereby accepted, approved and authonzed to be delivered m executed form to the Underwriters (b) That the offering documents prepared to connection with the sale of the Bonds, m substantially the form attached to this Ninth Supplement, are hereby accepted, approved and -17- authorized to be delivered nn executed fonn to the Undenwnters. The use of the "Prelnrninary Official Statement" prepared in connection with the sale of the Bonds ns hereby ratified. Section 25 DTC REGISTRATION The Bonds nnitially shall be issued and delivered in such manner that no physical distribution of the Bonds will be made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Bonds. DTC has represented that rat ns a lmm~ted purpose trust company incorporated under the laws. of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Umfonm Commercnal Code, and a "cleanng agency" regnstered under Sectnon 17A of the Securities Exchange Act of 1934, as amended, and the Cnty accepts, but in no way vernfies, such representations. The Bonds uitnally authorized by this Ninth Supplement shall be delivered to and regnstered nn the name of CEDE & CO ,the nominee of DTC It is expected that DTC will hold the Bonds on behalf of the Underwriters and them respectnve particnpants. So long as each Bond ns registered nn the name of CEDE & CO ,the Paying Agent/Regnstrar shall treat and deal wrath DTC the same nn all respects as of rat were the actual and beneficnal owner thereof. It ns expected that DTC will manntain a book-entry system wlich will ndentnfy ownershnp of the Bonds nn nntegral amounts of $5,000, wrath transfers of ownership benng effected on the records of DTC and rats partncnpants pursuant to rules and regulations estabinshed by them, and that the Bonds initially deposnted wrath DTC shall be nmmobilnzed and not be further exchanged for substntute Bonds except as herennafter provnded. The Cnty is not responsible or lnable for any fiznctnons of DTC, will not be responsible for paying any fees or charges wrath respect to rats servnces, will not be responsible or lnable for manntanring, supernsnng, or revnewnng the records of DTC or rats partncnpants, or protecting any nnterests or nghts of the beneficial owners of the Bonds. It shall be the duty of the DTC Partncnpants, as;defined nn the Officnal Statement herein approved, to make all arrangements wrath DTC to establish thus book-entry system, the beneficnal ownershnp of the Bonds, and the method of paying the fees and charges of DTC The City does not represent, nor does rat nn any way covenant that the nmtnal book- entry system estabinshed wrath DTC will be manntanned in the future. Notwnthstanding the nmtral establishment of the foregonng book-entry system wrath DTC, of for any reason any of the ongnnally delnvered Bonds is duly filed wrath the Paying AgentlRegistrar wrath proper request for transfer and substntutnon, as provided for nn this Ninth Supplement, substntute Bonds will be duly delnvered as provnded in this Ninth Supplement, and there will be no assurance or representatnon that any book- entry system will be maintained for such Bonds. To effect the establishment of the foregonng book- entrysystem, the Cnty has executed and filed wrath DTC the "Blanket DTC Letter of Representatnons" in the foam provnded by DTC to evidence the City's nntent to establish sand book-entry system. Sectnon 26 ALLOCATION OF, AND LIlVIITATION 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 Bonds and any investment earnings thereon to be used for the nmprovement and extensnon of the System (referred to herein and Section 27.hereof as a "Project") by allocating proceeds to expendntures withn 18 months of the later of the date that (a) the expendnture on a Project ns made or (b) each such Project ns completed. The foregonng notwithstandnng, the City shall not expend such proceeds or nnvestment earnings more than 60 days after the later of (a) the fifth anmversary of the date of delivery of the Bonds or (b) the date the Bonds are retired, unless the City obtains an opinion of nationally-recognized bond counsel substantially to the effect that such expendnture will not adversely affect the tax-exempt status of the Bonds. For purposes of thus Sectnon, the City shall not be obligated to comply wrath this covenant if rat obtains an -18- opinion of nationally-recognized bond counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 27 DISPOSITION OF PROJECT That the Crty covenants that the property constituting a Project will not be sold or otherwise disposed in a transaction resulting m the receipt by the Crty of cash or other compensation, unless the City obtains an o_piruon ofnationally-recognized bond counsel substantially to the effect that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of this Section, the portion of the property compnsmg personal property and disposed of m 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, the Crty shall not be obligated to comply with this covenant if rt obtains an opinion of nationally- recognized bond counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 28 DELIVERY OF DOCUMENTS TO SURETY BOND PROVIDER. That the Designated Financial Officer is hereby directed to send to the Surety Bond Provider copies of the Ninth Supplement and the final Official Statement prepared m connection with the sale of the Bonds promptly after the date of adoption of this Ninth Supplement. Section 29 PREAMBLE That the preamble to this Ninth Supplement is hereby incorporated by reference, and is to be considered a part of the operative text of this Ninth Supplement. Section 30 IlVIlVIEDIATE EFFECT That this Ninth Supplement shall be effective immediately from and after rts passage in accordance vv~th the provisions of Section 1201 028, Texas Government Code, and rt is accordingly so ordained. [Execution Page Follows] -19- EXl-IIBIT A That, as used in this Ninth Supplement, the following terms shall have the meanings set forth below, unless the text hereof specifically indicates otherwise "Bank" shall have the meaning given said term in the preamble to the Ninth Supplement. "Bond Purchase Agreement" means the Bond Purchase Agreement, dated December 11, 2001, by and among the City and the Underwriters. "Bonds" means the Serves 2001 Bonds. .` "Busnness Day" means a day other than a Sunday, Saturday, a legal holiday, or a day on which banking institutions in the city where the principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close "Commercial Paper Notes" shall have the meaning given said term nn the preamble to the Ninth Supplement. "Eighth Supplement" means the ordinance authorizing the issuance of the Series 2000E Bonds. "Fifth Supplement" means the ordinance authorizing the nssuance of the Series 1997 Bonds. "Master Ordinance" means the "Master Ordinance estabinshnng the Crty of Fort Worth Texas Water and Sewer System Revenue Financing Program", passed by the City on December 10, 1991 "MSRB" means the Municipal Securities Rulemakmg Board. "Ninth Supplement" means the ordinance authorizing the issuance of the Bonds. "NRMSIR" means each person whom the SEC or rats staff has determined to be a nationally recognized municipal secuntnes nnformatnon repository wntlun the meaning of the Rule from time to time "Paying Agent/Regnstrar" means the financial institution specified m Section 5(a) of the Ninth Supplement. "Previously Issued Panty Bonds" means the Serves 1993 Bonds, the Series 1996 Bonds, the Serves 1997 Bonds, the Series 1998 Bonds, the Serves 2000 Bonds and the Series 20008 Bonds. "Registration Books" shall have the meaning graven sand term nn Section 6(a) of the Ninth Supplement. "Rule" means SEC Rule 15c2-12, as amended from time to time A-1 "SEC" means the United States Securities and Exchange Commission. "Second Supplement" means the ordinance authorizing the issuance of the Senes 1993 Bonds. "Series 1993 Bonds" means the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 1993, authorized by the Second Supplement. "Senes 1996 Bonds" means the Crty ofFort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Senes 1996, authorized by the Third Supplement. "Senes 1997 Bonds" means the City ofFort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Serves 1997, authorized by the Fifth Supplement. "Senes 1998 Bonds" means the Crty ofFort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Serves 1998, authorized by the Sixth Supplement. "Series 2000 Bonds" means the City ofFort Worth, Texas Water and Sewer System Revenue Bonds, Series 2000, authorized by the Seventh Supplement. "Senes 2000B Bonds" means the City of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Senes 2000B, authorized by the Eighth Supplement. "Senes 2001 Bonds" means the City ofFort Worth, Texas Water and Sewer System Revenue Bonds, Senes 2001, authorized by the Ninth Supplement. "Seventh Supplement" means the ordinance authonznng the issuance of the Serves 2000 Bonds. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository wrtlin the meaning of the Rule from time to time "Sixth Supplement" means the ordinance authorizing the nssuance of the Senes 1998 Bonds "Surety Bond Provider" means Ambac Assurance Corporation. "Term Bonds" shall have the meaning given said tenor nn Section 3 of the Ninth Supplement. "Third Supplement" means the ordinance authonznng the issuance of the Series 1996 Bonds "Underwriters" means Lehman Brothers, as senior managing underwater, together with the nnvestment banking firms that contract to purchase the Bonds pursuant to the terms of the Bond Purchase Agreement. A-2 EXHIBIT B NO FORM OF BOND UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF TARRAIVT AND DENTON CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE BOND, SERIES 2001 MATURITY DATE INTEREST RATE DATED DATE CUSIl' December 1, 2001 ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF FORT WORTH, IN TARRANT AND DENTON COUNTIES, TEXAS (the "Issuer"), hereby prorruses to pay to or to the registered assignee hereof (either being hereinafter called the "registered owner") the. principal amount of and to pay interest thereon from the dated date specified above, on August 15, 2002 and senuannually on each February 15 and August 15 thereafter to the matunty date specified above, or the date of redemption prior to matunty, at the interest rate per annum specified above, except that if the Paying Agent/Registrar's Authentication Certificate appearing on the face of this Bond is dated later than August 15, 2002, such interest is payable serruannually on each February 15 and August 15 following such date. THE PRINCIPAL OF AND INTEREST ON this Bond are payable m lawful money of the United 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 matunty or upon the date fixed for its redemption prior to matunty, at the designated corporate trust office m Dallas, Texas (the "Designated Trust Office"), of JPMorgan Chase Bank, which is the "Paying Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Pa}nng Agent/Registrar tothe registered owner hereof on each interest payment date by check or draft, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter pro- vided, and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first- class postage prepaid, on each such interest payment date, to the registered owner hereof, at its address as it appeared on the last day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any accrued B-1 interest due at matunty or upon the redemption of this Bond prior to maturity as provided herein shall be paid to the registered owner upon presentation and surrender of this Bond for redemption and payment at the Designated Trust Office of the Paying Agent/Registrar The Issuer has covenanted in the Bond Ordinance that on or before each principal payment date, interest payment date, and accrued interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Debt Service Fund" created by the ordinance establishing the Crty of Fort Worth, Texas Water and Sewer System Revenue Financing Program (the "Master Ordinance"), the amounts required to provide for the payment, in immediately available funds, of all pnncipal of and interest on the Bonds, when due. IN THE EVENT of anon-payment of interest on a scheduled payment. date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent. at least five business days prior to the Special Record Date by Umted States mail, first class postage prepaid, to the address of each registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice THE TERMS AND PROVISIONS of this Bond are continued on the reverse side hereof and shall for all purposes have the same effect as though fully set forth at this place IF THE DATE for the payment of the pnncipal of or interest on this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions m the City where the Designated Trust Office of the Paying Agent/Registrar islocated are authonzed by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. Notwithstanding. the foregoing, dunng any period in which ownership of the Bonds is detenYined only by a book entry at a secunties depository for the Bonds, any payment to the securities depository, or its nominee or registered assigns, shall be made in accordance with existing arrangements between the Board and the securities depository THIS BOND is one of a senes of bonds of like tenor and effect except as to number, pnncipal amount, interest rate, matunty, and nght of pnor redemption, dated as of the dated date specified above, aggregating $49,125,000 (herein sometimes called the "Bonds") issued for the purpose of (i) extending and improving the City's Water and Sewer System and (ii) paying the costs related thereto THE OUTSTANDING BONDS maturing on and after February 15, 2013 may be redeemed pnor to their scheduled maturities, at the option of the Issuer, m whole, or m part on February 15, 2012, or on any date thereafter, at the redemption pace of the principal amount of the Bonds called for redemption, plus accrued interest thereon to the date fixed for redemption, and without premium, provided, that dunng any period m which ownership of the Bonds is deternuned only by a book entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same matunty and B-2 beanng the same interest rate are to be redeemed, the particular Bonds of such matunty and bearing such interest rate shall be selected m accordance with the arrangements between the Board and the securities depository NOTICE OF any such redemption of Bonds shall be given m the following manner, to-wit, (i) a written notice of such redemption shall be given to the registered owner of each Bond or a portion thereof being called for redemption not more than b0 days nor less than 30 days prior to'the date fixed for such redemption by depositing such notice m the United States Mail, first-class, postage prepaid, addressed to each such registered owner at lus address shown on the Registration Books of the Paying Agent/Registrar and (ii) a notice of such redemption shall be published one time, at least 30 days prior to the date fixed for such redemption, m a Journal or publication of general circulation in the United States of Amenca which carves as a regular feature notices of redemption of municipal bonds, provided, however, that the failure to send, mail, or receive such notice described in clause (i) above, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond, as publication of notice as described in clause (ii) above shall be the only notice actually required in connection with or as a prerequisite to the redemption of any Bonds. By the date fixed for any such redemption due provision shall be made by the Issuer with the Paying Agent/Registrarfnr the payment of the required redemption pace for this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion hereof which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled matunty, and shall not bear or accrue interest after the date fixed for its 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 for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of pnncipal amount of this Bond or any portion hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same matunty date, bearing interest at the same rate, m any denomination or denorrunations m any integral multiple of $5,000 (an "Authonzed Denorrunation") at the wntten 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 Issuer, all as provided in the Bond Ordinance. The years of matunty of the Bonds called for such redemption shall be selected by the Issuer The Bonds or portions thereof redeemed within a matunty shall be selected by lot or other customary random method selected by the Paying Agent/Registrar (provided that a portion of a Bond may be redeemed only in an Authonzed Denorrunation) ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest coupons, m the denorrunation of any Authonzed Denorrunation. As provided in the Bond Ordinance, this Bond may, at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate amount of fully registered Bonds, without interest coupons, payable to the appropriate registered owner, assignee or assignees, as the case may be, having any authorized denomination or denorrunations as requested in wasting by the appropriate registered owner, assignee or assignees, as the case maybe, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all m accordance with the form and procedures set B-3 forth in the Bond Ordinance Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar at the Designated Trust Office, together with proper instruments of assignment, inform and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in any authorized denomination to the assignee or assignees'in whose name or names this Bond or any such portion or portions hereof is or are to be 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 may be used to evidence the assignment of this Bond or any portion or portions hereof from time to time by the registered owner The one requesting such conversion and exchange shall pay the Paying Agent/Registrar's reasonable standard or customary fees and charges for convert- ing and exchanging any Bond or portion thereof. In any circumstance, any taxes or governmental charges required to be paid wrth respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such pnvilege. The fore- going notwithstanding, in the case of the conversion and exchange of an assigned and transferred Bond or Bonds or any portion or portions thereof, such fees and charges of the Paying Agent/Registrar will be paid by the Issuer The Paying Agent/Registrar shall not be required (i) to make any such transfer, conversion or exchange during the penod beginning at the opemng of business 30 days before the day of the first mailing of a notice of redemption and ending at the close of business on the day of such mailing, or (ii) to transfer, convert or exchange any Bonds so selected for redemption when such redemption is scheduled to occur within 30 calendar days, provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of an unredeemed balance of a Bond called for redemption in part. IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, whose qualifications are substan- tially similar to the previous Paying Agent/Registrar it is replacing, and promptly will cause wntten notice thereof to be mailed to the registered owners of the Bonds. WHENEVER the beneficial ownership of this Bond is determined by a book entry at a securities depository for the Bonds, the foregoing requirements of holding, delivering or transfemng this Bond shall be modified to require the appropriate person or entity to meet the requirements of the .securities depository as to registering or transferring the book entry to produce the same effect. BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all of the terms and provisions of the Master Ordinance and the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Master Ordinance and the Bond Ordinance are duly recorded and available for inspection in the official minutes and records of the Issuer, and agrees that the terms and provisions of this Bond, the Master Ordinance and the Bond Ordinance constitute a contract between each registered owner hereof and the Issuer All capitalized terms not defined herein shall have the same meaning as given said terms in the Master Ordinance or the Bond Ordinance B-4 FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed of this Bond ns not accompanied by an executed Registratnon Certnficate of the Comptroller of Public Accounts of the State of Texas) It ns hereby certnfied that this Bond .has been issued under the provnsnons of the proceedings adopted by the Issuer as described nn the text of tlis Bond, and that this Bond has been issued nn exchange for or replacement of a bond, bonds, or a portnon of a bond or bonds of an issue which originally was approved by the Attorney General of the State of Texas and regnstered by the Comptroller of Pubinc Accounts of the State of Texas. Dated By JPMORGAN CHASE BANK, Paying Agent/Registrar Authonzed Sngnatory FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE OFFICE OF COMPTROLLER STATE OF TEXAS REGISTER NO I hereby certnfy that this Bond has been examined, certnfied as to validity, and approved by the Attorney General ofthe State of Texas and that thus Bond has been regnstered by the Comptroller of Pubinc Accounts of the State of Texas. Witness my sngnature and seal this (SEAL) NOTE TO PRINTER. *¶ not to be printed on Bonds Comptroller of Pubinc Accounts of the State of Texas B-6 FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee (Please pant or typewrite name and address, including zip code of Transferee) the wrtlun Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to 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(s) above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever B-7 Exhibit C to Ninth Supplemental Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 18 of this Ninth Supplement. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance wrth such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below Tables 1 through 16 contained in the Official Statement; "Excerpts from the Annual Financial Report", as set forth in Appendix B to the Official Statement; and "Surety Bond and Surety Bond Provider", as described m Appendix D to the Official Statement Accounting Principles The. accounting pnnciples referred to in such Section are the accounting pnnc~ples described in the notes to the financial statements referred to in paragraph 1 above. SIGNED AND SEALED THIS 11TH DAY OF DECEMBER, 2001 ~i~ _~' Mayor, ,~~,? ~ ,; f''~ ,~-,~ ,..~ ~ , 2 r, Crty of Fort Worth, Texas ,~ ~~>, ,,a"~'°'y+~, '~r~, .~. n ~~ ~' ~ r y f.4- n~ >~ .,>,1 c .. s eR n... .. r ~~ ~ «~ P ~, ~: ~' ~ '~ Crty Secretary ~~~. n~ ,,~,,,,.-°°^ ~~ ,f . F~ ~~. APPROVED AS TO FORM AND LEGALITY ~~~~~~ City Attorney -20- City of Fort Worth, Texas ~11~A~ar And Cauncll CatrllrtunlcAtlon DATE REFERENCE NUMBER LOG NAME PAGE 12/18/01 **G-13467 60PROCEEDS 1 of 1 SUBJECT APPROPRIATION ORDINANCE FOR APPROPRIATION OF $50,000,000 IN PROCEEDS FROM WATER AND SEWER SYSTEM REVENUE BONDS, SERIES 2001 RECOMMENDATION It is recommended that the City Council adopt the attached appropriation ordinance increasing estimated receipts and appropriations by $50,000,000 in the Water and Sewer Capital Project Funds from proceeds of the sale of Water and Sewer System Revenue Bonds, Series 2001 DISCUSSION On December 11, 2001, the City Council adopted Ordinance No 14879 authorizing the issuance and. sale of City of Fort Worth, Texas, Water and Sewer System Revenue Bonds, Series 2001 The $50,000,000 will be distributed to projects where contracts have been awarded by the City Council through the commercial paper line of credit authorization. FISCAL INFORMATION/CERTIFICATION The Finance Director certifies that funds are available in the Water and Sewer Capital Project Funds for the recommended appropriations as a result of the December 2001 bond sale. MG k Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (to) P160 488102 060160159010 $41,000,000 ~yP~O~~~ Mik G 4 e roomer 61 0 P170 488102 070170139010 $ 9,000,000 ppeeii°~ ' f~I p Ori inatin De artment Head: P160 541200 060160159010 41 000 00 Y ~QViv~9~ g g p $ , , 0 1.~f i P170 541200 070170139010 $ 9,000,000 Dale Fisseler 8207 (from) C ~ ~ Zal1~ ~ c ~~ Additional Information Contact: ~,~;;s,,,, l_~r~-K/ City :3acr~stary of the Dale Fisseler 8207 C'i4',l of ?'nrt [~Iorih, T3xas ~L10ptC~. =.~i;"t.~lil "~~~.' n~i..U _Er.'ty<,,,L' /