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Home My WebLink AboutOrdinance 12351.~ 1 ORDINANCE NO / ~3 Jt' THIRD SUPPLEMENTAL ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 1996 THE STATE OF TEXAS COUNTIES OF TA~~RANT AND DENTON CITY OF FORT WORTH WHEREAS, the City of Fort Worth, Texas (the "City" or the "Issuer"), a "home-rule" city operating under ahome-rule charter adopted pursuant to Section 5 of Article XI of the Texas Constitution, with a population according to the latest federal decennial census of in excess of 90,000, has established and currently owns and operates a combined waterworks and sanitary sewer system (the "System"), and WHEREAS, the City heretofore has established the City of Fort Worth, Texas Water and Sewer System Revenue Finance Program for the purpose of providing a financing structure for revenue supported indebtedness of the System, and WHEREAS, said Program was established pursuant to the terms of a "Master Ordinance Establishing the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program" (the "Master Ordinance"), and WHEREAS, unless otherwise defined herein, terms used herein shall have the meaning given in the Master Ordinance; and WHEREAS, the Master Ordinance authorizes revenue supported indebtedness to be issued, incurred or assumed pursuant to the terms of supplemental ordinances (any such ordinance being a "Supplement"), and WHEREAS, pursuant to the terms of the Master Ordinance, the City has adopted two Supplements (designated as the "First Supplement" and "Second Supplement", respectively, and the "Pnor Supplements", collectively) pursuant to which the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Serves 1991A and Serves 1991B and the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Senes 1993 (the "Previously Issued Panty Obligations") were issued, and which were secured by the pledge of a first lien on and pledge of the Pledged Revenues of the System, and WHEREAS, in addition to the Previously Issued Panty Bonds, the City has authonzed the issuance of up to $50,000,000 of its Water and Sewer System Commercial Paper Notes, Senes A (the "Commercial Paper Notes"), for the purpose of unproving and extending the City's Water and Sewer System (the "System"), and ,~, WHEREAS, the City currently has outstanding $39,730,000 in pnncipal amount of Commercial Paper Notes, and WHEREAS, the City deems it appropriate to issue the hereinafter authonzed bands (i) in the amount of $25,935,000 for the purpose of extending and unprovuig the System and (ii) in the amount of $39,730;000 for the purpose of retiniig a portion of the outstanding Commercial Paper Notes, and WHEREAS, notice of intention to sell the bonds hereinafter authonzed was published in The Fort Worth Star-Telegram, a newspaper of general circulation published in the City, in the manner provided by applicable law, on December 20, 1995 and December 27, 1995, and WHEREAS, at the City Council meeting held January 9, 1996, the City Council approved a motion to delay the sale of the hereinafter authorized bonds for one week, with such sale to occur at the regular meeting of the City Council of January 1 b, 1996, because economic conditions in the market warranted such ~ delay; and WHEREAS, no petition has been filed by the time fixed for the adoption of this Ordinance meeting the requirements of Article 2368a, V.A.T C S , as amended, and Chapter 252, Texas Local Government Code, as amended, requesting that an election be held on the question of issuing the bonds hereinafter authonzed, thereby rendering such an election unnecessary; and WHEREAS, the City Council has adopted this Third Supplement to the Master Ordinance in accordance with the provisions of the Master Ordinance and the bonds hereinafter authonzed shall hereafter constitute Panty Obligations under the Master Ordinance; and WHEREAS, the bonds hereinafter authonzed are to be issued and delivered pursuant to Article 717k and Articles 1111 through 1118, inclusive, V.A.T C S , as amended, for the purposes set forth above. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS SECTION 1 DEFINITIONS In addition to the definitions set forth in the preamble of this Third Supplement, the terms used in this Third Supplement (except in the FORM OF BOND set forth in Exhibit B to this Third Supplement) and not otherwise defined shall have the meanings given in the Master Ordinance, the Pnor Supplements or in Exhibit A to this Third Supplement. Section 2. BONDS AUTHORIZED That the "City of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1996" are hereby authonzed to be issued in the aggregate pnncipal amount of $65,665,000, for the following purposes, to-wit. (i) in the amount of $25,935,000 for the purpose of extending and unprovuig the System and (ii) in the amount of $39,730,000 for the purpose of retinng the currently outstanding Commercial Paper Notes. The Bonds shall be issued, shall be payable, are subject to redemption pnor to their scheduled maturities, shall have the charactenstics, and shall be signed and executed (and the Bonds shall be sealed), as provided, in the FORM OF BOND m Exhibit B to this Third Supplement. -2- c Section 3 DATE AND MATURITIES That the Bonds shall be dated January 1, 1996, shall be in the denorrunation of $5,000, or any integral multiple thereof, shall be numbered consecutively from one upward, and shall mature on February 15 in each of the years, and in the amounts, respec- tively, unless .redeemed as stated in the FORM OF BOND set forth m Exhibit B of this Third Supplement, as set forth in the following schedule YEARS AMOUNTS($1 YEARS AMOUNTS($1 1998 1,000,000 2007 3,695,000 1999 2,545,000 2008 3,895,000 2000 2,655,000 2009 4,105,000 2001 2,770,000 2010 4,330,000 2002 2,900,000 2011 4,580,000 2003 3,035,000 2012 4,840,000 2004 3,185,000 2013 5,-120,000 2005 3,340,000 2014 5,420,000 2006 3,510,000 2015 4,740,000 Section 4 RIGHT OF PRIOR REDEMPTION (a) That the Bonds are subject to optional redemption prior to their scheduled maturities in the manner provided in the FORM OF BOND set forth in Exhibit B to this Third Supplement. (b) Notice of any redemption of Bonds shall be given in the following manner, to-wit, (i) a written notice of such redemption shall be given to the owner of each Bond or a portion thereof being called for redemption not more than 60 days nor less than 30 days prior to the date fixed for such redemption by depositing such notice in the United States Mail, first-class postage prepaid, addressed to each such owner at the address thereof shown on the Registration Books of the Paying Agent/Registrar and (ii) a notice of such redemption shall be published one time, at least 30 days pnor to the date fixed for such redemption, m a~ournal or publication of general circulation m the United States of America which Carnes as a regular feature notices of redemption of municipal bonds, provided, however, that the failure to send, mail, or receive such notice described in clause (i) above, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond, as publication of notice as described m clause (ii) above shall be the only notice actually required in connection with or as a prerequisite to the redemption of any Bonds. By the date fixed for any such redemption due provision shall be made by the City with the Paying Agent/Registrar for the payment of the required redemption price for the Bonds or the portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Bonds, or the portions thereof which are to be so redeemed, thereby automatically shall be redeemed pnor to their scheduled maturities, and shall not bear interest after the date fixed for their redemption, and shall not be regarded as being Outstanding except for the right of the owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of the Bonds -3- 1n or any portion thereof. If a portion of any Bond shall he redeemed, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denorrunation or denorruna- tions many integral multiple of $5,000 at the written request of the owner, and in an aggregate prin- cipal amount equal to the unredeemed portion thereof, will be issued to the owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in this Third Supplement. The maturities of Bonds to be called for redemption shall be determined by the City The Bonds or portions to be redeemed within each such maturity shall be selected by lot or other customary random method selected by the Paying Agent/Registrar (provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000) The City shall give written notice to the Paying. AgentlRegistrar of any such redemption of Bonds at least 60 calendar days (or such shorter period as is acceptable to the Paying Agent~Registrar) prior to such redemption. (c) (i) In addition to the manner of providing notice of redemption of Bonds as set forth above, the Paying AgentiRegistrar shall give notice of redemption of Bonds by United States Mail, first-class postage prepaid, at least thirty (30) days prior to a redemption date to each registered securities depository and to any national information service that disseminates redemption notices. In addition, in the event of a redemption caused by an advance refunding of the Bonds, the Paying Agent/Registrar shall send a second notice of redemption to the persons specified in the immediately preceding sentence at least thirty (30) days but not more than mnety (90) days prior to the actual redemption date. Any notice sent to the registered securities depositories or such national information services shall be sent so that they are received at least two (2) days prior to the general mailing or publication date of such notice. The Paying Agent/Registrar shall also send a notice of prepayment or redemption to the owner of any Bond who has not sent the Bonds in for redemption sixty (60) days after the redemption date. (ii) Each redemption notice, whether required in the FORM OF BOND or otherwise by this Third Supplement, shall contain a description of the Bonds to be redeemed including the complete name of the Bonds, the series, the date of issue, the interest rate, the maturity date, the CUSIP number, if any, the certificate numbers, the amounts called of each certificate; the publication and mailing date for the notice, the date of redemption, the redemption pace, the name of the Paying Agent/Registrar and the address at which the Bond may be redeemed including a contact person and telephone number (iii) All redemption payments made by the Paying Agent/Registrar to the registered owners of the Bonds shall include a CUSIP number relating to each amount paid to such registered owner Section S INTEREST That the Bonds scheduled to mature during the years, respectively, set forth below shall bear interest at the following rates per annum. -4- ;, matunties 1998, 3 950% maturities 1999, 4 100% matunties 2000, 4.250% matunties 2001, 4 400% matunties 2002, 4 500% matunties 2003, S 000% matunties 2004, 5 000% matunties 2005, 5.250% matunties 2006, 5.250% matunties 2007, S 000% maturities 2008, 5 100% matunties 2009, 5.200% matunties 2010, 5.250% matunties 2011, 5 300% matunties 2012, 5 350% matunties 2013, 5 375% matunties 2014, 5 375% matunties 2015, S 125% Said interest shall be payable to the owner in the manner provided and on the dates stated in the FORM OF BOND set forth in Exhibit B to this Third Supplement. Section 6 CHARACTERISTICS OF THE BONDS (a) Registration, Transfer, Conversion and Exchange; Authentication. The City shall keep or cause to be kept at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office") of Texas Commerce Bank National Association (the "Paying Agent/Registrar"), books or records for the registration of the transfer, conversion and exchange of the Bonds (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers, conversions and exchanges under such reasonable regulations as the City and the Paying Agent/Registrar may prescribe; and the Pa}nng Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein provided. The City Manager or the designee thereof is hereby authorized to execute a "Paying Agent/Registrar Agreement" in such form as is approved by the City Attorney The Paying Agent/Registrar shall obtain and record in the Regis- trationBooks the address of the owner of each Bond to which payments with respect to the Bonds shall be mailed, as herein provided, but it shall be the duty of each owner to notify the Paying Agent/Registrar in wasting of the address to which payments shall be mailed, and such interest payments shall not be mailed unless such notice has been given. The City shall have the right to inspect at the Designated Trust Office the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity Except as otherwise provided in the FORM OF BOND set forth m Exhibit B to this Third Supplement, the owner of each Bond requesting a conversion, transfer, exchange and delivery of such Bond shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of a substitute Bond or Bonds Registration of assignments, transfers, conversions and exchanges of Bonds shall be made m the manner provided and with the effect stated in the in the FORM OF BOND set forth in Exhibit B to this Third Supplement. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign the "Paying AgentfRegistrar's Authentication Certificate" in the form set forth in the FORM OF BOND set forth in Exhibit B to this Third Supplement, and, except as provided below, no such Bond shall be deemed to be issued or Outstanding unless such Certificate is so executed, the foregoing notwithstanding, such Certificate need not be executed if any such Bond is accompanied by an executed "Comptroller's Registration Certificate" in the form set forth in the -5- ;, FORM OF BOND set forth in Exhibit 8 to this Third Supplement. The Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the City or any other body or person so as to accomplish the foregoing conversion and exchange of any Bond or portion thereof, and the Paying AgentlRegistrar shall provide for the punting, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be of type composition punted on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Article 717k-6, Texas Revised Civil Statutes, as amended, and particularly Section 6 thereof, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed upon. the Paying Agent/Registrar, and, upon the execution of said Certificate, the converted and exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds which uutially were issued and delivered pursuant to this Third Supplement, approved by the Attorney General, and registered by the Comptroller of Public Accounts (b) Payment of Bonds and Interest. The City hereby further appoints the Paying AgentlRegistrar to act as the paying agent for paying the principal of, premium, if any, and interest on the Bonds, all as provided in this Third Supplement. The Paying Agent/Registrar shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Bonds. (c) In General. The Bonds (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Bonds to be payable only to the registered owners thereof, {ii) may be redeemed pnor to their scheduled maturities, (iii) may be transferred and assigned, (iv) maybe converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall be payable, and (vui) shall be administered and the Paying Agent/Registrar and the City shall have certain duties and responsibilities with respect to the Bonds, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF BOND set forth in Exhibit B to this Third Supplement. The Bonds initially issued and delivered pursuant to this Third Supplement are not re- quired to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for any Bond or Bonds issued under this Third Supplement the Paying Agent/Registrar shall execute the "Paying Agent/Registrar's Authentication Certificate", in the form set forth in said FORM OF BOND (d) Substitute Pa n~ng A eg nt/Registrar The City covenants with the owners of the Bonds that at all times while the Bonds are Outstanding a competent and legally qualified entity shall act as and perform the sernces of Paying AgentlRegistrar for the Bonds under this Third Supplement, and that the Paying Agent/Registrar will be one entity Such entity may be the City, to the extent permitted by law, or a bank, trust company, financial institution, or other agency, as selected by the City The City reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days pnor to the next principal or interest payment date after such notice. In the event that the entity at any tune acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that promptly it will appoint a competent and legally qualified entity to act as Paying Agent/Registrar under this Third Supplement. -6- 'il Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by the City Upon any change in the Paying AgentlRegistrar, the City promptly will cause a written not- ice thereof to be sent by the new Paying Agent/Registrar to each owner of the Bonds, by United States Mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Third Supplement, and a certified copy of this Third Supplement shall be delivered to each Paying Agent/Registrar Section 7 FORM OF BONDS {a) That the form of all Bonds, including the form of the Paying AgentlRegistrar's Certificate, the form of Assignment, and the form of the Comptroller's Registration Certificate to be attached only to the Bonds uutially issued and delivered pursuant to this Third Supplement, shall be, respectively, substantially as set forth in Exhibit B, with such appropriate variations, orrussions, or insertions as are perrrutted or required by this Third Supplement and any Bond Purchase Agreement. (b) The punter of the Bonds is hereby authorized to punt on the Bonds the form of bond counsel's opuuon relating to the Bonds, and is hereby authorized to pant on the Bonds an appropnate statement of insurance fiinushed by a municipal bond insurance company providing municipal bond insurance, if any, covering all or any part of the Bonds. Section 8 ESTABLISHIVVIENT OF FINANCING PROGRAM AND ISSUANCE OF PARITY OBLIGATIONS That by adoption of the Master Ordinance the City has established the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program for the purpose of providing a financing structure for revenue supported indebtedness of the System. The Master Ordinance is intended to establish a master plan under which revenue supported debt of the System can be incurred. This Third Supplement provides for the authorization, issuance, sale, delivery, form, characteristics, provisions of payment and redemption, and security of the Bonds which are a series of Panty Obligations. The Master Ordinance is incorporated herein by reference and as such made a part hereof for all purposes, except to the extent modified and supplemented hereby, and the Bonds are hereby declared to be Panty Obligations under the Master Ordinance. The City hereby determines that it will have sufficient funds to meet the financial obligations of the System, including sufficient Pledged Revenues to satisfy the Annual Debt Sernce Requirements of the System and to meet all financial obligations of the City relating to the System. Section 9 PLEDGE That the Bonds are and shall be secured by and payable from a first lien on and pledge of the Pledged Revenues, and the Pledged Revenues are further pledged to the establishment and maintenance of the Debt Service Fund, and to the Reserve Fund to the extent hereinafter provided. The Bonds are and will be secured by and payable only from the Pledged Revenues, and are not secured by or payable from a mortgage or deed of trust on any properties, whether real, personal, or mixed, constituting the System. Section 10 DEBT SERVICE FUND ACCOUNTS That in connection with the Bonds, the City need not establish any special accounts within the Debt Service Fund. -7- Section 11 RESERVE FUND That deposits to the credit of the Reserve Fund shall be made m the manner described m Section 13(b) of this Third Supplement. Section 12 INVESTMENTS That money in the Reserve Fund created under this Third Supplement shall not be invested in secuntaes vvnth an average aggregate weighted matunty of greater than seven years. The value of the Reserve Fund, in addition to the annual deternunat~on described in the Master Ordinance, shall be established at the time or times withdrawals are made therefrom. Investments shall be sold promptly when necessary to prevent any default m connection with the. Bonds. Earnings derived from the investment of moneys on deposit m the vanous Funds and Accounts shall be credited to the Fund or Account from which moneys used to acquire such investment shall have come. Section 13 FLOW OF FUNDS. That all monies in the System Fund not required for paying Operating Expenses during each month shall be applied by the City, on or before the 10th day of the following month, commencing during the months and m the order of priority with respect to the Funds and Accounts that such applications are hereinafter set forth in this Section. (a) Debt Sernce Fund - To the credit of the Debt Sernce Fund, m~the following order of pnonty, to-vent. (1) such amounts, deposited in approximately equal monthly installments, commencing during the month in which the Bonds are delivered, or the month thereafter if delivery is made after the 10th day thereof; as will be sufficient, together with other amounts, ;f any, m the Debt Service Fund available for such purpose, to pay the interest scheduled to come due on the Bonds on the next succeeding interest payment date, and (2) such amounts, deposited in approximately equal monthly installments, commencing during the month which shall be the later to occur of, (i) the twelfth month before the first matunty date of the Bonds, or (ii) the month m which the Bonds are delivered, or the month thereafter if delivery is made after the 10th day thereof, as will be sufficient, together v~nth other amounts, if any, in the Debt 5ernce Fund available for such purpose, to pay the pnncipal scheduled to mature on the Bonds on the next succeeding principal payment date (b) Reserve Fund. To the credit of the Reserve Fund, such amounts, deposited m approximately equal monthly installments, commencing during the month m which the Bonds are delivered, or the month thereafter of delivery is made after the 10th day thereof, equal to not less than 1/24 of the Required Reserve Amount, until such tune as such amounts together vvrth other amounts, if any, in the Reserve Fund, equal the Required Reserve Amount. When and so long as the Reserve Fund Obligations in the Reserve Fund are not less than the Required Reserve Amount, no deposits need be made to the credit of the Reserve Fund. When and if the Reserve Fund at any time contains less than the Requued Reserve Amount due to any cause or condition then, subject and subordinate to making the required deposits to the credit of the Debt Service Fund, commencing with the month during which such deficiency occurs, such deficiency shall be made up from the next available Pledged -8- Revenues or from any other sources available for such purpose, nn monthly installments of not less than 1/12 of the Required Reserve Amount, nn the manner provided nn the Master Ordinance Reimbursements to the provider, if any, of a Credit Facility shall constitute the malcmg up of a deficiency to the extent that such reimbursements result nn the reinstatement, m whole or m part, as the case maybe, of the amount of the Credit Facility Section 14 PAYMENT OF BONDS That on or before the first scheduled interest payment date, and on or before each interest payment date and principal payment date thereafter while any of the Bonds aze Outstanding and unpaid, the City shall make available to the Paying Agent/Regnstraz,. out of the Debt Service Fund (and the Reserve Fund, of necessary) monies sufficient to pay such interest on and such principal amount of the Bonds, as shall become due on such dates, respectively, at maturity or by redemption pnor to maturity The Paying Agent/Registrar shall destroy all paid Bonds and fiznush the City with an appropriate certificate of cancellation or destruction. Section 15 COVENANTS REGARDING TAX-EXEMPTION That the Issuer covenants to refrain from any action which would adversely affect, or to take such action as to ensure, the treatment of the Bonds as obligations described m section 103 of the Code, the interest on which ns not includable nn the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows (a) to take any action to assure that no more than ten percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if any) aze used for any "private business use", as defined m section 141(b)(6) of the Code or, of more than ten percent of the proceeds aze so used, that amounts, whether or not received by the Issuer, vvnth respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than ten percent of the debt service on the Bonds, m contravention of section 141(b)(2) of the Code; (b) to take any action to assure that nn the event that the "private business use" described nn subsection (a) hereof exceeds five percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount nn excess of five percent ns used fora "private business use" which ns "related" and not "disproportionate", vvnthin the meaning of section 141(b)(3) of the Code, to the governmental use; (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited unto a reserve fund, >f any) is directly or ndirectly used to finance loans to persons, other than state or local governmental units, nn contravention of section 141(c) of the Code, (d) to refrain from taking any action which would othervvnse result nn the Bonds being treated as "private activity bonds" wrtlin the meaning of section 141(b) of the Code, -9- (e) to refrain from taking any action that would result in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code, (f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a matenally higher }Held over the teen of the Bonds, other than investment property acquired unth - (1) proceeds of the Bonds invested for a reasonable temporary penod of three years or less or, in the case of a refunding bond, for a penod of 30 days or less until such proceeds are needed for the purpose for which the Bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1 148-1(b) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed ten percent of the proceeds of the Bonds; (g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and (h) to pay to the United States of Amenca at least once during each five-year penod (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the United States of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code For purposes of the foregoing clauses (a) and (b) above, the Issuer understands that the term "proceeds" included "disposition proceeds" as defined in the Treasury Regulations and, in the case of a refunding bond, transferred proceeds (if any) and proceeds of the refunded bonds expended pnor to the date of the issuance of the Bonds. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U S Department of the Treasury pursuant thereto In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code In furtherance of the foregoing, the Mayor, the City Manager, any Assistant City -10- Manager, and the Director of Fiscal Sernces may execute any certificates or other 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 Bonds. In order to facilitate compliance with the above clause (h), a "Rebate Fund" is hereby established by the Crty for the sole benefit of the United States of Amenca, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the registered owners of the Bonds. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. Section 16 AMENDMENT OF THIRD SUPPLEMENT (a) That the owners of a majonty in Outstanding Principal Amount of the Bonds shall have the nght from time to time to approve any amendment to this Third Supplement which may be deemed necessary or desirable by the City, provided, however, that nothing herein contained shall permit or be construed to permit the amend- ment of the terms and conditions in this Third Supplement or in the Bonds so as to (1) Make any change m the maturity of any of the Outstanding Bonds; (2) Reduce the rate of interest borne by any of the Outstanding Bonds, (3) Reduce the amount of the principal payable on the Outstanding Bonds; (4) Modify the terms of payment of principal of, premium, if any, or interest on the Outstanding Bonds or impose any conditions with respect to such payment; (5) Affect the nghts of the owners of less than all of the Bonds then Outstanding; (6) Amend this clause (a) of this Section, or (7) Change the minunum percentage of the pnncipal amount of Bonds necessary for consent to any amendment; unless such amendment or amendments shall be approved by the owners of all of the Bonds then Outstanding. (b) That if at any tune the City shall desire to amend the Thud Supplement under this Section, the City shall cause notice of the proposed amendment to be published in a financial newspaper or journal published in The City of New York, New York, and a newspaper of general circulation in the City, once dunng each calendar week for at least two successive calendar weeks. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the principal office of the Paying AgentlRegistrar for inspection by all owners of the Bonds. Such publication is not required, however, if notice in wasting is given to each owner of the Bonds. (c) That whenever at any time not less than 30 days, and within one year, from the date of the first publication of said notice or other service of written notice the City shall receive an instrument or instruments executed by the owners of at least a ma~onty in Outstanding Principal Amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which. specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agent/Registrar, the govenung body of the City may pass such amendment in substantially the same form. (d) That upon the passage of any such amendment pursuant to the provisions of this Section, this Thud Supplement shall be deemed to be amended in accordance with such amendment, and the -11- respective rights, duties and obligations under this Third Supplement of the City and all the owners of then Outstanding Bonds shall thereafter be detemm~ed, exercised and enforced hereunder, subject in all respects to such amendment. (e) That any consent given by the owners of a Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the first publication of the notice provided for ui this Section, and shall be conclusive and binding upon all future owners of the same Bond during such period. Such consent may be revoked at any time after six months from the date of the first publication of such notice by the owner who gave such consent, or by a successor in title,. by filing written notice thereof with the Paying Agent/Registrar and the City, but such revocation shall not be effective if the owners of at least a ma~onty in Outstanding Principal Amount of the Bonds have, prior to the attempted revocation, consented to and approved the amendment. (f) The foregoing provisions of this Section notwithstanding, the City by action of the City Council may amend this Third Supplement without the consent of any owner of the Bonds or any other Panty Obligations, solely for any one or more of the following purposes (1) To add to the covenants and agreements of the City in this Third Supplement contained, other covenants and agreements thereafter to be observed, grant additional rights or remedies to the owners of the Bonds or to surrender, restrict or limit any right or power herein reserved to or conferred upon the City; (2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained in this Third Supplement, or in regard to clanfyuig matters or questions ansing under this Third Supplement, as are neces- sary or desirable and not contrary to or inconsistent with this Third Supplement and which shall not adversely affect the interests of the owners of the Bonds then Outstanding; (3) To modify any of the provisions of this Third Supplement m any other respect whatever, provided that such modification shall be, and be expressed to be, effective only after the Bonds Outstanding at the date of the adoption of such modification shall cease to be Outstanding; (4) To make such amendments to this Third Supplement as may be required, in the opinion of Bond Counsel, to ensure compliance with sections 103 and 141 through 150 of the Code and the regulations promulgated thereunder and applicable thereto, (5) To make such changes, modifications or amendments as may be necessary or desirable in order to allow the owners of the Bonds to thereafter avail themselves of a book- entry system for payments, transfers and other matters relating to the Bonds, which changes, modifications or amendments are not contrary to or inconsistent with other provisions of this Third Supplement and which shall not adversely affect the interests of the owners of the Bonds; -12- (6) To make such changes, modifications or amendments as may be necessary or desirable nn order to -obtain or maintain the granting of a rating on the Bonds by a Rating Agency or to obtain or maintann a Credit Agreement or a Credit Facility issued nn support of the Bonds, and (7) To make such changes, modifications or amendments as may be necessary or desirable, which shall not adversely affect the interests of the owners of the Bonds, nn order, to the extent pemm~tted by law, to facilntate the econonnic and practical utilization of interest rate swap agreements, foreign currency exchange agreements, or similar type of agreements with respect to the Bonds. Notice of any such amendment maybe published by the City nn the manner described nn clause (b) of this Section, provided, however, that the publication of such notice shall not constitute a condition precedent to the adoption of such amendatory ordinance and the failure to publish such notice shall not adversely affect the nrnplementatnon of such amendment as adopted pursuant to such amendatory ordinance. (g) Ownership of the Bonds shall be established by the Registration Books manntanned by the Paying Agent/Regnstrar, nn rats capacity as registrar and transfer agent for the Bonds. Section 17 DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS (a) That m the event any Outstanding Bond ns damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Regnstrar shall cause to be pnnted, executed, and delivered, a new bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond nn the manner hereinafter provided. (b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made to the Paying AgentlRegnstrar In every case of loss, theft, or destruction of a Bond, the applicant for a replacement bond shall furnish to the City and to the Paying Agent/Regnstrar such security or nndemnity as may be requnred by them to save each of them harmless from any loss or damage wrath respect thereto Also, nn every case of loss, theft, or destruction of a Bond, the applicant shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may be In every case of damage or mutilation of a Bond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Bond, the City may authonze the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or indemmty is furnished as above provided in thus Section. (d) Pnor to the issuance of any replacement bond, the Paying Agent/Registrar shall charge the owner of such Bond with all hegal, printing, and other expenses in connection therewith. Every -13- replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Thud Supplement equally and proportionately with any and all other Bonds duly issued under this Tlurd Supplement. (e) In accordance with Section 6 of Article 717k-6, Texas Revised Civil Statutes, as amended, this Section of this Thud Supplement shall constitute authority for the issuance of any such replacement bond without necessity of further action by the govenung body of the City or any other body or person, and the duty of the replacement of such bands is hereby authorized and imposed upon the Paying AgentlRegistrar, and the Pa}nng Agent/Registrar shall authenticate and deliver such bonds in the form and manner and with the effect, as provided in Section 6(a) of this Third Supplement for Bonds issued in exchange for other Bonds. Section 18 CONTINCTING DISCLOSURE UNDERTAKING (a) Annual Reports. (i) The Crty shall provide annually to each NRMSIR and any SID, within six months after the end of each Year ending in or after 1996, financial information and operating data with respect to the City of the general type included in the final Official Statement authorized by Section 25 of this Ordinance, being the information described in Exhibit C hereto Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C hereto, or such other accounting principles as the City maybe required to employ from tune to time pursuant to state law or regulation, and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, then the City shall provide unaudited financial statements within such period and shall provide audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report on such statements becomes available. (ii) If the City changes its Year, rt will notify each NRMSIR and any SID of the change (and of the date of the new Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section maybe set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRM5IR and any SID or filed with the SEC (b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meamng of the federal securities laws 1 Principal and interest payment delinquencies; 2 Non-payment related defaults, 3 Unscheduled draws on debt service reserves reflecting financial difficulties, -14- e 4 Unscheduled draws on credit enhancements reflecting financial difficulties, 5 Substitution of credit or liqundity providers, or their failure to perform, 6 Adverse tax opinnons or events affecting the tax-exempt status of the Bonds, 7 Modifications to rights of holders of the Bonds, 8 Bond calls; 9 Defeasances; 10 Release, substitution, or sale of properly securing repayment of the Bonds, and 11 Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, nn a timely manner, of any failure by the City to provide financial information or operating data nn accordance with subsection (a) of this Section by the time required by such subsection. (c) Limitations, Disclaimers, and Amendments. (i) The Cnty shall be obligated to observe and perform the covenants specified nn this Section for so long as, but only for so long as, the City remains an "obligated person" vv~th respect to the Bonds wnthnn the meamng of the Rule, except that the City nn any event will give notice of any deposit made nn accordance with this Ordinance or applicable law that causes Bonds no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothnng nn this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or clam hereunder to any other person. The Crty undertakes to provide only the financial information, operating data, financial statements, and notices which nt has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or matenal to a complete presentation of the City's financial results, condition, or prospects or to update any information provided nn accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest m or sell Bonds at any future date (iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE -15- (iv) No default by the City in observing or performing its obligations under this Section shall comprise a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (v) The provisions of this Section maybe amended by the City from time to time to adapt to changed circumstances that arse from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have pernutted an underwater to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the Holders of a ma~onty in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interest of the holders and beneficial owners of the Bonds. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (a) of this Section an explanation, in narrative form, of the reason for the amendment and of the impact of any change in the type of financial information or operating data so provided. Section 19 THIltD SUPPLEMENT TO CONSTITUTE A CONTRACT, EQUAL SECURITY That in consideration of the acceptance of the Bonds, the issuance of which is authorized hereunder, by those who shall hold the same from time to time, this Third Supplement shall be deemed to be and shall constitute a contract between the City and the Holders from time to time of the Bonds and the pledge made in this Third Supplement by the City and the covenants and agreements set forth in this Third Supplement to be performed by the City shall be for the equal and proportionate benefit, security, and protection of all Holders, without preference, priority, or distinction as to security or otherwise of any of the Bonds authorized hereunder over any of the others by reason of tune of issuance, sale, or maturity thereof or otherwise for any cause whatsoever, except as expressly provided in or permitted by this Third Supplement. Section 20 SEVERABILITY OF INVALID PROVISIONS That if any one or more of the covenants, agreements, or provisions herein contained shall be held contrary to any express provisions of law or contrary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements, or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements, or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Bonds issued hereunder Section 21 PAYMENT AND PERFORMANCE ON BUSINESS DAYS That, except as provided to the contrary in the FORM OF BOND set forth in Exhibit B to this Third Supplement, whenever under the terms of this Third Supplement or the Bonds, the performance date of any provision hereof or thereof, including the payment of principal of or interest on the Bonds, shall occur on a day other than a Business Day, then the performance thereof, including the payment of principal of and interest on the Bonds, need not be made on such day but may be performed or paid, as the -16- case maybe, on the next succeeding Business Day with the same force and effect as if made on the date of performance or payment. Section 22 LIMITATION OF BENEFITS WITH RESPECT TO THE THIltD SUPPLEMENT That with the exception of the rights or benefits herein expressly conferred, nothing expressed or contained herein or implied from the provisions of tlis Third Supplement or the Bonds is intended or should. be construed to confer upon or give to any person other than the City, the Holders, and the Paying Agent/Registrar, any legal or equitable nght, remedy, or claim under or by reason of or in respect to thus Third Supplement or any covenant, condition, stipulation, promise, agreement, or provision herein contained. Thus Third Supplement and all of the covenants, conditions, stipulations, pronnises, agreements, and provisions hereof are intended to be and shall be for and inure to the sole and exclusive benefit of the City, the Holders, and the Paying Agent/Registrar as herein and therein provided. Section 23 FURTHER PROCEDURES That the Mayor Pro-Tem, the City Secretary or Assistant City Secretary, any Designated Financial Officer, and all other officers, employees, and agents of the City, and each of them, shall be and they are hereby expressly authonzed, empowered, and directed from time to time and at any time to do and perform all such acts and things and to execute, aclrnowledge, and deliver in the name and under the seal and on behalf of the Issuer all such instruments, whether or not herein mentioned, as maybe necessary or desirable in order to carry out the terms and provisions of this Third Supplement, the Bonds, the Bond Purchase Agreement, the offering documents prepared in connection with the sale of the Bonds, or the Paying Agent/Registrar Agreement described in Section 6 hereof. In case any officer whose signature appears on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purpose the same as if he or she had remained in office until such delivery Section 24 APPROVAL AND REGISTRATION OF BONDS That the City Manager of the City is hereby authonzed to have control of the Bonds and all necessary records and proceedings pertaining to the Bonds pending their delivery and their investigation, examination and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Bonds, said Comptroller of Public Accounts (or a deputy designated in wasting to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate accompanying the Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on each such certificate Section 25 SALE OF BONDS (a) That the sale of the Bonds to the Underwriters, at the purchase price described in the Bond Purchase Agreement, is hereby authonzed, ratified and confirmed. One Bond in the pnncipah amount maturing on each matunty date as set forth in Section 3 hereof shall be delivered to the Underwnters, and the Underwnters shall have the right to exchange such bonds as provided in Section 6 hereof without cost. (b) That the Bond Purchase Agreement setting forth the terms of the sale of the Bonds to the Underwriters, in substantially the form attached to this Third Supplement, is hereby accepted, approved and authonzed to be delivered in executed form to said Underwriters -17- (c) That the offering documents prepared in connection with the sale of the Bonds, in substantially the form attached to this Tuurd Supplement, are hereby accepted, approved and authorzed to be delivered in executed form to the Underwriters. The use of the "Preliriunary Official Statement" prepared in connection with the sale of the Bonds is hereby ratified. Section 26 DTC REGISTRATION The Bonds iuhally shall be issued and delivered m such manner that no physical distribution of the Bonds will be made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Bonds. DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, a member of the Federal Reserve System, a "clearng corporation" within the meaning of the New York Uniform Commercial Code, and a "cleanng agency" registered under Section 17A of the Securities Exchange Act of 1934, as amended, and the City accepts, but in no way venfies, such representations. The Bonds initially authorized by this Third Supplement shall be delivered to and registered in the name of CEDE & CO., the nominee of DTC It is expected that DTC will hold the Bonds on behalf of the Underwriters and their respective participants. So long as each Bond is registered in the name of CEDE & CO ,the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it were the actual and beneficial owner thereof. It is expected that DTC will maintain abook-entry system which will identify ownership of the Bonds in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC and its participants pursuant to rules and regulations established by them, and that the Bonds initially deposited with DTC shall be immobilized and not be further exchanged for substitute Bonds except as hereinafter provided. The City is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or its participants, or protecting any interests or rights of the beneficial owners of the Bonds. It shall be the duty of the DTC Participants, as defined in the Official Statement herein approved, to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Bonds, and the method of paying the fees and charges of DTC The City does not represent, nor does it in any way covenant that the initial book- entry system established with DTC will be maintained m the future Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any reason any of the originally delivered Bonds is duly filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this Third Supplement, substitute Bonds will be duly delivered as provided in this Third Supplement, and there will be no assurance or representation that any book- entry system will be maintained for such Bonds To effect the establishment of the foregoing book- entry system, the City Manager or the Director of Fiscal Services are hereby authorzed to execute the "DTC Letter of Representation" in the form provided by DTC to evidence the City's intent to establish said book-entry system. Section 27 ESCROW AGREEMENT That the City Manager of the City is hereby authorzed and directed to execute, the City Secretary is authorzed to attest, and the City Attorney is authorzed to approve as to form, on behalf of the City, the Escrow Agreement covering the use of the moneys to be deposited with the "Escrow Agent" therein named for the benefit of the holders of the Commercial Paper Notes being retired with a portion of the proceeds from the sale of the Bonds, the form of the Escrow Agreement being in substantially the form attached to this Turd Supplement. -18- Section 28 PREAMBLE. That the preamble to this Third Supplement is hereby incorporated by reference, and is to be considered a part of the operative text of this Third Supplement. Section 29 IlVIlVIEDIATE EFFECT That this Third Supplement shall be effective immediately from and after its passage m accordance with the provisions of Section 2 of Chapter 25 of the Charter of the City, and it is accordingly so ordained. SIGNED AND SEALED THIS 16TH DAY OF JANUARY, 1996 M yor Pro-Tem, C~ of Fort Worth, Texas ~~~~ City Secretary (SEAL) APPROVED AS TO FORM AND LEGALITY i , , ~ ;~k~C,, .vU~ City Attorney -19- EXHIBIT A That, as used in this Thud Supplement, the following terms shall have the meanings set forth below, unless the text hereof specifically indicates otherwise "Bond Purchase Agreement" means the Bond Purchase Agreement, dated January 16, 1996, by and among the Crty and the Underwriters. "Bonds" means the Serves 1996 Bonds. "Business Day" means a day other than a Sunday, Saturday, a legal holiday, or a day on which banking institutions in the city where the principal corporate trust office of the Pa}nng Agent/Registrar is located are authorized by law or executive order to close. "Commercial Paper Notes" shall have the meaning given said term in the preamble to the Third Supplement. "First Supplement" means the ordinance authorizing the issuance of the Serves 1991 A Bonds and the Serves 1991B Bonds. "Master Ordinance" means the "Master Ordinance estabhsling the City of Fort Worth Texas Water and Sewer System Revenue Financing Program", passed by the City on December 10, 1991 "MSRB" means the Municipal Securities Rulemalang Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository wrtlin the meaning of the Rule from time to time "Paying Agent/Registrar" means the financial institution specified in Section 6(a) of the Third Supplement. "Previously Issued Panty Obligations" shall be the Series 1991A Bonds, the Series 1991B Bonds and the Series 1993 Bonds "Registration Books" shall have the meaning given said term m Section 6(a) of the Third Supplement. "Rule" means SEC Rule 15c2-12, as amended from time to time "SEC" means the United States Securities and Exchange Commission. "Second Supplement" shall mean the ordinance authonznng the issuance of the Series 1993 Bonds A-1 "Senes 1991A Bonds" shall mean the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Serves 1991A, authorized by the First Supplement. "Senes 1991B Bonds" shall mean the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Senes 1991B, authorized by the First Supplement. "Series 1993 Bonds" shall mean the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Serves 1993, authonzed by the Second Supplement. "Series 1996 Bonds" shall mean the City of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Senes 1996, authonzed by the Third Supplement. "SID" means any person designated by the State of Texas or an authonzed department, officer, or agency thereof as, and deternuned by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. "Third Supplement" shall mean the ordinance authorizing the nssuance of the Serves 1996 Bonds. "Underwriters" means the investment banking firms that contract to purchase the Bonds pursuant to the terms of the Bond Purchase Agreement. A-2 EXHIBIT B NO FORM OF BOND UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF TA,RRANT AND DENTON CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BOND, SERIES 1996 MATURITY DATE INTEREST RATE DATED DATE CUSIP JANUARY 1, 1996 ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF FORT WORTH, IN TARRANT AND DENTON COUNTIES, TEXAS (the "Issuer"), hereby promises to pay to or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon from the dated date specified above, on August 15, 1996 and serruannually on each February 15 and August 15 thereafter to the matunty date specified above, or the date of redemption pnor to maturity, at the interest rate per annum specified above, except that if the Paying Agent/Registrar's Authentication Certificate appeanng on the face of this Bond is dated later than August 15, 1996, such interest is payable serruannually on each February 15 and August 15 following such date THE PRINCIPAL OF AND INTEREST ON this Bond are payable m lawful money of the United States of America, without exchange or collection charges The principal of this Bond shall be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or upon the date fixed for its redemption pnor to matunty, at the designated corporate trust office in Dallas, Texas (the "Designated Trust Office"), of Texas Commerce Bank National Association, which is the "Paying Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by check or draft, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided, and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date; to the registered owner hereof, at its address as it appeared on the last day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, ashereinafter described. Any accrued interest due at matunty or upon the redemption of this Bond pnor to matunty as provided herein shall be paid to the registered owner upon presentation and surrender of this Bond for redemption and B-1 ;: payment at the Designated Trust Office of the Paying Agent/Registrar The Issuer has covenanted in the Bond Ordinance that on or before each pnncipal payment date, interest payment date, and accrued interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Debt Service Fund" created by the ordinance establishing the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program (the "Master Ordinance"), the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bonds, when due IN THE EVENT of anon-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by Umted States mail, first class postage prepaid, to the address of each registered owner appeanng on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. THE TERMS AND PROVISIONS of this Bond are continued on the reverse side hereof and shall for all purposes have the same effect as though fully set forth at this place. *IF THE DATE for the payment of the pnncipal of or interest on this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Designated Trust Office of the Paying Agent/Registrar is located are authonzed by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authonzed to close, and payment on such date shall have the same force and effect as if made on the onginal date payment was due Notwithstanding the foregoing, dunng any penod in which ownership of the Bonds is determined only by a book entry at a securities depository for the Bonds, any payment to the secunties depository, or its nominee or registered assigns, shall be made in accordance with existing arrangements between the Board and the securties depository *THIS BOND is one of a serves of bonds of like tenor and effect except as to number, principal amount, interest rate, maturity, and right of prior redemption, dated as of the dated date specified above, aggregating $65,665,000 (herein sometimes called the "Bonds") issued for the following purposes, to-wit. (i) in the amount of $25,935,000 for the purpose of extending and improving the Issuer's Water and Sewer System and (ii) in the amount of $39,730,000 for the purpose of retiring the Issuer's currently outstanding Water and Sewer System Commercial Paper Notes, Series A. *THE OUTSTANDING BONDS matunng on and after February 15, 2007 maybe redeemed prior to their scheduled maturities, at the option of the Issuer, in whole, or in part on February 15, 2006, or on any date thereafter, at the redemption pace of the pnncipal amount of the Bonds called for redemption, plus accrued interest thereon to the date fixed for redemption, and without premium, rop vided, that during any penod in which ownership of the Bonds is determined only by a book entry B-2 at a securities depository for the Bonds, if fewer than all of the Bonds of the same matunty and bearing the same interest rate are to be redeemed, the particular Bonds of such matunty and bearing such interest rate shall be selected in accordance with the arrangements between the Board and the secunties depository *NOTICE OF any such redemption of Bonds shall be given in the following manner, to-wit, (i) a wntten notice of such redemption shall be given to the registered owner of each Bond or a portion thereof being called for redemption not more than 60 days nor less than 30 days prior to the date fixed for such redemption by depositing such nonce in the United States Mail, first-class, postage prepaid, addressed to each such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar and (ii) a notice of such redemption shall be published one time, at least 30 days prior to the date fixed for such redemption, in a journal or publication of general circulation in the United States of Amenca which Games as a regular feature notices of redemption of municipal bonds, provided, however, that the failure to send, mail, or receive such notice described in clause (i) above, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Bond, as publication of notice as described in clause (ii) above shall be the only notice actually required in connection with or as a prerequisite to the redemption of any Bonds. By the date fixed for any such redemption due provision shall be made by the Issuer unth the Paying AgentlRegistrar for the payment of the required redemption pace for this Bond or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion hereof which is to be so redeemed, thereby automatically shall be redeemed pnor to its scheduled matunty, and shall not bear or accrue interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption pace plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying AgentlRegistrar shall record in the Registration Books all such redemptions of pnncipal amount of this Bond or any portion hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same matunty date, bearing interest at the same rate, in any denorrunation or denominations m any integral multiple of $5,000 at the written request of the registered owner, and in an aggregate pnncipal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in the Bond Ordinance. The years of matunty of the Bonds called for such redemption shall be selected by the Issuer The Bonds or portions thereof redeemed within a maturity shall be selected by lot or other customary random method selected by the Paying Agent/Registrar (provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000) *ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest coupons, in the denomination of any integral multiple of $5,000 As provided in the Bond Ordinance, this Bond may, at the request of the registered owner or the assignee or assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate amount of fully registered Bonds, without interest coupons, payable to the appropriate registered owner, assignee or assignees, as the case maybe, having any authonzed denomination or denorrunations as requested in writing by the appropriate registered owner, assignee or assignees, as the case maybe, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures B-3 set forth nn the Bond Ordinance Among other requirements for such assignment and transfer, this Bond must be presented and surrendered to the Paying Agent/Regnstrar at the Designated Trust Office, together with proper instruments of assignment, nn form and with guarantee of signatures satisfactory to the Paying Agent/Regnstrar, evidencing assignment of this Bond or any portion or por- tions hereof in any authorized denominatnon to the assignee or assignees nn whose name or names this Bond or any such portion or portions hereof ns or are to be registered. The form of Assignment printed or endorsed on this Bond may be executed by the registered owner to evidence the assignment hereof, but such method ns not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Regnstrar may be used to evidence the assignment of this Bond or any portion or portions hereof from time to time by the registered owner The one requesting such conversion and exchange shall pay the Paying Agent/Regnstrar's reasonable standard or customary fees and charges for converting and exchanging any Bond or portion thereof. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such privilege. The foregoing notwnthstanding, nn the case of the conversion and exchange of an assigned and transferred Bond or Bonds or any portion or portions thereof, such fees and charges of the Paying Agent/Regnstrar will be paid by the Issuer The Paying Agent/Regnstrar shall not be required (i) to make any such transfer, conversion or exchange during the period begnnring at the opening of business 30 days before the day of the first mailing of a notnce of redemptnon and ending at the close of business on the day of such mailing, or (ii) to transfer, convert or exchange any Bonds so selected for redemption when such redemption ns scheduled to occur within 30 calendar days; provided, however, such lmm~tatnon of transfer shall not be applicable to an exchange by the registered owner of an unredeemed balance of a Bond called for redemptnon nn part. *IN THE EVENT any Paying Agent/Regnstrar for the Bonds ns changed by the Issuer, resngns, or othenwnse ceases to act as such, the Issuer has covenanted nn the Bond Ordinance that rat promptly will appoint a competent and legally qualified substitute therefor, whose qualnficatnons are substan- tially similar to the prevnous Paying Agent/Regnstrar rat ns replacing, and promptly will cause written nonce thereof to be mailed to the registered owners of the Bonds * WHENEVER the beneficnal ownershnp of this Bond ns deten-mnned by a book entry at a securities depository for the Bonds, the foregoing requirements of holding, delivering or transfemng thus Bond shall be modified to require the appropriate person or entity to meet the requirements of the securities depository as to registering or transfemng the book entry to produce the same effect. *BY BECOMING the regnstered owner of thus Bond, the registered owner thereby acknowledges all of the terms and provisions of the Master Ordinance and the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Master Ordinance and the Bond Ordinance are duly recorded and available for nnspectnon in the officnal minutes and records of the Issuer, and agrees that the terms and provisions of this Bond, the Master Ordinance and the Bond Ordinance constitute a contract between each regnstered owner hereof and the Issuer All capntalnzed terms not defined herenn shall have the same meannng as graven sand ten-ms nn the Master Ordinance or the Bond Ordinance B-4 ~: *THE BONDS are special obligations of the Issuer payable solely from and equally secured by a first lien on and pledge of the Pledged Revenues of the System. The Issuer has reserved the right, subject to the restrictions stated, and adopted by reference, m the Master Ordinance, to issue additional panty revenue obligations which also maybe made payable from, and secured by a first lien on and pledge of, the aforesaid Pledged Revenues. For a more complete description and ident~- fication of the revenues and funds pledged to the payment of the Bonds, and other obligations of the Issuer secured by and payable from the same source or sources as the Bonds, reference is hereby made to the Master Ordinance and the Bond Ordinance. *THE ISSUER has reserved the right, subject to the restrictions stated, and adopted by reference, m the Bond Ordinance, to amend the Bond Ordinance, and under some (but not all) circumstances amendments must be approved by the owners of a ma~onty in Outstanding Principal Amount of the Bonds. *THE REGISTERED OWNER HEREOF shall never have the right to demand- payment of this obligation out of any funds raised or to be raised by taxation. *IT IS HEREBY certified and covenanted that this Bond has been duly and validly authorized, issued and delivered, and that all acts, conditions and things required or proper to be performed, exist and be done precedent to or in the authorization, issuance and delivery of this Bond have been performed, existed and been done in accordance with law IN WITNESS WHEREOF, this Bond has been signed with the imprinted or lithographed manual or facsimile signature of the Mayor or the Mayor Pro-Tem of said Issuer, attested by the imprinted or lithographed facsimile signature of the City Secretary, and approved as to form and legality by the imprinted or lithographed facsunile signature of the Crty Attorney, and the official seal of said Issuer has been duly affixed to, panted, lithographed or impressed on this Bond. CITY OF FORT WORTH, TEXAS (SEAL) By --- Mayor (Pro-Tem) ATTEST City Secretary APPROVED AS TO FORM AND LEGALITY B-5 City Attorney FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Bond is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It ns hereby certified that this Bond has been issued under the provisions of the proceedings adopted by the Issuer as described m the text of this Bond, and that this Bond has been issued m exchange for or replacement of a bond, bonds, or a portnon of a bond or bonds of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated , Texas Pa}nng Agent/Registrar By Authorized Signatory B-6 ~s. *FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee (Please pant or typewrite name and address, including zip code of Transferee) the wrtlun Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution m the prerruses. Dated Signature Guaranteed NOTICE Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company NOTICE The signature(s) above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every particular, without alteration or enlargement or any change whatsoever B-7 ** FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE OFFICE OF COMPTROLLER REGISTER NO STATE OF TEXAS I hereby certify that this Bond has been exarruned, certified as to validity, and approved by the Attorney General of the State of Texas and that ttus Bond has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this. Comptroller of Public Accounts of the State of Texas (SEAL) NOTE TO PRINTER. *¶s to be pnnted on back of Bond **¶ not to be pnnted on Bond B-8 Ezhibit C to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The follovv~ng information is referred to m Section 18 of this Ordinance. Annual Financial Statements and Operating Data The financial infonnatlon and operating data vv~th respect to the City to be provided annually in accordance vv~th such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below Tables 1 through 15 contained in the Official Statement; and "Excerpts from the Annual Financial Report", as set forth in Appendix B to the Official Statement Accounting Principles The accounting pnnciples referred to in such Section are the accounting pnnciples described in the notes to the financial statements referred to m paragraph 1 above. a ., c THE STATE OF TEXAS COUNTIES OF TA,RRANT AND DENTON CITY OF FORT WORTH I, Alice Church, City Secretary of the Crty of Fort Worth, m the State of Texas, do hereby certify that I have compared the attached and foregoing excerpt from the riunutes of the regular, open, public meeting of the City Council of the City of Fort Worth, Texas held on January 16, 1996, and of Ordinance No /a.3 ~~ which was duly passed at said meeting, and that said copy is a true and correct copy of said excerpt and the whole of said ordinance. Said meeting was open to the public, and public notice of the time, place, and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code, as amended. In testimony whereof, I have set my hand and have hereunto affixed the seal of said City of Fort Worth, this 16th day of January, 1996 Gl~i~~ Crty Secretary of the City of Fort Worth, Texas (SEAL)