0848OFFICIAL RECORD
ORDINANCE NO. 848
AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE, TEXAS,
GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS,
SERIES 2003"; specifying the terms and features of said bonds; levying a
continuing direct annual ad valorem tax for the payment of said bonds;
and resolving other matters incident and related to the issuance, sale,
payment and delivery of said bonds, including the approval and execution
of a Paying AgentJRegistrar Agreement, a Purchase Contract and Special
Escrow Agreement and the approval and distribution of an Official
Statement; providing for the redemption of certain outstanding obligations
of the City; and providing an effective date.
WHEREAS, the City Council of the City of Southlake, Texas (the "City") has heretofore
issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal
amount $3,700,000 (collectively, the "Refunded Obligations") more particularly described as
follows:
(1) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1992-A, dated
October 1, 1992, scheduled to mature on February 15 in each of the years 2004
through 2013, and aggregating in principal amount $875,000; and
(2) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1994, dated
December 1, 1994, scheduled to mature on August 15 in each of the years 2005
through 2015, and aggregating in principal amount $2,825,000;
AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter
1207, as amended, the City Council is authorized to issue refunding bonds and deposit the
proceeds of sale directly with any place of payment for the Refunded Obligations, or other
authorized depository, and such deposit, when made in accordance with said statute, and
ordinances authorizing the issuance of the Refunded Obligations, shall constitute the making of
firm banking and financial arrangements for their discharge and final payment; and
WHEREAS, the City Council hereby finds and determines that general obligation
refunding bonds should be issued at this time to refund the Refunded Obligations, and such
refunding will result in the City saving approximately $439,816.25 in debt service payments on
such indebtedness and further provide present value savings of approximately $209,542.25;
and
WHEREAS, in combination with the issuance of such refunding bonds, the City Council
of the City of Southlake, Texas hereby finds and determines that $610,000 in principal amount
of general obligation bonds approved and authorized to be issued at an election held May 1,
1999 should be issued and ~old at this time; a summary of the general obligation bonds
authorized at said election, the principal amounts authorized, amounts heretofore issued and
being issued pursuant to this Ordinance and amounts remaining to be issued subsequent
hereto being as follows:
45300240,1
Amounts Amount
Amount Previously Being Unissued
Authorized Issued Issued Balance
Purpose
Street Improvements (intersections)
Street Improvements (design enhancements)
Park Improvements (hike and bike trails)
$17,300,000 $10,508,179 $ -0~ $6,791,821
2,150,000 950,000 610,000 590,000
4,730,000 2,230,000 -0- 2,500,000
AND WHEREAS, the Council hereby reserves and retains the right to issue the balance
of unissued bonds approved at said election in one or more installments when, in the judgment
of the Council, funds are needed to accomplish the purposes such bonds are voted to finance;
now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: Authorization Desiqnation - Principal Amount-Purpose, General
obligation refunding bonds of the City shall be and are hereby authorized to be issued in the
aggregate principal amount of $4,495,000 to be designated and bear the title "CITY OF
SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS,
SERIES 2003" (hereinafter referred to as the "Bonds"), for the purpose of refunding certain
outstanding obligations of the City (identified in the preamble hereof and referred to as the
"Refunded Obligations"), to pay costs of issuance and to provide funds in the amount of
$610,000 for street improvements (design enhancements to State Highway 114 interchanges,
including material selection, paving, signage and bridge railing), in accordance with authority
conferred by and in conformity with the Constitution and laws of the State of Texas, including
V.T.C.A., Government Code, Chapters 1207 and 1331.
SECTION 2: Fully Reqistered Obliqations - Bond Date - Authorized Denominations
Stated Maturities - Interest Rates The Bonds shall be issued as fully registered obligations
only, shall be dated April 15, 2003 (the "Issue Date"), shall be in denominations of $5,000 or any
integral multiple (within a Stated Maturity, except for the single Initial Bond referenced in Section
8) thereof, and shall become due and payable on February 15 in each of the years and in
principal amounts (the "Stated Maturities") and bear interest at the rate(s) per annum in
accordance with the following schedule:
YEAR OF PRINCIPAL INTEREST
MATURIT~ AMOUNT RATE(S)
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2004 $ 105,000 2.00%
2005 340,000 2.00%
2006 345,000 2.50%
2007 360,000 2.50%
2008 370,000 3.00%
2009 380,000 3.25%
2010 400,000 3.50%
2011 410,000 3.50%
2012 435,000 3.65%
2013 345,000 3.80%
2014 365,000 4.00%
2015 385,000 4.00%
-2-
2016 50,000 4.10%
2017 50,000 4.20%
2018 50,000 4.30%
The Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the
rate(s) per annum shown above in this Section (calculated on the basis of a 360-day year of
twelve 30-day months). Interest on the Bonds shall be payable on February 15 and August 15
in each year, commencing February 15, 2004.
SECTION 3: Terms of Payment - Payinq Aqent/Reqistrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar, and the payment thereof shall be in any coin or currency of the United States
of America, which at the time of payment is legal tender for the payment of public and private
debts, and shall be without exchange or collection charges to the Holders.
The selection and appointment of Wachovia Bank, National Association, Houston,
Texas, to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed.
Books and records relating to the registration, payment, exchange and transfer of the Bonds
(the "Security Register") shall at all times be kept and maintained on behalf of the City by the
Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a
"Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A, and
such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor and City Secretary are hereby authorized to execute and deliver such
Agreement in connection with the delivery of the Bonds. The City covenants to maintain and
provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any
successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other
entity qualified and authorized to serve in such capacity and perform the duties and services of
Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City
agrees to promptly cause a written notice thereof to be sent to each Holder by United States
Mail, first class postage prepaid, which notice shall also give the address of the new Paying
Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities
or redemption, only upon presentation and surrender of the Bonds to the .Paying
Agent/Registrar at its designated offices in Charlotte, North Carolina (the "Designated
Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose name
appears in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date
for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
)~ollday, 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.
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In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at least five (5) business days prior to the Special Record Date by United States
Mail, first class postage prepaid, to the address of each Holder appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION4: Redemption. (a) Optional Redemption. The Bonds having Stated
Maturities on and after February 15, 2011 shall be subject to redemption prior to maturity, at the
option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on February 15,
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 least forty-five (45) days prior to a
redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the
Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of
redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be
entered in the minutes of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar
shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by
dividing the principal amount of such Bonds by $5,000 and shall select the Bonds to be
redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be
redeemed in whole or in part at the address of the Holder appearing on the Security Register at
the close of business on the business day next preceding the date of mailing such notice, and
any notice of redemption so mailed shall be conclusively presumed to have been duly_ given
irrespective of whether received by the Holder.
All notices of redemption shall (i)specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or
the principal amount thereof to be redeemed) shall become due and payable and interest
thereon shall cease to accrue from and after the redemption date therefor; provided moneys
45300240.1 -4-
sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Reqistration - Transfer - Exchanqe of Bonds-Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each and every owner of the Bonds issued under and pursuant to the provisions of
this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or
exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly
authorized agent, upon surrender of such Bond to the Paying Agent/Registrar at the Designated
Payment/Transfer Office for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Bond (except for the single Initial Bond referenced in Section 8
hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar,
one or more new Bonds shall be registered and issued to the assignee or transferee of the
previous Holder; such Bonds to be in authorized denominations, of like Stated Maturity and of a
like aggregate principal amount as the Bend or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the single Initial Bond referenced in
Section 8) may be exchanged for other Bonds of authorized denominations and having the
same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount
as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated PaymenVTransfer Office of the Paying Agent/Registrar. Whenever any Bonds are
surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to
the Holder requesting the exchange.
All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders
at the Designated 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 Bonds surrendered in such
transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds cancelled by reason of an exchange or transfer pursuant to the prowsions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a podion, as the case may be,
of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in
the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such
new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
45300240.1 -5-
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to
an assignee of a Holder any Bond called for redemption, in whole or in par[, within 45 days of
the date fixed for the redemption of such Bond; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Bond called for redemption in part.
SECTION 6: 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 Bonds, 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 a Blanket
Issuer Letter of Representations by and between the City and DTC (the "Depository
Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds 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
Bond (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
Bonds 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 Bonds, the City covenants and agrees with the Holders of
the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to
be issued and delivered to DTC Participants and Beneficial Owners, as the case may be.
Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the
Secudty Register maintained by the Paying Agent/Registrar and payment of such Bonds shall
be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Reqistration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Issue Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the
time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, ali as authorized and provided in V.T.C.A., Government
Code, Chapter 120'1, as amended.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 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 Bond shall be conclusive evidence, and the only evidence, that such Bond has
been duly certified, registered and delivered.
45300240.1 -6-
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T-l, or (ii) as multiple fully registered bonds, being one bond for each stated maturity
in the applicable principal amount and denomination and to be numbered consecutively from T-
1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall
be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s)
shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for
approval, certified and registered by the Office of the Comptroller of Public Accounts of the
State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/ Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written
instructions from the initial purchaser(s), or the designee thereof, and such other information
and documentation as the Paying Agent/Registrar may reasonably require.
SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate
of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of
Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall
be substantially in the forms set forth in this Section with such appropriate insertions, Omissions,
substitutions, and other variations as are permitted or required by this Ordinance and may have
such letters, numbers, or other marks of identification (including identifying numbers and letters
of the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends on insured
Bonds and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be
established by the City or determined by the officers executing such Bonds as evidenced by
their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved or
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
(B) Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND,
SERIES 2003
Issue Date:
April 15, 2003
Interest Rate:
Stated Maturity:
CUSIP NO:
45300240.1 -7-
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, on the Stated Maturity date specified
above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid
upon prior redemption), and to pay interest on the unpaid principal amount hereof from the
Issue Date at the per annum rate of interest specified above computed on the basis of a
360-day year of twelve 30-day months; such interest being payable on February 15 and August
15 in each year, commencing February 15, 2004. Principal of this Bond is payable at its Stated
Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the
Designated PaymentZTransfer Office of the Paying Agent/Registrar executing the registration
certificate appearing hereon, or its successor. Interest is payable to the registered owner of
this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter
referenced) whose name appears on the "Security Register" maintained by the Paying
Agent/Registrar at the close of business on the "Record Date", which is the last business day of
the month next preceding each interest payment date, and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to
the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner.
All payments of principal of, premium, if any, and interest on this Bond shall be without
exchange or collection charges to the owner hereof and in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and
private debts.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $4,495,000 (herein referred to as the "Bonds") for the purpose of refunding certain
outstanding obligations of the City (identified in the Ordinance hereinafter referenced and
referred to as the "Refunded Obligations"), to pay costs of issuance and the provide funds in the
amount of $610,000 for street improvements (design enhancements to State Highway 114
interchanges, including material selection, paving signage and bridge railing), under and in strict
conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government
Code, Chapters 1207 and 1331, and pursuant to an Ordinance adopted by the City Council of
the City (herein referred to as the "Ordinance").
The Bonds maturing on and after February 15, 2011 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 thirty days prior to the date fixed for any redemption of Bonds, the City shall
cause a written notice of such redemption to be sent by United States Mail, first class postage
prepaid, to the registered owners of each Bond to be redeemed at the address shown on the
Security Register and subject to the terms and provisions relating thereto contained in the
Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date such
45300240.1
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor, provided
moneys for the payment of the redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar.
in the event a portion of the principal amount of a Bond is to be redeemed 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 Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided by
the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to
the registered owner, without charge. If a Bond is selected for redemption, in whole or in par[,
the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an
assignee of the registered owner within 45 days of the redemption date therefor; provided,
however, such limitation on transferability shall not be applicable to an exchange by the
registered owner of the unredeemed balance of a Bond redeemed in par[.
The Bonds are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to
the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the
Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by
the acceptance hereof hereby assents, for definitions of terms; the description of and the nature
and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to
the transfer or exchange of this Bond; the conditions upon which the Ordinance may be
amended or supplemented with or without the consent of the Holders; the rights, duties, and
obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this
Bond may be discharged at or prior to its maturity, and deemed to be no longer Outstanding
thereunder; and for other terms and provisions contained therein. Capitalized terms used
herein have the meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
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 Bonds
of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and
of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the
designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the
registered owner whose name appears on the Security Register (i) on the Record Date as the
owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the
owner entitled to payment of principal hereof at its Stated Maturity, or redemption, in whole or in
part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the
Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary, in
the event of nonpayment of interest on a scheduled payment date and for thirty (30) days
thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
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payment date of the past due interest (which shall be 15 days after the Special Record Date)
shall be sent at Feast 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 cedified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by
law; that all acts, conditions and things required to exist and be done precedent to and in the
issuance of the Bonds to render the same lawful and valid obligations of the City have been
properly done, have happened and have been performed in regular and due time, form and
manner as required by the Constitution and ~aws of the State of Texas, and the Ordinance; that
the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has
been made for the payment of the principal of and interest on the Bonds by the levy of a tax as
aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Issue Date.
CITY OF SOUTHLAKE, TEXAS
COUNTERSIGNED:
Mayor
City Secretary
(SEAL)
45300240.1 -1 0-
(C) *Form of Registration Certificate of Comptroller of Public Accounts to appear on
Initial Bond(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER )
)
OF PUBLIC ACCOUNTS )
)
THE STATE OF TEXAS )
REGISTER NO.
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
*NOTE TO PRINTER: Do not print on definitive bonds
(D) Form of Certificate of Paying Agent/Registrar to appear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within-mentioned Ordinance; the bond or bonds of the
above entitled and designated series originally delivered having been approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts, as shown
by the records of the Paying Agent/Registrar.
The designated office of the Paying Agent/Registrar in Charlotte, North Carolina, is the
Designated Payment/Transfer Office for this Bond.
Registration date:
WACHOVIA BANK,
NATIONAL ASSOCIATION,
Houston, Texas,
as Paying Agent/Registrar
By
Authorized Signature
45300240.1 -1 1-
(E) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:).
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every particular.
(F) The Initial Bond(s) shall be in the form set forth in paragraph B of this Section,
except that the form of the single fully registered Initial Bond shall be modified as follows:
(i) immediately under the name of the bond 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 corporaf~e 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:
YEAR OF PRINCIPAL INTEREST
MATURITY INSTALLMENTS RATE
45300240.1 -1 2-
(INFORMATION TO BE INSERTED FROM SCHEDULE IN SECTION ?
HEREOF).
(or so much principal thereof as shall not have been prepaid prior to maturity) and to pay
interest on the unpaid Principal Amount hereof from the Issue Date at the per annum rates of
interest specified above computed on the basis of a 360-day year of twelve 30-day months;
such interest being payable on February 15 and August 15 in each year, commencing February
15, 2004. Principal installments of this Bond are payable in the year of maturity to the
registered owner hereof by Wachovia Bank, National Association, Houston, Texas (the "Paying
Agent/Registrar"), upon presentation and surrender, at its designated offices Charlotte, North
Carolina (the "Designated Payment/Transfer Office"). Interest is payable to the registered
owner of this Bond whose name appears on the "Security Register" maintained by the Paying
Agent/Registrar at the close of business on the "Record Date", which is the last business day of
the month next preceding each interest payment date, and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to
the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner.
All payments of principal of, premium, if any, and interest on this Bond shall be without
exchange or collection charges to the owner hereof and in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment of public and
private debts.
SECTION 10: Lew of Taxes. To provide for the payment of the "Debt Service
Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their
redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is
hereby levied, and there shall be annually assessed and collected in due time, form, and
manner, a tax on all taxable property in the City, within the limitations prescribed by law, and
such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for
the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be
ample and sufficient to provide funds each year to pay the principal of and interest on said
Bonds while Outstanding; full allowance being made for delinquencies and costs of collection;
separate books and records relating to the receipt and disbursement of taxes levied, assessed
and collected for and on account of the Bonds shall be kept and maintained by the City at all
times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt
Service Requirements on the Bonds shall be deposited to the credit of a "Special 2003
Refunding Bond Account" (the "Interest and Sinking Fund") maintained on the records of the
City and deposited in a special fund maintained at an official depository of the City's funds; and
such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the
payment of the Bonds.
Proper officers of the City are hereby authorized and directed to cause to be transferred
to the Paying Agent/Registrar for the Bonds, from funds on deposit in the Interest and Sinking
Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and
principal of the Bonds as the same accrues or matures; such transfers of funds to be made in
such manner as will cause collected funds to be deposited with the Paying AgentJRegistrar on
or before each principal and interest payment date for the Bonds.
SECTION 11: Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
4530o240.1 -13-
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying Agent/ Registrar of evidence
satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of
indemnification in an amount satisfactory to hold the City and the Paying Agent/ Registrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be borne by the Holder of the Bond
mutilated, or destroyed, lost or stolen.
Every replacement Bond issued pursuant to this Section shall be a valid and binding
obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all
other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost or stolen Bonds.
SECTION 12: Satisfaction of Obiiqation 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 Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes
levied under this Ordinance and all covenants, agreements, and other obligations of the City to
the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in
trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii)Government
Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Securities have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the
principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Securities will be made under this Section and no use
made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or
regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying Agent/Registrar,
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the
City. Furthermore, any money held by the Paying AgentJRegistrar for the payment of the
principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
45300240.1 -14-
deposited and are held in trust to pay shall upon the request of the City be remitted to the City
against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of
funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed
property laws of the State of Texas.
The term "Government Securities", as used herein, means (i) direct noncallable
obligations of the United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, (ii) noncallable
obligations of an agency or instrumentality of the United States, including obligations
unconditionally guaranteed or insured by the agency or instrumentality and on the date of their
acquisition or purchase by the City are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a
state or an agency or a county, municipality, or other political subdivision of a state that have
been refunded and on the date of their acquisition or purchase by the City, are rated as to
investment quality by a nationally recognized investment rating firm not less than AAA or its
equivalent.
SECTION 13: Ordinance a Contract - Amendments - Outstandinq Bonds. This
Ordinance shall constitute a contract with the Holders from time to time, be binding on the City,
and shall not be amended or repealed by the City so long as any Bond remains Outstanding
except as permitted in this Section. The City may, without the consent of or notice to any
Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental
to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal
defect or omission herein. In addition, the City may, with the consent of Holders holding a
majority in aggregate principal amount of the Bonds then Outstanding, amend, add to, or
rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders
of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or
times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the
principal amount thereof, the redemption price, or the rate of interest thereon, or in any other
way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds,
(2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal
amount of Bonds required to be held by Holders for consent to any such amendment, addition,
or rescission.
The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of
the date of determination, all Bonds theretofore issued and delivered under this Ordinance,
except:
(1) those Bonds cancelled by the Paying AgentJRegistrar or delivered to
the Paying Agent/Registrar for cancellation;
(2) those Bonds deemed to be duly paid by the City in accordance with
the provisions of Section 12 hereof; and
(3) those mutilated, destroyed, lost, or stolen Bonds which have been
replaced with Bonds registered and delivered in lieu thereof as provided in
Section 11 hereof.
SECTION 14: Covenants to Maintain Tax-Exempt Status. (a) Definitions.
used in this Section, the following terms shall have the following meanings:
When
45300240.1 -1 5-
"Closing Date~ means the date on which the Bonds are first authenticated and delivered
to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the
Regulations, of the Bonds.
"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 Bonds are invested and which is not acquired to
carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (i) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations; and (ii) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations.
(b) Not to Cause Interest to Become Taxable The City shall not use, permit
the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not ad~;ersely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141
of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the
last Stated Matudty of Bonds:
(t) exclusively own, operate and possess all property the
acquisition, construction or improvement of which is to be financed or refinanced
directly or indirectly with Gross Proceeds of the Bonds (including property
financed with Gross Proceeds of the Refunded Obligations), and not use or
permit the use of such Gross Proceeds (including all contractual arrangements
with terms different than those applicable to the general public) or any property
acquired, constructed or improved with such Gross Proceeds in any activity
45300240.1 -16-
carried on by any person or entity (including the United States or any agency,
department and instrumentality thereof) other than a state or local government,
unless such use is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or
other payment by any person or entity who is treated as using Gross Proceeds of
the Bonds or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with Gross Proceeds of the Refunded Obligations),
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the
Bonds to make or finance loans to any person or entity other than a state or local government.
For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to
a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) Not to Invest at Hiqher Yield. Except to the extent permitted by section
148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior
to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Bonds.
(0 Not Federally Guaranteed. Except to the extent permitted by section
149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to
take any action which would cause the Bonds to be federally guaranteed within the meaning of
section 149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitraqe Profits. Except to the extent otherwise provided in
section 148(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 Bond is discharged. However,
to the extent permitted by law, the City may commingle Gross Proceeds of the
453o024o.1 -17-
Bonds with other money of the City, provided that the City separately accounts
for each receipt and expenditure of Gross Proceeds and the obligations acquired
therewith.
(2) Not less frequently than each Computation Date, the City
shall calculate the Rebate Amount in accordance with rules set forth in section
148(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 Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds
by the Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States out of the Interest and
Sinking 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
Bonds equals (i) in the case of a Final Computation Date as defined in Section
1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate
Amount on such date; and (ii) in the case of any other Computation Date, ninety
percent (90%) of the Rebate Amount on such date. In all cases, the rebate
payments shall be made at the times, in the installments, to the place and in the
manner as is or may be required by section 148(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 exemise reasonable diligence to assure that
no errors are made in the calculations and payments required by paragraphs (2)
and (3), and if an error is made, to discover and promptly correct such error
within a reasonable amount of time thereafter (and in all events within one
hundred eighty (180) days after discovery of the error), including payment to the
United States of any additional Rebate Amount owed to it, interest thereon, and
any penalty imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitraqe Profits. Except to the extent permitted by section
148 of the Code and the Regulations and rulings thereunder, the City shall not, at any time prior
to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
(j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro
Tam, City Manager, Director of Finance and City Secretary, individually or jointly, to make
elections permitted or required pursuant to the provisions of the Code or the Regulations, as
they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax
Exemption or similar or other appropriate certificate, form or document.
45300240.1 -18-
(k) Bonds Not Hedqe Bonds. (1) At the time the original bonds refunded by
the Bonds were issued, the City reasonably expected to spend at least 85% of the spendable
proceeds of such bonds within three years after such bonds were issued and (2) not more than
50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose
Investments having a substantially guaranteed Yield for a period of 4 years or more.
(I) Qualified Advance Refundinq. The Bonds are issued in part to refund the
Refunded Obligations, and the Bonds will be issued more than 90 days before the redemption
of the Refunded Obligations. The City represents as follows:
(i) The Bonds are a current refunding of the Series 1992-A Refunded
Obligations and the first advance refunding of the Series 1994 Refunded Obligations,
within the meaning of section 149(d)(3) of the Code.
(ii) The Refunded Obligations are being called for redemption, and will be
redeemed not later than the earliest date on which such bonds may be redeemed.
(iii) The initial temporary period under section 148(c) of the Code will end: (i)
with respect to the proceeds of the Bonds not later than 30 days after the date of issue
of such Bonds; and (ii) with respect to proceeds of the Refunded Obligations on the
Closing Date if not ended prior thereto.
(iv) On and after the date of issue of the Bonds, no proceeds of the Refunded
Obligations will be invested in Nonpurpose Investments having a Yield in excess of the
Yield on such Refunded Obligations.
(v) The Bonds are being issued for the purposes stated in the preamble of
this Ordinance. There is a present value savings associated with the refunding. In the
issuance of the Bonds the City has neither: (i) overburdened the tax-exempt bond
market by issuing more bonds, issuing bonds earlier or allowing bonds to remain
outstanding longer than reasonably necessary to accomplish the governmental purposes
for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the
meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "device" to
obtain a material financial advantage based on arbitrage, within the meaning of section
149(d)(4) of the Code, apart from savings attributable to lower interest rates and reduced
debt service payments in eady years.
SECTION 15: Sale of Bonds - Official Statement Approval. The Bonds authorized by
this Ordinance are hereby sold by the City 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 Bonds is hereby ratified, confirmed and approved in all respects.
The final Official Statement, which reflects the terms of sate (together with such changes
45300240.1 -19-
approved by the Mayor, City Manager, Director of Finance or City Secretary, one or more of
said officials), shall be and is hereby in all respects approved and the Purchasers are hereby
authorized to use and distribute said final Official Statement, dated April 15, 2003, in the
reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are
further authorized and directed to manually execute and deliver for and on behalf of the City
copies of said Official Statement in final form as may be required by the Purchasers, and such
final Official Statement in the form and content manually executed by said officials sha~l be
deemed to be approved by the City Council and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 16: Special Escrow A~reement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement") by and between the City and JPMorgan Chase Bank,
Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by
reference as a part of this Ordinance for all purposes, is hereby approved as to form and
content, and such Agreement in substantially the form and substance attached hereto, together
with such changes or revisions as may be necessary to accomplish the refunding or benefit the
City, is hereby authorized to be executed by the Mayor and City Secretary for and on behalf of
the City and as the act and deed of this City Council; and such Agreement as executed by said
officials shall be deemed approved by the City Council and constitute the Agreement herein
approved.
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on
the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL
2003 CITY OF SOUTHLAKE, TEXAS, REFUNDING BOND ESCROW FUND" (the "Escrow
Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter 1201, as
amended, this Ordinance and the Agreement.
SECTION 17: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tern, City Manager, Assistant City Manager,
Director of Finance and City Secretary, any one or more of said officials, are hereby authorized
and directed to furnish and execute such agreements, documents and certifications relating to
the City and the issuance, sale and delivery of the Bonds, including certifications as to facts,
estimates, circumstances and reasonable expectations pertaining to the use, expenditure and
investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney
General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to
the Purchasers, and, together with the City's bond counsel and the Paying Agent/Registrar,
make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and
the initial exchange thereof for definitive Bonds.
SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds,
proceeds of sale in the sum of (i) $600,000.00 shall be deposited to the construction fund and
$3,799,122.54 shall be deposited with the Escrow Agent for application in accordance with the
Agreement, and (iii) $14,352.67, representing accrued interest shall be deposited in the Interest
45300240.1 -20-
and Sinking Fund. The balance of the proceeds of sale shall be disbursed for payment of
costs of ~ssuance in accordance with instructions from the City, and any proceeds of sale
remaining after payment of the costs of issuance for the Bonds shall deposited in the Interest
and Sinking Fund for the Bonds. Pending expenditure for authorized projects and purposes,
such proceeds of sale may be invested in authorized investments and any investment earnings
realized may be expended for such authorized projects and purposes or deposited in the Bond
Fund as shall be determined by the appropriate authorized officials of the City. All surplus
proceeds of sale of the Bonds, including investment earnings, remaining after completion of all
authorized projects or purposes shall be deposited to the credit of the Interest and Sinking
Fund.
Additionally, on or immediately prior to the date of the delivery of the Bonds to the
Underwriters, the Director of Finance shall cause to be transferred in immediately available
funds to the Escrow Agent from moneys on deposit in the interest and sinking funds maintained
for the payment of the Refunded Obligations the sum of $122,376.87 to accomplish the
refunding.
SECTION 19: Redemption of Refunded Obliqations. (a) The certificates of
obligation of that series known as "City of Southlake, Texas, Tax and Wat,e, rworks and Sewer
System (Limited Pledge) Revenue Certificates of Obligation, Series 1992-A, dated October 1,
1992, maturing in the years 2004 through 2013, and aggregating in principal amount $875,000,
shall be redeemed and the same are hereby called for redemption on May 22, 2003, at the price
of par and accrued interest to the date of redemption. The City Secretary is hereby authorized
and directed to file a copy of this Ordinance, together with a suggested form of notice of
redemption to be sent to certificateholders, with JPMorgan Chase Bank, Dallas, Texas
(successor paying agent/registrar to Ameritrust Texas, National Association), in accordance with
the redemption provisions applicable to such obligations; such suggested form of notice of
redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of
this Ordinance for all purposes.
(b) The certificates of obligation of that series known as "City of Southlake, Texas
Tax and Waterworks and Sewer System (Limited P edge) Revenue Certificates of Obligation,
Series 1994", dated December 1, 1994, maturing in the years 2005 through 2015, and
aggregating in principal amount $2,825,000, shall be redeemed and the same are hereby called
for redemption on August 15, 2004, at the price of par and accrued interest to the date of
redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to
certificateholders, with JPMorgan Chase Bank, Dallas, Texas (successor paying agent~registrar
to Texas Commerce Bank, Association), in accordance with the redemption provisions
applicable to such obligations; such suggested form of notice of redemption being attached
hereto as Exhibit E and incorporated herein by reference as a part of this Ordinance for all
purposes.
The redemption of the obligations described above being associated with the refunding
of such obligations, the approval, authorization and arrangements herein given and provided for
the redemption of such obligations on the redemption dates designated therefor and in the
manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City
Secretary is hereby authorized and directed to make all arrangements necessary to notify the
holders of such obligations of the City's decision to redeem such obligations on the date and in
the manner herein provided and in accordance with the ordinances authorizing the issuance of
the obligations and this Ordinance.
45300240.1 -21 ~
SECTION 20: 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 dose of business on the
business day next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 21: Cancellation. All Bonds surrendered for payment, redemption, transfer,
exchange, or replacement, if surrendered to the Paying AgentJRegistrar, shall be promptly
cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar
and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The
City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the City may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying
Agent/Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to
the City.
SECTION 22: Leqal Opinion. The obligation of the Purchasers to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski EL.P, Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion or an executed counterpart thereof is hereby authorized to be either printed on definitive
printed obligations or deposited with DTC along with the global certificates for the
implementation and use of the Book Entry Only System used in the settlement and transfer of
the Bonds.
SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the Bonds
deposited with The Depository Trust Company or on printed definitive Bonds. It is expressly
provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds
shall be of no significance or effect as regards the legality thereof and neither the City nor
attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the definitive Bonds.
SECTION 24: 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 25: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
45300240.1 ~22-
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 26: Govemin¢:l 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 27: Effect of Headinqs. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 28: 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 29: 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 30: Incorporation of Findinqs and Determinations The findings and
determinations of the City Council contained in the preamble hereof are hereby incorporated by
reference and made a part of this Ordinance for all purposes as if the same were restated in full
in this Section.
SECTION 31: Continuinq Disclosure Undertakinq. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"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 SlD, 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 15 of this
Ordinance, being the information described in Exhibit F hereto. Financial statements to be
provided shall be (1) prepared in accordance with the accounting principles described in Exhibit
F 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
45300240,1 -23-
NRMSIR and any SID with the financial information and operating data and will file the annual
audit report when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSiR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each
NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the
Bonds, 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 Bonds;
(7) Modifications to rights of holders of the Bonds;
(8) Bond calls;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds; and
(11 ) Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
(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 Bonds within the meaning of the Rule, except
that the City in any event will give the notice required by subsection (c) hereof of any Bond calls
and defeasance that cause the City to be no longer such an bi,gated person.
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, 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
undert2k~ 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 undedake 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 Bonds at any future date.
45300240.1 -24-
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND 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 an underwriter to purchase or
sell Bonds in the primary offering of the Bonds 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 Bonds 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 Bonds. The provisions of this Section may also be amended from time to time or repealed
by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final
jurisdiction determines that such provisions are invalid, but only if and to the extent that
reservation of the City's right to do so would not prevent underwriters of the initial public offering
of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends
the provisions of this Section, it shall include with any amended financial information or
operating data filed with each NRMSlR and SID pursuant to subsection (b) of this Section 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 32: Public Meetinq. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
45300240.1 -25-
SECTION 33: 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
45300240.1 -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, General Obligation Refunding and Improvement Bonds, Series 2003" (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, THERE¢ORE, 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
45302615.1 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 Tem, 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,
45302615.1 - 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 PayinqAqent. 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.
45302615.1 - 3 - EXHIBIT A
ARTICLE FOUR
REGISTRAR
Section 4.01. Secudty Reqister- Transfers and Exchanqes. 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 Reqister. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
45302615.1 ~ 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 11 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.
45302615.1 - 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) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of issuer. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Moneys Held by Bank-FiduciaryAccount/Collateralization. A fi~uciary
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 fidudary
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
45302615.1 - 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 Sank 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 ctaim, 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. Assiqnment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
Section 6.04. Effect of Headinqs. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assiqns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
45302615.1 - 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 Aqreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Aqreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10. Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. 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
othenNise 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. Governinq Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas. '
45302615.1 - 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:
(CITY SEAL)
Attest:
City Secretary
Address: 5847 San Felipe, Suite 1050
Houston, Texas 77057
CITY OF SOUTHLAKE, TEXAS
BY
Mayor
Address:
1400 Main Street, Suite 440
Southlake, Texas 76092
45302615.1 ~ 9 - EXHIBIT A
CITY OF SOUTHLAKE, TEXAS
(Tarrant County, Texas)
$4,495,000 GENERAL OBLIGATION REFUNDING
AND IMPROVEMENT BONDS, SERIES 2003
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).
I. Purchase and Sale of the Bonds. 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 $4,495,000 General Obligation
Refunding and Improvement Bonds, Series 2003 (the "Bonds "). Inasmuch as this purchase
and sale represents a negotiated transaction, the Issuer understands, and hereby confirms, that
the U~derwriters are not acting as a fiduciary of the Issuer, but rather are acting solely in their
capacity as Underwriters for their own account. The Representative has been duly authorized
by the Underwriters to execute this agreement and to act hereunder.
F:\WDOX\CLIENTS\070030\00008\ 1003006& WPD / 2
The principal amount of the Bonds 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 Bonds 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 Bonds shall be $4,470,224.23 (representing the par amount
of the Bonds, plus a net reoffering premium on the Bonds of $4,772.65, less an underwriting
discount of $29,548.42), plus accrued interest on the Bonds from the dated date of the Bonds
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 Bonds at the Closing, or should the Issuer be unable to satisfy the conditions
of the obligations of the Underwriters to pumhase, accept delivery of and pay for the Bonds,
as set forth in this Purchase Contract (unless waived by the Underwriters), or should such
obligations of the Underwriters be terminated for any reason permitted by this Purchase
Contract, such check shall immediately be returned to 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 Bonds 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 Bonds 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 (I 0%) of the principal
amount of the Bonds 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 Bonds to certain dealers (including
dealers depositing Bonds 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\10030068~WPD / 2
F. XHIBIT B
3. The Official Statement. (a) Attached hereto as Exhibit A is a copy of the
Preliminary Official Statement dated Apri! 8, 2003 (the "?relimina~ Official Statement"),
including the cover page and Appendices thereto, of the Issuer relating to the Bonds. 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 muttmlly
ag-reed to by the Issuer and the Under~vriters, 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 Bonds 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 Bonds for
completion, ali as permitted to be excluded by Section (b)(l) 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 Bonds. 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 Bonds. 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/ts 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 tmderwriting
period" for the Bonds), 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 comRly 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 preparation and
F:',WDOX\CLIENTS\O70030\OOOO8\IOO30068.WI~D / 2 3
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. Representation& Warranties, and Covenants of the lssuer. Thelssuerhereby
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 ail documents required hereunder and thereunder to be executed and delivered by
the Issuer, (ii) to sell, issue and deliver the Bonds 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 Mil
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 Bonds, (ii) the
approval, execution and delivery of, and the performance by the Issuer of the
obligations on its part, contained in the Bonds 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 Bonds, 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\O7OO3OiOOOOg, 003006&WPD / 2 4
EXHIBIT B
accordance with their terms, subject to bankn~ptcy, 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
Bonds as aforesaid, the Ordinance will provide, for the benefit of the holders, from
time to time, of the Bonds, the legally valid and binding pledge of and lien it purports
to create as set forth in hhe 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 Bonds, 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 Bonds or under the terms of any such
law, regulation or instrument, except as provided by the Bonds and the Ordinance;
(e) Ail 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 Bonds have been duly obtained or will be obtained prior to
Closing;
(f) The Bonds and the Ordinance conform to the descriptions thereof contained
in the Official Statement under the captions "PLAN OF FINANCING" and "THE
OBLIGATIONS"; and the Undertaking (as hereinafter defined) conforms to the
description thereof contained in the OfficiaI Statement under the caption
"CONTINUING DISCLOSURE OF INFORMATION";
I 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
respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale,
F:!WDOX\CLIENT$\070030\00008\t0030068 WPD / 2 5
F) HIRIT B
issuance or delivery of the Bonds or the collection of taxes pledged to the payment of
principal of and interest on the Bonds pursuant to the Ordinance or in any way
contesting or affecting the validity or enforceability of the Bonds, or contesting the
exclusion from gross income of interest on the Bonds 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 Bonds, 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 bas/s therefor, wherein an unfavorable
decision, ruling or finding would materially adversely affect the validity or
enforceability of the Bonds or the Issuer Documents;
(h) As of the date thereof, the Preliminary Official Statement did not contain any
untrue statement ora 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
Pumhase 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 ornecessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
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 ora 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 cimumstances under which made, not misleading;
(k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the
Bonds 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 income for federal income tax purposes of
the interest on the Bonds;
(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 Bonds for offer and sale under the Blue 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
F:\WDOX\CLIENTS'~070030\00008\ 10030068.WPD / 2 6
EXHIBIT B
the Bonds for investment under the laws of such states and other,jurisdictions and (B)
to continue such qualifications in effect so long as required for the distribution of the
Bonds (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 Bonds 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 Bonds, other
than the Issuer's Tax and Tax Increment Revenue Refunding Bonds, Series 2003-A
(Reinvestment Zone Number One), Tax and Waterworks and Sewer System Surplus
Revenue Certificates of Obligation, Series 2003 and Tax and Tax Increment Revenue
Certificates of Obligation, Series 2003-A (Reinvestment Zone Number One) which are
being issued simultaneously with the issuance of the Bonds, 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.
la) At or before 10:00 a.m., Central time, on May 20, 2003, or at such other rime
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
and conditions hereof, accept such delivery and pay the purchase price of the Bonds
as set forth in Section 1 of this Purchase Contract by wire transfer payable in
F:\WDOX\CLI ENTS\070030\00008\ 10030068.WPD / 2 7
immediately available funds to the order of the Issuer. Payment for the Bonds 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 Bonds shall be made to The Depository Trust Company, New
York, New York ("DTC"). The Bonds shall be delivered in definitive fully registered
form, bearing CUSIP numbers without coupons, with one Bond for each maturity of
the Bonds, 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 Bonds 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 tree,
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 Bonds 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;
Id) At the time of the Closing, all official action of the Issuer relating to the Bonds
and the Ordinance shall be in full force and effect and shall not have been amended,
modified or supplemented;
F:"WDOX\CLIE NTS\070030\00008\10030068.WPD / 2
F×HIRIT 1:i
(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 Bonds;
(f) At or prior to the Closing, the municipal bond insurance poiicy 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
dev. elopment involving a prospective change in the condition, financial or otherwise,
or ~n 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 Bonds 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 appear/ng in the Official Statement;
(2) The Ordinance (which shall include the undertaking of the Issuer (thh
"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, and the escrow agreement described in the Ordinance (the
"Escrow Agreement"), having been duly executed on behalf of the Issuer by
its Mayor and JPMorgan Chase Bank, Dallas, Texas (the "Escrow Agent',);
(3) The approving opinions of Bond Counsel with respect to the Bonds, in
substantially the form attached to the Official Statement;
(4) Supplemental opinion of Bond Counsel addressed to the Issuer and the
Underwriters, substantially to the effect that:
F:', WDO X\CLIENTS\O70030\OOOOg\ l OO30068 WPD / 2
EXHIBIT B
(i) the Bonds are exempted securities under the Securities Act of
1933, as amended (the "1933 Act"), and the Trust Indenture Act of
1939, as amended (the "TruxtlndentureAct "), and it is not necessary,
in connection with the offering and sale of such Bonds, to register the
Bonds 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
Bonds"), "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 counseI for the Underwriters, to the effect that:
(i) the Bonds 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 Bonds, to register the Bonds 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 ora 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
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);
F:\WDOX\CL IENTS\070030\f}0008\ 10030068.WPD / 2
10
EXHIBIT B
(6) A certificate, dated the date of CIosing, of an appropriate official of the
Issuer to the effect that (i) the representations and warranties of the Issuer
contained herein are tree and correct in all material respects on and as of the
date of Closing as if made on the date of Closing; (ii) no iitigation 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
Bonds 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 Bonds, pursuant to the Ordinance, and other income
or the levy or collection of the taxes pledged or to be pledged to pay the
principal of and interest on the Bonds, or the pledge thereof, (iii) the Bonds
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 Bonds 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 Bonds will be used in a manner thdt
would cause the Bonds 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;
(8) Evidence satisfactory to the Underwriters that the Bonds 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-
F:"WDO X\CLIE NTS'~070030\00008\ 10030068 WPD / 2
i1
Hill Companies, Inc., on the basis of the issuance of the municipal bond
insurance policy described in (1 O) 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 Bonds;
(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;
(I1) A copy of the special report prepared by Grant Thornton LLP,
independent certified public accountants relating to the Refunded Obligations
(the "Verification Agent"), addressed to the Issuer, Bond Counsel, and the
Underwriters, verifying (I) the arithmetical computations of the adequacy of
the maturing principal and interest on the escrowed securities and uninvested
cash on hand under the Escrow Agreement to pay, when due, the principal of
and interest on the Refunded Obligations, and (ii) the computation of the yield
with respect to such securities and the Bonds;
(I 2) Form of a certificate of the Escrow Agent to the effect that moneys and
escrowed securities have been received and that such moneys and securities
have been deposited in the escrow fund under the Escrow Agreement; and
(13) Such additional legal opinions, certificates, instruments and other
documents as the Representative or counsel to the Underwriters may
reasonably request to evidence the troth 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 Bonds contained in this
Pumhase Contract, or if the obligations of the Underwriters to purchase, to accept delivery of
and to pay for the Bonds shall be terminated for any reason permitted by this Purchase
Contract, this Purchase Contract shall terminate and neither the Underwriters nor the Issuer
F:\WDOX~CLIENTS\OTOO30\OOO{i8\iOO30{168.WPD / 2 12
EXHIBIT
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 Bonds if, between the date of this Purchase Contract and the Closing, the market
price or marketability of the Bonds shall be materially adversely affected, in the reasonable
judgment of the Representative, reasonably exercised, by the occurrence of any of the
following:
(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 Bonds or upon interest
on the Bonds as described in the OfficiaI 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 Bonds, 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 Bonds, 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 govemmentaI
F:tWDOX\CLIENTS\070030\00008\ 10030068 W~D / 2 1 3
F×HIRIT R
authority or any national securities exchange, a general banking moratorium declared
by federal, Stare 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 enfomeability of the pledge of revenues to pay principal of
and interest on the Bonds;
(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 cimumstances 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 Bonds;
(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 Bonds); and
(j) the purchase of and payment for the Bonds by the Underwriters, or the resale
of the Bonds 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,
F:\WDOX\CLIENTS\070030\O0008\i 0030068.WPD / 2 14
EXHIBIT B
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 Bonds, (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; (vi) the fees and expenses of the Verification Agent; and
(vii)any other expenses agreed to by the Issuer to be reasonably considered expenses
of the Issuer which are incident to the 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
m connection with the public offering of the Bonds; and (iii) all other expenses
incurred by them in connection with the public offering of the Bonds, 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 Pumhase Contract may be given by delivering the same to the Issuer, at the address
indicate~ abo. ve, Attention: Mayor (with copies to the City Manager), and any notice or other
commumcat~on 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. HaskelI, 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 Pumhase 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 Bonds pursuant to this Purchase Contract; and (iii) any
termination of this Purchase Contract.
11. Effectiveness. This Purchase Contract shall become effective upon th~
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. Severabillty. 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 jurisdictinns, 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,
F:' WDOX\CLa:'NTS\070030\0000g\ 10030068.WPD / 2 15
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 oft. his Purchase Contract, "business day" means
any day on which the New York Stock Exchange is open for trading.
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:/WDOX\CLIENTS\070030\00008\10030068. WPD / 2 1 6
t: ,tlll:ll'l' R
Very truly yours,
RBC DAIN RAUSCHER INC.
By¸
Authorized Representative
EXECUTION PAGE TO PURCHASE CONTRACT (BONDS)
F:\WDOX\CLIENTS\070030\00008\i 0030068.WPD / 2
EXHIBIT B
ACCEPTED AND AGREED TO THIS
day of April, 2003
CITY OF SOUTHI.AKE, TEXAS
By:
Rick Stacy
Mayor
EXECUTION PAGE TO PURCHASE CONTRACT (BONDS)
F:\ V~DOX\CLIEb.~S\OTOO30\OOOOS\ I OO30068. WPD / 2
Schedule I
A.G. Edwards & Sons, Inc.
Estrada Hinojosa & Company, Inc.
F: WDOX\OLIENTS\070030/00008\I0030068.WPD/2 Schedule I - Page I
~'¥HII~IT R
Schedule II
CITY OF SOUTHL AKE, TEXAS
GENERAL OBLIGATION REFUNDING
AND IMPROVEMENT BONDS, SERIES 2003
MATURITY SCHEDULE
The Bonds shall have the following terms:
February 15
Amount Maturity Rate (%) yield
$105,000 2004 2.000% 1.250%
$340,000 2005 2.000% 1.600%
$345,000 2006 2.500% 1.920%
$360,000 2007 2.500% 2.380%
$370,000 2008 3.000% 2.720%
$380,000 2009 3.250% 3.040%
$400,000 2010 3.500% 3.370%
$410,000 2011 3.500% 3.630%
$435,000 2012 3.650% 3.770%
$445,000 2013 3.800% 3.900%
$365,000 2014 4.000% 4.000%
$385,000 2015 4.000% 4.110%
$50,000 2016 4.100% 4.210%
$50,000 2017 4.200% 4.310%
$55,000 2018 4.300% 4.410%
(Accrued Interest from April I5, 2003 to be added )
REDEMPTION PROVISIONS
The Issuer reserves the right, at its option, to redeem Bonds having stated maturities on and
after February 15, 201 I, 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\O7OO30\OOOO8\IOO3OO6&WPD / 2 Schedule II - Page ]
EXHIBIT "A"
Preliminary Official Statement
dated April 8, 2003
F:\WDOX\CLIENTS\O70030\OOOOS\lOO30068.WPD / 2
Exhibit A
SPECIAL ESCROW AGREEMENT
THE STATE OF TEXAS
COUNTY OF TARRANT
THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as
of April 15, 2003, by and between the City of Southlake, Texas, a duly incorporated municipal
corporation in Tarrant, Texas (the "City") acting by and through the Mayor and City Secretary,
and JPMorgan Chase Bank, Dallas, Texas, a banking association organized and existing under
the laws of the State of New York and authorized to do business in the State of Texas, or its
successors or assigns hereunder (the "Bank"),
WITNESSETH:
WHEREAS, the City Council of the City of Southlake, Texas (the "City") has heretofore
issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal
amount $3,700,000 (collectively, the "Refunded Obligations") more particularly described as
follows:
(1) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1992-A, dated
October 1, 1992, scheduled to mature on February 15 in each of the years 2004
through 2013, and aggregating in principal amount $875,000; and
(2) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 1994, dated
December 1, 1994, scheduled to mature on August 15 in each of the years 2005
through 2015, and aggregating in principal amount $2,825,000;
AND WHEREAS, in accordance with the provisions of V.T.C.A., Government Code,
Chapter 1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an
amount sufficient to provide for the payment of obligations to be refunded, deposit the proceeds
of such refunding bonds with any place of payment for the obligations being refunded, or other
authorized depository, and enter into an escrow or similar agreement with such depository for
the safekeeping, investment, reinvestment, administration and disposition of such deposit, upon
such terms and conditions as the parties may agree, provided such deposits may be invested
only (i) direct noncallabie 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 that mature and/or bear interest payable at such times and in
such amounts as will be sufficient to provide for the scheduled payment of the Refunded
Obligations; and
45302623.2
EXHIBIT C
WHEREAS, in accordance with the provisions of the ordinances authorizing the
Refunded Obligations, the deposits to refund and defease such Refunded Obligations shall be
invested only in direct obligations of the United States of America, including obligations the
principal of and interest on are unconditionally guaranteed by the United States of America
(hereinafter called the "Escrowed Securities"); and
WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and
interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a pad of this Agreement for all purposes; and
WHEREAS, the City on the 15~h day of April, 2003, pursuant to an ordinance (the "Bond
Ordinance") finally passed and adopted by the City Council, authorized the issuance of bonds
known as "City of Southlake, Texas, General Obligation Refunding and Improvement Bonds,
Series 2003" (the "Bonds"), and such Bonds are being issued in part to refund, discharge and
make final payment of the principal of and interest on the Refunded Obligations; and
WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other
available funds of the City, are to be deposited with the Bank and used in part to purchase the
Escrowed Securities listed and identified in Exhibit B attached hereto and incorporated by
reference as a part of this Agreement for all purposes; and
WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Bank in accordance with this
Agreement; and
WHEREAS, the Escrowed Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Obligations and the
accrued interest thereon, as the Same shall become due in accordance with the terms of the
ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A
attached hereto; and
WHEREAS, the City has completed all arrangements for the purchase of the Escrowed
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Bank is a banking association organized and existing under the I~ws of
the State of New York, possessing trust powers and is fully qualified and empowered to enter
into this Agreement and authorized to do business in the State of Texas; and
WHEREAS, in Section '~6 of the Bond Ordinance, the City Council duly approved and
authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action
necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the
provisions thereof, including, without limitation, all actions required by the ordinances
authorizing the Refunded Obligations, the Act, the Bond Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and
to secure the payment of the principal of and the interest on the Refunded Obligations as the
45302623,2 2 EXHIBIT C
same shall become due, the City and the Bank hereby mutually undertake, promise and agree
as follows:
SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of copies of the
ordinances authorizing the issuance of the Refunded Obligations and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of
said documents shall be deemed an incorporation of such provision as a pad hereof in the
same manner and with the same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation/Fundinfl There is hereby created by the City with
the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2003 CITY OF
SOUTHLAKE, TEXAS, REFUNDING BOND ESCROW FUND" (hereinafter called the "Escrow
Fund") for the benefit of the holders of the Refunded Obligations, and, immediately following the
delivery of the Bonds, the City agrees and covenants to cause to be deposited with the Bank the
following amounts:
$3,032,946.54 For the purchase of Escrowed Securities identified in Exhibit B to
be held for the account of the Escrow Fund
$ 888,552.87 For deposit in the Escrow Fund as a beginning cash balance.
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and
credited to the Escrow Fund for application and disbursement for the purposes and in the
manner provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warrant,/. The City hereby represents that the
cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the
credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on
the Refunded Obligations as the same shall become due and payable, and such Refunded
Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at the
times and in the amounts set forth and identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of a copy of the Bond Ordinance
which also provides for the redemption of the (i) Series 1992-A Refunded Obligations, on May
22, 2003 at the redemption price of par plus accrued interest thereon, and (ii) Series 1994
Refunded Obligations on August 15, 2004; all in accordance with the provisions of the notice
requirements applicable to said Refunded Obligations and the notice requirements contained in
the respective ordinances authorizing such Refunded Obligations.
The Bank agrees to cause a notice of redemption pertaining to the Refunded Obligations
to be sent to the registered owners thereof appearing on the registration books at least thirty
(30) days prior to the respective redemption date therefor.
SECTION 4: Pledqe of Escrow. The Bank agrees that all cash and Escrowed
Securities, together with any income or interest earned thereon, held in the Escrow Fund shall
be and is hereby irrevocably pledged to the payment of the principal of and interest on the
Refunded Obligations which will mature and become due on and after the date of this
Agreement, and such funds initially deposited and to be received from maturing principal and
interest on the Escrowed Securities in the Escrow Fund shall be applied solely in accordance
with the provisions of this Agreement.
45302623.2 3 EXHIBIT C
SECTION 5: Escrow Insufficiency - City Warranty to Cum. If, for any reason, the funds
on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A
attached hereto, as the same becomes due and payable, the City shall make timely deposits to
the Escrow Fund, from lawfully available funds, of additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be immediately given by the Bank
to the City by the fastest means possible, but the Bank shall in no manner be responsible for the
City's failure to make such deposits.
SECTION 6: Escrow Fund Secudties/Seqreqation. The Bank shall hold said Escrowed
Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for
the benefit of the holders of the Refunded Obligations, wholly segregated from other moneys
and securities on deposit with the Bank; shall never commingle said Escrowed Securities and
moneys with other moneys or securities of the Bank; and shall hold and dispose of the assets
therein only as set forth herein. Nothing herein contained shall be construed as requiring the
Bank to keep the identical moneys, or any part thereof, in said Escrow Fund, if it is impractical,
but moneys of an equal amount, except to the extent such are represented by the Escrowed
Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as escrow
agent; and a special account evidencing such facts shall at all times be maintained on the books
of the Bank.
SECTION 7: Escrow Fund Collections/Payments, The Bank shall from time to time
collect and receive the principal of and interest on the Escrowed Securities as they respectively
mature and become due and credit the same to the Escrow Fund. On or before each principal
and/or interest payment date or redemption date, as the case may be, for the Refunded
Obligations shown in Exhibit A attached hereto, the Bank, without further direction from anyone,
including the City, shall cause to be withdrawn from the Escrow Fund the amount required to
pay the accrued interest on the Refunded Obligations due and payable on said payment date
and the principal of the Refunded Obligations due and payable on said payment date or
redemption date, as the case may be, and the amount withdrawn from the Escrow Fund shall be
immediately transmitted and deposited with the paying agent for the Refunded Obligations to be
paid with such amount. The paying agent for the Refunded Obligations is the Bank.
If any Refunded Obligation thereon shall not be presented for payment when the
principal thereof or interest thereon shall have become due, and if cash shall at such times be
held by the Bank in trust for that purpose sufficient and available to pay the principal of such
Refunded Obligation and interest thereon it shall be the duty of the Bank to hold said cash
without liability to the holder of such Refunded Obligation for interest thereon after such maturity
or redemption date, in trust for the benefit of the holder of such Refunded Obligation, who shall
thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on
or with respect to said Refunded ~)bligation, including for any claim for the payment thereof and
interest thereon. All cash required by the provisions hereof to be set aside or held in trust for
the payment of the Refunded Obligations, including interest thereon, shall be applied to and
used solely for the payment of the Refunded Obligations and interest thereon with respect to
which such cash has been so set aside in trust.
Subject to the provisions of the last sentence of Section 25 hereof, cash held by the
Bank in trust for the payment and discharge of any of the Refunded Obligations and interest
thereon which remains unclaimed for a period of three (3) years after the stated maturity date or
redemption date of such Refunded Obligations shall be returned to the City. Notwithstanding
the above and foregoing, any remittance of funds from the Bank to the City shall be subject to
any applicable unclaimed property laws of the State of Texas.
45302623.2
4 EXHIBIT C
SECTION 8: Disposal of Refunded Obliqation.~ All Refunded Obligations cancelled on
account of payment by the Bank shall be disposed of or otherwise destroyed by the Bank, and
an appropriate certificate of destruction furnished the City.
SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be
irrevocable and the holders of the Refunded Obligations shall have an express lien on all
moneys and Escrowed Securities in the Escrow Fund until paid out, used and applied in
accordance with this Agreement.
Unless disbursed in payment of the Refunded Obligations, all funds and the Escrowed
Securities received by the Bank for the account of the City hereunder shall be and remain the
property of the Escrow Fund and the City and the owners of the Refunded Obligations shall be
entitled to a preferred claim and shall have a first lien upon such funds and Escrowed Securities
enjoyed by a trust beneficiary. The funds and Escrowed Securities received by the Bank under
this Agreement shall not be considered as a banking deposit by the City and the Bank and the
City shall have no right or title with respect thereto, except as otherwise provided herein. Such
funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City.
SECTION 10: Absence of Bank Claim/Lien on Escrow Fund The Bank shall have no
lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for
payment of services rendered hereunder, services rendered as paying agentJregistrar for the
Refunded Obligations, or for any costs or expenses incurred hereunder and reimbursable from
the City.
SECTION 11: Substitution of Investments/Reinvestmenfs. The Bank shall be authorized
to accept initially and temporarily cash andfor substituted Escrowed Securities pending the
delivery of the Escrowed Securities identified in the Exhibit B attached hereto, or shall be
authorized to redeem the Escrowed Securities and reinvest the proceeds thereof, together with
other moneys held in the Escrow Fund in noncallable direct obligations of the United States of
America provided such early redemption and reinvestment of proceeds does not change the
repayment schedule of the Refunded Obligations appearing in Exhibit A and the Bank receives
the following:
(1) an opinion by an independent certified public accountant to the effect
that (i) the initial and/or temporary substitution of cash and/or securities for one or
more of the Escrowed Securities identified in Exhibit B pending the receipt and _
delivery thereof to the Escrow Agent or (ii) the redemption of one or more of the
Escrowed Securities and the reinvestment of such funds in one or more
substituted securities (which shall be noncallable direct obligations of the United
States of America), together with the interest thereon and other available moneys
then held in the Escrow Fund, will, in either case, be sufficient, without
reinvestment, to pay, as the same become due in accordance with Exhibit A, the
principal of, and interest on, the Refunded Obligations which have not previously
been paid, and
(2) with respect to an early redemption of Escrowed Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Obligations to be included in the gross
income for federal income tax purposes, under the Code and related regulations
as in effect on the date of such investment, or otherwise make the interest on the
45302623,2 5 EXHIBIT C
Bonds or the Refunded Obligations subject to Federal income taxation and (b)
such reinvestment complies with the Constitution and laws of the State of Texas
and with all relevant documents relating to the issuance of the Refunded
Obligations and the Bonds.
SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as
provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed
Securities listed in Exhibit B and neither the City nor the Bank shall reinvest any moneys
deposited in the Escrow Fund except as specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through redemption or cancellation of the
Refunded Obligations there exists or will exist excesses of interest on or maturing principal of
the Escrowed Securities in excess of the amounts necessary hereunder for the Refunded
Obligations, the Bank may transfer such excess amounts to or on the order of the City, provided
that the City delivers to the Bank the following:
(1) an opinion by an independent certified public accountant that after
the transfer of such excess, the principal amount of securities in the Escrow
Fund, together with the interest thereon, and other available monies then held in
the Escrow Fund, will be sufficient to pay, as the same become due and without
reinvestment, in accordance with Exhibit A, the principal of, and interest on, the
Refunded Obligations which have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transfer will not cause interest on the Bonds or
the Refunded Obligations to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded
Obligations subject to Federal income taxation, and (b) such transfer complies
with the Constitution and laws of the State of Texas and with all relevant
documents relating to the issuance of the Refunded Obligations or the Bonds.
SECTION 14: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Escrowed Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Bank's Liability for Investmentn. The Bank shall not be liable
or responsible for any loss resulting from any investment made in the Escrowed Securities or
substitute securities as provided in Section 'l 1 hereof.
SECTION 16: Bank's Compensation - Escrow Administration/Settlement of Payinq
~. The City agrees to pay the Bank for the performance of services hereunder
and as reimbursement for anticipated expenses to be incurred hereunder the amount of
$2,825.00 and, except for reimbursement of costs and expenses incurred by the Bank pursuant
to Sections 3, 11 and 19 hereof, the Bank hereby agrees said amount is full and complete
payment for the administration of this Agreement.
The City also agrees to deposit with the Bank on the effective date of this Agreement,
the sum of $!,200.00, which represents the total charge due the Bank as paying agent for
45302623.2 6 EXHIBIT C
the Refunded Obligations and the Bank acknowledges and agrees that above amount is and
represents the total amount of compensation due the Bank for services rendered as paying
agent for the Refunded Obligations. The Bank hereby agrees to pay, assume and be fully
responsible for any additional charges that it may incur in the performance of its duties and
responsibilities as paying agent for the Refunded Obligations.
SECTION 17: Escrow Agent's Duties / Responsibilities/Liability. The Bank shall not be
responsible for any recital herein, except with respect to its organization and its powers and
authority. As to the existence or nonexistence of any fact relating to the City or as to the
sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank shall
be entitled to rely upon a certificate signed on behalf of the City by its City Secretary or Mayor
and/or City Secretary of the City as sufficient evidence of the facts therein contained. The Bank
may accept a certificate of the City Secretary under the City's seal, to the effect that a resolution
or other instrument in the form therein set forth has been adopted by the City Council of the
City, as conclusive evidence that such resolution or other instrument has been duly adopted and
is in full force and effect.
The duties and obligations of the Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon any
certificate or opinion furnished to the Bank, conforming to the requirements of this Agreement;
but notwithstanding any provision of this Agreement to the contrary, in the case of any such
certificate or opinion or any evidence which by any provision hereof is specifically required to be
furnished to the Bank, the Bank shall be under a duty to examine the same to determine
whether it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent facts.
The Bank shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the holders of not less than a majority in
aggregate principal amount of all said Refunded Obligations at the time outstanding relating to
the time, method and place of conducting any proceeding for any remedy available to the Bank
not in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Obligations have
concurred in any such direction, Refunded Obligations owned by any obligor upon the Refunded
Obligations, or by any person directly or indirectly controlling or controlled by or under direct or
indirect common control with such obligor, shall be disreqarded, except that for the purposes of
determining whether the Bank shall be protected in relying on any such direction only Refunded
Obligations which the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and
include the Chairman of the Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons who at the time shall be officers,
45302623.2 7 EXHIBIT C
respectively, or to whom any corporate trust matter is referred, because of his knowledge of and
familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 18: Limitation Re: Bank's DutieslResponsibilities/Liabilities to Third Partie,,.
The Bank shall not be responsible or liable to any person in any manner whatever for the
sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect
to the City, or for the identity or authority of any person making or executing this Agreement for
and on behalf of the City. The Bank is authorized by the City to rely upon the representations of
the City with respect to this Agreement and the deposits made pursuant hereto and as to the
City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in
any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the
City and the holders of the Refunded Obligations. Neither the City nor the Bank shall assign or
attempt to assign or transfer any interest hereunder or any portion of any such interest. Any
such assignment or attempted assignment shall be in direct conflict with this Agreement and be
without effect.
SECTION 19: Interpleader. In the event conflicting demands or notices are made upon
the Bank growing out ~f or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(1) Withhold and. stop all further proceedings in, and performance of,
this Agreement with respect to the issue in question and of all instruCtions
received hereunder in regard to such issue; and
(2) File a suit in interpleader and obtain an order from a court of
appropriate jurisdiction requiring all persons involved to interplead and litigate in
such court their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in connection with this Section, the
City, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result
thereof. The obligations of the Bank under this Agreement shall be performable at the corporate
office of the Bank in the City of Dallas, Texas.
The Bank may advise with legal counsel in the event of any dispute or question
regarding the construction of any of the provisions hereof or its duties hereunder, and in the
absence of negligence or bad faith on the part of the Bank, no liability shall be incurred by the
Bank for any action taken pursuant to this Section and the Bank shall be fully protected in acting
in accordance with the opinion and instructions of legal counsel that is knowledgeable and has
expertise in the field of law addressed in any such legal opinion or with respect to the
instructions given.
SECTION 20: .A. ccountinq - Annual Report. Promptly after August 15, 2004 or the date
final payment is made on the Refunded Obligations, the Bank shall forward to the City, to the
attention of the Director of Finance, or other designated official of the City, a final report
pertaining to the Escrow Fund, including all deposits and disbursement of funds made from
such fund.
45302623.2 8 EXHIBIT C
SECTION 21: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
CITY OF SOUTHLAKE, TEXAS
1400 Main Street, Suite 440
Southlake, Texas 76092
Attention: Director of Finance
JPMORGAN CHASE BANK
2001 Bryan Street, 10~ Floor
Dallas, Texas 75201
Attention: Issuer Administrative Services
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the
Bank is authorized by law to close, then the performance thereof, including the payment of
principal of and interest on the Refunded Obligations, need not be made on such date but may
be performed or paid, as the case may be, on the next succeeding business day of the Bank
with the same force and effect as if made on the date of performance or payment and with
respect to a payment, no interest shall accrue for the period after such date.
SECTION23: Warranty of Parties Re: Power to Execute and Deliver Escrow
Aqreement. The City covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in any and every said
Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Obligations shall have been modified as provided in this Agreement.
The City covenants that it is duly authorized under the Constitution and laws of the State of
Texas to execute and deliver this Agreement, that all actions on its part for the payment of said
Refunded Obligations as provided herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded Obligations and coupons in the hands of
the holders and owners thereof are and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 24: Severability. If any one or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Agreement. In the event
any covenant or agreement contained in this Agreement is declared to be severable from the
45302623.2 9 EXHIBIT C
other provisions of this Agreement, written notice of such event shall immediately be given to
each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch
Investors Service) which has rated the Refunded Obligations on the basis of this Agreement.
SECTION 25: Termination. This Agreement shall terminate when the Refunded
Obligations, including interest due thereon, have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Obligations are not presented for payment
when due and payable, the nonpayment thereof shall not prevent the termination of this
Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued
interest thereon shall upon termination of this Agreement be held by the Bank for such purpose
in accordance with Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow
Fund at termination and not needed for the payment of the principal of or interest on any of the
Refunded Obligations shall be paid or transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Bank by this Agreement.
SECTION 27: Successors/Assiqns. (a) Should the Bank not be able to legally
serve or perform the duties and obligations under this Agreement, or should the Bank be
declared to be insolvent or closed for any reason by federal or state regulatory authorities or a
court of competent jurisdiction, the City, upon being notified or discovering the Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Obligations, to such successor and (ii) assign all rights, duties and obligations under
this Agreement to such successor. If the City should fail to appoint such a successor within
ninety (90) days from the date the City discovers, or is notified of, the event or circumstance
causing the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of
the Refunded Obligations, may apply to a court of competent jurisdiction to appoint a successor
or assigns of the Bank and such court, upon determining the Bank is unable to continue to
serve, shall appoint a successor to serve under this Agreement and the amount of
compensation, if any, to be paid to such successor for the remainder of the term of this
Agreement for services to be rendered both for administering the Escrow Fund and for paying
agent duties and responsibilities for the Refunded Obligations.
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this Agreement upon notifying the City in writing of its intention to resign
and requesting the City to appoint a successor. No such resignation shall take effect until a
successor has been appointed by the City and such successor has accepted such appointment
and agreed to perform all duties and obligations hereunder for a total compensation equal to the
unearned proportional amount paid the Bank under Section 16 hereof for the administration of
this Agreement and the unearned proportional amount of the paying agents fees for the
Refunded Obligations due the Bank.
,/~r~y successor to the Bank shall be a bank, trust company or other financial institution
that is duly qualified under applicable law (the Act or other appropriate statute) to serve as
escrow agent hereunder and authorized and empowered to perform the duties and obligations
contemplated by this Agreement and organized and doing business under the laws of the
United States or the State of Texas, having its principal office and place of business in the State
of Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the
supervision or examination by Federal or State authority.
45302623.2 1 0 EXHIBIT C
Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City
and the Bank, or its successor or assigns, an instrument accepting such appointment
hereunder, and the Bank shall execute and deliver an instrument transferring to such successor,
subject to the terms of this Agreement, all the rights, powers and trusts created and established
and to be performed under this Agreement. Upon the request of any such successor Bank, the
City shall execute any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor Bank all such rights, powers and duties. The term "Bank" as used
herein shall be the Bank and its legal assigns and successor hereunder.
SECTION 28: Escrow Aqreement - Amendment/Modification. This Agreement shall be
binding upon the City'nd the Bank and their respective successors and legal representatives
and shall inure solely to the benefit of the holders of the Refunded Obligations, the City, the
Bank and their respective successors and legal representatives. Furthermore, no alteration,
amendment or modification of any provision of this Agreement shall (1) alter the firm financial
arrangements made for the payment of the Refunded Obligations or (2) be effective unless (i)
prior written consent of such alteration, amendment or modification shall have been obtained
from the holders of all Refunded Obligations outstanding at the time of such alteration,
amendment or modification and (ii) such alteration, amendment or modification is in writing and
signed by the parties hereto; provided, however, the City and the Bank may, without the consent
of the holders of the Refunded Obligations, amend or modify the terms and provisions of this
Agreement to cure in a manner not adverse to the holders of the Refunded Obligations any
ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any
amendment or modification to this Agreement, prior written notice of such amendment or
proposed modification, together with the legal documents amending or modifying this
Agreement, shall be furnished to each national rating service (Standard & Poor's Corporation,
Moody's Investors Service or Fitch Investors Service) which has rated the Refunded Obligations
on the basis of this Agreement, prior to such amendment or modification being executed.
SECTION 29: Effect of Headinqs The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 30: Executed Counterparts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
SECTION 31: Governinq Law. This Agreement shall be governed by the laws-of the
State of Texas and sh;;il be effective as of the date of the delivery of the Bonds.
45302623.2
11 EXHIBIT C
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
CITY OF SOUTHLAKE, TEXAS
ATTEST:
Mayor
City Secretary
(City Seal)
JPMORGAN CHASE BANK,
as Escrow Agent
ATTEST:
Title:
Authorized Signer
(Bank Seal)
45302623.2 I2 EXHIBIT C
EXHIBIT D
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION
SERIES 1992-A
DATED OCTOBER 1, 1992
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after February 15, 2004 and aggregating in principal amount $875,000 have
been called for redemption on May 22, 2003 at the redemption price of par and accrued
interest to the date of redemption, such certificates of obligation being identified as follows:
Year of Principal
Maturity Amount
2004 $65,000
2005 70,000
2006 75,000
2007 80,000
2008 85,000
2OO9 90,000
2010 95,000
2011 100,000
2012 105,000
2013 110,000
CUSIP Number
ALL SUCH CERTIFICATES shall become due and payable on May 22, 2003, and
interest thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said obligations shall be paid to the registered owners of the obligations
only upon presentation and surrender of such certificates to JPMorgan Chase Bank, Dallas,
Texas (successor paying agent/registrar to Ameritrust Texas, National Association) at its
designated offices at the following addresses:
First Class/
Registered/Certified
JPMorgan Chase Bank
Institutional Trust Services
P. O. Box 2320
Dallas, Texas 75221-2320
Express Delivery/Courier
JPMorgan Chase Bank
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
By Hand Only
JPMorgan Chase Bank
Room 234-North Building
Institutional Trust Securities Window
55 Water Street
Charlotte, North Carolina 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said certificates and pursuant to an ordinance by the City Council of the City
of Southlake, Texas.
45300240.1
JPMORGAN CHASE BANK
Address: 2001 Bryan Street, 10th Floor
Dallas, Texas 75201
EXHIBIT E
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION
SERIES 1994
DATED DECEMBER 1, 1994
NOTICE IS HEREBY GIVEN that all certificates of obligation of the above series
maturing on and after August 15, 2005 and aggregating in principal amount $2,825,000 have
been called for redemption on August 15, 2004 at the redemption price of par and accrued
interest to the date of redemption, such cedificates of obligation being identified as follows:
Year of Principal
Maturity Amount CUSIP Number
2005 $180,000
2006 190,000
2007 205,000
2008 220,000
2009 235,000
2010 250,000
2011 265,000
2012 290,000
2013 305,000
2014 330,000
2015 355,000
ALL SUCH CERTIFICATES shall become due and payable on August 15, 2004, and
interest thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said obligations shall be paid to the registered owners of the obligations
only upon presentation and surrender of such certificates to JPMorgan Chase Bank, Dallas,
Texas (successor paying agent/registrar to Texas Commerce Bank, National Association) at
its designated offices at the following addresses:
First Class/
Registered/Certified
JPMorgan Chase Bank
Institutional Trust Services
P. O. Box 2320
Dallas, Texas 75221-2320
Express Delivery/Courier
JPMorgan Chase Bank
Institutional Trust Services
2001 Bryan Street, 9th Floor
Dallas, Texas 75201
By Hand Only
JPMorgan Chase Bank
Room 234-North Building
Institutional Trust Securities Window
55 Water Street
Charlotte, North Carolina 10041
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said certificates and pursuant to an ordinance by the City Council of the City
of Southlake, Texas.
45300240.1
JPMORGAN CHASE BANK
Address: 2001 Bryan Street, 10th Floor
Dallas, Texas 75201
Exhibit F
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 31 of this Ordinance.
A~nnual Financial Statements and Operating Da;4
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.
A_cccounting Principle,,-
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.
45300240.1