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IIOS 30 AZID. go aouensst eqg buzzt1oggne SDS vNIQUO NV ?°gC 'ON HONVNIQ2IO WHEREAS, the City Council hereby finds and determines that such indebtedness represented by the Refunded Obligations should be refunded to extend the term of, and restructure the payment of, such indebtedness and provide tax rate relief to the citizens of the City while also enabling the City to undertake and implement planning goals and objectives for providing and financing infrastructure needs and necessary municipal facilities; and WHEREAS, the City Council hereby finds and determines that the Refunded Obligations are scheduled to mature, or are subject to being redeemed, not more than twenty (20) years from the date of the refunding bonds herein authorized; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: SECTION 1: Authorization-Designation-Principal Amount- Purpose - Date. General obligation refunding bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $3,076,137, to be designated and bear the title "CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 1990" (hereinafter referred to as the "Bonds"), for the purpose of providing funds for the discharge and final payment of 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 Article 717k, V.A.T.C.S., as amended. The Bonds shall be dated March 1, 1990 (the "Issue Date") and issued as fully registered obligations, without coupons. SECTION 2: Fully Registered Interest Paying/Non-Interest Paying Obligations Terms. The Bonds shall be issued in part as "Current Interest Bonds" (obligations paying accrued interest to the holders or owners on and at stated intervals prior to maturity or redemption) and in part as "Capital Appreciation Bonds" (obligations paying no accrued interest to the holders or owners prior to maturity). The Current Interest Bonds (other than the Initial Bond referenced in Section 7 hereof) shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, shall be lettered "R- and the definitive printed obligations shall be numbered consecutively from One (1) upward. Furthermore, the Current Interest Bonds shall bear interest (calculated on the basis of a 360-day year of twelve 30-day months) on the unpaid principal amounts from the Issue -2- Date at the per annum rate(s) shown in the schedule hereafter appearing, and such interest shall be payable on February 1 and August 1 in each year, commencing February 1, 1991. The Capital Appreciation Bonds shall each be issued in Maturity Amounts (the "Accreted Value" [as hereinafter defined] at maturity) of $5,000, or any integral multiple thereof within a Stated Maturity (except for the Initial Bond referenced in Section 7 hereof), shall be lettered "CAB- and the definitive printed obligations shall be numbered consecutively from One (1) upward. Interest on the Capital Appreciation Bonds shall accrue from the date of delivery of the Bonds to the initial purchasers (April 10, 1990) and compound semiannually on February 1 and August 1 in each year, commencing August 1, 1990, until the Stated Maturity. The accrued interest on Capital Appreciation Bonds shall be payable at maturity as a portion of the Maturity Amount. The term "Accreted Value", as herein used with respect to Capital Appreciation Bonds, shall mean the original principal amount of a Capital Appreciation Bond plus interest thereon compounded semiannually to February 1 or August 1, as the case may be, next preceding the date of such calculation (or the date of calculation, if such calculation is made on February 1 or August 1), at the respective interest rate(s) stated in the schedule hereinafter appearing therefor and, with respect to each $5,000 Accreted Value at maturity, as set forth in the Accreted Value table appearing in the Official Statement referred to in Section 15 hereof. For any day other than a February 1 or August 1, the Accreted Value of a Capital Appreciation Bond shall be determined by a straight line interpolation between the values for the applicable semiannual compounding dates (based on 30-day months). The Bonds shall be issued in the aggregate principal amount of $3,076,137 and in part as "Current Interest Bonds" totalling $2,785,000 in principal amount and in part as "Capital Appreciation Bonds" totalling $291,137 in original principal amount and aggregating in Maturity Amount $570,000. (a) Current Interest Bonds: The Current Interest Bonds shall become due and payable on February 1 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at per annum rate(s) in accordance with the following schedule: -3- Stated Maturity Principal Amount Interest Rate(s) 1992 1993 1994 1995 1996 1997 1998 $ 40 000 45 000 45 000 110 000 115 000 175 000 185 000 6.10% 6.20% 6.30% 6.40% 6.50% 6.60% 6.70% 2002 200,000 7.00% 2003 215,000 7.00% 2009 1,655,000 7.10% (b) Capital Appreciation Bonds. The Capital Appreciation Bonds shall be issued in the original principal amounts, which shall accrete in value on a semiannual basis at the interest rate(s) stated in the table below, and shall become due and payable on February 1 in each of the years (the "Stated Maturities") in the Maturity Amounts set forth in the following table: Stated Year of Original Principal Interest Maturity Maturity Amount Rate Amount 1999 $104,532.30 6.90% $190,000 2000 96,753.70 7.00% 190,000 2001 89,851.00 7.05% 190,000 SECTION 3: Terms of Payment - Paying Agent/Registrar. 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 (the "Security Register") for the Bonds 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 FIRST CITY, TEXAS-AUSTIN, N.A., Austin, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor -4- 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. The Bonds shall be payable at their Stated Maturities or upon their earlier redemption only upon the presentation and surrender to the principal office of the Paying Agent/Registrar. Interest on a Capital Appreciation Bond shall be payable at its Stated Maturity as a portion of the Accreted Value or Maturity Amount. Interest on a Current Interest Bond shall be paid to the Holders whose names appear in the Security Register at the close of business on the Record Date (the 15th day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where 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 non-payment of interest on one or more maturities on a scheduled payment date on the Current Interest Bonds, and for thirty (30) days thereafter, a new record date for such interest payment for such maturity or maturities (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 of the Current Interest Bonds appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. -5- SECTION 4: Redemption. (a) Optional Redemption. (1) The Current Interest Bonds having Stated Maturities on and after February 1, 2002, 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 1, 2000 or on any date thereafter at the redemption price of par, together with accrued interest to the redemption date. (2) The Capital Appreciation Bonds shall not be subject to redemption at the option of the City prior to their Stated Maturities. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of its decision to exercise the right to redeem Current Interest Bonds, the principal amount of each Stated Maturity to be redeemed, and the date set for the redemption thereof. The decision of the City to exercise the right to redeem Current Interest Bonds shall be entered in the minutes of the governing body of the City. (c) Mandatory Redemption. The Current Interest Bonds maturing on February 1, 2009 (the "Term Bonds") shall also be subject to mandatory redemption on the dates and in the principal amounts set forth below at the redemption price of par and accrued interest to the date of redemption, to wit: Date Amount February 1, 2004 February 1, 2005 February 1, 2006 February 1, 2007 February 1, 2008 $230,000 245,000 265,000 285,000 305,000 On or prior to each December 15 in each of the years specified above that the Term Bonds are to be mandatorily redeemed, the Paying Agent/Registrar shall select by lot the numbers of the Term Bonds within the applicable maturity to be redeemed on the next following February 1 from moneys set aside for that purpose in the Interest and Sinking Fund. Any Term Bonds not selected for prior redemption shall be paid on the date of their Stated Maturity. -6- The principal amount of the Term Bonds for a given maturity required to be redeemed pursuant to the operation of such mandatory redemption provisions shall be reduced, at the option of the City, by the principal amount of Term Bonds for such maturity which, at least 50 days prior to the mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and cancelled by said Paying Agent/Registrar at the request of the City with moneys in the Interest and Sinking Fund at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, or (3) shall have been redeemed pursuant to the optional redemption provisions set forth above in paragraph (a) hereof and not theretofore credited against a mandatory redemption requirement. (d) Selection of Bonds for Redemption. If less than all Outstanding Current Interest Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such as representing the number of Bonds Outstanding which is obtained by dividing the principal amount by $5,000 and shall select the Current Interest 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 Current Interest 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 Current Interest 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 last 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. Ail notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify by number the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount to be redeemed, shall become due and payable on the redemption date specified, and the accruing of interest shall cease from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount to be redeemed, -7- shall be made at the principal office of the Paying Agent/ Registrar only upon presentation and surrender of the Bonds to be redeemed, in whole or in part, by the Holder. If a Current Interest Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption has been duly given or waived as herein provided, such Current Interest Bond (or the principal amount 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 Current Interest 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: Registration Transfer - Exchange of Bonds - Predecessor Bonds. A Security Register relating to the registration, payment, and transfer or exchange of the Bonds shall at all times be kept and maintained by the City at the principal office of the Paying Agent/Registrar, as provided herein and in accordance with the provisions of an agreement with the Paying Agent/Registrar and such rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each registered owner of the Bonds issued under and pursuant to the provisions of this Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be transferred or exchanged for Bonds of like kind (Current Interest Bonds or Capital Appreciation Bonds), of other authorized denominations upon the Security Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender for transfer of any Bond (other than the Initial Bonds authorized in Section 7 hereof) at the principal office of the Paying Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Bonds, executed on behalf of, and furnished by, the City of authorized denominations and of like Stated Maturity and of a like aggregate principal amount (with respect to Current Interest Bonds) or Maturity Amount (with respect to Capital Appreciation Bonds) as the Bond or Bonds surrendered for transfer. -8- At the option of the Holder, Bonds (other than the Initial Bonds authorized in Section 7 hereof) 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 (with respect to Current Interest Bonds) or Maturity Amount (with respect to Capital Appreciation Bonds) as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the principal office of the Paying Agent/ Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds, executed on behalf of, and furnished by, the City, to the Holder requesting the exchange. Ail Bonds issued upon any such transfer or exchange shall be delivered at the principal office of the Paying Agent/Registrar, or sent by United States Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. Ail 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. 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 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 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 transfer or exchange any Current Interest Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption of such Current Interest Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Current Interest Bond called for redemption in part. -9- 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 the Bond Procedures Act of 1981, 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 8C, 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 8D, manually executed by an authorized officer, employee or representative of the Paying Agent/ Registrar, and either such certificate upon any Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. SECTION 7: Initial Bonds. The Bonds herein authorized shall be initially issued as two (2) fully registered bonds, being (i) a single fully registered Current Interest Bond in the aggregate principal amount shown in Section 2 hereof with principal installments to become due and payable as provided in Section 2(a) hereof and numbered TR-1 and (ii) a single fully registered Capital Appreciation Bond in the aggregate Maturity Amount appearing in Section 2 hereof with installments of such Maturity Amount to become due and payable as provided in Section 2(b) hereof and numbered TCAB-1. The two (2) initial bonds (hereinafter collectively called the "Initial Bonds") shall be registered in the name of the initial purchaser(s), or the designee thereof. The Initial Bonds 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 time after the delivery of the Initial Bonds, the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), 0[ the designee thereof, shall cancel the Initial Bonds delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts (with respect to Current Interest Bonds) or Maturity Amounts -10- (with respect to Capital Appreciation Bonds) and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 8: Forms. A. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of Registration, 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 thereof. 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 shall be printed, lithographed, or engraved or produced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by the execution thereof, but the Initial Bonds submitted to the Attorney General of Texas may be typewritten or photocopied or otherwise reproduced. B. Form of Definitive Bond. [Current Interest Bond] REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BOND, SERIES 1990 Issue Date: March 1, 1990 Interest Rate: Stated Maturity: CUSIP NO: Registered Owner: Principal Amount: DOLLARS -11- 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, 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 Issue Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 1 and August 1 in each year, commencing February 1, 1991. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the principal 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 Date", which is the 15th 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 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 $3,076,137 (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City and to pay costs of issuance, under and in strict conformity with the Constitution and laws of the State of Texas, including Article 717k, V.A.T.C.S., and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds are issued in part as "Current Interest Bonds", which total in principal amount $2,785,000 and pay accrued interest at stated intervals to registered owners and in part as "Capital Appreciation Bonds", which total ~n original principal amount $291,137 and pay no accrued interest prior to their Stated Maturities. -12- The Current Interest Bonds maturing on February 1, 2009 (the "Term Bonds") are subject to mandatory redemption prior to maturity with funds on deposit in the Interest and Sinking Fund established and maintained for the payment thereof in the Ordinance, and shall be redeemed in part prior to maturity at the price of par and accrued interest to the date of redemption, and without premium, on February 1, 2004, and annually thereafter on each February 1 through February 1, 2008 and in the amounts set forth in the Ordinance. The particular Bonds to be redeemed on each such date shall be chosen by lot by the Paying Agent/Registrar; provided, however, that the principal amount of Term Bonds for a given maturity required to be redeemed pursuant to the operation of such mandatory redemption provisions shall be reduced, at the option of the City, by the principal amount of Term Bonds for such maturity which, at least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and cancelled by said Paying Agent/Registrar at the request of the City with moneys in the Interest and Sinking Fund at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, or (3) shall have been redeemed pursuant to the optional redemption provisions appearing below and not theretofore credited against a mandatory redemption requirement. The Current Interest Bonds maturing on and after February 1, 2002, 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 1, 2000, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption and upon 30 days prior written notice being sent by United States Mail, first class postage prepaid, to the registered owners of the Bonds to be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof 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. -13- In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of this Bond to the Paying Agent/Registrar at its principal office, and there shall be issued to the registered owner hereof, without charge, 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 hereof. If this Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this 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 hereof in the event of its redemption 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 principal office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the 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 or redemption, 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 principal 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. -14- 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 its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/ Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the 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 shall 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. -15- 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 SOUTHLAKE, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) [Capital Appreciation Bond] REGISTERED NO. CAB- REGISTERED MATURITY AMOUNT $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING SERIES 1990 BOND, Issue Date: Stated Yield: March 1, 1990 % Stated Maturity: CUSIP NO: Registered Owner: Maturity Amount: 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, on the Stated Maturity date specified above, without right of prior redemption or prepayment, the Maturity Amount stated above. The Maturity Amount of this Bond represents the accretion of the original principal amount of this Bond from the date of delivery to the initial purchasers (April 10, 1990) to the Stated Maturity and such accretion in value occuring at the above Stated Yield and compounding on August 1, 1990, and semiannually thereafter on -16- February 1 and August 1. A table of the "Accreted Values" per $5,000 "Accreted Value" at maturity is printed on the reverse side of this Bond. The term "Accreted Value", as used herein, means the original principal amount of this Bond plus the interest thereon compounded semiannually to February 1 and August 1, as the case may be, next preceding the date of such calculation (or the date of calculation, if such calculation is made on February 1 or August 1) at the Stated Yield for the Stated Maturity shown above and in the Table of Accreted Values printed hereon. For any date other than February 1 or August 1, the Accreted Value of this Bond shall be determined by a straight line interpolation between the values for the applicable semiannual compounding dates (based on 30-day months). This Bond is payable to the registered owner hereof, upon presentation and surrender, at the principal office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Payments of 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 $3,076,317 (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City and to pay costs of issuance, under and in strict conformity with the Constitution and laws of the State of Texas, including Article 717k, V.A.T.C.S., and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds are issued in part as "Current Interest Bonds", which total in principal amount $2,785,000 and pay accrued interest at stated intervals to registered owners and in part as "Capital Appreciation Bonds", which total in original principal amount $291,137 and pay no accrued interest prior to their Stated Maturities. 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 principal office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance -17- 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 principal 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, accruing interest at the same rate, and of the same aggregate Maturity 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 date of surrender of this Bond as the owner entitled to payment of the Maturity Amount at its Stated Maturity, and (ii) 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. 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 shall 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. -18- 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. COUNTERSIGNED: CITY OF SOUTHLAKE, TEXAS Mayor ~ity Secretary (SEAL) C o *Form of Registration Certificate of Public Accounts to appear on only. of Comptroller Initial Bonds REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS REGISTER NO. I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this (SEAL) *NOTE TO PRINTER: Comptroller of Public Accounts of the State of Texas Do Not Print on Definitive Bonds -19- 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 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. FIRST CITY, TEXAS-AUSTIN, Austin, Texas, as Paying Agent/Registrar Registration Date: By Authorized Signature Eo Form of Assiqnment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells assigns, and transfers unto (Print or typewrite name, address and zip code of transferee:) ................................. .............. or ot~er i~ntif~i~g number iSoci~l Security .........................................: ................. ) the within Bond and all ri t's the under and hereby irrevocably constitutes and appoints .............. ~;r attorney transfer Bond on books kept 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. F. The Initial Bonds for the Current Interest Payinq Bonds and the Capital Appreciation Bonds shall be in the respective forms set forth therefor in paragraph B of this Section, except as follows: -20- (1) [Form of Current Interest Initial Bond] Heading and paragraph one shall be amended to read as follows: NO. TR-1 $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BOND, SERIES 1990 Issue Date: March 1, 1990 CUSIP NO: Registered Owner: Principal Amount: DOLLARS The City of Southlake, Texas (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 1 in the years and in principal installments in accordance with the following schedule: YEAR OF PRINCIPAL INTEREST MATURITY INSTALLMENTS RATE (Information to be inserted from schedule in Section 2 hereof) (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 Issue Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on February 1 and August 1 in each year, commencing February 1, 1991. Principal installments of this Bond are payable at the year of maturity or on a prepayment date to the registered owner hereof, upon presentation and surrender, at the principal office of FIRST CITY, TEXAS-AUSTIN, N.A., Austin, Texas (the "Paying Agent/Registrar"). 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 -21- Paying Agent/Registrar at the close of business on the "Record Date", which is the 15th 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 the United States of America which at the time of payment is legal tender for the payment of public and private debts. (2) [Form of Capital Appreciation Initial Bond] Heading and first two paragraphs shall be amended to read as follows: REGISTERED MATURITY AMOUNT NO. TCAB-1 $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BOND, SERIES 1990 Issue Date: March 1, 1990 CUSIP NO: Registered Owner: Maturity Amount: DOLLARS The City of Southlake, Texas (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 aggregate Maturity Amount stated above on February 1 in each of the years and in installments in accordance with the following schedule: Year of Maturity Stated Maturity Amount Yield~s) (Information to be inserted from schedule in Section 2 hereof). -22- (without right of prior redemption or prepayment). The respective installments of the Maturity Amount hereof represents the accretion of the original principal amounts of each year of maturity from the date of delivery to the initial purchasers (April 10, 1990) to the respective years of maturity and such accretion in values occuring at the respective Stated Yields and compounding on August 1, 1990, and semiannually thereafter on each February 1 and August 1. A table of the "Accreted Values" per $5,000 "Accreted Value" at maturity is attached to this Bond. The term "Accreted Value", as used herein, means the original principal amount of this Bond plus the interest thereon compounded semiannually to February 1 and August 1, as the case may be, next preceding the date of such calculation (or the date of calculation, if such calculation is made on February 1 or August 1) at the respective Stated Yields shown above and in the Table of Accreted Values attached hereto. For any date other than February 1 or August 1, the Accreted Value of this Bond shall be determined by a straight line interpolation between the values for the applicable semiannual compounding dates (based on 30-day months). The installments of Maturity Amounts of this Bond are payable at maturity to the registered owner hereof, without exchange or collection charges, upon its presentation and surrender, at the principal office of FIRST CITY, TEXAS-AUSTIN, N.A., Austin, Texas (the "Paying Agent/ Registrar"), and shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 9: Levy 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 1990 Refunding Bond -23- 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 or comes due by reason of redemption prior to maturity; 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. SECTION 10: Mutilated Destroyed - 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 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 Obliqation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and -24- 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) (with respect to Current Interest Bonds) and Maturity Amounts (with respect to Capital Appreciation Bonds) 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 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 Bonds on the Stated Maturities 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 bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section in excess of the amount required for the payment of the Bonds 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 Bonds and remaining unclaimed for a period of four (4) 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. -25- The term "Government Securities", as used herein, means direct obligations of the United States of America, which are non-callable prior to the respective Stated Maturities of the Bonds and may be United States Treasury Obligations such as the State and Local Government Series and may be in book-entry form. SECTION 12: Ordinance a Contract Amendments - Outstanding 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 who own in aggregate 51% of the principal amount (with respect to Current Interest Bonds) and Maturity Amount (with respect to Capital Appreciation Bonds) 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 or Maturity Amount, as the case may be, thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount or Maturity Amount, as the case may be, of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. Furthermore, while the payment of principal of and interest on the Bonds is insured by Municipal Bond Investors Assurance Corporation ("MBIA"), no amendment or change to this Ordinance will be made without the consent of MBIA. 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 C~ty ~n accordance with the provisions of Section 11 hereof by the irrevocable deposit with the Paying Agent/Registrar, or an authorized escrow -26- agent, of money or Government Securities, or both, in the amount necessary to fully pay the principal of, premium, if any, and interest thereon to maturity or redemption, as the case may be, provided that, if such Bonds are to be redeemed, notice of redemption thereof shall have been duly given pursuant to this Ordinance or irrevocably provided to be given to the satisfaction of the Paying Agent/ Registrar, or waived; 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 10 hereof. SECTION 13: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in this Section, following terms shall have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Computation Date" has the meaning stated in Treas. Reg. § 1.148-8T(b)(1). "Gross Proceeds" has the meaning stated in Treas. Reg. § 1.148-ST(d). "Investment" has the meaning stated in Treas. Reg. § 1.148-8T(e). "Nonpurpose Investment" means any Investment in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purpose of the Bonds. Obligations acquired with proceeds of the Bonds that are to be used to discharge the Refunded Obligations are Nonpurpose Investments. "Yield of" (1) any Investment shall be computed in accordance with Treas. Reg. ~1.148-2T, and ~2) the Bonds has the meaning stated in Treas. Reg. § 1.148-3T. the -27- (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 shall have received 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 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 or any property acquired, constructed, or improved with such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) in any activity carried on by any person or entity other than a state or local government, unless such use is solely as a member of the general public, or (2) not directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds of the Bonds or any property the acquisition, construction, or improvement of which is to be financed 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. (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 -28- 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 Higher Yield. Except to the extent permitted by section 148 of the Code and the regulations and rulings thereunder, the City shall not, at any time prior to the final Stated Maturity of the Bonds, directly or indirectly invest Gross Proceeds of the Bonds in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Investments allocated to such Gross Proceeds 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 with the Secretary of the Treasury the information required by section 149(e) of the Code with respect to the Bonds on such form and in such place as such Secretary may prescribe. (h) No Rebate Required. The City warrants and represents that it satisfies the requirements of paragraphs (2) and (3) of section 148(f) of the Code with respect to the Bonds without making the payments to the United States described in such section. Specifically, the City warrants and represents that (1) the City is a governmental unit with general taxing powers; (2) at least 95% of the Gross Proceeds of the Bonds will be used for the local governmental activities of the City; -29- (3) the aggregate face amount of all tax-exempt obligations issued or expected to be issued by the City (and all subordinate entities thereof) in the calendar year in which the Bonds are issued is not reasonably expected to exceed $5,000,000; (4) the average maturity date of the Bonds is not later than the average maturity date of the Refunded Obligations, both as calculated in accordance with section 147(b)(2)(A) of the Code; (5) no Bond has a maturity date which is later than 30 years from the date of issuance of the Refunded Obligations; (6) no Refunded Obligation was an industrial development bond, as defined in section 103(b)(2) of the Internal Revenue Code of 1954 (the "1954 Code") as amended to October 22, 1986 (but without regard to subparagraph (B) of section 103(b)(3)) or a private loan bond, as defined in section 103(o)(2)(A) of the 1954 Code (but without regard to any exception from such definition other than section 103(o)(2)(C); and (7) the aggregate amount of all tax exempt obligations issued by the City (and all subordinate entities thereof) in the calendar year in which the Refunded Obligations were issued did not exceed $5,000,000. (i) Qualified Advance Refunding. The Bonds are being issued exclusively 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 that: (1) None of the Refunded Obligations are "private activity bonds," within the meaning of section 141 of the Code. Specifically, the covenants set forth in subsection (c) and (d) of this Section are true, correct, and complete with respect to the Refunded Obligations, their proceeds, and the facilities financed therewith. (2) The Bonds are the first advance refunding (within the meaning of section 149(d)(5) of the Code) of the Refunded Obligations. (3) The Refunded Obligations are being called for redemption, and will be redeemed, not later than the earliest date on which each such issue may be redeemed at par or at a premium of 3 percent or less. -30- (4) 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 date of issuance of the Bonds if not ended prior thereto. (5) Section 148(e) of the Code did not apply to the Refunded Obligations. 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 the Refunded Obligations to which any of such proceeds relate. (6) The City will not realize present value debt service savings in connection with the issuance of the Bonds. In the issuance of the Bonds the City has employed no "device" to obtain a material financial advantage (based on arbitrage), within the meaning of section 149(d)(4) of the Code. SECTION 14: Qualified Tax Exempt Obligations. That in accordance with the provisions of paragraph (3) of subsection (b) of Section 265 of the Code, the City hereby designates the Bonds to be "qualified tax exempt obligations" in that the Bonds are not "private activity bonds" as defined in the Code and the reasonably anticipated amount of "qualified tax exempt obligations" to be issued by the City (including all subordinate entities of the City) for the calendar year in which the Bonds are issued will not exceed $10,000,000. SECTION 15: Sale of Bonds Official Statement Approval. The Bonds authorized by this Ordinance have been and are hereby sold by the City to Merrill Lynch, Pierce Fenner & Smith Incorporated and others (herein referred to collectively as the "Purchasers") in accordance with the Purchase Contract, dated March 6, 1990, attached hereto as Exhibit A and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this Council, and the City Secretary is authorized to attest said Purchase Contract, in regard to the approval and execution of the Purchase Contract, the Council hereby finds, determines and declares that the representations, warranties and agreements of the City c0nt~ined therein are true and correct in all material respects and shall be honored snd performed by the City. -31- Furthermore, the use of the Preliminary Official Statement, dated February 28, 1990, in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement reflecting the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Manager, City Secretary or Finance Director, any one or more of said officials), shall be and is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute said final Official Statement, dated March 6, 1990, in the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such Official Statement in the final form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 16: Special Escrow Agreement Approval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the City and First City, Texas-Austin, N.A., Austin, Texas, Texas (the "Escrow Agent"), attached hereto as Exhibit B 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 and City Secretary for and on behalf of the City and as the act and deed of the 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, the City Manager and Finance Director, either or both of said officials, in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the Federal 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 CITY OF SOUTHLAKE, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow Fund"), including the execution of the subscription forms for the purchase and issuance of the "United States Treasury Securities - State and Local Government Series"; all as contemplated and provided in Article 717k, V.A.T.C.S., as amended, this Ordinance and the Agreement. -32- SECTION 17: 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, City Secretary, City Manager, and Finance Director, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the 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, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Purchasers, and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bonds to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 18: Proceeds of Sale. Inunediately following the delivery of the Bonds, the proceeds of sale (less certain costs of issuance and the accrued interest received from the Purchaser of the Bonds) shall be deposited with the Escrow Agent for application and disbursement in accordance with the provisions of the Agreement and in accordance with written instructions to the Escrow Agent from the City Manager. 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 -33- 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. while the payment of the principal of and interest on the Bonds is insured by MBIA, any notice to the Holders pursuant to the provisions of this Ordinance shall also be sent to MBIA, first class mail, postage prepaid, and, unless notified in writing by MBIA of a change in address, addressed as follows: Municipal Bond Investors Assurance Corporation 113 King Street Armonk, New York 10504 SECTION 20: Cancellation. Ail 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 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: Printed Opinion. The Purchasers' obligation to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworksi, Dallas, Texas, approving the Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Bonds. Printing of a true and correct reproduction of said opinion on the reverse side of each of the definitive Bonds is hereby approved and authorized. SECTION 22: CUSIP Numbers. CUSIP numbers may be printed or typed on the 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 -34- 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, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 24: Inconsistent Provisions. Ail 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: Governinq Law. This construed and enforced in accordance with of Texas and the United States of America. Ordinance shall be the laws of the State SECTION 26: Effect of Headings. 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: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 29: Incorporation of Findings and Determinations. The findings and determinations of the City Council contained in the preamble hereof are hereby incorporated by 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 Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by Article 6252-17, Vernon's Texas Civil Statutes, as amended. -35- SECTION 31: Effective Date. This Ordinance shall take effect and be in full force immediately from and after its date of adoption shown below. PASSED ON FIRST READING, March 6, 1990. PASSED ON SECOND READING AND ADOPTED, 1990. ATTEST: City Secretary (City Seal) this March 27, CITY OF SOUTHLAKE, TEXAS M~yor APPROVED AS TO LEGALITY: $924C City AttOrney ~--- ~ -36- $3,076,137 CITY OF SOUTHLAKE, TEXAS General Obligation Refunding Bonds Series 1990 PURCHASE CONTRACT March 6, 1990 The Honorable Mayor and City Council Members City of Southlake 667 North Carroll Avenue Southlake, Texas 76092 Dear Mayor and City Council Members: The undersigned, Merrill Lynch, Pierce Fenner & Smith Incorporated (herein called the 'Underwriters'), offer to enter into this Purchase Contract with the City of Southlake, Texas (the 'City'). This offer is made subject to the City's acceptance of this Purchase Contract on or before 10:00 P.M., Central Standard Time on March 6, 1990. 1. Purchase and Sale of thc Bonds. Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriters hereby agree to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters an $3,076,137 principal amount of City of Southlake, Texas General Obligation Refunding Bonds, Series 1990 (the 'Bonds'). The Bonds shall be dated, shall have the maturities and bear interest at the rate or rates per annum as shown on the cover page of the Official Statement (hereinafter defined), such interest (except for the Bonds, maturing in the years 1999 through 2001 which pay interest only at maturity, the 'Capital Appreciation Bonds') being payable on February 1, 1991, and semiannually thereafter on February 1 and August 1 in each year. The Capital Appreciation Bonds shall compound interest from their date of initial delivery as of August 1, 1990 and each February 1 and August I thereafter. The purchase price for the Bonds shall be $3,038,454.32 (representing the par amount of the Bonds other than the Capital Appreciation Bonds, of $2,785,000, less an underwriter's discount of $34,116.25 plus the par amount of the Series 1990A Capital Appreciation Bonds of $291,137.00, less an underwriter's discount on such Capital Appreciation Bonds of $3,566.43). Accrued interest shall also be paid as a portion of the purchase price hereunder with respect to the Bonds other than the Capital Appreciation Bonds from March 1, 1990 to the date of Closing (hereinafter referenced). The Official Statement, a copy of which is attached hereto as Exhibit A, including the cover page, inside cover page and the Appendices thereto, as further amended only in the manner hereinafter provided, is hereinafter called the 'Official Statement.' 2. Ordinance. The Bonds shall be as described in and shall be issued and secured under the provisions of an ordinance adopted by the City on March 6, 1990 (the "Ordinance"). The Bonds shall be subject to redemption and shall be payable as provided in the Ordinance. 3. Public Offering. It shall be a condition of the obligation of the City to sell and deliver the Bonds to the Underwriters, and of the obligation of the Underwriters to purchase and accept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered by the City and accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, at not in excess of the initial public offering prices, as set forth on the cover page of the Official Statement, plus interest accrued on the Bonds other than the Capital Appreciation Bonds from March 1, 1990, and confirm in writing to the City at or prior to the Closing (hereinafter referenced), the principal amount (or percentage of principal amount) of each maturity and the corresponding price for each maturity (or the yield from each maturity resulting from such price) at which the Bonds were sold pursuant to such bona fide public offering. 4. Security Dep~it. Delivered to the City herewith is a corporate check of Merrill Lynch, Pierce Fenner & Smith Incorporated payable to the order of the City in the amount of thirty thousand dollars ($30,000). The City agrees to hold such check uncashed until the Closing to ensure the performance by the Underwriters of their obligations to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with the payment by the Underwriters of the purchase price of the Bonds, the City shall return such check to Merrill Lynch, Pierce Fenner & Smith Incorporated as provided in Paragraph 7 hereof. Should the City fail to deliver the Bonds at the Closing, or should the City be unable to satisfy the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Purchase Contract (unless waived by the Underwriters), or should such obligations of the Underwriters be terminated for any reason permitted by this Purchase Contract, such check shall immediately be returned to Merrill Lynch, Pierce Fenner & Smith Incorporated. In the event the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing as herein provided, such check shall be retained by the City as and for full liquidated damages for such failure of the Underwriters and for any defaults hereunder on the part of the Underwriters. The Underwriters hereby agree not to stop or cause payment on said check to be stopped unless the City has breached any of the terms of this Purchase Contract. 5. Official Statement. The City hereby authorizes the use of the Escrow Agreement, hereinafter defined, the Ordinance and the Official Statement and the information therein contained by the Underwriters in connection with the public offering and sale of the Bonds. The City agrees to cooperate with the Underwriters to provide a supply of final Official Statements within seven business days of the date hereof in sufficient quantities to comply with the Underwriters' obligations under applicable MSRB Rules and Rule 15c2-12 of the federal Securities Exchange Act of 1934. The Underwriters will use their best efforts to assist the City in the preparation of the final Official Statement in order to insure compliance with the aforementioned rules. The City hereby ratifies the use by the Underwriters in the offering of the Bonds prior to the date hereof of the Preliminary Official Statement for the Bonds dated February 28, 1990 (the 'Preliminary Official Statement'). Such Preliminary Official Statement is 'deemed final' as of such date by the Authority within the meaning of Rule 15c2-12(b)(1) of the Securities Exchange Act of 1934, as amended. 6. Representations, Warranties and Agreements of City. On the date hereof, the City represents, warrants and agrees as follows: (a) The City is a duly organized and existing political subdivision of the State of Texas and a body politic and corporate, duly created, existing and acting under the provisions of the Constitution and laws of the State of Texas and its home rule charter and has full legal right, power and authority to enter into this Purchase Contract and the Escrow Agreement between the City and the Escrow Agent named in the Official Statement (the 'Escrow Agreement'), to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to the Underwriters as provided herein and to carry out and consummate all other transactions contemplated by the Ordinance, the Escrow Agreement and this Purchase Contract; (b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of and the performance by the City of the obligations contained in the Bonds, the Escrow Agreement and this Purchase Contract and has duly authorized and approved the performance by the City of ils obligations contained in the Ordinance, the Escrow Agreement and this Purchase Contract; (c) The City is not in breach of or default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official Statement, to which the City is a party or is otherwise subject, which would have a material and adverse effect upon the business or financial condition of the City; and the execution and delivery of the Escrow Agreement and this Purchase Contract by the City and the execution and delivery of the Bonds and the adoption of the Ordinance by the City and compliance with the provisions of each thereof will not violate or constitute a breach of or default under any existing law, administrative regulation, judgment, decree or any agreement or other instrument to which the City is a party or is otherwise subiect; (d) AIl approvals, consents and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the City of its obligations to sell and deliver the Bonds hereunder will have been ohtained prior to the Closing; (e) At the time of the City's acceptance hereof and at the time of the Closing, lhe Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact required to he stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; / (f) Between the date of this Purchase Contract and the Closing, the City will not, without the prior written consent of the Underwriters, issue any additional bonds or other obligations for borrowed money payable in whole or in part from ad valorem taxes, and the City will not incur any material liabilities, direct or contingent, payahte in whole or in part from ad valorem taxes, nor will there he any adverse change of a material nature in the financial position of the City; (g) Except as described in the Official Statement, no litigation is pending or, to the knowledge of the City, threatened in any court affecting the corporate existence of the City, the title of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of the Bonds, the levy or the collection of the taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the issuance, execution, delivery, payment, security or validity of the Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance, the Escrow Agreement or this Purchase Contract, or contesting the powers of the City, or any authority for the Bonds, the Ordinance, the Escrow Agreement, or this Purchase Contract or contesting in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement or materially and adversely affecting the financial condition of the City; (h) The City will cooperate with the Underwriters in arranging for the qualification of the Bonds for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriters designate, and will use their best efforts to continue such qualifications in effect so long as required for distribution of the Bonds; provided, however, that the City will not be required to execute a general consent to service of process or to qualify to do business in connection with any such qualification in any jurisdiction; (i) The descriptions contained in the Official Statement of the Bonds, the Escrow Agreement and the Ordinance accurately reflect the provisions of such instruments, and the Bonds, when validly executed, authenticated and delivered in accordance with the Ordinance and sold to the Underwriters as provided herein, will be validly issued and outstanding obligations of the City entitled to the benefits of, and subject to the limitations contained in, the Ordinance; and 0) If prior to the Closing an event occurs affecting the City which is materially adverse for the purpose for which the Official Statement is to be used and is not disclosed in the Official Statement, the City shall notify the Underwriters, and if in the opinion of the Underwriters such event requires a supplement or amendment to the Official Statement, the City will supplement or amend the Official Statement in a form and in a manner approved by the Underwriters' Counsel. 7. Closing. At I0:00 A.M., Central Daylight Standard Time, on April 10, 1990, the City will deliver the initial bond or bonds (as required by the Ordinance) to the Underwriters and will have available for immediate exchange the Bonds in definitive form, duly executed and authenticated, together with the other documents hereinafter mentioned, and the Underwriters will accept such delivery and pay the respective purchase prices of the Bonds as set forth in Paragraph 1 hereof in immediately available funds. Concurrently with such payment by the Underwriters, the City shall return to Merrill Lynch, Pierce Fenner & Smith Incorporated, the check referred to in Paragraph 4 hereof. Delivery and payment as aforesaid shall be made at the offices of Fulbright & Jaworski, Suite 2800, 2200 Ross Avenue, Dallas, Texas 75201, or such other place, as shall have been mutually agreed upon by the City and the Underwriters. The Bonds shall be printed or lithographed; shall be prepared and delivered as fully registered bonds in the denomination or maturity amount of S5,000 or any multiple thereof; shall be registered in the names as shall be requested by the Underva'iters at least five days prior to the Closing; and, if the Underwriters shall so request, shall be made available to the Underwriters at least one business day before the Closing for purpose of inspection in New York, New York. 8. Conditions. The Underwriters have entered into this Purchase Contract in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Purchase Contract to purchase and pay for the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following conditions: (a) The representations and warranties of the City contained herein shall be true, complete and correct in all material respects on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) At the time of the Closing, the Ordinance and the Escrow Agreement shall be in full force and effect, and the Ordinance and the Escrow Agreement shall not have been amended, or supplemented and the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to by the Underwriters; (c) At the time of the Closing, all official action of the City related to the Ordinance and the Escrow Agreement shall be in full force and effect and shall not have been amended, modified or supl~lemented; (d) The City shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (e) The City will purchase the government securities necessary to provide the funds needed to refund the City's outstanding obligations as contemplated by the Escrow Agreement (the 'Refunded Bonds") and will have defeased the Refunded Bonds and will apply with both rating agencies for the Triple A rating on the Refunded Bonds; (f) At or prior to the Closing, the Underwriters shall have received two copies of each of the following documents: (1) The Official Statement of the City executed on behalf of the City by the Mayor and City Clerk of the City; (2) The Ordinance certified by the City Clerk of the City under its seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Underwriters; (3) The unqualified opinions, dated the date of Closing, of Fulbright & Jaworski, Bond Counsel to the City, in substantially the form and substance of Appendix C to the Official Statement; (4) An opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law and a certificate of the Comptroller of Public Accounts of the State of Texas regarding the registration of the Bonds as required by law; (5) The supplemental opinions, dated the date of Closing, of Fulbright & Jaworski, Bond Counsel to the City, addressed to the City and the Underwriters, to the effect that (A) in its capacity as Bond Counsel, such firm has reviewed the information in the Official Statement under the captions, 'Plan of Financing,' 'The Bonds,' 'Ad Valorem Tax Law,' 'Tax Rate Limitation,' "Tax Exemption,' ~Tax Accounting Treatment of Capital Appreciation Bonds' and 'Legal Investments and Eligibility to Secure Public Funds in Texas' and such firms are of the opinion that the information relating to the Bonds and the Ordinance contained under such captions in all respects accurately and fairly reflects the provisions thereof and, insofar as such information relates to matters of law, is true and accurate; (B) the Bonds are exempt from the registration requirements under the Securities Act of 1933, as amended, and the Ordinance is exempt from the qualification requirements as an indenture under the Trust Indenture Act of 1939, as amended; (C) in the performance of their duties as Bond Counsel for the City, without having undertaken to determine independently the accuracy and completeness of the statements contained in the Official Statement, nothing has come to the attention of such counsel which would lead them to believe that the Official Statement (excluding the financial statements and other financial and statistical data included therein, all as to which no view need be expressed) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (6) The opinion of McCall, Parkhurst & Horton, as Underwriters' Counsel, dated the date of the Closing addressed to the Underwriters to the effect that the Bonds are exempt from the registration requirements under the Securities Act of 1933, as amended, and the Ordinance is exempt from the qualification requirements as an indenture under the Trust Indenture Act of 1939, as amended. The opinion of such Counsel shall also state that, based upon their participation in the preparation of the Official Statement, such Counsel has no reason to believe that the Official Statement (except for the financial statements and other financial and statistical data contained therein, as to which no view need be expressed), as of the date of the Official Statement, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (7) A certificate, dated the date of the Closing, signed by the Mayor and the City Manager of the City, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (ii) except to the extent disclosed in the Official Statement, no litigation is pending or, to the knowledge of such persons, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the levy or the collection of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Ordinance, the Escrow Agreement or this Purchase Contract, or contesting the powers of the City or contesting the authorization of the Bonds or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the Preliminary Official Statement or the Official Statement (but in lieu of or in conjunction with such certificate, the Underwriters may, in their discretion, accept certificates or opinions of the Acting City Attorney that, in her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); and (iii) to the best of their knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any respect; (8) A certificate, dated the date of Closing, of the Finance Directors of the City to the effect that, except as disclosed in the Official Statement, there has not been any material adverse change in the affairs or financial condition of the City since September 30, 1989, the latest date as to which audited financial information is available; (9) A certificate, dated the date of the Closing, of an appropriate official of the City to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of delivery of the Bonds, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended; (10) A copy of a special report prepared by KPMG Peat Marwick, the independent Certified Public Accountants named in the Official Statement~, addressed to the City, Co-Bond Counsel, the Underwriters and Underwriters' Counsel verifying the arithmetical computations of the adequacy of the maturing principal of and interest on the escrowed securities and uninvested cash on hand under the Escrow Agreement to pay, when due, the principal of and interest on the bonds being refunded by the Bonds and the computation of the yield with respect to such securities and the Bonds; (11) A copy of the MBIA policy of municipal insurance insuring the payment of the principal of and interest on the Bonds, and ex4dence of the rating of Moody's Investor's Service and of Standard & Poor's Corporation with regard to insurance on the Bonds delivered in a form acceptable to the Underwriters; and (12) Such additional legal opinions, certificates, instruments and other documents as Bond Counsel ot the Underwriters may reasonably request to evidence the truth, accuracy and completeness, as of the date hereof and as of the date of the Closing, of the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance and satisfaction by the City at or prior to the date of the Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Underwriters. If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the City shall be under further obligation hereunder, except that: (i) the check referred to in Paragraph 4 hereof shall be immediately returned to Merrill Lynch, Pierce Fenner & Smith Incorporated by the City, and (ii) the respective obligations of the City and the Underwriters set forth in Paragraphs 10 and 12 hereof shall continue in full force and effect. 9. Termination. The Underwriters may terminate their obligation to purchase at any time before the Closing if any of the following should occur: (a) (i) Legislation (including any amendment thereto) shall have been introduced in or adopted by either House of the Congress of the United States, or recommended to the Congress for passage by the President of the United States or favorably reported for passage to either House of the Congress by any Committee of such House, or (ii) a decision shall have been rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or (iii) an order, ruling or regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United States or the Internal Revenue Service or any other agency of the United States, or (iv) a release or official statement shall have been issued by the President of the United States or by the Treasury Department of the United States or by the Internal Revenue Service, the effect of which, in any such case described in clause (i), (ii), (iii), or (iv), would be to impose, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds or upon income of the general character to be derived by the City, other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the date hereof, in such a manner as in the judgment of the Underwriters would materially impair the marketability or materially reduce the market price of obligations of the general character of the Bonds. (b) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection with the public offering of the Bonds, or any action shall have been taken by any court or by any governmental authority suspending the use of the Official Statement or any amendment or supplement thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court or by any such authority. (c) (i) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in the judgment 0[ the Uncle~x~riters would materially affect the market price of the Bonds. (d) (i) A general suspension of trading in securities shall have occurred on the New York Stock Exchange, or (ii) the United States shall have become engaged in hostilities which have resulted in the declaration, on or after the date of this Purchase Contract, of a national emergency or war, the effect of which, in either case described in clause (i) and (ii), is, in the judgment of the Underwriters, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in this Purchase Contract and the Official Statement. (e) An event described in Paragraph 60) hereof occurs which, in the opinion of the Underwriters, requires a supplement or amendment to the Official Statement. (f) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas. (g) A lowering of the ratings initially assigned to the Bonds, with and without regard to insurance, by Moody's Investors Service, Inc. and Standard & Poor's Corporation, respectively, shall occur prior to the Closing. (h) Any event occurs which prevents the United States Treasury Department from delivering on the day of Closing the State and Local Government Securities subscribed for by the City in connection with the issuance of the Bonds. 10. Expen.se~ (a) The Underwriters shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations hereunder, including but not limited to: (i) the cost of the preparation, printing and distribution of the Preliminary Official Statement and the Official Statement; (ii) the cost of the preparation and printing of the Bonds; (iii) the fees and expenses of Co-Bond Counsel to the City; (iv) the fees and disbursements of the City's accountants, advisors, and of any other experts or consultants retained by the City; and (v) fees and premiums for the policy of municipal bond insurance and for bond ratings and any travel or other expenses incurred incident thereto. (b) The Underwriter shall pay: (i) all advertising expenses of the Underwriters in connection with the offering of the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents, including this Purchase Contract and (iii) all other expenses incurred by them in connection with their offering and distribution of the Bonds, including the fees of Counsel to the Underwriters. 11. Notices. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Merrill Lynch, Pierce Fenner & Smith Incorporated, 2121 San Jacinto Street, Suite 1100, Dallas, Texas 75201, Attention: Jack Addams. 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriters (including the successors or assigns of any of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. The City's representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters and (ii) delivery of any payment for the Bonds hereunder; and the City's representations and warranties contained in Paragraph 6 of this Purchase Contract shall remain operative and in full force and effect, regardless of any termination of this Purchase Contract. 8 13. Effective Date. This Purchase Contract shall become effective upon the execution of the acceptance hereof by the Mayor and City Secretary of the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, Merrill Lynch, Pierce Fenner & Smith Incorporated Accepted: This 6th day of March, 1990 Director and Regional Manager By: Mayor /C~ty Secretary 9 Exhibit A Official Statement Port Worth Star-Telegram !00 W SEVENTH STREET•FORT WORTH,TEXAS 76102 STATE OF TEXAS County of Tarrant Before me, a Notary Public in and for said County and State , this day personally appeared Billing Specialist for the Fort Worth Star-Telegram , published by the Star-Telegram Inc . at Fort Worth , in Tarrant County, Texas ; and who, after being duly sworn, did depose and say that the following clipping of an advertisement was published in the above named paper on the following dates : DATE DESCRIPTION AD SIZE TOTAL INCHA.INE RATE AMOUNT MAR 14 6479504 CL . 358 1X45 L 45 . 38 17 . 10 mart *******AS PER ATTACHED AFFIDAVITS*********_.-.,. SIGNED �uBSCRIBED AND SWORN TO BEFORE ME , THIS THE DAY OF NOTARY PUBLIC TARRANT COJNTY, TEXAS 01 AFFIDAVITS atAb Ar---TEAR ALONG THIS PERFORATION AND RETURN THE LOWER PORTION WITH YOUR PAYMENT ----► brt REMIT TO : 400 WR. SgEEVEE�Np7THH, pFgW=,��TgX 76y1p0�2 Worth Star-Telegram ACCOUNT AMOUNT 6479504 NUMBER CIT57 DUE 17 . 10 PAGE IF 1 CITY OF SOUTHLAKE ORIGIN PLEASEPAY 66 667 N CARROLL 17 . 10 THIS AMOUNT SOUTHLAKE TX 76092 0 ATTN : SANDRA LEGRAND PLEASE WRITE IN AMOUNT ENCLOSED i 1 AFFIDAVIT OF PUBLICATION THE STATE OF TEXAS COUNTY OF TARRANT § BEFORE ME, the undersigned authority on this day personally appeared Dona Latta of the FORT WORTH STAR-TELEGRAM a newspaper published in the County of Tarrant , Texas , who , being by me duly sworn, upon oath deposes and says : That said newspaper is the official newspaper of the City of Southlake, Texas , and that the caption of the ordinance authorizing the issuance of "City of Southlake, Texas , General Obligation Refunding Bonds, Series 1990" was published in said newspaper in its issue of march 14 , 1990, in the manner shown in the attachment hereto . Title: B S & LEGALS SWORN TO AND SUBSCRIBED BEFORE ME, this the 20th. day of MARCH , 1990 . // '(r Notary Public, State of Texas My Commission Expires : /!2/ • (Notary qa�•' '� -, PUBLIC Wt*RING li NA SUE A. RUSSELL NOTICE IS HEREBY GIV- COri9MSSiON EXPIRES E N.to all Interested persons 6 0 5 6 c '� OCTOEE� 21, 1993 that tbe City Council of the City , ti; +~ of Southlake, Texas, will be ti`shpwF holding a public hearing during thwRegular City Council meet- ing re be held onMarch 27,MO,' at 7:30 p.m.In the City Council Chambers of City Hall, 667 Ngrttt Carroll Avenue,South- late-,Texas. Purpose of the hearing Is to consider the following ordl• nariae In second reading: 'ORDINANCE NO.502 AN ORDINANCE author- icing the issuanceof"CITY OF SOUTHLAKE TEX- $,GENERAL O�LIGA- TfON REFUNDING '. BONDS, SERIES 1990"; -- sbeclfyirtg the terms and -- features of said bonds;lever `- alnaa continuing directall- 5 nual ad valorem tax forth. payment of said bonds;and resolving other matters in- cident and related to the Is- cbattee,sate,payment and CeltVe of said bonds,In- cludingry the approval and Cntactn aonfd aS pPirald E crow Agreement and the aooroval and distribution of,an Official Statement pertaining thereto;and de- claring an emergency. City of Southlake Sandra L.LeGrand City Secretary Fort Worth Star-Telegram 400 W.SEVENTH STREET•FORT WORTH,TEXAS 76102 ' E STATE OF TEXAS unty of Tarrant Before me , a Notary ublic in and for said County and State , this day personally appeared 'fRE / Myk ok Billing Specialist for the Fort Worth Star-Telegram , published by the Star-Telegram Inc . at Fort Worth , in Tarrant County , Texas ; and who , after being duly sworn , did depose and say that the following clipping of an advertisement was published in the above named paper on the following dates : DATE DESCRIPTION AD SIZE TOTAL IN TOTAL RATE AMOUNT MAR 28 ' 6489541 CL . 358 1X33 L 33 . 38 12 . 54 marrh PA ORDINANCE NO.502 AN ORDINANCE authorizing .,.. _........... ..._- the Issuance of "CITY OF SOUTHLAKE,TEXAS,GEN- ERAL OBLIGATION RE- FUNDING BONDS, SERIES 1990";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,includ- ing the approval and execution of a PurchaseContract and Stse- clalEscrowAgreementan e approval and distribution of an Official anatemeat pertaining SIGNS Gu1BM-� thereto;and declaring an emergency. JBSCRIBED PASSED AND APPROVED BEFORE ME , T IS THE 'd.°l )4. DAY OF lci °- THIS THE 27th DAY OF /� MARCH,1990. NOTARY PUBLIC -. (_-T•(- Gary Flckes �_ t!LQZ� Mayor of Southlake ATTEST: Sandra L.LeGrand TARRANT COUNTY, TEXAS City Secretary APPROVED AS TO FORM: ��� , E.Allen Taylor sr A e SUE A. RUSSELL City Attorney �. COh",MISSION EXPIRE, 01 AFFIDAVITS �'4'�1�P �±' OCT03r"R 27, 1993 A.----- — TEAR ALONG THIS PERFORATION AND RETURN THE LOWER PORTION WITH YOUR PAYMENT . REMIT TO : 400 W . SEVENTH, FW , TX 76102 PortWorth St ;3 p.irr ';'C X X X X KO AKA>46X14X XUTX*1 14Xr X4t,X761 s7 9 ACCOUNT AMOUNT 6489541 ; ' NUMBER CITS? DUE 12 . 54 -- PAGE 11F 1 CITY OF SOUTHLAKE ORIGINA 667 N CARROLL PLEASE PAY ` 12 . 54 SOUTHLAKE TX ?6092 0 THIS AMOUNT ATTN : SANDRA LEGRAND PLEASE WRITE IN AMOUNT ENCLOSED