0845ORDINANCE NO. 845
OFFICIAL RECORD
AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE, TEXAS,
TAX AND TAX INCREMENT REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2003-A (REINVESTMENT ZONE NUMBER
ONE)"; specifying the terms and features of said certificates; providing for
the payment of said cedificates of obligation by the levy of an ad valorem
tax upon all taxable properly within the City and a lien on and pledge of
the certain tax increment revenues; and resolving other matters incident
and relating to the issuance, payment, security, sale and delivery of said
Certificates, including the approval and execution of a Paying
AgentJRegistrar Agreement and a Purchase Contract and the approval
and distribution of an Official Statement; and providing an effective date.
WHEREAS, notice of the City Council's intention to issue certificates of obligation in a
maximum principal amount of $4,050,000 for the purposes of paying contractual
obligations to be incurred for (a) the construction of public works in Reinvestment Zone Number
One, to wit: water and sewer improvements and extensions, and (b) professional services
rendered in relation to such project and the financing thereof, has been duly published in The
Foal Wodh Star Telegram, a newspaper hereby found and determined to be of general
circulation in the City of Southlake, Texas, on March 23, 2003 and March 30, 2003, the date of
the first publication of such notice being not less than fifteen (15) days prior to the tentative date
stated therein for the adoption of the ordinance authorizing the issuance of such certificates;
and
WHEREAS, no petition protesting the issuance of the certificates of obligation and
bearing valid petition signatures of at least 5% of the qualified electors of the City, has been
presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to
the date of the passage of this ordinance; and
WHEREAS, the Council hereby finds and determines that the certificates of obligation
described in the aforesaid notice should be issued and sold at this time in the amount and
manner as hereinafter provided; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: Authorization, Desiqnation, Principal Amount, Purpose. Certificates of
obligation of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $4,045,000, to be designated and bear the title "CITY OF SOUTHLAKE, TEXAS,
TAX AND TAX INCREMENT REVENUE CERTIFICATES OF OBLIGATION, SERIES 2003-A
(REINVESTMENT ZONE NUMBER ONE)" (hereinafter referred to as the "Certificates"), for the
purposes of paying contractual obligations to be incurred for (a) the construction of public works
in Reinvestment Zone Number One, to wit: water and sewer improvements and extensions, and
(b) professional services rendered in relation to such project and the financing thereof, pursuant
to authority conferred by and in conformity with the Constitution and laws of the State of Texas,
including V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended.
SECTION 2: Fully Reqistered Obliqations - Authorized Denominations-Stated
Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated
April 15, 2003 (the "Certificate Date") and shall be in denominations of $5,000 or any integral
multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on
February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear
interest at the per annum rate(s) in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
2011 $440,000 3.50%
2012 455,000 3.65%
2013 475,000 3.80%
2014 490,000 4.00%
2015 515,000 4.00%
2016 535,000 4.10%
2017 555,000 4.20%
2018 580,000 4.30%
The Certificates shall bear interest on the unpaid principal amounts from the Certificate
Date at the rate per annum shown above in this Section (calculated on the basis of a 360-day
year of twelve 30-day months), and such interest shall be payable on February 15 and August
15 of each year, commencing February 15, 2004.
SECTION 3: Terms of Payment-Payinq Aclent/Reqistrar. The principal of, premium, if
any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or
otherwise, shall be payable only to the registered owners or holders of the Certificates
(hereinafter called the 'Holders") appearing on the registration and transfer books maintained by
the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the
United States of America, which at the time of payment is legal tender for the payment of public
and private debts, and shall be without exchange or collection charges to the Holders.
The selection and appointment of Wachovia Bank, National Association, Houston, Texas
to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed.
Books and records relating to the registration, payment, transfer and exchange of the
Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the
City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and
provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City
may prescribe. The Mayor and City Secretary are authorized to execute and detiver such
Agreement in connection with the delivery of the Certificates. The City covenants to maintain
and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged,
and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution
or other entity qualified and authorized to serve in such capacity and perform the duties and
services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the
Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder
by United States Mail, first class postage prepaid, which notice shall also give the address of the
new Paying AgentJRegistrar.
Principal of and premium, if any, on the Certificates shall be payable at the Stated
Maturities or the redemption thereof only upon presentation and surrender of the Certificates to
the Paying Agent/Registrar at its designated offices in Charlotte, North Carolina (the
"Designated Payment/Transfer Office"). Interest on the Certificates shall be paid to the Holders
whose name appears in the Security Register at the close of business on the Record Date (the
last business day of the month next preceding each interest payment date) and shall be paid by
45298552.1 2
the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to
the address of the Holder recorded in the Security Register or (ii) by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
Holder. If the date for the payment of the principal of or interest on the Certificates shall be a
Saturday, Sunday, a legal holiday, or a day when banking institutions in the City where the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by
law or executive order to close, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made
on the original date payment was due.
In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying AgentJ Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
Mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business next preceding the date of mailing of such
notice.
SECTION 4: Redemption. (a) Optional Redemption. The Certificates 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
AgentJRegistrar), on February 15, 2010, or on any date thereafter at the redemption price of par
plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option. At Feast forty-five (45) days prior to a
redemption date for the Certificates (unless a shorter notification period shall be satisfactory to
the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date
of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall
be entered in the minutes of the governing body of the City.
(c) Selection of Certificates for Redemption. If less than all Outstanding Certificates
of the same Stated Matudty are to be redeemed on a redemption date, the Paying Agent/
Registrar shall treat such Certificates as representing the number of Certificates Outstanding
which is obtained by dividing the principal amount of such Certificates by $5,000 and shall
select the Certificates to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Certificates, a notice of redemption shall be sent by United States Mail, first class
postage prepaid, in the name of the City and at the City's expense, to each Holder of a
(~erti~cate to De redeemed in whole or in part at the address of the Holder appearing on the
Security Register at the close of business on the business day next preceding the date of
mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to
have been duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii)
identify the Certificates to be redeemed and, in the case of a portion of the principal amount to
be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
45298552.1 3
(iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed,
shall become due and payable on the redemption date specified and the interest thereon, or on
the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after
the redemption date, provided moneys sufficient for the payment of such Certificate (or the
principal amount thereof to be redeemed) at the then applicable redemption price are held for
the purpose of such payment by the Paying Agent/Registrar and (v) specify that payment of the
redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be
made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon
presentation and surrender of the Certificates. if a Certificate is subject by its terms to prior
redemption and has been called for redemption and notice of redemption has been duly given
as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed) shall
become due and payable and interest thereon shall cease to accrue from and after the
redemption date therefor.
SECTION 5: Reqistration - Transfer Exchanqe of Certificates-Predecessor
Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security
Register the name and address of each and every owner of the Certificates issued under and
pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any
Certificate may be transferred or exchanged for Certificates of other authorized denominations
by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to
the Paying AgentJRegistrar for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in
Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying
Agent/Registrar, the Paying Agent/Registrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized denominations
and having the same Stated Maturity and of a like aggregate principal amount as the Certificate
or Certificates surrendered for transfer.
At the option of the Holder, Certificates (other than the Initial Certificate(s) authorized in
Section 8 hereof) may be exchanged for other Certificates of authorized denominations and
having the same Stated Maturity, bearing the same rate of interest and of like aggregate
principal amount as the Certificates surrendered for exchange, upon surrender of the
Certificates to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/
Registrar. Whenever any Certificates are surrendered for exchange, the Paying
Agent/Registrar shall register and deliver new Certificates to the Holder requesting the
exchange.
All Certificates issued in any transfer or exchange of Certificates shall be delivered to the
Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by
United States Mail, first class, postage prepaid to the Holders, and, upon the registration and
delivery thereof, the same shall be the valid obligations of the City, evidencing the same
obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates
surrendered in such transfer or exchange.
All transfers or exchanges of Certificates pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
45298552.1
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Certificates cancelled by reason of an exchange or transfer pursuant to the provisions
hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the
case may be, of the same obligation to pay evidenced by the new Certificate or Certificates
registered and delivered in the exchange or transfer therefor. Additionally, the term
"Predecessor Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for
which a replacement Certificate has been issued, registered and delivered in lieu thereof
pursuant to the provisions of Section 18 hereof and such new replacement Certificate shall be
deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to
an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days
of the date fixed for the redemption of such Certificate; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Certificate called for redemption in part.
SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
transfer/exchange of the Certificates, the City hereby approves and authorizes the use of
"Book-Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository
Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be
deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants").
While the Certificates are held by DTC under the Depository Agreement, the Holder of the
Certificates on the Security Register for all purposes, including payment and notices, shall be
Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or
owner of each Certificate (the "Beneficial Owners") being recorded in the records of DTC and
DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Certificates, the City covenants and agrees with the
Holders of the Certificates to cause Certificates to be printed in definitive form and provide for
the Certificate certificates to be issued and delivered to DTC Participants and Beneficial
Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned,
transferred and exchanged on the Security Register maintained by the Paying AgenVRegistrar
and payment of such Certificates shall be made in accordance with the provisions of Sections 3,
4 and 5 hereof.
SECTION 7: Execution - Reqistration. The Certificates shall be executed on behalf of
the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals who are or were the proper
officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the
45298552.1 5
City, notwithstanding that one or more of the individuals executing the same shall cease to be
such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect
to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided
in V.T.C.A., Government Code, Chapter '1201.
No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Certificate either a certificate of
registration substantially in the form provided in Section 9C, manually executed by the
Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a
certificate of registration substantially in the form provided in Section 9D, manually executed by
an authorized officer, employee or representative of the Paying Agent/Registrar, and either such
certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly certified, registered and delivered.
SECTION 8: initial Certificate(s). The Certificates herein authorized shall be initially
issued either (i)as a single fully registered certificate in the total principal amount stated in
Section 1 hereof with principal installments to become due and payable as provided in Section 2
hereof and numbered %1, or (ii) as multiple fully registered certificates, being one certificate for
each year of maturity in the applicable principal amount and denomination and to be numbered
consecutively from %1 and upward (hereinafter called the "Initial Ceilificate(s)") and, in either
case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the
designee thereof. The Initial Certificate(s) shall be the Certificates submitted to the Office of the
Attorney General of the State of Texas for approval, certified and registered by the Office of the
Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s).
Any time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to
written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial
Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized
denominations, Stated Maturities, principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to
and in accordance with such written instructions from the initial purchaser(s), or the designee
thereof, and such other information and documentation as the Paying Agent/Registrar may
reasonably require.
SECTION 9: Forms. A. Forms Generally. The Certificates, the Registration
Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration
Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each-of the
Certificates, shall be substantially in the forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as are permitted or required by this
Ordinance and may have such letters, numbers, or other marks of identification (including
identifying numbers and letters of the Committee on Uniform Securities Identification
Procedures of the American Bankers Association) and such legends and endorsements
(including insurance legends in the event the Certificates, or any maturities thereof, are
purchased with insurance and any reproduction of an opinion of counsel) thereon as may,
consistently herewith, be established by the City or determined by the officers executing such
Certificates as evidenced by their execution. Any portion of the text of any Certificates may be
set forth on the reverse thereof, with an appropriate reference thereto on the face of the
certificate.
The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or
engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as
determined by the officers executing such Certificates as evidenced by their execution.
45298552.1 6
B. Form of Certificates.
REGISTERED
NO.
REGISTERED
$
Certificate Date:
April 15, 2003
Registered Owner:
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND TAX INCREMENT REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2003-A
(REINVESTMENT ZONE NUMBER ONE)
Interest Rate: Stated Maturity:
% February 15,
CUSIP NO:
Principal Amount: DOLLARS
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the 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
Certificate Date at the per annum rate of interest specified above computed on the basis of a
360-day year of twelve 30-day months. Principal of this Certificate is payable at its Stated
Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the
Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration
certificate appearing hereon, or its successor; provided, however, while this Certificate is
registered to Cede & Co., the payment of principal upon a partial redemption of the principal
amount hereof may be accomplished without presentation and surrender of this Certificate.
Accrued interest on the unpaid principal amount hereof is payable on February 15 and August
15 in each year, commencing February 15, 2004 to the registered owner of this Certificate (or
one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced)
whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at
the close of business on the "Record Date", which is the last business day of the month next
preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar
by check sent United States Mail, first class postage prepaid, to the address of the registered
owner recorded in the Security Register or by such other method, acceptable to the Paying
Agent/Registrar, requested, by, and at the risk and expense of, the registered owner. All
payments of principal of, premium, if any, and interest on this Certificate shall be without
exchange or collection charges to the owner hereof and in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and
private debts.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of $4,045,000 (herein referred to as the "Certificates") for the purposes of paying
contractual obligations to be incurred for (a) the construction of public works in Reinvestment
Zone Number One, to wit: water and sewer improvements and extensions, and (b) professional
services rendered in relation to such project and the financing thereof, under and in strict
45298552,1 7
conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local
Government Code, Subchapter C of Chapter 271, as amended, and pursuant to an Ordinance
adopted by the City Council of the City (herein referred to as the "Ordinance").
The Certificates may be redeemed prior to their Stated Maturities, at the option of the
City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if
within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2010, or on any
date thereafter, at the redemption price of par, together with accrued interest to the date of
redemption.
At least thir[y days prior to a redemption date, the City shall cause a written notice of
such redemption to be sent by United States Mail, first class postage prepaid, to the registered
owners of each Certificate to be redeemed at the address shown on the Security Register and
subject to the terms and provisions relating thereto contained in the Ordinance. if a Certificate
(or any portion of its principal sum) shall have been duly called for redemption and notice of
such redemption duly given, then upon the redemption date such Certificate (or the.portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the payment
of the redemption price and the interest accrued on the principal amount to be redeemed to the
date of redemption are held for the purpose of such payment by the Paying Agent/Registrar,
interest shall cease to accrue and be payable from and after the redemption date on the
principal amount redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a
new Certificate or Certificates of like maturity and interest rate in any authorized denominations
provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in
whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such
Certificate to an assignee of the registered owner within 45 days of the redemption date
therefor; provided, however, such limitation on transferability shall not be applicable to an
exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part.
The Certificates are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City and are additionally payable
from and, together with the Previously Issued Certificates (identified and defined in the
Ordinance) and the "City of Southlake, Texas, Tax and Tax Increment Revenue Refunding
Bonds, Series 2003-A (Reinvestment Zone Number One)" (authorized for issuance concurrently
with the Certificates), equally and ratably secured by a lien on and pledge of Pledged Tax
Increment Revenues (as defined in the Ordinance). In the Ordinance, the City reserves and
retains the right to issue Additional Obligations payable, in whole or in part, from the Pledged
Tax increment Revenues and equally and ratably secured by a parity lien on and pledge of such
Pledged Tax Increment Revenues without having to satisfy or comply with any terms or
conditions precedent for their issuance other than as may be required by the laws of the State.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the
owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of
terms; the description of and the nature and extent of the tax levied for the payment of the
Certificates; the nature and extent of the pledge of the Pledged Tax Increment Revenues
45298552.1 8
securing the payment of the Certificates; the terms and conditions relating to the transfer or
exchange of this Certificate; the conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the rights, duties, and obligations of
the City and the Paying Agent/Registrar; the terms and provisions upon which the tax levy and
the pledge of the Pledged Tax Increment Revenues and covenants made in the Ordinance may
be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no
longer Outstanding thereunder; and for the other terms and provisions contained therein.
Capitalized terms used herein have the meanings assigned in the Ordinance.
This Certificate, subject to certain limitations contained in the Ordinance, may be
transferred on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Certificates of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the
registered owner whose name appears on the Security Register (i) on the Record Date as the
owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the
contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
Mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the Certificates is duly
authorized by law; that all acts, conditions and things required to exist and be done precedent to
and in the issuance of the Certificates to render the same lawful and valid obligations of the City
have been properly done, have happened and have been performed in regular and due time,
form and manner as required by the Constitution and laws of the State of Texas, and the
Ordinance; that the Certificates do not exceed any Constitutional or statutory limitation; and that
due provision has been made for the payment of the principal of and interest on the Certificates
as aforestated. In case any provision in this Certificate shall be invalid, illegal, or unenforceable,
the validity, legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance
shall be construed in accordance with and shall be governed by the laws of the State of Texas.
45298552.1 9
IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be
duly executed under the official seal of the City as of the Cedificate Date.
CITY OF SOUTHLAKE, TEXAS
COUNTERSIGNED:
Mayor
City Secretary
(Seal)
C, *Form of Registration Certificate of Comptroller of Public Accounts to appear
on Initial Certificate(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
REGISTER NO.
I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
*NOTE TO PRINTER: Do not print on definitive Certificates
45298552.1 1 0
only.
Form of Certificate of Paying Agent/Registrar to appear on Definitive Certificates
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Certificate has been duly issued and registered under the provisions of the
within-mentioned Ordinance; the certificate or certificates of the above entitled and designated
series originally delivered having been approved by the Attorney General of the State of Texas
and registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated office of the Paying Agent/Registrar located in Charlotte, North Carolina,
the is "Designated PaymenCFransfer Office" for this Certificate.
WACHOVIA BANK,
NATIONAL ASSOCIATION,
Houston, Texas,
as Paying Agent/Registrar
Registration Date:
By
Authorized Signature
E. 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:)
(Social Security or other identifying number ) the within
Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for registration thereof, with full
power of substitution in the premises.
DATED:
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
Certificate in every particular.
F. The Initial Certificate(s) shall be in the form set forth in paragraph B of this
Section, except that the form of a single fully registered Initial Certificate shall be modified
as follows:
45298552,1 1 1
(i) immediately under the name of the certificate the headings "Interest Rate __
and "Stated Maturity "shall both be omitted;
(ii) paragraph one shall read as follows:
Registered Owner:
Principal Amount: Dollars
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of the Registered
Owner named above, or the registered assigns thereof, the Principal Amount hereinabove
stated on February 15 in each of the years and in principal installments in accordance with the
following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the
unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) of interest
specified above computed on the basis of a 360-day year of twelve 30-day months. Principal
installments of this Certificate are payable at its Stated Maturity or on a prepayment date to the
registered owner hereof by Wachovia Bank, National Association, Houston, Texas (the "Paying
Agent/Registrar"), upon presentation and surrender, at its designated offices in Charlotte, North
Carolina (the "Designated Payment/Transfer Office"). Accrued interest on the unpaid principal
amount hereof is payable on February 15 and August 15 of each year, commencing
February 15, 2004, to the registered owner of this Certificate whose name appears on the
"Security Register" maintained by the Paying Agent/Registrar at the close of business on the
"Record Date", which is the last business day of the month next preceding each interest
payment date hereof and interest shall be paid by the Paying Agent/Registrar by check sent
United States Mail, first class postage prepaid, to the address of the registered owner recorded
in the Security Register or by such other method, acceptable to the Paying Agent/ Registrar,
requested by, and at the risk and expense of, the registered owner. All payments of principal of,
premium, if any, and interest on this Certificate shall be without exchange or collection charges
to the owner hereof and in any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private debts.
SECTION 10: Definitions. For purposes of this Ordinance and for clarity with respect
to the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of
Pledged Tax Increment Revenues therefor, the following words or terms, whenever the same
appears herein without qualifying language, are defined to mean as follows:
(a) The term "Creation Ordinance" shall mean Ordinance No. 682,
adopted by the City Council of the City on September 23, 1997, as amended by
Ordinance No. 682-A adopted by the City Council of the City on December 2,
1997, providing for the creation and establishment of the Zone.
45298552.1 12
(b) The term "Additional Obligations" shall mean obligations hereafter
issued which by their terms are payable, in whole or in part, from and secured by
a parity lien on and pledge of the Pledged Tax Increment Revenues of the Zone
of equal rank and dignity with the lien and pledge securing the payment of the
Previously Issued Certificates, the Series 2003-A Bonds and the Certificates.
(c) The term "Certificates" shall mean the "City of Southlake, Texas,
Tax and Tax Increment Revenue Certificates of Obligation, Series 2003-A
(Reinvestment Zone Number One)" authorized by this Ordinance.
(d) The term "Certificate Fund" shall mean the special Fund created
and established under the provisions of Section 11 of this Ordinance.
(e) The term "Collection Date" shall mean, when reference is being
made to the levy and collection of annual ad valorem taxes, the date the annual
ad valorem taxes levied each year by the City become delinquent.
(f) The term "Fiscal Year" shall mean the twelve month financial
accounting period used by the City which may be any twelve consecutive month
period established by the City.
(g) The term "Government Securities" shall mean shall mean (i) direct
noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United
States of America, (ii) noncallable obligations of an agency or instrumentality of
the United States, including obligations unconditionally guaranteed or insured by
the agency or instrumentality and on the date of their acquisition or purchase by
the City are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a
state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(h) The term "Outstanding" when used in this Ordinance with respect
to Certificates means, as of the date of determination, all Certificates theretofore
issued and delivered under this Ordinance, except:
(1) those Certificates cancelled by the Paying
Agent/Registrar or delivered to the Paying Agent/Registrar for
cancellation;
(2) those Certificates for which payment has been duty
provided by the City in accordance with the provisions of
Section 19 hereof; and
(3) those Certificates that have been mutilated,
destroyed, lost, or stolen and replacement Certificates have been
registered and delivered in lieu thereof as provided in Section 18
hereof.
45298552.1 1 3
(i) The term "Participating Taxing Units" shall mean the City and the
following taxing units levying property taxes on real property in the Zone that
have determined to deposit tax increment to the credit of the Tax Increment Fund
pursuant to V.T.C.A., Tax Code, Section 311.013, to wit: Tarrant County, Texas,
Tarrant County Hospital District and Tarrant County Junior College District.
(j) The term "Pledged Tax ~ncrement Revenues" shall mean all
amounts deposited by all Participating Taxing Units to the credit of the Tax
Increment Fund as provided by V.T.C.A., Tax Code, Section 311.013.
(k) The term "Previously Issued Certificates" shall mean the
outstanding and unpaid certificates of obligation, payable from ad valorem taxes
and additionally payable from and secured by a lien on and pledge of the
Pledged Tax Increment Revenues, more particularly described as follows: (1)
"City of Southlake, Texas, Tax and Tax Increment Revenue Certificates of
Obligation, Series 2000-B (Reinvestment Zone Number One)", dated March 1,
2000, and originally issued in the principa~ amount of $11,925,036.45, and (2)
"City of Southlake, Texas, Tax and Tax Increment Revenue Certificates of
Obligation, Series 2000E (Reinvestment Zone Number One)", dated
December 1, 2000, and originally issued in the principal amount of $3,630,000
(I) The term "Series 2003-A Bonds" shall mean the "City of
Southlake, Texas, Tax and Tax Increment Revenue Refunding Bonds, Series
2003 (Reinvestment Zone Number One)", dated April 15, 2003 authorized for
issuance concurrently with the Certificates.
(m) The term "Tax Increment Fund" shall mean the Tax Increment
Fund created and established pursuant to the Creation Ordinance.
(n) The term "Zone" shall mean "Reinvestment Zone Number One,
City of Southlake, Texas", heretofore created pursuant to V.T.C.A., Tax Code,
Chapter 311 and the Creation Ordinance
SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide
a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and
is hereby created a special account or fund on the books and records of the City known ~s the
"SPECIAL SERIES 2003-A TAX AND TAX INCREMENT REVENUE CERTIFICATE OF
OBLIGATION FUND", and all moneys deposited to the credit of such Fund shall be shall be
kept and maintained in a special banking account at the City's depository bank. Authorized
officials of the City are hereby authorized and directed to make withdrawals from said Fund
sufficient to pay the principal of and interest on the Certificates as the same become due and
payable, and, shall cause to be transferred to the Paying Agent/Registrar from moneys on
deposit in the Certificate Fund an amount sufficient to pay the amount of principal and/or
interest falling due on the Certificates, such transfer of funds to the Paying Agent/Registrar to be
made in such manner as will cause immediately available funds to be deposited with the Paying
Agent/Registrar on or before the last business day next preceding each interest and principal
payment date for the Certificates.
Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate
Fund may, at the option of the City, be invested in obligations identified in, and in accordance
with the provisions of the "Public Funds Investment Act" (V.T.C.A., Government Code, Chapter
45298552.1 14
2256) relating to the investment of "bond proceeds"; provided that all such investments shall be
made in such a manner that the money required to be expended from said Fund will be
available at the proper time or times. All interest and income derived from deposits and
investments in said Certificate Fund shall be credited to, and any losses debited to, the said
Certificate Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Certificates.
SECTION 12: Tax Levy. To provide for the payment of the "Debt Service
Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking
fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the
greater), there shall be and there is hereby levied for the current year and each succeeding year
thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient
tax on each one hundred dollars' valuation of taxable property in said City, within the limitations
prescribed by law, adequate to pay such Debt Service Requirements, full allowance being made
for delinquencies and costs of collection; said tax shall be assessed and collected each year
and applied to the payment of the Debt Service Requirements, and the same shall not be
diverted to any other purpose. The taxes so levied and collected shall be paid into the
Certificate Fund. The City Council hereby declares its purpose and intent to provide and levy a
tax legally and fully sufficient to pay the said Debt Service Requirements, it having been
determined that the existing and available taxing authority of the City for such purpose is
adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness.
Notwithstanding the requirements of this Section 12 for the levy of a sufficient ad
valorem tax for the Debt Service Requirements of the Certificates, the amount of ad valorem
taxes required to be levied for the payment of Debt Service of the Certificates may be reduced
by the sum of (i) the amount of Pledged Tax Increment Revenues then on deposit to the credit
of the Tax Increment Fund at the time the City's annual tax rate is levied by the City Council and
(ii) the amount of Pledged Tax Increment Revenues budgeted and appropriated for the payment
of the Certificates from the tax levy then being made by the Participating Taxing Units. It is the
intent of this Section 12 that the Certificates will be paid first from the Pledged Tax Increment
Revenues and from ad valorem taxes only to the extent such Pledged Tax Increment Revenues
are insufficient for the payment of the Debt Service Requirements.
SECTION 13: Pledqe of Tax Increment Revenues. The City hereby covenants and
agrees that the Pledged Tax Increment Revenues, with the exception of those in excess of the
amounts required to be deposited to the Certificate Fund as hereafter provided, are ~qereby
pledged, equally and ratably, to the payment of the principal of and interest on the Previously
Issued Certificates, the Certificates, the Series 2003-A Bonds and Additional Obligations, if
issued, and the pledge of Pledged Tax Increment Revenues for the payment of the Certificates
shall constitute a lien on such Pledged Tax Increment Revenues in accordance with the terms
and provisions hereof and be valid and binding without further action by the City and without any
filing or recording except for the filing of this Ordinance in the records of the City.
in accordance with the provisions of the Creation Ordinance, the City represents and
warrants to the holders of the Certificates that it has established a Tax Increment Fund for the
Zone, which Fund is maintained at a depository bank of the City, and while the Certificates are
Outstanding, the City agrees to deposit to the credit of the Tax Increment Fund all Pledged Tax
Increment Revenues from the Participating Taxing Units when and as such Revenues are
received in accordance with V.A.T.C., Tax Code, Section 311.013.
45298552.1 15
SECTION 14: Deposits to Certificate Fund. The City hereby covenants and agrees to
cause to be deposited to the credit of the Certificate Fund prior to each principal and interest
payment date for the Certificates from the Pledged Tax Increment Revenues an amount equal
to one hundred per centum (100%) of the amount required to fully pay the interest and principal
payments then due and payable on the Certificates, such deposits to pay accrued interest and
maturing principal on the Certificates to be made in substantially equal semiannual installments
on or before the tenth day of each February and August of each year, beginning with the
February or August first to follow the delivery of the Certificates to the initial purchaser.
The semiannual deposits to the Certificate Fund, as hereinabove provided, shall be
made until such time as such Fund contains an amount equal to the amount to pay in full the
principal of and interest on all the Certificates until their maturity or their scheduled redemption
date. In addition, the accrued interest received from the sale of the Certificates and any
proceeds of sale of the Certificates in excess of the amount required to pay the contractual
obligations to be incurred (including change orders to a construction contract) shall be deposited
in the Certificate Fund, which amounts shall reduce the sums otherwise required to be
deposited in said Fund from the Pledged Tax Increment Revenues.
SECTION 15: Security of Funds. All moneys on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly
invested) shall be secured in the manner and to the fullest extent required by the laws Of Texas
for the security of public funds, and moneys on deposit in such Funds shall be used only for the
purposes permitted by this Ordinance.
SECTION 16: Special Covenants. The City hereby further covenants as follows:
(a) The Zone has been established and created pursuant to
Ordinance Number 682, as amended, and the provisions of the Act, and while
the Certificates are Outstanding, tax increment revenues collected by the City
and by the Participating Tax Units shall be deposited to the credit of the Tax
Increment Fund as required by the provisions of the Act and this Ordinance
(b) It has the lawful power to pledge the Pledged Tax Increment
Revenues to the payment of the Certificates in the manner herein contemplated
and has lawfully exercised such power under the Constitution and laws of the
State of Texas, including said power existing under Chapter 311, Texas Tax
Code, and V.T.C.A., Local Government Code; Sections 271.041, et seq.
(c) Other than for the payment of the Previously Issued Certificates,
the Series 2003-A Bonds and the Certificates, the Pledged Tax Increment
Revenues have not in any manner been pledged or encumbered to the payment
of any debt or obligation of the City or of the Zone.
SECTION 17: Issuance of Additional Parity Obligations The City hereby expressly
reserves the right to hereafter issue additional obligations payable, in whole or in part, from the
Pledged Tax Increment Revenues and, to the extent provided, secured by a lien on and pledge
of the Pledged Tax Increment Revenues of equal rank and dignity with the lien and pledge
securing the payment of the Previously Issued Certificates, the Series 2003-A Bonds and the
Certificates.
45298552.~ 16
SECTION 18: Mutilated - Destroyed - Lost and Stolen Certificates. In case any
Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may
execute and deliver a replacement Certificate of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost
or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder
thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying AgentJRegistrar
of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership
thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount
satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and
charges associated with such indemnity and with the preparation, execution and delivery of a
replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed,
lost or stolen.
Every replacement Certificate issued pursuant to this Section shall be a valid and
binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably
with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone
of the destroyed, lost, or stolen Certificates. The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement
and payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 19: 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
interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the
pledge of taxes levied under this Ordinance and the Pledged Tax Increment Revenues of the
Zone (to the extent such pledge of Pledged Tax Increment Revenues shall not have been
discharged or terminated by prior payment of principal of or interest on the Certificates) and all
covenants, agreements, and other obligations of the City to the Holders shall thereupon cease,
terminate, and be discharged and satisfied.
Certificates or any principal amount(s) thereof shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section when (i) money sufficient to
pay in full such Certificates or the principal amount(s) thereof at maturity or the redemption date
therefor, together with all interest due thereon, shall have been irrevocably deposited with and
held in trust by the Paying AgentJRegistrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying AgentJRegistrar; or an
authorized escrow agent, which Government Securities have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or
the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Securities will be made under this Section and no use
made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or
regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying Agent/Registrar,
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
45298552.1 17
the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which
such moneys have been so deposited shall be remitted to the City or deposited as directed by
the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the
principal of and interest on the Certificates and remaining unclaimed for a period of three (3)
years after the Stated Maturity, or applicable redemption date, of the Certificates such moneys
were deposited and are held in trust to pay shall upon the request of the City be remitted to the
City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance
of funds from the Paying Agent/Registrar to the City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 20: Ordinance a Contract-Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City so long as any Certificate remains Outstanding except as permitted in this
Section. The City may, without the consent of or notice to any Holders, from time to time and at
any time, amend this Ordinance in any manner not detrimental to the interests of the Holders,
including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In
addition, the City may, with the consent of Holders holding a majority in aggregate principal
amount of the Certificates then Outstanding affected thereby, amend, add to, or rescind any of
the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding
Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of
payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal
amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify
the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give
any preference to any Certificate over any other Certificate, or (3)reduce the aggregate
principal amount of Certificates required to be held by Holders for consent to any such
amendment, addition, or rescission.
SECTION 21: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in
this Section, the following terms have the following meanings:
"Closing Date" means the date on which the Certificates are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1(b)of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section
Regulations, and any replacement proceeds as defined in Section
Regulations, of the Certificates.
1.148-1(b) of the
1.148-1(c) of the
"Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired
to carry out the governmental purposes of the Certificates.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations.
45298552.1 1 8
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 14I through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Certificate to become includable in the gross income, as defined in section 61 of the Code, of
the owner thereof for federal income tax purposes. Without limiting the generality of the
foregoing, unless and until the City receives a written opinion of counsel nationally recognized in
the field of municipal bond law to the effect that failure to comply with such covenant will not
adversely affect the exemption from federal income tax of the interest on any Certificate, the
City shall comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Certificates:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates, and not use or permit the use
of such Gross Proceeds (including all contractual arrangements with terms
different than those applicable to the general public) or any property acquired,
constructed or improved with such Gross Proceeds in any activity carried on by
any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use
is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other_
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds,
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the
Certificates to make or finance loans to any person or entity other than a state or local
government. For purposes of the foregoing covenant, such Gross Proceeds are considered to
be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such
Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt
for federal income tax purposes; (2) capacity in or service from such property is committed to
such person or entity under a take-or-pay, output or similar contract or arrangement; or (3)
45298552.1 1 9
indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property
acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a
transaction which is the economic equivalent of a loan.
(e) Not to Invest at Hiqher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Certificates to be federally guaranteed within the meaning of
section 149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by section
149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and
in such place as the Secretary may prescribe.
(h) Rebate of Arbitraqe Profits. Except to the extent otherwise provided in section
148(0 of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account
separately and apart from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of accounting for at least six
years after the day on which the last Outstanding Certificate is discharged.
However, to the extent permitted by law, the City may commingle Gross
Proceeds of the Certificates with other money of the City, provided that the City
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shatl
calculate the Rebate Amount in accordance with rules set forth in section 148(0.
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Certificates until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Certificates by
the Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States out of the Certificate Fund or
its general fund, as permitted by applicable Texas statute, regulation or opinion
of the Attorney General of the State of Texas, the amount that when added to the
future value of previous rebate payments made for the Certificates equals (i) in
the case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the
Regulations, one hundred percent (100%) of the Rebate Amount on such date;
and (ii) in the case of any other Computation Date, ninety percent (90%) of the
45298552.1 20
Rebate Amount on such date. In all cases, the rebate payments shall be made
at the times, in the installments, to the place and in the manner as is or may be
required by section 148(0 of the Code and the Regulations and rulings
thereunder, and shall be accompanied by Form 8038-T or such other forms and
information as is or may be required by Section 148(0 of the Code and the
Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no
errors are made in the calculations and payments required by paragraphs (2) and
(3), and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitraqe Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that
reduces the amount required to be paid to the United State§ pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Certificates not
been relevant to either party.
(j) Elections. The City hereby directs and authorizes the Mayor, City Secretary, City
Manager and Director of Finance, individually or jointly, to make elections permitted or required
pursuant to the provisions of the Code or the Regulations, as they deem necessary or
appropriate in connection with the Certificates, in the Certificate as to Tax Exemption or similar
or other appropriate certificate, form or document.
SECTION 22: Sale of Cer[ificates - Official Statement Approval. The sale of the
Certificates authorized by this Ordinance to RBC Dain Rauscher Inc., A. G. Edwards & Sons,
Inc. and Estrada Hinojosa & Company, inc. (herein referred to as the "Purchasers') in
accordance with the Purchase Contract, dated April 15, 2003, attached hereto as Exhibit B
and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor or
Mayor Pro Tern 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 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 contained in the Purchase Contract are
true and correct in all material respects and shall be honored and performed by the City.
Furthermore, the use of the Official Statement by the Purchasers in connection with the
public offering and sale of the Certificates is hereby ratified, confirmed and approved in all
respects. The final Official Statement, which reflects the terms of sale (together with such
changes approved by the Mayor, City Manager, Director of Finance or City Secretary,
individually or jointly), shall be and is hereby in all respects approved, and the Purchasers are
hereby authorized to use and distribute said final Official Statement, dated April 15, 2003, in the
reoffering, sale and delivery of the Certificates to the public. The Mayor and City Secretary are
further authorized and directed to manually execute and detiver for and on behalf of the City
copies of said Official Statement in final form as may be required by the Purchasers, and such
final Official Statement in the form and content manually executed by said officials shall be
45298552.1 21
deemed to be approved by the City Council and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 23: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the
accrued interest received from the Purchasers, shall be deposited in a construction fund
maintained at a depository of the City. Pending expenditure for authorized projects and
purposes, such proceeds of sale may be invested in authorized investments in accordance with
the provisions of V.T.C.A., Government Code, Chapter 2256, including specifically guaranteed
investment contracts permitted in V.T.C.A., Section 2256.015, et seq, and any investment
earnings realized may be expended for such authorized projects and purposes or deposited in
the Certificate Fund as shall be determined by the City Council. Accrued interest as well as all
surplus proceeds of sale of the Certificates, including investment earnings, remaining after
completion of all authorized projects or purposes shall be deposited to the credit of the
Certificate Fund.
SECTION 24: Control and Custody of Certificates. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending the sale
of the Certificates, the investigation by the Attorney General of the State of Texas, including the
printing and supply of definitive Certificates, and shall take and have charge and control of the
Initial Certificate(s) pending the approval thereof by the Attorney General, the registration
thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Secretary, Director of Finance, and City
Manager, any one or more of said officials, are hereby authorized and directed to furnish and
execute such documents and certifications relating to the City and the issuance of the
Certificates, including a certification as to facts, estimates, circumstances and reasonable
expectations pertaining to the use and expenditure and investment of the proceeds of the
Certificates as may be necessary for the approval of the Attorney General and their registration
by the Comptroller of Public Accounts. In addition, such officials, together with the City's
financial advisor, bond counsel and the Paying Agent/Registrar, are authorized and directed to
make the necessary arrangements for the delivery of the Initial Certificate(s) to the Purchasers
and the initial exchange thereof for definitive Certificates.
SECTION 25: Notices to Holders-Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder appearing in the Security Register at the close of business on the
business day next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides
for notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 26: Cancellation. All Certificates surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be
promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying
45298552.1 22
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 Certificates previously certified or registered and delivered which the City may have
acquired in any manner whatsoever, and all Certificates so delivered shall be promptly
cancelled by the Paying Agent/Registrar. All cancelled Certificates held by the Paying
Agent/Registrar shall be returned to the City.
SECTION 27: Bond Counsel's Opinion. The Purchasers' obligation to accept delivery of
the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski EL.P,
Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and
delivered as of the date of delivery and payment for the Certificates. An executed counterpart of
said opinion shall accompany the global certificates deposited with The Depository Trust
Company or a reproduction thereof shall be printed on the definitive Certificates in the event the
book entry only system shall be discontinued.
SECTION 28: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Certificates shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving the Certificates as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates.
SECTION 29: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is
intended to be and shall be for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 30: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 31: Governinq Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 32: Effect of Headinqs. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 33: 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 34: 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 35: Continuinq Disclosure Undertakinq. (a) Definitions. As used in this
Section, the following terms hav~ the meanings ascribed to such terms below:
45298552.1 23
"MSRB* means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any
SID, within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2003) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 22 of this Ordinance,
being the information described in Exhibit C hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report,
when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material EventNotices. The City shall notify any SID and either-each
NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the
Certificates, if such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates; and
11. Rating changes.
45298552.1 24
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Certificates within the meaning of the Rule,
except that the City in any event will give the notice required by subsection (c) hereof of any
Certificate calls and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances resulting from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted underwriters to purchase or
sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into
account any amendments or interpretations of the Rule to the date of such amendment, as well
as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate
principal amount (or any greater amount required by any other provision of this Ordinance that
authorizes such an amendment) of the Outstanding Certificates consent to such amendment or
(b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel)
determines that such amendment will not materially impair the interests of the Holders and
beneficial owners of the Certificates. The provisions of this Section may also be amended from
time to time or repealed by the City if the SEC amends or repeals the applicable provisions of
45298552.1 25
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and
to the extent that reservation of the City's right to do so would not prevent underwriters of the
initial public offering of the Certificates from lawfully purchasing or selling Certificates in such
offering. If the City so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with subsection (b) an
explanation, in narrative form, of the reasons for the amendment and of the impact of any
change in the type of financial information or operating data so provided.
SECTION 36: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 37: Effective Date. This Ordinance shall take effect and be in full force from
and after its adoption on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028.
PASSED AND ADOPTED, this April 15, 2003.
CITY OF SOUTHLAKE, TEXAS
ATTEST:
City Secretary
45298552.1 26
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of April 15, 2003 (this "Agreement"), by and
between the City of Southlake, Texas (the "Issuer"), and Wachovia Bank, National Association,
Houston, Texas, a banking association duly organized and existing under the laws of the
United States of America (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Southlake, Texas, Tax and Tax Increment Revenue Certificates of Obligation, Series 2003-A
(Reinvestment Zone Number One)" (the "Securities"), dated April 15, 2003, which Securities are
scheduled to be delivered to the initial purchasers on or about May 20, 2003; and
WHEREAS, the Issuer has selected and the Bank has agreed to serve as Paying
Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest
on said Securities and with respect to the registration, transfer and exchange thereof by the
registered owners; and
WHEREAS, the Bank represents it has full power and authority to perform and serve as
Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution."
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any
45302621.1 EXHIBIT A
of the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any
Security which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the principal office of the Bank as indicated in Section 3.01
hereof. The Bank will notify the Issuer in writing of any change in location of the Bank
Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the Mayor, Mayor Pro Tern, City Manager, Assistant City
Manager, Director of Finance, or City Secretary, any one or more of said officials, and
delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or government or
any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by such
particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed,
or stolen Security for which a replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the Resolution).
"Redemption Date" when used with respect to any Security to be redeemed
means the date fixed for such redemption pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank means the Chairman
or Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the
Executive Committee of the Board of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
45302621.1 - 2 - EXHIBIT A
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of
the Bank customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principal of
a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following office:
Wachovia Bank, National Association
Customer Information Center
1525 West W. T. Harris Blvd.
Charlotte, North Carolina 28288
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities).on the
Record Date. All payments of principal and/or interest on the Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first
class, postage prepaid, to the address appearing on the Security Register or (2) by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and
expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
45302621.1 - 3 - EXHIBIT A
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register- Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register. The Bank represents and warrants its office
in Houston, Texas will at all times have immediate access to the Security Register by electronic
or other means and will be capable at all times of producing a hard copy of the Security Register
at its Houston office for use by the Issuer.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
45302621.1 - 4 - EXHIBIT A
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
Section 4.05. Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of Section 18 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time
after receipt of written request from the Issuer, furnish the Issuer information as to the Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. _
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as
to the truth of the statements and correctness of the opinions expressed therein, on certificates
or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
45302621.1 - 5 - EXHIBIT A
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) Thee Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank - Fiduciary Account/Collateralization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities
shall be continuously collateralized by securities or obligations which qualify and are eligible
under both the laws of the State of Texas and the laws of the United States of America to
secure and be pledged as collateral for fiduciary accounts to the extent such money is not
insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary
account shall be made by check drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium (if any), or interest on any
45302621.1 - 6 - EXHIBIT A
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where the
administrative offices of the Issuer is located, and agree that service of process by certified or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State
of Texas to determine the rights of any Person claiming any interest herein.
Section 5.08. DT Services. It is hereby represented and warranted that, in the event the
Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements," which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
45302621.1 - 7 - EXHIBIT A
Section 6.06. Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
45302621.1 - 8 - EXHIBIT A
•
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WACHOVIA BANK, NATIONAL
ASSOCIATION,
Houston, Texas
[SEAL] BY
Title:
Attest:
Title: Address: 5847 San Felipe, Suite 1050
Houston, Texas 77057
CITY OF SOUTHLAKE, TEXAS
(CITY SEAL)
BY
Attest: Mayor
Address: 1400 Main Street, Suite 440
Southlake, Texas 76092
City Secretary
45302621.1 - 9 - EXHIBIT A
SCITYOF SOUTHLAKE, TEXAS
T
(Tarrant County, Texas)
$4,045,000 TAX AND TAX INCREMENT REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2003-A
(REINVESTMENT ZONE NUMBER ONE)
PURCHASE CONTRACT
April 15, 2003
Honorable Mayor and City Council
City of Southlake
1400 Main Street, Suite 440
Southlake, Texas 76092
Ladies and Gentlemen:
The undersigned,RBC Dain Rauscher Inc.(the "Representative"),acting on its own
behalf and on behalf of the other underwriters listed on Schedule I hereto (collectively, the
"Underwriters"), and not acting as fiduciary or agent for you, offers to enter into the
following Purchase Contract with the City of Southlake,Texas(the "Issuer"), which, upon
the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the
Underwriters. This offer is made subject to the Issuer's written acceptance hereof on or before
10 p.m.,Central time,on April 15,2003,and,if not so accepted,will be subject to withdrawal
by the Underwriters upon notice delivered to the Issuer at any time prior to the acceptance
hereof by the Issuer. Terms not otherwise defined in this Purchase Contract shall have the
same meanings set forth in the Ordinance(as defined herein)or in the Official Statement(as
defined herein).
1. Purchase and Sale of the Obligations. Subject to the terms and conditions and
in reliance upon the representations, warranties and agreements set forth herein, the
Underwriters hereby agree to purchase from the Issuer, and the Issuer hereby agrees to sell
and deliver to the Underwriters, all,but not less than all, of the Issuer's$4,045,000 Tax and
Tax Increment Revenue Certificates of Obligation, Series 2003-A (Reinvestment Zone
Number One)(the "Obligations"). Inasmuch as this purchase and sale represents a negotiated
transaction,the Issuer understands,and hereby confirms,that the Underwriters are not acting
as a fiduciary of the Issuer, but rather are acting solely in their capacity as Underwriters for
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2
their own account. The Representative has been duly authorized by the Underwriters to
execute this agreement and to act hereunder.
The principal amount of the Obligations to be issued, the dated date therefor, the
maturities,mandatory and optional redemption provisions,if any,and interest rates per annum
are set forth in Schedule II hereto. The Obligations shall be as described in, and shall be
issued and secured under and pursuant to the provisions of an ordinance to be adopted by the
Issuer's City Council on April 15,2003 (the "Ordinance').
The purchase price for the Obligations shall be $3,963,806.76 (representing the par
amount of the Obligations, less an original issue discount on the Obligations of$46,843.10,
less an underwriting discount of$34,350.14),plus accrued interest on the Obligations from
the dated date of the Obligations to the Closing Date (as hereinafter defined).
Delivered to the Issuer herewith as a good faith deposit is a check payable to the order
of the Issuer in the amount of$50,000. In the event you accept this offer,such check shall be
held uncashed by you until the time of Closing, at which time such check shall be returned
uncashed to the Representative. In the event that the Issuer does not accept this Purchase
Contract, such check will be immediately returned to the Representative. Should the Issuer
fail to deliver the Obligations at the Closing, or should the Issuer be unable to satisfy the
conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for
the Obligations, 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 the Representative. In the
event that the Underwriters fail (other than for a reason permitted hereunder) to purchase,
accept delivery of and pay for the Obligations at the Closing as herein provided, such check
shall be cashed and the amount thereof retained by the Issuer as and for fully liquidated
damages for such failure of the Underwriters, and, except as set forth in Sections 8 and 10
hereof,no party shall have any further rights against the other hereunder. The Underwriters
and the Issuer understand that in such event the Issuer's actual damages may be greater or may
be less than such amount. Accordingly,the Underwriters hereby waive any right to claim that
the Issuer's actual damages are less than such amount,and the Issuer's acceptance of this offer
shall constitute a waiver of any right the Issuer may have to additional damages from the
Underwriters.
2. Public Offering. The Underwriters agree to make a bona fide public offering
of all of the Obligations at a price not to exceed the public offering price set forth on the inside
cover page of the Official Statement and may subsequently change such offering price without
any requirement of prior notice;provided however,at least ten percent(10%)of the principal
amount of the Obligations of each maturity shall be sold to the"public"(exclusive of dealers,
brokers and investment bankers, etc.) at the initial offering price set forth in the Official
Statement. The Underwriters may offer and sell the Obligations to certain dealers(including
dealers depositing Obligations into investment trusts) and others at prices lower than the
public offering price stated on the inside cover page of the Official Statement.
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 2
EXHIBIT B
•
3. The Official Statement. (a) Attached hereto as Exhibit A is a copy of the
Preliminary Official Statement dated April 8, 2003 (the "Preliminary Official Statement"),
including the cover page and Appendices thereto, of the Issuer relating to the Obligations.
Such copy of the Preliminary Official Statement,as amended to conform to the terms of this
Purchase Contract and with changes and amendments to the date hereof as have been mutually
agreed to by the Issuer and the Underwriters, is referred to hereinafter as the "Official
Statement."
(b) The Preliminary Official Statement has been prepared by the Issuer for use in
connection with the public offering, sale and distribution of the Obligations by the
Underwriters. The Issuer hereby represents and warrants that the Preliminary Official
Statement was deemed final by the Issuer as of its date, except for the omission of
such information which is dependent upon the final pricing of the Obligations for
completion, all as permitted to be excluded by Section(b)(1)of Rule 15c2-12 under
the Securities Exchange Act of 1934 (the "Rule").
(c) The Issuer hereby authorizes the Official Statement and the information therein
contained to be used by the Underwriters in connection with the public offering and
the sale of the Obligations.- The Issuer consents to the use by the Underwriters prior
to the date hereof of the Preliminary Official Statement in connection with the public
offering of the Obligations. The Issuer shall provide, or cause to be provided,to the
Underwriters as soon as practicable after the date of the Issuer's acceptance of this
Purchase Contract(but, in any event,not later than within seven business days after
the Issuer's acceptance of this Purchase Contract and in sufficient time to accompany
any confirmation that requests payment from any customer) copies of the Official
Statement which is complete as of the date of its delivery to the Underwriters in such
quantity as the Representative shall request in order for the Underwriters to comply
with Section(b)(4)of the Rule and the rules of the Municipal Securities Rulemaking
Board.
(d) If, after the date of this Purchase Contract to and including the date the
Underwriters are no longer required to provide an Official Statement to potential
customers who request the same pursuant to the Rule(the earlier of(i) 90 days from
the"end of the underwriting period"(as defined in the Rule)and(ii)the time when the
Official Statement is available to any person from a nationally recognized municipal
securities repository,but in no case less than 25 days after the"end of the underwriting
period" for the Obligations), the Issuer becomes aware of any fact or event which
might or would cause the Official Statement, as then supplemented or amended, to
contain any untrue statement of a material fact or to omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if it is necessary to amend or supplement the Official Statement to
comply with law,the Issuer will notify the Representative(and for the purposes of this
clause provide the Representative with such information as it may from time to time
request), and if, in the opinion of the Representative, such fact or event requires
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 3
EXHIBIT B
preparation and publication of a supplement or amendment to the Official Statement,
the Issuer will forthwith prepare and furnish, at the Issuer's own expense(in a form
and manner approved by the Representative),a reasonable number of copies of either
amendments or supplements to the Official Statement so that the statements in the
Official Statement as so amended and supplemented will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or so that the Official
Statement will comply with law. If such notification shall be subsequent to the
Closing,the Issuer shall furnish such legal opinions,certificates,instruments and other
documents as the Representative may deem necessary to evidence the truth and
accuracy of such supplement or amendment to the Official Statement.
(e) The Representative hereby agrees to file the Official Statement with a
nationally recognized municipal securities information repository. Unless otherwise
notified in writing by the Representative, the Issuer can assume that the "end of the
underwriting period" for purposes of the Rule is the date of the Closing.
4. Representations, Warranties,and Covenants ofthe Issuer. The Issuer hereby
represents and warrants to and covenants with the Underwriters that:
(a) The Issuer is a political subdivision and municipal corporation operating as
such under the laws of the State of Texas and has full legal right,power and authority,
and at the date of the Closing will have full legal right,power and authority under the
Ordinance(i)to enter into,execute and deliver this Purchase Contract,the Ordinance,
and all documents required hereunder and thereunder to be executed and delivered by
the Issuer,(ii)to sell,issue and deliver the Obligations to the Underwriters as provided
herein, and (iii) to carry out and consummate the transactions contemplated by this
Purchase Contract and the Official Statement, and the Issuer has complied, and will
at the Closing be in compliance in all respects, with the terms of this Purchase
Contract and the Ordinance as they pertain to such transactions;
(b) By all necessary official action of the Issuer prior to or concurrently with the
acceptance hereof,the Issuer has duly authorized all necessary action to be taken by
it for(i)the adoption of the Ordinance and the issuance and sale of the Obligations,
(ii)the approval,execution and delivery of,and the performance by the Issuer of the
obligations on its part, contained in the Obligations and this Purchase Contract and
(iii) the consummation by it of all other transactions contemplated by the Official
Statement and this Purchase Contract and any and all such other agreements and
documents as may be required to be executed,delivered and/or received by the Issuer
in order to carry out, give effect to, and consummate the transactions contemplated
herein and in the Official Statement;
(c) The Obligations,when issued, delivered and paid for, in accordance with the
Ordinance and this Purchase Contract, will constitute legal, valid and binding
obligations of the Issuer entitled to the benefits of the Ordinance and enforceable in
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 4
EXHIBIT B
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws and principles of equity relating to or affecting the
enforcement of creditors'rights;upon the issuance,authentication and delivery of the
-Obligations as aforesaid, the Ordinance will provide, for the benefit of the holders,
from time to time,of the Obligations,the legally valid and binding pledge of and lien
it purports to create as set forth in the Ordinance;
(d) The Issuer is not in breach of or default in any material respect under any
applicable constitutional provision,law or administrative regulation of the State or the
United States or any applicable judgment or decree or any loan agreement,indenture,
bond,note,resolution,agreement or other instrument to which the Issuer is a party or
to which the Issuer is or any of its property or assets are otherwise subject, and no
event has occurred and is continuing which constitutes or with the passage of time or
the giving of notice, or both, would constitute a default or event of default by the
Issuer under any of the foregoing; and the execution and delivery of the Obligations,
this Purchase Contract and the adoption of the Ordinance and compliance with the
provisions on the Issuer's part contained therein, will not conflict with or constitute
a breach of or default under any constitutional provision, administrative regulation,
judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or
other instrument to which the Issuer is a party or to which the Issuer is or to which any
of its property or assets are otherwise subject nor will any such execution, delivery,
adoption or compliance result in the creation or imposition of any lien,charge or other
security interest or encumbrance of any nature whatsoever upon any of the property
or assets of the Issuer to be pledged to secure the Obligations or under the terms of any
such law, regulation or instrument, except as provided by the Obligations and the
Ordinance;
(e) All authorizations, approvals, licenses, permits, consents and orders of any
governmental authority, legislative body, board, agency or commission having
jurisdiction of the matter which are required for the due authorization of,which would
constitute a condition precedent to, or the absence of which would materially
adversely affect the due performance by the Issuer of its obligations under the Issuer
Documents and the Obligations have been duly obtained or will be obtained prior to
Closing;
(1) The Obligations and the Ordinance conform to the descriptions thereof
contained in the Official Statement under the captions "PLAN OF FINANCING,"
"THE OBLIGATIONS";and the Undertaking(as hereinafter defined)conforms to the
description thereof contained in the Official Statement under the caption
"CONTINUING DISCLOSURE OF INFORMATION";
(g) There is no litigation, action, suit,proceeding,inquiry or investigation,at law
or in equity, before or by any court, government agency, public board or body,
pending or, to the best knowledge of the Issuer after due inquiry, threatened against
the Issuer, affecting the existence of the Issuer or the titles of its officers to their
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 5
EXHIBIT B
respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale,
issuance or delivery of the Obligations or the collection of taxes or revenues pledged
to the payment of principal of and interest on the Obligations pursuant to the
Ordinance or in any way contesting or affecting the validity or enforceability of the
Obligations, or contesting the exclusion from gross income of interest on the
Obligations for federal income tax purposes, or contesting in any way the
completeness or accuracy of the Preliminary Official Statement or the Official
Statement or any supplement or amendment thereto, or contesting the powers of the
Issuer or any authority for the issuance of the Obligations, the adoption of the
Ordinance or the execution and delivery of this Purchase Contract, nor, to the best
knowledge of the Issuer,is there any basis therefor,wherein an unfavorable decision,
ruling or finding would materially adversely affect the validity or enforceability of the
Obligations or the Issuer Documents;
(h) As of the date thereof,the Preliminary Official Statement did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein,in the light of the circumstances
under which they were made,not misleading;
(i) At the time of the Issuer's acceptance hereof and (unless the Official
Statement is amended or supplemented pursuant to paragraph(d)of Section 3 of this
Purchase Contract) at all times subsequent thereto during the period up to and
including the date of Closing,the Official Statement does not and will not contain any
untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein,in light of the circumstances
under which they were made, not misleading;
(j) If the Official Statement is supplemented or amended pursuant to paragraph
(d) of Section 3 of this Purchase Contract, at the time of each supplement or
amendment thereto and(unless subsequently again supplemented or amended pursuant
to such paragraph) at all times subsequent thereto during the period up to and
including the date of Closing, the Official Statement as so supplemented or amended
will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,in light
of the circumstances under which made, not misleading;
(k) The Issuer will apply,or cause to be applied,the proceeds from the sale of the
Obligations as provided in and subject to all of the terms and provisions of the
Ordinance and agrees not to take or omit to take any action which action or omission
will adversely affect the exclusion from gross incomefor federal income tax purposes
of the interest on the Obligations;
(1) The Issuer will furnish such information and execute such instruments and
take such action in cooperation with the Underwriters as the Representative may
reasonably request(A)to(y)qualify the Obligations for offer and sale under the Blue
F\WDOX\CLIENTS\070030\00008\10030138.WPD/2 6
EXHIBIT B
Sky or other securities laws and regulations of such states and other jurisdictions in
the United States as the Representative may designate and(z)determine the eligibility
of the Obligations for investment underthe laws of such states and other jurisdictions
and(B)to continue such qualifications in effect so long as required for the distribution
of the Obligations (provided,however,that the Issuer will not be required to qualify
as a foreign corporation or to file any general or special consents to service of process
under the laws of any jurisdiction)and will advise the Representative immediately of
receipt by the Issuer of any written notification with respect to the suspension of the
qualification of the Obligations for sale in any jurisdiction or the initiation or threat
of any proceeding for that purpose;
(m) The financial statements of, and other financial information regarding the
Issuer,in the Official Statement fairly present the financial position and results of the
Issuer as of the dates and for the periods therein set forth. Prior to the Closing,to the
best of the Issuer's knowledge,there will be no adverse change of a material nature in
such financial position, results of operations or condition, financial or otherwise, of
the Issuer. The Issuer is not a party to any litigation or other proceeding pending or,
to its knowledge, threatened which, if decided adversely to the Issuer, would have a
materially adverse effect on the financial condition of the Issuer;
(n) Prior to the Closing the Issuer will not offer or issue any bonds,notes or other
obligations for borrowed money or incur any material liabilities,direct or contingent,
payable from or secured by any of the revenues which will secure the Obligations,
other than the Issuer's General Obligation Refunding and Improvement Bonds,Series
2003, Tax and Tax Increment Revenue Refunding Bonds, Series 2003-A
(Reinvestment Zone Number One) and Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2003 which are being issued
simultaneously with the issuance of the Obligations,without the prior approval of the
Representative;
(o) Except as disclosed in the Official Statement,the Issuer is in compliance with
all previous continuing disclosure agreements made in accordance with the Rule;and
(p) Any certificate, signed by any official of the Issuer authorized to do so in
connection with the transactions contemplated by this Purchase Contract, shall be
deemed a representation and warranty by the Issuer to the Underwriters as to the
statements made therein.
5. Closing.
(a) At or before 10:00 a.m.,Central time,on May 20, 2003,or at such other time
and date as shall have been mutually agreed upon by the Issuer and the Representative
(the "Closing"),the Issuer will,subject to the terms and conditions hereof,deliver the
Initial Bond to the Underwriters duly executed and authenticated, together with the
other documents hereinafter mentioned,and the Underwriters will,subject to the terms
F•\WDOX\CLIENTS\070030\00008\10030138.wPD/2 7
EXHIBIT B
and conditions hereof, accept such delivery and pay the purchase price of the
Obligations as set forth in Section 1 of this Purchase Contract by wire transfer payable
in immediately available funds to the order of the Issuer. Payment for the Obligations
as aforesaid shall be made at the offices of the Paying Agent/Registrar named in the
Official Statement,or such other place as shall have been mutually agreed upon by the
Issuer and the Representative.
(b) Delivery of the Obligations shall be made to The Depository Trust Company,
New York,New York("DTC"). The Obligations shall be delivered in definitive fully
registered form, bearing CUSIP numbers without coupons, with one Bond for each
maturity of the Obligations, registered in the name of Cede& Co., all as provided in
the Ordinance,and shall be made available to the Representative at least one business
day before the Closing for purposes of inspection.
6. Closing Conditions. The Underwriters have entered into this Purchase
Contract in reliance upon the representations, warranties and agreements of the Issuer
contained herein, and in reliance upon the representations,warranties and agreements to be
contained in the documents and instruments to be delivered at the Closing and upon the
performance by the Issuer 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,to accept delivery of and to pay for the Obligations shall be conditioned upon the
performance by the Issuer 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
additional conditions, including the delivery by the Issuer of such documents as are
enumerated herein, in form and substance reasonably satisfactory to the Representative:
(a) The representations and warranties of the Issuer contained herein shall be true,
complete and correct on the date hereof and on and as of the date of the Closing,as if
made on the date of the Closing;
(b) The Issuer shall have performed and complied with all agreements and
conditions required by this Purchase Contract to be performed or complied with by it
prior to or at the Closing;
(c) At the time of the Closing,(i)the Ordinance and the Obligations shall be in full
force and effect and shall not have been amended,modified or supplemented,and the
Official Statement shall not have been supplemented or amended,except in any such
case as may have been agreed to by the Representative; and (ii) all actions of the
Issuer required to be taken by the Issuer shall be performed in order for Bond Counsel
and counsel to the Underwriters to deliver their respective opinions referred to
hereafter;
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 8
EXHIBIT B
(d) At the time of the Closing, all official action of the Issuer relating to the
Obligations and the Ordinance shall be in full force and effect and shall not have been
amended, modified or supplemented;
(e) At or prior to the Closing, the Ordinance shall have been duly adopted and
filed of record and the Issuer shall have duly executed and delivered, and the Paying
Agent/Registrar shall have duly authenticated, the Obligations;
(f) At or prior to the Closing,the municipal bond insurance policy shall have been
duly executed, issued and delivered by Financial Security Assurance Inc.;
(g) At the time of the Closing, there shall not have occurred any change or any
development involving a prospective change in the condition, financial or otherwise,
or in the revenues or operations of the Issuer, from that set forth in the Official
Statement that in the judgment of the Representative,reasonably exercised,is material
and adverse and that makes it,in the judgment of the Representative,impracticable to
market the Obligations on the terms and in the manner contemplated in the Official
Statement;
(h) The Issuer shall not have failed to pay principal or interest when due on any
of its outstanding obligations for borrowed money;
(i) All steps to be taken and all instruments and other documents to be executed,
and all other legal matters in connection with the transactions contemplated by this
Purchase Contract shall be reasonably satisfactory in legal form and effect to the
Representative and to counsel for the Underwriters;
(j) At or prior to the Closing,the Underwriters shall have received copies of each
of the following documents:
(1) The Official Statement,and each supplement or amendment thereto,if
any,executed by original or facsimile signature on behalf of the Issuer by the
Mayor or such other official as may have been agreed to by the Representative,
and the reports and audits referred to or appearing in the Official Statement;
(2) The Ordinance(which shall include the undertaking of the Issuer(the
"Undertaking") which satisfies the requirements of Section (b)(5)(i) of the
Rule),with such supplements or amendments as may have been agreed to by
the Representative;
(3) The approving opinions of Bond Counsel with respect to the
Obligations, in substantially the form attached to the Official Statement;
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 9
EXHIBIT B
•
(4) Supplemental opinion of Bond Counsel addressed to the Issuer and the
Underwriters, substantially to the effect that:
(i) the Obligations are exempted securities under the Securities
Act of 1933,as amended(the "1933 Act"),and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and it is not
necessary,in connection with the offering and sale of such Obligations,
to register the Obligations under the 1933 Act or to qualify the
Ordinance under the Trust Indenture Act; and
(ii) the statements and information contained in the Official
Statement under the captions and subcaptions "PLAN OF
FINANCING"(except for the subcaption"Use of Proceeds of the TIF
Certificates"), "THE OBLIGATIONS" (except for the information
under the subcaption"Book-Entry-Only System"),"TAX MATTERS"
and"CONTINUING DISCLOSURE OF INFORMATION"(except for
the subcaption "Compliance with Prior Undertakings"), and the
subcaptions "Registration and Qualification of Obligations for Sale,"
"Legal Investments and Eligibility to Secure Public Funds in Texas"
and "Legal Opinions" under the caption "OTHER INFORMATION"
fairly and accurately summarize the matters purported to be
summarized therein.
(5) An opinion, dated the date of the Closing and addressed to the
Underwriters, of counsel for the Underwriters, to the effect that:
(i) the Obligations are exempt securities under the 1933 Act and
the Trust Indenture Act and it is not necessary,in connection with the
offering and sale of the Obligations, to register the Obligations under
the 1933 Act and the Ordinance need not be qualified under the Trust
Indenture Act; and
(ii) based upon their participation in the preparation of the Official
Statement as counsel for the Underwriters and their participation at
conferences at which the Official Statement was discussed,but without
having undertaken to determine independently the accuracy,
completeness or fairness of the statements contained in the Official
Statement, such counsel has no reason to believe that the Official
Statement 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
(except for any financial,forecast,technical and statistical statements
and data included in the Official Statement and the information
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 10
EXHIBIT B
regarding the Depository and its book-entry system and information
regarding the municipal bond insurer,in each case as to which no view
need be expressed);
(6) A certificate,dated the date of Closing,of an appropriate official of the
Issuer to the effect that (i) the representations and warranties of the Issuer
contained herein are true and correct in all material respects on and as of the
date of Closing as if made on the date of Closing; (ii) no litigation or
proceeding against it is pending or,to his or her knowledge,threatened in any
court or administrative body nor is there a basis for litigation which would(a)
contest the right of the members or officials of the Issuer to hold and exercise
their respective positions,(b)contest the due organization and valid existence
of the Issuer, (c) contest the validity, due authorization and execution of the
Obligations or the adoption of the Ordinance, or(d)attempt to limit,enjoin or
otherwise restrict or prevent the Issuer from functioning and collecting taxes,
including payments on the Obligations,pursuant to the Ordinance, and other
income or the levy or collection of the taxes and revenues pledged or to be
pledged to pay the principal of and interest on the Obligations, or the pledge
thereof,(iii)the Obligations and the Ordinance have been duly adopted by the
Issuer, are in full force and effect and have not been modified, amended or
repealed, and (iv)to the best of his or her knowledge, no event affecting the
Issuer 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, in light of the circumstances under which made, not
misleading in any respect as of the time of Closing, and the information
contained in the Official Statement relating to the Issuer and the Obligations
is correct in all material respects and, as of the date of the Official Statement
did not, and as of the date of the Closing does not, contain any untrue
statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made,not misleading;
(7) A certificate of the Issuer in form and substance satisfactory to Bond
Counsel and counsel to the Underwriters (a)setting forth the facts, estimates
and circumstances in existence on the date of the Closing,which establish that
it is not expected that the proceeds of the Obligations will be used in a manner
that would cause the Obligations to be"arbitrage bonds"within the meaning
of Section 148 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any applicable regulations (whether final, temporary or
proposed),issued pursuant to the Code,and(b)certifying that to the best of the
knowledge and belief of the Issuer there are no other facts, estimates or
circumstances that would materially change the conclusions,representations
and expectations contained in such certificate;
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 11
EXHIBIT B
•
(8) Evidence satisfactory to the Underwriters that the Obligations have
been rated"Aaa"by Moody's Investors Services,"AAA"by Fitch Ratings,and
"AAA" by Standard & Poor's Rating Services, A Division of The McGraw-
Hill Companies, Inc., on the basis of the issuance of the municipal bond
insurance policy described in(10)below,and that such ratings are in effect as
of the date of Closing;
(9) The approving opinion of the Attorney General of the State of Texas
and the registration certificates of the Comptroller of Public Accounts of the
State of Texas in respect of the Obligations;
(10) A copy of the policy of municipal bond insurance issued by Financial
Security Assurance Inc., together with the customary opinion of its legal
counsel as to the validity and enforceability of such policies and the fairness
and accuracy of the language contained in the Official Statement; and
(11) Such additional legal opinions, certificates, instruments and other
documents as the Representative or counsel to the Underwriters may
reasonably request to evidence the truth and accuracy,as of the date hereof and
as of the date of the Closing, of the Issuer's representations and warranties
contained herein and of the statements and information contained in the
Official Statement and the due performance or satisfaction by the Issuer on or
prior to the date of the Closing of all the respective agreements then to be
performed and conditions then to be satisfied by the Issuer.
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 in form and substance satisfactory to the
Underwriters.
If the Issuer shall be unable to satisfy the conditions to the obligations of the
Underwriters to purchase,to accept delivery of and to pay for the Obligations contained in this
Purchase Contract,or if the obligations of the Underwriters to purchase,to accept delivery of
and to pay for the Obligations shall be terminated for any reason permitted by this Purchase
Contract,this Purchase Contract shall terminate and neither the Underwriters nor the Issuer
shall be under any further obligation hereunder,except that the respective obligations of the
Issuer and the Underwriters set forth in Section 1 (with respect to the Check) hereof shall
continue in full force and effect. -
7. Termination. The Underwriters shall have the right to cancel their obligation to
purchase the Obligations if, between the date of this Purchase Contract and the Closing,the
market price or marketability of the Obligations shall be materially adversely affected,in the
reasonable judgment of the Representative,reasonably exercised,by the occurrence of any of
the following:
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 12
EXHIBIT B
(a) legislation shall be enacted by or introduced in the Congress of the United
States or recommended to the Congress for passage by the President of the United
States, or the Treasury Department of the United States or the Internal Revenue
Service or any member of the Congress or favorably reported for passage to either
House of the Congress by any committee of such House to which such legislation has
been referred for consideration, a decision by a court of the United States or of the
State or the United States Tax Court shall be rendered,or an order,ruling,regulation
(final,temporary or proposed),press release, statement or other form of notice by or
on behalf of the Treasury Department of the United States, the Internal Revenue
Service or other governmental agency shall be made or proposed,the effect of any or
all of which would be to impose, directly or indirectly, federal income taxation upon
interest received on obligations of the general character of the Obligations or upon
interest on the Obligations as described in the Official Statement, or other action or
events shall have transpired which may have the purpose or effect, directly or
indirectly,of changing the federal income tax consequences of any of the transactions
contemplated herein;
(b) legislation is introduced in or enacted(or resolution passed)by the Congress
or an order, decree, or injunction is issued by any court of competent jurisdiction, or
an order,ruling,regulation(final,temporary,or proposed),press release or other form
of notice is issued or made by or on behalf of the Securities and Exchange
Commission, or any other governmental agency having jurisdiction of the subject
matter, to the effect that obligations of the general character of the Obligations,
including any or all underlying arrangements,are not exempt from registration under
or other requirements of the 1933 Act, or that the Ordinance is not exempt from
qualification under or other requirements of the Trust Indenture Act, or that the
issuance, offering, or sale of obligations of the general character of the Obligations,
including any or all underlying arrangements, as contemplated hereby or by the
Official Statement or otherwise,is or would be in violation of the federal securities law
as amended and then in effect;
(c) a general suspension of trading in securities on the New York Stock Exchange
or the American Stock Exchange, the establishment of material restrictions (not in
force as of the date hereof) upon trading securities generally by any governmental
authority or any national securities exchange,a general banking moratorium declared
by federal, State of New York, or State officials authorized to do so;
(d) any amendment to the federal or state Constitution or action by any federal or
state court, legislative body,regulatory body, or other authority materially adversely
affecting the tax status of the Issuer, its property, income securities (or interest
thereon),or the validity or enforceability of the pledge of revenues to pay principal of
and interest on the Obligations;
F:\WDOX\CLIENTS\070030\00008\100301 38.WPD/2 13
EXHIBIT B
(e) any event occurring,or information becoming known which,in the judgment
of the Representative reasonably exercised,makes untrue in any material respect any
statement or information contained in the Official Statement,or has the effect that the
Official Statement contains any untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,not misleading;
(f) there shall have occurred since the date of this Purchase Contract any
materially adverse change in the affairs or financial condition of the Issuer,except for
changes which the Official Statement discloses are expected to occur;
(g) the United States shall have become engaged in hostilities which have resulted
in a declaration of war or a national emergency or there shall have occurred any other
outbreak or escalation of hostilities or terrorist act or a national or international
calamity or crisis, financial or otherwise;
(h) any fact or event shall exist or have existed that, in the Representative's
judgment, reasonably exercised, requires an amendment of or supplement to the
Official Statement and such amendment or supplement in the opinion of the
Representative materially affects the marketability of the Obligations;
(i) there shall have occurred any downgrading,or any notice shall have been given
of(A) any intended or potential downgrading or(B) any review or possible change
that does not indicate a possible upgrade, in the rating accorded any of the Issuer's
obligations (including the rating to be accorded the Obligations); and
) the purchase of and payment for the Obligations by the Underwriters, or the
resale of the Obligations by the Underwriters, on the terms and conditions herein
provided shall be prohibited by any applicable law, governmental authority, board,
agency or commission;provided,however,that such prohibition is not caused by any
intentional act, or failure to act,of the Underwriters.
8. Expenses.
(a) The Underwriters shall be under no obligation to pay, and the Issuer shall
pay,any expenses incident to the performance of the Issuer's obligations hereunder,
including, but not limited to (i) the cost of preparation and printing of the
Obligations, (ii) the fees and disbursements of Bond Counsel and counsel to the
. Issuer;(iii)the fees and disbursements of the Financial Advisor to the Issuer;(iv)the
fees and disbursements of any other engineers, accountants, and other experts,
consultants or advisers retained by the Issuer;(v)the fees for bond ratings and credit
enhancement fees or premiums,if any; and(vi)any other expenses agreed to by the
Issuer to be reasonably considered expenses of the Issuer which are incident to the
F:\WDOX\CLIENTS\070030\00008110030138.WPD/2 14
EXHIBIT B
transaction contemplated hereby.
(b) The Underwriters shall pay (i) the cost of preparation and printing of this
Purchase Contract,and any requested Blue Sky Survey;(ii)all advertising expenses
in connection with the public offering of the Obligations;and(iii)all other expenses
incurred by them in connection with the public offering of the Obligations,including
the fees and disbursements of counsel retained by the Underwriters.
9. Notices. Any notice or other communication to be given to the Issuer under
this Purchase Contract may be given by delivering the same to the Issuer, at the address
indicated above,Attention:Mayor(with copies to the City Manager),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 RBC Dain Rauscher Inc.,2711 N.Haskell, Suite 2400,
Dallas, Texas 75204,Attention: William R. Gumbert.
10. Parties in Interest. This Purchase Contract as heretofore specified shall
constitute the entire agreement between us and is made solely for the benefit of the Issuer and
the Underwriters(including successors or assigns of the Underwriters)and no other person
shall acquire or have any right hereunder or by virtue hereof. This Purchase Contract may
not be assigned by the Issuer. All of the Issuer'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 any of the Underwriters; (ii)
delivery of and payment for the Obligations pursuant to this Purchase Contract;and(iii)any
termination of this Purchase Contract.
11. Effectiveness. This Purchase Contract shall become effective upon the
acceptance hereof by the Issuer and shall be valid and enforceable at the time of such
acceptance.
12. Choice of Law. This Purchase Contract shall be governed by and construed
in accordance with the law of the State of Texas.
13. Severability. If any provision of this Purchase Contract shall be held or
deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any
particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts
with any provisions of any Constitution, statute,rule of public policy, or any other reason,
such circumstances shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or of rendering any other
provision or provisions of this Purchase Contract invalid,inoperative or unenforceable to any
extent whatever.
14. Business Day. For purposes of this Purchase Contract,"business day"means
any day on which the New York Stock Exchange is open for trading.
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 15
•
EXHIBIT n
15. Section Headings. Section headings have been inserted in this Purchase
Contract as a matter of convenience of reference only, and it is agreed that such section
headings are not a part of this Purchase Contract and will not be used in the interpretation of
any provisions of this Purchase Contract.
16. Counterparts. This Purchase Contract may be executed in several
counterparts each of which shall be regarded as an original (with the same effect as if the
signatures thereto and hereto were upon the same document)and all of which shall constitute
one and the same document.
If you agree with the foregoing,please sign the enclosed counterpart of this Purchase
Contract and return it to the Representative. This Purchase Contract shall become a binding
agreement between you and the Underwriters when at least the counterpart of this letter shall
have been signed by or on behalf of each of the parties hereto.
[Execution page follows]
F:\W DOX\CLIENTS\070030\00008\10030138.WPD/2 16
EXHIBIT B
Very truly yours,
RBC DAN RAUSCHER INC.
By
Authorized Representative
EXECUTION PAGE TO PURCHASE CONTRACT(TIF CERTIFICATES)
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2
EXHIBIT B
ACCEPTED AND AGREED TO THIS
day of April, 2003
CITY OF SOUTHLAKE, TEXAS
By:
Rick Stacy
Mayor
EXECUTION PAGE TO PURCHASE CONTRACT(TIF CERTIFICATES)
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2
EXHIBIT B
Schedule I
A.G. Edwards & Sons, Inc.
Estrada Hinojosa& Company, Inc.
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 Schedule I- Page 1
EXHIBIT B
G ` 4
Schedule II
CITY OF SOUTHLAKE,TEXAS
TAX AND TAX INCREMENT REVENUE
CERTIFICATES OF OBLIGATION,SERIES 2003-A
(REINVESTMENT ZONE NUMBER ONE)
MATURITY SCHEDUL E
The Obligations shall have the following terms:
February 15
Amount Maturity Rate(%) Yield(%)
$440,000 2011 3.500% 3.660%
$455,000 2012 3.650% 3.800%
$475,000 2013 3.800% 3.930%
$490,000 2014 4.000% 4.030%
$515,000 2015 4.000% 4.140%
$535,000 2016 4.100% 4.240%
$555,000 2017 4.200% 4.340%
$580,000 2018 4.300% 4.440%
(Accrued Interest from April 15,2003 to be added)
REDEMPTION PROVISIONS
The Issuer reserves the right,at its option,to redeem Obligations having stated maturities on
and after February 15, 2011, in whole or in part in principal amounts of$5,000 or any integral
multiple thereof,on February 15,2010,or any date thereafter,at the par value thereof plus accrued
interest to the date of redemption.
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 Schedule II - Page 1
EXHIBIT 13
n.
EXHIBIT "A"
Preliminary Official Statement
dated April 8, 2003
F:\WDOX\CLIENTS\070030\00008\10030138.WPD/2 Exhibit A
EXHIBIT B
Exhibit C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 35 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2. The information in the Official Statement contained in Tables 1 through 6 and 8
through 15.
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
45298552.1