0938ORDINANCE NO. 938
AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008"; specifying
the terms and features of said certificates; providing for the payment of
said certificates of obligation by the levy of an ad valorem tax upon all
taxable property within the City and a limited pledge of the net revenues
from the operation of the City's Waterworks and Sewer System; and
resolving other matters incident and relating to the issuance, payment,
security, sale and delivery of said Certificates, including the approval and
execution of a Paying Agent/Registrar Agreement and a Purchase
Agreement and the approval and distribution of an Official Statement; and
providing an effective date.
WHEREAS, notice of the intention of the City of Southlake, Texas (the "City") to issue
certificates of obligation in the maximum principal amount of $14,185,000 for the purpose of
paying contractual obligations to be incurred for (i) the construction of public works, to wit: (a)
drainage improvements, (b) street improvements, including sidewalks and the acquisition of
land and rights-of-way, (c) improvements and extensions to the City's combined Waterworks
and Sewer System, and (d) park improvements, and (ii) professional services rendered in
relation to such projects and the financing thereof, has been duly published in The Fort Worth
Star Telegram on January 16, 2008 and January 26, 2008, the date the first publication of such
notice being not less than thirty-one (31) days prior to the tentative date stated therein for the
adoption of the ordinance authorizing the issuance of such certificates; and
WHEREAS, no petition protesting the issuance of the certificates of obligation and
bearing valid petition signatures of at least 5% of the qualified electors of the City, has been
presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to
the date of the passage of this ordinance; and
WHEREAS, the City hereby finds and determines that the certificates of obligation
described in the aforesaid notice should be issued and sold at this time in the amount and
manner as hereinafter provided; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: Authorization Designation, Principal Amount, Purpose. Certificates of
obligation of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $14,015,000, to be designated and bear the title "CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED .PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2008" (hereinafter referred to as the "Certificates"),
for the purpose of paying contractual obligations to be incurred for (i) the construction of public
works, to wit: (a) drainage improvements, (b) street improvements, including sidewalks and the
acquisition of land and rights-of-way, (c) improvements and extensions to the City's combined
Waterworks and Sewer System, and (d) park improvements, and (ii) professional services
rendered in relation to such projects and the financing thereof, pursuant to authority conferred
by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A.,
Local Government Code, Subchapter C of Chapter 271, as amended.
nnnn~aan~/~nannFaa
SECTION 2: Fullv Registered Obligations -Authorized Denominations-Stated
Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated
February 15, 2008 (the "Certificate Date"), and shall be in denominations of $5,000 or any
integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and
payable on February 15 in each of the years and in principal amounts (the "Stated Maturities")
and bear interest at the per annum rate(s) in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate
2009 $ 200,000 3.500%
2010 500,000 3.500%
2011 515, 000 3.500%
2012 530,000 3.500%
2013 555,000 3.500%
2014 575,000 4.000%
2015 600,000 4.000%
2016 625, 000 4.000%
2017 650,000 4.000%
2018 680, 000 4.000%
2019 705,000 4.000%
2020 735, 000 4.000%
2021 765,000 4.125%
2022 795, 000 4.250%
2023 830,000 4.250%
2024 865,000 4.375%
2025 910,000 4.500%
2026 950,000 4.500%
2027 990, 000 4.625%
2028 1,040, 000 4.500%
The Certificates shall bear interest on the unpaid principal amounts from the Certificate
Date at the rate per annum shown above in this Section (calculated on the basis of a 360-day
year of twelve 30-day months), and such interest shall be payable on February 15 and
August 15 of each year, commencing February 15, 2009.
SECTION 3: Terms of Payment-Paving Agent/Registrar. The principal of, premium, if
any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or
otherwise, shall be payable only to the registered owners or holders of the Certificates
(hereinafter called the "Holders") appearing on the registration and transfer books maintained by
the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the
United States of America, which at the time of payment is legal tender for the payment of public
and private debts, and shall be without exchange or collection charges to the Holders.
The selection and appointment of The Bank of New York Trust Company, N.A., Dallas,
Texas to serve as Paying Agent/Registrarfnr the Certificates is hereby approved and confirmed.
Books and records relating to the registration, payment, transfer and exchange of the
Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the
City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and
provisions of a "Paying Agent/RegistrarRgreement", substantially in the form attached hereto as
80003880.1/10800634 2
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrarsnd the City
may prescribe. The Mayor and City Secretary are authorized to execute and deliver such
Agreement in connection with the delivery of the Certificates. The City covenants to .maintain
and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged,
and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution
or other entity qualified and authorized to serve in such capacity and perform the duties and
services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the
Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder
by United States Mail, first class postage prepaid, which notice shall also give the address of the
new Paying Agent/Registrar.
Principal of and premium, if any, on the Certificates shall be payable at the Stated
Maturities or the redemption thereof only upon presentation and surrender of the Certificates to
the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated
Payment/Transfer Office"). Interest on the Certificates shall be paid to the Holders whose name
appears in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a
legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer 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 when 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.
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 each Holder appearing on the Security
Register at the close of business on the last business next preceding the date of mailing of such
notice.
SECTION 4: Redemption. (a) Optional Redemption. The Certificates maturing on and
after February 15, 2019 shall be subject to redemption prior to maturity, at the option of the City,
in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a
Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2018 or on any date
thereafter at the redemption price of par plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option. At least forty-five (45) days prior to a
redemption date for the Certificates (unless a shorter notification period shall be satisfactory to
the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date
of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall
be entered in the minutes of the governing body of the City.
sooossso.~/iosoossa 3
(c) Selection of Certificates for Redemption. If less than all Outstanding Certificates
of the same Stated Maturity are to be redeemed on a redemption date, the Paying
Agent/Registrar shall treat such Certificates as representing the number of Certificates
Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000
and shall select the Certificates to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Certificates, a notice of redemption shall be sent by United States Mail, first class
postage prepaid, in the name of the City and at the City's expense, to each Holder of a
Certificate to be redeemed in whole or in part at the address of the Holder appearing on the
Security Register of the close of business on the business day next preceding the date of
mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to
have been duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii)
identify the Certificates to be redeemed and, in the case of a portion of the principal amount to
be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed,
shall become due and payable on the redemption date specified and the interest thereon, or on
the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after
the redemption date, provided moneys sufficient for the payment of such Certificate (or the
principal amount thereof to be redeemed) at the then applicable redemption price are held for
the purpose of such payment by the Paying Agent/Registrar and (v) specify that payment of the
redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be
made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon
presentation and surrender of the Certificates. If a Certificate is subject by its terms to prior
redemption and has been called for redemption and notice of redemption has been duly given
as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed) shall
become due and payable and interest thereon shall cease to accrue from and after the
redemption date therefor.
SECTION 5: Registration -Transfer - Exchange of Certificates-Predecessor
Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security
Register the name and address of each and every owner of the Certificates issued under and
pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any
Certificate may be transferred or exchanged for Certificates of other authorized denominations
by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to
the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in
Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying
Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized denominations
and having the same Stated Maturity and of a like aggregate principal amount as the Certificate
or Certificates surrendered for transfer.
At the option of the Holder, Certificates (other than the Initial Certificate(s) authorized in
Section 8 hereof) may be exchanged for other Certificates of authorized denominations and
having the same Stated Maturity, bearing the same rate of interest and of like aggregate
80003880.1 /10800634 4
principal amount as the Certificates surrendered for exchange, upon surrender of the
Certificates to be exchanged at the Designated Payment/Transfer Office of the Paying
Agent/Registrar. Whenever any Certificates are surrendered for exchange, the Paying
Agent/Registrar shall register and deliver new Certificates to the Holder requesting the
exchange.
All Certificates issued in any transfer or exchange of Certificates shall be delivered to the
Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by
United States Mail, first class, postage prepaid to the Holders, and, upon the registration and
delivery thereof, the same shall be the valid obligations of the City, evidencing the same
obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates
surrendered in such transfer or exchange.
All transfers or exchanges of Certificates pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Certificates cancelled by reason of an exchange or transfer pursuant to the provisions
hereof are hereby defined to be "Predecessor Certificates,° evidencing all or a portion, as the
case may. be, of the same obligation to pay evidenced by the new Certificate or Certificates
registered and delivered in the exchange or transfer therefor. Additionally, the term
"Predecessor Certificates" shall include any .mutilated, lost, destroyed, or stolen Certificate for
which a replacement Certificate has been issued, registered and delivered in lieu thereof
pursuant to the provisions of Section 20 hereof and such new replacement Certificate shall be
deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to
an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days
of the date fixed for the redemption of such Certificate; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Certificate called for redemption in part.
SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
transfer/exchange of the Certificates, the City hereby approves and authorizes the use of
"Book-Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository
Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be
deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants").
While the Certificates are held by DTC under the Depository Agreement, the Holder of the
Certificates on the Security Register for all purposes, including payment and notices, shall be
Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or
owner of each Certificate (the "Beneficial Owners") being recorded in the records of DTC and
DTC Participants.
80003880.1/10800634 5
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Certificates, the City covenants and agrees with the
Holders of the Certificates to cause Certificates to be printed in definitive form and provide for
the Certificate certificates to be issued and delivered to DTC Participants and Beneficial
Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned,
transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar
and payment of such Certificates shall be made in accordance with the provisions of Sections 3,
4 and 5 hereof.
SECTION 7: Execution -Registration. The Certificates shall be executed on behalf of
the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals who are or were the proper
officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the
City, notwithstanding that one or more of the individuals executing the same shall cease to be
such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect
to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided
in V.T.C.A., Government Code, Chapter 1201, as amended.
No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Certificate either a certificate of
registration substantially in the form provided in Section 9C, manually executed by the
Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a
certificate of registration substantially in the form provided in Section 9D, manually executed by
an authorized officer, employee or representative of the Paying Agent/Registrar, and either such
certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly certified, registered and delivered.
SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially
issued either (i) as a single fully registered certificate in the total principal amount stated in
Section 1 hereof with principal installments to become due and payable as provided in Section 2
hereof and numbered T-1, or (ii) as multiple fully registered certificates, being one certificate for
each year of maturity in the applicable principal amount and denomination and to be numbered
consecutively from T-1 and upward (hereinafter called the "Initial Certificate(s)") and, in either
case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the
designee thereof. The Initial Certificate(s) shall be the Certificates submitted to the Office of the
Attorney General of the State of Texas for approval, certified and registered by the Office of the
Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s).
Any time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to
written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial
Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized
denominations, Stated Maturities, principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to
and in accordance with such written instructions from the initial purchaser(s), or the designee
thereof, and such other information and documentation as the Paying Agent/Registrar may
reasonably require.
SECTION 9: Forms. A. Forms Generally. The Certificates, the Registration
Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration
80003880.110800634 6
Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the
Certificates, shall be substantially in the forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as are permitted or required by this
Ordinance and may have such letters, numbers, or other marks of identification (including
identifying numbers and letters of the .Committee on Uniform Securities Identification
Procedures of the American Bankers Association) and such legends and endorsements
(including insurance legends in the event the Certificates, or any maturities thereof, are
purchased with insurance and any reproduction of an opinion of counsel) thereon as may,
consistently herewith, be established by the City or determined by the officers executing such
Certificates as evidenced by their execution. Any portion of the text of any Certificates may be
set forth on the reverse thereof, with an appropriate reference thereto on the face of the
certificate.
The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or
engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as
determined by the officers executing such Certificates as evidenced by their execution.
B. Form of Certificates.
REGISTERED
NO.
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2008
Certificate Date: Interest Rate: Stated Maturity: CUSIP NO:
February 15, 2008 % February 15,
Registered Owner:
Principal Amount: DOLLARS
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, on the Stated Maturity date specified above the
Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior
redemption) and to pay interest on the unpaid principal amount hereof from the interest payment
date next preceding the "Registration Date" of this Certificate appearing below (unless this
Certificate bears a "Registration Date" as of an interest payment date, in which case it shall bear
interest from such date, or unless the "Registration Date" of this Certificate is prior to the initial
interest payment date in which case it shall bear interest from the Certificate Date) at the per
annum rate of interest specified above computed on the basis of a 360-day year of
twelve 30-day months; such interest being payable on February 15 and August 15 in each year,
commencing February 15, 2009. Principal of this Certificate is payable at its Stated Maturity or
redemption to the registered owner hereof, upon presentation and surrender, at the Designated
Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate
appearing hereon, or its successor; provided, however, while this Certificate is registered to
80003880.1/10800634 7
Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof
may be accomplished without presentation and surrender of this Certificate. Interest is payable
to the registered owner of this Certificate (or one or more Predecessor Certificates,. as defined in
the Ordinance hereinafter referenced) whose name appears on the "Security Register»
maintained by the Paying Agent/Registrar at the close of business on the "Record Date°, which
is the last business day of the month next preceding each interest payment date, and interest
shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage
prepaid, to the address of the registered owner recorded in the Security Register or by such
other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and
expense of, the registered owner. If the date for the payment of the principal of or interest on
the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions
in the city where the Designated Payment/Transfer 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 when
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. All payments of principal of,
premium, if any, and interest on this Certificate shall be without exchange or collection charges
to the owner hereof and in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private debts.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of $14,015,000 (herein referred to as the "Certificates°) for the purpose of paying
contractual obligations to be incurred for (i) the construction of public works, to wit: (a) drainage
improvements, (b) street improvements, including sidewalks and the acquisition of land and
rights-of--way, (c) improvements and extensions to the City's combined Waterworks and Sewer
System, and (d) park improvements, and (ii) professional services rendered in relation to such
projects and the financing thereof, under and in strict conformity with the Constitution and laws
of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter
271, as amended, and pursuant to an Ordinance adopted by the City Council of the City (herein
referred to as the "Ordinance").
The Certificates maturing on and after February 15, 2019, may be redeemed prior to
their Stated Maturities, at the option of the City, in whole or in part in principal amounts of
$5,000. or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying
Agent/Registrar), on February 15, 2018, or on any date thereafter, at the redemption price of
par, together with accrued interest to the date of redemption.
At least thirty days prior to a redemption date, the City shall cause a written notice of
such redemption to be sent by United States Mail, first class postage prepaid, to the registered
owners of each Certificate to be redeemed at the address shown on the Security Register and
subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate
(or any portion of its principal sum) shall have been duly called for redemption and notice of
such redemption duly given, then upon the redemption date such Certificate (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the payment
of the redemption price and the interest accrued on the principal amount to be redeemed to the
date of redemption are held for the purpose of such payment by the Paying Agent/Registrar,
interest shall cease to accrue and be payable from and after the redemption date on the
principal amount redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
80003880.1/10800634 8
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a
new Certificate or Certificates of like maturity and interest rate in any authorized denominations
provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in
whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such
Certificate to an assignee of the registered owner within 45 days of the redemption date
therefor; provided, however, such limitation on transferability shall not be applicable to an
exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part.
The Certificates are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City and from a limited pledge of
the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sewer
System (the "System"), such pledge being limited to an amount of $1,000 and, together with a
parity pledge securing the payment of the Previously Issued Certificates, being junior and
subordinate to the lien on and pledge of such Net Revenues securing the payment of "Prior Lien
Obligations" (identified and defined in the Ordinance) now outstanding and hereafter issued by
the City. In the Ordinance, the City reserves and retains the right to issue Prior Lien
Obligations without limitation as to principal amount but subject to any applicable terms,
conditions or restrictions under law or otherwise.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
PaymentlTransfer Office of the Paying Agent/Registrar, and to all the provisions of which the
owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of
terms; the description of and the nature and extent of the tax levied for the payment of the
Certificates; the Net Revenues pledged to the payment of the principal of and interest on the
Certificates; the nature and extent and manner of enforcement of the pledge; the terms and
conditions relating to the transfer or exchange of this Certificate; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and
provisions upon which the tax levy and the pledges, charges and covenants made therein may
be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no
longer Outstanding thereunder; and for the other terms and provisions contained therein.
Capitalized terms used herein have the meanings assigned in the Ordinance.
This Certificate, subject to certain limitations contained in the Ordinance, may be
transferred on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Certificates of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the
registered owner whose name appears on the Security Register (i) on the Record Date as the
owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the
80003880.110800634 9
contrary. In the event of 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 each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the Certificates is duly
authorized by law; that all acts, conditions and things required to exist and be done precedent to
and in the issuance of the Certificates to render the same lawful and valid obligations of the City
have been properly done, have happened and have been performed in regular and due time,
form and manner as required by the Constitution and laws of the State of Texas, and the
Ordinance; that the Certificates do not exceed any Constitutional or statutory limitation; and that
due provision has been made for the payment of the principal of and interest on the Certificates
as aforestated. In case any provision in this Certificate 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. The terms and provisions of this Certificate and the Ordinance
shall be construed in accordance with and shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be
duly executed under the official seal of the City as of the Certificate Date.
CITY OF SOUTHLAKE, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(Seal)
80003880.1 /10800634 '10
C. Form of Registration Certificate of Comptroller of Public Accounts to appear on
Initial Certificate(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
D. Form of Certificate of Paying Agent/Registrar to appear on Definitive Certificates
only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Certificate has been duly issued and registered under the provisions of the
within-mentioned Ordinance; the certificate or certificates of the above entitled and designated
series originally delivered having been approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated office of the Paying Agent/Registrar located in Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Certificate.
THE BANK OF NEW YORK TRUST
COMPANY, N.A., Dallas, Texas,
as Paying Agent/Registrar
Registration Date:
80003880.1/10800634
11
Authorized Signature
By
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for registration thereof, with full
power of substitution in the premises.
DATED:
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it
appears on the face of the within
Certificate in every particular.
F. The Initial Certificate(s) shall be in the form set forth in paragraph B of this Section,
except that the form of a single fully registered Initial Certificate shall be modified as follows:
REGISTERED
NO. T-1
REGISTERED
$14,015,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2008
Certificate Date: February 15, 2008
Registered Owner:
Principal Amount: FOURTEEN MILLION FIFTEEN THOUSAND DOLLARS
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, the Principal Amount hereinabove stated on
February 15 in each of the years and in principal installments in accordance with the following
schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
80003880.1 /10800634 12
(or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the
unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) of interest
specified above computed on the basis of a 360-day year of twelve 30-day months; such
interest being payable on February 15 and August 15 of each year, commencing February 15,
2009. Principal installments of this Certificate are payable at its Stated Maturity or on a
prepayment date to the registered owner hereof by The Bank of New York Trust Company,
N.A., Dallas, Texas (the "Paying Agent/Registrarn), upon presentation and surrender, at its
designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest is
payable to the registered owner of this Certificate whose name appears on the "Security
Register" maintained by the Paying Agent/Registrar at the close of business on the "Record
Date", which is the last business day of the month next preceding each interest payment date
hereof and interest shall be paid by the Paying Agent/Registrar by check sent United States
Mail, first class postage prepaid, to the address of the registered owner recorded in the Security
Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and
at the risk and expense of, the registered owner. If the date for the payment of the principal of
or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when
banking institutions in the city where the Designated Payment/Transfer 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 when 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. All
payments of principal of, premium, if any, and interest on this Certificate shall be without
exchange or collection charges to the owner hereof and in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and
private debts.
SECTION 10: Definitions. For purposes of this Ordinance and for clarity with respect to
the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net
Revenues therefor, the following words or terms, whenever the same appears herein without
qualifying language, are defined to mean as follows:
(a) The term "Certificates" shall mean the "CITY OF SOUTHLAKE,
TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2008" authorized by this
Ordinance.
(b) The term "Certificate Fund° shall mean the special Fund created
and established under the provisions of Section 11 of this Ordinance.
(c) The term "Collection Date" shall mean, when reference is being
made to the levy and collection of annual ad valorem taxes, the date annual ad
valorem taxes levied each year by the City become delinquent.
(d) The term "Fiscal Year" shall mean the twelve month accounting
period used by the City in connection with the operation of the System which may
be any twelve consecutive month period established by the City.
(e) The term "Government Securities" .shall mean (i) direct
noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United
80003880.1/10800634 1 3
States of America, (ii) noncallable obligations of an agency or instrumentality of
the United States, including obligations unconditionally guaranteed or insured by
the agency or instrumentality and on the date of their acquisition or purchase by
the City 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 on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(f) The term "Gross Revenues" shall mean all income, receipts and
revenues of every nature derived or received from the operation and ownership
(excluding refundable meter deposits, restricted gifts and grants in aid of
construction) of the System, including earnings and income derived from the
investment or deposit of moneys in any special funds or accounts created and
established for the payment and security of the Prior Lien Obligations and other
obligations payable solely from and secured only by a lien on and pledge of the
Net Revenues.
(g) The term "Maintenance and Operating Expenses° shall mean all
current expenses of operating and maintaining the System, including all salaries,
labor, materials, repairs and extensions necessary to render efficient service;
provided, however, that only such repairs and extensions, as in the judgment of
the City Council, reasonably and fairly exercised, are necessary to maintain the
operations and render adequate service to the City and the inhabitants thereof,
or such as might be necessary to meet some physical accident or condition
which would otherwise impair obligations payable from Net Revenues shall be
deducted in determining "Net Revenues". Depreciation charges shall not be
considered Maintenance and Operating Expenses. Maintenance and Operating
Expenses shall include payments under contracts for the purchase of water
supply, treatment of sewage or other materials, goods, services, or facilities for
the System to the extent authorized by law and the provisions of such contract.
(h) The term "Net Revenues" shall mean the Gross Revenues of the
System, with respect to any period, after deducting the System's Maintenance
and Operating Expenses during such period.
(i) The term "Outstanding" when used in this Ordinance with respect
to Certificates means, as of the date of determination, all Certificates theretofore
issued and delivered under this Ordinance, except:
(1) those Certificates cancelled by the Paying
Agent/Registrar or delivered to the Paying Agent/Registrar for
cancellation;
(2) those Certificates deemed to be duly paid by the
City in accordance with the provisions of Section 21 hereof; and
(3) those mutilated, destroyed, lost, or stolen
Certificates which have been replaced with Certificates registered
and delivered in lieu thereof as provided in Section 20 hereof.
80003880.1/10800634 14
Q) The term "Previously Issued Certificates" shall mean the
outstanding and unpaid "City of Southlake, Texas, Tax and Waterworks and
Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1998",
dated May 15, 1998, "City of Southlake, Texas, Tax and Waterworks and Sewer
System (Limited Pledge) Revenue Certificates of Obligation, Series 1999", dated
April 1, 1999, "City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 2000-C", dated
December 1, 2000, "City of Southlake, Texas, Tax and Waterworks and Sewer
System (Limited Pledge) Revenue Certificates of Obligation, Series 2004", dated
June 1, 2004, "City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 2006", dated
January 15, 2006, and "City of Southlake, Texas, Tax and Waterworks and
Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2007",
dated October 1, 2007.
(k) The term "Prior Lien Obligations" shall mean (i) the outstanding
and unpaid (1) "City of Southlake, Texas, Tax and Waterworks and Sewer
System Surplus Revenue Certificates of Obligation, Series 2000-A", dated March
1, 2000, originally issued in the principal amount of $9,215,000, (2) "City of
Southlake, Texas, Tax and Waterworks and Sewer System Surplus Revenue
Certificates of Obligation, Series 2000-D", dated December 1, 2000, originally
issued in the principal amount of $8,085,000, (3) "City of Southlake, Texas, Tax
and Waterworks and Sewer System Surplus Revenue Certificates of Obligation,
Series 2003", dated April 15, 2003, originally issued in the principal amount of
$12,755,000 and (4) "City of Southlake, Texas, Tax and Waterworks and Sewer
System Surplus Revenue Certificates of Obligation, Series 2004A", dated June 1,
2004, originally issued in the principal amount of $2,965,000, and (ii) obligations
hereafter issued which by the terms of the authorizing ordinance are made
payable from and secured by a lien on and pledge of the Net Revenues of the
System ranking prior and superior to the lien and pledge securing the payment of
the Previously Issued Certificates and Certificates.
(I) The term "System" shall mean all properties, facilities and plants
currently owned, operated and maintained by the City for the supply, treatment,
transmission and distribution of treated potable water and the collection,
treatment and disposal of water-carried wastes, together with all future
extensions, improvements, replacements and additions thereto.
SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide
a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and
is hereby created a special account or fund on the books and records of the City known as the
"SPECIAL SERIES 2008 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND", and all
moneys deposited to the credit of such Fund shall be shall be kept and maintained in a special
banking account at the City's depository bank. The Mayor, Mayor Pro Tem, City Manager,
Director of Finance and City Secretary of the City, individually or jointly, are hereby authorized
and directed to make withdrawals from said Fund sufficient to pay the principal of and interest
on the Certificates as the same become due and payable, and, shall cause to be transferred to
the Paying Agent/Registrarfrnm moneys on deposit in the Certificate Fund an amount sufficient
to pay the amount of principal and/or interest falling due on the Certificates, such transfer of
funds to the Paying Agent/Registrar to be made in such manner as will cause immediately
sooo3sso.~/~osoossa 1 5
available funds to be deposited with the Paying Agent/Registrar on or before the last business
day next preceding each interest and principal payment date for the Certificates.
Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate
Fund may, at the option of the City, be invested in obligations identified in, and in accordance
with the provisions of the "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter
2256) relating to the investment of "bond proceeds"; provided that all such investments shall be
made in such a manner that the money required to be expended from said Fund will be
available at the proper time or times. All interest and income derived from deposits and
investments in said Certificate Fund shall be credited to, and any losses debited to, the said
Certificate Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Certificates.
SECTION 12: Tax Levy. To provide for the payment of the "Debt Service
Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking
fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the
greater), there shall be and there is hereby levied for the current year and each succeeding year
thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient
tax on each one hundred dollars' valuation of taxable property in said City, within the limitations
prescribed by law, adequate to pay such Debt Service Requirements, full allowance being made
for delinquencies and costs of collection; said tax shall be assessed and collected each year
and applied to the payment of the Debt Service Requirements, and the same shall not be
diverted to any other purpose. The taxes so levied and collected shall be paid into the
Certificate Fund. The City Council hereby declares its purpose and intent to provide and levy a
tax legally and fully sufficient to pay the said Debt Service Requirements, it having been
determined that the existing and available taxing authority of the City for such purpose is
adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness.
Accrued interest received from the purchasers of the Certificates shall be deposited to
the Certificate Fund. In addition, any surplus proceeds from the sale of the Certificates not
expended for authorized purposes shall be deposited in the Certificate Fund, and such amounts
so deposited shall reduce the sums otherwise required to be deposited in said Fund from ad
valorem taxes.
SECTION 13: Limited Pledcre of Revenues. The City hereby covenants and agrees
that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment
and security of Prior Lien Obligations, the Net Revenues of the System in an aggregate amount
of $1,000 are hereby irrevocably pledged to the payment of the principal of and interest on the
Certificates, and the limited pledge of $1,000 of the Net Revenues of the System herein made
for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in
accordance with the terms and provisions hereof and shall be on a parity in all respects with the
lien on the Net Revenues securing the payment of the Previously Issued Certificates.
Furthermore, such lien on and pledge of the Net Revenues securing the payment of the
Certificates shall be valid and binding and fully perfected from and after the date of adoption of
this Ordinance without physical delivery or transfer or transfer of control of the Net Revenues,
the filing of this Ordinance or any other act; all as provided in Chapter 1208 of the Texas
Government Code.
Section 1208, Government Code, applies to the issuance of the Certificates and the
pledge of the Net Revenues of the System granted by the City under this Section 13, and such
pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the
80003880.1/10800634 1 6
Certificates are Outstanding such that the pledge of the Net Revenues of the System granted by
the City under this Section 13 is to be subject to the filing requirements of Chapter 9, Business
& Commerce Code, then in order to preserve to the registered owners of the Certificates 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, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur.
SECTION 14: System Fund. The City hereby covenants and agrees that all Gross
Revenues (excluding earnings from the investment of money held in any special funds or
accounts created for the payment and security of Prior Lien Obligations) shall be deposited as
collected into a fund maintained at an official depository of the City and known on the books of
the City as the "City of Southlake Waterworks and Sanitary Sewer System Fund" (hereinafter
called the "System Fund"). All moneys deposited to the credit of the System Fund shall be
allocated, appropriated and budgeted to the extent required for the following purposes and in
the order of priority shown, to wit:
First: To the payment of Operating and Maintenance Expenses of the System
as defined in herein or required by statute to be a first charge on and claim
against the Gross Revenues of the System.
Second: To the payment of all amounts required to be deposited in the special
Funds created and established for the payment, security and benefit of Prior Lien
Obligations in accordance with the terms and provisions of the ordinances
authorizing the issuance of Prior Lien Obligations.
Third: Equally and ratably, to the payment of the limited amounts pledged to the
payment of the Previously Issued Certificates and the Certificates.
Any Net Revenues remaining in the System Fund after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment thereof, may be
appropriated and used for any other City purpose now or hereafter permitted by law.
SECTION 15: Deposits to Certificate Fund. Subject to the provisions of Section 13
hereof, the City hereby covenants and agrees to cause to be deposited in the Certificate Fund
from the pledged Net Revenues of the System in the System Fund, the amount of Net
Revenues of the System pledged to the payment of the Certificates.
The City covenants and agrees that the amount of pledged Net Revenues of the System
($1,000), together with other lawfully available revenues appropriated by the City for payment of
the debt service requirements on the Certificates and ad valorem taxes levied, collected, and
deposited in the Certificate Fund for and on behalf of the Certificates, will be an amount equal to
one hundred percent (100%) of the amount required to fully pay the interest and principal due
and payable on the Certificates. In addition, any surplus proceeds from the sale of the
Certificates not expended for authorized purposes shall be deposited in the Certificate Fund,
and such amounts so deposited shall reduce the sums otherwise required to be deposited in
said Fund from ad valorem taxes and the Net Revenues of the System.
SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly
invested) shall be secured in the manner and to the fullest extent required by the laws of Texas
80003880.1 X10800634 17
for the security of public funds, and moneys on deposit in such Funds shall be used only for the
purposes permitted by this Ordinance.
SECTION 17: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the Net Revenues of the System
to the payment of the Certificates in the manner herein contemplated and has
lawfully exercised such power under the Constitution and laws of the State of
Texas, including said power existing under V.T.C.A, Government Code, Sections
1502.56 and 1502.58 and V.T.C.A., Local Government Code, Sections 271.041,
et seq.
(b) Other than for the payment of the outstanding Prior Lien
Obligations, Previously Issued Certificates and the Certificates, the Net
Revenues of the System have not in any manner been pledged to the payment of
any debt or obligation of the City or of the System.
SECTION 18: Issuance of Prior Lien Obligations and Additional Parity Obligations. The
City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without
limitation as to principal amount but subject to any terms, conditions or restrictions applicable
thereto under law or otherwise, and such Prior Lien Obligations hereafter issued may be
payable, in whole or in part, from the Net Revenues (without impairment of the obligation of
contract with the Holders of the Certificates) upon such terms and secured in such manner as
the City Council may determine. Additionally, the City reserves the right without any limitations
or restrictions to issue additional obligations payable (in whole or in part) from and secured by
lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien on
and pledge of such Net Revenues securing the payment of the Previously Issued Certificates
and the Certificates.
SECTION 19: Application of Prior Lien Obligations Covenants and Agreements. It is
the intention of this governing body and accordingly hereby recognized and stipulated that the
provisions, agreements and covenants contained herein bearing upon the management and
operations of the System, and the administering and application of revenues derived from the
operation thereof, shall to the extent possible be harmonized with like provisions, agreements
and covenants contained in the ordinances authorizing the issuance of the Prior Lien
Obligations, and to the extent of any irreconcilable conflict between the provisions contained
herein and in the ordinances authorizing the issuance of the Prior Lien Obligations, the
provisions, agreements and covenants contained therein shall prevail to the extent of such
conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and
benefits, if any, conferred thereby to the holders of the Prior Lien Obligations. Notwithstanding
the above, any change or modification affecting the application of revenues derived from the
operation of the System shall not impair the obligation of contract with respect to the pledge of
revenues herein made for the payment and security of the Certificates.
SECTION 20: Mutilated - Destroyed -Lost and Stolen Certificates. In case any
Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may
execute and deliver a replacement Certificate of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost
or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder
thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar
80003880.1 /10800634 18
of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership
thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount
satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and
charges associated with such indemnity and with the preparation, execution and delivery of a
replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed,
lost or stolen.
Every replacement Certificate issued pursuant to this Section shall be a valid and
.binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably
with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone
of the destroyed, lost, or stolen Certificates.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost or stolen Certificates.
SECTION 21: Satisfaction of Obligation of City. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of
taxes levied under this Ordinance and the Net Revenues of the System (to the extent such
pledge of Net Revenues shall not have been discharged or terminated by prior payment of
principal of or interest on the Certificates) and all covenants, agreements, and other obligations
of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Certificates or any principal amount(s) thereof shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section when (i) money sufficient to
pay in full such Certificates or the principal amount(s) thereof at maturity or the redemption date
therefor, together with all interest due thereon, shall have been irrevocably deposited with and
held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Securities have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or
the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Securities will be made under this Section and no use
made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or
regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying Agent/Registrar,
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which
such moneys have been so deposited shall be remitted to the City or deposited as directed by
the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the
principal of and interest on the Certificates and remaining unclaimed for a period of three (3)
years after the Stated Maturity, or applicable redemption date, of the Certificates such moneys
were deposited and are held in trust to pay shall upon the request of the City be remitted to the
80003880.1X10800634 1 9
City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance
of funds from the Paying Agent/Registrar to the City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 22: Ordinance a Contract -Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City while any Certificates remain Outstanding except as permitted in this
Section and in Section 37 hereof. The City may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the City may, with the consent of Holders holding a
majority in aggregate principal amount of the Certificates then Outstanding, amend, add to, or
rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders
of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the
time or times of payment of the principal of, premium, if any, and interest on the Certificates,
reduce the principal amount thereof, the redemption price or the rate of interest thereon, or in
any other way modify the terms of payment of the principal of, premium, if any, or interest on the
Certificates, (2) give any preference to any Certificate over any other Certificate, or (3) reduce
the aggregate principal amount of Certificates required to be held by Holders for consent to any
such amendment, addition, or rescission.
SECTION 23: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in
this Section, the following terms have the following meanings:
"Closing Date° means the date on which the Certificates are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Intemal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the
Regulations, of the Certificates.
"Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired
to carry out the governmental purposes of the Certificates.
"Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Intemal Revenue
Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
aooosaao.~/~oaoossa 20
Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Certificate to become includable in the gross income, as defined in section 61 of the Code, of
the owner thereof for federal income tax purposes. Without limiting the generality of the
foregoing, unless and until the City receives a written opinion of counsel nationally recognized in
the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Certificate, the
City shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Certificates:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates, and not use or permit the use
of such Gross Proceeds (including all contractual arrangements with terms
different than those applicable to the general public) or any property acquired,
constructed or improved with such Gross Proceeds in any activity carried on by
any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use
is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds,
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the
Certificates to make or finance loans to any person or entity other than a state or local
government. For purposes of the foregoing covenant, such Gross Proceeds are considered to
be "loaned° to a person or entity if: (1) property acquired, constructed or improved with such
Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt
for federal income tax purposes; (2) capacity in or service from such property is committed to
such person or entity under stake-or-pays output or similar contract or arrangement; or
(3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any
property acquired, constructed or improved with such Gross Proceeds are otherwise transferred
in a transaction which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
/. ~~-~-~ . '1A
final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
(f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Certificates to be federally guaranteed within the meaning of
Section 149(b) of the Code and the Regulations and rulings thereunder.
(g) ,.Information Report. The City shall timely file the information required by
Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in
Section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all -Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account
separately and apart from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of accounting for at least six
years after the day on which the last Outstanding Certificate is discharged.
However, to the extent permitted by law, the City may commingle Gross
Proceeds of the Certificates with other money of the City, provided that the City
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in Section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Certificates until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Certificates by
the Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States from the construction fund,
other appropriate fund, or if as permitted by applicable Texas statute, regulation
or opinion of the Attorney General of the State of Texas, the Certificate Fund, the
amount that when added to the future value of previous rebate payments made
for the Certificates equals (i) in the case of a Final Computation Date as defined
in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the
Rebate Amount on such date; and (ii) in the case of any other Computation Date,
ninety percent (90%) of the Rebate Amount on such date. In all cases, the
rebate payments shall be made at the times, in the installments, to the place and
in the manner as is or may be required by Section 148(f) of the Code and the
Regulations and rulings thereunder, and shall be accompanied by Form 8038-T
or such other forms and information as is or may be required by Section 148(f) of
the Code and the Regulations. and rulings thereunder.
annn~s~an ~/~nanna~d 77
(4) The City shall exercise reasonable diligence to assure that no
errors are made in the calculations and payments required by paragraphs (2) and
(3), and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h)-of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Certificates not
been relevant to either party.
Q) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
City Secretary, City Manager and Director of Finance, individually or jointly, to make elections
permitted or required pursuant to the provisions of the Code or the Regulations, as they deem
necessary or appropriate in connection with the Certificates, in the Certificate as to Tax
Exemption or similar or other appropriate certificate, form or document.
SECTION 24: Sale of Certificates -Official Statement Approval. The sale of the
Certificates authorized by this Ordinance to Southwest Securities, Inc. and Wachovia Securities,
Inc. (herein referred to as the "Purchasers") in accordance with the Purchase Agreement,
dated February 19, 2008, attached hereto as Exhibit B and incorporated herein by reference as
a part of this Ordinance for all purposes. The Mayor or Mayor Pro Tem is hereby authorized
and directed to execute said Purchase Agreement for and on behalf of the City and as the act
and deed of this Council, and in regard to the approval and execution of the Purchase
Agreement, the Council hereby finds, determines and declares that the representations,
warranties and agreements of the City contained in the Purchase Agreement are true and
correct in all material respects and shall be honored and performed by the City.
Furthermore, the use of the Preliminary Official Statement, dated February 12, 2008, by
the Purchasers in connection with the public offering and sale of the Certificates is hereby
ratified, confirmed and approved in all respects. The final Official Statement, which reflects the
terms of sale (together with such changes approved by the Mayor, Mayor Pro Tem, City
Manager, Director of Finance or City Secretary, individually or collectively), shall be and is
hereby in all respects approved, and the Purchasers are hereby authorized to use and distribute
said final Official Statement, dated February 19, 2008 in the reoffering, sale and delivery of the
Certificates to the public. The Mayor and City Secretary are further authorized and directed to
manually execute and deliver for and on behalf of the City copies of said Official Statement in
final form as may be required by the Purchasers, and such final Official Statement in the form
and content manually executed by said officials shall be deemed to be approved by the City
Council and constitute the Official Statement authorized for distribution and use by the
Purchasers.
SECTION 25: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the
accrued interest received from the Purchasers and amounts to pay costs of issuance and
municipal bond insurance premium, if any, shall be deposited in a construction fund maintained
at a City depository bank. Pending expenditure for authorized projects and purposes, such
sooossso.~/~oaoossa 23
proceeds of sale may be invested in authorized investments in accordance with the provisions
of V.T.C:A., Government Code, Chapter 2256, including specifically guaranteed investment
contracts permitted in V.T.C.A., Section 2256.015, et seq, and any investment earnings
realized may be expended for such authorized projects and purposes or deposited in the
Certificate Fund as shall be determined by the City Council. Accrued interest as well as all
surplus proceeds of sale of the Certificates, including investment earnings, remaining after
completion of all authorized projects or purposes shall be deposited to the credit of the
Certificate Fund.
SECTION 26: Control and Custody of Certificates. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending the sale
of the Certificates, the investigation by the Attorney General of the State of Texas, including the
printing and supply of definitive Certificates, and shall take and have charge and control of the
Initial Certificate(s) pending the approval thereof by the Attorney General, the registration
thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Manager, Director of Finance and City
Secretary, any one or more of said officials, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the City and the issuance of the
Certificates, including a certification as to facts, estimates, circumstances and reasonable
expectations pertaining to the use and expenditure and investment of the proceeds of the
Certificates as may be necessary for the approval of the Attorney General and their registration
by the Comptroller of Public Accounts. In addition, such officials, together with the City's
financial advisor, bond counsel and the Paying Agent/Registrar, are authorized and directed to
make the necessary arrangements for the delivery of the Initial Certificate(s) to the Purchasers
and the initial exchange thereof for definitive Certificates.
SECTION 27: Notices to Holders-Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder appearing in the Security Register at the close of business on the
business day next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides
for notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 28: Cancellation. All Certificates surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be
promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying
Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying
Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrarfnr cancellation
any Certificates previously certified or registered and delivered which the City may have
acquired in any manner whatsoever, and all Certificates so delivered shall be promptly
cancelled by the Paying Agent/Registrar. All cancelled Certificates held by the Paying
Agent/Registrarshatl be returned to the City.
80003880.1/10800634 24
SECTION 29: Bond Counsel's Opinion. The Purchasers' obligation to accept delivery of
the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P.,
Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and
delivered as of the date of delivery and payment for the Certificates. An executed counterpart of
said opinion shall accompany the global certificates deposited with The Depository Trust
Company or a reproduction thereof shall be printed on the definitive Certificates in the event the
book entry only system shall be discontinued.
SECTION 30: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Certificates shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving the Certificates as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates.
SECTION 31: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is
intended to be and shall be for the sole and exclusive benefit of the City, the Paying
Agent/Registrarand the Holders.
SECTION 32: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict, and the provisions of this Ordinance shalt be. and remain
controlling as to the matters contained herein.
SECTION 33: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 34: Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 35: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 36: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the City Council
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 37: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMS/R" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
80003880.1 /10800634 25
"Ru/e" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2008) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 24 of this Ordinance,
being the information described in Exhibit C hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report,
when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Certificates, if
such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates;
and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
80003880.1/10800634 26
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Certificates within the meaning of the Rule,
except that the City in any event will give the notice required by subsection (c) hereof of any
Certificate calls and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data; financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances resulting from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or
type of operations of the City, but only if (1) the provisions of this Section, as so amended,
would have permitted underwriters to purchase or sell Certificates in the primary offering of the
Certificates in compliance with the Rule, taking into account any amendments or interpretations
of the Rule to the date of such amendment, as well as such changed circumstances, and (2)
either (a) the Holders of a majority in aggregate principal amount (or any greater amount
required by any other provision of this Ordinance that authorizes such an amendment) of the
Outstanding Certificates consent to such amendment or (b) a Person that is unaffiliated with the
City (such as nationally recognized bond counsel) determines that such amendment will not
materially impair the interests of the Holders and beneficial owners of the Certificates. The
provisions of this Section may also be amended from time to time or repealed by the City if the
SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, but only if and to the extent that reservation of the
City's right to do so would not prevent underwriters of the initial public offering of the Certificates
from lawfully purchasing or selling Certificates in such offering. If the City so amends the
provisions of this Section, it shall include with any amended financial information or operating
data next provided in accordance with subsection (b) an explanation, in narrative form, of the
80003880.1/10800634 27
reasons for the amendment and of the impact of any change in the type of financial information
or operating data so provided.
SECTION 38: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 39: Effective Date. This Ordinance shall take effect and be in full force from
and after its adoption on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028.
remainder of page left blank intentionally]
80003880.1/10800634 28
PASSED AND ADOPTED, this February 19, 2008.
ATTEST:
_ P
fi(~-
City Secretary
(City Seal) ; ~J; ,~
• •7v
' o; s cn
}; ..
~,~ o
J'
'•. .•'
CITY OF SOUTHLAKE, TEXAS
-~
ayor
80003880.1/10800634 S'~
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
80003880.1/10800634 A-1
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of February 19, 2008 (this "Agreement"), by and
between the City of Southlake, Texas (the "Issuer"), and The Bank of New York Trust Company,
N.A., Dallas, Texas, a banking association duly organized and existing under the laws of the
United States of America (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the execution and delivery
of its "City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited Pledge)
Revenue Certificates of Obligation, Series 2008" (the "Securities"), February 15, 2008, such
Securities scheduled to be delivered to the initial purchasers thereof on or about April 1, 2008;
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 said 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, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal of, 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 "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, 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 "Bond Resolution".
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
Annex A attached hereto.
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).
80003881.1/10800634
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any
Security which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the offices of the Bank located in Dallas, Texas, at the
address appearing in Section 3.01 hereof. The Bank will notify the Issuer iri writing of
any change in location of the Bank Office.
"Bond Resolution" means the resolution, order or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"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.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Director of Finance
or City Secretary, any one or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"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 Bond Resolution).
"Record Date" means the last business day of the month next preceding each
interest payment date.
"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 Bond Resolution.
"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
80003881.1/10800634 2
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.
"Securities" means the securities defined in the recital paragraphs herein.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution 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 the Paving Agent. 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,
Redemption Date or Acceleration Date, to the Holder upon surrender of the Security to the Bank
at the following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 2001 Bryan Street, 9th
Floor, Dallas, Texas 75201, Attention: Operations.
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 interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and/or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first
class postage prepaid, to the address appearing on the Security Register or (2) by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and
expense.
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 Bond Resolution.
80003881.1/10800634 3
ARTICLE FOUR
REGISTRAR
Section 4.01. Securitv 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. All transfers, exchanges and
replacements 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 National Association of Securities
Dealers, such written instrument to be in a form satisfactory to the Bank and 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 (3) 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 governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of the Securitv 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.
sooosss~ . ~n osoossa 4
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.
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, cancel and destroy, pursuant to the Securities and Exchange Act of
1934, all Securities in lieu of which or in exchange for which other Securities have been issued,
or which have been paid, and will provide a certificate of destruction of such Securities to the
Issuer upon the Issuer's request.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the applicable provisions of the Bond Resolution, 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 overissuance.
In case any Security shall be mutilated, 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 upon (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, destroyed, lost or stolen.
Section 4.07. Transaction Information to the 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 hereof, Securities it has delivered upon the
transfer or exchange of any Securities pursuant to Section 4.01 hereof, and Securities it has
delivered in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities pursuant to
Section 4.06 hereof.
80003881.1110800634 5
ARTICLE FIVE
THE BANK
Section 5.01. Duties of the Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on the 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
transferor 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 the 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.
80003881.1 /10800634 6
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. Moneys Held by the Bank -Fiduciary Account. A fiduciary account shall
at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement
of moneys received from the Issuer hereunder for the payment of the Securities, and money
deposited to the credit of such account until paid to the Holders of the Securities shall be
continuously collateralized by securities or obligations which qualify and are eligible under both
the laws of the State of Texas and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such money is not insured by the
Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be
made by check drawn on such fiduciary account unless the. owner of such Securities shall, at its
own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium, if any, or interest on any
Security and remaining unclaimed for three (3) years after final maturity of the Security has
become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security
shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with
respect to such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank, and its directors, officers and employees (collectively, the "Indemnified
Parties"), and hold the Indemnified Parties harmless against any loss, liability or expense
incurred without negligence or bad faith on the part of the Indemnified Parties, arising out of or
in connection with the Bank's acceptance or administration of the Bank's duties hereunder,
including the cost and expense against any claim or liability in connection with the exercise or
performance of any of the Bank's powers or duties under this Agreement.
Section 5.07. Interoleader. 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 State and County where 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 in the State
of Texas to determine the rights of any Person claiming any interest herein.
Section 5.08. DTC 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", 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.
80003881.1/10800634 7
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 execution page of this Agreement.
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06. Severability. 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 Bond Resolution 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 Bond Resolution, the
Bond Resolution 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 (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (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 is given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. 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.
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for
the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a
successor Paying Agent/Registrar has not been delivered to the resigning Paying
Agent/Registrartyithin sixty (60) days after the giving of such notice of resignation.
80003881.1/10800634 8
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 AgenURegistrar designated and appointed by
the Issuer.
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.
(remainder of page left blank intentionally)
80003881.1/10800634 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Attest:
Title:
Attest:
City Secretary
THE BANK OF NEW YORK TRUST
COMPANY, N.A.
BY
Title:
Address: 2001 Bryan Street, 8"' Floor
Dallas, Texas 75201
CITY OF SOUTHLAKE, TEXAS
BY
Mayor
Address: 1400 Main Street, Suite 440
Southlake, Texas 76092
80003881.1/10800634 S-1
ANNEX A
80003881.1/10800634 A-~
EXHIBIT B
PURCHASE AGREEMENT
80003880.1 /10800634 B-'I
PURCHASE AGREEMENT
RELATING TO
$14,015,000
CITY OF SOUTHLAKE, TEXAS
(Tarrant and Denton Counties)
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION,
SERIES 2008
February 19, 2008
Mayor and City Council
City of Southlake, Texas
1400 Main Street
Southlake, Texas 76092
Ladies and Gentlemen:
Southwest Securities, Inc. (the "Representative', on behalf of themselves and Wachovia
Bank, N.A. (the "Underwriters'; and not acting as fiduciary or agent for you hereby offers, to enter
into .this Purchase Agreement (the "Purchase Agreement's with the City of Southlake, Texas (the
"Issuer', which, upon your acceptance of this offer will be binding upon you and upon the
Underwriters. Terms not otherwise defined herein-shall have the same meanings as set forth in the
Ordinance (hereinafter defined).
1. PURCHASE AND SALE OF THE CERTIFICATES. (a) Upon the terms and conditions, and
in reliance upon the representations, warranties, and covenants herein, the Underwriters hereby
agree to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the
Underwriters, all (but not less than all) of $14,015,000 City of Southlake, Tax and Waterworks and
Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2008 (the "Certificates'.
The Certificates shall have the terms and features (including principal amounts, interest rates,
maturity schedules and terms with respect to redemption) set forth in Schedule I.
The purchase price for all of the Certificates will be $14,028,689.07 which purchase price reflects the
original aggregate principal amount of the Certificates of $14,015,000 plus a net re-offering premium
of $36,084.35 (which includes a total re-offering premium of $184,825.00 less a total original issue
discount of $148,740.65), less an Underwriters' Discount of $96,257.23, plus accrued interest of
$73,861.95 on the Certificates, calculated on the basis of a 360-day year of twelve 30-day months
from February 15, 2008, to the date of Closing.
(b) The Certificates are being issued under and pursuant to the Ordinance (hereinafter
defined), in accordance with Subchapter C of Chapter 271 of the Texas Local Government Code, as
amended (the "Act', and all other applicable laws.
2. THE ORDINANCE. The Certificates shall be as described in and shall be issued and
secured under the provisions of the ordinance authorizing the issuance and sale of the Certificates
adopted by the City on February 19, 2008 (the "Ordinance'.
3. PUBLIC OFFERING. The Underwriters agree to make a bona fide public offering of all
the Certificates at the initial offering prices set forth on page 2 of the Official Statement described
below provided, however, that at least ten percent (10%) of the principal amount of the Certificates
of each maturity shall be sold to the "public" (exclusive of dealers, brokers and investment bankers,
etc.) at the offering prices set forth on page 2 of the Official Statement. On or before Closing
(described below), the Representative shall execute a certificate prepared by Bond Counsel
(hereinafter defined) verifying the initial offering prices to the public at which a substantial amount
of each stated maturity of the Certificates were sold to the public.
4. OFFICIAL STATEMENT. (a) The Issuer agrees to deliver to the Underwriters, at such
addresses as the Underwriters shall specify, a reasonable number of copies of the Official Statement
relating to the Certificates (the "Official Statement', as the Underwriters shall reasonably request in
order to comply with paragraph (b)(4) of Rule 15c2-12 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the "Rule'. The Issuer agrees to deliver such Official
Statements within seven business days after the execution of this Purchase Agreement.
(b) The Issuer has previously approved the Preliminary Official Statement relating to the
Certificates; dated February 12, 2008 (the "Preliminary Official Statement's and the Official
Statement (the Official Statement, and any amendments or supplements and all appendices thereto
that may be authorized for use with respect to the Certificates are herein referred to collectively as
the "Official Statement', and consents to their distribution and use by the Underwriters, and
authorizes the execution of the Official Statement by a duly authorized officer of the Issuer. The
Issuer hereby represents. and warrants that the Preliminary Official Statement delivered to the
Underwriters prior to the date of this Purchase Agreement was deemed final by the Issuer as of the
date thereof, except for the omission of such information as permitted to be excluded by the Rule.
The Official Statement may be revised, amended, changed or supplemented after the execution of
this Purchase Agreement only with the permission of the Underwriters.
(c) The Representative shall give notice to the Issuer on the date after which no
participating Underwriter, as such term is defined in the Rule, remains obligated to deliver an
Official Statement pursuant to paragraph (b)(4)(iii) of the Rule. Unless written notice to the contrary
is provided by the Representative to the Issuer, the Issuer may assume such date to be the Closing.
(d) The Issuer has agreed in the Ordinance to provide certain periodic information and
notices of material events in accordance with the Rule as described in the Official Statement under
"CONTINUING DISCLOSURE OF INFORMATION." The Underwriters' obligation to accept
and pay for the Certificates is conditioned upon its review and approval of a certified copy of the
Ordinance containing the agreements described under such heading.
5. GOOD FAITH CHECg. The Representative will deliver to the Issuer a corporate check of
the Representative payable to the order of the Issuer in the amount of 14$ 0,850 as security for the
performance by the Underwriters of their obligation to accept and pay for the Certificates at the
-2-
Closing (described below) in accordance with the provisions of this Purchase Agreement. Such
check shall be held by the Issuer uncashed until the Closing. At the Closing, such check shall be
returned to the Representative upon receipt by or on behalf of the Issuer of the Purchase Price for
the Certificates. Upon the Issuer's failure to deliver the Certificates at the Closing, or if the Issuer
shall be unable to satisfy the conditions to the obligations of the Underwriters contained in this
Purchase Agreement, or if such obligations shall be terminated for any reason permitted by this
Purchase Agreement, such check shall be returned to the Representative within two (2) business
days of such event. In the event that the Underwriters fail (other than for a reason permitted under
this Purchase Agreement) to accept and pay for the Certificates at the Closing, such check shall be
retained and may be cashed by the Issuer as and for full liquidated damages for such failure on the
part of the Underwriters, and the cashing of such check and retention of such proceeds shall
constitute a full release and discharge of all claims and rights hereunder against the Underwriters.
6. REPRESENTATIONSAND WARRANTIES OF THE ISSUER. On the date hereof, the Issuer
represents and warrants to the Underwriters that:
(a) The Issuer is a home-rule city operating as such under the Constitution and laws of the
State of Texas (the "State', and is authorized by the Act (i) to issue the Certificates for the purposes
described in the Ordinance and (ii) to secure the Certificates in the manner described in the
Ordinance and as described in the Official Statement.
(b) The Issuer has the full legal right, power, and authority (i) to adopt the Ordinance
authorizing the issuance of and awarding the sale of the Certificates; (ii) to enter into this Purchase
Agreement described in the Ordinance; (iii)' to issue, sell, and deliver the Certificates to the
Underwriters as provided herein; and (iv) to carry out and consummate all other transactions
described in each of the aforesaid documents, and the Issuer has complied in all material respects
with all provisions of applicable law, including the Act, in all matters relating to such transactions.
(c) The Issuer has duly authorized (i) the execution and delivery of the Certificates and the
execution, delivery, and due performance of this Purchase Agreement; (ii) the distribution and use of
the Official Statement; and (iii) the taking of any and all such actions as may be required on the part
of the Issuer to carry out, give effect to, and consummate the transactions described in such
instruments. All consents or approvals necessary to be obtained by the Issuer in connection with
the foregoing have been received or will be received prior to, or in connection with, the Closing, and
the consents or approvals so received are still in full force and effect.
(d) (i) The Ordinance has been duly adopted by the Issuer, is in full force and effect, and
constitutes the legal, valid, and binding agreement of the Issuer; (ii) this Purchase Agreement when
executed and delivered, will constitute a legal, valid, and binding agreement of the Issuer; and (iii) the
Ordinance, and this Purchase Agreement are enforceable against the Issuer in accordance with their
respective terms, except as enforceability thereof maybe limited by principles of sovereign immunity
and bankruptcy, insolvenry, or other laws affecting creditors' rights generally.
(e) When delivered to the Underwriters, the Certificates will have been duly authorized,
executed, authenticated, issued, and delivered and will constitute legal, valid, and binding obligations
of the Issuer in conformity with the laws of the State of Texas, including the Act, and will be entitled
to the benefit and security of the Ordinance.
(f) The information relating to the Issuer contained in the Preliminary Official Statement is,
and as of the date of Closing such information in the Official Statement will be, true and correct in
-3-
all material respects, and the Preliminary Official Statement does not and the Official Statement will
not contain any untrue statement of a material fact relating to the Issuer or omit to state any material
fact relating to the Issuer necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) Neither the adoption of the Ordinance, the execution and delivery of this Purchase
Agreement, or the Certificates, nor the consummation of the transactions described herein or
therein or the compliance with the provisions hereof or thereof will conflict with, or constitute on
the part of the Issuer a violation of, or a breach of or default under, (i) any statute, indenture,
mortgage, commitment, note, or other agreement ox instrument to which the Issuer is a party or by
which it is bound; (ii) any provision of the Texas Constitution; or (iii) any existing law, rule,
regulation, ordinance, judgment, order, or decree to which the Issuer is subject.
(h) Except as may be disclosed in the Official Statement, on the date hereof and on the date
of closing, the Issuer is not, in any material respect that would adversely affect the validity ox
marketability of the Certificates, in breach of or default under any applicable law or administrative
regulation of the State of Texas or any department, division, agenry, or instrumentality thereof, or of
the United States or any agency ox instrumentality thereof or any applicable judgment or decree or
any loan agreement, note, resolution, certificate, agreement, or other instrument to which the Issuer
is a party or is otherwise subject.
(i) Except as is specifically disclosed in the Official Statement, there is no action, suit,
proceeding, inquiry, or investigation, at law or in equity, before or by any court, public board, or
body, pending in Tarrant or Denton Counties, Texas, or, to the best knowledge of the Issuer,
threatened, which in any way questions the powers of the Issuer referred to in paragraph 6(b) above, .
or the validity of any proceeding taken by the Issuer in connection with the issuance of the
Certificates, or wherein an unfavorable decision, ruling, or finding could materially adversely affect
the transactions described in this Purchase Agreement, or of any other document or instrument
required or described in this Purchase Agreement, or which, in any way, could adversely affect the
validity or enforceability of the Ordinance, the Certificates, or this Purchase Agreement or, to the
knowledge of the Issuer, which in any way questions the exclusion from gross income of the
recipients thereof of the interest on the Certificates for federal income tax purposes as described in
the Official Statement.
(j) Any certificate signed by an official of the Issuer and delivered to the Underwriters shall
be deemed a representation and warranty by the Issuer, as appropriate, to the Underwriters as to the
truth of the statements therein contained.
(k) As of the date hereof and on the date of closing, the Issuer has not been notified of any
listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose
arbitrage certifications may not be relied upon.
(1) The Issuer will not knowingly take or omit to take any action, which action or omission
will in any way cause the proceeds from the sale of the Certificates be applied in a manner other than
as provided in the Ordinance.
(m) Except as may be disclosed in the Official Statement, the Issuer has complied in all
material aspects with all previous continuing disclosure undertakings in written contracts or
-4-
agreements entered into by the Issuer as specified in paragraph (b)(5)(i) of the Rule.
(n) To the best of the knowledge of the Issuer, the financial statements of the Issuer in the
Official Statement present fairly the financial position and the results of operations of the Issuer at
the respective dates and for the respective periods indicated therein, in conformity with generally
accepted accounting principles applied on a consistent basis throughout the periods presented.
(o) As of the date of the Closing, there will not be any material adverse change in the
financial position, results of operations, or condition, financial or otherwise, from that described in
the Official Statement other than in the ordinary course of business or as may be otherwise disclosed
to the Underwriters in accordance with this Purchase Agreement.
7. COVENANTS OF THE ISSUER. The Issuer covenants with the Underwriters as follows:
(a) The Issuer will cooperate, at no expense to the Issuer, with the Underwriters in
qualifying the Certificates for offer and sale under the securities or Blue Sky laws of such
jurisdictions of the United States as the Underwriters may request; provided, however, that the
Issuer shall not be required to qualify as a foreign corporation or to consent to suit or to service of
process in any jurisdiction. The Issuer consents to the use by the Underwriters in the course of their
compliance with the securities or Blue Sky laws of the various jurisdictions of the documents relating
to the Certificates, subject to the right of the Issuer to withdraw such consent by written notice to
the Underwriters.
(b) Prior to the earlier of (i) receipt of notice from the Representative pursuant to Section
4(c) hereof that Official Statements are no longer required under the Rule or (ii) 25 days after the
Closing, any event shall occur as a result of which it is necessary to amend or supplement the
Official Statement in order to make the statements therein, in light of the circumstances when the
Official Statement is delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Official Statement to comply with law, the City shall notify the Underwriters (and
for the purposes of this clause (b) provide the Underwriters with such information as they may from
time to time request), and cooperate with the Underwriters in the preparation of either amendments
or supplements to the Official Statement so that the statements in the Official Statement as so
amended and supplemented will not, in light of the circumstances when the Official Statement is
delivered to a purchaser, be misleading or so that the Official Statement will comply with law.
8. CLOSING. At or before 10:00 a.m., Dallas, Texas time on April 1, 2008 or on such other
date and location as shall have been mutually agreed upon by the Issuer and the Representative, the
Issuer will deliver, or cause to be delivered, to the Representative, the Certificates together with the
other documents hereinafter mentioned and, provided the Representative has made arrangements
with The Depository Trust Company, New York, New York ("DTC'~, for the Certificates to be
book-entry only securities, the Issuer shall take appropriate steps to provide DTC with one or more
definitive certificates for each year of maturity of the Certificates, and the Representative will accept
such delivery and pay the Purchase Price of the Certificates by making a federal funds wire transfer
in immediately available funds for the account of the Issuer to The Bank of New York Trust
Company, N.A., Dallas, Texas (the "Paying Agent/Registrar'. Upon receipt of such payment and
at the Closing, the Issuer shall immediately return to the Representative the good faith check
described in Section 5 hereof.
-5-
The activities relating to the final execution and delivery of the Certificates and the payment
therefore and the delivery of the certificates, opinions, and other instruments as described in
Section 9 of this Purchase Agreement shall occur at the offices Fulbright & Jaworski L.L.P. in
Dallas, Texas, or such other place as shall have been mutually agreed upon by the Issuer and the
Representative. The payment for the Certificates and simultaneous delivery of the Certificates to the
Representative is herein referred to as the "Closing."
9. CLOSING CONDITIONS. The obligations of the Underwriters to purchase the
Certificates shall be subject (a) to the performance by the Issuer of its obligations to be performed
hereunder at and prior to the Closing, (b) to the accuracy, in all material respects, of the
representations and warranties of the Issuer herein as of the date hereof and as of the time of the
Closing, and (c) to the following conditions, including the delivery by the Issuer of such documents
as are enumerated herein in form and substance reasonably satisfactory to Bond Counsel and
Underwriters' Counsel:
(a) At the time of Closing, (i) the Official Statement, this Purchase Agreement, and the
Ordinance shall be in full force and effect and shall not have been amended, modified, repealed, or
supplemented from the date hereof except as may have been agreed to in writing by the
Representative; (u) the proceeds of the sale of the Certificates shall be deposited and applied as
described in the Ordinance; and (iii) the Issuer shall have duly adopted and there shall be in full
force and effect such ordinances or resolutions as, in the opinion of Bond Counsel, shall be
necessary in connection with the transactions described herein.
(b) At or prior to the Closing, the Underwriters shall receive the following executed or
certified documents in such number of counterparts as shall be mutually agreeable to the Issuer, the
Representative, Underwriters' Counsel (hereinafter defined), and Bond Counsel:
(1) The Certificates and the Ordinance (containing the agreement to provide continuing
disclosure of information as described in the Official Statement);
(2) A final opinion of Bond Counsel dated the date of Closing, in substantially the form set
forth as Atitir C (relating to the Certificates) of the Official Statement;
(3) A letter of Bond Counsel addressed to the Underwriters and dated the date of Closing,
to the effect that Bond Counsel's final opinion referred to in, Section 9(b)(2) hereof may be relied
upon by the Underwriters to the same extent as if such opinion were addressed to the Underwriters;
(4) A certificate signed by an authorized officer of the Issuer as prepared by Bond Counsel
setting forth facts, estimates, and circumstances in existence on the date of Closing, which facts,
estimates, and circumstances shall be sufficiently set forth therein to support the conclusion that it is
not expected that the proceeds of the Certificates will be used in a manner or that the Issuer will
take any action or omit to take any action that would cause the Certificates to be "arbitrage bonds,"
within the meaning of the Internal Revenue Code of 1986, as amended (the "Code', and the
regulations, temporary regulations, and proposed regulations promulgated under the Code;
(5) An opinion, dated the date of closing, of West & Associates L.L.P., Underwriters'
Counsel ("Underwriters' Counsel', addressed to the Underwriters, and dated the date of Closing to
the effect that: (i) the Certificates are exempt securities within the meaning of Section 3(a)(2) of the
-6-
1933 Act, as amended, and it is not necessary in connection with the sale of the Certificates to the
public to register the Certificates under the 1933 Act, as amended, or to qualify the Ordinance under
the 1939 Act, as amended; and (it) in their participation in the preparation of the Official Statement,
nothing has come to the attention of said firm that would lead them to believe that the Official
Statement (excluding the financial and statistical data and forecasts included therein, all as to which
no view need be expressed) contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading;
(6) The approving opinion of the Attorney General of Texas with respect to the Certificates;
(8) The registration certificate of the Comptroller of Public Accounts of the State of Texas
with respect to the Certificates;
(9) The Preliminary Official Statement-and the Official Statement;
(10) Letters from Moody's Investors Service, Inc. and Standard & Poor s Ratings Service, a
division of The McGraw-Hill Companies, Inc., and Fitch Ratings to the effect that the Certificates
have been assigned ratings of "Aaa", "AAA", and "AAA", respectively, which ratings shall be in
effect as of the date of Closing;
(11) A certificate, in form and substance reasonably satisfactory to the Representative and
Underwriters' Counsel, of the Issuer or any duly authorized officer or official of the Issuer
satisfactory to the Representative and Underwriters' Counsel, dated as of the Closing, to the effect
that: (i) each of the Issuer's representations, warranties, and covenants contained herein are true and
correct in all material respects as of the Closing; (ii) the Issuer has authorized, by all action necessary
under the Act and the laws and Constitution of the State, the adoption of the Ordinance, and the
execution, delivery, and due performance of the Certificates, and this Purchase Agreement; (iii) no
litigation is pending in Tarrant or Denton Counties, Texas, or to the knowledge of the officer or
official of the Issuer signing the certificate threatened, to restrain or enjoin the issuance or sale of the
Certificates or in any way affecting any authority for or the validity of the Ordinance, the Certificates
or this Purchase Agreement; (iv) the Certificates and this Purchase Agreement are in the form or in
substantially the form approved for such execution by appropriate proceedings of the Issuer; (v)
since September 30, 2006 there has not been any material adverse change in the properties, financial
position, or results of operations of the Issuer, whether or not arising from transactions in the
ordinary course of business, other than as set forth in the Official Statement or as otherwise
disclosed to the Underwriters pursuant to this Purchase Agreement, and since such date the Issuer
has not entered into any transaction or incurred any debt or other liability, except as set forth in the
Official Statement or as otherwise disclosed to the Underwriters; and (vi) the information contained
in the Official Statement relating to the Issuer, its organization, activities, properties, and financial
condition, is true and correct in all material respects and does not contain any untrue or incorrect
statement of a material fact and does not omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading;
and
(12) A copy of the insurance polity issued by Financial Security Assurance Inc. relating to
the guarantee of the payment of scheduled interest on and principal or accreted value (if applicable)
of the Certificates; and
-7-
(13) Such additional legal opinions, certificates, proceedings, instruments, and other
documents as Underwriters' Counsel or Bond Counsel may reasonably request to evidence
compliance by the Issuer with legal requirements, the truth and accuracy, as of the time of Closing,
of the representations of the Issuer herein contained, and the due performance or satisfaction by the
Issuer at or prior to such time of all agreements then to be performed and all conditions then to be
satisfied by the Issuer.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriters
contained in this Purchase Agreement, or if the obligations of the Underwriters to purchase and
accept delivery of the Certificates shall be terminated for any reason permitted by this Purchase
Agreement, the good faith check described in Section 5 hereof shall be returned to the
Representative, this Purchase Agreement shall terminate, and neither the Underwriters nor the
Issuer shall be under further obligation hereunder; except that the respective obligations to pay
expenses, as provided in Section 13 hereof, shall continue in full force and effect.
10. CANCELLATION RIGHTS. The Underwriters shall have the right to cancel their
obligations to purchase the Certificates if between the date hereof and the date of Closing.
(a) a decision with respect to legislation shall be reached by a committee of the House of
Representatives or the Senate of the Congress of the United States, or legislation shall be favorably
reported by such a committee or be introduced, by amendment or otherwise, in ox be passed by the
House of Representatives or the Senate, or recommended to the Congress of the United States for
passage by the President of the United States, or be enacted, or a decision by a federal court of the
United States or the United States Tax Court shall have been rendered, or a ruling, release, order,
regulation or official statement by or on behalf of the United States Treasury Department, the
Internal Revenue Service, or other governmental agency shall have been made or proposed to be
made having the purpose ox effect, or any other action or event shall have occurred which has the
purpose or effect, directly or indirectly, of adversely affecting the federal income tax consequences
of owning the Certificates or of any of the transactions contemplated in connection herewith,
including causing interest on the Certificates to be included in gross income for purposes of federal
income taxation, or imposing federal income taxation upon revenues ox other income of the general
character to be derived by the Issuer, or by any similar body, or upon interest received on
obligations of the general character of the Certificates, which, in the reasonable judgment of the
Underwriters, materially adversely affects the market price of, or market for, the Certificates; or
(b) legislation shall have been enacted, or actively considered for enactment with an
effective date prior to the Closing, or a decision by a court of the United States shall have been
rendered, the effect of which is that the Certificates, including any underlying obligations, or the
Ordinance, as the case may be, axe not exempt from the registration or qualification of the Securities
Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and
as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect; or
(c) a stop order, ruling, regulation, or official statement by the Securities and Exchange
Commission, or any other governmental agency having jurisdiction of the subject matter, shall have
been issued or made, or any other event occurs, the effect of which is that the issuance, offering, ox
sale of the Certificates, including any underlying obligations, or the execution and delivery of the
Ordinance as contemplated hereby or by the Official Statement is, or would be, in violation of any
-8-
provision of the federal securities laws, including the Securities Act of 1933, as amended and as then
in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust
Indenture Act of 1939, as amended and as then in effect; or
(d) any event shall have occurred or any information shall have become known to the
Underwriters which causes the Underwriters to reasonably believe that the Official Statement, as
then amended or supplemented, includes an untrue statement of a material fact, or omits to state any
material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading and such event or information, in the reasonable judgment of the
Underwriters, would materially adversely affect the mazket price of, or market for, the Certificates;
or
(e) there shall have occurred any outbreak of hostilities, or any national or international
calamity or crisis, including a financial crisis, the effect of which on the financial markets of the
United States is such as, in the reasonable judgment of the Underwriters, would materially adversely
affect the market price of, or mazket for, the Certificates; or
(f) there shall be in force a general suspension of trading on the New York Stock Exchange,
the effect of which on the financial markets of the United States is such, in the reasonable judgment
of the Underwriters, would materially adversely affect the market price of, or market for, the
Certificates; or
(g) a general banking moratorium shall have been declared by federal, New York, or State
authorities; or
(h) any proceeding shall be pending by the Securities and Exchange Commission against the
Issuer which, in the reasonable judgment of the Underwriters, would materially adversely affect the
market price of, or mazket for, the Certificates; or
(i) additional material restrictions not in force as of the date hereof shall have been imposed
upon trading in securities generally by any governmental authority, or by any national securities
exchange which in the reasonable judgment of the Underwriters, would materially adversely affect
the market price of, or the market for, the Certificates; or
(j) there shall have occurred any downgrading, or any notice shall have been given of (A) any
intended or potential downgrading or (B) any review or possible change that does not indicate the
direction of a possible change, in the rating accorded any of the Issuer's obligations, including the
downgrade of the rating of any of the City's obligations due to a downgrade of an Insurer (including
the ratings to be accorded the Certificates);
(k) the issuance of the Certificates or any action necessary for the issuance of the
Certificates has been enjoined or invalidated by the order of a court of competent jurisdiction.
11. ISSUER OBLIGATIONS SUBJECT TO PERFORMANCE BY UNDERWRTTERS. The
obligations of the Issuer hereunder are subject to the performance by the Underwriters of its
obligations hereunder.
Z2. SURVIVAL OF REPRESENTATIONS WARRANTIES AND AGREEMENTS. Unless
otherwise set forth herein, all representations, warranties, and agreements of the Issuer shall remain
operative and in full force and effect, as of the date hereof and as of the Closing date, regardless of
-9-
any investigations made by or on behalf of the Underwriters or the Issuer and shall survive the
Closing.
13. EXPENSES. The Issuer will pay or cause to be paid all reasonable expenses incident to
the performance of its obligations under this Purchase Agreement, including, but not limited to,
mailing or delivery of the Certificates; costs of printing the Preliminary Official Statement and
Official Statement, any amendment or supplement to the Preliminary Official Statement or the
Official Statement, fees and disbursements of Bond Counsel; any fees charged by investment rating
agencies for the rating of the Certificates; any paying agent/registrar fees; fees and expenses of the
Issuer's independent certified public accountants; and fees and expenses of the Financial Advisors to
the Issuer.
The Underwriters shall pay all advertising expenses in connection with the public offering of
the Certificates, all other expenses incurred by them in connection with their public offering and
distribution of the Certificates, including the fees and disbursements of Underwriters' Counsel and
all other expenses incident to the performance of the obligations of the Underwriters under this
Purchase Agreement.
14. OTHER TRANSACTIONS BY UNDERWRITERS AND ISSUER. The Underwriters ox their
affiliates may from time to time, in their individual capacity and separate and apart from the
transactions contemplated hereby and the compensation provided for herein, sell securities to,
provide derivative products to, engage in swaps with, and enter into other transactions with the
Issuer, or its agents acting in its behalf, and shall be entitled to retain any compensation or profits
inuring to the Underwriters or their affiliates in connection therewith as approved by the Issuer.
15. NOTICES. Any notice or other communication to be given to the Issuer under this
Purchase Agreement may be given by delivering the same in writing at its address set forth above,
Attention: City Manager, with a copy to (i) the City Attorney and (ii) the Director of Finance, and
any notice or other communication to be given to the Underwriters under this Purchase Agreement
may be given by delivering the same in writing to Southwest Securities, Inc., 1201 Elm Street,
Suite 3500, Dallas, Texas 78270; Attn: Dan Almon.
16. NO RECOURSE AGAINST INDIVIDUALS. None of the members of the City Council,
nor any officer, agent, or employee of the Issuer, shall be charged personally with any liability, or be
held liable under any term or provision of this Purchase Agreement or the Certificates, or because of
execution or attempted execution, or because any breach or attempted or alleged breach, of this
Purchase Agreement.
17. PARTIES IN INTEREST. This Purchase Agreement is made solely for the benefit of the
Issuer and the Underwriters (including the successors or assigns of the Underwriters) and no other
person, including any purchaser of the Certificates, shall acquire or have any right hereunder or by
virtue hereof.
18. EFFECTIVENESS. This Purchase Agreement shall become effective upon the
acceptance hereof by the Issuer and shall be valid and enforceable at the time of such acceptance.
19. GOVERNING LAW. This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America.
20. SEVERABILITY. If any provision of this Purchase Agreement shall be held or deemed
to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
-10-
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
Constitution, statute, rule of public polity, or any other reason, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions of this Purchase Agreement
invalid, inoperative or unenforceable to any extent whatever.
21. SECTION HEAnINGS. Section headings have been inserted in this Purchase Agreement
as a matter of convenience of reference only, and it is agreed that such section headings are not a
part of this Purchase Agreement and will not be used in the interpretation of any provisions of this
Purchase Agreement.
22. COU1y7CERPA1tTS. This Purchase Agreement may be executed in several counterparts,
each of which shall be regarded as an original and all of which shall constitute on and the same
document. This Purchase Agreement shall become effective upon the execution of the acceptance
hereof by the officially authorized and designated officers of the Issuer shown below and shall be
valid and enforceable as of the time of such acceptance.
[Signatures begin on next page)
-11-
Very truly yours,
SOUTHWEST SECURITIES, INC.
By:
Authorized Signatory
REPRESENTATIVE'S SIGNATURE PAGE TO THE PURCHASE AGREEMENT]
Accepted and agreed to as
of the date first written above:
By:
ATTEST:
City Secretary
CITY OF SOUTHLASE, TEXAS
Mayor
[ISSUER'S SIGNATURE PAGE TO THE PURCHASE AGREEMENT]
SCHEDULEI
$14,015,000 City of Soutblake, Texas
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2008*
Interest Accrues From: February 15, 2008
Principal Maturity Interest Principal Maturity Interest
Amount eb.15 Rate Yield Amount eb.15 Rate Yield
$200,000 2009 3.500% 2.100% $705,000 2019 4.000% 3.930%
500,000 2010 3.500% 2.200% 735,000 2020 4.000% 4.120%
515,000 2011 3.500% 2.490% 765,000 2021 4.125% 4.260%
530,000 2012 3.500% 2.720% 795,000 2022 4.250% 4.360%
555,000 2013 3.500% 2.890% 830,000 2023 4.250% 4.470%
575,000 2014 4.000% 3.050% 865,000 2024 4.375% 4.550%
600,000 2015 4.000% 3.220% 910,000 2025 4.500% 4.630%
625,000 2016 4.000% 3.380% 950,000 2026 4.500% 4.680%
650,000 2017 4.000% 3.540% 990,000 2027 4.625% 4.730%
680,000 2018 4.000% 3.730% 1,040,000 2028 4.500% 4.780%
* The Certificates maturing on and after February 15, 2019 aze subject to optional redemption prior to maturity, in
whole or in part, on February 15, 2018, or any date thereafter, at a redemption price of paz plus accrued interest to
the date of redemption.
Exhibit C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 37 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the .headings of the Official Statement referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2. The information in the Official Statement contained in Tables 1 through 6 and 8
through 15.
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
80003880.1/10800634 C-1
INVOICE Preview
Star-Telegram Customer ID: CIT57
400 W.7TH STREET Invoice Number: 294448021
FORT WORTH,TX 76102
(817)390-7761 Invoice Date: 2/22/2008
Federal Tax ID 22-3148254 - Terms: Net due in 21 days
`--- . Due Date: 2/29/2008
Bill To: v -`"--.
MAR PO Number: NO PO
CITY OF SOUTHLAKE 6 Z U4,i
1400 MAIN ST i?V, Order Number: 29444802
STE 440 — - _ Sales Rep: 073
SOUTHLAKE, TX 76092-7604 Description: CITY OF SOUTHLA
Attn Attn: ACCOUNTS PAYABLE Publication Date: 2/22/2008
Description Location Col Depth Linage MU Rate Amount
CITY Or-
SOUTHLAKE AND SEWER SYS
CITY OF SOL ORDINANCE NO. 938 TEM; AND RE- 1 67 67 LINE SO,X I $54.27
AN ORDINANCE AU- SOLVING OTHER
THORIZING THE IS- MATTERS INCIDENT RECEIVED
SUANCE OF CITY OF AND RELATING TO Q
Sales Discoun SOUTHLAKE, TEX- THE ISSUANCE, ($5.00)
AS, TAX AND WA- PAYMENT, SECURI-
TERWORKS AND TY, SALE AND DE-
SEWER SYSTEM LIVERY OF SAID
(LIMITED PLEDGE) CERTIFICATES IN- Q
Misc Fee REVENUE CERTIFI- CLUDING THE AP- MAN Q $5.00
TIONES OF,SERIES 20 8A• CU- T ION OF A PAY- 1 0 2OOV
SPECIFYING THE ING AGENT/
TERMS AND FEA- R E G I 5 T R A R
TURES OF SAID AGREEMENT AND A
CERTIFICATES' PURCHASE AGREE- OFFICE
THE YG FOR MENT AND THE `J I IVL OF CITY (t/'/�R�Rj4RL mount: $54.27
THE PAYMENT OF APPROVAL AND O1 r ICFE CITY IY SE_lV +I llR
SAID CERTIFICATES DISTRIBUTION OF
OF OBLIGATION BY AN OFFICIAL
THE LEVY OF AN AD STATEMENT; AND
VALOREM TAX UP- PROVIDING AN EF-
ON ALL TAXABLE FECTIVE DATE.
PROPERTY WITHIN PASSED AND AP-
THE CITY AND A PROVED THIS THE
LIMITED PLEDGE OF 19th DAY OF FEB-
THE NET REVENUES RUARY, 2008, DUR-
FROM THE OPERA- ING THE REGULAR
TION OF THE CITY'S CITY COUNCIL
WATERWORKS MEETING. -
MAYOR: Andy ciP1. . CHRISTY L.HOLLAND
Wambsganss +e MY COMMISSION EXPIRES
ATTEST: Lori Payne, ll
City Secretary i ` buy 31,2008
r _
•
THE STATE OF TEXAS
County of Tarrant
Before me,a Notary Public in and for said County and State,this day personally appeared Deborah Baylor, Bid and Legal Coordinator for the Star-
Telegram,published by the Star-Telegram,Inc.at Fort Worth,in Tarrant County,Texas;and who,after being duly sworn,did depose and say that the
attached clipping of an advertisement was published in the above named paper on the listed dates: BIDS&LEGAL DEPT. STAR TELEGRAM
(817)390-7501
Signed �- is , ,�
SUBSCRIBED AND SWORN TO BEFORE ME,THIS Sunday, Fe ruary 4 08. Aiar
//,
Notary Public t tJ/1t-<
Thank You For Your Payment
Remit To: Star-Telegram Customer ID: CIT57
P.O. BOX 901051 Customer Name: CITY OF SOUTHLAKE
FORT WORTH, TX 76101-2051 Invoice Number: 294448021
Invoice Amount: $54.27
PO Number: NO PO
Amount Enclosed: $