0885
ORDINANCE NO. ~5
AN ORDINANCE authorizing the issuance of "CITY OF SOUTH LAKE, TEXAS,
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005";
specifying the terms and features of said bonds; levying a continuing
direct annual ad valorem tax for the payment of said bonds; and resolving
other matters incident and related to the issUance, sale, payment and
delivery of said bonds, including the approval and execution of a Paying
Agent/Registrar Agreement, a Purchase Letter and a Special Escrow
Agreement; providing for the redemption of certain outstanding
obligations of the City; and providing an effective date.
WHEREAS, the City Council of the City of Southlake, Texas (the "City") has heretofore
issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal
amount $34,390,000 (collectively, the "Refunded Obligations") more particularly described as
follows:
(1) City of South lake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1996, dated
February 15, 1996, scheduled to mature on February 15 in each of the years
2009 through 2016, and aggregating in principal amount of $1,110,000 (the
"Series 1996 Refunded Obligations");
(2) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1997, dated
February 15, 1997, scheduled to mature on February 15 in each of the years
2009 through 2014 and 2017, and aggregating in principal amount of $5,750,000
(the "Series 1997 Refunded Obligations");
(3) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1998, dated May 15,
1998, scheduled to mature on February 15 in each of the years 2011 through
2018, and aggregating in principal amount of $7,020,000 (the "Series 1998
Refunded Obligations");
(4) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1999, dated April 1,
1999, scheduled to mature on February 15 in each of the years 2013 through
2019, and aggregating in principal amount of $7,640,000 (the "Series 1999
Refunded Obligations");
(5) City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2000-A, dated March 1, 2000,
scheduled to mature on February 15 in each of the years 2012 through 2017 and
2020, and aggregating in principal amount of $5,525,000 (the "Series 2000-A
Refunded Obligations");
(6) City of South lake, Texas, Tax and Limited Pledge Revenue
Certificates of Obligation, Series 2000-C, dated December 1, 2000, scheduled to
mature on August 15 in each of the years 2014 through 2017, 2022 and 2026,
45578562.1
and aggregating in principal amount of $3,120,000 (the "Series 2000-C Refunded
Obligations");
(7) City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2000-D, dated December 1,
2000, scheduled to mature on February 15 in each of the years 2014 through
2017 and 2021, and aggregating in principal amount of $4,225,000 (the "Series
2000-D Refunded Obligations");
AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code,
Chapter 1207, as amended, the City Council is authorized to issue refunding bonds and deposit
the proceeds of sale directly with any place of payment for the Refunded Obligations, or other
authorized depository, and such deposit, when made in accordance with said statute, and
ordinances authorizing the issuance of the Refunded Obligations, shall constitute the making of
firm banking and financial arrangements for their discharge and final payment; and
WHEREAS, the City Council hereby finds and determines that general obligation
refunding bonds should be -issued at this time to refund the Refunded Obligations, and such
refunding will result in the City saving approximately $2,972,805.98 in debt service payments on
such indebtedness and further provide present value savings of approximately $1,872,566.81;
now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: Authorization - Desiqnation - Principal Amount-Purpose. General
obligation refunding bonds of the City shall be and are hereby authorized to be issued in the
aggregate principal amount of $35,700,000 to be designated and bear the title "CITY OF
SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005"
(hereinafter referred to as the "Bonds"), for the purpose of refunding certain outstanding
obligations of the City (identified in the preamble hereof and referred to as the "Refunded
Obligations") and to pay costs of issuance, in accordance with authority conferred by and in
conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government
Code, Chapter 1207.
SECTION 2: Fully Reqistered Obliqations - Bond Date - Authorized Denominations
Stated Maturities - Interest Rates. The Bonds shall be issued as fully registered obligations
only, shall be dated March 15, 2005 (the "Issue Date"), shall be in denominations of $5,000 or
any integral multiple (within a Stated Maturity, except for the single Initial Bond referenced in
Section 8) thereof, and 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 rate(s) per annum in
accordance with the following schedule:
YEAR OF PRINCIPAL INTEREST
MATURITY AMOUNT RATE(S)
2006 $ 185,000 4.20%
2007 195,000 4.20%
2008 200,000 4.20%
2009 825,000 4.20%
2010 865,000 4.20%
2011 1,625,000 4.20%
45578562.1
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2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2,180,000
3,205,000
3,975,000
4,130,000
4,320,000
4,330,000
3,690,000
2,740,000
1,530,000
805,000
165,000
170,000
180,000
185,000
200,000
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
4.20%
The Bonds shall bear interest on the unpaid principal amounts from the date of delivery
to the initial purchasers (anticipated, April 20, 2005.) at the rate(s) per annum shown above in
this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on
the Bonds shall be payable on February 15 and August 15 in each year, commencing
August 15, 2005.
SECTION 3: Terms of Payment - Pavinq Aqent/Reqistrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (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 Bank of America, N.A., Dallas, Texas, to serve as
Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records
relating to the registration, payment, exchange and transfer of the Bonds (the "Security
Register") shall at all times be kept and maintained on behalf of the City by the Paying
Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a
"Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A, and
such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor or Mayor Pro Tem and City Secretary are hereby authorized to execute
and deliver such Agreement in connection with the delivery of the Bonds. The City covenants to
maintain and provide a Paying Agent/Registrar at all times until the Bonds 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 Bonds, 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 Bonds shall be payable at the Stated Maturities
or redemption, only upon presentation and surrender of the Bonds to the Paying
Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Pay.mentlTrans~er
Office"). Interest on the Bonds 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
45578562.1
3
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 Bonds shall be a Saturday, Sunday, a legal holiday, or a day when
banking institutions in the City where the Designated PaymentlTransfer 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 day next preceding the date of mailing of
such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated
Maturities on and after February 15, 2015 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,
2014 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 Bonds (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 Bonds, 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 Bonds shall be
entered in the minutes of the governing body of the City. .
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar
shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by
dividing the principal amount of such Bonds by $5,000 and shall select the Bonds 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 Bonds, 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 Bond to be
redeemed in whole or in part at the address of the Holder appearing on the Security Register at
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 Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
45578562.1
4
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, 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, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated PaymentfTransfer
Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given as hereinabove provided, such Bond (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; provided moneys
sufficient for the payment of such Bond (or of 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.
SECTION 5: Reqistration - Transfer - Exchanqe of Bonds-Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each and every owner of the Bonds issued under and pursuant to the provisions of
this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or
exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly
authorized agent, upon surrender of such Bond to the Paying Agent/Registrar at the Designated
Payment/Transfer Office 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 Bond (except for the single Initial Bond referenced in Section 8
hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar,
one or more new Bonds shall be registered and issued to the assignee or transferee of the
previous Holder; such Bonds to be in authorized denominations, of like Stated Maturity and of a
like aggregate principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the single Initial Bond referenced in
Section 8) may be exchanged for other Bonds of authorized denominations and having the
same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount
as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Bonds are
surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to
the Holder requesting the exchange.
All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders
at the Designated PaymentfTransfer 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 I and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such
transfer or exchange.
All transfers or exchanges of Bonds 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.
45578562.1
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Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in
the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to the provisions of Section 10 hereof and such
new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to
an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of
the date fixed for the redemption of such Bond; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Bond called for redemption in part.
SECTION 6: Execution - Reqistration. The Bonds 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 Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Issue Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the
time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Govemment
Code, Chapter 1201, as amended.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 8(c), 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 8( d), manually executed by an
authorized officer, employee or representative of the Paying Agent/Registrar, and either such
certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that
such Bond has been duly certified, registered and delivered.
SECTION 7: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T -1, or (ii) as multiple fully registered bonds, being one bond for each stated maturity
in the applicable principal amount and denomination and to be numbered consecutively from T-
1 and upward (hereinafter called the "Initial Bond(s)"} and, in either case, the Initial Bond(s) shall
be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s)
shall be the Bonds 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 tim~ after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds 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.
45578562.1
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SECTION 8: Forms. (a) Forms Generallv. The Bonds, the Registration Certificate
of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of
Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, 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 on insured
Bonds 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 Bonds as evidenced by
their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved or
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
(b)
Form of Definitive Bond.
REGISTERED
NO.
REGISTERED
$
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTH LAKE, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 2005
Issue Date:
March 15, 2005
Interest Rate:
%
Stated Maturity:
February 15, 20_
CUSIP NO:
Registered Owner:
Principal Amount:
The City of South lake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of 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 date
of delivery to the initial purchasers (April 20, 2005) 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 August 15, 2005. Principal
of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon
presentation and surrender, at the Designated PaymentfTransfer Office of the Paying
Agent/Registrar executing the registration certificate appearing hereon, or its successor.
Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, 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
.
45578562.1
7
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 Mc;1il, 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. All payments of principal of, premium, if any, and
interest on this Bond 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 Bond is one of the series specified in its title issued in the aggregate principal
amount of $35,700,000 (herein referred to as the "Bonds") for the purpose of refunding
certain outstanding obligations of the City (identified in the Ordinance hereinafter referenced
and referred to as the "Refunded Obligations") and to pay costs of issuance, under and in strict
conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government
Code, Chapter 1207, and pursuant to an Ordinance adopted by the City Council of the City
(herein referred to as the "Ordinance").
The Bonds maturing on and after February 15, 2015 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, 2014, 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 the date fixed for any redemption of Bonds, 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 Bond 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 Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date such
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor, provided
moneys for the payment of the redemption price and the interest 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.
In the event a portion of the principal amount of a Bond is to be redeemed, payment of
the redemption price of such principal amount shall be made to the registered owner only upon
presentation and surrender of such Bond to the Designated PaymentlTransfer Office of the
Paying Agent/Registrar, and a new Bond or Bonds 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 Bond is
selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be
required to transfer such Bond 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 Bond
redeemed in part.
The Bonds are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City. 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 of the provisions of which the owner or holder of this Bond by
45578562.1
8
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 Bonds; the terms and conditions relating to
the transfer or exchange of this Bond; 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 this
Bond may be discharged at or prior to its maturity, and deemed to be no longer Outstanding
thereunder; and for other terms and provisions contained. therein. Capitalized terms used
herein have the meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
PaymentfTransfer 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 Bonds
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 Bond as the
owner entitled to payment of principal hereof at its Stated Maturity, or 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 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
d~ue 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 Bonds 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 Bonds 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 Bonds 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 Bonds by the levy of a tax as
aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining provisions s~all not in any way be affected
or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws of the State of Texas.
45578562.1
9
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Issue Date.
CITY OF SOUTH LAKE, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(SEAL)
(c) *Form of Registration Certificate of Comptroller of Public Accounts to appear on
Initial Bond(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 Bond 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)
*NOTE TO PRINTER: Do not print on definitive bonds
4.5578562.1
10
(d) Form of Certificate of Paying Agent/Registrar to appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within-mentioned Ordinance; the bond or bonds 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 offices of the Paying Agent/Registrar in Dallas, Texas, is the Designated
Payment/Transfer Office for this Bond.
BANK OF AMERICA, N.A.,
Dallas, Texas,
as Paying Agent/Registrar
Registration date:
By
Authorized Signature
(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
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attomey to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every particular.
45578562.1
11
(f) The Initial Bond(s) shall be in the form set forth in paragraph (b)of this Section,
except that the form of the single fully registered Initial Bond shall be modified as follows: .
Heading and first paragraph shall read as follows:
REGISTERED
NO T-1
REGISTERED
$35,700,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 2005
Issue Date: March 15, 2005
Registered Owner: Bank of America, N.A., Dallas, Texas
Principal Amount: THIRTY FIVE MILLION SEVEN HUNDRED THOUSAND DOLLARS
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of 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:
YEAR OF
MATURITY
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(information to be inserted from schedule in section 2 hereof).
(or so much principal thereof as shall not have been prepaid prior to maturity) and to pay
interest on the unpaid Principal Amount hereof from the date of the delivery to the initial
purchasers (April 20, 2005) at the per annum rates 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 August 15, 2005. Principal installments of this Bond
are payable in the year of maturity to the registered owner hereof by Bank of America, N.A.,
Dallas, Texas (the "Paying Agent/Registrar"), 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 Bond 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. All payments of principal of, premium, if any, and interest on this Bond shall
be without exchange or collection charges to the owner hereof and in any coin or currency of
45578562.1
12
the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
SECTION 9: Levv of Taxes. To provide for the payment of the "Debt Service
Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their
redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is
hereby levied, and there shall be annually assessed and. collected in due time, form, and
manner, a tax on all taxable property in the City, within the limitations prescribed by law, and
such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for
the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be
ample and sufficient to provide funds each year to pay the principal of and interest on said
Bonds while Outstanding; full allowance being made for delinquencies and costs of collection;
separate books and records relating to the receipt and disbursement of taxes levied, assessed
and collected for and on account of the Bonds shall be kept and maintained by the City at all
times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt
Service Requirements on the Bonds shall be deposited to the credit of a "Special 2005
Refunding Bond Account" (the "Interest and Sinking Fund") maintained on the records of the
City and deposited in a special fund maintained at an official depository of the City's funds; and
such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the
payment of the Bonds.
Proper officers of the City are hereby authorized and directed to cause to be transferred
to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking
Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and
principal of the Bonds as the same accrues or matures; such transfers of funds to be made in
such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on
or before each principal and interest payment date for the Bonds.
PROVIDED, however, in regard to the payments to become due on the Bonds on
August 15, 2005, sufficient current funds will be available and are hereby appropriated to make
such payments; and proper officials of the City are hereby authorized and directed to transfer
and deposit in the Interest and Sinking Fund such current funds which, together with the
accrued interest received from the initial purchasers, will be sufficient to pay the payments on
the Bonds on August 15, 2005.
SECTION 10: Mutilated - Destroved - Lost and Stolen Bonds. In case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, 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 of the destruction, loss or theft of such Bond, 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 Bond shall be borne by the Holder of the Bond
mutilated, or destroyed, lost or stolen.
Every replacement Bond 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
45578562.1
13
other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Bonds.
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 Bonds.
SECTION 11: Satisfaction of Obliaation of City. If the City shall payor cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes
levied under this Ordinance and all covenants, agreements, and other obligations of the City to
the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds 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 Bonds or the principal amount(s) thereof at maturity or to 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 Bonds, 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 Bonds to be treated as "arbitrage bondsfl
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 Bonds, 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 Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall upon the request of the City be remitted to the 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.
The term "Government Securitiesfl, as used herein, means (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 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
45578562_1
14
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.
SECTION 12: Ordinance. a Contract - Amendments - Outstandinq Bonds. 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 so long as any Bond remains Outstanding
except as permitted in this Section. 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 Bonds then Outstanding, amend, add to, or
rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders
of Outstanding Bonds, 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 Bonds, 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 principalof, premium, if any, or interest on the Bonds,
(2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal
amount of Bonds required to be held by Holders for consent to any such amendment, addition,
or rescission.
The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of
the date of determination, all Bonds theretofore issued and delivered under this Ordinance,
except:
(1) those Bonds cancelled by the Paying Agent/Registrar or delivered to
the Paying Agent/Registrar for cancellation;
(2) those Bonds deemed to be duly paid by the City in accordance with
the provisions of Section 12 hereof; and
(3) those mutilated, destroyed, lost, or stolen Bonds which have been
replaced with Bonds registered and delivered in lieu thereof as provided in
Section 11 hereof.
SECTION 13: Covenants to Maintain Tax-Exempt Status. (a) Definitions.
used in this Section, the following terms shall have the following meanings:
When
"Closing Date" means the date on which the Bonds are first authenticated and delivered
to the initial purchasers against payment therefor.
"Code" means the Internal 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 Bonds.
45578562.1
15
"Investment" has the meaning setforth 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 Bonds are invested and which is not acquired to
carry out the governmental purposes of the Bonds.
"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 Internal Revenue
Code of 1954, which are applicable to the Bonds. 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.
"Yield" of (i) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations; and (ii) the Bonds 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
Bond 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 Bond, 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 Bonds:
(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 Bonds (including property financed with
Gross Proceeds of the Refunded Obligations), 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
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with Gross Proceeds of the Refunded Obligations),
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.
45578562.1
16 .
(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 Bonds 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 a take-or-pay, 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 Hiqher 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
final Stated Maturity of the Bonds 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 Bonds.
(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 Bonds 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 Arbitraqe 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 Bond is discharged. However,
to the extent permitted by law, the City may commingle Gross Proceeds of the
Bonds 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 Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds 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
45578562.1
17
tax purposes, the City shall pay to the United States from an appropriate fund, or
if permitted by applicable Texas statute, regulation or opinion of the Attorney,
General of the State of Texas, the Interest and Sinking Fund, the amount that
when added to the future value of previous rebate payments made for the Bonds
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 CompLitation 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.
(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 Arbitraqe 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 Bonds, 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 Bonds not been
relevant to either party.
U) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
City Manager, Director of Finance, Assistant City Manager and City Secretary, 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 Bonds, in the
Certificate as to Tax Exemption or similar or other appropriate certificate, form or document.
(k) Bonds Not Hedqe Bonds. (1) At the time the original bonds refunded by the
Bonds were issued, the City reasonably expected to spend at least 85% of the spendable
proceeds of such bonds within three years after such bonds were issued and (2) not more than
50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose
Investments having a substantially guaranteed Yield for a period of 4 years or more.
(I) Qualified Advance Refundinq. The Bonds are issued to refund the Refunded
Obligations and the Bonds will be issued more than 90 days before the redemption of the
Refunded Obligations. The City represents as follows:
(i) The Bonds are the first advance refunding of the Refunded
Obligations, within the meaning of section 149(d)(3) of the Code.
45578562.1
18
(ii) The Refunded Obligations are being called for redemption, and
will be redeemed not later than the earliest date on which such bonds may be.
redeemed.
(iii) The initial temporary period under section 148(c) of the Code will
end: (i) with respect to the proceeds of the Bonds not later than 30 days after the
date of issue of such Bonds; and (ii) with respect to proceeds of the Refunded
Obligations on the Closing Date if not ended prior thereto.
(iv) On and after the date of issue of the Bonds, no proceeds of the
Refunded Obligations will be invested in Nonpurpose Investments having a Yield
in excess of the Yield on such Refunded Obligations.
(v) The Bonds are being issued for the purposes stated in the
preamble of this Ordinance. There is a present value savings associated with
the refunding. In the issuance of the Bonds the City has neither:
(i) overburdened the tax-exempt bond market by issuing more bonds, issuing
bonds earlier or allowing bonds to remain outstanding longer than reasonably
necessary to accomplish the governmental purposes for which the Bonds were
issued; (ii) employed an "abusive arbitrage device" within the meaning of Section
1.148-10(a) of the Regulations; nor (iii) employed a "device" to obtain a material
financial advantage based on arbitrage, within the meaning of section 149(d)(4)
of the Code, apart from savings attributable to lower interest rates and reduced
debt service payments in early years.
SECTION 14: Sale of Bonds. The offer of Bank of America, N.A. (herein referred to as
the "Purchasers") to purchase the Bonds in accordance with a letter agreement, dated as of
March 15, 2005, attached hereto as Exhibit B and incorporated herein by reference as a part of
this Ordinance for all purposes is hereby accepted and the sale of the Bonds to said Purchasers
is hereby approved and authorized. The Mayor or Mayor Pro Tem and City Secretary are
hereby authorized and directed to sign the acceptance clause of said letter for and on behalf of
the City and as the act and deed of this City Council. Delivery of the Bonds to the Purchasers
shall occur as soon as possible upon payment being made therefor in accordance with the
terms of sale.
SECTION 15: Special Escrow Aqreement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement") by and between the City and JPMorgan Chase Bank,
National Association (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein
by reference as a part of this Ordinance for all purposes, is hereby approved as to form and
content, and such Agreement in substantially the form and substance attached hereto, together
with such changes or revisions as may be necessary to accomplish the refunding or benefit the
City, is hereby authorized to be executed by the Mayor or Mayor Pro Tem and City Secretary for
and on behalf of the City and as the act and deed of this City Council; and such Agreement as
executed by said officials shall be deemed approved by the City Council and constitute the
Agreement herein approved.
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
Escrowed Securities referenced in the Agreement and the delivery thereof to the Escrow Agent
on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL
2005 CITY OF SOUTHLAKE, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow
45578562.1
19
Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter 1207, as
amended, this Ordinance and the Agreement.
SECTION 16: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(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, Assistant City Manager,
Director of Finance, and City Secretary, anyone or more of said officials, are hereby authorized
and directed to furnish and execute such agreements, documents and certifications relating to
the City and the issuance, sale and delivery of the Bonds, including certifications as to facts,
estimates, circumstances and reasonable expectations pertaining to the use, expenditure and
investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney
General, tRe registration by the Comptroller of Public Accounts and the delivery of the Bonds to
the Purchasers, and, together with the City's bond counsel and the Paying Agent/Registrar,
make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and
the initial exchange thereof for definitive Bonds.
SECTION 17: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale in the sum of (i) $35,497,558.28 shall be deposited to the credit of the Escrow
Fund and (ii) $2,441.72 shall be deposited to the credit of the Interest and Sinking Fund. The
balance of the proceeds of sale of the Bonds shall be expended to pay costs of issuance and
any excess amount budgeted for such purpose shall be deposited to the credit of the Interest
and Sinking Fund.
Additionally, on or immediately prior to the date of delivery of the Bonds to the
Purchasers, the Director of Finance shall cause to be transferred in immediately available
funds to the Escrow Agent from moneys on deposit in the interest and sinking funds
maintained for the payment of the Refunded Obligations the sum of $430,421.00 to accomplish
the refunding.
SECTION 18: Redemption of Refunded Obliqations. (a) The certificates of
obligation of that series known as "City of Southlake, Texas, Tax and Waterworks and Sewer
System (Limited Pledge) Revenue Certificates of Obligation, Series 1996", dated February 15,
1996, maturing in the years 2009 through 2016, and aggregating in principal amount
$1,110,000, shall be redeemed and the same are hereby called for redemption on February 15,
2006, at the price of par and accrued interest to the date of redemption. The City Secretary is
hereby authorized and directed to file a copy of this Ordinance, together with a suggested form
of notice of redemption to be sent to certificateholders, with JPMorgan Chase Bank, National
Association, Dallas, Texas (successor paying agent/registrar to Texas Commerce Bank,
National Association), in accordance with the redemption provisions applicable to such
obligations; such suggested form of notice of redemption being attached hereto as Exhibit D
and incorporated herein by reference as a part of this Ordinance for all purposes.
(b) The certificates of obligation of that series known as "City of Southlake, Texas,
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation,
Series 1997", dated February 15,1997, maturing in the years 2009 through 2014 and 2017, and
aggregating in principal amount $5,750,000, shall be redeemed and the same are hereby called
45578562.1
20
for redemption on February 15, 2006, at the price of par and accrj.Jed interest to the date of
redemption. The City Secretary is hereby authorized and directed to file a copy pf this
Ordinance, together with a suggested form of notice of redemption to be sent to
certificateholders, with jPMorgan Chase Bank, National Association, Dallas, Texas (successor
paying agent/registrar to Texas Commerce Bank, National Association), in accordance with the
redemption provisions applicable to such obligations; such suggested form of notice of
redemption being attached hereto as Exhibit E and incorporated herein by reference as a part of
this Ordinance for all purposes.
(c) The certificates of obligation of that series known as "City of Southlake, Texas,
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation,
Series 1998", dated May 15,1998, maturing in the years 2011 through 2018, and aggregating in
principal amount $7,020,000, shall be redeemed and the same are hereby called for redemption
on February 15, 2007, at the price of par and accrued interest to the date of redemption. The
City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a
suggested form of notice of redemption to be sent to certificate holders, with The Bank of New
York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to U. S. Trust
Company of Texas N.A., Dallas, Texas), in accordance with the redemption provisions
applicable to such obligations; such suggested form of notice of redemption being attached
hereto as Exhibit F and incorporated herein by reference as a part of this Ordinance for all
purposes.
(d) The certificates of obligation of that series known as "City of Southlake, Texas,
Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation,
Series 1999", dated April 1, 1999, maturing in the years 2013 through 2019, and aggregating in
principal amount $7,640,000, shall be redeemed and the same are hereby called for redemption
on February 15, 2008, at the price of par and accrued interest to the date of redemption. The
City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a
suggested form of notice of redemption to be sent to certificateholders, with jPMorgan Chase
Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of
Texas, National Association), in accordance with the redemption provisions applicable to such
obligations; such suggested form of notice of redemption being attached hereto as Exhibit G
and incorporated herein by reference as a part of this Ordinance for all purposes.
(e) The certificates of obligation of that series known as "City of Southlake, Texas,
Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series
2000-A", dated March 1, 2000, maturing in the years 2012 through 2017 and 2020, and
aggregating in principal amount $5,525,000, shall be redeemed and the same are hereby called
for redemption on February 15, 2009, at the price of par and accrued interest to the date of
redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to
certificateholders, with jPMorgan Chase Bank, National Association, Dallas, Texas (successor
paying agent/registrar to Chase Bank of Texas, National Association), in accordance with the
redemption provisions applicable to such obligations; such suggested form of notice of
redemption being attached hereto as Exhibit H and incorporated herein by reference as a part of
this Ordinance for all purposes.
(f) The certificates of obligation of that series known as "City of Southlake, Texas,
Tax and Limited Pledge Revenue Certificates of Obligation, Series 2000-C", dated December 1,
2000, maturing in the years 2014 through 2017, 2022 and 2026, and aggregating in principal
. amount $3,120,000, shall be redeemed and the same are hereby called for redemption on
45578562.1
21
August 15, 2009, at the price of par and accrued interest to the date of redemption. The City
Secretary is hereby authorized and directed to file a copy of this Ordinance, together. with a
suggested form of notice of redemption to be sent to certificateholders, with The Bank of New
York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to U. S. Trust
Company of Texas N.A., Dallas, Texas), in accordance with the redemption provisions
applicable to such obligations; such suggested form of notice of redemption being attached
hereto as Exhibit I and incorporated herein by reference as a part of this Ordinance for all
purposes.
(g) The certificates of obligation of that series known as "City of South lake, Texas,
Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series
2000-D", dated December 1, 2000, maturing in the years 2014 through 2017 and 2021, and
aggregating in principal amount $4,225,000, shall be redeemed and the same are hereby called
for redemption on February 15, 2009, at the price of par and accrued interest to the date of
redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to
certificateholders, with The Bank of New York Trust Company, N.A., Dallas, Texas (successor
paying agent/registrar to U. S. Trust Company of Texas N.A., Dallas, Texas), in accordance with
the redemption provisions applicable to such obligations; such suggested form of notice of
redemption being attached hereto as Exhibit J and incorporated herein by reference as a part of
this Ordinance for all purposes.
The redemption of the obligations described above being associated with the refunding
of such obligations, the approval, authorization and arrangements herein given and provided for
the redemption of such obligations on the redemption dates designated therefor and in the
manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City
Secretary is hereby authorized and directed to make all arrangements necessary to notify the
holders of such obligations of the City's decision to redeem such obligations on the date and in
the manner herein provided and in accordance with the ordinances authorizing the issuance of
the obligations and this Ordinance.
SECTION 19: 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 Bonds. 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 20: Cancellation. All Bonds 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/Registrar for cancellation any Bonds previously
45578562.1
22
certified or registered and delivered which the City may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying
Agent/Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to
the City.
SECTION 21: Leaal Ooinion. The obligation of the Purchasers to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion or an executed counterpart thereof is hereby authorized to be either printed on definitive
printed obligations or deposited with DTC along with the global certificates for the
implementation and use of the Book-Entry-Only System used in the settlement and transfer of
the Bonds.
SECTION 22: CUSIP Numbers. CUSIP numbers may be printed or typed on the Bonds
deposited with The Depository Trust Company or on printed definitive Bonds. It is expressly
provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds
shall be of no significance or effect as regards the legality thereof and neither the City nor
attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the definitive Bonds.
SECTION 23: 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/Registrar and the Holders.
SECTION 24: 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 shall be and remain
controlling as to the matters contained herein.
SECTION 25: Governina 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 26: Effect of Headinas. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 27: 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 28: Severabilitv. 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 29: Incorooration of Findinas and Determinations. The findings and
determinations of the City Council contained in the preamble hereof are hereby incorporated by
45578562.1
23
reference and made a part of this Ordinance for all purposes as if the same were restated in full
in this Section.
SECTION 30: Public MeetinQ. 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 31: 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]
45578562.1
24
PASSED AND ADOPTED, this March 15, 2005.
ATTEST:
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City Secretary
(City Seal)
45578562.1
CITY OF SOUTHLAKE, TEXAS
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Mayor
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25
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of March 15, 2005 (this "Agreement"), by and
between City of South lake, Texas (the "Issuer"), and Bank of America, N.A., Dallas, Texas, a
banking organization 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 issuance of its "City of
Southlake, Texas, General Obligation Refunding Bonds, Series 2005" (the "Securities") in the
aggregate principal amount of $35,700,000, such Securities to be issued in fully registered form
only as to the payment of principal thereof and interest thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof
on or about April 20, 2005; 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 such Paying Agent, 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.
45579662.1
EXHIBIT A
Section 1.02. Compensation.
As compensation for the Bank's services as Paying AgenURegistrar, the Issuer hereby
agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto for the first
year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee
schedule then in effect for services as Paying AgenURegistrar for municipalities, which shall be
supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer,
and shall be effective upon the first day of the following Fiscal Year.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements, and advances incurred or made by the Bank in accordance with any
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:
"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 office of the Bank at the address appearing in Section
3.01 hereof. The Bank will notify the Issuer in 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, Assistant City
Manager, Director of Finance and City Secretary, anyone or more of said officials, and
delivered to the Bank.
Illegal 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.
45579662.1
2
EXHIBIT A
"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 Resolution).
"Redemption Date" when used with respect to any Bond 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
the Bank customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfer of 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 Pavinq Aqent.
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:
BANK OF AMERICA, N.A.
901 Main Street, ih Floor
Dallas, Texas 75202
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
45579662.1
3
EXHIBIT A
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 Qwners,
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.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Reoister-Transfers and Exchanoes.
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.
The Bank represents and warrants that it will file and maintain a copy of the Security
Register for the Issuer and shall cause the Security Register to be current with all registration
and transfer information as from time to time may be applicable.
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 canceled 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
45579662.1
4
EXHIBIT A
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 Security Reqister.
The Bank, as Registrar, will maintain the Security Register relating to the registration,
payment, transfer, and exchange of the Securities in accordance with the Bank's general
practices and procedures in effect from time to time. The Bank shall not be obligated to
maintain such Security Register in any form other than those which the Bank has currently
available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders.
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of
the required fee, a copy of the information contained in the Security Register. The Issuer may
also inspect the information contained in the Security Register at any time the Bank is
customarily open for business, provided that reasonable time is allowed the Bank to provide an
up-to-date listing or to convert the information into written form.
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 Canceled Securities.
The Bank will retain and destroy, upon expiration of the appropriate retention period
under Texas law, 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 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.
45579662.1
5
EXHIBIT A
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.
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 transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counselor
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.
45579662.1
6
EXHIBIT A
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.
Section 5.04. Mav 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. Monevs Held bv the Bank-Special Depository Account/Collateralization.
A special depository 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 special depository accounts
to the extent such money is not insured by the Federal Deposit Insurance Corporation.
Payments made from such special depository account shall be made by check drawn on such
special depository 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 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 for, and hold it
harmless against, any loss, liability, or expense incurred without negligence or bad faith on its
part, arising out of or in connection with its acceptance or administration of its duties hereunder,
including the cost and expense against any claim or liability in connection with the exercise or
performance of any of its powers or duties under this Agreement.
Section 5.07. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse
claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or
State District Court located in the state and county where the administrative office of the Issuer
is located, and agree that service of process by certified or registered mail, return re~eipt
requested, to the address referred to in Section 6.03 of this Agreement shall constitute
45579662.1
7
EXHIBIT A
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 within the State of Texas to determine the
rights of any Person claiming any interest herein.
In the event the Bank becomes involved in litigation in connection with this Agreement,
the Issuer to the extent permitted by law agrees to indemnify and save the Bank harmless from
all loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result
thereof. The obligations of the Bank under this Agreement shall be performable at the principal
corporate office of the Bank in the City of Dallas, Texas.
Section 5.08. DT Services.
It is hereby represented and warranted that, in the event the Securities are otherwise
qualified and accepted for "Depository Trust Company" services or equivalent depository trust
services by other organizations, the Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements", effective as of the date of this agreement,
which establishes requirements for securities to be eligible for such type depository trust
services, including, but not limited to, requirements for the timeliness of payments and funds
availability, transfer turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the
parties hereto.
Section 6.02. Assiqnment.
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 addr:esses shown on the
execution page of this Agreement.
Section 6.04. Effect of Headinqs.
The Article and Section headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assiqns.
All covenants and agreements herein by the Issuer shall bind its successors and
assigns, whether so expressed or not.
45579662.1
8
EXHIBIT A
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 Aqreement.
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 Aqreement.
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 given to the Holders of
the Securities of the appointment of a successor Paying Agent/Registrar. However, if the Issuer
fails to appoint a successor Paying Agent/Registrar within a reasonable time, the Bank may
petition a court of competent jurisdiction within the State of Texas to appoint 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.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
thelssue~ '
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. Governinq Law.
This Agreement shall be construed in accordance with and governed by the laws of the
State of Texas.
45579662.1
9
EXHIBIT A
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
ATTEST:
Title
(CITY SEAL)
ATTEST:
City Secretary
45579662.1
BANK OF AMERICA, N.A.
Dallas, Texas
By
Title
Address:
901 Main Street, 7th Floor
Dallas, Texas 75202
CITY OF SOUTH LAKE, TEXAS
BY
Mayor
Address:
1400 Main Street
Southlake, Texas 76092
S-1
EXHIBIT A
ANNEX A
BANK FEES
None.
45579662.1
A-1
EXHIBIT A
BOND PURCHASE LETTER
March 15, 2005
Honorable Mayor and City Council
City of South lake
1400 Main Street
Southlake, Texas 76092
Re: $35,700,000 City of Southlake, Texas General Obligation Refunding Bonds,
Series 2005, dated March 15,2005
Ladies and Gentlemen:
Bank of America, N.A., Dallas, Texas (the "Purchaser") hereby offers to purchase from
the City of Southlake, Texas (the "City") the captioned bonds (the "Bonds") and, upon
acceptance of this offer by the City, such offer will become a binding agreement between the
Purchaser and the City. This offer must be accepted by 10:00 p.m., Dallas time, March 15,
2005, and if not so accepted will be subject to withdrawal.
1. Purchase Price: The purchase price for the Bonds is par, $35,700,000.00.
2. Terms of Bonds: The Bonds shall be issued in principal amounts, shall bear interest at
such rates, mature on such dates and in such amounts, and have such other terms and
conditions as are set forth in the Ordinance (the "Ordinance") to be adopted by the City
COLJnc~ on. March 15, 2005, unsigned copies of which have been provided- to the
Purchaser. Pursuant to and as more fully described iri the Ordinance, the Bonds shall
be secured by a pledge of ad valorem taxes to be levied on all taxable property within
the City.
3. ClosinQ: The City shall deliver the Initial Bond to, or for the account of, the Purchaser
and the Purchaser shall purchase the Bonds at 10:00 a.m. Dallas time, on April 20,
2005, or at such other time as shall be mutually agreed upon (hereinafter referred to as
the "Closing"). The Closing shall take place at the offices of Fulbright & Jaworski L.L.P.,
Dallas, Texas, or such other location as may be mutually agreed upon. The City will
also deliver a signed copy of the Ordinance to the Purchaser.
45579685.1/1 0502613
EXHIBIT B
City of Southlake, Texas
March 15, 2005
Page 2
4. Conditions to Closino: The Purchaser shall not have any obligation to consummate the
purchase of the Bonds unless the following requirements have been satisfied prior to
Closing:
(a) The City shall have adopted the Ordinance authorizing the issuance of the
Bonds.
(b) Fulbright & Jaworski L.L.P., Bond Counsel, shall have issued its approving
legal opinion as to the due authorization, issuance and delivery of the
Bonds and as to the exemption of the interest thereon from federal income
taxation, upon which the Purchaser shall be entitled to rely.
(c) The Bonds shall have been approved by the Attomey General of the State
of Texas and shall have been registered by the Comptroller of Public
Accounts of the State of Texas.
(d) Nothing shall have occurred prior to closing which in the reasonable
opinion of the Purchaser has had or could have a materially adverse affect
on the City's business, property or financial condition.
5. Nature of Purchase: The Purchaser acknowledges that no official statement or other
disclosure or offering document has been prepared in connection with the issuance and
sale of the Bonds. The Purchaser is a financial institution or other accredited investor as
defined in the Securities Act of 1933, Regulation D, 17 C.F.R. 9230.501 (a), accustomed
to purchasing tax-exempt obligations such as the Bonds. Fulbright & Jaworski L.L.P.,
Bond Counsel, has not undertaken steps to ascertain the accuracy or completeness of
information furnished to the Purchaser with respect to the City or the Bonds, and the
Purchaser has not looked to that firm for, nor has that firm made, any representations to
the Purchaser with respect to that information. The City and the Purchaser agree that
the Purchaser is acquiring the Bonds as evidence of a loan from the Purchaser to the
City. The Purchaser has satisfied itself that it may lawfully purchase the Bonds. The
Bonds (i) are not being registered under the Securities Act of 1933 and are not being
registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of
any state; (ii) will not be listed on any stock or other securities exchange; and (Hi) will not
carry any rating from any rating service. The Purchaser is familiar with the financial
condition and affairs of the City, particularly with respect to its ability to pay its tax
supported obligations such as the Bonds. The Purchaser has received from the City all
information that it has requested in order for it to assess and evaluate the security and
source of payment for the Bonds. The Purchaser is purchasing the Bonds for its own
account or for that of an affiliate as evidence of a loan to the City and has not present
intention to make a public distribution or sale of the Bonds. In no event will the
Purchaser sell the Bonds to purchasers who are not sophisticated investors unless an
official statement or other disclosure document is prepared with respect to such sale of
the Bonds.
45579685.1110502613
EXHIBITB
City of Southlake, Texas
March 15,2005
Page 3
6. In consideration of the purchase of the Bonds by the Purchaser, the City agrees as
follows:
(a) The City will provide the Purchaser with audited annual financial
statements within one hundred eighty (180) days after each fiscal year
end.
(b) The City agrees to deliver to the Purchaser any other financial information
that the Purchaser may reasonably request from time to time.
7. No Oral Aareements: To the extent allowed by law, the parties hereto agree to be
bound by the terms of the following notice: THIS PURCHASE AGREEMENT, THE
ORDINANCE OF THE CITY AUTHORIZING THE BONDS, THE ATTORNEY GENERAL
OPINION, THE OPINION OF BOND COUNSEL AND THE BONDS TOGETHER
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THIS
TRANSACTION AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEqUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
RELATING TO THIS TRANSACTION.
[Signatures begin on next page]
45579685.1/10502613
EXHIBIT B
If this purchase agreement meets with the Purchaser's and the City's approval, please
execute it in the place provided below.
BANK OF AMERICA, N.A.
Dallas, Texas
By:
Printed Name:
Title:
ACCEPTED BY THE CITY OF SOUTH LAKE, TEXAS:
Mayor
ATTEST:
City Secretary
45579685.1/10502613
S-1
EXHIBIT B
SPECIAL ESCROW AGREEMENT
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as
of March 15, 2005, by and between the City of South lake, Texas, a duly incorporated municipal
corporation in Tarrant County, Texas (the "City") acting by and through the Mayor and City
Secretary, and JPMorgan Chase Bank, National Association, Dallas, Texas, a banking
association organized and existing under the laws of the United States of America, or its
successors or assigns hereunder (the "Bank"),
WITNESSETH:
WHEREAS, the City Council of the City of Southlake, Texas (the "City") has heretofore
issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal
amount $34,390,000 (collectively, the "Refunded Obligations") more particularly described as
follows:
(1) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1996, dated
February 15, 1996, scheduled to mature on February 15 in each of the years
2009 through 2016, and aggregating in principal amount of $1,110,000 (the
"Series 1996 Refunded Obligations");
(2) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1997, dated
February 15, 1997, scheduled to mature on February 15 in each of the years
2009 through 2014 and 2017, and aggregating in principal amount of $5,750,000
(the "Series 1997 Refunded Obligations");
(3) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1998, dated May 15,
1998, scheduled to mature on February 15 in each of the years 2011 through
2018, and aggregating in principal amount of $7,020,000 (the "Series 1998
Refunded Obligations");
(4) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1999, dated April 1,
1999, scheduled to mature on February 15 in each of the years 2013 through
2019, and aggregating in principal amount of $7,640,000 (the "Series 1999
Refunded Obligations");
(5) City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2000-A, dated March 1, 2000,
scheduled to mature on February 15 in each of the years 2012 through 2017 and
2020, and aggregating in principal amount of $5,525,000 (the "Series 2000-A
Refunded Obligations");
(6) City of Southlake, Texas, Tax and Limited Pledge Revenue
Certificates of Obligation, Series 2000-C, dated December 1, 2000, scheduled to
mature on August 15 in each of the years 2014 through 2017, 2022 and 2026,
and aggregating in principal amount of $3,120,000 (the "Series 2000-C Refunded
Obligations");
45579651.1
EXHIBIT C
(7) City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2000-0, dated December 1,.
2000, scheduled to mature on February 15 in each of the years 2014 through
2017 and 2021, and aggregating in principal amount of $4,225,000 (the "Series
2000-0 Refunded Obligations");
AND WHEREAS, in accordance with the provisions of V.T.C.A., Government Code,
Chapter 1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an
amount sufficient to provide for the payment of obligations to be refunded, deposit the proceeds
of such refunding bonds with any place of payment for the obligations being refunded, or other
authorized depository, and enter into an escrow or similar agreement with such depository for
the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon
such terms and conditions as the parties may agree, provided such deposits may be invested
only in (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 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 AM 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 that mature and/or bear interest payable at such times and in
such amounts as will be sufficient to provide for the scheduled payment of the Refunded
Obligations; and
WHEREAS, in accordance with the provisions of the ordinances authorizing the Series
1996, Series 1997, Series 1998 and Series 1999 Refunded Obligations, the deposits to refund
and defease such Refunded Obligations shall be invested only in direct obligations of the United
States of America, including obligations the principal of and interest on are unconditionally
guaranteed by the United States of America (the "Escrowed Securities"); and
WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and
interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a part of this Agreement for all purposes; and
WHEREAS, the City on the 15th day of March, 2005, pursuant to an ordinance (the
"Bond Ordinance") finally passed and adopted by the City Council, authorized the issuance of
bonds known as "City of Southlake, Texas, General Obligation Refunding Bonds, Series 2005"
(the "Bonds"), and such Bonds are being issued to refund, discharge and make final payment of
the principal of and interest on the Refunded Obligations; and
WHEREAS, upon the delivery of the Bonds, a portion of the proceeds of sale, together
with other available funds of the City, are to be deposited with the Bank and used in part to
purchase the Escrowed Securities listed and identified in Exhibit B attached hereto and
incorporated by reference as a part of this Agreement for all purposes; and
WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Bank in accordance with this
Agreement; and
45579651.1
2
EXHIBIT C
WHEREAS, the Escrowed Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Obligations and the
accrued interest thereon, as the same shall become due in accordance with the terms of the
ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A
attached hereto; and
WHEREAS, the City has completed all arrangements for the purchase of the Escrowed
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Bank is a banking association organized and existing under the laws of
the United States of America, possessing trust powers and is fully qualified and empowered to
enter into this Agreement; and
WHEREAS, in Section 16 of the Bond Ordinance, the City Council duly approved and
authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action
necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the
provisions thereof, including, without limitation, all actions required by the ordinances
authorizing the Refunded Obligations, the Act, the Bond Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and
to secure the payment of the principal of and the interest on the Refunded Obligations as the
same shall become due, the City and the Bank hereby mutually undertake, promise and agree
as follows:
SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the
ordinances authorizing the issuance of the Refunded Obligations and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of
said documents shall be deemed an incorporation of such provision as a part hereof in the
same manner and with the same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation/FundinQ. There is hereby created by the City with
the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2005 CITY OF
SOUTHLAKE, TEXAS, REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow
Fund") for the benefit of the holders of the Refunded Obligations, and, immediately following the
delivery of the Bonds, the City agrees and covenants to cause to be deposited with the Bank the
following amounts:
$35,496,565.65
For the purchase of Escrowed Securities identified in Exhibit B to
be held for the account of the Escrow Fund
$
992.63
For deposit in the Escrow Fund as a beginning cash balance.
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and
credited to the Escrow Fund for application and disbursement for the purposes and in the
manner provided in this Agreement.
45579651.1
3
EXHIBIT C
SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the
cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the
credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on
the Refunded Obligations as the same shall become due and payable, and such Refunded
Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at the
times and in the amounts set forth and identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of a copy of the Bond Ordinance
which also provides for the redemption (i) on February 15, 2006 of the Series 1996 Refunded
Obligations and the Series 1997 Refunded Obligations at the redemption price of par plus
accrued interest thereon, (ii) on February 15, 2007 of the Series 1998 Refunded Obligations at
the redemption price of par plus accrued interest thereon, (iii) on February 15, 2008 of the
Series 1999 Refunded Obligations at the redemption price of par plus accrued interest thereon,
(iv) on February 15, 2009 of the Series 2000-A Refunded Obligations and the Series 2000-D
Refunded Obligations at the redemption price of par plus accrued interest thereon and (v) on
August 15, 2009 of the Series 2000-C Refunded Obligations at the redemption price of the
accreted value thereof as of the date of redemption; all in accordance with the provisions of the
notice requirements applicable to said Refunded Obligations and the notice requirements
contained in the respective ordinances authorizing such Refunded Obligations.
The Bank agrees to cause a notice of redemption pertaining to the Series 1996
Refunded Obligations, Series 1997 Refunded Obligations, Series 1999 Refunded Obligations
and Series 2000-A Refunded Obligations to be sent to the registered owners thereof appearing
on the registration books at least thirty (30) days prior to the respective redemption dates
therefor.
SECTION 4: Pledqe of Escrow. The Bank agrees that all cash and Escrowed
Securities, together with any income or interest earned thereon, held in the Escrow Fund shall
be and is hereby irrevocably pledged to the payment of the principal of and interest on the
Refunded Obligations which will mature and become due on and after the date of this
Agreement, and such funds initially deposited and to be received from maturing principal and
interest on the Escrowed Securities in the Escrow Fund shall be applied solely in accordance
with the provisions of this Agreement.
SECTION 5: Escrow Insufficiency - City Warranty to Cure. If, for any reason, the funds
on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A
attached hereto, as the same becomes due and payable, the City shall make timely deposits to
the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be immediately given by the Bank
to the City by the fastest means possible, but the Bank shall in no manner be responsible for the
City's failure to make such deposits.
SECTION 6: Escrow Fund Securities/Seqreqation. The Bank shall hold said Escrowed
Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for
the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys
and securities on deposit with the Bank; shall never commingle said Escrowed Securities and
moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets
therein only as set forth herein. Nothing herein contained shall be construed as requiring the
Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical,
but moneys of an equal amount, except to the extent such are represented by the Escrowed
Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow
45579651.1
4
EXHIBIT C
agent; and a special account evidencing such facts shall at all times be maintained on the books
of the Bank.
SECTION 7: Escrow Fund Collections/Pavments. The Bank shall from time to time
collect and receive the principal of and interest on the Escrowed Securities as they respectively
mature and become due and credit the same to the Escrow Fund. On or before each principal
and/or interest payment date or redemption date, as the case may be, for the Refunded
Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone,
including the City, shall cause to be withdrawn from the Escrow Fund the amount required to
pay the accrued interest on the Refunded Obligations due and payable on said payment date
and the principal of the Refunded Obligations due and payable on said payment date or
redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be
immediately transmitted and deposited with the paying agent for the Refunded Obligations to be
paid with such amount. The paying agent for the Series 1996 Refunded Obligations, Series
1997 Refunded Obligations, Series 1999 Refunded Obligations and Series 200Q-A Refunded
Obligations is the Bank and the paying agent for the Series 1998 Refunded Obligations, the
Series 2000-C Refunded Obligations and the Series 2000-0 Refunded Obligations is The Bank
of New York Trust Company, N.A., Dallas, Texas.
If any Refunded Obligation thereon shall not be presented for payment when the
principal thereof or interest thereon shall have become due, and if cash shall at such times be
held by the Bank in trust for that purpose sufficient and available to pay the principal of such
Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash
without liability to the holder of such Refunded Obligation for interest thereon after such maturity
or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall
thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on
or with respect to said Refunded Obligation, including for any claim for the payment thereof and
interest thereon. All cash required by the provisions hereof to be set aside or held in trust for
the payment of the Refunded Obligations, including interest thereon, shall be applied to and
used solely for the payment of the Refunded Obligations and interest thereon with respect to
which such cash has been so set aside in trust.
Subject to the provisions of the last sentence of Section 25 hereof, cash held by the
Bank in trust for the payment and discharge of any of the Refunded Obligations and interest
thereon which remains unclaimed for a period of three (3) years after the stated maturity date or
redemption date of such Refunded Obligations shall be returned to the City. Notwithstanding
the above and foregoing, any remittance of funds from the Bank to the City shall be subject to
any applicable unclaimed property laws of the State of Texas.
SECTION 8: Disposal of Refunded Obliqations. All Refunded Obligations cancelled on
account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and
an appropriate certificate of destruction furnished the City.
SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be
irrevocable and the holders of the Refunded Obligations shall have an express lien on all
moneys and Escrowed Securities in the Escrow Fund until paid out, used and applied in
accordance with this Agreement.
Unless disbursed in payment of the Refunded Obligations, all funds and the Escrowed
Securities received by the Bank for the account of the City hereunder shall be and remain the
property of the Escrow Fund and the City and the owners of the Refunded Obligations shall be
45579651.1
5
EXHIBIT C
entitled to a preferred claim and shall have a first lien upon such funds and Escrowed Securities
enjoyed by a trust beneficiary. The funds and Escrowed Securities received by the Bank under
this Agreement shall not be considered as a banking deposit by the City and the Bank and the
City shall have no right or title with respect thereto, except as otherwise provided herein. Such
funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City.
SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no
lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for
payment of services rendered hereunder, services rendered as paying agent/registrar for the
Refunded Obligations, or for any costs or expenses incurred hereunder and reimbursable from
the City.
SECTION 11: Substitution of Investments/Reinvestments. The Bank shall be authorized
to accept initially and temporarily cash and/or substituted Escrowed Securities pending the
delivery of the Escrowed Securities identified in the Exhibit B attached hereto, or shall be
authorized to redeem the Escrowed Securities and reinvest the proceeds thereof, together with
other moneys held in the Escrow Fund in noncallable direct obligations of the United States of
America provided such early redemption and reinvestment of proceeds does not change the
repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank receives
the following:
(1) an opinion by an independent certified public accountant to the effect
that (i) the initial and/or temporary substitution of cash and/or securities for one or
more of the Escrowed Securities identified in Exhibit B pending the receipt and
delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the
Escrowed Securities and the reinvestment of such funds in one or more
substituted securities (which shall be noncallable direct obligations of the United
States of America), together with the interest thereon and other available moneys
then held in the Escrow Fund, will, in either case, be sufficient, without
reinvestment, to pay, as the same become due in accordance with Exhibit A, the
principal of, and interest on, the Refunded Obligations which have not previously
been paid, and
(2) with respect to an early redemption of Escrowed Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Obligations to be included in the gross
income for federal income tax purposes, under the Code and related regulations
as in effect on the date of such investment, or otherwise make the interest on the
Bonds or the Refunded Obligations subject to Federal income taxation and (b)
such reinvestment complies with the Constitution and laws of the State of Texas
and with all relevant documents relating to the issuance of the Refunded
Obligations and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as
provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed
Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys
deposited in the Escrow Fund except as specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through redemption or cancellation of the
Refunded Obligations there exists or will exist excesses of interest on or maturing principal of
45579651.1
6
EXHIBIT C
the Escrowed Securities in excess of the amounts necessary hereunder for the Refunded
Obligations, the Bank may transfer such excess amounts to or on the order of the City, pr.ovided
that the City delivers to the Bank the following:
(1) an opinion by an independent certified public accountant that after the
transfer of such excess, the principal amount of securities in the Escrow Fund,
together with the interest thereon, and other available monies then held in the
Escrow Fund, will be sufficient to pay, as the same become due and without
reinvestment, in accordance with Exhibit A, the principal of, and interest on, the
Refunded Obligations which have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transfer will not cause interest on the Bonds or
the Refunded Obligations to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded
Obligations subject to Federal income taxation, and (b) such transfer complies
with the Constitution and laws of the State of Texas and with all relevant
documents relating to the issuance of the Refunded Obligations or the Bonds.
SECTION 14: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Escrowed Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Bank's Liability for Investments. The Bank shall not be liable
or responsible for any loss resulting from any investment made in the Escrowed Securities or
substitute securities as provided in Section 11 hereof.
SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Pavino
Aoent's Charoes. The City agrees to pay the Bank for the performance of services hereunder
and as reimbursement for anticipated expenses to be incurred hereunder the amount of
$2,750.00 and, except for reimbursement of costs and expenses incurred by the Bank pursuant
to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete
payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the effective date of this Agreement,
the sum of $ , which represents the total charge due all paying agents for the
Refunded Obligations and the City acknowledges and agrees that $ of such
amount is and represents the total amount of compensation due The Bank of New York Trust
Company, N.A., Dallas, Texas and the Bank represents the balance of such amount is and
represents the total amount of compensation due the Bank for services rendered as paying
agent for the Refunded Obligations. Furthermore, the Bank agrees to transmit to the other
paying agent for the Refunded Obligations the amount included in such deposit for paying agent
services to be rendered for the Refunded Obligations in accordance with the City's instructions.
SECTION 17: Escrow Aoent's Duties / Responsibilities/Liabilitv. The Bank shall not be
responsible for any recital herein, except with respect to its organization and its powers and
authority. As to the existence or nonexistence of any fact relating to the City or as to the
sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall
45579651.1
7
EXHIBIT C
be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor
and/or City Secretary of the City as sufficient evidence of the facts therein contained. Th~ Bank
may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution
or other instrument in the form therein set forth has been adopted by the City Council of the
City, as conclusive evidence that such resolution or other instrument has been duly adopted and
is in full force and effect.
The duties and obligations of the Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement;
but notwithstanding any provision of this Agreement to the contrary, in the case of any such
certificate or opinion or any evidence which by any provision hereof is specifically required to be
furnished to the Bank, the Bank shall be under a duty to examine the same to determine
whether it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent facts.
The Bank shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the holders of not less than a majority in.
aggregate principal amount of all said Refunded Obligations at the time outstanding relating to
the time, method and place of conducting any proceeding for any remedy available to the Bank
not in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Obligations have
concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded
Obligations, or by any person directly or indirectly controlling or controlled by or under direct or
indirect common control with such obligor, shall be disregarded, except that for the purposes of
determining whether the Bank shall be protected in relying on any such direction only Refunded
Obligations which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and
include the Chairman of the Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons who at the time shall be officers,
respectively, or to whom any corporate trust matter is referred, because of his knowledge of and
familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 18: Limitation Re: Bank's Duties/Responsibilities/Liabilities to Third Parties.
The Bank shall not be responsible or liable to any person in any manner whatever for the
sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect
to the City, or for the identity or authority of any person making or executing this Agreement for
and on behalf of the City. The Bank is authorized by the City to rely upon the representations of
the City with respect to this Agreement and the deposits made pursuant hereto and as to the
45579651.1
8
EXHIBIT C
City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in
any manner as a result of such reliance. The duty of the Bank hereunder shall only be, to the
City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assign or
attempt to assign or transfer any interest hereunder or any portion of any such interest. Any
such assignment or attempted assignment shall be in direct conflict with this Agreement and be
without effect.
SECTION 19: Interpleader. In the event conflicting demands or notices are made upon
the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(1) Withhold and stop all further proceedings in, and performance of,
this Agreement with respect to the issue in question and of all instructions
received hereunder in regard to such issue; and
(2) File a suit in interpleader and obtain an order from a court of
appropriate jurisdiction requiring all persons involved to interplead and litigate in
such court their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in connection with this Section, the
City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result
thereof. The obligations of the Bank under this Agreement shall be performable at the corporate
office of the Bank in the City of Dallas, Texas.
The Bank may advise with legal counsel in the event of any dispute or question
regarding the construction of any of the provisions hereof or its duties hereunder, and in the
absence of negligence or bad faith on the part of the Bank, no .liability shall be incurred by the
Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting
in accordance with the opinion and instructions of legal counsel that is knowledgeable and has
expertise in the field of law addressed in any such legal opinion or with respect to the
instructions given.
SECTION 20: Accountinq - Annual Report. Promptly after September 30th of each
year, commencing with the year 2005, while the Escrow Fund is maintained under this
Agreement, the Bank shall forward to the City, to the attention of the Director of Finance, or
other designated official of the City, a statement in detail of the Escrowed Securities and monies
held, and the current income and maturities thereof, and the withdrawals of money from the
Escrow Fund for the preceding 12 month period ending September 30th of each year.
SECTION 21: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
45579651.1
9
EXHIBIT C
CITY OF SOUTHLAKE, TEXAS
1400 Main Street, Suite 440
South lake, Texas 76092
Attention: Director of Finance
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
2001 Bryan Street, 8th Floor
Dallas, Texas 75201
Attention: Issuer Administrative Services
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the
Bank is authorized by law to close, then the performance thereof, including the payment of
principal of and interest on the Refunded Obligations, need not be made on such date but may
be performed or paid, as the case may be, on the next succeeding business day of the Bank
with the same force and effect as if made on the date of performance or payment and with
respect to a payment, no interest shall accrue for the period after such date.
SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow
Aqreement. The City covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in any and every said
Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Obligations shall have been modified as provided in this Agreement.
The City covenants that it is duly authorized under the Constitution and laws of the State of
Texas to execute and deliver this Agreement, that all actions on its part for the payment of said
Refunded Obligations as provided herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded Obligations and coupons in the hands of
the holders and owners thereof are and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 24: Severabilitv. If anyone or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Agreement. In the event
any covenant or agreement contained in this Agreement is declared to be severable from the
other provisions of this Agreement, written notice of such event shall immediately be given to
each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch
Investors Service) which has rated the Refunded Obligations on the basis of this Agreement.
45579651.1
10
EXHIBIT C
SECTION 25: Termination. This Agreement shall terminate when the Refunded
Obligations, including interest due thereon, have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Obligations are not presented for payment
when due and payable, the nonpayment thereof shall not prevent the termination of this
Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued
interest thereon shall upon termination of this Agreement be held by the Bank for such purpose
in accordance with Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow
Fund at termination and not needed for the payment of the principal of or interest on any of the
Refunded Obligations shall be paid or transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Bank by this Agreement.
SECTION 27: Successors/Assions. (a) Should the Bank not be able to legally serve
or perform the duties and obligations under this Agreement, or should the Bank be declared to
be insolvent or closed for any reason by federal or state regulatory authorities or a court of
competent jurisdiction, the City, upon being notified or discovering the Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under
this Agreement to such successor. If the City should fail to appoint such a successor within
ninety (90) days from the date the City discovers, or is notified of, the event or circumstance
causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of
the Refunded Obligations, may apply to a court of competent jurisdiction to appoint a successor
or assigns of the Bank and such court, upon determining the Bank is unable to continue to
serve, shall appoint a successor to serve under this Agreement and the amount of
compensation, if any, to be paid to such successor for the remainder of the term of this
Agreement for services to be rendered both for administering the Escrow Fund and for paying
agent duties and responsibilities for the Refunded Obligations.
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this Agreement upon notifying the City in writing of its intention to resign
and requesting the City to appoint a successor. No such resignation shall take effect until a
successor has been appointed by the City and such successor has accepted such appointment
and agreed to perform all duties and obligations hereunder for a total compensation equal to the
unearned proportional amount paid the Bank under Section 16 hereof for the administration of
this Agreement and the unearned proportional amount of the paying agents fees for the
Refunded Obligations due the Bank.
Any successor to the Bank shall be a bank, trust company or other financial institution
that is duly qualified under applicable law (the Act or other appropriate statute) to serve as
escrow agent hereunder and authorized and empowered to perform the duties and obligations
contemplated by this Agreement and organized and doing business under the laws of the
United States or the State of Texas, having its principal office and place of business in the State
of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the
supervision or examination by Federal or State authority.
Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City
and the Bank, or its successor or assigns, an instrument accepting such appointment
hereunder, and the Bank shall execute and deliver an instrument transferring to such successor,
45579651.1
11
EXHIBIT C
subject to the terms of this Agreement, all the rights, powers and trusts created and established
and to be performed under this Agreement. Upon the request of any such successor Ba,nk, the
City shall execute any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used
herein shall be the Bank and its legal assigns and successor hereunder.
SECTION 28: Escrow Aqreement - Amendment/Modification. This Agreement shall be
binding upon the City and the Bank and their respective successors and legal representatives
and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the
Bank and their respective successors and legal representatives. Furthermore, no alteration,
amendment or modification of any provision of this Agreement shall (1) alter the firm financial
arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i)
prior written consent of such alteration, amendment or modification shall have been obtained
from the holders of all Refunded Obligations outstanding at the time of such alteration,
amendment or modification and (ii) such alteration, amendment or modification is in writing and
signed by the parties hereto; provided, however, the City and the Bank may, without the consent
of the holders of the Refunded Obligations, amend or modify the terms and provisions of this
Agreement to cure in a manner not adverse to the holders of the Refunded Obligations any
ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any
amendment or modification to this Agreement, prior written notice of such amendment or
proposed modification, together with the legal documents amending or modifying this
Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation,
Moody's Investors Service or Fitch Investors Service) which has rated the Refunded Obligations
on the basis of this Agreement, prior to such amendment or modification being executed.
SECTION 29: Effect of Headinqs. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 30: Executed Counterparts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
SECTION 31: Governinq Law. This Agreement shall be governed by the laws of the
State of Texas and shall be effective as of the date of the delivery of the Bonds.
45579651.1
12
EXHIBIT C
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
ATTEST:
City Secretary
(City Seal)
ATTEST:
Authorized Signer
(Bank Seal)
45579651.1
CITY OF SOUTH LAKE, TEXAS
Mayor
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION, Dallas, Texas,
as Escrow Agent
Title:
S-1
EXHIBIT C
EXHIBIT D
NOTICE OF REDEMPTION
CITY OF SOUTH LAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION
SERIES 1996
DATED FEBRUARY 15, 1996
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15,2009 and aggregating in principal amount $1 ,110,000 have
been called for redemption on February 15, 2006, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturity Principal Amount Number
2009 $115,000 . 2013 $140,000
2010 $120,000 2014 $150,000
2011 $125,000 2015 $160,000
2012 $135,000 2016 $165,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
February 15, 2006, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to JPMorgan Chase
Bank, National Association, Dallas, Texas (successor paying agent/registrar to Texas
Commerce Bank, National Association) at its designated offices at the following addresses:
First Class/
Registered/Certified
JPMorgan Chase Bank, N.A.
Institutional Trust Services
P. O. Box 2320
Dallas, Texas 75221-2320
Express Delivery/Courier
JPMorgan Chase Bank, N.A.
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
By Hand Only
JPMorgan Chase Bank, N.A.
Room 234-North Building
-Institutional Trust Securities
Window
55 Water Street
New York, New York 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said certificates of obligation and pursuant to an ordinance by the City
Council of the City of South lake, Texas.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
45579646.1
EXHIBIT E
NOTICE OF REDEMPTION
CITY OF SOUTH LAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION
SERIES 1997
DATED FEBRUARY 15, 1997
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15, 2009 and aggregating in principal amount $5, 750,000 have
been called for redemption on February 15, 2006, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturity Principal Amount Number
2009 $505,000 2013 $ 630,000
2010 $535,000 2014 $ 670,000
2011 $565,000
2012 $595,000 2017 $2,250,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
February 15, 2006, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to JPMorgan Chase
Bank, National Association, Dallas, Texas (successor paying agent/registrar to Texas
Commerce Bank, National Association) at its designated offices at the following addresses:
First Class/
Reg isteredlCertified
JPMorgan Chase Bank, N.A.
Institutional Trust Services
P. o. Box 2320
Dallas, Texas 75221-2320
Express Delivery/Courier
JPMorgan Chase Bank, N.A.
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
By Hand Only
JPMorgan Chase Bank, N.A.
Room 234-North Building
Institutional Trust Securities
Window
55 Water Street
New York, New York 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said certificates of obligation and pursuant to an ordinance by the City
Council of the City of South lake, Texas.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
45579646.1
EXHIBIT F
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION
SERIES 1998
DATED MAY 15,1998
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15, 2011 and aggregating in principal amount $7,020,000 have
been called for redemption on February 15, 2007, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturity Principal Amount Number
2011 $725,000 2015 $ 890,000
2012 $765,000 2016 $ 940,000
2013 $800,000 2017 $ 995,000
2014 $850,000 2018 $1,055,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
February 15, 2007, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to The Bank of New
York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to U. S. Trust
Company of Texas, N.A.) at its designated offices at the following addresses:
Bv Hand:
Bv Mail:
Debt Processing Group
The Bank of New York
111 Sanders Creek Parkway
East Syracuse, New York 13057
Debt Processing Group
The Bank of New York
P. O. Box 396
East Syracuse, New York 13057
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
Southlake, Texas.
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
Address: 600 North Pearl Street
Plaza of the Americas
South Tower, Suite 420
Dallas, Texas 75201
45579646.1
EXHIBIT G
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION
SERIES 1999
DATED APRIL 1, 1999
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15, 2013 and aggregating in principal amount $7,640,000 have
been called for redemption on February 15, 2008, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturity Principal Amount Number
2013 $ 940,000 2017 $1,140,000
-2014 $ 990,000 2018 $1,195,000
2015 $1,035,000 2019 $1,250,000
2016 $1,090,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
February 15, 2008, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to JPMorgan Chase
Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of
Texas, National Association) at its designated offices at the following addresses:
First Class/
Registered/Certified
JPMorgan Chase Bank, N.A.
Institutional Trust Services
P. O. Box 2320
Dallas, Texas 75221-2320
Express Delivery/Courier
JPMorgan Chase Bank, N.A.
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
By Hand Only
JPMorgan Chase Bank, N.A.
Room 234-North Building
Institutional Trust Securities
Window
55 Water Street
New York, New York 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said certificates of obligation and pursuant to an ordinance by the City
Council of the City of Southlake, Texas.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
45579646.1
EXHIBIT H
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2000-A
DATED MARCH 1, 2000
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15, 2012 and aggregating in principal amount $5,525,000 have
been called for redemption on February 15, 2009, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturitv Principal Amount Number
2012 $485,000 2016 $ 605,000
2013 $510,000 2017 $ 645,000
2014 $540,000
2015 $575,000 2020 $2,165,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
February 15, 2009, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to JPMorgan Chase
Bank, National Association, Dallas, Texas (successor paying agent/registrar to Chase Bank of
Texas, National Association) at its designated offices at the following addresses:
First Class/
Registered/Certified
JPMorgan Chase Bank, N.A.
Institutional Trust Services
P. O. Box 2320
Dallas, Texas 75221-2320
Express Delivery/Courier
JPMorgan Chase Bank, N.A.
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
By Hand Only
JPMorgan Chase Bank, N.A.
Room 234-North Building
Institutional Trust Securities
Window
55 Water.Street
New York, New York 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said certificates of obligation and pursuant to an ordinance by the City
Council of the City of Southlake, Texas.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
45579646.1
EXHIBIT I
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATION
SERIES 2000-C
DATED DECEMBER 1, 2000
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after August 15, 2014 and aggregating in principal amount $3,120,000 have
been called for redemption on August 15, 2009, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturity Principal Amount Number
2014 $175,000 2022 $1,180,000
2015 $180,000
2016 $190,000 2026 $1,195,000
2017 $200,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
August 15, 2009, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to The Bank of New
York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to U. S. Trust
Company of Texas, N.A.) at its designated offices at the following addresses:
By Hand:
By Mail:
Debt Processing Group
The Bank of New York
111 Sanders Creek Parkway
East Syracuse, New York 13057
Debt Processing Group
The Bank of New York
P. O. Box 396
East Syracuse, New York 13057
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
Southlake, Texas.
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
Address: 600 North Pearl Street
Plaza of the Americas
South Tower, Suite 420
Dallas, Texas 75201
45579646.1
EXHIBIT J
NOTICE OF REDEMPTION
CITY OF SOUTH LAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM
SURPLUS REVENUE CERTIFICATES OF OBLIGATION
SERIES 2000-D
DATED DECEMBER 1, 2000
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15, 2014 and aggregating in principal amount $4,225,000 have
been called for redemption on February 15, 2009, at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of CUSIP Year of CUSIP
Maturity Principal Amount Number Maturity Principal Amount Number
2014 $435,000 2017 $ 505,000
2015 $455,000
2016 $485,000 2021 $2,345,000
ALL SUCH CERTIFICATES OF OBLIGATION shall become due and payable on
February 15, 2009, and interest thereon shall cease to accrue from and after said redemption
date and payment of the redemption price of said obligations shall be paid to the registered
owners of the obligations only upon presentation and surrender thereof to The Bank of New
York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to U. S. Trust
Company of Texas, N.A.) at its designated offices at the following addresses:
Bv Hand:
BvMail:
Debt Processing Group
The Bank of New York
111 Sanders Creek Parkway
East Syracuse, New York 13057
Debt Processing Group
The Bank of New York
P. O. Box 396
East Syracuse, New York 13057
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
Southlake, Texas.
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
Address: 600 North Pearl Street
Plaza of the Americas
South Tower, Suite 420
Dallas, Texas 75201
45579646.1