O607ORDINANCE NO. 607
ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
$3,720,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF
KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND,
SERIES 2016; SECURING THE PAYMENT THEREOF BY AUTHORIZING
THE LEVY OF AN ANNUAL AD VALOREM TAX; AND APPROVING AND
AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND
PROCEDURES RELATED THERETO INCLUDING AN ESCROW
AGREEMENT, A PAYING AGENT/REGISTRAR AGREEMENT AND A
PURCHASE CONTRACT AND INVESTMENT LETTER
DATE OF APPROVAL: AUGUST 15, 2016
TABLE OF CONTENTS
Recitals..............................
...............................
1
Section 1.
Amount and Purpose of the Bond ... ...............................
4
Section 2.
Designation .................... ...............................
4
Section 3.
Date, Denominations, Numbers, Maturity, and Installment Payments
ofthe Bond ..................... ...............................
4
Section 4.
Interest ........................ ...............................
5
Section 5.
Characteristics of the Bond ........ ...............................
6
Section 6.
Form of Bond ................... ...............................
8
Section 7.
Interest and Sinking Fund; Tax Levy; Security Interest .................
15
Section 8.
Investments .................... ...............................
15
Section 9.
Defeasance of Bond .............. ...............................
16
Section 10.
Damaged, Mutilated, Lost, Stolen, or Destroyed Bond ..................
17
Section 11.
Custody, Approval, and Registration of Bond; Bond Counsel's Opinion;
Cusip Numbers; and CUSIP Numbers ...............................
18
Section 12.
Covenants Regarding Tax Exemption of Interest on the Bond ............
18
Section 13.
Sale of Bond .................... ...............................
21
Section 14.
Approval of Escrow Agreement; Refunding of Refunded Obligations ......
21
Section 15.
Notice of Defeasance and Redemption of Refunded Obligations ..........
22
Section 16.
Further Procedures ............... ...............................
22
Section 17.
Ordinance a Contract; Amendments . ...............................
22
Section 18.
Remedies in Event of Default ...... ...............................
23
Section 19.
No Rule 15c2 -12 Undertaking; Annual Financial Statements .............
24
Section 20.
Interested Parties ................ ...............................
24
Section 21. Incorporation of Recitals .......... ............................... 24
Section 22. Choice of Law .................. ............................... 24
Section 23. Effective Date .................. ............................... 24
SIGNATURES
Exhibit A Form of Paying Agent/Registrar Agreement
Exhibit B Written Procedures Relating to Continuing Compliance with Federal Tax Covenants
Exhibit C Form of Escrow Agreement
Exhibit D Form of Notice of Redemption
Exhibit E Form of Purchase Contract and Investment Letter
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ORDINANCE NO. 607
ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
$3,720,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF
KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND,
SERIES 2016; SECURING THE PAYMENT THEREOF BY AUTHORIZING
THE LEVY OF AN ANNUAL AD VALOREM TAX; AND APPROVING AND
AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND
PROCEDURES RELATED THERETO INCLUDING AN ESCROW
AGREEMENT, A PAYING AGENT/REGISTRAR AGREEMENT AND A
PURCHASE CONTRACT AND INVESTMENT LETTER
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF KENNEDALE
WHEREAS, the CITY OF KENNEDALE, TEXAS (the "City ") in Tarrant County, Texas, is a
political subdivision of the State of Texas operating as a home -rule city pursuant to the Texas Local
Government Code and its City Charter, which was originally approved by the qualified voters of the
City on January 17, 1998, and which was most recently amended by the qualified voters of the City
on May 7, 2016; and
WHEREAS, among numerous series of bonds and certificates of obligation of the City which
are secured by the full faith and credit of the City and a pledge by the City to levy ad valorem taxes
sufficient to pay principal of and interest on such bonds or certificates of obligations as they become
due, there are specifically outstanding the following series of obligations:
City of Kennedale, Texas Combination Tax and Limited Pledge Revenue Certificates of
Obligation, Series 2005, dated February 1, 2005, maturing February 15 in the years 2018,
2021, 2024, and 2026, currently outstanding in the principal amount of $485, 000 (the "Series
2005 Certificates "); and
City of Kennedale, Texas Combination Tax and Limited Pledge Revenue Certificates of
Obligation, Series 2008, dated August 15, 2008, maturing February 15 in the years 2017
through 2020, and 2022, 2024, 2026, and 2028, currently outstanding in the principal amount
of $3,450,000 (the "Series 2008 Certificates "); and
WHEREAS, the City now desires to refund the following outstanding obligations:
(i) all of the outstanding Series 2005 Certificates; and
(ii) a portion of the Series 2008 Certificates;
which obligations are referred to collectively herein as the "Refunded Obligations" and are more
specifically described as maturing in the years and in the respective principal amounts (aggregating
$3,935, 000 in principal amount) and bearing interest as shown in the following tables:
SERIES 2005 CERTIFICATES TO BE REFUNDED
SERIES 2008 CERTIFICATES TO BE REFUNDED
STATED
MATURITY
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT
INTEREST
CUSIP NO.
(FEBRUARY 15)
MATURING IN YEAR ($)
BEING REFUNDED ($)
RATE ( %)
(489332)
2018
80,000
80,000
3.900
EW2
2020
260,000
260,000
4.000
FU5
2021
135,000
135,000
4.100
EXO
2022
545,000
545,000
4.250
FV3
2024
155,000
155,000
4.300
EY8
2024
605,000
605,000
4.400
FW1
2026
115,000
115,000
4.400
EZ5
SERIES 2008 CERTIFICATES TO BE REFUNDED
WHEREAS, all of the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized; in particular, the Refunded
Obligations and the respective ordinances which authorized the issuance of the Refunded
Obligations provide that (i) the Series 2005 Certificates maturing on and after February 15, 2016
may be called at the option of the City on February 15, 2015, or any date thereafter, at par, and (ii)
the Series 2008 Certificates maturing on and after February 15, 2019 may be called at the option of
the City on February 15, 2018, or any date thereafter, at par; and
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STATED
MATURITY
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT
INTEREST
CUSIP NO.
(FEBRUARY 15)
MATURING IN YEAR ($)
BEING REFUNDED ($)
RATE ( %)
(489332)
2019
245,000
245,000
4.000
FT8
2020
260,000
260,000
4.000
FU5
2022
545,000
545,000
4.250
FV3
2024
605,000
605,000
4.400
FW1
2026
645,000
645,000
4.500
FX9
2028
690,000
690,000
4.650
FY7
WHEREAS, all of the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized; in particular, the Refunded
Obligations and the respective ordinances which authorized the issuance of the Refunded
Obligations provide that (i) the Series 2005 Certificates maturing on and after February 15, 2016
may be called at the option of the City on February 15, 2015, or any date thereafter, at par, and (ii)
the Series 2008 Certificates maturing on and after February 15, 2019 may be called at the option of
the City on February 15, 2018, or any date thereafter, at par; and
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WHEREAS, Chapter 1207, Texas Government Code, as amended ( "Chapter 1207"),
authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof, and
any other available funds or resources, directly with a place of payment (paying agent) for the
Refunded Obligations, or with another trust company or commercial bank that does not act as a
depository for the City, in an amount sufficient to provide for the payment and /or redemption of the
Refunded Obligations, and such deposit, if made before such payment dates, shall constitute the
making of firm banking and financial arrangements for the discharge and final payment or
redemption of the Refunded Obligations; and
WHEREAS, Chapter 1207 (specifically Section 1207.062, Texas Government Code) further
authorizes the City to enter into an escrow agreement with (i) any paying agent for the Refunded
Obligations, or (ii) another trust company or commercial bank that does not act as a depository for
the Board and is named in the proceedings authorizing such escrow agreement, with respect to the
safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon
such terms and conditions as the City and such paying agent, trust company or commercial bank
may agree; provided that such deposits may be invested and reinvested in:
(i) direct noncallable obligations of the United States, including obligations that are
unconditionally guaranteed by the United States,
(ii) noncallable obligations of an agency or instrumentality of the United States, including
obligations that are unconditionally guaranteed or insured by the agency or instrumentality
and that, on the date the City Council of the City adopts or approves this Ordinance, are
rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent, and
(iii) noncallable obligations of a state or an agency or a county, municipality, or other
political subdivision of a state that have been refunded and that, on the date the City Council
of the Issuer adopts or approves this Order, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent,
and all of which must mature and bear interest payable at such times and in such amounts as will be
sufficient to provide for the scheduled payment or redemption of the Refunded Obligations; and
WHEREAS, (i) U.S. BANK NATIONAL ASSOCIATION, serves as the paying agent/registrar
for the Series 2005 Certificates, and (ii) WELLS FARGO BANK, N.A., serves as the paying
agent /registrar for the Series 2008 Certificates;
WHEREAS, BOKF, NA, which is a trust company or commercial bank that does not act as
a depository for the City, is eligible to serve as the "Escrow Agent" under the 'Escrow Agreement,
and the City Council of the City (the "City Council ") desires to appoint BOKF, NA to serve as the
Escrow Agent for the Refunded Obligations; and
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WHEREAS, the Escrow Agreement hereinafter authorized, under which BOKF, NA will
serve as the Escrow Agent, constitutes an escrow agreement of the kind authorized and permitted
by Chapter 1207; and
WHEREAS, the City Council of the City hereby finds and declares a public purpose and
deems it advisable and in the best interests of the City to issue a bond (defined in Section 3 hereof
as the "Bond "), the proceeds of which will be used to pay costs of issuance and refund the Refunded
Obligations in order to achieve a gross debt service savings and a net present value debt service
savings for the benefit of the taxpayers of the City; and
WHEREAS, such refunding of the Refunded Obligations will result in a gross debt service
savings of $405,809.25 and a net present value debt service savings of $356,405.67 (i.e., 10.256%
of the principal amount of the Refunded Obligations); and
WHEREAS, the Bond hereinafter authorized and designated is to be issued and delivered
pursuant to Chapter 1207 and Chapter 1201, Texas Government Code; and
WHEREAS, 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;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
KENNEDALE, TEXAS.
SECTION 1. AMOUNT AND PURPOSE OF THE BOND. The City's general obligation
refunding bond (hereinafter sometimes called the "Bond ") is hereby authorized to be issued in the
aggregate principal amount of $3,720,000 FOR THE PURPOSE OF PROVIDING FUNDS TO
REFUND A PORTION OF THE CITY'S GENERAL OBLIGATION INDEBTEDNESS AND
PAY COSTS OF ISSUANCE.
SECTION 2. DESIGNATION. The Bond authorized to be issued by this Ordinance shall
be designated the CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BOND,
SERIES 2016.
SECTION 3. DATE, DENOMINATIONS, NUMBERS, MATURITY, AND
INSTALLMENT PAYMENTS OF THE BOND.
(a) Initially there shall be issued, sold, and delivered hereunder one fully registered Bond,
without interest coupons, dated September 1, 2016, in the denomination and principal amount of
$3,720, 000, numbered R -1, with any bond issued in replacement thereof being in the denomination
and principal amount hereinafter stated and numbered consecutively from R -2 upward, payable in
installments to the registered owner thereof, or to the registered assignee of said bond (in each case,
the "Registered Owner ").
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(b) Principal of the Bond shall mature and be payable in installments on the dates and in the
principal installment amounts and shall bear interest at the per annum rate set forth in the following
schedule:
Payment Date
Principal Installment
Interest
(Februar 15)
A ($)
Ra te ( %)
2017
95,000
1.790
2018
90,000
1.790
2019
340,000
1.790
2020
350,000
1.790
2021
345,000
1.790
2022
360,000
1.790
2023
365,000
1.790
2024
375,000
1.790
2025
375,000
1.790
2026
385,000
1.790
2027
315,000
1.790
2028
325,000
1.790
Total
3,720,000
The term 'Bond" as used in this Ordinance shall mean and include collectively the bond initially
issued and delivered pursuant to this Ordinance, as well as all other substitute bonds and
replacement bonds issued pursuant hereto.
SECTION 4. INTEREST. The Bond shall bear interest from the dates specified in the
FORM OF BOND set forth in this Ordinance to date of maturity at the rate per annum set forth
above. Said interest shall be payable in the manner provided and on the dates stated in the FORM
OF BOND set forth in this Ordinance.
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SECTION 5. CHARACTERISTICS OF THE BOND.
(a) Registration and Transfer; Authentication The City shall keep or cause to be kept at
the designated corporate trust or commercial banking office (currently located in Killeen, Texas) of
First National Bank Texas (the "Paying Agent/Registrar "), books or records for the registration of
the transfer of the Bond (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 under such reasonable regulations as the City and Paying Agent /Registrar
may prescribe; and the Paying Agent/Registrar shall make such registrations and transfers as herein
provided within three days of presentation in due and proper form. Attached hereto as ExhibitA is
a copy of the Paying Agent/Registrar Agreement between the City and the Paying Agent/Registrar
which is hereby approved in substantially final form, and the Mayor or Mayor Pro -Tem and the City
Secretary of the City are hereby authorized to execute the Paying Agent/Registrar Agreement and
approve any changes in the final form thereof.
The Paying Agent /Registrar shall obtain and record in the Registration Books the address
of the Registered Owner of each Bond to which payments with respect to the Bond shall be mailed,
as herein provided; but it shall be the duty of the Registered Owner to notify the Paying
Agent /Registrar in writing 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 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. The City shall pay
the Paying Agent/Registrar's standard or customary fees and charges for making such registration,
transfer and delivery of a substitute Bond or Bond. Registration of assignment and transfer of a
Bond shall be made in the manner provided and with the effect stated in the FORM OF BOND set
forth in this Ordinance. Each substitute Bond shall bear a letter and /or number to distinguish it from
each other Bond.
Except as provided in Section 5(c) hereof, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said Bond, and
no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The
Paying Agent/Registrar promptly shall cancel the paid Bond or a Bond surrendered for transfer. 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, and the Paying Agent/Registrar
shall provide for the printing, execution and delivery of the substitute Bond in the manner prescribed
herein. Pursuant to Subchapter D, Chapter 1201, Texas Government Code, the duty of transfer of
the Bond as aforesaid is hereby imposed upon the Paying Agent /Registrar, and, upon the execution
of said Bond, the transferred Bond shall be valid, incontestable, and enforceable in the same manner
and with the same effect as the Bond which initially was issued and delivered pursuant to this
Ordinance, approved by the Attorney General, and registered by the Comptroller of Public
Accounts.
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(b) Payment of Bond and Interest The City hereby . further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bond, all
as provided in this Ordinance. The Paying Agent /Registrar shall keep proper records of all
payments made by the City and the Paying Agent /Registrar with respect to the Bond, and of all
transfers of the Bond, and all replacements of the Bond, as provided in this Ordinance. However,
in the event of a nonpayment of interest on a scheduled payment date, and for thirty (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 City. Notice of the Special Record Date and of the scheduled payment date of the
past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States mail, first -class postage prepaid,
to the address of the Registered Owner appearing on the Registration Books at the close of business
on the last business day next preceding the date of mailing of such notice.
(c) In General The Bond (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bond to be payable only to the Registered Owner
thereof, (ii) may be transferred and assigned, (iii) shall have the characteristics, (iv) shall be signed,
sealed, executed and authenticated, (v) the principal of and interest on the Bond shall be payable,
and (vi) shall be administered, and the Paying Agent/Registrar and the City shall have certain duties
and responsibilities with respect to the Bond, all as provided, and in the manner and to the effect as
required or indicated, in the FORM OF BOND set forth in this Ordinance. The Bond initially issued
and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the
Paying Agent/Registrar, but on each substitute Bond issued in transfer or replacement for any Bond
issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT /REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM
OF BOND.
(d) Substitute PayingA eg nt/Registrar The City covenants with the registered Owner of the
Bond that at all times while the Bond is outstanding the City will provide a competent and legally
qualified bank, trust company, financial institution or other agency to act as and perform the services
of Paying Agent /Registrar for the Bond under this Ordinance, and that the Paying Agent/Registrar
will be one entity. The City reserves the right to, and may, at its option, but only with the prior
written consent of the Registered Owner, change the Paying Agent/Registrar upon not less than 40
days written notice to the Paying Agent/Registrar, to be effective not later than 30 days prior to the
next principal or interest payment date after such notice. In the event that the entity at any time
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, but only
upon the prior written consent ofthe Registered Owner, a competent and legally qualified bank-, trust
company, financial institution, or other agency to act as Paying Agent /Registrar under this
Ordinance. 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 Bond, to the new Paying Agent /Registrar designated and
appointed by the City. Upon any change in the Paying Agent /Registrar, the City promptly will cause
a written notice thereof to be sent by the new Paying Agent /Registrar to the Registered Owner of
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the Bond, 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 Ordinance, and a certified
copy of this Ordinance shall be delivered to the Paying Agent/Registrar.
(e) On the closing date, one Initial Bond representing the entire principal amount of the
Bond, payable in stated installments to the Purchaser, executed by manual or facsimile signature of
the Mayor or Mayor Pro -Tem of the City and the City Secretary of the City, approved by the
Attorney General of Texas, and registered and manually signed by the Comptroller of Public
Accounts of the State of Texas, will be delivered to the Purchaser or its designee. The Paying
Agent/Registrar shall insert the date of delivery and deliver the Bond to the Purchaser.
SECTION 6. FORM OF BOND. The form of the Bond, including the form of Paying
Agent /Registrar's Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bond
initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as
follows, with such appropriate variations, omissions, or insertions as are permitted or required by
this Ordinance.
[The remainder of this page intentionally left blank]
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(a) Form of Bond
NO. R -1 UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
COUNTY OF TARRANT $3,720,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BOND, SERIES 2016
Interest Rate
Delivery Date
Maturity_Date
As shown below
September 15, 2016
REGISTERED OWNER: FIRST NATIONAL BANK TEXAS
As shown below
PRINCIPAL AMOUNT: THREE MILLION SEVEN HUNDRED TWENTY
THOUSAND DOLLARS
The CITY OFKENNEDALE, TEXAS (the "City "), being apolitical subdivision and home
rule municipality of the State of Texas located in Tarrant County, Texas, for value received, hereby
promises to pay, from the sources described herein, to the registered owner specified above, or
registered assign (the "Registered Owner "), the principal amount from time to time unpaid and to
pay interest thereon from the date of delivery of this Bond as specified above, at the rate per annum
set forth in the table below, calculated on the basis of a 360 -day year of twelve 30 -day months. The
principal of this Bond shall mature and be paid in installments on the dates and in the amounts set
forth in the table below:
Payment Date
Principal Installment
Interest
(Feb r u ary 15)
Amount ($)
Rat ( %)
2017
95,000
1.790
2018
90,000
1.790
2019
340,000
1.790
2020
350,000
1.790
2021
345,000
1.790
2022
360,000
1.790
2023
365,000
1.790
2024
375,000
1.790
2025
375,000
1.790
2026
385,000
1.790
2027
315,000
1.790
2028
325,000
1.790
Total
3
91
THEPRINCIPAL OFAND INTEREST ONTHISBOND are payable in lawful money of
the United States of America, without exchange or collection charges. The City shall pay interest
on the unpaid principal installments of this Bond on February 15, 2017, and on each February 15
and August 15 thereafter to the date of maturity thereof. The last principal installment of this Bond
shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at
maturity at the designated corporate trust or commercial banking office of FIRST NATIONAL BANK
TEXAS (currently located in Killeen, Texas), which is the "Paying Agent/Regisfiar" for this Bond.
The payment of all other principal installments of and interest on this Bond shall be made by the
Paying Agent/Registrar to the Registered Owner hereof on each principal and interest payment date
by check or draft, dated as of such principal and interest payment date, drawn by the Paying
Agent /Registrar on, and payable solely from, funds of the City required by the ordinance authorizing
the issuance of this Bond (the "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 business day of the
month next preceding each such date (the "Record Date ") on the Registration Books kept by the
Paying Agent/Registrar, as hereinafter described. In addition, principal and interest may be paid by
such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and
expense of, the Registered Owner.
THE CITY COVENANTS WITH THE REGISTERED OWNER of this Bond that on or
before each principal payment date and interest payment date for this Bond it will make available
to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of and
interest on the Bond, when due.
IF THE DATE FOR THE PAYMENT of the principal 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 corporate trust or commercial banking office of the Paying Agent/Registrar is located
are authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking
institutions are authorized to close; and payment on such date shall have the same force and effect
as if made on the original date payment was due.
THIS BOND IS DATED AS OF SEPTEMBER 1, 2016, and is authorized and issued
pursuant to and in compliance with the Constitution and laws of the State of Texas in the original
aggregate principal amount of $3,720,000 FOR THE PURPOSE OF PROVIDING FUNDS TO
REFUND A PORTION OF THE CITY'S GENERAL OBLIGATION INDEBTEDNESS AND
PAY COSTS OF ISSUANCE.
ON FEBRUARY I5, 2024, or on any date thereafter, the principal installment payments of
this Bond maturing on and after February 15, 2025, may be redeemed prior to their scheduled
maturities, at the option of the City, with funds derived from any available and lawful source, as a
whole, or in part, at the redemption price of the principal amount of this Bond called for redemption,
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plus accrued interest thereon to the date fixed for redemption. The City shall determine the maturity
or maturities, and the principal amount of this Bond within each maturity, to be redeemed.
AT LEAST 30 DAYS prior to the date fixed for any redemption of this Bond or portions
thereof prior to maturity, a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first -class postage prepaid to the Registered Owner of this
Bond to be redeemed at its address as it appeared on the Registration Books maintained by the
Paying Agent/Registrar on the day such notice of redemption is mailed. The notice with respect to
an optional redemption may state (1) that it is conditioned upon the deposit of moneys, in an amount
equal to the amount necessary to effect the redemption, with the Paying Agent /Registrar no later
than the redemption date, or (2) that the City retains the right to rescind such notice at any time prior
to the scheduled redemption date if the City delivers a certificate of an authorized representative to
the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice,
and such notice and optional redemption shall be of no effect if such moneys are not so deposited
or if the notice is so rescinded. Any notice of redemption so mailed shall be conclusively presumed
to have been duly given irrespective of whether received by the Registered Owner. By the date
fixed for any such redemption, due provision shall be made with the Paying Agent /Registrar for the
payment of the required redemption price for the Bond or portions thereof which are to be so
redeemed. If such written notice of redemption is mailed and if due provision for such payment is
made, all as provided above, the Bond or portions thereof which are to be so redeemed thereby
automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not bear
interest after the date fixed for redemption, and they shall not be regarded as being outstanding
except for the right of the Registered Owner to receive the redemption price from the Paying
Agent /Registrar out of the funds provided for such payment. If a portion of this Bond shall be
redeemed a substitute Bond having the same principal installment maturity dates, bearing interest
at the same rates, and in an aggregate principal amount equal to the unredeemed portion thereof, will
be issued to the Registered Owner upon the surrender thereof for cancellation, at the expense of the
City, all as provided in the Ordinance.
UPON THE PAYMENT OF THE OUTSTANDING principal balance of this Bond, the
Paying Agent/Registrar shall note in the Bond Registration Books the amount of such payment, the
date said payment was made and the remaining unpaid principal balance of this Bond.
THIS BOND IS ISSUEDASA FULL Y REGISTERED BOND, without interest coupons,
in the denomination of the principal amount thereof. As provided in the Ordinance, this Bond may,
at the request of the Registered Owner or the assignee hereof, be assigned or transferred for a like
aggregate principal amount of a frilly registered Bond in the denomination of the principal amount
hereof, without interest coupons, payable to the Registered Owner or assignees as the case may be,
having the same denomination, upon surrender of this Bond to the Paying Agent /Registrar for
cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among
other requirements for such assignment and transfer, this Bond must be presented and surrendered
to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this
Bond. The form of Assignment printed or endorsed on this Bond may be executed by the Registered
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Owner to evidence the assignment hereof, but such method is not exclusive, and other instruments
of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment
of this Bond by the Registered Owner. The Paying Agent/Registrar's reasonable standard or
customary fees and charges for assigning, transferring or exchanging any Bond will be paid by the
City. In any circumstance, any taxes or governmental charges required to be paid with respect
thereto shall be paid by the one requesting such assignment or transfer, as a condition precedent to
the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such
transfer during the period commencing with the close of business on any Record Date and ending
with the opening of business on the next following principal or interest payment date.
IN THE EVENTANYPAYINGAGENT /REGISTRAR FOR THE BOND IS CHANGED
by the City, resigns, or otherwise ceases to act as such, the City has covenanted in the Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the Registered Owner of the Bond.
IT IS HEREBY CERTIFIED, RECITED, AND COVENANTED that this Bond has been
duly and validly authorized, issued and delivered; 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
ofthis Bond have been performed, existed and been done in accordance with law, and that this Bond
does not exceed any constitutional or statutory limitation; that this Bond is an obligation ofthe City;
and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of
this Bond, as such interest comes due, and as such principal matures, have been levied and ordered
to be levied against all taxable property in the City, and have been pledged for such payment, within
the limits prescribed by law, all as provided in the Ordinance authorizing the Bonds.
THE CITY HAS RESERVED THE RIGHT to amend the Ordinance as provided therein,
and under some (but not all) circumstances amendments thereto must be approved by the Registered
Owner of the Bond.
BYBECOMING THE REGISTERED OWNER OF THIS BOND, the Registered Owner
thereby acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Ordinance is duly recorded and available for inspection
in the official minutes and records of the governing body of the City, and agrees that the terms and
provisions of this Bond and the Ordinance constitute a contract between the Registered Owner
hereof and the City.
S #2
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor or Mayor Pro -Tem of the City and countersigned with the manual
or facsimile signature of the City Secretary of the City, and has caused the official seal of the City
to be duly impressed, or placed in facsimile, on this Bond.
(signature)
City Secretary
City of Kennedale, Texas
(signature)
Mayor (Pro -Tem)
City of Kennedale, Texas
� &) 6f -;
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I� 64 °, � 1 �'� <11 Q t" f n
(SEAL)
(b) Form of Pang 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 is hereby certified that this Bond has been issued under the provisions of the Ordinance
described in the text of this Bond; and that this Bond has been issued in replacement of, or
transferred for, a Bond of a Series 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:
FIRST NATIONAL BANK TEXAS
Paying Agent/Registrar
Authorized Representative
[The remainder of this page intentionally left blank]
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(d) Form of Assignment
�O WI ( t-
, �)00
ASSIGNMENT
(Please print or type clearly)
For value received, the undersigned hereby sells,
assigns and transfers unto:
Transferee's Social Security or Taxpayer
Identification Number:
Transferee's name and address, including zip code:
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of
the within Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution participating in a
securities transfer association recognized signature
guarantee program.
NOTICE: The signature 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.
(e) Form of Registration Certificate of the Comptroller of Public Accounts:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved
by the Attorney General of the State of Texas, and that this 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
(COMPTROLLER'S SEAL)
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SECTION 7. INTEREST AND SINKING FUND; TAX LEVY; SECURITY INTEREST.
(a) Interest and Sinking Fund; Tax Levy A special " Interest and Sinking Fund" is
hereby created and shall be established and maintained by the City at an official depository bank of
the City. Said Interest and Sinking Fund shall be kept separate and apart from all other funds and
accounts of the City, and shall be used only for paying the interest on and the principal of the Bond.
Immediately after the issuance and delivery of the Bond, all accrued interest on the Bond, if any,
together with any premium on the Bond that is not used by the City to pay costs of issuance in
accordance with the provisions of Section 1201.042(d), Texas Government Code, as amended, shall
be deposited to the credit of the Interest and Sinking Fund. In addition, all ad valorem taxes levied
and collected for and on account of the Bond shall be deposited, as collected, to the credit of said
Interest and Sinking Fund. For each fiscal year while the Bond or interest thereon is outstanding and
unpaid, the governing body of the City shall compute and ascertain a rate and amount of ad valorem
tax which will be sufficient to raise and produce the money required to pay the interest on the Bond
as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal
of the Bond as such principal matures (but never less than 2% of the original principal amount of
the Bond as a sinking fund each year); and said tax shall be based on the latest approved tax rolls
of the City, with full allowance being made for tax delinquencies and the cost of tax collection. Said
rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be levied, against all
taxable property in the City for each year while the Bond or interest thereon is outstanding and
unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the
Interest and Sinking Fund created by this Ordinance. Said ad valorem taxes sufficient to provide
for the payment of the interest on and principal of the Bond, as such interest comes due and such
principal matures, are hereby pledged for such payment, within the limit prescribed by law.
(b) Security Interest Chapter 1208, Texas Government Code, applies to the issuance
of the Bond and the pledge of the ad valorem taxes granted by the City under Section 7(a) of this
Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time
while the Bond is outstanding and unpaid such that the pledge of the ad valorem taxes granted by
the City under Section 7(a) of this Ordinance is to be subject to the filing requirements of Chapter
9, Texas Business & Commerce Code, then in order to preserve to the registered owner of the Bond
the perfection of the security interest in said pledge, the City agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9, Texas Business & Commerce Code, and enable a filing to perfect the security interest
in said pledge to occur.
SECTION 8. INVESTMENTS. Funds on deposit in the Interest and Sinking Fund shall be
secured by the depository bank of the City in the manner and to the extent required by law to secure
other public funds of the City and may be invested from time to time in any investment authorized
in the Public Funds Investment Act (Chapter 2256, Texas Government Code) and the City's
investment policy adopted in accordance with the provisions of the Public Funds Investment Act at
the direction of the City Manager or Finance Director of the City; provided, however, that
investments purchased for and held in the Interest and Sinking Fund shall have a final maturity no
later than the next principal or interest payment date for which such funds are required. Income and
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profits from such investments shall be deposited in the Interest and Sinking Fund. It is further
provided, however, that any interest earnings on Bond proceeds which are required to be rebated to
the United States of America pursuant to Section 13 hereof in order to prevent the Bond from being
an arbitrage bond shall be so rebated and not considered as interest earnings for the purposes of this
Section.
SECTION 9. DEFEASANCE OF BOND. (a) The Bond and the interest thereon shall be
deemed to be paid, retired and no longer outstanding (a "Defeased Bond ") within the meaning of
this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the
principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of
maturity or otherwise) either (i) shall have been made or caused to be made in accordance with the
terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably
depositing with or making available to the Paying Agent /Registrar in accordance with an escrow
agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful
money of the United States of America sufficient to make such payment or (2) Defeasance Securities
that mature as to principal and interest in such amounts and at such times as will insure the
availability, without reinvestment, of sufficient money to provide for such payment (which
sufficiency shall be verified by a certified public accountant or a firm of certified public
accountants), and when proper arrangements have been made by the City with the Paying
Agent /Registrar for the payment of its sei vices until the Defeased Bond shall have become due and
payable. At such time as the Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid,
the Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the
benefits of, the ad valorem maintenance taxes herein levied and pledged as provided in this
Ordinance, and such principal and interest shall be payable solely from such money or Defeasance
Securities. Notwithstanding the foregoing, in the event the funds on deposit in the Future Escrow
Agreement are deficient for any reason to pay debt service on the Defeased Bond when due, the City
shall remain obligated to pay such deficiency from lawfully available and /or appropriated funds.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the City be invested in Defeasance Securities, maturing in the amounts and times as
hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Bond and interest thereon, with respect
to which such money has been so deposited, shall be turned over to the City, or deposited as directed
in writing by the City. Any Future Escrow Agreement pursuant to which the money and /or
Defeasance Securities are held for the payment of the Defeased Bond may contain provisions
permitting the investment or reinvestment of such moneys in Defeasance Securities or the
substitution of other Defeasance Securities upon the satisfaction of the requirements specified in
subsection (a)(i) or (ii) of this Section. All income from such Defeasance Securities received by the
Paying Agent /Registrar which is not required for the payment of the Defeased Bond, with respect
to which such money has been so deposited, shall be remitted to the City or deposited as directed
in writing by the City.
(c) The term "Defeasance Securities" means (i) direct, noncallable obligations of the
United States of America, including obligations that are unconditionally guaranteed by the United
5Fol
States of America., (ii) noncallable obligations of an agency or instrumentality of the United States
of America, including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date of the purchase thereof are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent, (iii) noncallable
obligations of a state or an agency or a county, municipality, or other political subdivision of a state
that have been refunded and that, on the date the governing body of the City adopts or approves the
proceedings authorizing the financial arrangements are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, and (iv) any other then
authorized securities or obligations under applicable state law that may be used to defease
obligations such as the Bond.
(d) Until the Defeased Bond shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for the Defeased Bond the
same as if they had not been defeased, and the City shall make proper arrangements to provide and
pay for such services as required by this Ordinance.
SECTION 10. DAMAGED, MUTILATED, LOST, STOLEN, ORDESTROYED BOND.
(a) Replacement Bond In the event any outstanding Bond is damaged, mutilated, lost,
stolen, or destroyed, the Paying Agent /Registrar shall cause to be printed, executed, and delivered,
a new Bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated,
lost, stolen, or destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bond Application for replacement of a damaged,
mutilated, lost, stolen, or destroyed Bond shall be made by the Registered Owner thereof to the
Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the Registered Owner
applying for a replacement Bond shall furnish to the City and to the Paying Agent/Registrar such
security or indemnity as may be required by them to save each of them harmless from any loss or
damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the
Registered Owner 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 Registered Owner shall surrender to the Paying Agent /Registrar
for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred 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 such Bond, the City may
authorize the payment of the same (without surrender thereof except in the case of a damaged or mu-
tilated Bond) instead of issuing a replacement Bond, provided security or indemnity is furnished as
above provided in this Section.
(d) Charge for Issuing Replacement Bond Prior to the issuance of any replacement Bond,
the Paying Agent /Registrar shall charge the Registered Owner of such Bond with all legal, printing,
and other expenses in connection therewith. Every replacement Bond issued pursuant to the
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provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall
constitute a Bond 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 Ordinance equally
and proportionately with any other Bond duly issued under this Ordinance.
(e) Authority for Issuing Replacement Bond In accordance with Section 1201, Texas
Government Code, this Section of this Ordinance shall constitute authority for the issuance of any
such replacement Bond without necessity of further action by the City or any other body or person,
and the duty of the replacement of such Bond is hereby authorized and imposed upon the Paying
Agent /Registrar, and the Paying Agent/Registrar shall authenticate and deliver such replacement
Bond in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance for
Bond issued in conversion and exchange of a Bond.
SECTION 11. CUSTODY, APPROVAL, AND REGISTRATION OF BOND; BOND
COUNSEL'S OPINION; AND CUSIP NUMBERS. The Mayor of the City is hereby authorized
to have control of the Bond initially issued and delivered hereunder and all necessary records and
proceedings pertaining to the Bond pending its delivery and its investigation, examination, and
approval by the Attorney General of the State of Texas, and its registration by the Comptroller of
Public Accounts of the State of Texas. Upon registration of the Bond the Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Bond, and the seal of said Comptroller shall
be impressed, or placed in facsimile, on such Certificate. The approving legal opinion of the City's
Bond Counsel (with an appropriate certificate pertaining thereto executed by facsimile signature of
the City Secretary of the City) and the assigned CUSIP numbers may, at the option of the City, be
printed on the Bond issued and delivered under this Ordinance, but neither shall have any legal
effect, and shall be solely for the convenience and information of the Registered Owner of the Bond.
In addition, if bond insurance is obtained, the Bond may bear an appropriate legend as provided by
the insurer.
SECTION 12. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON
THE BOND. (a) Covenants The City covenants to take any action necessary to assure, or refrain
from any action which would adversely affect, the treatment of the Bond as an obligation described
in section 103 of the Internal Revenue Code of 1986, as amended (the "Code "), the interest on which
is not includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bond or the projects financed therewith (less amounts deposited to a reserve fund, if any)
are used for any "private business use," as defined in section 141(b)(6) of the Code or, if
more than 10 percent of the proceeds or the projects financed therewith are so used, such
amounts, whether or not received by the City, with respect to such private business use, do
not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly,
secure or provide for the payment of more than 10 percent of the debt service on the Bond,
in contravention of section 141(b)(2) of the Code;
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(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bond or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" which is "related" and not
"disproportionate," within the meaning of section 141(b)(3) ofthe Code, to the governmental
use;
(3) 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 Bond (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;
(4) to refrain from taking any action which would otherwise result in the Bond being
treated as a "private activity bond" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bond being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bond, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Bond, other than investment property acquired
with —
(A) proceeds of the Bond invested for a reasonable temporary period of 3
years or less or, in the case of a refunding bond, for a period of 90 days or less until
such proceeds are needed for the purpose for which the Bond is issued,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148 -1(b) of the Treasury Regulations, and
(C) 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
Bond;
(7) to otherwise restrict the use of the proceeds of the Bond or amounts treated as
proceeds of the Bond, as may be necessary, so that the Bond does 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
(8) to pay to the United States of America at least once during each five -year period
(beginning on the date of delivery of the Bond) 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 Bond has been paid in full, 100
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percent of the amount then required to be paid as a result of Excess Earnings under section
148(f) of the Code.
(b) Rebate Fund In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation the
bondholders. The Rebate Fund is established for the additional purpose of compliance with section
148 of the Code.
(c) Proceeds The City understands thatthe term " proceeds" includes "disposition proceeds"
as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if
any) and proceeds of the refunded bonds expended prior to the date of issuance of the Bond. It is
the understanding of the City that the covenants contained herein are intended to assure compliance
with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury
pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify
or expand provisions of the Code, as applicable to the Bond, the City 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 Bond 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
Bond, the City 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 Bond under section 103 of the Code. In furtherance of such intention, the
City hereby authorizes and directs the Mayor, City Manager and Finance Director of the City 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 Bond.
(d) Allocation of, and Limitation on, Expenditures for the Project The City covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 1 of this Ordinance (the "Project ") on its books and records in accordance with
the requirements of the Internal Revenue Code. The City recognizes that in order for the proceeds
to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures
within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is
completed; but in no event later than three years after the date on which the original expenditure is
paid. The foregoing notwithstanding, the City recognizes that in order for proceeds to be expended
under the Internal Revenue Code, the sale proceeds or investment earnings must be expended no
more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Bond, or (2) the
date the Bond is retired. The City agrees to obtain the advice of nationally - recognized bond counsel
if such expenditure fails to comply with the foregoing to assure that such expenditure will not
adversely affect the tax - exempt status of the Bond. For purposes hereof, the issuer shall not be
obligated to comply with this covenant if it obtains an opinion that such failure to comply will not
adversely affect the excludability for federal income tax purposes from gross income of the interest.
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(e) Disposition of Project The City covenants that the property constituting the Project will
not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other
compensation, unless the City obtains an opinion of nationally - recognized bond counsel that such
sale or other disposition will not adversely affect the tax - exempt status of the Bond. For purposes
of the foregoing, the portion of the property comprising personal property and disposed in the
ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes hereof, the City shall not be obligated to comply with this covenant if
it obtains an opinion that such failure to comply will not adversely affect the excludability for
federal income tax purposes from gross income of the interest.
(f) Written Procedures Unless superseded by another action of the City, to ensure
compliance with the covenants contained herein regarding private business use, remedial actions,
arbitrage and rebate, the City Council hereby adopts and establishes the instructions attached hereto
as Exhibit B as the City's written procedures.
(g) Designation as Qualified Tax - Exempt Obligation The City hereby designates the Bond
as a "qualified tax - exempt obligation" as defined in section 265(b)(3) of the Code. In furtherance
of such designation, the City represents, covenants and warrants the following: (a) that during the
calendar year in which the Bond is issued, the City (including any subordinate entities) has not
designated nor will designate bonds, which when aggregated with the Bond, will result in more than
$10,000,000 of "qualified tax - exempt bonds" being issued; (b) that the City reasonably anticipates
that the amount of tax - exempt obligations issued, during the calendar year in which the Bond is
issued, by the City (or any subordinate entities) will not exceed $10,000,000; and, (c) that the City
will take such action or refrain from such action as necessary, and as more particularly set forth in
this Section, in order that the Bond will not be considered a "private activity bonds" within the
meaning of section 141 of the Code.
SECTION 13. SALE OF BOND. The Bond is hereby initially sold and shall be delivered
to FIRST NATIONAL BANK TEXAS (the "Purchaser ") for cash for the par value thereof and no
accrued interest, pursuant to the Purchase Contract and Investment Letter, attached hereto as
Exhibit C , dated the date of the final passage of this Ordinance which the Mayor or Mayor Pro -Tem
of the City is hereby authorized to execute and deliver. In satisfaction of Section 1201.022(a)(3),
Texas Government Code, and upon consultation with the City's Financial Advisor, the City Council
hereby determines that the final terms of the Bond as set forth in this Ordinance are in the City's best
interests. The Bond initially shall be registered in the name of FIRST NATIONAL BANK TEXAS.
SECTION 14. APPROVAL OF ESCROW AGREEMENT; REFUNDING OF
REFUNDED OBLIGATIONS. Concurrently with the initial delivery of the Bond the City shall
deposit an amount from the proceeds from the sale of the Bond and other available funds of the City,
if required, with BOKF, NA, as "Escrow Agent," sufficient to provide for the refunding of the
Refunded Obligations, all in accordance with Chapter 1207. Attached hereto as Exhibit D is an
Escrow Agreement between the City and the Escrow Agent, which is hereby approved in
substantially final form, and the Mayor or Mayor Pro -Tem and City Secretary of the City are hereby
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authorized, for and on behalf of the City, to approve any changes in the Escrow Agreement from the
form attached hereto and to execute the Escrow Agreement in final form.
SECTION 15. NOTICE OF DEFEASANCE AND REDEMPTION OF REFUNDED
OBLIGATIONS. There is attached to this Ordinance as ExhibitE is aNOTICE OFDEFEASANCE
AND REDEMPTION with respect each series of the Refunded Obligations. The Refunded
Obligations are hereby called for redemption on the "Redemption Date" set forth in the respective
NOTICE OFDEFEASANCEAND REDEMPTION. As soon as practicable after the adoption ofthis
Ordinance, a copy of each such NOTICE OF DEFEASANCE AND REDEMPTION shall be (i)
posted with the MSRB through the EMMA system, and (ii) sent to all registered owners of the
respective Refunded Obligations by first class mail postage prepaid, addressed to such registered
owners at their respective addresses shown on the registration books of the paying agent /registrar
for the Refunded Obligations.
SECTION 16. FURTHER PROCEDURES. The Mayor, Mayor Pro -Tem, City Manager,
Finance Director, and City Secretary of the City are hereby expressly authorized, empowered and
directed from time to time and at any time to do and perform all such acts and things and to execute,
acknowledge and deliver in the name and under the corporate seal and on behalf of the City all other
instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out
the terms and provisions of this Ordinance, the Bond, and the sale of the Bond. In case any officer
whose signature shall appear on the Bond shall cease to be such officer before the delivery of such
Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if such
officer had remained in office until such delivery.
SECTION 17. ORDINANCE A CONTRACT; AMENDMENTS. The Ordinance shall
constitute a contract with the Registered Owner of the Bond, binding on the City and its successors
and assigns, and shall not be amended or repealed by the City as long as any Bond remains
outstanding except as permitted in this Section.
(a) The City may from time to time, without the consent of Registered Owner, except as
otherwise required by paragraph (b) below, amend or supplement this Ordinance to (i) cure any
ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests
of the Registered Owner, (ii) grant additional rights or security for the benefit of the Registered
Owner, (iii) add events of default as shall not be inconsistent with the provisions of this Ordinance
and that shall not materially adversely affect the interests of the Registered Owner, (v) qualify this
Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of
federal laws from time to time in effect, or (iv) make such other provisions in regard to matters or
questions arising under this Ordinance as shall not be materially inconsistent with the provisions of
this Ordinance and that shall not, in the opinion of nationally - recognized bond counsel, materially
adversely affect the tax - exempt status of the Bond.
(b) Except as provided in paragraph (a) above, the Registered Owner of the Bond shall have
the right from time to time to approve any amendment hereto that may be deemed necessary or
desirable by the City; provided, however, that without the consent of the Registered Owner, nothing
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herein contained shall permit or be construed to permit amendment of the terms and conditions of
this Ordinance or in any of the Bond so as to:
(1) Make any change in the maturity of the Bond;
(2) Reduce the rate of interest borne by the Bond;
(3) Reduce the amount of the principal of payable on the Bond; or
(4) Modify the terms of payment of principal of or interest on the Bond or impose
any condition with respect to such payment.
(c) If at any time the City shall desire to amend this Ordinance under Section 16(a) or (b)
above, the City shall send by U.S. mail to the Registered Owner of the Bond a copy of the proposed
amendment prior to its effective date.
(d) Whenever at any time within one year from the date of mailing of such notice the City
shall receive an instrument or instruments executed by the Registered Owner, which instrument or
instruments shall refer to the proposed amendment and which shall specifically consent to and
approve such amendment, the City may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the City and Registered
Owner of the Bond shall thereafter be determined, exercised, and enforced, subject in all respects
to such amendment.
(f) Any consent given by the Registered Owner of the Bond pursuant to the provisions of
this Section shall be irrevocable for a period of six months from the date of the such consent and
shall be conclusive and binding upon all future Registered Owners of the Bond during such period.
Such consent may be revoked at any time after six months from the date of said consent by the
Registered Owner who gave such consent, or by a successor in title, by filing notice with the City,
but such revocation shall not be effective if the Registered Owner has, prior to the attempted
revocation, consented to and approved the amendment.
(g) For the purposes of establishing ownership of the Bond, the City shall rely solely upon
the registration of the ownership of such Bond on the Registration Books kept by the Paying
Agent /Registrar.
SECTION 18. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights and
remedies provided by the laws of the State of Texas, it is specifically covenanted and agreed
particularly that in the event the City (i) defaults in the payment of the principal, premium, if any,
or interest on the Bond, (ii) defaults in the deposits and credits required to be made to the Interest
and Sinking Fund, or (iii) defaults in the observance or performance of any other of the covenants,
-23-
conditions or obligations set forth in this Ordinance, the Registered Owner of the Bond. shall be
entitled to seek a writ of mandamus issued by a court of proper jurisdiction compelling and requiring
the governing body of the City and other officers of the City to observe and perform any covenant,
condition or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any such default or acquiescence
therein, and every such right and power may be exercised from time to time and as often as may be
deemed expedient. The specific remedy herein provided shall be cumulative of all other existing
remedies, and the specification of such remedy shall not be deemed to be exclusive.
SECTION 19. NO RULE 15C2 -12 UNDERTAKING; ANNUAL FINANCIAL
STATEMENTS. The City has not made an undertaking in accordance with Rule 15c2 -12 of the
Securities and Exchange Commission (the "Rule ") in connection with the issuance of the Bond
inasmuch as the Purchaser is not acting as an "underwriter in a primary offering of municipal
securities" within the meaning of the Rule. The City is not, therefore, obligated pursuant to the Rule
to provide any on -going disclosure relating to the City or the Bond; however, as long as the Bond
is outstanding, the City shall provide the following to the Registered Owner:
(a) Audited financial statements of the City, to be provided within 180 days after
the close of each fiscal year ending on and after August 31, 2016; and
(b) A copy of the City's annual budget within not more than 30 days after it is
adopted by the City's governing body.
SECTION 20. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied
is intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City and the Registered Owners of the Bond, any right, remedy or claim under or by reason of this
Ordinance or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises
and agreements in this Ordinance contained by and on behalf of the City shall be for the sole and
exclusive benefit of the City and the Registered Owners of the Bond.
SECTION 21. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
incorporates such recitals as a part of this Ordinance.
SECTION 22. CHOICE OF LAW. This Ordinance shall be governed by and construed in
accordance with the laws of the State of Texas.
SECTION 23. EFFECTIVE DATE. Pursuant to the provisions of Section 1201.028, Texas
Government Code, this Ordinance shall become effective immediately after its adoption.
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ADOPTED BY THE CITY COUNCIL OF THE CITY OF KENNEDALE, TEXAS AT A
REGULAR MEETING HELD ON THE 15 DAY OFA UGUST, 2016.
ATTEST:
City Secretary, City of Kennedal exas
(SEAL)
Signature Page to Ordinance Authorizing the Issuance of
City of Kennedale, Texas General Obligation Refunding Bond, Series 2016
EXHIBIT A
THE PAYING AGENT /REGISTRAR AGREEMENT IS OMITTED AT THIS POINT
AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT OF PROCEEDINGS
PAYING AGENT/REGISTRAR AGREEMENT
THISPA YINGA GENTIREGISTRAR A GREEMENT, dated as of September 1, 2016 (this
"Agreement "), by and between the CITY OF KENNDALE, TEXAS (the "Issuer ") and FIRST
NATIONAL BANK TEXAS, Killeen, Texas (the "Bank "), a national banking association duly
organized and operating under the laws of the United States of America.
WHEREAS, the Issuer has duly authorized and provided for the issuance of its CITY OF
KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016 (the "Securities "),
such Securities to be issued in fully registered form only as to the payment of principal and interest
thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof on
or about September 15, 2016; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent /Registrar in
connection with the payment of the principal of, premium, if any, and interest on the Securities and
with respect to the registration, transfer, and exchange thereof by the registered owners thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer
and has full power and authority to perform and serve as Paying Agent /Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
SECTION 1.01. APPOINTMENT The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities. As Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof, all in accordance
with this Agreement and the "Ordinance" (hereinafter defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar
for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the Ordinance, a copy of which books and records shall be maintained at the
office of the Bank located in the State of Texas or shall be available to be accessed from such office
located in the State of Texas.
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
SECTION 1.02. COMPENSATION As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Schedule A attached hereto for the first year of this Agreement and thereafter the fees and amounts
set forth in the Bank's current fee schedule then in effect for services as Paying Agent/Registrar for
municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the
Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of the
provisions hereof (including the reasonable compensation and the expenses and disbursements of
its agents and counsel).
ARTICLE TWO
DEFINITIONS
SECTION 2.01. DEFINITIONS For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Bank Office" means the corporate trust or commercial banking office of the Bank as
indicated on the signature page hereof. The Bank will notify the Issuer in writing of any change in
location of the Bank Office.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Person in whose name a Security is
registered in the Security Register.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
"Ordinance" means the resolutions, orders or ordinances ofthe governing body of the Issuer
pursuant to which the Securities are issued, certified by the City Secretary or any other officer of the
Issuer and delivered to the Bank, together with any pricing certificate executed pursuant thereto.
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government.
"Predecessor Securities" of any particular Security means every previous Security
evidencing all or a portion of the same obligation as that evidenced by such particular Security (and,
for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a
replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06
hereof and the Ordinance).
2
"Redemption Date" when used with respect to any Security to be redeemed means the date
fixed for such redemption pursuant to the terms of the Ordinance.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice -
Chairman of the Board of Directors, the Chairman or Vice - chairman of the Executive Committee
of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar
to those performed by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the Issuer
providing for the registration and transfer of the Securities.
"Stated Maturity" means the date specified in the Ordinance the principal of a Security is
scheduled to be due and payable.
SECTION 2.02. OTHER DEFINITIONS The terms "Bank," "Issuer," and "Securities"
( "Security ") have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and
functions of this Agreement.
ARTICLE THREE
PAYING AGENT
SECTION 3.01. DUTIES OF PAYING AGENT (a) Principal Paents As Paying Agent, the
Bank shall, provided adequate collected funds have been provided to it for such purpose by or on
behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity
or Redemption Date, to the Holder upon surrender of the Security to the Bank at the Bank Office.
(b) Interest Payments As Paying Agent, the Bank shall, provided adequate collected funds
have been provided to it for such purpose by or on behalf of the Issuer by no later than 10:00 a.m.
Central Time on the applicable payment date, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and preparing and
sending checks by United States mail, first class postage prepaid, on each payment date, to the
Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the
address appearing on the Security Register or by such other method, acceptable to the Bank,
requested in writing by the Holder at the Holder's risk and expense.
(c) Federal Tax Information Reporting To the extent required by the Code and the
Regulations it shall be the duty of the Bank to report to the owners of the Securities and the Internal
Revenue Service (i) the amount of "reportable payments," if any, subject to back up withholding
during each year and the amount of tax withheld, if any, with respect to the payments on the
Securities, and (ii) the amount of interest or amount treated as interest, such as original issue
discount, on the Securities required to be included in the gross income of the owners thereof for
federal income tax purposes.
SECTION 3.02. PAYMENT DATES The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities on the dates specified in the Ordinance.
ARTICLE FOUR
REGISTRAR
SECTION 4.01. SECURITY REGISTER - TRANSFERS AND EXCHANGES The Bank agrees to
keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange, and replacement of the Securities, and the payment
of the principal of and interest on the Securities to the Holders and containing such other information
as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer
and the Bank may prescribe. If the Bank Office is located outside the State of Texas, a copy of the
Security Register shall be kept in the State of Texas. All transfers, exchanges, and replacement of
Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by an
officer of a federal or state bank or a member of the Financial Industry Regulatory Authority, in
form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in
writing.
The Bank may request any supporting documentation it feels necessary to effect a re-
registration, transfer, or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in relation
to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be
completed and new Securities delivered to the Holder or the assignee of the Holder in not more than
three business days after the receipt of the Securities to be cancelled in an exchange or transfer and
the written instrument of transfer or request for exchange duly executed by the Holder, or his duly
authorized agent, in form and manner satisfactory to the Paying Agent/Registrar.
SECTION 4.02. SECURITIES The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use, and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than
the care maintained by the Bank for debt securities of other political subdivisions or corporations
for which it serves as registrar, or that is maintained for its own securities.
11
SECTION 4.03. FORM OF SECURITY REGISTER The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer, and exchange of the Securities in
accordance with the Bank's general practices and procedures in effect from time to time. The Bank
shall not be obligated to maintain such Security Register in any form other than those which the
Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
SECTION 4.04. LIST OF SECURITY HOLDERS The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained in
the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up -to -date listing or to convert the information into written form.
Unless required by law, the Bank will not release or disclose the contents of the Security
Register to any person other than to, or at the written request of, an authorized officer or employee
of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of
a court order and prior to the release or disclosure of the contents of the Security Register, the Bank
will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of
the contents of the Security Register.
SECTION 4.05. RETURN OF CANCELLED SECURITIES The Bank will, at such reasonable
intervals as it determines, surrender Securities to the Issuer in lieu of which or in exchange for which
other Securities have been issued, or which have been paid, or will provide a certificate of
destruction relating thereto.
SECTION 4.06. MUTILATED, DESTROYED, LOST, OR STOLEN SECURITIES The Issuer
hereby instructs the Bank, subject to the applicable provisions of the Ordinance, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the
same does not result in an over issuance.
In case any Security shall be mutilated, or destroyed, lost, or stolen, the Bank, in its
discretion, may execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed, lost, or
stolen Security, only after (i) the filing by the Holder thereof with the Bank of evidence satisfactory
to the Bank of the destruction, loss, or theft of such Security, and of the authenticity of the
ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory
to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity
and with the preparation, execution, and delivery of a replacement Security shall be borne by the
Holder of the Security mutilated, or destroyed, lost, or stolen.
SECTION 4.07. TRANSACTION INFORMATION TO ISSUER The Bank will, within a
reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to
the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
exchange of any Securities pursuant to Section 4.0 1, and Securities it has delivered in exchange for
or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
SECTION 5.01. DUTIES OF BANK The Bank undertakes to perform the duties set forth
herein and in the Ordinance and agrees to use reasonable care in the performance thereof.
The Bank is also authorized to transfer funds relating to the closing and initial delivery of
the Securities in the manner disclosed in the closing memorandum as prepared by the Issuer's
financial advisor, bond counsel or other agent. The Bank may act on a facsimile or e -mail
transmission of the closing memorandum acknowledged by the financial advisor or the Issuer as the
final closing memorandum. The Bank shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Bank's reliance upon and compliance with such instructions.
SECTION 5.02. RELIANCE ON DOCUMENTS, ETC (a) The Bank may conclusively rely, as
to the truth of the statements and correctness of the opinions expressed therein, on certificates or
opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own funds
or otherwise incur any financial liability for performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not
assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security, or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties. Without limiting the generality of the foregoing
statement, the Bank need not examine the ownership of any Securities, but is protected in acting
upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer
which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not
be bound to make any investigation into the facts or matters stated in a resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security,
or other paper or document supplied by the Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any action
taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties hereunder
either directly or by or through agents or attorneys of the Bank.
SECTION 5.03. RECITALS OF ISSUER The recitals contained herein with respect to the
Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or
any other Person for any amount due on any Security from its own funds.
SECTION 5.04. MAY HOLD SECURITIES The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent /Registrar, or any other agent.
SECTION 5.05. MONEY HELD BY BANK The Bank shall deposit any moneys received from
the Issuer into an account to be held in an agent capacity for the payment of the Securities, with
such moneys in the account that exceed the deposit insurance, available to the Issuer, provided by
the Federal Deposit Insurance Corporation to be fully collateralized with securities or
obligations that are eligible under the laws of the State of Texas and to the extent practicable
under the laws of the United States of America to secure and be pledged as collateral for trust
accounts until the principal and interest on such securities have been presented for payment and paid
to the owner thereof. Payments made from such trust account shall be made by check drawn on
such trust account unless the owner of such Securities shall, at its own expense and risk, request
such other medium of payment.
Funds held by the Bank hereunder need not be segregated from any other funds provided
appropriate accounts are maintained in the name and for the benefit of the Issuer.
The Bank shall be under no liability for interest on any money received by it hereunder.
Any money deposited with the Bank for the payment on any Security and remaining
unclaimed for three years after final maturity of the Security has become due and payable will be
held by the Bank and disposed of only in accordance with Title 6 of the Property Code (Unclaimed
Property).
The Bank will comply with the reporting provisions of Chapter 74 of the Property Code with
respect to property that is presumed abandoned under Chapter 72 or Chapter 75 of the Property Code
or inactive under Chapter 73 of the Property Code.
7
SECTION 5.06. INDEMNIFICATION To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without
negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or liability
in connection with the exercise or performance of any of its powers or duties under this Agreement.
SECTION 5.07. INTERPLEADER The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the County in the State of Texas where
either the Bank maintains an office or the administrative offices of the Issuer is located, and agree
that service of process by certified or registered mail, return receipt requested, to the address referred
to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank
further agree that the Bank has the right to file a Bill of Interpleader in any court of competent
jurisdiction located in the State of Texas to determine the rights of any Person claiming any interest
herein.
SECTION 5.08. DEPOSITORY TRUST COMPANY SERVICES It is hereby represented and
warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust
Company" services or equivalent depository trust services by other organizations, the Bank has the
capability and, to the extent within its control, will comply with the "Operational Arrangements,"
effective from time to time, which establishes requirements for securities to be eligible for such type
depository trust services, including, but not limited to, requirements for the timeliness of payments
and funds availability, transfer turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
SECTION 6.01. AMENDMENT This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
SECTION 6.02. ASSIGNMENT This Agreement may not be assigned by either party without
the prior written consent of the other.
SECTION 6.03. NOTICES Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the
Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on
the signature page of this Agreement.
SECTION 6.04. EFFECT OF HEADINGS The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
SECTION 6.05. SUCCESSORS AND ASSIGNS, MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION All covenants and agreements herein by the Issuer shall bind its successors and
assigns, whether so expressed or not.
Any corporation into which the Bank may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion, or consolidation to which
the Bank shall be a party, or any corporation succeeding to all or substantially all of the corporate
trust business of the Bank shall be the successor the Bank hereunder without the execution or filing
of any paper or any further act on the part of either of the parties hereto. In case any Security shall
have been registered, but not delivered, by the Bank then in office, any successor by merger,
conversion, or consolidation to such authenticating Bank may adopt such registration and deliver
the Security so registered with the same effect as if such successor Bank had itself registered such
Security.
SECTION 6.06. SEVERABII,ITY In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
SECTION 6.07. BENEFITS OF AGREEMENT Nothing herein, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy, or claim hereunder.
SECTION 6.08. ENTIRE AGREEMENT This Agreement and the Ordinance constitute the
entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar
and if any conflict exists between this Agreement and the Ordinance, the Ordinance shall govern.
SECTION 6.09. COUNTERPARTS This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and the
same Agreement.
SECTION 6.10. TERMINATION This Agreement will terminate on the date of final payment
of the principal of and interest on the Securities to the Holders thereof or may be earlier terminated
by either party upon 60 days written notice; provided, however, an early termination of this
Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has
been appointed by the Issuer and such appointment accepted, and (b) notice has been given to the
Holders of the Securities of the appointment of a successor Paying Agent/Registrar. If the 60 -day
notice period expires and no successor has been appointed, the Bank, at the expense of the Issuer,
has the right to petition a court of competent jurisdiction to appoint a successor under the
Agreement. Furthermore, the Bank and the Issuer mutually agree that the effective date of an early
termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise
adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the
Issuer.
I
The provisions of Section 1.02 and of Article Five shall survive and remain in full force and
effect following the termination of this Agreement.
SECTION 6.11. GOVERNING LAW This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
[The remainder of this page intentionally left blank]
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
FIRST NATIONAL BANK TEXAS
By:
Title:
Address: 507 N. Gray Street
Killeen, Texas 76541
Attention: Ty Molyneaux
Attest:
e
Title: 1Ai LAi
CITY OF KENNEDALE, TEXAS
By:
Title: Mayor
Address: 405 Municipal Drive
Kennedale, Texas 76060
Attention: Finance Director
Attest:
City Secretary
Signature Page to Paying Agent /Registrar Agreement Relating to
City of Kennedale, Texas General Obligation Refunding Bonds, Series 2016
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
FIRST NATIONAL BANI{ TEXAS
By:
Title:
Address: 507 N. Gray Street
Killeen, Texas 76541
Attention: Ty Molyneaux
Attest:
Title:
CITY OF KENNEDALE, TEXAS
B
Y•
Title: Mayor
Address: 405 Municipal Drive
Kennedale, Texas 76060
Attention: Finance Director
Attest:
Vj
City Secretary
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01
Signature Page to Paying Agent /Registrar Agreement Relating to
City of Kennedale, Texas General Obligation Refiinding Bonds, Series 2016
SCHEDULE A
PAYING AGENT/REGISTRAR FEE SCHEDULE
One -time $500.00 processing fee paid at Closing
EXHIBIT B
WRITTEN PROCEDURES RELATING TO
CONTINUING COMPLIANCE WITH FEDERAL TAX COVENANTS
A. Arbitrage With respect to the investment and expenditure of the proceeds of the
Bond, the City's Business Manager (the "Responsible Person ") will:
(i) monitor all amounts deposited into a sinking fund or funds (e.g., the Interest and
Sinking Fund), to assure that the maximum amount invested at a yield higher than
the yield on the Bonds does not exceed an amount equal to the debt service on the
Bonds in the succeeding 12 month period plus a carryover amount equal to
one - twelfth of the principal and interest payable on the Bonds for the immediately
preceding 12 -month period;
(ii) monitor the actions of the Escrow Agent to ensure compliance with the applicable
provisions of the Escrow Agreement, including with respect to reinvestment of cash
balances;
(iii) ensure that the applicable information return (e.g., IRS Form 8038 -G, 8038 -GC, or
any successor forms) is timely filed with the IRS; and
(iv) assure that, unless excepted from rebate and yield restriction under section 148(f) of
the Code, excess investment earnings are computed and paid to the U.S. government
at such time and in such manner as directed by the IRS (A) at least every 5 years
after the date of delivery of the Bonds (the "Issue Date "), and (B) within 30 days
after the date the Bonds are retired.
B. Private Business Use With respect to the use of the facilities financed or refinanced
with the proceeds of the Bonds the Responsible Person will:
(i) monitor the date on which the facilities are substantially complete and available to
be used for the purpose intended;
(ii) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of the City or members of the general
public has any contractual right (such as a lease, purchase, management or other
service agreement) with respect to any portion of the facilities;
(iii) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of the City or members of the general
public has a right to use the output of the facilities (e.g., water, gas, electricity);
Im
(iv) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of the City or members of the general
public has a right to use the facilities to conduct or to direct the conduct of research;
(v) determine whether, at any time the Bonds are outstanding, any person, other than the
City, has a naming right for the facilities or any other contractual right granting an
intangible benefit;
(vi) determine whether, at any time the Bonds are outstanding, the facilities are sold or
otherwise disposed of; and
(vii) take such action as is necessary to remediate any failure to maintain compliance with
the covenants contained in the Resolution related to the public use of the facilities.
C. Record Retention The Responsible Person will maintain or cause to be maintained
all records relating to the investment and expenditure of the proceeds of the Bonds and the use of
the facilities financed or refinanced thereby for a period ending three (3) years after the complete
extinguishment of the Bonds. If any portion of the Bonds is refunded with the proceeds of another
series of tax - exempt obligations, such records shall be maintained until the three (3) years after the
refunding obligations are completely extinguished. Such records can be maintained in paper or
electronic format.
D. Responsible Person The Responsible Person shall receive appropriate training
regarding the City's accounting system, contract intake system, facilities management and other
systems necessary to track the investment and expenditure of the proceeds and the use of the
facilities financed or refinanced with the proceeds of the Bonds. The foregoing notwithstanding,
the Responsible Person is authorized and instructed to retain such experienced advisors and agents
as may be necessary to carry out the purposes of these instructions.
W E
EXHIBIT C
THE PURCHASE CONTRACT AND INVESTMENT LETTER IS OMITTED AT THIS POINT
AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT OF PROCEEDINGS
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BAISTEMS
$3,720,000
CITY OF KENNEDALE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2016
PURCHASE CONTRACT AND INVESTMENT LETTER
August 15, 2016
Members of the City Council
City of Kennedale, Texas
405 Municipal Drive
Kennedale, Texas 76060
Ladies and Gentlemen:
The undersigned, as an authorized representative of First National Bank Texas (the "Purchaser "),
offers to enter into this Purchase Contract and Investment Letter (this "Contract ") with the CITY OF
KENNEDALE, TEXAS (the "Issuer "). This offer is made subject to the Issuer's acceptance of this Contract
on or before 10:00 P.M., Central Time, on the date hereof.
1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the
representations set forth herein, the Purchaser hereby agrees to purchase from the Issuer, and the Issuer
hereby agrees to sell and deliver to the Purchaser, an aggregate of $3,720,000 in principal amount of the
City of Kennedale, Texas General Obligation Refunding Bonds, Series 2016 (the "Bonds "). The Bonds
will be dated as of September 1, 2016, will mature on the dates and in the principal installments, will be
subject to redemption, and will bear interest at the rate(s) and from the date, all as specified in the
Ordinance (defined below). The purchase price for the Bonds will be equal to par and no accrued interest.
2. Bonds. The Bonds will be as described in and will be issued and secured under the provisions
of an ordinance approved on this date by the City Council of the Issuer (the "Ordinance ").
3. Representations, Warranties, and Agreements of Purchaser. The Purchaser hereby makes
the following representations and warranties to the Issuer:
(a) The Purchaser has the full right, power, and authority to enter into this Contract, and this
Contract constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency, moratorium, reorganization, or other
laws of general application affecting the enforcement of creditors' rights or by equitable principles, and
subject to the unavailability in any jurisdiction of specific performance or any other equitable remedy.
(b) The Purchaser has knowledge and experience in financial and business matters relating to the
investment in the Bonds, and is capable of evaluating the merits and risks (including the security pledged
to the payment of the Bonds) of such investment and protecting its interests in connection with this
financing. The Purchaser has the financial ability to bear the economic risks of purchasing the Bonds.
(c) The Purchaser is: (i) an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of 1933, or (ii) a state or national bank organized under the laws of
the United States, and the Purchaser has sufficient knowledge and experience in financial and business
matters, including purchase and ownership of municipal obligations, to be able to evaluate the economic
risks and merits of the investment represented by the purchase of the Bonds.
(d) The Purchaser understands that no offering statement, prospectus, offering circular, or other
comprehensive offering statement containing material information with respect to the Bonds has been
issued and the Purchaser acknowledges that the Purchaser has either been furnished with or has had
access to all information that the Purchaser has requested of the Issuer in order to enable the Purchaser to
make an informed investment decision concerning investment in the Bonds, and the Purchaser has had the
opportunity to ask questions and receive answers from knowledgeable individuals concerning the purpose
for which the proceeds of the Bonds will be utilized, and the security therefore, so that the Purchaser has
been able to make an informed decision to purchase the Bonds.
(e) The Purchaser understands that the Bonds (i) are not being registered under the Securities Act
of 1933 and are not being registered or otherwise qualified for sale under the "Blue Sky" laws and
regulations of any state due to exemptions from registration provided for therein, (ii) will not be listed on
any stock or other securities exchange, (iii) will carry no rating from any rating service, and (iv) will not
be readily marketable.
(f) The Purchaser acknowledges that the Purchaser is responsible for consulting with the
Purchaser's advisors concerning satisfaction of any obligations, including, but not limited to, any
obligations arising under federal and state securities and income tax laws, of the Purchaser with respect to
subsequent purchasers of the Bonds if and when any such future disposition of the Bonds may occur.
(h) The Purchaser has made its own inquiry and analysis with respect to the Bonds, the security
therefor, the property to be financed with the proceeds of the Bonds, and other material factors affecting
the security and payment of the Bonds and, except as set forth in this Contract and the documents,
instruments, and agreements executed in connection herewith, the Purchaser has not relied upon any
statement (other than those set forth in such documents, instruments, and agreements, and the opinions to
be delivered at the Closing (defined below) of the Attorney General of Texas and Bond Counsel to the
Issuer) by the Issuer, its officers, trustees, or employees, or its financial consultants or legal advisors in
connection with such inquiry and analysis or in connection with the offer and sale of the Bonds.
(i) The Purchaser acknowledges that it and its representatives have been furnished, prior to the
date hereof, or will be furnished at or prior to the Closing pursuant to the terms of this Contract, all
documents and certificates executed in connection with the issuance of the Bonds and all information
concerning the financing needed to make an informed decision with respect to its investment in the
Bonds. The Purchaser further acknowledges that it has full opportunity to ask questions and receive
answers from officers and representatives of the Issuer concerning the financing and to obtain any
additional information that the Issuer possesses which was necessary to verify the accuracy of the
information regarding the Issuer, the financing, or otherwise desired in connection with its evaluation of
the decision to purchase the Bonds.
0) The Purchaser is purchasing the Bonds for its own loan account as evidence of a privately
negotiated loan and has no present intention of reselling or distributing the Bonds. In making the
foregoing representation, the Purchaser is aware that it must bear the economic risk of such investment
for an indefinite period of time, and, in the event that any of the Bonds are sold by the Purchaser, such
sale may only be made to persons who are able to and do confirm in writing to the Issuer in advance of
such sale the representations contained in paragraphs (a) through (i) hereof. The Purchaser is not acting
in the capacity of broker, dealer, municipal securities underwriter, or financial advisor in connection with
its purchase of the Bonds.
4. Representations, Warranties, and Agreements of Issuer. The Issuer hereby makes the
following representations and warranties to the Purchaser:
(a) The Issuer has full legal right, power, and authority under the constitution and laws of the
State of Texas to issue, sell and deliver the Bonds as provided herein and in the Ordinance.
(b) By all necessary official action of the Issuer prior to or concurrently with the acceptance
hereof, the Issuer has duly authorized and approved the issuance and sale of the Bonds upon the terms set
forth herein and in the Ordinance.
(c) This Contract constitutes a legal, valid and binding obligation of the Issuer enforceable in
accordance with its terms, and the Bonds, when issued, authenticated and delivered as provided herein,
will be the legal, valid, and binding obligations of the Issuer enforceable in accordance with its terms; in
all cases, except as the enforceability of this Contract and the Bonds may be limited by bankruptcy,
insolvency, reorganization, and similar laws affecting creditor's rights generally and general principles of
equity which permit the exercise of judicial discretion.
(d) The Issuer is not in breach of or default in any material respect under any applicable
constitutional provision, law or administrative regulation of the State of Texas or the United States or any
applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, ordinance, or
other instrument to which the Issuer is a party or to which the Issuer is or any of its property or assets are
otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of
time or the giving of notice, or both, would constitute a material default or event of default by the Issuer
under any of the foregoing.
(e) The adoption, execution and delivery of the Bonds and compliance with the provisions on the
Issuer's part contained therein, will not, in any material manner, conflict with or constitute a breach of or
default under any constitutional provision, law, administrative regulation, judgment, decree, loan
agreement, indenture, bond, note, resolution, ordinance, agreement or other instrument to which the Issuer
is a party or to which the Issuer or any of its property or assets are otherwise subject, and such adoption,
execution, delivery or compliance will not result in the creation or imposition of any lien, charge or other
security interest or encumbrance of any nature upon the property or assets, if any, of the Issuer to be
pledged to secure the Bonds or under the terms of any such law, regulation or instrument, except as
provided by the Bonds.
5. Closing. At 10:00 A.M., Central Time, on September 14, 2016, or such other date as the
parties agree to (the "Closing "), the Issuer will deliver to the Purchaser one definitive Bond payable in
annual principal installments in the `aggregate principal amount of $3,720,000, duly executed and
authenticated, together with the other documents hereinafter mentioned, and the Purchaser will accept
such delivery and pay the purchase price of the Bonds as set forth in Paragraph 1 hereof in immediately
available funds. Delivery and payment as aforesaid will be made at the offices of the Paying
Agent/Registrar (defined in the Ordinance) or such other place as will have been mutually agreed upon by
the Issuer and the Purchaser. The definitive Bonds may be delivered in typed form and may be issued in
exchange for the initial Bond that was approved by the Attorney General of Texas and were registered by
the Comptroller of Public Accounts of the State of Texas.
6. Expenses. The Purchaser will be under no obligation to pay, and the Issuer will pay, all
expenses incident to the performance of the Issuer's obligations hereunder, including but not limited to:
(i) the cost of the preparation and, if necessary, printing of the Bonds; (ii) the fees and expenses of
Financial Advisor and Bond Counsel to the Issuer; and (iii) the fees and disbursements of the Issuer's
accountants, advisors, and of any other experts or consultants retained by the Issuer. The Issuer shall be
responsible for the reimbursement to the Purchaser for any reasonable out -of- pocket legal fees and
expenses in an amount not to exceed $ -0 -. Upon delivery of the Bonds and payment of the purchase price
by the Purchaser, such fees and expenses incurred by the Purchaser shall be reimbursed by the Issuer.
7. Parties in Interest. This Contract is made solely for the benefit of the Issuer and the Purchaser
(including the successors or assigns of the Purchaser) and no other person will acquire or have any right
hereunder or by virtue hereof. The Issuer's representations, warranties, and agreements contained in this
Contract will remain operative and in full force and effect, regardless of (i) any investigations made by or
on behalf of the Purchaser, and (ii) delivery of any payment for the Bonds hereunder; and the Purchaser's
and the Issuer's representations and warranties contained in Paragraph 3 and 4, respectively, of this
Contract, will remain operative and in full force and effect, regardless of any termination of this Contract.
8. Counterparts. This Contract may be executed in several counterparts, each of which will be
regarded as an original and all of which will constitute one and the same instrument. The section
headings of this Purchase Contract are for convenience of reference only and will not affect its
interpretation.
9. Effective Date. This Contract will become effective upon the execution of the acceptance
hereof by the President of the Issuer and will be valid and enforceable as of the time of such acceptance.
10. Purchasers Conditions to Closing. The Purchaser shall not have any obligation to
consummate the purchase of the Bonds unless from the time of execution and delivery of this Contract to
the date of the Closing, there shall not have been, in the reasonable judgment of the Purchaser, any (i)
material adverse change in the financial condition or general affairs of Issuer; (ii) event, court decision,
proposed law or rule that may have the effect on the contemplated transactions; or (iii) any other material
market disruption, including but not limited to international or national crisis, suspension of stock
exchange trading, or banking moratorium materially affecting, in the Purchaser's opinion, the market
price of the Bonds.
(The remainder of this page is intentionally left blank.)
Very truly yours,
FIRST NATIONAL BANK TEXAS
By: v 3 Sr, v
Name:
Title:
Accepted and agreed to this 15"' day of August, 2016.
CITY OF KENNEDALE, TEXAS
Mayor
Execution Page to Purchase Contract and Investment Letter Relating to
City of Kennedale, Texas General Obligation Refunding Bonds, Series 2016
Very truly yours,
Accepted and agreed to this 15' day of August, 2016.
CITY OF KENNEDALE, TEXAS
By: ✓
Mayor
FIRST NATIONAL BANK TEXAS
By: _
Name:
Title:
OF
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Execution Page to Purchase Contract and Investment Letter Relating to
City of Kennedale, Texas General Obligation Refunding Bonds, Series 2016
EXHIBIT D
THE ESCROW AGREEMENT IS OMITTED AT THIS POINT
AS IT APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT OF PROCEEDINGS
ESCROW AGREEMENT
Relating to the Refunding of
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2005
(Maturing on February 15 in the years 2018, 2021, 2024 and 2026)
and
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008
(Maturing on February 15 in the years 2019, 2020, 2022, 2024, 2026 and 2028)
THIS ESCROWAGREEMENT, dated as of September 1, 2016 (herein, together with any
amendments or supplements hereto, called this "Agreement ") is entered into by and between the
CITY OFKENNEDALE, TEXAS (herein called the "Issuer ") and BOKF, NA, Austin, Texas, as escrow
agent (herein, together with any successor in such capacity, called the "Escrow Agent "). The
addresses of the Issuer and the Escrow Agent are shown on Exhibit attached hereto and made a
part hereof.
WITNESSETH:
WHEREAS, the Issuer heretofore issued and there presently remain outstanding the
obligations (collectively, the "Refunded Obligations ") described in verification report provided by
Barthe & Wahrman, PA relating to the Refunded Obligations (the "Report "), which is attached
hereto as Exhibit B and made a part hereof; and
WHEREAS, the Refunded Obligations are scheduled to mature in such years, bear interest
at such rates, and be payable at such times and in such amounts as are set forth in the Report; and
WHEREAS, when firm banking arrangements have been made for the payment of principal
and interest to the maturity or redemption dates of the Refunded Obligations, then the Refunded
Obligations shall no longer be regarded as outstanding except for the purpose of receiving payment
from the funds provided for such purpose; and
WHEREAS, Chapter 1207, Texas Government Code, as amended ( "Chapter 1207"),
authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof, and
any other available funds or resources, directly with a place of payment (paying agent) for the
Refunded Obligations, or with another trust company or commercial bank that does not act as a
depository for the Issuer, in an amount sufficient to provide for the payment and /or redemption of
the Refunded Obligations, and such deposit, if made before such payment dates, shall constitute the
making of firm banking and financial arrangements for the discharge and final payment or
redemption of the Refunded Obligations; and
WHEREAS, Chapter 1207 (specifically Section 1207.062, Texas Government Code) further
authorizes the Issuer to enter into an escrow agreement with (i) any paying agent for the Refunded
Obligations, or (ii) another trust company or commercial bank that does not act as a depository for
the Board and is named in the proceedings authorizing such escrow agreement, with respect to the
safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon
such terms and conditions as the Issuer and such paying agent, trust company or commercial bank
may agree; provided that such deposits may be invested and reinvested in direct noncallable
obligations of the United States, including obligations that are unconditionally guaranteed by the
United States, which mature and bear interest payable at such times and in such amounts as will be
sufficient to provide for the scheduled payment or redemption of the Refunded Obligations; and
WHEREAS, U.S. Bank National Association currently serves as the paying agent for the
Refunded Obligations; however, as permitted by Section 1207.062, Texas Government Code, the
Issuer has appointed BOKF, NA, which is a commercial bank that does not act as a depository for
the Issuer, to serve as the escrow agent in connection with refunding and defeasing the Refunded
Obligations; and
WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the terms
of this Agreement and timely make available to the paying agents for the respective Refunded
Obligations the amounts required to provide for the payment of the principal of, premium, if any,
and interest on such Refunded Obligations when due, and in accordance with their terms, but solely
from the funds, in the manner, and to the extent provided in this Agreement; and
WHEREAS, the CITY OF KENNEDALE, TEXAS GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2016 (the "Refunding Bonds ") have been issued, sold and delivered for the purpose, among
others, of obtaining the funds required to provide for the payment of the principal of the Refunded
Obligations at their respective maturity dates or dates of redemption and the interest thereon to such
dates; and
WHEREAS, the Issuer desires that, concurrently with the delivery of the Refunding Bonds
to the purchasers thereof, certain proceeds of the Refunding Bonds, together with certain other
available funds of the Issuer, if applicable, shall be applied to purchase certain direct obligations of
the United States of America hereinafter defined as the "Escrowed Securities" for deposit to the
credit of the Escrow Fund created pursuant to the terms of this Agreement and to establish a
beginning cash balance (if needed) in such Escrow Fund; and
WHEREAS, the Escrowed Securities shall mature and the interest thereon shall be payable
at such times and in such amounts so as to provide moneys which, together with cash balances from
time to time on deposit in the Escrow Fund, will be sufficient to pay interest on the Refunded
Obligations as it accrues and becomes payable and the principal of the Refunded Obligations on
their maturity dates or dates of redemption; and
WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrowed Securities,
particularly those in book entry form, the Issuer desires to establish the Escrow Fund at the principal
corporate trust office of the Escrow Agent; and
NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements
herein contained, the sufficiency of which hereby are acknowledged, and to secure the full and
timely payment of principal of and the interest on the Refunded Obligations, the Issuer and the
Escrow Agent mutually undertake, promise, and agree for themselves and their respective
representatives and successors, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.01 DEFINITIONS Unless the context clearly indicates otherwise, the following
terms shall have the meanings assigned to them below when they are used in this Agreement:
"Code" means the Internal Revenue Code of 1986, as amended, or to the extent applicable
the Internal Revenue Code of 1954, together with any other applicable provisions of any successor
federal income tax laws.
"Escrow Fund" means the fund created by this Agreement to be administered by the Escrow
Agent pursuant to the provisions of this Agreement.
"Escrowed Securities" means the direct noncallable, not pre- payable United States Treasury
obligations and obligations the due timely payment of which is unconditionally guaranteed by the
United States of America described in the Report or cash or other direct obligations of the United
States of America substituted therefor pursuant to Article IV of this Agreement.
SECTION 1.02 OTHER DEFINITIONS The terms "Agreement," "Escrow Agent," "Issuer,"
"Refunded Obligations," "Refunding Bonds," and "Report," when they are used in this Agreement,
shall have the meanings assigned to them in the preamble to this Agreement.
SECTION 1.03 INTERPRETATIONS The titles and headings of the articles and sections of
this Agreement have been inserted for convenience and reference only and are not to be considered
a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all
of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth
herein and to achieve the intended purpose of providing for the refunding of the Refunded
Obligations in accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS AND
ESCROWED SECURITIES
SECTION 2.01 DEPOSITS IN THE ESCROW FUND Concurrently with the sale and delivery
of the Refunding Bonds the Issuer shall deposit, or cause to be deposited, with the Escrow Agent,
for deposit in the Escrow Fund, the funds and Escrowed Securities described in the Report, and the
Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the Issuer in writing.
ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
SECTION 3.01 ESCRow FUND The Escrow Agent has created on its books a special trust
fund and irrevocable escrow to be known as the City of Kennedale, Texas General Obligation
Refunding Bonds, Series 2016Escrow Fund (the "Escrow Fund "). The Escrow Agent hereby agrees
that upon receipt thereof it will irrevocably deposit to the credit of the Escrow Fund the funds and
the Escrowed Securities described in the Report. Such deposit, all proceeds therefrom, and all cash
balances from time to time on deposit therein (a) shall be the property of the Escrow Fund, (b) shall
be applied only in strict conformity with the terms and conditions of this Agreement, and (c) are
hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations, which payment shall be made by timely transfers of such amounts at such times as are
provided for in Section 3.02 hereof. When the final transfers have been made for the payment of
such principal of and interest on the Refunded Obligations, any balance then remaining in the
Escrow Fund shall be transferred to the Issuer, and the Escrow Agent shall thereupon be discharged
from any further duties hereunder.
SECTION 3.02 PAYMENT OF PRINCIPAL AND INTEREST The Escrow Agent is hereby
irrevocably instructed to transfer from the cash balances from time to time on deposit in the Escrow
Fund, the amounts required to pay the principal of the Refunded Obligations at their respective
maturity dates and interest thereon to such maturity dates in the amounts and at the times shown in
the Report.
SECTION 3.03 SUFFICIENCY OFESCROW FUND The Issuer represents (based solely on the
Report) that the successive receipts of the principal of and interest on the Escrowed Securities will
assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times
sufficient to provide moneys for transfer to each paying agent at the times and in the amounts
required to pay the interest on the Refunded Obligations as such interest comes due and the principal
of the Refunded Obligations as the Refunded Obligations mature, all as more fully set forth in the
Report. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit
in the Escrow Fund shall be insufficient to transfer the amounts required by each place of payment
(paying agent) for the Refunded Obligations to make the payments set forth in Section 3.02 hereof,
notice of any such insufficiency shall be given to the Issuer by the Escrow Agent as promptly as
practicable as hereinafter provided, but neither the Escrow Agent nor the Issuer shall in any manner
be responsible for any insufficiency of funds in the Escrow Fund.
SECTION 3.04 TRUST FUND The Escrow Agent shall hold at all times the Escrow Fund,
the Escrowed Securities and all other assets of the Escrow Fund, wholly segregated from all other
funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities
or any other assets of the Escrow Fund to be commingled with any other funds or securities of the
Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth
herein. The Escrowed Securities and other assets of the Escrow Fund shall always be maintained
by the Escrow Agent as trust funds for the benefit of the owners of the Refunded Obligations; and
a special account thereof shall at all times be maintained on the books of the Escrow Agent. The
owners of the Refunded Obligations shall be entitled to the same preferred claim and first lien upon
the Escrowed Securities, the proceeds thereof, and all other assets of the Escrow Fund to which they
are entitled as owners of the Refunded Obligations. The amounts received by the Escrow Agent
under this Agreement shall not be considered as a banking deposit by the Issuer, and the Escrow
Agent shall have no right to title with respect thereto except as an Escrow Agent under the terms of
this Agreement. The amounts received by the Escrow Agent under this Agreement shall not be
subject to warrants, drafts or checks drawn by the Issuer or, except to the extent expressly herein
provided, by any paying agent for the Refunded Obligations.
SECTION 3.05 SECURITY FOR CASH BALANCES Cash balances from time to time on
deposit in the Escrow Fund shall, to the extent not insured by the Federal Deposit Insurance
Corporation or its successor, be continuously secured by a pledge of direct obligations of, or
obligations unconditionally guaranteed by, the United States of America, having a market value at
least equal to such cash balances.
ARTICLE IV
LIMITATION ON INVESTMENTS
SECTION 4.01 GENERAL REINVESTMENT RESTRICTION Except as provided in Sections
3.02, 4.02, 4.03 and 4.04 hereof, the Escrow Agent shall not have any power or duty to invest or
reinvest any money held hereunder, or to make substitutions of the Escrowed Securities, or to sell,
transfer or otherwise dispose of the Escrowed Securities.
SECTION 4.02 REINVESTMENT OF CERTAIN CASH BALANCES IN ESCROW BY ESCROW
AGENT In addition to the Escrowed Securities listed in the Report, the Escrow Agent shall reinvest
cash balances shown in the Report in United States Treasury Certificates of Indebtedness, Notes or
Bonds - State and Local Government Series with an interest rate equal to zero percent (0 %) (the
"Zero SLGs ") to the extent such Obligations are available from the Department of Treasury. All
such re- investments shall be made only from the portion of cash balances derived from the maturing
principal of and interest on any Escrowed Securities. Unless otherwise instructed by the Issuer in
accordance with Section 4.03 hereof, the Escrow Agent shall acquire any Zero SLGs on the dates
the Escrowed Securities listed in the Report mature, as shown in the Report, (or on the first date any
Zero SLGs become available thereafter. The Escrow Agent shall purchase Zero SLGs that mature
on the dates shown in the Report.
SECTION 4.03 SUBSTITUTIONS AND REINVESTMENTS At the discretion of the Issuer, the
Escrow Agent shall reinvest cash balances representing receipts from the Escrowed Securities, make
substitutions of the Escrowed Securities or redeem the Escrowed Securities and reinvest the
proceeds thereof or hold such proceeds as cash, together with other moneys or securities held in the
Escrow Fund provided that the Issuer delivers to the Escrow Agent the following:
(1) an opinion by an independent certified public accountant that after such
substitution or reinvestment the principal amount of the securities in the Escrow Fund (which
shall be noncallable, not pre- payable direct obligations of the United States of America),
together with the interest thereon and other available moneys, will be sufficient to pay,
without further investment or reinvestment, as the same become due in accordance with the
Report, the principal of, interest on and premium, if any, on the Refunded Obligations which
have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond counsel to the
effect that (a) such substitution or reinvestment will not cause the Refunded Obligations to
be "arbitrage bonds" within the meaning of Section 103 of the Code or the regulations
thereunder in effect on the date of such substitution or reinvestment, or otherwise make the
interest on the Refunded Obligations subject to federal income taxation, and (b) such
substitution or reinvestment complies with the Constitution and laws of the State of Texas
and with all relevant documents relating to the issuance of the Refunded Obligations.
The Escrow Agent shall have no responsibility or liability for loss or otherwise with respect
to investments made at the direction of the Issuer.
SECTION 4.04 SUBSTITUTION FOR ESCROWED SECURITIES Concurrently with the initial
deposit by the Issuer with the Escrow Agent, but not thereafter, the Issuer, at its option, may
substitute cash or non - interest bearing direct noncallable and not pre- payable obligations of the
United States Treasury (i.e., Treasury obligations which mature and are payable in a stated amount
on the maturity date thereof, and for which there are no payments other than the payment made on
the maturity date) (the "Substitute Obligations ") for non - interest bearing Escrowed Securities, if any,
but only if such Substitute Obligations
(a) are in an amount, and /or mature in an amount, which is equal to or greater than the
amount payable on the maturity date of the obligation listed in the Report for which
such Substitute Obligation is substituted,
(b) mature on or before the maturity date of the obligation listed in the Report for which
such Substitute Obligation is substituted, and
(c) produce the amount necessary to pay the interest on and principal of the Refunded
Obligations, as set forth in the Report, as verified by a certified public accountant or
a firm of certified public accountants.
If, concurrently with the initial deposit by the Issuer with the Escrow Agent, any such Substitute
Obligations are so substituted for any Escrowed Securities, the Issuer may, at any time thereafter,
substitute for such Substitute Obligations the same Escrowed Securities for which such Substitute
Obligations originally were substituted.
SECTION 4.05 ARBITRAGE The Issuer hereby covenants and agrees that it shall never
request the Escrow Agent to exercise any power hereunder or permit any part of the money in the
Escrow Fund or proceeds from the sale of Escrowed Securities to be used directly or indirectly to
acquire any securities or obligations if the exercise of such power or the acquisition of such
securities or obligations would cause any Refunding Bonds or Refunded Obligations to be an
"arbitrage bond" within the meaning of the Code.
ARTICLE V
APPLICATION OF CASH BALANCES
SECTION 5.01 IN GENERAL Except as provided in Sections 3.02, 4.02, 4.03 and 4.04
hereof, no withdrawals, transfers, or reinvestment shall be made of cash balances in the Escrow
Fund.
ARTICLE VI
RECORDS AND REPORTS
SECTION 6.01 RECORDS The Escrow Agent will keep books of record and account in
which complete and correct entries shall be made of all transactions relating to the receipts,
disbursements, allocations and application of the money and Escrowed Securities deposited to the
Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable
hours and under reasonable conditions by the Issuer and the owners of the Refunded Obligations.
SECTION 6.02 REPORTS While this Agreement remains in effect, the Escrow Agent
annually shall prepare and send to the Issuer a written report summarizing all transactions relating
to the Escrow Fund during the preceding year, including, without limitation, credits to the Escrow
Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from
the Escrow Fund for payments on the Refunded Obligations or otherwise, together with a detailed
statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the
end of such period.
ARTICLE VII
CONCERNING THE PAYING AGENTS AN ESCROW AGENT
SECTION 7.01 REPRESENTATIONS The Escrow Agent hereby represents that it has all
necessary power and authority to enter into this Agreement and undertake the obligations and
responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder.
SECTION 7.02 LIMITATION ON LIABILITY The liability of the Escrow Agent to transfer
funds for the payment of the principal of and interest on the Refunded Obligations shall be limited
to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the
Escrow Fund. Notwithstanding any provision contained herein to the contrary, neither the Escrow
Agent nor any paying agent for the Refunded Obligations shall have any liability whatsoever for the
insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the
Escrowed Securities to make timely payment thereon, except for the obligation to notify the Issuer
as promptly as practicable of any such occurrence.
The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken
as the statements of the Issuer and shall not be considered as made by, or imposing any obligation
or liability upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing
the Refunding Bonds or the Refunded Obligations and is not responsible for nor bound by any of
the provisions thereof (except as the paying agent for the Refunding Bonds). In its capacity as
Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this
Agreement.
The Escrow Agent makes no representations as to the value, conditions or sufficiency of the
Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security afforded
thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to
any of such matters.
It is the intention of the patties hereto that the Escrow Agent shall never be required to use
or advance its own funds or otherwise incur personal financial liability in the performance of any
of its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in any exercise of reasonable care and believed by it to be within the discretion or power
conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the
consequences of any error of judgment; and the Escrow Agent shall not be answerable except for
its own action, neglect or default, nor for any loss unless the same shall have been through its
negligence or willful misconduct.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the Issuer with respect to arrangements or contracts with
others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose
of and deliver the same in accordance with this Agreement. If, however, the Escrow Agent is called
upon by the terms of this Agreement to determine the occurrence of any event or contingency, the
Escrow Agent shall be obligated, in malting such determination, only to exercise reasonable care and
diligence, and in event of error in making such determination the Escrow Agent shall be liable only
for its own willful misconduct or its negligence. In determining the occurrence of any such event
or contingency the Escrow Agent may request from the Issuer or any other person such reasonable
additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact
relating to the occurrence of such event or contingency, and in this connection may make inquiries
of, and consult with, among others, the Issuer at any time.
SECTION 7.03 COMPENSATION (a) Concurrently with the sale and delivery of the
Refunding Bonds, the Issuer shall pay to the Escrow Agent, as a fee for performing the services
hereunder and for all expenses incurred or to be incurred by the Escrow Agent in the administration
of this Agreement, the sum of $2, 000. 00, the sufficiency of which is hereby acknowledged by the
Escrow Agent. In the event that the Escrow Agent is requested to perform any extraordinary
services hereunder, the Issuer hereby agrees to pay reasonable fees to the Escrow Agent for such
extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow
Agent in performing such extraordinary services, and the Escrow Agent hereby agrees to look only
to the Issuer for the payment of such fees and reimbursement of such expenses. The Escrow Agent
hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any
fees for its services, whether regular or extraordinary, as Escrow Agent, or in any other capacity, or
for reimbursement for any of its expenses.
(b) The Issuer covenants to timely pay for all future paying agency services of the
respective paying agent for the Refunded Obligations in accordance with the paying agent fee
schedule now or hereafter in effect through the final payment of the Refunded Obligations. In the
event the Issuer fails to pay the paying agent fee relating to the Refunded Obligations when due,
such paying agent's sole remedy, as paying agent for such Refunded Obligations, for nonpayment
shall be in accordance with the terms of the paying agent agreement relating to the Refunded
Obligations, and no funds held in the Escrow Fund shall be available to pay such paying agent fees.
SECTION 7.04 SUCCESSOR ESCROW AGENTS If at any time the Escrow Agent or its legal
successor or successors should become unable, through operation or law or otherwise, to act as
escrow agent hereunder, or if its property and affairs shall be taken under the control of any state
or federal court or administrative body because of insolvency or bankruptcy or for any other reason,
a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Issuer,
by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor
Escrow Agent shall have been appointed by the Issuer within 60 days, a successor may be appointed
by the owners of a majority in principal amount of the Refunded Obligations then outstanding by
an instrument or instruments in writing filed with the Issuer, signed by such owners or by their duly
authorized attorneys -in -fact. If, in a proper case, no appointment of a successor Escrow Agent shall
be made pursuant to the foregoing provisions of this section within three months after a vacancy
shall have occurred, the owner of any Refunded Obligation may apply to any court of competent
jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if
any, as it may deem proper, prescribe and appoint a successor Escrow Agent.
Any successor Escrow Agent shall be a corporation organized and doing business under the
laws of the United States or the State of Texas, authorized under such laws to exercise corporate
trust powers, authorized under Texas law to act as an escrow agent, having its principal office and
place of business in the State of Texas, having a combined capital and surplus of at least $5,000,000
and subject to the supervision or examination by Federal or State authority.
Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the
Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor Escrow Agent, subj ect to the terms
of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the
request of any such successor Escrow Agent, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all
such rights, powers and duties.
The Escrow Agent at the time acting hereunder may at any time resign and be discharged
from the trust hereby created by giving not less than sixty (60) days' written notice to the Issuer and
publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper
printed in the English language and with general circulation in New York, New York, such
publication to be made once at least three (3) weeks prior to the date when the resignation is to take
effect. No such resignation shall take effect unless a successor Escrow Agent shall have been
appointed by the owners of the Refunded Obligations or by the Issuer as herein provided and such
successor Escrow Agent shall be a paying agent for certain of the Refunded Obligations or shall
otherwise be permitted by law to serve in such capacity and shall have accepted such appointment,
in which event such resignation shall take effect immediately upon the appointment and acceptance
of a successor Escrow Agent.
Under any circumstances, the Escrow Agent shall pay over to its successor Escrow Agent
proportional parts of the Escrow Agent's fee and, if applicable, its paying agent's fee hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 NOTICE Any notice, authorization, request, or demand required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed
by registered or certified mail, postage prepaid addressed to the Issuer or the Escrow Agent at the
address shown on Exhibit A attached hereto. The United States Post Office registered or certified
mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of
delivery. Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof. Prior written notice of any
amendment to this Agreement contemplated pursuant to Section 8.08 and immediate written notice
of any incidence of a severance pursuant to Section 8.04 shall be sent to each of the following rating
agencies, but only if such rating agency is then maintaining a rating on the Refunded Obligations
or the Refunding Bonds: (i) Fitch Ratings, One State Street Plaza, New York, New York 10004,
(ii) Moody's Investors Service, Attn: Public Finance Rating Desk/Refunded Obligations, 7 World
Trade Center, 250 Greenwich Street, New York, New York 10007, and (iii) Standard & Poor's
Ratings Services, Attn: Municipal Bond Department, 55 Water Street, New York, New York 10041.
10
SECTION 8.02 TERMINATION OF RESPONSIBILITIES Upon the taking of all the actions as
described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or
responsibilities hereunder to the Issuer, the owners of the Refunded Obligations or to any other
person or persons in connection with this Agreement.
SECTION 8.03 BINDING AGREEMENT This Agreement shall be binding upon the Issuer
and the Escrow Agent and their respective successors and legal representatives, and shall inure
solely to the benefit of the owners of the Refunded Obligations, the Issuer, the Escrow Agent and
their respective successors and legal representatives.
SECTION 8.04 SEVERABILITY In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
SECTION 8.05 TEXAS LAW GOVERNS This Agreement shall be governed exclusively by
the provisions hereof and by the applicable laws of the State of Texas.
SECTION 8.06 TIME OF THE ESSENCE Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by this Agreement.
SECTION 8.07 EFFECTIVE DATE OF AGREEMENT This Agreement shall be effective upon
receipt by the Escrow Agent of the funds described in the Report and the Escrowed Securities,
together with the specific sums stated in subsections (a) and (b) of Section 7.03 for Escrow Agent
and paying agency fees, expenses, and services.
SECTION 8.08 AMENDMENTS This Agreement shall not be amended except to cure any
ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless
the same shall be in writing and signed by the parties thereto. No such amendment shall adversely
affect the rights of the holders of the Refunded Obligations.
[The rennainder of this page intentionally left blank]
11
EXECUTED as of the date first written above.
ATTEST:
City Secretary
ATTEST:
a 'vc� 'Jxa�dz,�
Title: Anne-Marie Hansen
Trust Officer
CITY OF KENNEDALE, TEXAS
By
ay �gII91 @90�®
®m ®® 'j n F irc ® ® fe,
BOKF, NA
e:
Signature Page to Escrow Agreement Relating to the
City of Kemnedale, Texas General Obligation Refimding Bonds, Series 2016
EXHIBIT A
ADDRESSES OF THE ISSUER AND THE ESCROW AGENT
ISSUER
City of Kennedale, Texas
405 Municipal Drive
Kennedale, Texas 76060
Attention: Finance Director
ESCROW AGENT
BOKF, NA
100 Congress Avenue, Suite 250
Austin, Texas 78701
Attention: Corporate Trust Services
A -1
EXHIBIT B
REPORT
[The Report is omitted at this point as it appears elsewhere in this
Transcript of Proceedings]
EXHIBIT E
NOTICE OF DEFEASANCE AND REDEMPTION
To the Holders of the
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2005
(Maturing on February 15 in the years 2018, 2021, 2024 and 2026)
NOTICE IS HEREBY GIVEN that the City of Kennedale, Texas (the "City"), in Tarrant County, Texas, has
deposited cash and authorized investment securities, if any, into an irrevocable escrow account in order to pay, and has
legally defeased, the following maturities of the City's outstanding COMBINATION TAX AND REVENUE CERTIFICATES
OF OBLIGATION, SERIES 2005, dated February 1, 2005 (the "Refunded Obligations "):
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2005
NOTICE IS FURTHER GIVEN that all of the Refunded Obligations have been called for redemption on
September 20, 2016 (the "Redemption Date ") at the Redemption Price equal to 100% of par plus accrued interest to
the Redemption Date. The Refunded Obligations shall be redeemed and shall become due and payable on the
Redemption Date, and the interest thereon shall cease to accrue fi•om and after the Redemption Date.
NOTICE IS FURTHER GIVEN THAT the Refunded Obligations will be payable at and should be submitted
either in person or by certified mail to the following address:
Delivery Instructions:
U.S. Bank
Global Corporate Trust Services
111 Fillmore Ave E
St. Paul, MN 55107
To avoid a backup withholding tax required by Section 3406 of the Internal Revenue Code of 1986, holders
must submit a properly completed IRS Form W -9.
x THE ABOVE REFERENCED CUSIP NUMBERS ARE PROVIDED FOR THE CONVENIENCE OF THE HOLDERS. NEITHER THE
PAYING AGENT NOR THE CITY ARE RESPONSIBLE FOR ANY ERROR OF ANY NATURE RELATING TO THE CUSIP NUMBERS.
STATED
MATURITY
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT
INTEREST
CUSIP NO.
(FEBRUARY 15)
MATURING IN YEAR ($)
BEING REFUNDED ($)
RATE ( %)
(489332)
2018
80,000
80,000
3.900
EW2
2021
135,000
135,000
4.100
EXO
2024
155,000
155,000
4.300
EY8
2026
115,000
115,000
4.400
EZ5
NOTICE IS FURTHER GIVEN that all of the Refunded Obligations have been called for redemption on
September 20, 2016 (the "Redemption Date ") at the Redemption Price equal to 100% of par plus accrued interest to
the Redemption Date. The Refunded Obligations shall be redeemed and shall become due and payable on the
Redemption Date, and the interest thereon shall cease to accrue fi•om and after the Redemption Date.
NOTICE IS FURTHER GIVEN THAT the Refunded Obligations will be payable at and should be submitted
either in person or by certified mail to the following address:
Delivery Instructions:
U.S. Bank
Global Corporate Trust Services
111 Fillmore Ave E
St. Paul, MN 55107
To avoid a backup withholding tax required by Section 3406 of the Internal Revenue Code of 1986, holders
must submit a properly completed IRS Form W -9.
x THE ABOVE REFERENCED CUSIP NUMBERS ARE PROVIDED FOR THE CONVENIENCE OF THE HOLDERS. NEITHER THE
PAYING AGENT NOR THE CITY ARE RESPONSIBLE FOR ANY ERROR OF ANY NATURE RELATING TO THE CUSIP NUMBERS.
NOTICE OF DEFEASANCE AND REDEMPTION
To the Holders of the
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008
(Maturing on February 15 in the years 2019, 2020, 2022, 2024, 2026, and 2028)
NOTICE IS HEREBY GIVEN that the City of Kennedale, Texas (the "City"), in Tarrant County, Texas, has
deposited cash and authorized investment securities, if any, into an irrevocable escrow account in order to pay, and has
legally defeased, the following maturities of the City's outstanding COMBINATION TAX AND REVENUE CERTIFICATES
OF OBLIGATION, SERIES 2005, dated August 15, 2008 (the "Refunded Obligations "):
CITY OF KE,NNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008
NOTICE IS FURTHER GIVEN that all of the Refunded Obligations have been called for redemption on
February 15, 2018 (the "Redemption Date ") at the Redemption Price equal to 100% of par plus accrued interest to the
Redemption Date. The Refunded Obligations shall be redeemed and shall become due and payable on the Redemption
Date, and the interest thereon shall cease to accrue from and after the Redemption Date.
NOTICE IS FURTHER GIVEN THAT the Refunded Obligations will be payable at and should be
submitted either in person or by certified mail to the following address:
Express Delivery
First Class /Registered /Certified Mail
Hand Delivery
STATED
Wells Fargo Bank, N.A.
MATURITY
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT
INTEREST
CUSIP NO.
(FEBRUARY 15)
MATURING IN YEAR ($)
BEING REFUNDED ($)
RATE ( %)
(489332)
Minneapolis, MN 555479
2019
245,000
245,000
4.000
FT8
2020
260,000
260,000
4.000
FU5
2022
545,000
545,000
4.250
FV3
2024
605,000
605,000
4.400
FW1
2026
645,000
645,000
4.500
FX9
2028
690,000
690,000
4.650
FY7
NOTICE IS FURTHER GIVEN that all of the Refunded Obligations have been called for redemption on
February 15, 2018 (the "Redemption Date ") at the Redemption Price equal to 100% of par plus accrued interest to the
Redemption Date. The Refunded Obligations shall be redeemed and shall become due and payable on the Redemption
Date, and the interest thereon shall cease to accrue from and after the Redemption Date.
NOTICE IS FURTHER GIVEN THAT the Refunded Obligations will be payable at and should be
submitted either in person or by certified mail to the following address:
Express Delivery
First Class /Registered /Certified Mail
Hand Delivery
Wells Fargo Bank, N.A.
Wells Fargo Bank, N.A.
Wells Fargo Bank, N.A.
Corporate Trust Operations
Corporate Trust Operations
Northstar East Building
N9309 -121
P.O. Boa 1517
6082 d Ave. So., 12' Floor
6 "i & Marquette Avenue
Minneapolis, MN 55480 -1517
Minneapolis, MN 55479
Minneapolis, MN 555479
To avoid a backup withholding tax required by Section 3406 of the Internal Revenue Code of 1986, holders
must submit a properly completed IRS Form W -9.
* THE ABOVE REFERENCED CUSIP NUMBERS ARE PROVIDED FOR THE CONVENIENCE OF THE HOLDERS. NEITHER THE
PAYING AGENT NOR THE CITY ARE RESPONSIBLE FOR ANY ERROR OF ANY NATURE RELATING TO THE CUSIP NUMBERS.
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF TARRANT §
CITY OF KENNEDALE §
I, the undersigned City Secretary of the CITY OF KENNEDALE, TEXAS (the "City "), hereby certify
as follows:
1. The City Council of the City (the "City Council ") convened in Regular Meeting on
August 15, 2016 at the City Hall (the "Meeting "), and the roll was called of the duly constituted officers and
members of the City Council, to wit:
Brian Johnson, Mayor
Charles Overstreet, Councilmember Place 1
Liz Carrington, Councilmember, Place 2
Mike Walker, Councilmember, Place 3
Kelly Turner, Councilmember, Place 4 and Mayor Pro Tem
Frank Fernandez, Councilmember, Place 5
and all of the officers and members of the City Council were present, except the following absentees:
None Whereupon, among other business, the following was transacted at
the Meeting: a written
ORDINANCE NO. 607
ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
$3,720,000 IN AGGREGATE PRINCIPAL AMOUNT OF CITY OF KENNEDALE,
TEXAS GENERAL OBLIGATIONREFUNDING BOND, SERIES 2016; SECURING
THE PAYMENT THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL AD
VALOREM TAX; AND APPROVING AND AUTHORIZING THE EXECUTION OF
ALL INSTRUMENTS AND PROCEDURES RELATED THERETO INCLUDING AN
ESCROW AGREEMENT, A PAYING AGENT/REGISTRAR AGREEMENT AND
A PURCHASE CONTRACT AND INVESTMENT LETTER
(the "Ordinance ") was duly introduced for the consideration of the City Council. It was then duly moved
and seconded that the Ordinance be passed and, after due discussion, said motion carrying with it the
adoption of the Ordinance, prevailed and carried by the following vote:
AYES: 5 NOES: 0 ABSTENTIONS: 0
2. A true, full and correct copy of the Ordinance adopted at the Meeting described in the above and
foregoing paragraph is attached to and follows this Certificate; the Ordinance has been duly recorded in the
City Council's minutes of the Meeting; the above and foregoing paragraph is a true, full and correct excerpt
from the City Council's minutes of the Meeting pertaining to the passage of the Ordinance; the persons
named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members
of the City Council as indicated therein; each of the officers and members of the City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place and purpose of the Meeting, and
that the Ordinance would be introduced and considered for passage at the Meeting, and each of said officers
and members consented, in advance, to the holding of the Meeting for such purpose, and that the Meeting
was open to the public and public notice of the time, place and purpose of the Meeting was given, all as
required by Chapter 551, Texas Government Code.
Signed and sealed this 15`' day of August, 2016.
(SEAL)
o 4AW
City Secretary
City of Kennedale, Texas
Signature Page to the Certificate for Ordinance Relating to
City of Kennedale, Texas General Obligation Refunding Bond, Series 2016