Loading...
HomeMy WebLinkAboutOrdinance 13459ORDINANCE NO ~ ~ ~ ~ I AN AMENDED AND RESTATED ORDINANCE approving and authonzmg the issuance of commercial paper notes m an aggregate principal amount at any one time outstanding not to exceed $75,000,000 to provide interim financing to pay Project Costs for Eligible Projects and to refund obligations issued in connection with an Eligible Project, authorizing such short term obligations to be issued, sold and delivered in various forms, including commercial paper notes and a bank note, and prescribing the terms, features and characteristics of such instruments, approving and authorizing certain authorized officers and employees to act on behalf of the City in the selling and delivery of such short term obligations, within the limitations and procedures specified herein, making certain covenants and agreements in connection therewith, resolving other matters incident and related to the issuance, sale, security and delivery of commercial paper notes, including the approval of an Issuing and Paying Agent Agreement, a Credit Agreement and a Dealer Agreement, approving the use of an Offering Memorandum m connection with the sale from time to time of such short term obligations, and providing an effective date THE STATE OF TEXAS COUNTIES OF TARR.ANT AND DENTON CITY OF FORT WORTH WHEREAS, the Crty of Fort Worth, Texas (the "City" or the "Issuer") is a "Home-Rule City", acting as such under the Constitution and laws of the State of Texas, and has a population in excess of 90,000, and WHEREAS, on March 8, 1990, the City Council of the City adopted an ordinance (the "Commercial Paper Ordinance") which authorized the issuance of its short term obligations pursuant to the provisions of Article 717q, V A.T C S (the "Act"), to provide interim financing for additions, improvements and extensions to the City's combined water and sewer system (the "System"), and WHEREAS, the City currently has outstanding four classes of obligations supported by a pledge of and lien on the net revenues of the System, the first such class being (i) revenue bonds and (ii) obligations under two separate interest rate swap agreements executed in connection with such revenue bonds (hereinafter defined as the "Prior Lien Obligations"), payable from and secured by a first lien on and pledge of the net revenues of the System, the second such class being the obligations, if any, incurred under the Second Amended and Restated Credit Agreement, as amended, by and among the City, Canadian Imperial Bank of Commerce, New York Agency, and The Sakura Bank Limited, Houston Agency (the "Liquidity Agreement"), executed and delivered pursuant to the Commercial Paper Ordinance in support of the outstanding City of Fort Worth, Texas Water and Sewer System Commercial Paper Notes, Serves A (the "Outstanding Commercial Paper Notes"),the third such class being revenue bonds secured by a lien of and pledge of the net revenues of the System subordinate to the pledge of and lien on the net revenues securing the Prior Lien Obligations, and the obligations, if any, incurred under the Liquidity Agreement (hereinafter defined as the "Subordinate Lien Bonds"), and the fourth such class being certificates of obligation payable from and secured by ad valorem taxes and a .subordinate lien on and limited pledge of the System's net revenues (hereinafter defined as the "Subordinate Lien Obligations"), and WHEREAS, the Crty Council hereby finds that the adoption of this Ordinance, as an amendment to and restatement of the Commercial Paper Ordinance, is deemed necessary to enable the Crty to (i) name a co-Dealer, a new hquidrty provider, and a new Issuing and Paying Agent, (ii) extend the Maximum Maturity Date as set forth m the Commercial Paper Ordinance, and (iii) make such changes as to permit the program authorized hereby to be consistent with the changes m the commercial paper public debt market that have occurred since the date the Commercial Paper Ordinance was adopted, and WHEREAS, such short term obligations proposed to be issued pursuant to this Ordinance constitute bond anticipation notes which the City intends to fund through the issuance of its revenue bonds, and WHEREAS, arrangements relating to such mtenm financing have been settled and the Crty Council hereby finds and determines that the issuance of short term obligations, including commercial paper notes and a bank note, subject to the terms, conditions and limitations hereinafter prescribed, should be approved and authorized at this time, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS ARTICLE I DEFINITIONS Section 1 O1 Definitions Unless the context shall indicate a contrary meaning or intent, the terms below defined, for all purposes ofthis ordinance or any ordinance amendatory or supplemental hereto, shall be construed, are used and are intended to have the following meanings, to-wit "Advance" shall mean a loan made under and subject to the conditions set forth m the Agreement. "Agreement" or "Credit Agreement" shall mean the Credit Agreement approved and authorized to be entered into by Section 2.14 hereof, as from time to time amended or supplemented, or any other credit facility provided in lieu thereof in accordance with the provisions of Section 4 03 hereof. "Authorized Representative" shall mean one or mo'r'e of the following officers or employees of the City, acting in concert or individually, to-wit the Mayor, the City Manager, any Assistant City Manager, the Director of Fiscal Services, the Crty Treasurer, or such other officer or employee of the City designated in writing by the City Manager, as approved by the City Council, to act as an Authorized Representative "Bank" shall mean Westdeutsche Landesbank Girozentrale, acting through its New York Branch, or any subsequent or succeeding party to the Agreement. "Bank Note" shall mean the promissory note issued pursuant to the provisions of this Ordinance and the Agreement in evidence of Advances made by the Bank under the Agreement, having the terms and characteristics contained therein and issued m accordance wrth the terms thereof. "Bond Counsel" shall mean an attorney or firm of attorneys which are nationally recognized as having expertise in the practice of tax-exempt municipal finance law, as approved by the City McCall, Parkhurst & Horton L.L.P and Kelly, Hart & Hallman, a Professional Corporation, have been selected by the Crty to serve as Bond Counsel wrth respect to the issuance of Commercial Paper Notes under this Ordinance "Bonds" shall mean a series or issue of bonds, notes or similar obligations (other than the Notes or the Agreement (including the Bank Note)) issued by the Crty subsequent to the date of passage of this Ordinance, which bonds, notes or similar obligations are payable from and secured solely by a lien on and pledge of the Net Revenues of the System, prior m rank and dignity, on a parity in rank and dignity, or subordinate m rank and dignity to the lien on and pledge securing the payment of the Prior Lien Obligations. "Business Day" shall mean any day (a) when banks are not authorized to be closed m the Crty and (b) when banks or the New York Stock Exchange are not authorized to be closed in New York, New York. "Crty" or "Issuer" shall mean the Crty of Fort Worth, Texas "Crty Council" shall mean the governing body of the Crty "Code" shall mean the Internal Revenue Code of 1986, as amended "Commercial Paper Note" shall mean a note issued pursuant to the provisions of this Ordinance, having the terms and characteristics specified m Section 2.03 hereof and m the form described m Section 2.05 hereof. "Dealer" shall mean the entities so designated in the Dealer Agreement (one or more) executed in accordance wrth Section 3 04 hereof "Dealer Agreement" shall mean the Dealer Agreement approved and authorized to be entered into by Section 3 04 hereof, as from time to time amended or supplemented "Designated Office" shall mean the corporate trust office of the Issuing and Paying Agent where Commercial Paper Notes must be presented and delivered for receipt of payment of the principal amount thereof. "DTC" shall mean The Depository Trust Company or any substitute securities depository appointed pursuant to this Ordinance, or any nominee thereof. "DTC Participant" shall mean a member of, or the participant m, DTC that will act on behalf of a Holder "Eligible Investments" shall mean any or all of the authorized investments described in the Public Funds Investment Act of 1987, Chapter 2256, Texas Government Code, in which the City may purchase, sell and invest its funds and funds under its control, and provided further, that Eligible Investments shall specifically include, with respect to the investment of proceeds of any Commercial Paper Notes, guaranteed investment contracts fully collateralized by direct obligations ofthe United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. "Eligible Project" shall mean the acquisition or construction of improvements, additions or extensions for the System, including capital assets and facilities incident and related to the operation, maintenance and administration thereof, all as provided m the Act. "Fiscal Year" shall mean any consecutive twelve-month period declared by the Crty as its fiscal year, which currently runs from October 1 through September 30 "Holder" or "Noteholder" shall mean any person, firm, association, or corporation who is m possession of any Note drawn, issued or endorsed to such person, firm, association or corporation or to the order of such person, firm, association or corporation or to bearer or m blank. "Issuing and Paying Agent", "Paying Agent/Registrar" or "Registrar" shall mean the agent appointed pursuant to Section 2.02 hereof, or any successor to such agent. "Issuing and Paying Agent Agreement" shall mean the agreement approved and authorized to be entered into by Section 3.03 hereof, as from time to time amended or supplemented. "Master Note" shall mean the "Master Note" as defined in Section 2.02 hereof. "Master Ordinance" shall mean the "Master Ordinance Establishing the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program" adopted December 10, 1991 "Maximum Interest Rate" shall mean 12% per annum "Maximum Maturity Date" shall mean twenty years following the date of passage of this Ordinance "Note" or "Notes" shall mean the evndences of indebtedness authorized to be issued and at any time outstanding pursuant to this Ordinance and shall include Commercial Paper Notes (including the Master Note), notes in such form or forms as shall be approved by the City Council in an ordinance amending this Ordinance, and the Bank Note, as appropriate "Offering Memorandum" shall mean the Offering Memorandum relating to the Notes "Outstanding Prior Lien Bonds" shall mean the outstanding and unpaid bonds ofthe following series, to-wit the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Serves 1991A and Series 1991B, the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 1993, the Crty of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1996 and the Crty ofFort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1997 "Pledged Revenues" shall have the meamng given said term in the Master Ordinance "Prior Lien Obligations" shall mean (i) the Outstanding Prior Lien Bonds, (ii) the Swap Agreements, and (iii) other obligations hereafer issued or incurred as provided in Section 4 17 hereof. "Project Costs" shall mean-all costs and expenses incurred in relation to Eligible Projects, including without hmrtation design, planning, engineering and legal costs, acquisition costs of land, interests m land, rights-of--way and easements, construction costs, costs of machinery, equipment, and other capital assets nncident and related to the operation, maintenance, and adrmmstration of an Eligible Project, financing costs, mcludnng interest during construction and thereafter, underwriter's discount and/or fees for legal, financial, and other professional services, and renmbursement for such Project Costs attributable to Eligible Projects incurred prior to the nssuance of any Commercial Paper Notes "Series A Note Construction Account" shall mean the account so designated nn Section 2.11 hereof. "Series A Note Payment Fund" shall mean the fund so designated nn Section 2.09 hereof. "Subordinate Lien Bonds" shall mean the outstanding and unpaid bonds of the following series, to-wnt Crty ofFort Worth, Texas Water and Sewer System Subordinate Lnen Revenue Bonds, Series 1989, Series 1991, Series 1992, Series 1995, Series 1996 and Series 1998 "Subordinate Lien Obligations" shall mean the currently outstanding Cnty of Fort Worth, Texas Certificates of Obligation, Series 1989 5 "Supplement" shall have the meaning given said term in the Master Ordinance "System" shall have the meaning given said term in the Master Ordinance "Swap Agreements" shall mean the two respective ISDA Master Agreements, one with Lehman Brothers Special Financing Inc , and the other with GBDP, L P , for the purpose of enhancing the security for or providing for the payment of the principal of and interest on the Outstanding Prior Lien Bonds by providing for the receipt of fixed rate payments which were estimated to exceed the variable rate payments to be made by the City thereunder Section 1 02. Construction of Terms Utilized in this Ordinance If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, ferrumne or neuter gender shall be considered to include the other genders Certain terms not defined herein shall have the meaning given said terms m the Credit Agreement. ARTICLE II AUTHORIZATION OF NOTES Section 2.01 General Authorization. Pursuant to authority conferred by and m accordance with the provisions of the Constitution and laws of the State of Texas, particularly the Act, Commercial Paper Notes shall be and are hereby authorized to be issued m an aggregate principal amount not to exceed SEVENTY FIVE MILLION DOLLARS ($75,000,000) at any one time outstanding for the purpose of financing Project Costs of Eligible Projects and to refinance, renew or refund Notes, including interest thereon, all in accordance with and subject to the terms, conditions, and limitations contained herein, and a Bank Note shall be and is hereby authorized to be issued m the initial aggregate principal amount of EIGHTY ONE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($81,750,000) at any one time outstanding for the purpose of evidencing Advances to retire Commercial Paper Notes, all in accordance with and subject to the terms, conditions and limitations contained herein and, with respect to the Bank Note, the Agreement For purposes of this Section 2.01, any portion of outstanding Notes to be paid from money on deposit m the Series A Note Payment Fund and from the available proceeds of Notes or Bonds on the day of calculation shall not be considered outstanding. The authority to issue Commercial Paper Notes from time to time under the provisions of this Ordinance shall exist until the Maximum Maturity Date, regardless of whether prior to the Maximum Maturity Date there are at any time no Commercial Paper Notes outstanding. Anything m this Ordinance to the contrary notwithstanding, m connection with the refinancing or refunding of Notes, such Notes shall qualify as "obligations", as such term is defined m the Act at the time any such refinancing or refunding occurs. Further, any such refunding or refinancing, other than a simultaneous refunding, of Notes, to the extent then required by applicable law, shall be by means of a gross defeasance established at the time of the issuance of the refunding Commercial 6 Paper Notes, and the Notes to be so refunded or refinanced shall be selected by the governing body of the Crty Section 2.02. Terms Applicable to Notes -General Subject to the limitations contained herein, Commercial Paper Notes herein authorized shall be dated as of their date of issuance or prior thereto, but within 30 days of the date of issuance (the "Note Date"), as determined by an Authorized Representative, shall bear interest at such fixed rate or rates per annum computed on the basis of actual days elapsed (but in no event m any case to exceed the Maximum Interest Rate) as may be determined by an Authorized Representative and all Commercial Paper Notes authorized herem shall mature on or prior to the Maximum Maturity Date. Subject to the Maximum Interest Rate limitation, Commercial Paper Notes authorized to be issued hereunder without a fixed numerical rate of interest for the term thereof shall bear interest in accordance with any clearly stated formula or method of calculation as determined by an Authorized Representative and such formula or method of calculation shall be set forth m the Commercial Paper Note Commercial Paper Notes issued hereunder may contain terms and provisions for the redemption or prepayment thereof prior to maturity, subJect to any applicable limitations contamed herem, as shall be determined by an Authorized Representative Subject to applicable terms, limitations and procedures contained herein, Commercial Paper Notes may be sold m such manner at public or private sale and at par or at such discount (wrtlun the interest rate and yield restrictions provided herem) as an Authorized Representative shall approve at the time of the sale thereof. The Commercial Paper Notes shall be issued m registered form, without coupons, provided, however, Commercial Paper Notes may be registered to bearer The principal of and interest on the Commercial Paper Notes shall be payable m lawful money of the United States of America, without exchange or collection charges to the Holder of the Commercial Paper Note, the principal thereof to be payable upon presentation and surrender of the Commercial Paper Note at the Designated Office of the Issuing and Paying Agent and interest thereon to be payable to the registered owner thereof (when registered other than to bearer) either (i) by check sent by United States Mail, first class postage prepaid, to the address of the registered owner appearing on the Registration Books of the City maintained by the Registrar or (ii) by such other method, acceptable to the Issuing and Paying Agent, requested by the Holder, but interest on a Commercial Paper Note registered to bearer shall be payable only upon presentation of the Commercial Paper Note at the Designated Office of the Issuing and Paying Agent. The selection and appointment of U S Bank Trust National Association to serve as Issuing and Paying Agent, Paying Agent/Registrar and Registrar for the Commercial Paper Notes is hereby confirmed and the Crty covenants and agrees to keep and maintain with the Registrar at its Designated Office books and records (the "Registration Books") for the registration, payment, transfer and exchange of the Commercial Paper Notes, all as provided herem and such reasonable 7 rules and regulations as the Registrar may prescribe The pity covenants to maintain and provide a Registrar at all times while the Commercial Paper Notes are outstanding, which shall be a national or state banking association or corporation or trust company organized and doing business under the laws of the United States of America or of any state and authorized under such laws to exercise trust powers. Should a change in the Paying Agent/Registrar for the Commercial Paper Notes occur, the City agrees to promptly cause a written notice thereof to be (i) sent to each registered owner of the Commercial Paper Notes then outstanding by United States Mail, first class postage prepaid and (ii) published in a financial newspaper or journal of general circulation in The Crty of New York, New York, once during each calendar week for at least two calendar weeks, provided, however, the publication of such notice shall not be required if notice is sent to each Holder of the Commercial Paper Notes. Such notice shall give the address of the successor Paying Agent/Registrar A successor Paying Agent/Registrar maybe appointed by the Crty without the consent of the Holders. A copy of the Registration Books and any change thereto shall be .provided to the City by the Paying Agent/Registrar, by means of telecommunications equipment or such other means as may be mutually agreeable thereto, within two Business Days of the opening of such Registration Books or any change therein, as the case may be The Crty and the Paying Agent/Registrar may treat the bearer (in the case of Commercial Paper Notes so registered) or the registered payee thereof as the absolute owner of any Commercial Paper Note for the purpose of receiving payment thereof and for all purposes, and the City and the Paying Agent/Registrar shall not be affected by any notice or knowledge to the contrary If an Authorized Representative determines that it is possible and desirable to provide for a book-entry only system of Commercial Paper Note registration with DTC, such Authorized Representative, acting for and on behalf of the Crty, is hereby authorized to approve, execute, and deliver a Letter of Representations to DTC and to enter into such other agreements and execute such instruments as are necessary to implement such book-entry only system, such approval to be conclusively evidenced by the execution thereof by said Authonzed Representative Under the initial book-entry only system with DTC, (i) no physical Commercial Paper Note certificates will be delivered to DTC and (ii) the City will execute and deliver to the Issuing and Paying Agent, as custodian for DTC, a master note relating to the Commercial Paper Notes (the "Master Note") m substantially the form set forth m Exhibit D Except as provided herein, the ownership of the Commercial Paper Notes shall be registered m the name of Cede & Co , as nominee of DTC, which will serve as the initial secunties depository for the Commercial Paper Notes. Ownership ofbeneficial interests m the Commercial Paper Notes shall be shown by book-entry on the system maintained and operated by DTC and DTC Participants, and transfers of ownership of beneficial interests shall be made only by DTC and the DTC Participants bybook-entry, and the City and the Issuing and Paying Agent shall have no responsibility therefor DTC will be required to mamtam records of the positions of the DTC participants in the Commercial Paper Notes, and the DTC Participants and persons acting through the DTC participants will. be required to mamtam records of the purchasers of beneficial interests in the Commercial Paper Notes During any period when abook-entry only system is m effect, except as provided above in this paragraph, the Commercial Paper Notes shall not be s transferable or exchangeable, except for transfer to another securities depository or to another nominee of a securities depository With respect to Commercial Paper Notes registered in the name of DTC or its nominee, neither the City nor the Issuing and Paying Agent shall have any responsibility or obligation to any DTC Participant or to any person on whose behalf a DTC Participant holds an interest m the Commercial Paper Notes Without limiting the immediately preceding sentence, neither the City nor the Issuing and Paying Agent shall have any responsibility or obligation with respect to (i) the accuracy of the records of DTC or any DTC Participant with respect to any ownership interest m the Commercial Paper Notes, (ii) the delivery to any DTC Participant or any other person, other than a registered owner of the Commercial Paper Notes, as shown on the Registration Books, of any notice with respect to the Commercial Paper Notes, including any notice of redemption, and (iii) the payment to any DTC Participant or any other person, other than a registered owner of the Commercial Paper Notes, as shown m the Registration Books, of any amount with respect to principal of or interest on the Commercial Paper Notes. Whenever, during the term of the Commercial Paper Notes, the beneficial ownership thereof is determined by a book entry at DTC, the requirements m this Ordinance of holding, registering, delivering, exchanging, or transferring the Commercial Paper Notes shall be deemed modified to require the appropriate person or entity to meet the requirements of DTC as to holding, registering, delivering, exchanging, or transferring the book-entry to produce the same effect. Either the Crty or DTC may deterrrune to discontinue the book-entry only system and m such case, unless a new book-entry only system is put m place, physical certificates m the form set forth m Section 2.05 shall be provided to the beneficial owners thereof. If at any time, DTC ceases to hold the Commercial Paper Notes, all references herein to DTC shall be of no further force or effect. Whenever the beneficial ownership of the Commercial Paper Notes isdetermined by abook- entry at DTC, delivery of Commercial Paper Notes for payment at maturity shall be made pursuant to DTC's payment procedures as are m effect from time to time and the DTC Participants shall transrrut payment to beneficial owners whose Commercial Paper Notes have matured. The Crty and each Issuing and Paying Agent, the Bank, and the Dealer are not responsible for transfer of payment to the DTC Participants or beneficial owners Section 2.03 Commercial Paper Notes. Under and pursuant to the authority granted hereby and subJect to the hmrtations contained herein, Commercial Paper Notes to be designated "City of Fort Worth, Texas Water and Sewer System Commercial Paper .Notes, Series A" are hereby authorized to be issued and sold and delivered from time to time in such principal amounts as determined by an Authorized Representative m denominations of $100,000 or in integral multiples of $1,000 m excess thereof, numbered in ascending consecutive numerical order in the order of their issuance and to mature and become due and payable on such dates as an Authorized Representative shall determine at the time of sale, provided, however, that no Commercial Paper Note shall (i) 9 mature after the Maximum Matui`i~y Date or (ii) have a term in excess of two hundred seventy (270) calendar days Interest, if any, on Commercial Paper Notes shall be payable at maturity with principal. Section 2.04 Bank Note. Under and pursuant to authority granted hereby and subject to the limitations contained herein and in the Agreement, a promissory note to be designated the "Bank Note" is hereby authorized and approved in accordance wrth the terms of this Ordinance, the Agreement and the forms thereof set forth in the Agreement. Section 2.05. Form of Commercial Pager Notes The Commercial Paper Notes and the Certificate of Authentication to appear on each of the Commercial Paper Notes shall be substantially in the forms set forth in this section wrth such appropriate insertions, omissions, substitutions and other variations as are permitted or required by this Ordinance and may have such letters, numbers or other marks of identification (including identifying numbers and letters of the Comrruttee on Umform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements thereon as may, consistently herewith, be approved by an Authorized Representative Any portion of the text of any Commercial Paper Notes may be set forth on the reverse thereof, wrth an appropriate reference thereto on the face of the Commercial Paper Notes The Commercial Paper Notes shall be printed, lithographed, or engraved or produced m any other similar manner, or typewritten, all as determined and approved by an Authorized Representative Form of Commercial Paper Note UNITED STATES OF AMERICA STATE OF TEXAS CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM COMMERCIAL PAPER NOTE, Series A No Principal Amount Interest to Maturrty' Due at Maturrty• Owner Note Date Maturity Date Number of Days Interest Rate (%) The City of Fort Worth (the "City"), m Tarrant and Denton Counties, State of Texas, FOR VALUE RECEIVED, hereby promises to pay, solely from the sources hereinafter identified and as hereinafter stated, to the order of the party specified above on the maturity date specified above, the principal sum specified above and to pay interest, if any, on said principal amount at said maturity 10 date, from the above specified note date to said maturity date at the per annum interest rate shown above (computed on the basis of actual days elapsed), both principal and interest on this Note being payable in lawful money of the Umted States of America at the designated corporate trust office of the Issuing and Paying Agent executing the "Certificate of Authentication" endorsed hereon and appearing below, or its successor No interest will accrue on the principal amount hereof after said maturity date This Note is one of an issue of commercial paper notes (the "Commercial Paper Notes") which, together with other forms of short term obligations, including the below referenced Bank Note, has been duly authorized and issued in accordance with the provisions of an ordinance (the "Ordinance") passed by the City Council of the City for the purpose of financing Project Costs of Eligible Projects (as defined in the Ordinance) for the City's combined Water and Sewer System (the ~y'~ "System"), to refund obligations issued m connection with an Eligible Project, and to refinance, renew or refund Notes (as defined m the Ordinance), including interest thereon, m accordance with the provisions of the Ordinance, all m accordance and m strict conformity with the provisions of Article 717q, V A.T C S , as amended (the "Act") This Commercial Paper Note, together with the other Commercial Paper Notes, is payable from and equally secured by a lien on and pledge of (i) the proceeds from (a) the sale of other Commercial Paper Notes issued for such purpose and (b) the sale of a series or issue of Bonds (as defined in the Ordinance) to be issued by the City for such purpose, (ii) advances under and pursuant to the Credit Agreement between the City and the Bank (as defined in the Ordinance) pursuant to which the Bank has agreed to provide credit to the City under the terms and conditions set forth therein, which advances are to be evidenced by a Bank Note (as defined in said Credit Agreement), and (iii) amounts in certain funds established pursuant to the Ordinance This Commercial Paper Note, together with the other Commercial Paper Notes, is payable solely from the sources hereinabove identified securing the payment thereof, and the Commercial PaperNotes do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any other property of the City or the System. The holder hereof shall never have the right to demand payment of this obligation from any sources or properties of the Crty except as identified above It is hereby certified and recited that all acts, conditions and things required by law and the Ordinance to exist, to have happened and to have been performed precedent to and in the issuance of this Commercial Paper Note, do exist, have happened and have been performed in regular and in due time, form and manner as required by law and that the issuance of this Commercial Paper Note, together with all other Commercial Paper Notes, is not in excess of the principal amount of Commercial Paper Notes permitted to be issued under the Ordinance This Commercial Paper Note has all the qualities and incidents of a negotiable instrument under the laws of the State of Texas. This Commercial Paper Note shall not be entitled to any benefit under the Ordinance or be valid or become obligatory for any purpose until this Commercial Paper Note shall have been 11 authenticated by the execution by tie Issuing and Paying Agent of the Certificate of Authentication hereon. IN TESTIMONY WHEREOF, the Crty Council has caused the seal of the Crty to be duly impressed or placed in facsimile hereon, and this Note to be signed with the imprinted facsimile signature of the Mayor, attested by the facsimile signature of the City Secretary and approved as to form and legality by the facsimile signature of the City Attorney xxxxxxxx Crty Secretary, City of Fort Worth xxxxxxxx Mayor, City of Fort Worth APPROVED AS TO FORM AND LEGALITY xxxxxxxx Crty Attorney, Crty of Fort Worth (SEAL) ISSUING AND PAYING AGENT'S CERTIFICATE OF AUTHENTICATION This Commercial Paper Note is one of the Commercial Paper Notes delivered pursuant to the within mentioned Ordinance U S BANK TRUST NATIONAL ASSOCIATION, as Issuing and Paying Agent By• Authorized Signatory If Commercial Paper Notes are issued mbook-entry only form pursuant to Section 2.02, they shall be issued in the form of a Master Note in substantially the form attached hereto as Exhibit D, to which there shall be attached the form of Commercial Paper Note as prescribed above, and it is hereby declared that the provisions of the Commercial Paper Note as prescribed above are incorporated into and shall be a part of the Master Note It is further provided that this Ordinance and the form of Commercial Paper Note prescribed above shall constitute the "underlying records" 12 referred to in the Master Note Notwithstanding the provisions of Section 2.06, the Master Note shall be executed on behalf of the City by the manual signature of the Mayor or the Mayor Pro-Tem. Section 2.06. Execution -Authentication. The Notes (other than the Master Note) shall be executed on behalf of the Crty by the Mayor, attested by the Crty Secretary under its seal reproduced or impressed thereon, and approved as to form and legality by the Crty Attorney, all as provided in Section 2.05 hereof. The signature of said officers on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the date of passage of this Ordinance shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of the imtial sale and delivery of Notes authorized to be issued hereunder and with respect to -Notes delivered in subsequent sales, exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended (Article 717k-6, V A.T C S ) No Commercial Paper Note shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Commercial Paper Note a certificate of authentication executed by the Paying Agent/Registrar by manual signature, or, m the case of the Master Note, the Paying Agent/Registrar has executed the Master Note, and the execution of any Commercial Paper Note by the Paying Agent/Registrar .shall be conclusive evidence, and the only evidence, that such Commercial Paper Note has been duly certified or registered and delivered. Section 2.07. Notes Mutilated, Lost, Destroyed or Stolen. If any Note shall become mutilated, the Crty, at the expense of the Holder of said Note, shall execute and deliver a new Note of like tenor and number m exchange and substitution for the Note so mutilated, but only upon surrender to the City of the Note so mutilated. If any Note shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Crty and, if such evidence be satisfactory to it and indemmty satisfactory to it shall be given, the Crty, at the expense ofthe owner, shall execute and deliver a new Note of like tenor in lieu of and in substitution for the Note so lost, destroyed or stolen. Neither the Crty nor the Paying Agent/Registrar shall be required to treat both the ongmal Note and any duplicate Note as being outstanding for the purpose of deternumng the principal amount of Notes which may be issued hereunder, but both the original and the duplicate Note shall be treated as one and the same Section 2.08. Negotiabilrty, Registration and Exchan eg ability The obligations issued hereunder shall be, and shall have all of the qualities and incidents of, a negotiable instrument under the laws of the State of Texas, and each successive holder, m accepting any of the obligations, shall be conclusively deemed to have agreed that such obligations shall be and have all of the qualities and incidents of a negotiable instrument under the laws of the State of Texas. The Registration Books relating to the registration, payment and transfer or exchange of the Commercial Paper Notes shall at all times be kept and maintained by the Crty at the Designated Office of the Registrar, and the Registrar shall obtain, record and maintain in the Registration Books the name and address of each registered owner of the Commercial Paper Notes, except for Commercial 13 Paper Notes registered to bearer, issued under and pursuant to the provisions of this Ordinance, and 3,, the Registrar further shall provide such information to the City as described m Section 2.02 hereof. Any Commercial Paper Note may, in accordance with its terms and the terms hereof, be transferred or exchanged for Commercial Paper Notes of like tenor and character and of other authorized denominations upon the Registration Books by the Holder in person or by his duly authorized agent, upon surrender of such Commercial Paper Note to the Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Registrar Upon surrender for transfer of any Commercial Paper Note at the Designated Office of the Registrar, the Registrar shall register and deliver, in the name of the designated transferee or transferees (or to bearer, as appropriate), one or more new Commercial Paper Notes executed on behalf of, and furnished by, the City of like tenor and character and of authorized denominations and having the same maturity, bearing interest at the same rate and of a like aggregate principal amount as the Commercial Paper Note or Commercial Paper Notes surrendered for transfer Furthermore, Commercial Paper Notes may be exchanged for other Commercial Paper Notes of like tenor and character and of authorized denominations and having the same maturity, beanng the same rate of interest and of like aggregate principal amount as the Commercial Paper Notes surrendered for exchange, upon surrender of the Commercial Paper Notes to be exchanged at the Designated Office of the Registrar Whenever any Commercial Paper Notes are so surrendered for exchange, the Registrar shall register and deliver new Commercial Paper Notes of like tenor and character as the Commercial Paper Notes exchanged, executed on behalf of, and furnished by, the City to the Holder requesting the exchange The City and the Registrar may charge the Noteholder a sum sufficient to reimburse them for any expenses incurred in making any exchange or transfer after the first such exchange or transfer The Registrar or the City may also require payment from the Holder of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto Such charges and expenses shall be paid before any such new Commercial Paper Note shall be delivered New Commercial Paper Notes delivered upon any transfer or exchange shall be valid obligations of the Crty, evidencing the same debt as the Commercial Paper Notes surrendered, shall be secured by this Ordinance and shall be entitled to all ofthe security and benefits hereofto the same extent as the Commercial Paper Notes surrendered. The Crty reserves the right to change the above registration and transferability provisions of the Commercial Paper Notes at any time on or prior to the delivery thereof in order to comply with applicable laws and regulations of the United States m effect at the time of issuance thereof. Section 2.09. Series A Note Payment Fund. There is hereby created and established with the Issuing and Paying Agent a separate and special fund to be designated as the "City of Fort Worth, Texas Water and Sewer System Series A Note Payment Interest and Sinking Fund" (the "Series A Note Payment Fund") Moneys on deposit in the Series A Note Payment Fund shall be used to pay 14 principal of and interest on Commercial Paper Notes at the respective interest payment, maturity dates or redemption dates (if any) of each issue thereof as provided herein and the repayment of any Advances and term loans made pursuant to the Agreement (evidenced by the Bank Note) Amounts remaining in the Series A Note Payment Fund not then necessary for the purposes thereof may be transferred to the Series A Note Construction Account (created pursuant to Section 2.11 hereof) upon request of an Authorized Representative Additionally all proceeds ofAdvances shall be deposited into the Serves ANote Payment Fund and used to pay the principal of and interest on the Commercial Paper Notes. Pending the expenditure of moneys m the Series A Note Payment Fund for authorized purposes, moneys deposited in said Fund may be invested at the direction of the Director of Fiscal Services or the designee thereof in Eligible Investments Section 2.10 Pledge, Pa, m~ The Notes are obligations of the City payable from and secured solely by the funds pledged therefor pursuant to this Ordinance The City agrees to make payments into the Series A Note Payment Fund at such times and in such amounts as are necessary to provide for the full payment of the principal of and the interest on the Notes when due To provide security for the payment of the principal of and interest on the Notes and any other amounts due under the Agreement as the same shall become due and payable, there is hereby granted a hen on and pledge of, subject only to the provisions of this Ordinance perTrutting the application thereof for purposes and on the terms and conditions set forth herein, (i) the proceeds from (a) the sale of Bonds issued for such purpose and (b) the sale of other Notes issued pursuant to this Ordinance for such purpose, (ii) Advances, (iii) the amounts held m the Series A Note Payment Fund until the amounts deposited therein are used for authorized purposes, provided, however, amounts m the Series A Note Payment Fund attributable to and derived from Advances shall be used only to pay, prior to any application to the payment of the Bank Note, the principal of and interest on the Commercial Paper Notes m full, and (iv) the amounts remaining on deposit m the Serves A Note Construction Account after the payment of all Project Costs, and it is hereby resolved and declared that the principal of and interest on the Notes and any other amounts due under the Agreement shall be and are hereby equally and ratably secured by and payable from a lien on and pledge of the sources heremabove identified m clauses (i), (ii), (iii) and (iv) subject and subordinate only to the exceptions noted therein. Additionally, to provide security for the payment of the principal of and interest on the Bank Note and other amounts due under the Agreement as the same shall become due and payable, there is hereby granted a lien on and pledge of, subject only to the provisions oftlus Ordinance permitting the application thereof for purposes and on the terms and conditions set forth herein, the Pledged Revenues, such lien on and pledge of the Pledged Revenues, however, being subordinate only to the lien on and pledge of the Pledged Revenues in support of the Prior Lien Obligations Unless the Bank Note is paid from the proceeds of Commercial Paper Notes or Bonds issued for such purposes, or amounts available in the Serves A Note Payment Fund or the Serves A Note Construction Fund, all as described above, such payments are to be made from Pledged Revenues on deposit in the "Bank Note Account" in accordance with Section 4.02 hereof 15 a,, Section 2.11. Series A Note Construction Account. There is hereby created and established a separate account hereby designated as the "City of Fort Worth, Texas Water and Sewer System Series A Note Construction Account" (the "Series A Note Construction Account") The Series A Note Construction Account shall be held by the Crty with the City's depository bank, currently Bank One, Texas, N A. Moneys deposited m the Series A Note Construction Account shall remain therein until from time to time expended to pay for Project Costs, and to refund Notes issued in connection with Eligible Projects and shall not be used for any other purposes whatsoever, except as otherwise provided below, and pending such expenditure, moneys in said Account may be invested at the direction of the Director of Fiscal Services or the designee thereof in Eligible Investments Any amounts on deposit in the Series A Note Construction Account designated by an Authorized Representative as eligible to pay interest during construction and thereafter may be transferred from time to time at the direction of an Authorized Representative to the credit of the Series A Note Payment Fund for use in accordance with the terms of Section 2.09 hereof. Any amounts remaining m the Series A Note Construction Account after the payment of all Project Costs shall be paid into the Serves A Note Payment Fund and used for the payment of such maturities of the Commercial Paper Notes coming due at such times as may be selected by an Authorized Representative or for the payment of the Bank Note, as the case maybe In the event no Commercial Paper Notes are outstanding and there are no outstanding Advances, any amounts in the Serves A Note Construction Account not anticipated to be needed to pay Project Costs shall be transferred to the System Fund. Section 2.12. Cancellation. All Commercial Paper Notes which at maturity are surrendered to the Paying Agent/Registrar for the collection of the principal and interest thereof or are surrendered for transfer or exchange pursuant to the provisions hereof shall, upon payment or issuance of new Commercial Paper Notes, be cancelled by the Paying Agent/Registrar, and the Paying Agent/Registrar forthwith shall transmit to the City a certificate identifying such Commercial Paper Notes and that such Commercial Paper Notes have been duly cancelled and destroyed. Section 2.13. Fiscal and Other Agents. In furtherance ofthe purposes ofthis Ordinance, the Crty may from time to time appoint and provide for the payment of such additional fiscal, paying or other agents or trustees as it may deem necessary or appropriate in connection with the Notes Section 2.14. Credit Agreement. The Agreement, substantially m the form attached hereto as Exhibit A, is hereby approved, and shall be entered into with the Bank. The form of the Bank Note substantially in the form contained m the Agreement is approved with the interest rate payable thereon to be determined as set forth therein. Any Authorized Representative is hereby authorized to execute and deliver the Credit Agreement, and the Crty Secretary is authorized to attest and to place the City seal thereon. Section 2.15. Funds Secured. That moneys in all such Funds, to the extent not invested as permitted hereunder, shall be secured in the manner prescribed by law for securing funds ofthe Crty Section 2.16. Apnlicat~on of Prior Covenants The covenants and agreements (to the extent the same are not inconsistent herewith) contained m the Master Ordinance and any Supplement 16 thereto are hereby incorporated by reference and shall be deemed to be for the benefit and protection of the Bank Note and the Holder thereof in like manner as applicable to the Prior Lien Obligations, provided, however, nn the event of any conflict between the terms, covenants and agreements contained herein and the terms, covenants and agreements contained in the Master Ordinance and any Supplement thereto, the provisions ofthe Master Ordinance and any Supplement thereto shall control over the provisions hereof. ARTICLE III ISSUE AND SALE OF NOTES Section 3 O1. Issuance and Sale of Commercial Paper Notes (a) The Commercial Paper Notes shall be completed and delivered by the Issuing and Paying Agent nn accordance with telephonic, computer or written instructions of the Authorized Representative and nn the manner specnfied below and nn the Issunng and Paynng Agent Agreement. To the extent such nnstnuctnons are not written, they shall be confirmed m writing by the Authorized Representatnve within 24 hours Sand nstructions shall specnfy such princnpal amounts, dates of nssue, maturntnes, rates of discount or nnterest, or the formula or method of calculatnng nnterest and the bases upon whnch it ns to be computed, and other terms and condntnons whnch are hereby authornzed and permntted to be fixed by the Authornzed Representatnve at the tame of sale of the Commercnal Paper Notes Such nstructions shall nnclude the purchase prnce of the Commercnal Paper Notes, and a request that the Issunng and Paynng Agent authentncate such Commercnal Paper Notes by counter signature of rats authorized officer or employee and delnver them to the named purchaser or purchasers thereof upon recenpt of payment nn accordance wrath the custom then prevailnng nn the New York financnal market nn regard to such Commercnal Paper Notes The rules of the New York Clearnnghouse shall apply thereto Such nstructions shall also contann provisions representnng that all action on the part of the Cnty necessary for the valnd nssuance of the Commercnal Paper Notes then to be nssued has been taken, that all provnsnons of Texas and federal law necessary for the valnd nssuance of such Commercnal Paper Notes wrath provnsnon for nnterest exemptnon from federal nncome taxation have been complned wrath, of applncable, and that such Commercnal Paper Notes nn the hands of the Holders thereof will be valnd and enforceable obligations of the Crty according to them terms, subject to the exercnse of~udncnal dnscretnon nn accordance wrath general principles of equnty and bankruptcy, nnsolvency, reorgannzatnon, moratornum and other snmilar laws affecting creditors' rnghts heretofore or hereafter enacted to the extent constntutnonally applncable and that, of applncable, based upon the advnce ofBond Counsel, the stated interest on the Commercnal Paper Notes ns exempt from federal income taxation. Such nstructions shall also certify that (i) no Event of Default under Section 5.01 hereof has occurred and ns contnnunng as of the date of such Certnficate and that the Issunng and Paynng Agent has not recenved a No-Issuance Notice (as defined nn the Credit Agreement), (ii) the City has been advised by Bond Counsel that the projects described by the City to be financed with the proceeds ofthe Commercial Paper Notes will constitute Eingible Projects, 17 (iii) the City is in compliance with the covenants set forth in Article IV hereof as of the date of such instructions, (iv) the City has been advised by Bond Counsel that the proposed expenditure of the proceeds of such Commercial Paper Notes for such projects and refunding, as described by the City, will not cause the City to be in violation of its covenants set forth in Section 4 06 hereof; and (v) the sum of the interest payable on such Commercial Paper Note will not exceed a yield (calculated on the principal amount of the Commercial Paper Note on the basis of actual number of days elapsed) to the maturity date of such Commercial Paper Note in excess of the Maximum Interest Rate (b) The Bank Note shall be or has been delivered to the Bank and indebtedness may be incurred thereunder in accordance with the terms of the Agreement. Section 3.02. Proceeds of Sale of Commercial Paper Notes. The proceeds of the sale of any Commercial Paper Notes (net of all expenses and costs of sale and issuance) shall be applied for any or all of the following purposes as directed by an Authorized Representative (i) Proceeds to be used for the payment and redemption of outstanding Commercial Paper Notes at or before maturity and the repayment of any borrowing (evidenced by the Bank Note) or other amounts due under the Agreement shall be retained in the Series A Note Payment Fund, and expended therefor; and (ii) Proceeds not retained in the Series A Note Payment Fund as provided in subparagraph (i) above shall be transferred and deposited to the Series A Note Construction Account and used and applied in accordance with the provisions of Section 2.11 hereof. Section 3 03 Issuing and Paving Agent Agreement. The Issuing and Paying Agent Agreement by and between the City and the Issuing and Paying Agent, relating to the Commercial Paper Notes, in substantially the form attached to this Ordinance as Exhibit B, is hereby approved, and any Authorized Representative is hereby authorized and directed to execute the same for and on behalf of the Crty and the Crty Secretary is authorized to .attest and place the Crty seal on such instrument. Any Authorized Representative is hereby authorized to enter into any supplemental agreements with the Issuing and Paying Agent or with any successor Issuing and Paying Agent in order to implement the functions of the Issuing and Paying Agent or Registrar with respect to the Commercial Paper Notes. Section 3.04. Dealer Agreement. The Dealer Agreement to be entered into with the Dealer pertaining to the sale, from time to time, of Commercial Paper Notes or the purchase of Commercial Paper Notes from the City, all for a fee to be set forth in said Dealer Agreement, in substantially the form attached to this Ordinance as Exhibit C, is hereby approved, and any Authorized Representative is hereby authorized and directed to execute the same for and on behalf of the City and the City Secretary is authorized to attest and place the City seal on such instrument ~g ARTICLE IV COVENANTS OF THE CITY Section 4.01. Limitation on Issuance. Unless this Ordinance is amended and modified by the City Council in accordance with the provisions of Section 6.O1 hereof, the City covenants that there will not be issued and outstanding at any time under this Ordinance more than $75,000,000 in principal amount of Commercial Paper Notes. For purposes of this Section 4.01 any portion of outstanding Commercial Paper Notes to be paid on a particular day from moneys on deposit in the Series A Note Payment Fund and available proceeds of Notes or Bonds shall not be considered outstanding on such day In addition to the foregoing, no Commercial Paper Notes shall be issued for any project other than an Eligible Project. Additionally, the Crty covenants and agrees that the total principal amount of all Commercial Paper Notes outstanding at any one time and the total amount of interest accrued or to accrue thereon shall not exceed the "Commitment" (as defined in the Agreement) Section 4.02. Bank Note Account. There is hereby created and there shall be established and maintained a separate account to be known as the "Bank Note Account" for the sole benefit of the Bank Note within the Series A Note Payment Fund established by this Ordinance There shall be deposited by the City to the Bank Note Account the amounts required by Section 2.10 hereof for the payment of the Bank Note. Section 4.03. Maintenance of Available Credit Facilities Requirement. The City agrees and covenants that at all times up to and including the Maximum Maturity Date, unless the Commercial Paper Notes are no longer outstanding rt will maintain credit or liquidity facilities with banks m amounts such that, assuming that all then outstanding Commercial Paper Notes were to become due and payable immediately, the amount available for borrowing under such facilities would be sufficient at that time to pay principal and interest of all Commercial Paper Notes. No Commercial Paper Note shall be issued which ~f, after giving effect to the issuance thereof and, if applicable, the immediate application of the proceeds thereof to retire other Commercial Paper Notes secured by the credit or liquidity facility, the aggregate principal amount of all Commercial Paper Notes secured by or payable from the credit or liquidity facility would exceed the amount of the commitment thereunder The availability for borrowing of such amounts under such facilities may be subject to reasonable conditions precedent, including but not limited to, bankruptcy of the City In furtherance of the foregoing covenant, the City agrees that it will not issue any Commercial Paper Notes or make any borrowing which will result in a violation of such covenant, will not amend the Agreement in a manner which will cause a violation of such covenant and, ~f and to the extent necessary to maintain compliance with such covenant, will arrange for new credit or liquidity facilities pnor to, or contemporaneously with, the expiration of the Agreement. The Crty shall provide wntten notice to the Dealer and DTC (if the Commercial Paper Notes are then outstanding in book-entry-only form) at least ten Business Days pnor to any change in the bank providing a credit facility or a liquidity facility in respect to the Commercial Paper Notes 19 Section 4 04. Bonds The Crty hereby acknowledges that the Commercial Paper Notes are being issued as bond anticipation notes, and therefore the City in good faith shall endeavor to sell a sufficient principal amount ofthe Bonds in order to have funds available, together wrth other moneys available therefor, to pay the Notes and the interest thereon, or any renewals thereof, as the same shall become due Section 4.05. Punctual Payment. The City will punctually pay or cause to be paid the principal of and interest, if any, on the Notes (but only from the sources pledged herein), in conformity with the Notes, this Ordinance and the Agreement. Section 4 06. Commercial Paper Notes to Remain Tax Exempt. The Crty covenants to take any action to assure, or refrain from any action which would adversely affect, the treatment of the Commercial Paper Notes as obligations described in section 103 of the Code, the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation if such Commercial Paper Notes are designated by the Crty as "tax exempt" In furtherance thereof, the Crty covenants as follows (a) to take any action to assure that no more than 10 percent of the proceeds of the Commercial Paper Notes or the projects financed therewith {less amounts deposited to a reserve fund, if any) are used for any "pnvate business use", as defined m section 141(b)(6) of the Code or, if more than 10 percent of the proceeds are so used, that amounts, whether or not received by the Crty, wrth respect to such pnvate business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the Commercial Paper Notes, m contravention of section 141(b)(2) of the Code, (b) to take any action to assure that m the event that the "private business use" described m subsection (a) hereof exceeds 5 percent of the proceeds of the Commercial Paper Notes or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount m excess of 5 percent is used fora "pnvate business use" which is "related" and not "disproportionate", within the meamng of section 141(b) (3) of the Code, to the governmental use, (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Commercial Paper Notes (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code, (d) to refrain from taking any action which would otherwise result m the Commercial Paper Notes being treated as "pnvate activity bonds" within the meaning of section 141(b) of the Code, (e) to refrain from taking any action that would result m the Commercial Paper Notes being "federally guaranteed" within the meamng of section 149(b) of the Code, 20 (f) to refrain from using any portion of the proceeds of the Commercial Paper Notes, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire "investment property" (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term ofthe Commercial Paper Notes, other than investment property acquired with -- (1) proceeds of the Commercial Paper Notes invested for a reasonable temporary period of 3 years or less until such proceeds are needed for the purpose for which the obligations are issued, (2) amounts invested in a bona fide debt service fund, wrthin 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 10 percent of the proceeds of the Commercial Paper Notes, (g) to otherwise restrict the use of the proceeds of the Commercial Paper Notes or amounts treated as proceeds of the Commercial Paper Notes, as may be necessary, so that the Commercial Paper Notes do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings), and (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Commercial Paper Notes) an amount that is at least equal to 90 percent ofthe "Excess Earnings", within the meaning of section 148(f) of the Code, and to pay to the United States of America, not later than 60 days after the Commercial Paper Notes have been paid m full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code The City represents and covenants that rt will not expend, or perrnit to be expended, the proceeds of any Commercial Paper Notes m any manner inconsistent with its reasonable expectations as certified m a federal tax certificate to be executed from time to time with respect to the Commercial Paper Notes, provided, however, that the City may expend Commercial Paper Note proceeds m any manner if the City first obtains an unqualified opinion of Bond Counsel that such expenditure will not impair the exemption from federal income taxation of interest paid on the Commercial Paper Notes The Crty represents that it has not been notified of any listing or proposed lrstmg by the Internal Revenue Service to the effect that rt is an issuer whose arbitrage certifications may not be relied upon. The Crty understands that the term "proceeds" includes "disposition proceeds" as defined in the 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 Commercial Paper Notes It is the understanding of the City that the covenants contained herein are intended to assure compliance 21 with the Code and any regulations or rulings promulgated by the U S Department of the Treasury pursuant thereto In the event that regulations or rulings are hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Commercial Paper Notes, the City will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opnnnon of Bond Counsel, will not adversely affect the exemption from federal income taxation of interest on the Commercial Paper Notes under section 103 of the Code In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Commercial Paper Notes, the Cnty agrees to comply with the additional requirements to the extent necessary, in the opnnnon of Bond Counsel, to preserve the exemption from federal income taxation of interest on the Commercial Paper Notes under section 103 of the Code. In furtherance of such intention, the City Council hereby authorizes and directs the Mayor, the City Manager and the Director of Fiscal Services to execute any documents, certificates or reports required by the Code, and to make such elections on behalf of the City which may be permitted by the Code as are consistent with the purpose for the issuance of the Commercial Paper Notes. In order to facnhtate compliance with the above clause (h), a "Rebate Fund" is hereby established by the Crty for the sole benefit of the Unnted States of America, and such Fund shall not be subtect to the claim of any other person, nncludnng without limitation the Noteholders The Rebate Fund ns established for the additional purpose of compliance with section 148 of the Code Section 4 07 Allocation of and Limitation on, Expenditures for Elnpible Protects. That the Crty covenants to account for on its books and records the expenditure of proceeds from the sale of the Commercial Paper Notes and any investment earnings thereon to be used for Eligible Protects by allocating proceeds to expenditures within 18 months ofthe later ofthe date that (a) the expenditure on a Eligible Protect ns made or (b) each Eligible Protect ns completed The foregoing notwithstandnng, the Crty shall not expend such proceeds or nvestment earnings more than 60 days after the later of (a) the fifth anniversary of the date of delivery of the Commercial Paper Notes or (b) the date the Commercial Paper Notes are retired, unless the City obtanns an opinion of Bond Counsel substantially to the effect that such expenditure will not adversely affect the tax-exempt status of the Commercial Paper Notes. For purposes of thus Sectnon, the Crty shall not be obingated to comply with this covenant of rat obtains an opinion of Bond Counsel to the effect that such failure to comply will not adversely affect the excludabilnty for federal income tax purposes from gross income of the nnterest. Section 4 08. Disposition of Eln~ible Protects. That the Crty covenants that the property constntutnng an Eligible Protect will not be sold or otherwise disposed nn a transaction resulting nn the recenpt by the City of cash or other compensation, unless the Cnty obtanns an opinion of Bond Counsel substantially to the effect that such sale or other dnspositnon wall not adversely affect the tax-exempt status of the Commercnal Paper Notes For purposes of thus Sectnon, the portnon of the property comprnsnng personal property and disposed of nn the ordnnary course of business shall not be treated as a transaction resulting in the recenpt of cash or other compensation. For purposes of thus Sectnon, the City shall not be obingated to comply wrath thus covenant of rat obtanns an opnnion of Bond Counsel to the effect that such failure to comply will not adversely affect the excludabilnty for federal income tax purposes from gross ncome of the nnterest. 22 Section 4.09 Taxable Obligations. That the provisions of Section 4 06 of this Ordinance notwithstanding, the City reserves the ability to rssue Commercial Paper Notes m a manner such that such obligations are not obligations described in section 103(a) of the Code or are obligations which constitute "private activity bonds" within the meaning of section 141(b) of the Code If Commercial Paper Notes are so issued, the Authorized Representative is authorized to designate such Commercial Paper Notes m such a manner as to distinguish such Commercial Paper Notes from those Commercial Paper Notes that are issued as obligations described in section 103(a) of the Code Section 4 10 Supplemental Ordinances Other than as permitted herein with respect to the issuance or incurrence of additional obligations of the City secured by the Pledged Revenues, the City will not -adopt any supplemental ordinances with respect to the Pledged Revenues or the System, pursuant to the Master Ordinance, without the written consent of the Bank. Section 4 11 Opinion of Bond Counsel. The City shall cause the legal opinion of Bond Counsel as to the validity of the Notes and as to the exemption of interest on the Commercial Paper Notes from federal income taxation to be furnished to any Noteholder without cost. In addition, a copy of said opinion may be printed on each of the Commercial Paper Notes. In addition, in connection with the annual updating of the Offering Memorandum (as provided in accordance with Section 6.08 hereof) as required by the Dealer Agreement, there shall be provided an annual updated opinion of Bond Counsel, at the cost of the City or the Dealer as agreed to in the Dealer Agreement. Section 4 12. On oin~ Continuing Disclosure Covenant. To the extent required by the provisions of Rule 1 Sc2-12, promulgated by the U S Securities and Exchange Commission, the City agrees to enter into an agreement to file financial information and operating data with respect to the Commercial Paper Notes with such entities as are designated pursuant to the terms of said Rule 15c2- 12 as nationally recognized municipal securities information repositories and the state information depository in Texas Under the provisions of said Rule 15c2-12, as they exist on the date this Ordinance is adopted, the City is exempted from complying with the undertaking described in the first sentence of this Section 4 12, as the Notes are to be issued in the form of Commercial Paper Notes. Section 4 13. Rates and Charges The City hereby agrees and reaffirms its covenants to the holders of the Prior Lien Bonds and the counterparties under the Swap Agreements, and covenants to the Holder of the Bank Note, that it will at all times maintain rates and charges for the services furnished, provided, and supplied by the System which shall comply with the provisions of the Master Ordinance, be reasonable and non-discriminatory and produce income and revenues sufficient to pay' (a) all current Operating Expenses (as defined in the Master Ordinance), (b) to produce Net Revenues (as defined in the Master Ordinance) for each Fiscal Year at least equal to the Annual Debt Service Requirements (as defined in the Master Ordinance) during such Fiscal Year of the then Outstanding Prior Lien Obligations, and 23 (c) to pay all other financial obligations of the System and reasonably anticipated to be paid from Gross Revenues (as def ned in the Master Ordinance) Section 4 14 System Fund Pursuant to Section 2.13 hereof, the City hereby reaffirms its covenants to the holders ofthe Prior Lien Bonds and the counterparties under the Swap Agreements, and hereby covenants with respect to the Holder of the Bank Note, that all Gross Revenues shall be deposited as received in the "City of Fort Worth, Texas Water and Sewer System Revenue Fund" (hereinafter referred to as the "System Fund"), which shall be kept separate and apart from all other funds of the City Revenues received for the System Fund shall be deposited from time to time as received in such bank or banks as may be selected by the City in accordance with applicable laws relating to the selection of Crty depositories Section 4 15. Pnont oy f Deposits and Payments From Svstem Fund. The Crty shall make the deposits to and payments from the System Fund when and as required by the Master Ordinance and any Supplement thereto, and such deposits shall be made m the order and with the pnonties set forth m the Master Ordinance There is hereby created and there shall be established and maintained a separate account within the "Debt Service Fund" created by the Master Ordinance to be known as the "Bank Note Account" for the sole benefit of the Bank Note After satisfying the requirements of the Master Ordinance and any Supplement thereto with respect to payment of principal of and interest on the Pnor Lien Obligations and the respective reserve fund requirements therefor, there shall be deposited by the Crty to the Bank Note Account the amounts required by Section 2.10 hereof for the payment of the Bank Note Section 4 16 Compliance with Master Ordinance and Other Documents The Crty will comply with the terms and provisions of the Master Ordinance, any Supplement thereto, and any other ordinance or contract to which the Crty is a party, the non-compliance with which would materially adversely affect the ability of the Crty to make payments on the Notes when due Section 4 17 Reservation of Right to Issue or Incur Prior Lien Obh~ations and Obh~ations of Infenor Lien. In accordance with Section 4 10 hereof, the City hereby expressly reserves the right to hereafter issue or incur Pnor Lien Obligations in accordance with the provisions of the Master Ordinance, payable from and secured by a lien on and pledge of the Pledged Revenues of the System prior in right and claim to the lien and pledge securing the payment of the Bank Note In accordance with Section 4.10 hereof, the Crty also retains the right to issue bonds, notes, or other evidences of indebtedness or to incur contractual obligations secured by a lien on and pledge of the Pledged Revenues of the System junior and subordinate to the lien and pledge securing the Bank Note, including without limitation, indebtedness on a parity with the Subordinate Lien Bonds 24 ARTICLE V EVENTS OF DEFAULT AND REMEDIES OF NOTEHOLDERS Section 5.01 Events of Default. If one or more of the following events shall occur (a) if default shall be made in the due and punctual payment of any installment of principal of any Commercial Paper Note when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise, (b) if the Crty shall fail to make due and punctual payment of any installment of interest on any Commercial Paper Note when and as such interest installment shall become due and payable and such failure shall continue for five (5) Business Days, (c) if the principal of the Bank Note (and interest accrued thereon) shall become due and payable prior to the maturity thereof under the Bank Note and the Agreement, (d) if default shall be made by the Crty m the performance or observance of any other of the covenants, agreements or conditions on its part m this Ordinance or m the Commercial Paper Notes contained, and such default shall continue for a period of sixty (60) days after written notice thereof; provided, however, if such default cannot be cured wrtlun the sixty (60) day period but corrective action to cure such default is commenced and diligently pursued until the default is corrected no such Event of Default shall be deemed to have occurred, or (e) ifthere shall occur the dissolution (without a successor being named to assume the rights and obligations) or liquidation of the City or the filing by the City of a voluntary petition m bankruptcy, or adjudication of the Crty as a bankrupt, or assignment by the Crty for the benefit of its creditors, or the entry by the Crty into an agreement of composition with its creditors, or the approval by a court of competent ~unsdiction with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Crty in any proceeding for its reorganization instituted under the provisions of the Bankruptcy Code, as amended, or under any similar act m any~unsdiction which may now be m effect or hereafter enacted, then such event as described above shall constitute an "Event of Default" under this Ordinance Section 5.02. Suits at Law or in Equity and Mandamus In case one or more Events of Default shall occur, then and in every such case the Holder of any Note at the time outstanding shall be entitled to proceed to protect and enforce such Holder's rights by such appropriate judicial proceeding as such Holder shall deem most effectual to protect and enforce any such nght, either by suit m equity or by action at law, whether for the specific performance of any covenant or agreement contained in this Ordinance, or in aid of the exercise of any power granted m this Ordinance, or to enforce any other legal or equitable right vested in the Holders of Notes by this Ordinance or the 25 Notes or by law The provisions of this Ordinance shall be a contract with each and every Holder of Notes and the duties of the City shall be enforceable by any Noteholder by mandamus or other appropriate suit, action or proceeding m any court of competent jurisdiction. Section 5.03. Remedies Not Exclusive No remedy herein conferred upon or reserved to the Holders of Notes is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised at any time or from time to time, and as often as maybe necessary, by the Holder of any one or more of the Notes. ARTICLE VI MISCELLANEOUS Section 6.01 Amendments or Modifications Without Consent of Holders of Notes. This Ordinance and the rights and obligations of the City and of the Holders of Notes may be modified or amended at any time by a supplemental ordinance, without notice to or the consent of any Noteholders, but only to the extent permitted by law, and, subject to the rights of the holders of the Notes, only for any one or more of the following purposes -- (1) to add to the covenants and agreements of the City in this Ordinance contained, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the City; (2) to cure any ambiguity or inconsistency, or to cure or correct any defective provision contained m this Ordinance, upon receipt by the Crty of an approving opinion of Bond Counsel selected by the City, that the same is needed for such purpose, and will more clearly express the intent of this Ordinance, or (3) to supplement the security for the Notes, replace or provide additional credit facilities, make such changes, modifications or amendments as may be necessary or desirable in order to obtain the approval of this Ordinance by the Attorney General of Texas, as required by Section 6.09 hereof, or to obtain or maintain the granting of a rating on the Notes by a nationally recognized municipal bond rating agency, or change the form of the Notes, or make such other changes in the provisions hereof as the City may deem necessary or desirable and which shall not materially adversely affect the interests of the Holders of the Notes, provided, however, that nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions of this Ordinance or of the Commercial Paper Notes so as to (1) Make any change in the maturity of any of the outstanding Commercial Paper Notes, 26 (2) Reduce the rate of rnterest borne by any of the outstanding Commercial Paper Notes, (3) Reduce the amount of the principal payable on any of the outstanding Commercial Paper Notes, (4) Modify the terms of payment of principal of or interest on the outstanding Commercial Paper Notes, or impose any conditions with respect to such payment, (S) Affect the rights of the Holders of less than all of the outstanding Commercial Paper Notes, or (6) Reduce or restrict the pledge made pursuant to Section 2.10 hereof for payment of the Commercial Paper Notes, and provided, further, that no change, modification or amendment shall be made m this Ordinance or become valid and effective (i) wrthout the approval of such change, modification or amendment by the Attorney General of the State of Texas, to the extent required by the Act and (ii) without the written consent of the Bank. Section 6.02. Additional Actions. Any Authorized Representative, the Crty Secretary, and the other officers ofthe Crty, each are hereby authorized and directed, ~omtly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable m order to consummate the issuance, sale and delivery of the Notes and otherwise to effectuate the purposes of this Ordinance, the Agreement, the Dealer Agreement, the Offering Memorandum and the Issuing and Paying Agent Agreement. Specifically, by the adoption of this Ordinance, the Crty Council hereby authorizes the payment of the fees and expenses incurred and to be paid by the Crty m connection with the issuance, sale and delivery of the Notes and the execution and delivery of the Agreement, the Dealer Agreement and the Issuing and Paying Agent Agreement Section 6.03. Ordinance to Constitute a Contract; Equal Security In consideration of the acceptance of the Notes, the issuance of which is authorized hereunder, by those who shall hold the same from time to time, this Ordinance shall be deemed to be and shall constitute a contract between the Crty and the Holders from time to time of the Notes and the pledge made in this Ordinance by the Crty and the covenants and agreements set forth m this Ordinance to be performed by the Crty shall be for the equal and proportionate benefit, security and protection of all Holders of the Notes, wrthout preference, priority or distinction as to security or otherwise of any of the Notes authorized hereunder over any of the others by reason of time of issuance, sale or maturity thereof or otherwise for any cause whatsoever, except as expressly provided m or permitted by this Ordinance or, with respect to the Bank Note, the Agreement. Section 6.04.. Severability of Invalid Provisions If any one or more of the covenants, agreements or provisions herein contained shall beheld contrary to any express provisions of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or 27 shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Notes issued hereunder Section 6.05. Payment and Performance on Business Days. Whenever under the terms of this Ordinance or the Commercial Paper Notes, the performance date of any provision hereof or thereof, mcludmg the payment of principal of or interest on the Commercial Paper Notes, shall occur on a day other than a Business Day, then the performance thereof, mcludmg the payment of principal of and interest on the Commercial Paper Notes, need not be made on such day but may be performed or paid, as the 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 6.06. Defeasance If, when all or any portion of the Commercial Paper Notes shall have become due and payable in accordance with their terms or otherwise as provided in this Ordinance, the entire principal and interest so due and payable upon said Commercial Paper Notes shall be paid, or if at or prior to the date said Commercial Paper Notes have become due and payable, sufficient moneys or direct obligations of, or obligations guaranteed by, the United States of America the principal of and interest on which will provide sufficient moneys for such payment, shall beheld in trust by the Issuing and Paying Agent and provision shall also be made for paying all other sums payable hereunder by the City wrth respect to said Commercial Paper Notes, the pledge herein created wrth respect to said Commercial PaperNotesshall thereupon cease, terminate and become discharged and said Commercial Paper Notes shall no longer be deemed outstanding for purposes of this Ordinance and all the provisions ofthis Ordinance relating to the Commercial Paper Notes, including all covenants, agreements, liens and pledges made herein for the benefit thereof, shall be deemed duly discharged, satisfied and released. Section 6.07 Limitation of Benefits wrth respect to the Ordinance With the exception ofthe rights or benefits herein expressly conferred, nothing expressed or contained herein or implied from the provisions of this Ordinance or the Notes is intended or should be construed to confer upon or give to any person other than the Crty, the Holders of the Notes, the Issuing and Paying Agent and the parties to the Dealer Agreement and the Agreement, any legal or equitable right, remedy or claim under or by reason of or m respect to this Ordinance or any covenant, condition, stipulation, promise, agreement or provision herein contained. This Ordinance and all of the covenants, conditions, stipulations, promises, 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 of the Notes, the Issuing and Paying Agent and the parties to the Dealer Agreement and the Agreement as herein and therein provided Section 6.08. Use of Offering Memorandum. The use by the Dealer of the Offering Memorandum, prepared by the Dealer in connection wrth the sale of Commercial Paper Notes, and the distribution of the Offenng Memorandum by the Dealer, rs approved subject to the approval thereof by an Authorized Representative Any Authorized Representative is hereby authorized to provide to the Dealer such information as may, m the reasonable~udgment ofthe Dealer, be necessary to update, on an annual basis, the Offering Memorandum. 28 Section 6.09. Approval of Attorney General. No Notes herein authorized to be issued shall be sold or delivered by an Authorized Representative until the Attorney General of the State of Texas shall have approved this Ordinance, the Agreement and other agreements and proceedings as may be required in connection therewith, all as is required by the Act Section 6.10. Preamble The preamble to this Ordinance shall be considered an integral part of this Ordinance, and is herein incorporated as part of the body of this Ordinance for all purposes Section 6.11 Amendment and Restatement. Except to the extent set forth herein, the Commercial Paper Ordinance and the notes issued thereunder are hereby amended and restated. The provisions of the Commercial Paper Ordinance relating to the Notes, the agreements and certifications executed and delivered upon the delivery ofthe Notes, and all actions taken with respect to the Notes are hereby confirmed. Section 6.12. Immediate Effect This Ordinance shall take effect and be in full force and effect from and after the date of its passage, in .accordance with the provisions of Section 2 of Chapter 25 of the Charter of the City, and it is accordingly so ordained Section 6.13 Open Meeting. It is hereby officially found and determined that the meeting at which this Ordinance was passed was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code, as amended. PASSED AND APPROVED the ~ day of , 1998 C Mayor, City of Fort Worth, Texas AT EST City Secretary, Crty of Fort Worth, Texas AP OVED AS TO F GALITY Crty Attorney, Crty of Fort Worth 29 .~°~~~1`~~^l~ti ~~ `~1~~``~A~l~~~fr mfr ,~ ~ \ 1 ~1. r ~ ~' ~ ~ ' t f, ` ~' i f a ~ (A' t ' r' 1' ~ ~ ~~~ ,~~ REVOLVING CREDIT AGREEMENT dated as of June 1, 1998 between CITY OF FORT WORTH, TEXAS and WESTDEUTSCHE LANDESBANK GIROZENTRALE relating to $75,000,000 CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM COMMERCIAL PAPER NOTES, SERIES A TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1 O1 Definitions 1 Section 1 02 Incorporation of Certain Definitions by Reference 8 Section 1 03 Accounting Terms 8 Section 1 04 Interpretations 8 ARTICLE II REVOLVING CREDIT, TERM LOANS Section 2 O1 Commitment to Lend 8 Section 2 02 Method of Borrowm~ 9 Section 2 03 Bank Note 10 Section 2 04 Interest 10 Section 2 OS Commitment Fees, Terrnation Fee 12 Section 2 06 Termination or Reduction of Commitment 12 Section 2 07 Prepayment of Loans 13 Section 2 08 General Provisions as to Pa.~ 13 Section 2 09 Security for Bank Note 13 Section 2 10 Extension of Revolving Credit Period 14 Section 2 11 Notice of Paving Agent 15 Section 2 12 Failure of the Bank to Loan 15 Section 2 13 Compliance wrth Law 15 Section 2 14 No-Issuance Notice 16 ARTICLE III CONDITIONS Section 3 O 1 Conditions to Closing and Commencement of Revolving Credit Period 17 Section 3 02 Conditions to Loans Durm~ Revolvm~ Credit Period 18 Section 3 03 Conditions to Term Loan 19 ARTICLE IV REPRESENTATIONS AND WA,RR.ANTIES OF THE CITY Section 4 O1 Organization and Powers 19 Section 4 02 Authorization, Contravention 19 Section 4 03 Governmental Consent or Approval 19 Section 4 04 Binding Effect 19 -i- H:\F[' W O RTH\TAXC P~Ccagt.5 May 20, 1998 Section 4 OS Federal Reserve Regulations 20 Section 4 06 Lrti ag_tion 20 Section 4 07 No Event of Default under the Ordinance 20 Section 4 08 Financial Statements 20 Section 4 09 Complete and Correct Information 20 Section 4 10 Sale or Encumbrance of S,, s~ 20 Section 4 11 Incorporation by Reference 21 Section 4 12 Year 2000 Compliance. 21 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BANK Section 5 O1 O~aruzation and Powers 21 Section 5 02 Authorization, Contravention 21 Section 5 03 Bank Obligations Valid 21 ARTICLE VI COVENANTS OF THE CITY Section 6 O1 Information 22 Section 6 02 Access to Records 23 Section 6 03 Limitation on Debt 23 Section 6 04 Proceeds of Commercial Paper Notes 23 Section 6 OS No Amendment of Certain Contracts or Ordinances 23 Section 6 06 Rates, Sales of Obligations 23 Section 6 07 Other Covenants 24 Section 6 08 Taxes and Liabilities 24 Section 6 09 Supplemental Ordinances and Further Assurances 24 Section 6 10 Efforts to Pav 24 Section 6 11 Restrictions on Use of Proceeds 24 Section 6 12 Performance and Compliance with Other Covenants 24 Section 6 13 Compliance with Rules and Regulations 24 Section 6 14 Maintenance and Operation of the S sy tem 25 Section 6 15 Insurance 25 Section 6 16 Rates and Charges 25 Section 6 17 Investments Generallv 25 Section 6 18 Year 2000 Compliance. 26 ARTICLE VII DEFAULTS AND REMEDIES Section 7 O 1 Events of Default 26 Section 7 02 Suits at Law or m Erfurt,}! and Mandamus 29 -ii- H: \FI W O RTHITAXC %Cragt. S May 20, 1998 Section 7 03 Cross Defaults 29 Section 7 04 Remedies Not Exclusive 29 ARTICLE VIII MISCELLANEOUS Section 8 Ol Additional Costs 29 Section 8 02 Notices and Accounts 30 Section 8 03 No Waivers 30 Section 8 04 Protect Costs Expenses and Taxes 31 Section 8 OS Amendments or Modification 31 Section 8 06 Severability 31 Section 8 07 Headm~s 31 Section 8 08 Counterparts 31 Section 8 09 Payments m Dollars 31 SECTION 8 10 GOVERNING LAWS, VENUE 31 Section 8 11 Successor and Assigns, Participation 31 SECTION 8 12 LIABILITY OF THE BANK 32 SECTION 8 13 INDEMNIFICATION 33 Section 8 14 Telecopied Documents 34 Section 8 15 Term of the Agreement 34 Section 8 16 ENTIRE AGREEMENT 34 Exhibit A - Form of Bank Note Exhibit B - Form of Notice of Loan Exhibit B-1 - Request for Term Loan Exhibit C - Form of No-Issuance Notice Exhibit D - Form of Closing Certificate Exhibit E - Form of Opinion of City Attorney Exhibit F - Form of Opinion of Bond Counsel Exhibit G - Form of Opinion of United States Counsel to the Bank Exhibit H - Form of Final Date Extension Request Exhibit I - List of Authorized Representatives -iii- H: \FI' W O RT ti\TAXC P\Ccagt.5 May 20, 1998 REVOLVING CREDIT AGREEMENT 1 This Revolving Credit Agreement (this "Agreement") is dated as of June 1, 1998, and is 2 between the CITY OF FORT WORTH, TEXAS (the "City") and WESTDEUTSCHE 3 LANDESBANK GIROZENTRALE, acting through its New York Branch (the "Bank") 4 5 RECITALS 6 - ---- 7 Pursuant to authority granted by the laws of the State of Texas, particularly the Act (as 8 defined below), the City is empowered to issue revenue notes for the purpose of providing funds to 9 pay protect costs (as defined in the Act) of eligible protects (as defined in the Act), to 11 Pursuant to the Ordinance (as defined below) the City proposes to issue its commercial paper 12 notes (the "Commercial Paper Notes") in an amount not to exceed $75,000,000, the proceeds of 13 which would be used to finance and refinance protects eligible under the Act to be financed. 14 1s The City has requested the Bank to support the commercial paper program by making 16 available a revolving line of credit initially aggregating $81,750,000 (an amount supporting the 17 Commercial Paper Notes in a principal amount of $75,000,000 and interest thereon at an interest rate 18 of 12% per annum for a period of 270 days) and the Bank is willing to make available a revolving line 19 of credit subtect to the terms and conditions of this Agreement. 20 21 NOW, THEREFORE, the parties hereto agree as follows 22 23 ARTICLE I 24 DEFINITIONS 2~ 26 Section 1 O1 Definitions. 27 28 In addition to other terms defined herein, unless the context shall indicate a contrary meaning 29 or intent, the terms below defined, for all purposes of this Agreement or any agreement amendatory 30 or supplemental hereto, shall be construed, are used and are intended to have the following meanings, 31 to-wit 32 ' 33 "Act" shall mean Article 717q, Vernon's Annotated Texas Civil Statutes, as amended. 34 35 "Additional Prior Lien Obligations" shall mean bonds, notes, warrants, certificates of 36 obligations or other Debt which the City reserves the right to issue or enter into, as the case maybe, 37 in the future under the terms and conditions provided rn Section 8 of the Master Ordinance and 38 which obligations are equally and ratably secured solely by a first lien on and pledge of the Pledged 39 Revenues on a parity with the-Prior Lien Bonds and the Swap Agreements. 40 41 "Agreement" shall mean this Revolving Credit Agreement, as from time to time amended or 42 supplemented 43 H: \FI' W O RTH\TAXC P\Cragt. S May 20, 1998 1 "Applicable Law" shall mean all applicable provisions of all constitutions, statutes, rules, 2 regulations, ordinances and orders of all governmental and non-governmental bodies, including, 3 without limitation, the Act, all governmental approvals and all orders, judgments and decrees of all 4 courts and arbitrators of competent jurisdiction. Whenever the Applicable Law of a particular 5 ~unsdiction is referred to in this Agreement, such reference shall be deemed to include the Applicable 6 Law of all political subdivisions of such~urisdichon. 8 "Authorized Representative" shall mean one or more of the following officers or employees 9 of the City acting on behalf of the Crty, acting m concert or individually the Mayor, the Crty l0 Manager, any Assistant Crty Manager, the Director of Fiscal Services, the City Treasurer, or such 11 other officer or employee of the Crty designated by the Crty to .act as an Authorized Representative 12 Attached hereto as "Exhibit I" is the form of an incumbency certificate to be executed by the Crty 13 Secretary of the City and delivered to the Bank from time to time which will show the respective 14 name, title and signature example of each Authorized Representative 15 16 "Bank" shall mean Westdeutsche Landesbank Girozentrale, a German public law banking 17 institution, organized and existing under the laws of Germany, acting through its New York Branch, 18 or any subsequent banking institution which becomes a party to this Agreement. 19 20 "Bank Note" shall mean the prorrussory note evidencing Loans made by the Bank to the City, 21 in substantially the form of Exhibit "A" attached hereto, with appropriate completions, and any and 22 all renewals, extensions, or modifications thereof. 23 24 "Bank Rate" shall mean for any day, a per annum rate of interest equal to the lvgher of (i) the 25 base commercial lending rate established from time to time by the Bank at its New York office as its 26 base rate, m effect on such date, or (ii) the Federal Funds Rate, plus two percent (2%) ,provided 27 however, the Bank Rate shall be increased by 50% for each full letter downgrade ofthe current letter 28 rating assigned to the Prior Lien Bonds by either Moody's, S&P or Fitch, as applicable, and by an 29 additional 1 00% should any of the foregoing ratings be withdrawn or suspended for any reason. The 30 current letter ratings assigned to the Prior Lien Bonds are Aa2 by Moody's and AA by S&P and Fitch, 31 provided further, if the Bank Rate is increased by virtue of any such downgrade, withdrawal or 32 suspension, rt shall be decreased by a like amount to the extent such ratings are thereafter upgraded 33 or reinstated but m no event to a rate lower than the Bank Rate described in this first clause of this 34 definition. 35 36 "Bond Counsel" shall mean McCall, Parkhurst & Horton L.L.P and Kelly, Hart & Hallman, 37 P C ,and any other firm or firms selected by the City whose opinion concerning bond matters is 38 nationally recognized, which selection is approved in wasting by the Bank. 39 40 "Bonds" shall mean any or all of the Prior Lien Obligations, Junior Lien Obligations, 41 Subordinate Lien Obligations and Inferior Lien Obligations 42 -2- H:\FRVORTH\TAXCP\Cragt.5 May 20, 1998 "Borrowing Rate" shall mean with respect to any Term Loan, a per annum rate of interest H:\FI WORTH\TAXCP\Cragt.5 May 20,1998 -3- 1 equal to the Bank Rate plus one percent (1 00%), provided, however, of a Loan Advance is not 2 converted to a Term Loan, the Borrowing Rate for that Loan Advance shall be the Default Rate from 3 and including the Loan Advance Maturity Date to but excluding the date the Loan Advance is repaid 4 and provided further, that nn no event shall the Borrowing Rate cause the payment of interest by the 5 City to be nn excess of the Maximum Interest Rate 6 ~ "Business Day" shall mean any day (A) when banks are not required or authorized bylaw or s executive order to be closed in Fort Worth, Texas, or New York, New York, or (B) when the New 9 York Stock Exchange ns not required or authorized by law or executive order to be closed. to 11 "City" shall mean the Cnty of Fort Worth, Texas 12 13 "City Council" shall mean the governing body of the Crty 14 15 "Closing Date" shall mean the Closing Date as defined in Section 3 O1 hereof. 16 1~ "Code" shall mean the Internal Revenue Code of 1986, as amended, and when reference ns 18 made to a particular section thereof, the applicable Treasury Regulations from time to time 19 promulgated or proposed thereunder 20 21 "Collateral" shall mean the collateral described nn Section 2 09 hereof. 22 23 "Commercial Paper Notes" shall have the meaning set forth nn the Recitals. 24 25 "Commitment" shall mean $81,750,000, as such amount may be reduced pursuant to Section 26 2 06 hereof. The initial Principal Component of the Commitment ns equal to the principal amount of 27 Commercial Paper Notes and the nnntnal Interest Component of the Commitment ns equal to 270 days 28 interest on the nnntnal Principal Component at an assumed interest rate of 12% per annum on the basis 29 of a 360 day year 30 31 "Commitment Fee" shall mean the amount payable to the Bank pursuant to Section 2 OS 32 hereof and shall be (i) fourteen basis points (14%) per annum of the Commitment; provided, 33 however, the Commitment Fee shall be increased by OS% for each full letter downgrade of the 34 current letter ratnng assigned to the Prior Lien Bonds by either 1Vloody's, S&P or Fitch, as applicable, 35 by an additional 1% should any of the foregoing ratings be withdrawn or suspended for any reason 36 and by an additional 1% during the continuance of any Default, provided further, ifthe Commitment 37 Fee is increased by virtue of any such downgrade, withdrawal or suspensnon, it shall be decreased by 38 alike amount to the extent such ratings are thereafter upgraded or reinstated but in no event to a 39 Commitment Fee lower than the Commitment Fee described in the first clause of this definition. The 40 current letter ratnngs assigned to the Prior Lien Bonds are Aa2 by Moody's and AA by S&P and Fitch. 41 42 "Dealer" shall mean the dealer or remarketing agent selected from tame to time by the Cnty 43 to market or remarket the Commercial Paper Notes in accordance wrath Section 3 04 of the 44 Ordinance. The initial Dealer shall be Lehman Brothers. -4- H:\FI WO RTH~TAXCP~Cragt.5 May 20, 1998 1 "Dealer Agreement" shall mean the Dealer Agreement, dated as of June 1, 1998 between the 2 City and the Dealer, approved and authorized to be entered into by Section 3 04 of the Ordinance, 3 as from time to time amended or supplemented. 4 5 "Debt" is defined m the Master Ordinance 6 7 "Default" shall mean any condition or event that constitutes an Event of Default (as defined s in Section 7 O 1 hereof) or that with the giving of notice or lapse of time or both would, unless cured 9 or waived, become an Event of Default. to 11 "Default Rate" shall mean a rate of interest per annum equal to the Bank Rate plus 2% 12 13 "Effective Date" shall mean the Effective Date as defined m Section 3 Ol hereof. 14 15 "Federal Funds Rate" shall mean for any day the per annum rate (rounded upwards, if 16 necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight 17 Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds 18 brokers on that day, provided that (i) if the date for which the rate is to be determined is not a 19 Business Day, the Federal Funds Rate for that day shall be the rate on such transactions on the next 20 succeeding Business Day and (ii) if that rate is not so published for any day, the Federal Funds Rate 21 for that day shall be the average rate charged to the Bank on that day on such transactions as 22 deterrruned by the Bank. 23 24 "Final Date" shall mean the earlier of 25 26 (a) June _, 2005, or such later date as may be established pursuant to Section 2 10 27 of this Agreement; and 28 29 (b) The date the Comrrutment is reduced to zero pursuant to Section 2 06 or Section 30 7 O1 of this Agreement. 31 32 "Fiscal Year" is defined in the Ordinance 33 34 "Fitch" shall mean Fitch IBCA, Inc , or if such corporation is dissolved or liquidated or 35 otherwise ceases to perform securities rating services, such other nationally recognized securities 36 rating agency as may be designated m writing by the City 37 38 "Holder" shall mean the Bank and any other holder of the Bank Note or any entity to which 39 the Bank or any such other holder sells a participation m the Bank Note (whether or not the City was 4o given notice of such sale and whether or not the Holder has an interest m the Bank Note at the time 41 amounts are payable to such Holder thereunder and under this Agreement) 42 43 "Inferior Lien Obligations" shall mean (i) any bonds, notes, warrants, certificates of obligation, 44 or other Debt hereafter issued by the City that are payable from Net Revenues, such payment, -5- H:\FI W O RTEi~TAXC P~Cragt.5 May 20, 1998 1 however, shall be subject to, subordinate and inferior to the pledge thereof securing payment of, the 2 Prior Lien Obligations, Jumor Lien Obligations, or Subordinate Lien Obligations hereafter issued by 3 the City, and (ii) any obligations that are issued subject to the limitations contained in Article 1112, 4 Vernon's Texas Civil Statues, as amended. The Commercial Paper Notes are Inferior Lien 5 Obligations. 6 7 "Interest Component" means that portion of the Commitment or a Loan Advance relating to 8 the interest on Commercial Paper Notes. 9 l0 "Issuing and Paying Agent", "Paying Agent", "Registrar", shall mean the agent appointed 11 pursuant to Section 3 03 of the Ordinance, or any successor to such agent. The imtial Issuing and 12 Paying Agent shall be First Trust National Association 13 14 "Issuing and Paying Agent Agreement" shall mean the Issuing and Paying Agent Agreement, 15 dated as of June 1, 1998 between the Crty and the Issuing and Paying Agent, approved and 16 authorized by Section 3 03 of the Ordinance, as from time to time amended or supplemented. 17 18 "Junior Lien Obligations" shall mean any bonds, notes, warrants, certificates of obligation, or 19 other Debt hereafter issued by the Crty that are payable, m whole or in part, from and equally and 20 ratably secured by a lien on and pledge ofthe Pledged Revenues, such pledge bemg~urior and inferior 21 to the lien on and pledge of the Pledged Revenues that are or will be pledged to the payment of the 22 Prior Lien Obligations hereafter issued by the Crty, but prior and superior to the lien on and pledge 23 of the Pledged Revenues that are or will be pledged to the payment of any Subordinate Lien 24 Obligations or Inferior Lnen Obligations hereafter issued by the Crty The Bank Note is a Junior Lien 25 Obligation. 26 27 "Loan Advance" shall mean a loan made hereunder pursuant to Section 2 02(a) of this 28 Agreement. '' 29 30 "Loan Advance Maturity Date" shall mean the earlier to occur of 30 days from the date the 31 Loan Advance is made or the Final Date 32 33 "Loans" shall mean Loan Advances and Term Loans 34 35 "Maintenance and Operating Expenses" is defined in the Master Ordinance. 36 37 "Master Ordinance" shall mean the "Master Ordinance Establishing the Crty of Fort Worth, 38 Texas Water and Sewer System Revenue Financing Program" adopted December 10, 1991, as 39 amended. 40 41 "Maximum Interest Rate" shall mean the maximum net effective interest rate permitted by 42 law to be paid on obligations issued or incurred by the Crty in the exercise of its borrowing powers 43 (as currently prescribed by Article 717k-2, Vernon's Annotated Texas Civil Statutes, as amended) 44 -6- H:\FRVORT}i~TAXC P~Cragt.3 May 20, 1996 1 "Moody's" shall mean Moody's Investors Service, Inc or, if such corporation is dissolved or 2 liquidated or otherwise ceases to perform securities rating services, such other nationally recognized 3 securities rating agency as may be designated in writing by the Crty 4 5 "Note Payment Fund" is defined in the Ordinance. 6 7 "Notes" shall mean the Commercial Paper Notes and the Bank Note 8 9 "Notice of Loan" shall mean a written borrowing request in substantially the form of Exhibit to "B"attached hereto, with appropriate completions, executed by an Authorized Representative, which 11 requests a Loan from the Bank. 12 13 "No-Issuance Notice" shall mean the notice described in Section 2 14 hereof. 14 15 "Ordinance" shall mean Ordinance No of the City, adopted on May 26, 1998 16 authorizing the City, among other things, to execute, deliver, and perform this Agreement and the 17 Bank Note, and to execute and deliver from time to time the Commercial Paper Notes 18 19 "Outstanding" when used with reference to Bonds, shall mean, as of a particular date, all such 20 Bonds theretofore and thereupon delivered except (a) any such Bond cancelled by or on behalf of 21 the City at or before said date, (b) any such Bond defeased pursuant to the defeasance provisions of 22 the ordinance authorizing its issuance, or otherwise defeased as perrrutted by applicable law; and (c) 23 any such Bond m lieu of or m substitution for which another Bond shall have been delivered pursuant 24 to the ordinance authorizing the issuance of such Bond The term "Outstanding" also means with 25 reference to Notes, as of the date of deterrrunation, all Notes theretofore delivered, except 26 27 (1) Notes theretofore cancelled and delivered to the Crty or delivered to the 28 Issuing and Paying Agent for cancellation, 29 30 (2) Notes upon transfer of or in exchange for and in lieu of which other Notes 31 have been delivered pursuant to the Ordinance; and 32 33 (3) Notes under which obligations of the Crty have been released, discharged or 34 extinguished in accordance with the terms thereof. 35 36 "Participant" shall mean any Person which in accordance with Section 8 11(b) hereof, shall 37 participate in the benefi#s and obligations of the Bank under this Agreement pursuant to a 38 participation agreement between the Bank and such Person. 39 40 "Person" shall mean an individual, a corporation, a partnership, an association, a trust, or any 41 other entity or organization, including a governmental or political subdivision or any agency or 42 instrumentality thereof. 43 44 "Pledged Revenues" is defined in the Master Ordinance' H:~FI W O RTH\TAXC P~Cragt. S May 20, 1998 -7- 1 "Principal Component" means that portion of the Commitment or a Loan Advance relating 2 to the .principal of Commercial Paper Notes. 3 4 "Principal Payment Date" shall mean with respect to a Term Loan, the date upon which an 5 installment of principal scheduled to become payable hereunder and the Term Loan Maturity Date. 6 7 "Prior Lien Bonds" shall mean the City of Fort Worth, Texas Water and Sewer System 8 Revenue Refunding Bonds, Series 1991A and Series 1991B, the City of Fort Worth, Texas Water 9 and Sewer System Revenue Refunding Bonds, Serves 1993, the Crty ofFort Worth, Texas Water and 10 Sewer System Revenue Refunding and Improvement Bonds, Series 1996 and the City ofFort Worth, 11 Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1997 12 13 "Prior Lien Obligations" shall mean, collectively, the Prior Lien Bonds, any Additional Prior 14 Lien Obligations and the Swap Obligations. 1~ 16 "Project Costs" is defined m the Master Ordinance. 17 is "Regulation U" shall mean Regulation U of the Board of Governors of the Federal Reserve 19 System (or any successor), as the same may be amended from time to time 20 21 "Related Documents" shall mean the Ordinance, the Master Ordinance, the Issuing and Paying 22 Agent Agreement, the Dealer Agreement, the Commercial Paper Notes, the Bank Note, and any 23 exhibits, instruments, or agreements relating thereto 24 25 "Request for Term Loan" shall mean a written borrowing request in substantially the form of 26 Exhibit "B-1 "attached hereto, with appropriate completions, signed by an Authorized Representative, 27 which requests a Term Loan from the Bank. 28 29 "Revolving Credit Period" shall mean the period commencing on the Effective Date and 30 continuing to the Final Date 31 32 "S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw Hill, Inc , or, if 33 such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services, 34 such other nationally recognized securities rating agency as may be designated in writing by the City 35 36 "Special Events of Default" shall mean the Events of Default described m Section 7 O 1 (a)(i), 37 (e)(i), (f)(i), (g), (h), (i), (j), (k)(i), (1) and (m)(i) and (ii) 38 39 "Subordinate Lien Bonds" is defined m the Ordinance. 40 41 "Subordinate Lien Obligations" is defined in the Ordinance 42 43 "Swap Agreements" shall mean the two respective ISDA Master Agreements, one with 44 Lehman Brothers Special Financing Inc , and the other with GBDP, L.P , for the purpose of -8- H:\FI W ORTIi~TAXCP~Cragt.5 May 20, 1998 1 enhancing the security for or providing for the payment of the principal of and interest on the 2 Outstanding Pnor Lien Bonds by providing for the receipt of fixed rate payments which were 3 estimated to exceed the variable rate payments to be made by the Crty thereunder 4 5 "System" is defined m the Master Ordinance 6 ` 7 "Term Loan" shall mean a Loan Advance the Principal Component of which has been s converted to a term loan pursuant to Section 2 O1(b) hereof and which is evidenced by the Bank 9 Note to 11 "Term Loan Maturity Date" shz~ll mean the Final Date 12 13 Section 1 02 Incorporation of Certain Definitions by Reference Any terms with an initial 14 capital letter which are used herein and vvhich are not otherwise `defined herein shall have the meamng 15 assigned to them m the Ordinance as m effect on the Effective Date unless the context shall indicate 16 a contrary meamng. 17 18 Section 1 03 Accounting Terms. All accounting terms used herein shall be interpreted, all 19 accounting deterrrunations hereunder shall be made, and all financial statements required to be 20 delivered hereunder shall be prepared m accordance with generally accepted accounting principles 21 applied on a basis consistent (except :for changes concurred' in by the City's independent public 22 accountants) with the most recent financial statements ofthe City delivered pursuant to Section 6 O 1 23 24 Section 1 04 Interpretations. 7Che table of contents and article and section headings of this 25 Agreement are included herein for convenience of reference purposes only and shall not constitute 26 apart of this Agreement or affect its interpretation m any respect Except where the context 27 otherwise requires, words imparting this singular number shall include the plural number and vice 28 versa. All references to time herein shall refer to local time in New York, New York. 29 3o ARTICLE II 31 REVOLVING CREDIT, TERM LOANS 32 33 Section 2 O1 Commitment to bend. (a) Revolvm~ Credit. The Bank agrees that rt will, 34 during the Revolving Credit Period, on t:he terms and conditions set forth m this Agreement, lend to 35 the City from time to time amounts up t:o, but not to exceed, an aggregate principal amount at any 36 one time outstanding equal to its Comm:~tment. Each Loan Advance by the Bank under this Section 37 2 O 1(a) shall be made in such amount as may be requested by an Authorized Representative to enable 38 the Crty to pay the pnincipal of and interest on the Commercial~Paper Notes coming due during the 39 Revolving Credit Period. The Interest Component of a Loan Advance and, unless converted to a 4o Term Loan Advance, the Principal Component of such Loan Advance, shall be paid on its Loan 41 Advance Maturity Date The City may borrow under this Section 2 O 1(a), prepay under Section 2 07, 42 and reborrow under this Section 2 O1(a~) at any time and from time to time during the Revolving 43 Credit Period, provided, however, that the aggregate of all borrowings which are not repaid shall not 44 exceed the aggregate of the Commitment at any time -9- H:\FT W O RTH~TAXC P~Cragt. S May 20, 1998 1 (b) Term Loans The Bank agrees that rt will, on the terms and conditions set forth m this 2 Agreement, make a Term Loan to the City in an amount equal to the Principal Component of the 3 outstanding unpaid principal balance of any Loan Advance; provided, however, that the aggregate 4 principal amount of the Bank's outstanding Term Loans shall at no time exceed the Principal 5 Component of the Commitment. The principal amount outstanding under each Term Loan shall be 6 repaid in equal semiannual installments c;ommencmg on the date which is the earlier of the Final Date 7 and six months after the date of the Loan Advance with respect to it, and ending on the Final Date. 8 9 Section 2 02 Method of Borro~win (a) Revolvm Credit Each Loan Advance shall be to made to the City (or as directed by it) pursuant to a completed Notice of Loan signed by an 11 Authonzed Representative (or by the Issuing and Paying Agent acting on behalf of the Crty) made 12 to the Bank not later than 2 00 p m. of t:he Business Day on which a Loan Advance is to be made to 13 the City A completed and signed Notice: of Loan shall be made to the Bank by delivery of a telecopy, 14 or other written form contaimng the information prescribed in Exhibit "B" hereto Notwithstanding 15 the foregoing, the Bank will agree sub~e:ct to the conditions set forth in this Section and m Section 16 3 02 to honor a Notice of Loan made to the Bank on any date the Bank has delivered a No-Issuance 17 Notice pursuant to Section 2 14, which is also a date upon which Commercial Paper Notes are due 1s and payable 19 20 If the Bank makes a new Loan Advance hereunder on a day on which the Crty is to repay all 21 or any part of the principal of an outstanding Loan from the Bank, the Bank shall apply the proceeds 22 of its new Loan to make such repayment and only an amount equal to the difference (if any) between 23 the amount being borrowed and the amount being repaid shall be made available by the Bank or 24 renutted by the City as provided in Sect~~on 2 08, as the case maybe 25 26 Upon receipt by the Bank of a Notice of Loan, the request for a Loan Advance as therein set 27 out shall not be revocable by the Crty At or prior to 4 00 p m. on the date for which the Loan 28 Advance is requested, except as provided in the immediately preceding paragraph, and subject to 29 satisfaction of the applicable conditions set forth in Sections 2 02 and 3 02, the Bank shall make 3o available, m federal or other immediately available funds, to the Paying Agent the funds necessary for 31 such Loan Advance, for the account of the City with instructions to deposit such funds m the Note 32 Payment Fund. The address of the iiutia~l Paying Agent to which such funds are to be provided by 33 the Bank rs 34 35 U S Bank: Trust National Association 36 100 ~JVall Street, Suite 1600 37 New 'i~ork, New York 10005 38 Attn. Corporate Trust 39 Telephone (212) 361-2548 4o Telecopier• (212) 809-5459 41 42 (b) Term Loans. The City ma.y request that the Principal Component of a Loan Advance 43 on its Loan Advance Maturity Date be converted to a Term Loan pursuant to a completed .and signed 44 Request for Term Loan made to the Banl; not later than 3 Business Days prior to the Loan Advance -10- H:\FI W O RTHITAXC P~Cragt.5 May 20, 1998 1 Maturity Date A completed and signed Request for Term Loan shall be made to the Bank by 2 delivery of a telecopy or other written form containing the~information prescribed in Exhibit "B-1" 3 hereto 5 Section 2 03 Bank Note. (a) F;ach of the Loans made by the Bank shall be evidenced by a 6 single Bank Note payable to the order of the Bank m a principal amount equal to the Bank's 7 Commitment. The Bank Note shall bear interest and shall be due and payable on the dates, m the 8 amounts (which amounts shall not exceed the principal amount of outstanding Loans received by the 9 City), and under the circumstances set firth herein and in the Bank Note No interest shall begin to 1o accrue on the Bank Note until such time as the City has received a Loan from the Bank under this 11 Agreement. 12 13 (b) The Bank shall record, and ;~pnor to any transfer of its Bank Note shall endorse on the 14 schedules forming a part thereof, appropnate notations to evidence the date, amount, type, and 15 maturity of each Loan made by rt and thf; date and amount of each payment of principal made by the 16 Crty with respect thereto, provided, however, that the failure of the Bank to make any such 17 recordation or endorsement shall not aflect the obligations of the City hereunder or under the Bank 18 Note. In any legal action or proceeding in respect of this Agreement or a Bank Note, the notations 19 made on such Bank Note or as provided by the Bank's accounting records shall be presumptive 20 evidence ofthe existence and amount due thereunder The Bank is hereby authorized by the Crty so 21 to endorse its Bank Note and to attach to and make a part of its Bank Note a continuation or 22 substitution of any such schedule as and when required ~ 23 24 Section 2 04 Interest. (a) Each Loan Advance shall bear interest on the outstanding principal 25 amount thereof for each day from the date such Loan Advance is made until rt becomes due at the 26 Bank Rate. Each Term Loan shall bear interest on the outstanding principal amount thereof for each 27 day from the date such Term Loan is made until it becomes due at the Borrowing Rate. 28 29 (b) Interest on each Loan shall be payable on the first Business Day of each month and on the 3o maturity date thereof. , 31 32 (c) The Bank shall notify the Caty by telephone or telecopy of any change m the rate of 33 interest of Loans within two Business Days after any change m the Bank Rate or the Borrowing Rate. 34 35 (d) Notwithstanding anything contained herein or m the Bank Note to the contrary• 36 37 (i) (x) m the event that the amount of interest accrued m respect of any Loan by the 38 Bank as of any date, is as a result of the limitations contained herein on the rate or amount 39 of interest which may accrue on such Loan under the Bank Note, less than the amount of 4o interest which would have otherwise accrued on such Loan as of such date at the rate 41 determined under this Section 2 04 (without regard to the provisions of Section 2 13 hereof, 42 then the Bank Note will continue to bear interest with respect to such Loan at the Maximum 43 Interest Rate until such date (or t:he date such Loan is due and payable pursuant to Section 44 2 O1 and 2 06, ifearlier, or such later date as provided below in this Subsection (d)) on which -11- H:\FRVORTH\TAXC P~Cragt.5 May 20, 1998 the cumulative amount of interest accrued on the Bank Note with respect to such Loan equals the cumulative amount of interest which would have accrued thereon in accordance this 3 Section 2 04 hereof (other than'the provisions of Section 2 13 hereof) but for such limitation 4 on such rate of interest, on whit;h date the rate of interest on the Bank Note with respect to 5 such Loan shall revert to the rages otherwise provided for herein, and (y) until such time as 6 the amount of interest paid to the Bank is equal to the cumulative amount which otherwise 7 would have been paid to the Bank but for the restrictionon interest contained m Section 2 13 8 hereof no repayment maybe made by the City on such Loan, the maturity date wrth respect 9 to such Loan shall be extended (unless the Bank shall otherwise direct by written notice to to the Crty) and the Bank Note will remain outstanding for so long as necessary until the Bank 11 shall have recovered such cumulative amount of interest in respect of all prior Loans, and 12 13 (ii) in all events, all interest accruing on or becoming payable in respect of the Bank 14 Note or any Loan evidenced thereby, including not only amounts so denominated herein but 15 also any other payment, consideration, value, benefit, or other compensation for the use, 16 forbearance, or detention of money, shall never exceed an amount or produce a rate in excess 17 of the maximum amount or rate that may lawfully be contracted for, charged, reserved, 18 received, or paid under applicable law in respect of the Bank Note or any such Loan. 19 20 (e) To the extent perrrutted by law, any overdue principal of and overdue interest on any Loan 21 shall bear interest, payable on demand, for each day the same is overdue until paid, at a rate per 22 annum equal to the Default Rate. 23 24 (f) All computations of interest in respect of Loans under this Agreement shall be made on 25 a 365 or 366 day year basis and actual days elapsed. Interest shall accrue during each period during 26 which interest is computed from and including the first day thereof to but excluding the last day 27 thereof. Each determination of an interest rate by the Bank pursuant to any provision of this 28 Agreement shall be conclusive and binding on the Crty and the Bank in the absence of mamfest error 29 In addition, any calculation made pursuant to this Section 2 04(f) that would cause the interest 30 (including amounts described in Section 2 04(e)) paid, payable, or accruing on the indebtedness of 31 the Crty under this Agreement and the Bank Note to exceed the Maximum Interest Rate shall be 32 adjusted so as to reduce the interest paid, payable, and accruing hereunder to such Maximum Interest 33 Rate, as more fully set out in Section 2 04(d) of this Agreement. All sums paid or agreed to be paid 34 to the Bank for the use, forbearance, or detention of the indebtedness evidenced by the Bank Note 35 shall, to the extent permitted by law (including, to the extent applicable, Article 717k-2, V A.T C S , 36 as amended, and any successor statute) be amortized, prorated, allocated, and spread through the full 37 term of the Bank Note. 38 39 (g) Notwithstanding anything contained herein to the contrary, the interest rates applicable 4o to Loans maybe changed at any time upon the mutual written agreement of the Crty and the Bank. 41 If any such change m the interest rates applicable to Loans is so agreed to, this Agreement and the 42 Bank Note shall remain outstanding and continue in full force and effect, with no modification other 43 than as to the change in the interest rates applicable to Loans, and all Loans will continue to be made -12- H:\F[1VORTH\TAXCP~Cragt. S May 20, 1998 1 under the Bank Note in accordance with this Agreement, modified only to reflect the agreement of 2 the parties with respect to the changed interest rate applicable to Loans. 3 4 Section 2 OS Commitment Fetes, Termination Fee. The City shall pay to the Bank the 5 Commitment Fee calculated on a 360-day year basis and actual days elapsed for each day during the 6 term of this Agreement Such Commrtrnent Fee shall accrue from and including the Closing Date to 7 and including the Final Date and shall be payable in arrears (i) on the first day of each January, April, 8 July, and October during the term hereof, commencing on July 1, 1998, and (ii) on the Final Date to Section 2 06 Termination or R:eduction of Commitment. (a) Dunng the Revolving Credit 11 Period, the City may, upon at least thrE;e Business Days' notice to the Bank and any rating agency 12 which has issued a rating on the Commercial Paper Notes, reduce from time to time the aggregate 13 unused Principal Component of the Commitment by an aggregate amount of $1,000,000 or any 14 integral multiple of $100,000 m excess thereof (with the Interest Component relating to such reduced 15 Principal Component also being reduced by such reduction), provided that the Crty may not reduce 16 the Commitment ifthe unused portion of the Commitment as proposed to be reduced would be less 17 than the sum of the aggregate principal of all outstanding Commercial Paper Notes plus an amount i8 equal to the Interest Component relating thereto The notice delivered pursuant to the preceding 19 sentence must certify that the conditions set forth m the provrso to such sentence have been satisfied 20 and the Bank shall be entitled to rely upon such certification without any further investigation. 21 22 (b) The Commmtment shall terminate on the Final Date Any Loan outstanding (together with 23 accrued interest thereon) shall be due and payable on the Final Date 24 25 (c) If the Commitment is terminated in its entirety, all accrued Commitment Fees shall be 26 payable on the effective date of such termination. If the Commrtrnent is reduced, Commitment Fees 27 on the amount by which the Commitment is so reduced shall be payable on the effectrve date of such 28 termination and Commitment Fees on the amount by which the Commitment is reduced shall cease 29 to accrue on the date of such reduction. , 30 31 (d) At any time dunng the Revolving Credit Penod, upon not less than 30 Business Days nor 32 more than 45 Business Days pnor notice to the Bank and upon satisfaction of the further conditions 33 specified m this paragraph, the City ma.y terrrunate the Commitment m its entirety 34 35 Section 2 07 Prepayment of Loans. (a) Optional Prepayments. The Crty may, at its option, 36 at any time and from time to time, prepay Loans, in whole or in part, without premium or penalty 37 Each partial prepayment permitted above shall be in the principal amount of $100,000 or any multiple 38 thereof plus accrued interest thereon. 39 40 (b) Mandatory Prepayments; The principal amount of the Loans shall be prepaid upon 41 the subsequent issuance of any Commercial Paper Notes on the date of such issuance, in an amount 42 equal to the proceeds of such issuance, plus accrued interest on the principal amount prepaid. 43 -13- H:\FI' W O RTMTAXC P\C ~agt.5 May 20, 1998 (c) Upon receipt by the Bank of a notice of prepayment pursuant to this Section, such notice shall not be revocable by the City 4 Section 2 08 General Provisions as to Pa.Yment The following general provisions shall apply 5 to all payments of Commitment Fees artd payments under the Bank Note 7 (a) The Bank shall calculate and notify the Crty in writing of the amounts payable by 8 the City hereunder within three Business Days preceding any payment date Such calculations 9 will be based on the assumptions that the Bank Rate and the ratings assigned to Senior Lien 1o Bonds will not change from the date of calculation to the payment date In the event any of 11 the foregoing assumptions Chan€;e between the date of notification and the payment date, any 12 overpayment or underpayment resulting from such change will be applied to the next ensuing 13 payment or reimbursed or charged, as the case may be. 14 15 (b) The Crty shall make f;ach payment due to the Bank hereunder not later than 3 00 16 p m., on the day when due, m i:ederal or other funds immediately available, at The Chase 17 Manhattan Bank, N A., New York, New York, for the account of Westdeutsche Landesbank 18 Girozentrale, ABANo 021000021, Account No 920-1-060663, Reference Public Finance 19 Department 67000/City of Fort Worth Water and Sewer System, Series A, Attention. Loan. 20 Administration, provided, however, if the Crty provides the Bank with a Fed wire reference 21 number with respect to any payrnent before 3 00 p m., any payment actually received by the 22 Bank by wire after 12 00 noon shall be deemed to have been received before 3 00 p.m. on the 23 same Business Day 24 25 (c) Whenever any payment due hereunder shall be due on any day which is not a 26 Business Day, the date for paymf;nt thereof shall be extended to the next succeeding Business 27 Day If the date for the payment or prepayment of amounts due hereunder is extended by the 28 preceding sentence, or by operat~.on of law, or otherwise, interest thereon shall be payable for 29 the period of such extension at the rate applicable thereto under other provisions of this 3o Agreement. 31 32 Section 2 09 Secunty for Bank: Note. The Bank Note is a special obligations of the Crty 33 payable from and secured solely by the funds pledged therefor pursuant to the Ordinance, including 34 specifically Section 2 10 thereof, and this Agreement, as authorized thereby To provide security for 35 the payment of the principal of and interest on the Commercial Paper Notes, the Bank Note and any 36 amounts due under this Agreement, as tl~e same shall become due and payable, the City has granted 37 alien on and pledge of the following: 38 39 (a) the proceeds from (i)1:he sale of Bonds issued by the Crty for such purpose 4o and (ii) the sale of Commercial Paper Notes issued by the City for such purpose, 41 42 (b) the proceeds from Loans (for the payment of principal of the Commercial 43 Paper Notes only), 44 -14- H: \FI W O RTH\TAXC P\Cragt.5 May 20, 1998 1 (c) the amounts held in the Note Payment Fund?until the amounts therein are 2 used for authorized purposes, a;nd 3 4 (d) the amounts remaining on deposit in the Note Construction Account after 5 the payment of all Project Costs; provided, however, that amounts in the Note 6 Payment Fund attributable to anti derived from the proceeds ofthe Loans are pledged 7 to, and shall be used only to pay, the principal of the Commercial Paper Notes m full 8 prior to any application to the Bank Note. 9 l0 To provide additional security for the payment of the principal of and interest on the Bank Note and 11 other amounts due under this Agreement as the same shall become due and payable, the Crty has 12 pledged and granted, pursuant to Section 2 10 ofthe Ordinance, a lien on and pledge ofthe Pledged 13 Revenues, such lien on and pledge of Pledged Revenues to secure the Bank Note and other amounts 14 due under this Agreement, however, being subordinate only to the lien and pledge of the Pledged 15 Revenues securing the payment of the Prior Lien Obligations The Bank Note, being secured by and 16 payable from the lien on the Pledged Revenues as described m the preceding sentence, shall constitute 17 a Junior Lien Obligation. The Ordinance: creates the valid lien and pledge which rt purports to create 18 on the Pledged Revenues for the benefit: of the Holders of the Bank Note. All of such sources and 19 pledges are herein called the "Collateral" The Bank Note shall further be entitled to the benefits of 20 this Agreement. The Bank shall not be: entitled to any funds of the Crty raised or to be raised by 21 taxation. 22 23 Section 2 10 Extension of Revolvm Credit Period. At any time during the period from the 24 180th day through and including the 60th day preceding the fifth anniversary of the Closing Date, the 25 Crty may submit a written request in the form of Exhibit H hereto to the Bank that the Final Date be 26 extended for two years and effective fronn the date, if any, on wHich the Bank accepts in writing such 27 request from the Crty Any such written request may be accompanied by requests to increase or 28 decrease the amount, or otherwise modilFy the terms and conditions, of the Commitment. The Bank 29 agrees to consider any such request from the Crty and deliver the Bank's response in writing to the 30 Crty wrtlun 60 days from the date of receipt of such request. The foregoing notwithstanding, the Crty 31 may subrnit a written request to the Bank that the Final Date be extended for such period necessary 32 to accommodate opportunities to market Notes with maturities beyond the then current Final Date, 33 and the Bank agrees to consider any such request from the Crty and deliver the Bank's response m 34 writing to the Crty in a timely manner I:Pthe Bank, m its sole discretion, agrees to extend the Final 35 Date, then the Bank and the Crty shall enter into an amendment ofthis Agreement and deliver a copy 36 of.any such amendment, executed by the: parties thereto, to the. Issuing and Paying Agent. Except 37 as may be otherwise expressly provided m a particular amendment to this Agreement, each extension 38 of the Final Date, and the provision of the Commitment during the time of each such extension, shall 39 be on the same terms and conditions as those set forth in this Agreement. 40 41 Section 2 11 Notice of Pavin~T, Agent. The Crty will give notice to the Bank of the 42 appointment of any new or substitute Paying Agent, which notice shall specify the name and address 43 of the Paying Agent and the name of a person to contact at the Paying Agent. 44 -15- H:\F1IVORTi-[~TAXC %Cregt.S May 20, 1998 1 Section 2 12 Failure of the Bank to Loan. The failure of the Bank to make any requested 2 Loan required to be made under the Bank Note shall not release the Bank from its agreement to make 3 such Loans, nor shall receipt and acceptance by the Crty of any Loan or portion thereof from the 4 Bank be a release, discharge, or waiver of any claim, demand or cause of action of, or for the benefit 5 of, the Crty arising out of or in connect~.on wrth any such failure to advance funds. 6 7 Section 2 13 Compliance with Law Notwithstanding any other term or provision of this 8 Agreement or of the Bank Note, the ma;~imum amount of interest which may be payable by, charged 9 to, or collected from the City, or any other person either primarily or conditionally liable for the 1o payment of the Bank Note, shall be lmlited to, and shall in no event or under any circumstance 1l exceed, the Maximum Interest Rate so that, notwithstanding any other term or provision of this `~ 12 Agreement or the Bank Note, the aggregate of the interest on any Loan, including all fees and other 13 amounts which constitute interest under applicable state law (and any applicable federal statutes), 14 shall never exceed the Maximum Interest Rate. Accordingly, the Crty and the Bank stipulate and 15 agree that this Agreement and the Bank Note shall not be construed to create a contract to pay 16 interest for the use, forbearance, or detention of money at a rate m excess of the Maximum Interest 17 Rate, and the City shall never be liable for interest in excess of the Maximum Interest Rate 18 19 Specifically and without hmrtmg the generality of the foregoing, rt is further agreed among 20 the Crty and the Bank that the maximums amount of interest contracted for and payable on or under 21 this Agreement and the Bank Note, now or hereafter shall be calculated m order that such rate shall 22 not exceed the Maximum Interest Rate, and such parties agree that 23 24 (a) In the event of voluntary prepayment of any Loan or payment pnor to the normal 25 maturity date of any Loan, if the aggregate amount of any interest calculated thereunder or 26 thereon, plus any other amounts which constitute interest on such Loan would, in the 27 aggregate, if charged or paid (if calculated m accordance wrth provisions other than those set 28 forth in this Section) exceed the Maximum Interest Rate, then in such event the amount of 29 such excess shall not be charged, payable or due (if not ,previously paid) or (if paid) shall be 3o credited toward the payment ofthe principal of the Loan involved so as to reduce the amount 31 thereof and if, and to the extent, the entire principal amount has been paid m full, refunded 32 to the City 33 34 (b) If under any circumstances the aggregate amounts paid on any Loan pnor to or 35 incident to final payment thereof ~.nclude any amounts which under applicable state laws (and 36 any applicable federal statutes) would be deemed interest and which would exceed the 37 Maximum Interest Rate, such payment and collection shall be deemed to have been the result 38 of mathematical error on the part of all parties hereto, and the party receiving such excess 39 payment shall promptly refund the amount of such excess (to the extent only of the excess of 4o interest payments above the Maximum Interest Rate) upon discovery of such error by the 41 party receiving such payment of notice thereof from the party making such payment. 42 43 (c) The provisions of this Section 2 13 shall control over any other provisions of this 44 Agreement, the Bank Note, any other instrument or writing evidencing, respecting or -16- H:\FI V/O RTFI~TAXC %Ccagt.5 May 20, 1998 1 affecting the Loans, and the Barik further agrees that any limitations or restrictions imposed 2 on it, or on payments which it may receive by reason of this Section 2 13 shall apply and be 3 recognized in all circumstances and to all payments, regardless of the source or payor thereof. 5 (d) All fees prescribed in Section 2 OS shall constitute exclusively the consideration 6 for the Bank's agreement to have available funds in the amount committed by the Bank m 7 respect of Loans and to make such Loans in the future as provided herein and shall not 8 constitute or be treated as coml>ensation for the use of; forbearance, or detention of money 9 actually loaned and advanced hereunder 10 11 Section 2 14 No-Issuance Notice. If 12 13 (a) a Default shall have occurred and be continuing; or 14 15 (b) the representations and warranties of the City set forth in Article IV hereof are not 16 true and correct in all material respects on and as of the date of the No-Issuance Notice 17 referred to below with the same effect as though made on and as of the date of such notice; 18 19 the Bank may deliver a notice to that effect ("No-Issuance Notice") to the Paying Agent (a copy of 20 which shall be delivered by the Bank too the City and the Dealer), and the City will not issue any 21 additional Commercial Paper Notes aftf;r the delivery of such No-Issuance Notice A No-Issuance 22 Notice may be given in wntmg, delivered to the Paying Agent (and to the Crty and the Dealer), 23 substantially in the form of, or orally by specifying the appropriate information set forth m, Exhibit 24 "C" hereto, but if given orally shall be confirmed by the Bank promptly in writing, provided that the 25 failure to promptly confirm such No-Issuance Notice in venting shall not render the notice given 26 thereby ineffective The Bank agrees that if, after the delivery of a No-Issuance Notice, the event or 27 condition of the character described in clause (a) or (b) of this Section shall no longer be continuing 28 and the Bank shall have received a notice from an Authorized Representative to that effect, then the 29 Bank shall deliver a notice (a copy of which shall be delivered by the Bank to the Crty and the Dealer) 30 to the Paying Agent rescinding such No~-Issuance Notice 31 32 33 34 ARTICLE III 35 CONDITIONS 36 37 Section 3 O l Conditions to Closm~ and Commencement of Revolving Credit Period This 38 Agreement shall be delivered to, and binding upon, the City and the Bank on the date (the "Closing 39 Date") on which the conditions set out in Subsections (a) and (b) of this Section 3 O 1 shall have been 4o satisfied. The Revolving Credit Period :;hall commence on the date (the "Effective Date") on which 41 the conditions set out in Subsections (a), (b) and (c) of this Section 3 O1 shall have been satisfied. 42 -17- H:\F[ WORTMTAXC P~Cragt.5 May 20, 1998 1 (a) On the Closing Date, the Bank shall have received all of the following 2 3 (i) a counterpart of this Agreement duly executed. by the City and the 4 Bank; 5 6 (ii) a duly executed Bank Note, dated as of June ~ 1998 complying wrth 7 the provisions of Section 2 03 and substantially in the form set out in Exhibit "A" 8 hereto, 9 l0 (iii) a certified copy of each of the Master Ordinance and the Ordinance, 11 including any amendments thereto, if any, which have been adopted as of the Closing 12 Date, 13 14 (iv) a certificate of the Crty Manager and the Director of Fiscal Services 15 inform and substance satisfactory to the Bank, dated the Closing Date, and 16 substantially m the form of Exhibit "D" hereto, 17 18 (v) an opinion ofthe Crty Attorney, on which the Bank may rely, .dated the 19 Closing Date, and substantially in the form of Exhibit "E" hereto, with such changes, 20 modifications, deletions, or additions as may be acceptable to such counsel and 21 counsel for the recipients thereof; 22 23 (vi) an opinion of Bond Counsel, dated the Closing Date, substantially in 24 the form of Exhibit "F" hereto, wrth such changes, modifications, deletions, or 25 additions as may be acceptable to such counsel and counsel for the Bank and the 26 Dealer; 27 28 (vii) certified copies of the Issuing and Paying Agent Agreement and the 29 Dealer Agreement m foram and substance satisfactory to the Bank; 30 31 (vui) copies of all approvals or authorizations by, or consents of, or notices 32 to or registrations wrth, any governmental body or agency required for the Crty to 33 enter into this Agreement and the Related Documents and of all such approvals, 34 authorizations, consents;, notices, or registrations required to be obtained or made 35 prior to the Closing Date in connection wrth the transactions contemplated hereby and 36 by the Related Documents, 37 38 (ix) payment, m immediately available funds, of the amounts described in 39 clauses (i), (ii) and (iii) of Section 8 04 hereof; and 40 41 (x) such other documents, opinions, or certificates reasonably requested 42 by the Bank. 43 H:\FI W O RTH\TAXC P~Cragt.5 May 20, 1998 -18- 1 (b) In addition, on the Closing Date, the Crty shall have received all of the 2 following 3 4 (i) a counterpart of this Agreement, duly executed by the City and the 5 Bank; 6 7 (ii) a certificate, dated the Closing Date, of an officer of the Bank, 8 authorized to execute zmd deliver such certificate, to the effect that each of the 9 representations and warranties of the Bank contained in this Agreement are true and to correct on and as of the elate of such certificate as though made on and as of such date 11 and additionally to the effect that the Bank has received the instruments set forth in 12 Section 3 O1(a), that such instruments are m satisfactory form, and the conditions set 13 forth m Section 3 O1(a) have been satisfied, 14 15 (iii) Opinion of Vinson & Ellans L.I,.P ,Houston, Texas, Umted States 16 counsel to the Bank, dated the Closing Date and substantially m the form of Exhibit 17 "G", with such changes, modifications, deletions, or additions as maybe acceptable 18 to such counsel and counsel for the addressees thereof; and 19 20 (iv) the opinions of the Bank's foreign counsel with respect to the Bank's 21 undertakings hereunder 22 23 (c) On the Effective Date, the following items, in addition to the items fisted m 24 paragraphs (a) and (b) of this Section 3 Ol, shall have been delivered to the Crty and the 25 Bank. 26 27 (i) evidence satisfactory to the Bank that the Attorney General of the 28 State of Texas shall havf; approved this Agreement as required by the Act; and 29 30 (ii) an initial certificate of incumbency, dated on or before the Effective 31 Date, executed by the C~~ty Secretary in substantially the form of Exhibit I hereto 32 33 Section 3 02 Conditions to Loans During Revolvm~ Credit Period The obligation of the 34 Bank to make any Loan Advance, when so requested hereunder during the Revolving Credit Period, 35 is subject to receipt by the Bank of a Notice of Loan as required by Section 2 02(a) and to the 36 satisfaction of the further conditions that: no Special Event of Default has occurred and is continuing. 37 In addition, the Bank shall not have any obligation to make a Loan Advance to the Crty to pay the 38 principal of any Commercial Paper Notes which were issued by the Crty after receipt by the Paying 39 Agent, the Dealer, and an Authorized Representative of a No-Issuance Notice 40 41 Section 3 03 Conditions to Terrn Loan. The obligation of the Bank to make any Term Loan 42 is subject to receipt by the Bank of a Request for Term Loan as required by Section 2 02(b) and to 43 the satisfaction of the further conditions that (A) no Default or Event of Default has occurred and is 44 continuing, (B) the representations and warranties of the City contained in Article IV hereof are true -19- H:IFI W ORTH\TAXCP~Cragt.5 May 20, 1998 1 and correct in all respects as of the date of the conversion to a Term Loan, and (C) the City's delivery 2 to the Bank of a certificate to the effect of the foregoing on such date 5 ARTICLE IV 6 REPRESENTATIOI\fSRND WARRANTIES OF THE CITY 7 8 Section 4 O1 Organization and Powers. The Crty (a) is duly established and validly existing 9 under the laws of the State of Texas under and pursuant to the Constitution of the State of Texas and 1o is a home-rule city of the State of Texas, (b) has all corporate powers and all material governmental 11 licenses, authorizations, consents, and approvals required to carry on its business as now conducted, 12 (c) has full power and authority to operate the System and to acquire, construct, finance, and operate 13 the Eligible Projects, and (d) has full power and authority to adopt the Ordinance, to execute, deliver, 14 and perform the Ordinance, this Agreement, and the Related Documents, to borrow hereunder, and 15 to execute, deliver, and perform the Bank Note. 16 17 Section 4 02 Authorization, Contravention. The execution, delivery, and performance by 18 the Crty of the Ordinance, this Agreement, and the Related Documents and the making of the 19 payments under the Bank Note have been duly authorized by all necessary action by the Crty and do 20 not contravene, or result m the violation of, or constitute a default under, any provision of applicable 21 law or regulation, or any order, rule:, or regulation of any court, governmental agency, or 22 instrumentality or any agreement, resolution, or instrument to which the Crty is a party or by which 23 rt or any of its property is bound. ' 24 25 Section 4 03 Governmental Consent or Approval. No authorization, consent, approval, 26 permit, license, or exemption of, or filing or registration with, any court or governmental department, 27 commission, board, bureau, agency, or i;nstrumentahty that has not been obtained or issued is or will 28 be necessary for the valid adoption, execution, delivery or performance by the Crty of the Ordinance, 29 the Related Documents, this Agreement:, and the Bank Note 30 31 Section 4 04 Binding Effect. This Agreement, the Ordinance, and the Related Documents 32 constitute valid and binding obligations of the Crty enforceable against the Crty m accordance with 33 their respective terms, except as such enforceability may be lirnited by the City's bankruptcy, 34 insolvency, reorganization, moratorium, or other laws or equitable principles relating to or limiting 35 creditor's rights generally 36 37 Section 4 OS Federal Reserve Regulations. No part ofthe proceeds of any Loan will be used 38 for the purpose, whether immediate, incidental, or ultimate, to purchase or carry any margin stock 39 (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as 40 amended from time to time), or to extend credit to others for the purpose of purchasing or carrying 41 any margin stock, or for any other purpose which would violate any of the regulations of said Board 42 of Governors. 43 -20- H:\Ff WORTH\TAXCP\Cragt3 May 20, 1998 1 Section 4 06 Lrti anon. There is no action, suit, or proceedmg pending in any court in 2 _ Tarrant County, Texas, or, to the knowledge of the City, pendmg or threatened against or affecting 3 the City, the System, or relating to other applicable laws or regulations, or this Agreement or the 4 Related Documents in any court or before or by any governmental department, agency, 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2~ 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 instrumentality, or arbitrator the resolution of which would materially and adversely affect the ability or authority of the City to perform its obligations under this Agreement or the Related Documents, or which m any manner questions the validity or enforceability of this Agreement, the Ordinance, or the Related Documents or the granting,l-erfection, enforceability, or priority ofthe lien on and pledge of the Collateral provided in Section 2 09, except any action, sort, or proceedmg (i) as described in the Offering Memorandum prepared by the Crty and the Dealer relating to the Commercial Paper Notes or (ii) which may be brought pno:r to the Effective Date as to which the Bank has received an opinion of counsel satisfactory to the Bank, in form and substance satisfactory to the Bank and its counsel, to the effect that such action, suit, or proceedmg is without substantial merit. Section 4 07 No Event of Default under the Ordinance No "Event of Default" specified in the Ordinance and no event which, with the giving of notice or lapse of time or both would become such an Event of Default, has occurred and is continuing. Section 4 08 Financial Statements Since the effective date of the financial information provided by the City to the Bank in connection with this Agreement, there has been no material adverse change m the business, properties, condition (financial or otherwise), or operations, present or prospective, of the City or the System. Section 4 09 Complete and Correct Information. All information, reports, and other papers and data with respect to the City and the System furnished by the City to the Bank in connection with this Agreement were, at the time the same were so furnished, complete and correct in all material respects, to the extent necessary to give the Bank a true and accurate knowledge of the subject matter No document furnished or statement made by the City in connection with the negotiations, preparation, or execution of this Agreement contains any untrue statement of a fact material to its creditworthiness or orruts to state a material fact necessary in order to make the statements contained therein not misleading. Section 4 10 Sale or Encumbrance of S. sy tem. During the term of this Agreement, and as long as any Prior Lien Obligations, the Bank Note, or any interest thereon, remain Outstanding, the City will not sell, dispose of or, except as permitted hereunder or under the Master Ordinance, further encumber the System, provided, however, that this provision shall not prevent the City from disposing of any portion of the System which is being replaced or is deemed by the City to be obsolete, worn out, surplus or no longer needed for the proper operation ofthe System. Net proceeds from any such disposition shall be used only for System purposes. Any agreement pursuant to which the City contracts with a person, corporation, municipal corporation or political subdivision to operate the System or to lease and/or operate all or part of the System shall not be considered as an encumbrance of the System. H:\ET W O RT H\TAXC P\Cngt. S May 20, 1998 -21- 1 Section 4 11 Incorporationi by Reference The representations and warranties made by the 2 City in the Related Documents are hereby incorporated herein by reference and made for the benefit 3 of the Bank. 4 5 Section 4 12 Year 2000 Compliance. The City has conducted and is continuing to review 6 and assess its computer applications, and has undertaken certain modifications thereto, relating to any 7 defect or potential defect relating to "Yeear 2000" compatibility Based on the foregoing review and 8 modification, the Cnty believes that no :>uch defect could reasonably be expected to have a material. 9 adverse effect on the properties, assets,, condition (financial or otherwise), results of operation or l0 business prospects of the Crty ,~ 11 12 ARTICLE V 13 REPRESENTATIONS AND WARRANTIES OF THE BANK 14 15 16 Section 5 O l Organization and :Powers The Bank (a) rs duly established and validly existing 17 under the laws of nts~urisdiction, and (b) has full power and authority to execute, deliver, and perform 18 this Agreement and to make Loans in accordance with the Commitment and this Agreement. 19 20 Section 5 02 Authorization Contravention. The execution, delivery, and performance by 21 the Bank of this Agreement and its Loans to be made hereunder have been duly authorized by all 22 necessary action by the Bank and do not contravene, or result in the violation of or constitute a 23 default under, any provision of applicable law or regulation, its charter, or any order, rule, or 24 regulation of any court, governmental agency, or instrumentalnty or any material agreement, 25 resolution, or instrument to which the Bank is a party or by which rt or any of its property ns bound. 26 27 Section 5 03 Bank Obh ations Valid. This Agreement is a valid and binding agreement of 28 the Bank, assuming this Agreement ns a valid and binding agreement of the Crty, except as limited by 29 bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to the Bank or the 30 Crty or affecting generally the enforcement of creditor's nghts and remedies. 31 32 ARTICLE VI 33 COVENANTS OF THE CITY 34 35 The Crty agrees that durnng the term of this Agreement and whale any amount payable under 36 the Bank Note remains unpaid 37 38 Section 6 Ol Information. The: City will deliver to the Bank. 39 40 (a) as soon as reasonably available after the end of each Fiscal Year, and nn any event 41 wnthin 210 days after the end of such Fiscal Year, a copy of the annual report of the Crty 42 prepared in accordance wrath generally accepted accounting principles consistently applied and 43 audited by independent certnfie~d public accountants of recognized standing, including a H:\Ft W O RT H\TAXC PAC ragt.5 May 20, 1998 -22- 1 balance sheet of the City as of the end of such Fiscal Year and related statements of revenues, 2 expenses, and changes in retained earnings and cash flows for the Fiscal Year ended, 3 4 (b) as soon as practicable: and in any event within 90 days after the end of each quarter 5 of each Fiscal Year, the unaudited financial operations of the System as of the end of such 6 fiscal quarter, which includes information as to actual f nancial results compared to results 7 contemplated by an annual budget, prepared from the books .and records of the System on a 8 consistent basis, 9 10 (c) as soon as available and in any event within 40 days after the close of each fiscal 11 quarter of the City, a certificate of an Authorized Representative (i) to the effect that as of 12 the date of such certificate no Default has occurred, or (ii) if a Default has occurred specifying 13 the nature of such Default, the period of its existence, and the action which the City is taking 14 or proposes to take with respect thereto unless such Default has previously been reported 15 pursuant to 6 O 1(e) below, and :no change in the status ~of such Default has occurred, 16 17 (d) as soon as practicablf: but in any event within ten Business Days after the issuance 18 thereof, copies of any prospectus, official statement, offering circular, placement 19 memorandum, or .similar or corresponding document, and any supplements thereto and 20 updates and amendments thereof, that the City makes available in connection with the 21 offering, issuance or incurrence of Prior Lien Obligations or Junior Lien Obligations, and, on 22 request, copies of such other financial reports that the'City shall customarily and regularly 23 provide to the public; 24 25 (e) forthwith upon the occurrence of any Event of Default a certificate of an 26 Authorized Representative setting forth the details thereof and the action which the Crty is 27 taking or proposes to take with :respect thereto, a report showing the aggregate amount and 28 maturities of Commercial Paper Notes outstanding at the end of the preceding month and a 29 summary of the aggregate principal amount of Commercial Paper Notes issued, rolled over 30 and retired in such period, 31 32 (fl as soon as available z~fter the beginning of each Fiscal Year, a copy of the City's 33 budget for such Fiscal Year regarding the System and, if such budget has not then been 34 adopted, within 30 days after the beginning of such Fiscal Year, a copy of the continuing 35 appropriation ordinance adopted by the City appropriating funds pending the adoption of the 36 budget, 37 38 (g) concurrently with the delivery of the quarterly financial reports set out in 39 subsection (b) above, a written description of any actions, suits, and proceedings before any 4o court or governmental department, commission, board, bureau, agency or instrumentality 41 against the Crty or involving the System which, if determined against the Crty or the System, 42 would have a material adverse effect on the financial condition of the System, and 43 -23- H:\FI WORTMTAXCP~Cregt.S May 20, 1998 1 (h) upon written request of the Bank, information relating to the Pledged Revenues 2 or any other financial information reasonably requested. 3 4 Section 6 02 Access to Records The City will furnish to the Bank such information 5 regarding the financial condition, results of operations, or business of the City and the System as the 6 Bank may reasonably request and will permit any officers, employees, or agents of the Bank to visit 7 and inspect during the regular operating hours of the City any of the properties of the Crty and to 8 discuss matters reasonably pertinent to an evaluation of the credit of the Crty, all at such reasonable 9 times as the Bank may reasonably request. All information received by or provided to the Bank 1o pursuant to this Agreement, unless otherwise made public by the Crty, will be held as confidential 11 information by the Bank. 12 13 Section 6 03 Limitation on Debt. The City will not issue any additional Debt except m 14 accordance with the Master Ordinance. 15 16 Section 6 04 Proceeds of Commercial Paper Notes. The proceeds ofthe Commercial Paper 17 Notes will be used by the City solely for the purposes described in the Ordinance 18 19 Section 6 OS No Amendment of Certain Contracts or Ordinances. The City will not consent 20 to any amendment to or modification or waiver of any of the provisions of the Master Ordinance, the 21 Ordinance or the Related Documents without the prior wntten consent of the Bank. The Crty will 22 give the Bank notice as promptly as practicable (but in no event less than ten Business Days) of any 23 proposed amendments to or modifications or waivers of any provisions of the Master Ordinance or 24 the Ordinance and of any meeting of the: City Council of the City at which any of the foregoing will 25 be discussed or considered The foregoing notwithstanding, the City may adopt Supplements to the 26 Master Ordinance authorizing the issuance or incurrence of Prior Lien Obligations, subject to the 27 provisions of Section 6 03 of this Agreement, without the consent of the Bank. 28 29 Section 6 06 Rates, Sales of Obh aeons. The Crty shall prior to any date on which principal 30 of the Bank Note becomes due, fix, charge and collect rates and charges for the use and services of 31 the System, or, to the extent perrrutted by law, use its best efforts to offer and sell bonds or other 32 evidences of indebtedness, or undertake a combination of both ofthe foregoing, to produce amounts 33 sufficient, together with other funds available therefor, to pay on such date the principal amount of 34 the Bank Note which is due on such datf; plus accrued interest thereon and all other amounts due to 35 the Bank hereunder m respect thereof or in respect of the Commitment, not previously paid from 36 other funds available to the City 37 38 Section 6 07 Other Covenants. The Crty shall fully and faithfully perform each of the 39 covenants required of it pursuant to the provisions of the Ordinance and the Master Ordinance. 40 41 Section 6 08 Taxes and Liabilities The Crty will pay all the indebtedness and obligations 42 of the System promptly and in accordance with its terms and pay and discharge or cause to be paid 43 and discharged promptly all taxes, assessments, and governmental charges or levies imposed upon 44 it or upon its income and profits, or upc~n any of its property, real, personal, or mixed, or upon any -24- H:\Ff WORTH\TAXCP~Cregt.3 May 20, 1998 1 part thereof, before the same shall become in default, except for those matters which are reasonably 2 being contested in good faith by appropriate action or proceedings or for which the City has 3 established adequate reserves in accordance with generally accepted accounting principles applicable 4 to governmental entities. 5 6 Section 6 09 Supplemental Ordinances and Further Assurances The City will not adopt any 7 supplemental ordinances, pursuant to the Ordinance, the Master Ordinance or otherwise, which 8 would adversely affect the ability of t1.he City to make payments of the Bank Note when due; 9 provided, however, that nothing herein shall prevent the Crty from issuing Additional Prior Lien l0 Obligations as provided m the Master Ordinance The Crty will at any and all times, insofar as rt may 11 be authorized so to do bylaw, pass, ma~;e, do, execute, acknowledge, and deliver all and every such 12 further resolutions, acts, assignments, recordings, filings, transfers, and assurances as may be 13 necessary or desirable for the better assuring, conveying, granting, assigning, and confirming all and 14 singular the rights, revenues, and other funds and the Collateral hereby pledged or assigned to the 15 payment of the Bank Note, or intended so to be, of which the Crty may become bound to pledge or 16 assign. 17 18 Section 6 10 Efforts to Pay In the event that any Loan is not paid at maturity, the Crty shall 19 as quickly as possible take all action reasonably necessary to allow payment from any available 20 System funds including proceeds from Bonds 21 22 Section 6 11 Restrictions on Use of Proceeds The proceeds of the Loans will be applied 23 by the Crty only to pay the principal ofthe Commercial Paper Notes corning due during the Revolving 24 Credit Period. None of the funds borrowed by virtue of this Agreement will be used m any manner 25 or for any purpose except in the mariner and for the purposes authorized by Texas law, this 26 Agreement and the Ordinance 27 28 Section 6 12 Performance and Compliance with Other Covenants. The City shall perform 29 and comply with each of the covenants contained in the Related Documents. 30 31 Section 6 13 Compliance with :Rules and Regulations. The Crty shall comply with all laws, 32 ordinances, orders, rules, and regulations (including, without limitation, any applicable environmental 33 law, ordinance, order, rule or regulation) of duly constituted public authorities which if not complied 34 with would have a materially adverse efl:ect on the City's ability to perform its obligations hereunder 35 and under the Related Documents. 36 37 Section 6 14 Maintenance and .Operation of the System. The City covenants that it will at 38 all times maintain the System, or within the limits of its authority cause the same to be maintained, 39 in good condition and working order acid will operate the same, or cause the same to be operated, 40 in an efficient and economical manner at a reasonable cost and in accordance with sound business 41 principles. In operating and maintaining the System, the City will comply with all contractual 42 provisions and agreements entered into by rt and with all valid rules, regulations, directions or orders 43 of any governmental, administrative or~udicial body promulgating same, noncompliance with which 44 would materially and adversely affect tree operation of the System. -25- H:\FRVORTH\TAXC P\Cragt.5 May 20, 1998 1 Section 6 15 Insurance. The City will keep the System insured with insurers of good 2 standing against asks, accidents or casualties against which and to the extent customarily insured 3 against by political subdivisions of the State of Texas operating similar properties, to the extent that 4 such insurance is available All net proceeds of such insurance shall be applied to repair or replace 5 the insured property that is damaged or destroyed, or shall be deposited m the System Fund (as 6 defined in the Master Ordinance), or shalll be used to redeem Outstanding Bonds The cost of all such 7 insurance, together with any additional insurance, shall be a part of the Maintenance and Operation 8 Expenses. 9 10 Section 6 16 Rates and Charges So long as the Commitment or any Loans remain 11 Outstanding, the City shall fix, charge and collect rates and charges for the use and services of the 12 System m accordance with the Master Ordinance 13 14 Section 6 17 Investments Genera The City shall comply with the provisions ofthe Public 15 Funds Investment Act (Tex. Gov't Code Ann. §2256 (Vernon 1995)), and, in addition, shall not 16 17 (a) borrow money (by, without hrrutation, obtaining loans, issuing debt, i8 purchasing securities on margin, entering into repurchase agreements or similar agreements) 19 solely for the purpose of investment, m an amount at any time greater than 20% of the total 20 of the City's unleveraged investment portfolio, or 21 22 (b) knowingly maintain any of the City's investment portfolio in a pool of 23 investments managed by another person whose investment practices would result in the 24 indirect violation of the hrrutation set forth m Subsection (a) above, or 25 26 (c) invest m any ms~trument or execute any agreement commonly known as a 27 derivative (such as by way of example, an inverse floater or any other variable rate or floating 28 rate security the interest rate on which is not deternuned on a basis designed to result m a 29 value of the secunty approximately equal to par) or invest m any other security with a 3o derivative embedded in rt (such ass by way of example a structured note), except to the extent 31 that any such investments or agreements do not exceed 20% of the City's unleveraged 32 investment portfolio and except that forthe purposes oftlus subsection the term "derivative" 33 shall not include principal or interest steps of direct obligations of the United States which, 34 if held to maturity, would yield to the Crty the face amount of such secunty; provided, 35 however, notwithstanding the foregoing provision, the Crty shall have the right to enter into 36 transactions, agreements or investments without regard to the limitations set forth m this 37 Subsection (c) for legitimate hed;gmg purposes with respect to the City's investment portfolio, 38 consistent with sound mvestmerrt practices for investors similarly situated. 39 4o In determining whether the City's investment in a pool of investments described m Subsection (b) 41 above would cause a violation of Subse:coon (a) above, the amount of the City's investment in the 42 pool will be considered borrowed money for the purposes of Subsection (a) above in an amount equal 43 to the product of the amount of such. investment times the percentage by which such pool is 44 leveraged. -26- H:\FC W O RTH\TAXC P\Cragt 3 Mey 20, 1998 1 Section 6 18 Year 2000 Compliance. The City shall take all actions necessary to eliminate 2 any defects in computer software, databases, .hardware, controls and peripherals which may occur in 3 connection with the occurrence of the year 2000 or the use thereof on any date after December 31, 4 1999, to the extent such defect could reasonably be expected to have a material adverse effect on the 5 properties, assets, condition (financial or otherwise), results of operation or business prospects ofthe 6 City 9 ARTICLE VII 10 DEFAULTS AND REMEDIES 11 12 Section 7.01 Events ofDefault. If one or more ofthe following events ("Events ofDefault") 13 shall have occurred and be continuing 14 15 (a) the City shall fail to pay (i) any normally scheduled principal or interest due under 16 the Bank Note or (ii) any principal or interest under the Bank Note which is declared due and 17 payable pursuant to the provisions of Section 7 Ol or (iii) any Commitment Fee or any other 18 amount payable hereunder and, in each case, such failure shall continue for a period of five 19 Business Days from the date of notice given by the Barik under Section 2 08(a), 20 21 (b) any representation, warranty, certification, or statement made by the City m this 22 Agreement or in any certificate, :financial statement, or other document delivered pursuant to 23 this Agreement shall prove to have been incorrect in any material respect when made, 24 25 (c) breach by the Crty of any covenant, agreement, or condition contained m Section 26 6 02 through Section 6 17, 27 28 (d) breach by the City of any other covenant, agreement, or condition (other than 29 those referred to or contained iii clauses (a), (b), or (c)' above) contained m this Agreement 30 or the Bank Note and the continuation thereof for more than ten days after wntten notice 31 thereof has been given to the Ci1:y by the Bank without cure or correction to the satisfaction 32 of the Bank, provided, however, such breach shall not constitute an Event ofDefault after 33 such ten day period for such period of time as, if in the reasonable judgment of the Bank, the 34 Crty is diligently pursuing a cure; or correction of suchbreach, F 35 36 (e) (i) a final unappealable~udgment or order for the payment of money in excess of 37 $10,000,000 payable from the Pledged Revenues shall be rendered against the Crty and such 38 judgment or order shall continue; unsatisfied and unstayed for a period of 60 days, or (ii) the 39 City shall have failed promptly to lift any execution, garnishment, or attachment pursuant to 4o such judgment or order as, in the; wntten opinion of the System's Chief Engineer, will impair 41 the City's ability to carry on its System business, 42 43 (f) (i) default by the City in the payment of any Debt in excess of $10,000,000 when 44 due or within any applicable grace period or (ii) the occurrence of any event under any -27- H:\FI W O RT FI\TAXC P~Cregt. S May 20, 1998 1 ordinance, resolution, or instrument giving rise to any Debt, which results in or would entitle 2 the obl thereof or a trustee on behalf of such obligee to pursue any remedies against the City, 3 including the right to declare the acceleration of any maturity thereof, or upon the lapse of 4 time or the giving of notice or both would entitle the obligee thereof or a trustee on behalf of 5 such obligee to accelerate any maturity thereof, or which results in the forfeiture by the City 6 of any of its rights under any such ordinance, resolution, or instrument, 7 8 (g) the City shall commence a voluntary case or other proceeding seeking (i) 9 liquidation, reorganization, or other relief with respect Ito the System or its Debts under any 1o bankruptcy, insolvency, or other similar law now or hereafter m effect or (ii) the appointment 11 of a receiver, liquidator, custod~.an, or other similar official with respect to the Crty or any 12 substantial part of its property, or shall consent to ~ or acquiesce m such relief or the 13 appointment of or taking possession by any such official in an involuntary case or other 14 proceeding commenced against it, is 16 (h) a receiver, liquidator, custodian, or other official, appointed m an involuntary case 17 or proceeding commenced against the Crty, appointed without consent or acquiescence ofthe 18 City, takes charge of a substantial part of the System and such action as to the System is not 19 stayed, discharged, or vacated for a period of 30 days, 20 21 (i) the Crty shall make a general assignment for.the benefit of creditors, or declare a 22 moratorium with respect to its Debts, or shall fail generally to pay its Debts as they become 23 due, or shall take any action to authorize any of the foregoing; 24 25 (j) an involuntary case or other proceeding shall be commenced against the City 26 seeking (i) liquidation, reorganization, or other relief with respect to the City's Debts under 27 any bankruptcy, insolvency, or other similar law now or hereafter in effect, or (ii) the 28 appointment of a custodian, receiver, liquidator, trustee or other sirrular official ofthe System, 29 or any substantial part thereof, and such proceeding or case shall not be dismissed or stayed 30 within 90 days after the filing thereof or an order of relief shall be entered against the Crty 31 under the federal bankruptcy laws as now or hereafter in effect; 32 33 (k) (i) any provision of this Agreement relating to the City's ability to make payments 34 to the Bank hereunder, to make payments on the Bank Note or to raise funds to meet such 35 payment obligations or (ii) any other material provision of this Agreement shall at any time 36 for any reason cease to be valici and binding on the City as a result of federal or state 37 legislative or administrative action, or shall be declared in a final non-appealable~udgment by 38 any court having jurisdiction over the Crty to be null and void, invalid, or unenforceable, or 39 the validity or enforceability thereof shall be contested by the Crty; 40 41 (1) the powers ofthe City shall be limned in any way or the Master Ordinance shall be 42 modified or amended in any way without the prior written consent ofthe Bank, in either case, 43 which prevents the Crty from fixing, charging or collecting rates and charges for the use and 44 services of the System in an amount sufficient to pay its Debts as they become due; or n -28- H: \F[ W O RTH\TA XC P\Cagt. S May 20,1998 1 (m) S&P, Fitch and Moody's shall have (i) assigned the Commercial Paper Notes a 2 rating below A-3 (S&P), F-3 (Fitch) and P-3 (Moody's), (ii) assigned any other Debt a rating 3 below BBB (S&P and Fitch) and. Baa (Moody's), or (iii) suspended ratings of the Commercial 4 Paper Notes or any other Debt; 5 6 then, and m any such event, other than an Event of Default specified m paragraphs (g) through (j), 7 the Bank may declare the Bank Note, all accrued interest thereon, and all other amounts payable 8 under this Agreement to be forthwith due and payable, whereupon the Bank Note and such interest 9 and all such amounts shall become and be forthwith due and payable without presentment, demand, 1o protest or further notice of any kind, all of which are hereby expressly waived by the Crty If any 11 Event of Default specified in paragraphs (g) through (j) shall occur, without any notice to the City 12 or any other act by the Bank, the Bank Note, together with accrued interest thereon, and all other 13 amounts payable under this Agreement, shall become forthwith due and payable, without 14 presentment, demand, protest, or other notice of any kind, all of.which are hereby waived by the City 1~ ~ 16 Upon the occurrence of any Special Event of Default, the Commitment shall terrrunate and 17 the Bank shall have no obligation to make Loans to fund then outstanding Commercial Paper Notes 18 19 Upon the occurrence of an Ever,~t of Default that is not a Special Event of Default, the Bank 20 may by notice to the Crty terminate the: Commitment, if any (except as provided below), and the 21 Commitment shall thereupon terminate, provided however the Commitment shall not terminate, and 22 the right of the Bank to accelerate the maturity of the Bank Note shall not affect the obligation of the 23 Bank to make Loans in the aggregate amount equal to their respective Commitment m accordance 24 with the terms of Article II hereof, to the extent, but only to the extent, necessary for the Crty to 25 make required payments of principal oft:he Commercial Paper Notes issued and sold prior to the time 26 a No-Issuance Notice is received by the Paying Agent, provided further that if any Loans are made 27 that would not have been made but for the application of the immediately preceding provision, such 28 Loans shall be immediately due and payable on the date they are made 29 30 Failure to take action m regard to one or more Events of Default shall not constitute a waiver 31 of, or the right to take action in the future in regard to, such or subsequent Events of Default. 32 33 Section 7 02 Suits at Law or xn Equity and Mandamus. in case one or more Events of 34 Default shall occur, then and in every such case the Holder of the Bank Note shall be entitled to 35 proceed to protect and enforce such Holders' rights by such appropriate judicial proceeding as such 36 Holder shall deem most effectual to protect and enforce any such right, either by suit, in equity, or 37 by action at law, whether for the specific performance of any covenant or agreement contained m this 38 Agreement, or m aid of the exercise of any power granted in this Agreement, or to enforce any other 39 legal or equitable right vested in the Holder by this Agreement or the Bank Note or by law The 4o provisions ofthis Agreement shall be a contract with each and every Holder and the duties ofthe City 41 shall be enforceable by any Holder by mandamus or other appropriate suit, action, or proceeding m 42 any court of competent jurisdiction. ~ 43 -29- H:\FI W O RTH\TAXC P\Cngt. S May 20, 1998 1 Section 7 03 Cross Defaults If there shalt be an event of default under any other document 2 evidencing a Debt by the City,. the Crty shall not issue any additional Commercial Paper Notes until 3 such event of default is cured or remedied and made good 4 5 Section 7 04 Remedies Not Exclusive No remedy herein conferred upon or reserved to the 6 Holders is intended to be exclusive of any other remedy, and every such remedy shall be cumulative 7 and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law 8 or m equity or by statute or otherwise, and may be exercised at any time or from time to time, and 9 as often as may be necessary, by any Holder to 11 12 ARTICLE VIII 13 MISCELLANEOUS 14 15 Section 8 01 Additional Costs If any law or guideline or interpretation or application 16 thereof by any governmental authority charged with the interpretation or administration thereof or 17 compliance with any request or directive of any governmental authority now existing or hereafter 18 adopted 19 20 (i) su6~ects the Bank: or any Participant to any tax or changes the basis of taxation 21 with respect to this Agreement. or the Bank Note, or payments by the City of principal, 22 interest, fees or other amounts due from the Crty hereunder or under the Bank Note (except 23 for taxes on the overall net income or share capital of the Bank or any Participant imposed 24 by the jurisdiction m which the Bank's or Participant's principal office is located), 25 26 (ii) imposes, modifies or deems applicable any reserve, special deposit or similar 27 requirement against credits or comrrutments to extend credit extended by, assets (funded or 28 contingent) of, deposits with or for the account of, or other acquisitions of funds by, the Bank 29 or any Participant, 30 31 (iii) imposes, modifies or deems applicable any capital adequacy or similar 32 requirement (A) against assets (fi.~nded or contingent) of; or credits or commitments to extend 33 credit extended by, the Bank or a.ny Participant, or (B) otherwise applicable to the obligations 34 of the Bank or any Participant under this Agreement, or 35 36 (iv) imposes upon the: Bank or any Participant any other condition or expense with 37 respect to this Agreement, or the Bank Note, or its making, maintenance or funding of any 38 loan or other credit or any comrmtment or security therefor, 39 4o and the result of any of the foregoing is to increase directly or indirectly the cost to, reduce. the 41 income receivable by, or impose any t:xpense (including loss of margin) upon the Bank or any 42 Participant with respect to this Agreement, the Bank Note or the malang, maintenance or funding of 43 any loan (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing 44 the rate of return on the Bank's or any participant's capital, taking into consideration the Bank's or -30- N:\FRVORTFi~TAXCP~Cregt.S May 20, 1998 1 any Participant's policies wrth respect to capital adequacy) by an amount whrch the Bank or any 2 Participant deems to be material to it, then the Bank promptly shall notify the City (A) that such an 3 event as~described rn clauses (i) through. (iv) above has occurred, (B) the nature ofthe event that has 4 occurred and (C) of the amount determined in good Earth (using any reasonable averaging and 5 attribution methods) by the Bank (whrch determination shall be conclusive absent manifest error) to 6 be necessary to compensate the Bank or any Participant for such increase, reduction or imposition. 7 Such amount shall be due and payable by the Crty to the Bank or any Participant (as directed by the 8 Bank) within ten Business Days from the date of the Bank's notice. A certificate by the Bank or any 9 Participant as to the amount due and payable under this Section from time to time and the method 10 of calculating such amount shall be conclusive absent manifest error and shall be provided to the City 11 along with the notice described above. 7'he rights of any Participant in this Section 8 O 1 are expressly 12 limited by the provisions of Section 8 11 13 14 Section 8 02 Notices and Accounts Except as otherwise provided herein, all notices, is requests, and other communications to any party hereunder shall be in writing (including telecopy, 16 bank wire, or similar writing) and shall be given to such party at its address set forth on the signature 17 pages hereof or such other address or telecopy number as such party may hereafter specify for the is purpose of giving notice Each such notice, request or other commumcation shall be effective (i) if 19 given by telecopy, when such telecopy is transmitted to the telecopy number hereafter specified by 20 any party for the purpose of giving notice and the appropriate acknowledgment is received, (ii) rf 21 given by mail, 72 hours after such corrinumcation is deposited m the United States mail with first 22 class postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered at 23 the address specified m this Section, provided, however; that notices to the Bank under Article II 24 hereof shall not be effective until received ' 25 26 Section 8 03 No Waivers. No failure or delay by the Bank m exercising any nght, power, 27 or privilege hereunder or under the Bank. Note or otherwise shall operate as a waiver thereof nor shall 28 any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of 29 any other right, power, or privilege The rights and remedies herein provided shall be cumulative and 3o not exclusive of any rights or remedies provided by law 31 32 Section 8 04 Project Costs Eztrenses and Taxes. 'The Crty shall pay (i) to the Bank all 33 reasonable out-of-pocket expenses ofthf; Bank rn connection wrth the preparation ofthrs Agreement, 34 (ii) to Vinson & Elkins L.L.P , cour.~sel to the Bank, its fees (not to exceed $30,000) and 35 disbursements irr connection wrth the transactions contemplated by this Agreement, (iii) to the Bank's 36 foreign counsel the amount of $2,500, (iv) on the date any Loan is made pursuant to Section 2 02, 37 a loan fee in the amount of $125 to the Etank; and (v) rn case of any waiver or consent hereunder, or 38 any amendment hereof or any Default or alleged Default by the Crty hereunder, all reasonable 39 out-of-pocket expenses and legal fees incurred by the Bank rn connection wrth such waiver, consent, 4o amendment (and m the case of any arnenndment, an amendment fee of $1,500), or Event of Default 41 and collection and other enforcement proceedings resulting therefrom. 42 -31- H:\FI WORTFi~TAXCP~Cragt. S May 20, 1998 1 Section 8 OS Amendments or Modification. Any provision of this Agreement or the Bank 2 Note may be amended or modified if, but only if, such amendment or modification is in writing and 3 is signed by the Crty and the Bank. 4 5 Section 8 06 Severabilrtv Any provision of this Agreement which is prohibited, 6 unenforceable, or not authorized shall be ineffective to the extent of such prohibition, 7 unenforceabilrty, or nonauthorization without invalidating the .remaining provisions hereof. 8 9 Section 8 07 Headm~s. Section headings in this Agreement are included herein for l0 convenience of reference only and shall not constitute a part ofthis Agreement for any other purpose. 11 12 Section 8 08 Counterparts This Agreement maybe signed m any number of counterparts, 13 each of which shall be an original, with the same effect as if the signatures thereto and hereto were 14 upon the same instrument. Complete sets of counterparts shall be lodged with the Crty and the Bank. 1~ 16 Section 8 09 Payments in Dollars. All payments made or advanced under this Agreement 17 shall be in United States currency only , 18 19 SECTION 8 10 GOVERNING LAWS, VENUE ~ THIS AGREEMENT SHALL BE 20 DEEMED TO BE A CONTRACT MADE UNDER AND SHALL BE CONSTRUED IN 21 ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, 22 PROVIDED THAT THE BANK'S OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IIv 23 ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 24 THE VENUE FOR ANY LEGAL ACTION TO ENFORCE OR INTERPRET THIS AGREEMENT 25 SHALL BE IN TARRANT COUNTY TEXAS THE BANK HEREBY CONSENTS TO AND 26 SUBMITS TO IN PERSONAM JLTRiSI)ICTION OF COMPETENT COURTS LOCATED IN THE 27 STATE OF TEXAS, COUNTY OF TAR.RANT AND THE FEDERAL DISTRICT COURTS THAT 28 ARE LOCATED IN THE CITY OF FORT WORTH. 29 30 Section 8 11 Successor and Assigns, Participation. (a) The Bank's rights and obligations 31 under this Agreement may not be assigned by the Bank, other than by operation of law to a successor 32 or merged institution, unless (i) the City has received written notice from at least two nationally 33 recognized credit rating agencies that the ratings of the Commercial Paper Notes, if any, issued by 34 such rating agencies will not be lowered or withdrawn as a result of such assignment, and (ii) the Crty 35 has given its consent to such assignment, which consent shall be evidenced by a writing signed by an 36 Authorized Representative and shall not be unreasonably withheld. If such conditions have been 37 satisfied and the assignor and assignee have consummated the assignment, then (i) the assignee shall 3s be the Bank for all purposes hereunder with a Commitment equal to the amount specified to the City, 39 (it) the assignor shall have no further obligation hereunder with respect to its Commitment, (iii) the 4o assignor.shall deliver the Bank Note to the Crty, (iv) the Crty shall pay the assignor all unpaid accrued 41 interest on such Bank Note, (v) the Crty shall execute and deliver to the assignee a new Bank Note, 42 payable to the order of the assignee, dated the date of such assignment and m the maximum principal 43 amount of the assignee's Commitment, <ind (vi) if such assignment is not an assignment of all of the 44 assignor's rights and obligations hereunder, then the City shall execute and deliver to the assignor a -32- H:\FT W O RT H\TAXC P~Ctagt. S May 20, 1998 1 new Bank Note payable to the order o:f'the assignor, dated the date of such assignment and in the 2 maximum principal amount of the assignor's remaining Commitment. 3 4 5 6 7 8 9 10 11 12 13 14 1~ 16 i7 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 (b) The Crty recognizes that the Bank contemplates entering into participation agreements with certain other Participants and agrees, subject to the penultimate sentence of this paragraph, the Bank may enter into participation agreements wrth Participants without the consent of the Crty The Bank promptly shall notify the Crty of tYie names of any Participants with whom the Bank enters into participation agreements. Accordingly, the Crty confirms that~all of its representations, warranties, covenants, certifications, and obligations under this Agreement and the Bank Note, as well as all rights under the lien and pledge securing the payment of the aBank Note and granted to the Bank pursuant to the Ordinance and Section 2 09 of this Agreement, ~ are for the benefit of the Participants as well as for the benefit of the Bank. No assignee, Participant, or other transferee of the Bank's rights shall be entitled to receive any greater payment under Section 8 O1 than the Bank would have been entitled to receive wrth respect to the nghts transferred, unless such transfer is made wrth the City's prior written consent to that effect. Any costs incurred by the Crty in connection with any assignment or participation of this Agreement shall be paid by'the Bank making such assignment or granting such participation. SECTION 8.12. LIABILITY OF THE BANK. AS BETWEEN THE BANK AND THE CITY, THE CITY ASSUMES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL RISKS OF THE ACTS OR OMISSIONS OF THE PAYING AGENT AND THE DEALER WITH RESPECT TO THE USE OF ANS.' MONEY MADE AVAILABLE BY THE BANK IN ACCORDANCE WITH THIS AGREEMENT NEITHER THE BANK NOR ANY OF ITS OFFICERS OR DIItECTORS SHALIi, BE LIABLE OR RESPONSIBLE FOR (A) THE USE WHICH MAY BE MADE OF ANY MONEY MADE AVAILABLE BY THE BANK IN ACCORDANCE WITH THIS AGREEMENT OR FOR ANY ACTS OR OMISSIONS OF THE PAYING AGENT, AND THE DEALER IN CONNECTION THEREWITH, (B) THE VALIDITY, SUFFICIENCY, OR GENUINENESS OF ANY DOCUMENTS, DETERNIlNED IN GOOD FAITH BY THE BANK TO BE VALID, SUFFICIENT OR GENUINE, OR OF ANY ENDORSEMENT(S) THEREON, EVEN IF SUCH DOCUMENTS SHOULD IN FACT PROVE TO BE IN ANY OR ALL RESPECTS INVALID, INSUFFICIENT, FRAUDULENT, OR FORGED, (C) PAYMENT BY THE BANK AGAINST PRESENTATION OF DOCUMENTS DETERMINED IN GOOD FAITH BY THE BANK TO BE VALID, SUFFICIENT OR GENUINE, WHICH DO NOT STRICTLY COMPLY WITH THE TERMS OF THIS AGREEMENT, (D) ANY OTHER CIRCUMSTANCES WHATSOEVERINMAKINGORFAILINGTOMAKEPAYMENT UNDER THIS AGREEMENT, EXCEPT ONLY THAT THE CITY SHALL HAVE A CLAIM AGAINST THE BANK, AND THE BANK SHALL BE LIABLE TO THE CITY, TO THE EXTENT, BUT ONLY TO THE EXTENT, OF ANY DIRECT, AS OPPOSED TO CONSEQUENTIAL ORPUNITIVE, DAMAGES SUFFERED BY THE CITY WHICH THE CITY PROVES WERE CAUSED BY (I) THE BANK'S NEGLIGENCE OR WILLFUL MISCONDUCT IN DETERIVITNING WHETHER DOCUMENTS PRESENTED UNDER THIS AGREEMENT COMPLY WITH THE TERMS OF 'THIS AGREEMENT OR (II) THE BANK'S WILLFUL FAILURE TO PAY UNDER THIS AGREEMENT AFTER THE PRESENTATION TO IT BY AN AUTHORIZED REPRESENTATIVE OF DOCUMENTS STRICTLY COMPLYING WITH THE -33- H: \FT W O RTti~1'AXC %Cmgt. S May 20, 1998 1 TERMS AND CONDITIONS OF TH[S AGREEMENT IN FURTHERANCE, AND NOT IN 2 LIMITATION OF THE FOREGOING, THE BANK MAY ACCEPT DOCUMENTS THAT 3 APPEAR ON THEIR FACE TO BE IN ORDER WITHOUT RESPONSIBILITY FOR FURTHER 4 INVESTIGATION UNLESS THE BANK HAS RECEIVED ACTUAL NOTICE OR 5 INFORMATION TO THE CONTRARY , 6 7 SECTION 8 I3 INDEMNIFICATION IN ADDITION TO ANY AND ALL RIGHTS OF 8 REIlVIBURSEMENT, INDEMNIFICATION, SUBROGATION, OR ANY OTHER RIGHTS 9 PURSUANT HERETO OR UNDERLAW OREQUITY, THE CITY HEREBY AGREES, TO THE io EXTENT PERMITTED BY LAW, TO :INDEMNIFY AND HOLD HARMLESS THE BANK AND 11 ITS OFFICERS, DIRECTORS, AND AGENTS (THE "INDEMNIFIED PARTIES") FROM AND 12 AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, REASONABLE 13 COSTS, OR REASONABLE EXPENSES WHATSOEVER (INCLUDING REASONABLE 14 ATTORNEYS' FEES) WHICH THF'sY MAY INCUR (OR WHICH MAY BE CLAIMED ~5 AGAINST THEM BY ANY PERSON OR ENTITY WHATSOEVER) BY REASON OF OR IN 16 CONNECTION WITH (A) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE 17 STATEMENT OF ANY MATERI,!~L FACT CONTAINED OR INCORPORATED BY 18 REFERENCE IN THE INFORMATION SUPPLIED BY THE CITY TO THE BANK OR TO THE 19 DEALER IN CONNECTION WITH THE PERFORIVTANCE OF THEIR DUTIES UNDER THIS 20 AGREEMENT OR THE RELATED DOCUMENTS, INCLUDING ANY DISCLOSURE 21 DOCUMENT, OR THE OMISSION OR ALLEGED OMISSION TO STATE IN SUCH 22 INFORMATION AMATERIAL FACT'NECESSARY TO MAKE SUCH STATEMENTS, IN THE 23 LIGHT OF CIRCUMSTANCES UNDER WHICH THEY ARE OR WERE MADE, NOT 24 MISLEADING, OR (B) THE EXECLITION AND DELIVERY OF THIS AGREEMENT AND 25 THE BANK NOTE AND THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY 26 OR PAYMENT OR FAILURE TO PAY UNDER THE COMMITMENT, PROVIDED, 27 HOWEVER, THAT THE CITY SIiALL NOT BE REQUIRED TO INDEMNIFY ANY 28 INDEMNIFIEDPARTYFORANYCI,AIMS, DAMAGES, LOSSES, LIABILITIES, COSTS, OR 29 EXPENSES TO THE EXTENT, BUT ONLY TO THE EXTENT, CAUSED BY ITS 3o NEGLIGENCE OR WILLFUL MISCONDUCT IF ANY PROCEEDINGSHALLBEBROUGHT 31 OR THREATENED AGAINST ANY INDEMNIFIED PARTY BY REASON OF OR IN 32 CONNECTION WITH THE EVENTS DESCRIBED IN CLAUSE (A) OR (B), SUCH 33 INDEMNIFIED PARTY SHALL PROMPTLY NOTIFY THE CITY IN WRITING AND THE 34 CITY SHALL ASSUME THE DEFENSE THEREOF, INCLUDING THE EMPLOYMENT OF 35 COUNSEL SATISFACTORY TO SUC;H INDEMNIFIED PARTY AND THE PAYMENT OF ALL 36 COSTS OF LITIGATION NOTWITHSTANDING THE PRECEDING SENTENCE, SUCH 37 INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO EMPLOY ITS OWN COUNSEL AND 38 TO DETERNIlNE ITS OWN DEFENSE OF SUCH ACTION IN ANY SUCH CASE, BUT THE 39 FEES AND EXPENSES OF SUCH COUNSEL SHALL BE AT THE EXPENSE OF SUCH 40 INDEMNIFIED PARTY UNLESS (I) THE EMPLOYMENT OF SUCH COUNSEL SHALL 41 HAVE BEEN AUTHORIZED IN WRITING BY THE CITY OR (II) THE CITY, AFTER DUE 42 NOTICE OF THE ACTION SHALL NOT HAVE EMPLOYED COUNSEL TO HAVE CHARGE 43 OF SUCH DEFENSE, IN EITHER OF WHICH EVENTS THE REASONABLE FEES AND 44 EXPENSES OF COUNSEL FOR SUC;H INDEMNIFIED PARTY SHALL BE BORNE BY THE -34- H:\FI W ORTF{~TAXC %Cregt.S May 20, 1998 1 CITY THE CITY SHALL NOT BI? LIABLE FOR ANY SETTLEMENT OF ANY SUCH 2 ACTION EFFECTED WITHOUT ITS CONSENT NOTHING UNDER THIS SECTION IS 3 INTENDED TO LIMIT THE CITY'S PAYMENT OBLIGATIONS CONTAINED ELSEWHERE 4 IN THIS AGREEMENT THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS 5 AGREEMENT 6 7 Section 8 14 Telecopied Documents. (a) At the request of the Crty, this Agreement 8 provides that demands for payment hereunder may be presented to the Bank by, among other 9 methods, telecopy The City acknowledges and assumes all risks relating to the use of such 1o telecopied demands for payment (i) which are telecopied from the Crty's facsimile machine (which 11 telephone number currently is (817) 871 •8966) or such other facsimile machine and telephone number 12 as shall be designated by an Authorized Representative, and (ii) which bears the facsimile signature 13 of an Authorized Representative 14 15 (b) At the request of the Bank, this Agreement provides that demands for payment 16 hereunder may be presented to the City by, among other methods, telecopy The Bank acknowledges 17 and assume all asks relating to the use of'such telecopied demands for payment (i) which is telecopied 18 from the Bank's facsimile machine (which telecopy number currently is (212) 3 02-7946) or such other 19 facsimile machine and telephone number as shall be designated by the Bank, and (ii) which bears the 20 facsimile signature of an authorized representative of the Bank. 21 22 Section 8 15 Term of the Agreement. The term of this Agreement shall be until the payment 23 m full of all principal of and interest on the Bank Note, the Commitment Fees, and all other amounts 24 payable under this Agreement, provided, however, that notwithstanding any termination of this 25 Agreement, the provisions of Sections 8 O1, 8 04 and 8 13 ,shall survive payment of the Bank Note 26 and shall remain m full force and effect. 27 28 Section 8.16. ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE 29 ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE 3o TRANSACTIONS CONTEMPLATED HEREBY AND SUPERSEDES AND IS IN FULL 31 SUBSTITUTION FOR ANY AND ALL PRIOR AGREEMENTS AND UNDERSTANDINGS 32 BETWEEN SAID PARTIES RELA7CING TO SUCH TRANSACTIONS. 33 ` 34 THIS AGREEMENT AND THE RELATED DOCUMENTS REPRESENT THE 35 FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED 36 BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL 37 AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS 38 BETWEEN THE PARTIES. 39 -35- H:\Ff W ORTH\TAXCP~Ccagt.5 May 20, 1998 IN WITNES S WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. ATTEST City Secretary CITY OF FORT WORTH, TEXAS By. APPROVED AS TO FORM. City Attorney Address City of Fort Worth 1000 Throckmorton Fort Worth, Texas 76102 Attention. Director of Fiscal Services Telephone (817) 871-8185 Telecopy~ (817) 871-8966 City Manager H:\FT W O RT F{~TAXC P~Cragt. S May 20, 1998 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 Address/Lendmg Office 1211 Avenue of the Americas 23rd Floor New York, NY 10036 Attn. Loan Administration Telephone Z 12/852-6152 Teiefax. 212/3 OZ-7496 With a copy to Attn. Manager of Public Finance Telephone 212/852=6324 Telefax. 212/921-5947 H 1F'1lV O RTH~TAXC P1Cragt.5 May 20, 1998 WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By• By• Joseph R. Herrera Director David J Sellers Vice President 2 EXHIBIT A 4 Bank Note s Crty of Fort Worth, Texas Water and Sewer S, sy tem 6 Revolving Credit Agreement 7 Dated as of 8 $81,750,000.00 Fort Worth, Texas June 1, 1998 9 1o For value received, the CITY OF FORT WORTH, TEXAS (the "City"), ahome-rule city of 11 the State of Texas, organized and existing under and by virtue of the laws of the State of Texas, 12 promises to pay, solely from the funds hereafter referred to, to the order of WESTDEUTSCHE 13 LANDESBANK GIROZENTRALE, NEW YORK BRANCH (the "Bank"), at the address provided 14 in the Agreement (hereinafter defined), the aggregate unpaid principal amount of all Loans hereunder 15 and under the Agreement, not to exceed EIGHTY-ONE MII,LION SEVEN HUNDRED AND 16 FIFTY THOUSAND DOLLARS AND NO CENTS ($81,750,000 00) m principal amount at any one 17 time outstanding, made by the Bank to the City hereunder, m lawful money of the i.Tmted States of 18 America, in federal or other immediately available funds, and to pay interest at the rates set forth m 19 the Agreement on the actual unpaid principal amount hereof for each day outstanding from the date 20 hereof until this Bank Note is paid in full, in like money and funds at such office Interest shall be 21 payable on the dates set forth in the Agreement. Principal on this Bank Note shall be payable in 22 accordance with the Agreement. 23 24 This Bank Note is subject to prepayment, and amounts prepaid prior to the last day of the 25 Revolving Credit Penod may be reborrowed, all pursuant to the terms and under the conditions of 26 the Revolving Credit Agreement, dated as of June 1, 1998, between the Crty and the Bank (the 27 "Agreement", the terms of which are hereby incorporated by reference in tlvs Bank Note) All terms 28 used herein and not defined shall have the same meaning as in the Agreement. Reference is made to 2s the Agreement for provisions as to the prepayment hereof and for reborrowmg. Reference is also 3o made to the Agreement for provisions providing for additional interest and other amounts to be 31 payable under certain circumstances If the Holder enforces this Bank Note upon default, the City 32 shall reimburse the Holder for reasonable costs and expenses incurred by the Holder in collection, 33 mcludmg attorneys fees and expenses as set out m Section 8 04 of the Agreement. This Bank Note 34 shall be construed under and governed by laws of the State of Texas but Chapter 15, Texas, Credit 35 Code (Art. 5069-15 Ol, V.A.T C S , as amended} shall not apply 36 37 This Bank Note, mcludmg the interest hereon, 1s payable solely from and secured by a lien 38 upon the pledge of certain revenues and certain other available funds and money of the City, all as 39 set forth m Section 2 09 of the Agreement and Section 2 10 of the Ordinance (as defined m the 40 Agreement) This Bank Note does not constitute a general obligation or indebtedness of the City 41 within the meaning of any constitutional, charter, or statutory hrrutations or provisions (and the 42 Holder hereof shall never have the right to require or compel the levy of ad valorem taxes for the 43 payment of the principal of and interest on this Bank Note) Further reference is made to the 44 Agreement and the Ordinance for the provisions relating to the security of this Bank Note and the 45 duties and obligations of the Crty 46 A-1 1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 Made and executed at Fort Worth, Texas, as of the date and year first above wntten. sy~ (SEAL) ATTEST By' Crty Secretary APPROVED AS TO FORM. Crty Attorney CITY OF FORT WORTH, TEXAS Mayor A-2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1~ 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 SCHEDULE FOR BANK NOTE, DATED AS OF JUNE 1, 1998 OF THE CITY OF FORT WORTH, TEXAS PAYABLE TO WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH Date of Loan Type of Loan Amount of Loan Maturity of Loan Dates of Payment Amount of Payment Name and Signature of Bank Officer A-3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 EXHIBIT B NOTICE OF LOAN TO WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH, (the "Bank") under the Revolving Credit Agreement, dated as of June 1, 1998 between the Bank and the City of Fort Worth, Texas (the "City") (the "Agreement") The Crty, acting herein by the undersigned [Authorized Representative][Issuing and Paying Agent], pursuant to Section 2 02 and related provisions ofthe Agreement, issues this Notice ofLoan to be made under the Agreement as follows 1 Business Day on which Loan is to be made ("Loan Date") 2 Aggregate Principal Amount of Loan. 3 Maturity Date [30 days from Loan Date or Final Date if sooner] The Loans shall be available for the account of Holders of the Commercial Paper Notes at (the "Issuing and Pa}nng Agent") In connection with this Notice of Loan the City certifies to the Bank that at the issuance of this Notice of Loan no Special Event of Default has occurred and is continuing. Caprtahzed terms herein are used with the meaning given m the Agreement. Date of this Notice of Loan. CITY OF FORT WORTH, TEXAS By~ [Authorized Representative] [Issuing and Paying Agent] B-1 1 EXHIBIT B-1 2 3 REQUEST FOR TERM LOAN 4 5 TO WESTDEUTSCHE LANDESBANK GIROZENTRALE, New York Branch, (the "Bank") 6 under the Revolving Credit Agreement (the "Agreement"}, dated as of June 1, 1998 between 7 the Bank and the City of Fort Worth, Texas (the "Crty"} 8 9 The Crty, acting herein by the undersigned Authorized Representative, pursuant to Section l0 2 02 and related provisions of the Agreement, issues this Request for Term Loan to be made under 11 the Agreement as follows 12 13 1 Loan Date 14 15 16 17 2 Aggregate Pnncipal Amount of Loan. 18 19 20 21 3 Term Loan Maturity Date [ Anniversary of Loan [or Final Date if sooner]] 22 23 24 2s The City acknowledges that the Bank's obligations to make Term Loans to the City are 26 subject to the satisfaction of the conditions set forth m Section 3 03 of the Agreement on the date a 27 Loan is converted to a Term Loan. 28 29 Cap2talized terms herein are used with the meaning given in the Agreement. 30 31 Date of this Request for Term Loan. 32 33 CITY OF FORT WORTH, TEXAS 34 35 36 By• 37 Authorized Representative 38 39 40 $-I -1 1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 EXHIBIT C NO-ISSUANCE NOTICE New York, NY Ladies and Gentlemen. Westdeutsche Landesbank Girozentrale, New York Branch (the "Bank"),and the City ofFort Worth, Texas (the "Crty"), have entered into to that certain Revolving Credit Agreement dated as of June 1, 1998 (the "Agreement") Any term defined m the Agreement and used m this letter shall have the meanings ascribed to rt in the Agreement. [There exists a Default] [The representations and warranties of the Crty set forth in Artzcle IV of the Agreement are not true and correct m all material respects on and as ofthe date oftlus No- Issuance Notice] and this letter constitutes your notice thereof pursuant to Section 2.14 of the Agreement. [Describe Default or untrue representation.] Effective as of the earlier of your receipt of this notice or your receipt of oral advice of the contents hereof, and until you receive wntten notice from the Bank that this notice has been rescinded, you are instructed not to authenticate or deliver any Commercial Paper Notes. Very truly yours, WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By• Name Title C-1 ~ cc City of Fort Worth 2 1000 Throckmorton 3 Fort Worth, Texas 76102 4 Attention. Director of Fiscal Services 5 Telephone (817) 871-8185 6 Telecopy~ (817) 871-8966 7 10 11 12 C-2 1 EXHIBIT D 2 3 CLOSING CERTIFICATE AS REQUIRED BY 4 SECTION 3 O 1(a)(iv) s OF THE CREDIT AGREEMENT 6 7 I, the undersigned Crty Manager of the Crty of Fort Worth, Texas (the "Crty"), pursuant to 8 the Revolving Credit Agreement, dated as of June 1, 1998, between the City and Westdeutsche 9 Landesbank Girozentrale, New York Branch (the "Credit Agreement"), defined terms of which are l0 herein incorporated by reference, does hereby certify as follows 11 12 1 (a) Each of the representations and warranties of the City contained m the Credit 13 Agreement is true and correct m all material respects on and as of the date hereof as though made on 14 and as of this date, and (b) as of the date hereof no Default has occurred or is continuing; 15 16 2 Except as heretofore disclosed by the Crty, no litigation is pending in any court in 17 Tarrant County, Texas, or, to my knowledge, pending or threatened m any court to restrain or en~om 18 the issuance or delivery of the Crty of Fort Worth, Texas Water and Sewer System Commercial Paper 19 Notes, Series A and the Bank Note issued in connection therewith (collectively, the "Notes") or the 20 collection of the revenues and assets of the City pledged or to be pledged to pay the principal of and 21 interest on the Notes or the pledge thereof, or in any way contesting or affecting the validity of the 22 Notes, the Ordinance authorizing the Notes (the "Ordinance"), or the Credit Agreement, or 23 contesting the powers of the Crty or contesting the authorization of the Notes or the Ordinance or 24 contesting in any way the accuracy, completeness, or fairness of the Offering Memorandum prepared 25 in connection with the issuance of the Notes (the "Memorandum"), 26 27 3 To the best ofmy knowledge, the statements and representations mthe Memorandum 28 are true and accurate, and insofar as the City and its affairs, including its financial affairs, are 29 concerned, the Memorandum does not contain an untrue statement of a matenal fact or orrut to state 3o a matenal fact required to be stated therein or necessary to make the statements therein, in the light 31 of the circumstances under which they were made, not rrusleading; 32 33 4 There has not been any matenal and adverse change in the affairs or financial condition 34 of the City, including particularly the System, including the Pledged Revenues derived therefrom, 35 from that described in the Memorandum, 36 37 5 None of the Pledged Revenues are pledged or encumbered to the payment of any debt 38 or obligation of the Crty or the System, except (i) in connection with the outstanding Prior Lien 39 Obligations, (ii) in connection with the Notes, with such pledge securing the Bank Note being 4o subordinate only to the lien on and pledge of Pledged Revenues securing the payment of the Prior 41 Lien Obligations, and (iii) in connection v~nth the Subordinate Lten Obligations and the Inferior Lien 42 Obligations, and D-1 All conditions to the Closing Date m the Credit Agreement have been met. D-2 WITNESS MY HAND THIS DAY OF JUNE 1998 4 ~ CITY OF FORT WORTH, TEXAS 6 8 City Manager 9 10 11 D-3 1 EXI-IIBIT E 2 3 FORM OF OP1I~iION OF CITY ATTORNEY 4 5 [Closing Date] 6 7 Westdeutsche Landesbank Girozentrale, 8 New York Branch 9 1211 Avenue of the Americas, 23rd Floor to New York, New York 10036 11 12 City of Fort Worth, Texas Water and Sewer System Commercial Paper Notes, Serves A (the "Notes") 13 14 Ladies and Gentlemen. 15 16 I am the duly appointed Crty Attorney of the Crty of Fort Worth, Texas (the "City"), and this 17 opimon is rendered on behalf of the Crty pursuant to and in connection with the authorization of the 18 Notes as defined in Ordinance No adopted by the Crty Council of the City (the 19 "Council") on , 1998 (the "Ordinance") authorizing, among other things, the execution 20 and delivery of the Revolving Ciedit Agreement, dated as of June 1, 1998 (the "Credit Agreement") 21 between the City and Westdeutsche Landesbank Girozentrale, New York Branch (the "Bank") 22 Capitalized terms used herein and not otherwise defined herein shall have the meamngs ascribed to 23 them in the Credit Agreement. 24 25 I or my designated attorneys have examined oragmals or copies, certified or otherwise 26 identified to our satisfaction, of such documents, corporate records, certificates of public officials, 27 and other instruments, and we have conducted such other investigation of fact and law as I have 28 found necessary or advisable for the purpose of this opinion. 29 3o Under the Ordinance and the Credit Agreement, the proceeds of the loans made under the 31 Credit Agreement are to be applied to the payment of the principal of the Notes 32 33 I have also made such further investigation of law and facts as I have deemed necessary or 34 advisable for purposes of the opinions herein expressed. 35 36 Based upon the foregoing, I am of the opinion that 37 38 1 The Cnty (a) is an incorporated city operating under ahome-rule charter adopted 39 pursuant to Article XI, Section 5, of the Constitution of Texas, (b) has full power and authority to 4o execute, deliver, and perform the Credit Agreement, the Bank Note, the Ordinance, the Master 41 Ordinance and the Notes and to borrow under the Notes, the Bank Note and the Credit Agreement, 42 (c) has all requisite power and authority to own and operate the System, and (d) has all requisite E-1 1 power and authority to pledge and grant a lien on the Pledged Revenues to the Bank to secure 2 payment of the Loans and has lawfully exercised such power 3 4 2 The System is a "public utility" as defined in article 717q, V T C S (the "Act"), the 5 Notes have been or shall be issued, sold, and delivered to finance the costs and expenses incurred m 6 relation to the acquisition and construction ofimprovements, additions, and extensions for an "eligible 7 protect (as defined in the Act) and for the payment of previously issued obligations, the Notes are 8 or will be when issued "obligations" (as defined in the Act) and were duly authorized to be issued by 9 the Council, which is authorized by law to issue bonds for or on behalf of the Crty and is the l0 "governing body" (as defined in the Act) of the Crty; and the Council has authorized and approved l 1 the Credit Agreement and the Bank Note as "credit agreements" (as such term is defined m the Act) 12 m connection with the issuance, security, and payment of the Notes. 13 14 3 The execution, delivery, and performance of the Credit Agreement, the Bank Note, 15 the Notes, and the borrowing under the Credit Agreement, the Bank Note and the Notes by the Crty 16 have been duly authorized by all necessary action of the City and the Council 17 18 4 All authorizations, consents, approvals, licenses, perrnissions, and registrations, ifany, 19 of or with any person, including any governmental authority and the citizens of the Crty, required m 20 connection with (a) the execution, delivery, and performance ofthe Credit Agreement, the Bank Note 21 and the Notes and (b) the passage of the Ordinance by the Council authorizing the execution, 22 delivery, and performance of the Credit Agreement, the Bank Note and the Notes have, in each case, 23 been obtained. 24 25 5 The Credit Agreement (a) is a valid and binding obligation of the Crty enforceable in 26 accordance with its terms except as hrruted by bankruptcy, insolvency, moratorium, and similar laws 27 affecting creditors' rights generally and except to the extent enforceability thereof may be limited 28 under Texas law with respect to the indemnification provisions, (b) will not result in a default under 29 or a breach of any ordinance of the Crty or, to the. best of my knowledge, any other agreement or 30 instrument bmdmg upon the Crty or the System, and (c) will not conflict with or result m any violation 31 of any legal requirement. 32 33 6 The defense of sovereign immunity is not available to the City m any proceeding by 34 the Bank to enforce the obligations of the Crty under the Credit Agreement, and the City's consent 35 to the initiation of any such proceedings m any court of competent Jurisdiction and its waiver of and 36 agreement not to assert the defense of sovereign immunity m any such proceeding are valid and 37 bmdmg upon the City and enforceable 38 39 7 The Master Ordinance and the Ordinance are in full force and effect and to the best 40 of my knowledge there exists no breach, default, or event of default thereunder or any event which 41 with the lapse of time or action by a third party could result in a breach, default, or event of default 42 thereunder E-2 1 8 To the best of my knowledge and except as set forth in the Offering Memorandum 2 delivered in connection wrth the issuance of the Notes, there is no litigation or legal or administrative 3 proceeding pending, or threatened against, or any outstanding judgment, order, writ, m~unction, 4 decree, or award affecting the City before any court, governmental authority, or arbitral body (a) 5 which prohibits or affects, or if adversely determined could reasonably be expected to prohibit or 6 affect, the ability or authority of the Crty to execute, deliver, or perform any part of the Credit 7 Agreement or (b) which in the aggregate have, or if adversely determined would have, any material s adverse effect on the System. To the best of my knowledge, the Crty is not in default wrth respect 9 to any order, writ, m~unction, or decree of any court or other governmental authority which would to adversely affect the City's ability to execute, deliver, or perform any part of the Credit Agreement, 11 the Bank Note, the Notes, the Master Ordinance, or the Ordinance 12 13 9 The liens on and pledges of the Pledged Revenues of the System created pursuant to 14 the Ordinance and the Credit Agreement are legal, valid and binding liens on and pledges of such 15 Pledged Revenues 16 17 The opinions expressed above are qualified to the extent that the enforceability of the rights 18 and remedies set forth m the Credit Agreement and the Related Documents may be limited by 19 bankruptcy, reorganization, or other similar laws of general application relating to or affecting the 20 enforcement of creditors' rights. I express no opinion as to the extent to which any indemnification 21 provision contained m the Credit Agreement or any other document used m connection wrth the 22 issuance of the Notes is enforceable under Texas law or as to the specific remedy that any court, 23 governmental authority, or board of arbitration may grant, impose, or render in connection with the 24 above-described instruments 25 26 The opinions herein expressed and the statements herein made are limited in all respects to 27 the laws of the State of Texas and applicable federal law This opinion is solely for the benefit of and 2s may be relied upon by the addressees. This opinion may not be relied upon by any other person, 29 without my written consent. 30 31 Very truly yours, 32 33 34 Crty Attorney E-3 EXHIBIT F F-1 CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM COMMERCIAL PAPER NOTES, SERIES A AS BOND COUNSEL for the Cnty of Fort Worth, Texas (the "Crty"), we have reviewed a record of proceedings relating to the issuance from time to time of up to an aggregate principal amount of Seventy Five Thousand Million Dollars ($75,000,000) of rats Water and Sewer System Commercial Paper Notes, Serves A (the "Commercial Paper Notes"), all nn accordance wrath the ordinance of the Crty authornznng the issuance of such Commercnal Paper Notes (the "Ordinance") Terms used herein and not otherwise defined shall have the meaning given in the Ordinance WE HAVE EXAMINED the applicable and pertinent provnsvons of the Constitution and laws of the State of Texas, a transcript of certnfied proceedings of the Cnty relatnng to the authornzatnon, issuance, sale, and delivery of the Commercial Paper Notes, including the Ordvriance, certnficates and opnnions of officials of the Cnty, and other pertinent nnstruments relatnng to the nssuance of the Commercial Paper Notes WE ARE FURTHER OF THE OPINION THAT, under exnstnng laws, upon due executnon, authentncatnon and payment and upon complvance by the Cvty wrath condntnons and covenants ofthe Ordinance, the Commercnal Paper Notes will be legal, valid and binding specnal obhgatnons of the City whnch, together wrath the Bank Note authorized by the Ordinance to evndence advances under a Revolvnng Credit Agreement between the Cnty and the Bank named therenn (the "Crednt Agreement"), are payable from and secured by (i) the proceeds from (a) the sale of Bonds nssued for such purpose and (b) the sale of other Commercnal Paper Notes nssued pursuant to the Ordinance for such purpose, (ii) advances under the Crednt Agreement, (ini) the amounts held nn the "Serves A Note Payment Fund" estabinshed by the Ordinance until the amounts deposnted therenn are used for authonzed purposes, provnded, however, amounts vn the Serves A Note Payment Fund attributable to and derived from advances under the Crednt Agreement shall be used only to pay, prior to any applncatnon to the payment of the Bank Note, the principal of and nnterest on the Commercnal Paper Notes vn full, and (iv) the amounts remamm~g on deposnt in the "Serves A Note Construction Account" estabinshed by the Ordinance after the payment of all Project Costs (as defined in the Ordinance) The Commercnal Paper Notes do not constitute a legal or equvtable pledge, charge, lnen, or encumbrance upon any property of the City, includvng the Pledged Revenues as described nn the Ordinance, and the holders thereof shall never have the right to demand payment of the Commercnal Paper Notes from any sources or propertnes of the City except as vdentified above THE AGREEMENTS, COVENANTS AND OBLIGATIONS described in the foregoing paragraph, however, may be lmm~ted by bankruptcy, insolvency, moratorium, reorganizatvon or other laws affectvng creditors' rights generally IN OUR OPINION, except as discussed below, the interest on the Commercial Paper Notes is excludable from the gross income of the owners for federal income tax purposes under the statutes, regulations, published rulings, and court decisions existing on the date of this opinion. We are further of the opinion that the Commercial Paper Notes are not "pnvate activity bonds" and that accordingly, interest on the Commercial Paper Notes will not be included as an individual or corporate alternative minimum tax preference item under section 57 (a) (5) of the Internal Revenue Codes of 1986 (the "Code") In expressing the aforementioned opinions, we have relred on, and assume compliance by the Crty with certain representations and covenants regarding the use and investment of the proceeds of the Commercial Paper Notes We call your attention to the fact that failure by the City to comply with such representations and covenants may cause the interest on the Commercial Paper Notes to become includable m gross income retroactively to the date of issuance of the Commercial Paper Notes. WE CALL YOUR ATTENTION TO THE FACT that the interest on tax-exempt obligations, such as the Commercial Paper Notes, is (a) included in a corporation's alternative tnimmum taxable income for purposes of determining the alternative rrummum tax and environmental tax imposed on corporations by sections 55 and 59A of the Code, (b) subject to the branch profits tax imposed on foreign corporations by section 884 of the Code and (c) included m the passive investment income of an S corporation and subject to the tax imposed by section 1375 of the Code EXCEPT AS STATED ABOVE, we express no opinion as to any other federal, state or local tax consequences of acquiring, carrying, owning or disposing of the Commercial Paper Notes YOU MAY CONTINUE to rely on this opinion to the extent (i) there is no change m existing law subsequent to the date oftlus opinion and (ii) the representatives, warranties and covenants contained m the Ordinance, and certificates dated the date of this opinion and executed and delivered by authorized officials of the Crty remain true and accurate WE HAVE ACTED AS BOND COUNSEL for the Crty for the sole purpose of rendering an opinion with respect to the legality and validity of the Commercial Paper Notes under the Constitution and laws of the State of Texas and with respect to the exclusion from gross income of the interest on the Commercial Paper Notes for federal income tax purposes, and for no other reason or purpose We have not been requested to investigate or verify, and have not investigated or verified, any records, data, or other material relating to the financial condition or capabilities of the Crty and have not assumed any responsibility with respect thereto Respectfully, 1 EXHIBIT G 2 3 [VINSON & ELKINS L.L.P LETTERHEAD] 4 5 June _, 1998 6 7 Westdeutsche Landesbank Gnrozentrale, 8 New York Branch 9 1211 Avenue of the Americas, 23rd Floor l0 New York, New York 10036 11 12 Crty of Fort Worth 13 1000 Throckmorton 14 Fort Worth, Texas 76102 15 16 Re $75,000,000 City of Fort Worth, Texas Water and Sewer System Commercial Paper 17 Notes, Series A 18 19 Ladies and Gentlemen. 20 21 This opinion ns being furnished to you nn connection wnth the transactions contemplated under 22 that certann Revolvnng Credit Agreement (the "Crednt Agreement") dated as ofJune 1, 1998; between 23 Westdeutsche Landesbank Gnrozentrale, New York Branch, (the "Bank") actnng through nts New 24 York Branch, and relatnng to the Commercial Paper Note Program described above Defined terms 25 used herein have the same meannng as set forth nn the Credit Agreement except as such terms are 26 otherwnse defined herein or as the context otherwise requnres. 27 28 We have acted as specnal counsel for the Bank nn connection wnth the Crednt Agreement. In 29 such capacity, we have examined executed copies of the Ordinance, the Crednt Agreement and such 30 other documents and have received such information from officers and representatnves of the Bank 31 and government officnals as we have deemed necessary or approprnate nn rendernng the opnmons 32 expressed below Insofar as the opnnnon relates to matters of German law, we have assumed the 33 correctness of the opnmons to you dated the date hereof of Ulrnke Dnetrnchs, counsel for the Bank, 34 and our opnmon nnsofar as nt covers matters of German law ns subject to the lmm~tatnons set forth 35 therenn. We have, wnth your permnssnon, relned on such opnmons wnth respect to the matters set forth 36 therenn, nncluclnng, wnthout lmm~tatnon, that the Crednt Agreement has been duly authornzed by the Bank 37 and aonstntutes a valnd and bnndnng obingatnon of the Bank enforceable nn accordance wnth nts terms 38 under the laws of Germany 39 40 For purposes of thns opnnnon, we have assumed (except nn the case of the Bank and nts 41 officers) the authentncity of all original documents and the conformity to originals of all documents 42 submitted to us as conformed copnes or photocopnes of orngnnal documents, the genunneness of all 43 sngnatures, the due authorizatnon, executnon and delnvery of such documents and the due authority 44 of all persons executnng such documents G-1 199_ Page 2 1 Based upon the foregoing and subJect to the qualifications and limitations set forth below, we 2 are of the opinion that 3 4 1 The Bank is duly is authorized to operate as a branch of a foreign banking corporation 5 m the State of New York, and the Bank, acting through its New York Branch, has the corporate 6 power and authority to execute, deliver and perform its obligations under the Credit Agreement. 7 8 2 The execution, delivery and performance by the Bank of the Credit Agreement have 9 been duly authorized by all necessary corporate action on their part, and authorized officers of the to Bank have duly executed and delivered the Credit Agreement. ,11 12 3 The execution, delivery and performance by the Bank of the Credit Agreement do not 13 require the consent or approval of, the giving of notice to, the registration with, or the taking of any 14 other action in respect of, any governmental agency, comrnission, department or authority of any 15 Jurisdiction of'the United States of America which has not previously been effected. 16 17 4 The Credit Agreement constitutes a legal, valid and binding obligation of the Bank, 18 enforceable against the Bank m accordance with its terms, except as such enforceability may be 19 limited by (a) bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws 20 of general application affecting the enforcement of creditors' rights as such laws would apply m the 21 event of the insolvency, reorganization or liquidation of, or other similar occurrence with respect to, 22 the Bank or m the event of any moratorium or similar occurrence affecting the Bank, and (b) general 23 principles of equity 24 25 The foregoing opinon is lnrrited exclusively to the presently effective laws of the State of 26 Texas and the State of New York and the federal laws of the United States of America m effect on 27 the date hereof, and no opinion ns expressed herein as to any matter governed by the laws of any other 28 Jurisdictnon. Except for the opnnions set forth above, we express no opinon herein with respect to 29 the Commercial Paper Notes, the Ordinance or any of the transactions contemplated by the sale of 3o the Commercial Paper Notes or any other agreement or instrument, and no opinion is implied or may 31 be inferred beyond the matters expressly stated. 32 33 This opinion is furnished to you solely m connection wrath the transactions being consummated 34 on the date hereof as contemplated in the Credit Agreement, and may not be relied upon or described 35 or quoted from by any other person, firm or entity without, in each instance, our prior written 36 consent. We understand that a copy of this opinion may be delivered to and relied upon by Standard G-2 199_ Page 3 1 & Poor's Ratings Group, Moody's Investors Service, Inc and Fitch IBCA, Inc m connection with 2 the rating of the Bonds and we hereby consent to such delivery and reliance. We understand that this 3 opinion may also be delivered to and relied upon by German counsel of the Bank, and we hereby 4 consent to such delivery and reliance 5 6 Very truly yours, 10 11 Vinson & Elkins L.L.P 12 13 14 15 G-3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 EXHIBIT H FORM OF F1NAL DATE EXTENSION REQUEST [Dated Date] Westdeutsche Landesbank Girozentrale 1211 Avenue of the Americas 23rd Floor New York, New York 10036 Re Crty of Fort Worth, Texas Water and Sewer System Commercial Paper Notes, Serves A Final Date Extension Request Ladies and Gentlemen. Pursuant to Section 2 10 of that certain Revolving Credit Agreement, dated as of June 1, 1998, between the City of Fort Worth, Texas (the "Crty") and you ,the Crty requests that the Final Date (as defined m the Revolving Credit Agreement) be extended to [If applicable, add the following.] [Such request is being made to accommodate the City's opportunity to market Notes (as defined in the Agreement) with maturities beyond the current Final Date.] Very truly yours, CITY OF FORT WORTH, TEXAS By' Mayor H-1 1 2 3 4 5 6 7 8 9 to 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 EXHIBIT I CERTIFICATE OF INCUMBENCY I, the City Secretary of the Crty of Fort Worth, Texas, hereby certify as follows 1 This Certificate is given in connection with the definition of the term "Authorized Representative" as set forth m Section 1 O 1 of the Revolving Credit Agreement, dated as of June 1, 1998 between the City ofFort Worth, Texas (the "Crty")and Westdeutsche Landesbank Girozentrale, New York Branch (the "Revolving Credit Agreement") relating to the City's Water and Sewer System Commercial Paper Notes, Serves A (the "Notes") 2 Each of the persons named below has been duly authorized by the City or by the Ordinance adopted by the Crty which authonzed the issuance of the Notes (the "Ordinance") to serve as an "Authorized Representative" (as such term is defined and utilized m the Ordinance and the Revolving Credit Agreement) and such persons are on the date hereof the duly elected and qualified incumbents of the offices of the City set opposite their respective names, and the signatures hereinbelow are the genuine signatures of said officials Name Specimen Signatures EXECUTED this day of , 1998 Crty Secretary I-1 THE STATE OF TEXAS COUNTIES OF TARRANT AND DENTON CITY OF FORT WORTH I, Alice Church, Crty Secretary of the City of Fort Worth, in the State of Texas, do hereby certify that I have compared the attached and foregoing excerpt from the minutes of the regular, open, public meeting ofthe Crty Council ofthe Crty ofFort Worth, Texas held on May 26, 1998, and of Ordinance No which was duly passed at said meeting, and that said copy rs a true and correct copy of said excerpt and the whole of said ordinance Said meeting was held rn accordance wrth the provisions of Chapter 551, Texas Government Code In testimony whereof, I have set my hand and have hereunto affixed the seal of Bard Crty of Fort Worth, this 26th day of May, 1998 Crty Secretary of the Crty of Fort Worth, Texas (SEAL) City of .Fort Worth, Texas ~1-~Ayar And C~sunc~l ~ammun;cAt~an DATE 5/26/98 REFERENCE NUMBER G-12221 LOG NAME 13PAPER PAGE 1 of 1 SUBJECT AN AMENDED AND RESTATED ORDINANCE APPROVING AND AUTHORIZING THE ISSUANCE OF COMMERC:lAL PAPER NOTES IN AN AGGREGATE PRINCIPAL AMOUNT AT ANY ONE TIME OUTSTANDING NOT TO EXCEED $75,000,000 TO PROVIDE INTERIM FINANCING TO PAY PROJECT COSTS FOR ELIGIBLE PROJECTS FOR THE CITY'S WATEI~WORKS AND SEWER SYSTEM AND TO REFUND OBLIGATIONS ISSUED IN CONNECTION WITH AN ELIGIBLE PROJECT; APPROVING AND AUTHORIZING CERTAIN AUTHORIZED OFFICERS AND EMPLOYEES TO ACT ON BEHALF OF THE CITY IN THE SELLING AND DELIVERY OF SUCH SHORT TERM OBLIGATIONS, AND RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE ISSUANCE, SALE, SECURITY AND DELIVERY OF COMMERCIAL PAPER NOTES RECOMMENDATION It is recommended that the City Council adopt the attached amended and restated ordinance approving and authorizing the issuance of commercial paper notes in an amount not to exceed $75,000,000 to provide .interim financing for the construction of eligible projects for the City's waterworks and sewer system DISCUSSION Approval of this M&C will restructure the existing Water and Sewer Commercial Paper Program by re- extending the facility to 20 years, taking advantage of efficiencies of scale and incorporating favorable changes in the short-term debt market. After reviewing proposals from several commercial paper dealers and liquidity banks, the City's financial advisors and the City staff have recommended that the firms Lehman Brothers and M R. Beal be retained to market the notes. M R. Beal, an M/VVBE firm, will have a 20% participation in the program West LB, a German "Aa1/AA+" bank, has been selected to provide the liquidity facility and U S Bank Trust will be incorporated as the: Issuing/Paying Agent. FISCAL INFORMATION/CERTIFICATION The Director of the Department of Finance certifies that upon adoption of the attached ordinance, funds will be available in the current capital budgets, as appropriated, of the Water and Sewer Funds. CB m Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (to) ~~ Charles Boswell 8511 Ori inati g ng Department Head: Jim Keyes 8517 (from) ~'i~~ ~~ /~ ~ Additional Information Contact: If'E~~ «~ 6~fSy ®A Fort orl~ Jim Keyes 8517 I~dQ~~~i1$~i~1~itf~ ~~a l3 ~'~~1