Item 6A - MemoCITY OF
SOUTHLAKE
Item 6A
MEMORANDUM
July 30, 2024
To: Alison Ortowski, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Ordinance No. 1285, Authorizing the issuance of Tax and
Waterworks and Sewer System Revenue Certificates of Obligation,
Series 2024
Action
Requested: Approval of Ordinance No. 1285
Background
Information: On May 20th the Council approved Resolution 24-019. This
authorized the publication of a notice in the newspaper of the
city's intent to issue certificates of obligation. The certificates
are issued and approved by the adoption of an ordinance.
Approval of Ordinance No. 1285 will set in motion the legal
requirements to obtain the proceeds.
After approval, the Texas Attorney General's Office must
review the legal documents. The city would receive funding in
late August or early September. The proceeds from the bonds
will be used to construct water and wastewater capital projects
in accordance with the Capital Improvement Plan approved
on February 20t"
All other projects included in the approved FY 2024 Capital
Improvements Program will be funded with cash.
Financial
Considerations: The debt will be repaid through the city's utility fund.
Strategic Link: F2 Investing to provide and maintain high quality public
assets.
Citizen Input/
Board Review: Public hearing scheduled for August 6, 2024.
Legal Review: The law firm Norton Rose Fulbright serves as the City's bond
counsel, and as such has prepared the Ordinance.
Honorable Mayor and City Council
Page 2 of 2
Alternatives: In the absence of issuing the certificates, capital projects
would be funded on a pay-as-you-go basis. Budgets and the
timing of projects would be prioritized based on the amount of
revenue projected by fiscal year.
Supporting
Documents: Ordinance No. 1285
Staff
Recommendation: Approval of Ordinance No. 1285
ORDINANCE NO. 1285
AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2024"; specifying
the terms and features of said certificates; providing for the payment of said
certificates of obligation by the levy of an ad valorem tax upon all taxable
property within the City and a limited pledge of the net revenues from the
operation of the City's Waterworks and Sewer System; and resolving other
matters incident and relating to the issuance, payment, security, sale and
delivery of said certificates of obligation, including the approval and
execution of a Paying Agent/Registrar Agreement and the approval and
distribution of an Official Statement; and providing an effective date.
WHEREAS, notice of the intention of the City of Southlake, Texas (the "City") to issue
certificates of obligation in the maximum principal amount of $11,250,000 for the purpose of
paying contractual obligations to be incurred for (i) constructing, improving, extending and
equipping the City's combined waterworks and sewer system, including the purchase of land and
rights -of -way therefor; (ii) designing, constructing and equipping a City administrative facility
supporting various City divisions, including the utility billing/customer service, streets and
drainage, water, wastewater, environmental services and traffic divisions and (iii) professional
services rendered in connection therewith, such certificates to be payable from ad valorem taxes
and a limited pledge of the net revenues of the City's combined Waterworks and Sewer System
has been (a) duly published in the Fort Worth Star Telegram on June 14, 2024 and June 21, 2024,
the date the first publication of such notice being not less than forty-six (46) days prior to the
tentative date stated therein for the adoption of the ordinance authorizing the issuance of such
certificates and (b) duly published continuously on the City's website for at least forty-five (45)
days prior to the tentative date stated therein for the adoption of the ordinance authorizing the
issuance of such certificates; and
WHEREAS, no petition protesting the issuance of the certificates of obligation and bearing
valid petition signatures of at least five -percent (5%) of the qualified electors of the City, has been
presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to
the date of the passage of this ordinance; and
WHEREAS, the City hereby finds and determines that the certificates of obligation
described in such notice should be issued and sold at this time in the amount and manner as
hereinafter provided; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS:
SECTION 1: Authorization, Designation, Principal Amount, Purpose. Certificates of
obligation of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $ to be designated and bear the title "CITY OF SOUTHLAKE, TEXAS, TAX AND
WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2024" (hereinafter referred to as the "Certificates"), for the purpose of
paying contractual obligations to be incurred for (i) constructing, improving, extending and
equipping the City's combined waterworks and sewer system, including the purchase of land and
rights -of -way therefor; (ii) designing, constructing and equipping a City administrative facility
supporting various City divisions, including the utility billing/customer service, streets and
drainage, water, wastewater, environmental services and traffic divisions and (iii) professional
services rendered in connection therewith, pursuant to authority conferred by and in conformity
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with the Constitution and laws of the State of Texas, including Texas Local Government Code,
Subchapter C of Chapter 271, as amended.
SECTION 2: Fully Reaistered Obligations — Authorized Denominations — Stated
Maturities — Date. The Certificates are issuable in fully registered form only; shall be dated August
1, 2024 (the "Certificate Date"), and shall be in denominations of $5,000 or any integral multiple
thereof (within a Stated Maturity) and the Certificates shall become due and payable on
February 15 in each of the years and in principal amounts (the "Stated Maturities") and bear
interest at the per annum rate(s) in accordance with the following schedule:
Year of Principal Interest
Stated Maturitv Amount ($) Rate M)
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
The Certificates shall bear interest on the unpaid principal amounts from the initial delivery
of the Certificates at the rate per annum shown above in this Section (calculated on the basis of
a 360-day year of twelve 30-day months), and such interest shall be payable on February 15 and
August 15 of each year, commencing February 15, 2025, until maturity or prior redemption.
SECTION 3: Terms of Pavment - Pavina Aaent/Reaistrar. The principal of, premium, if
any, and the interest on the Certificates, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Certificates (hereinafter
called the "Holders") appearing on the Security Register (defined below) maintained by the Paying
Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of
America, which at the time of payment is legal tender for the payment of public and private debts,
and shall be without exchange or collection charges to the Holders.
The selection and appointment of The Bank of New York Mellon Trust Company, N.A.,
Houston, Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and
confirmed. Books and records relating to the registration, payment, transfer and exchange of the
Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the City
by the Paying Agent/Registrar, as provided herein and in accordance with the terms and
provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City
may prescribe. The Mayor or Mayor Pro Tern and City Secretary or Deputy City Secretary are
authorized to execute and deliver such Paying Agent/Registrar Agreement in connection with the
delivery of the Certificates. The City covenants to maintain and provide a Paying Agent/Registrar
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at all times until the Certificates are paid and discharged, and any successor Paying
Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and
authorized to serve in such capacity and perform the duties and services of Paying
Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the City
agrees to promptly cause a written notice thereof to be sent to each Holder by United States mail,
first class postage prepaid, which notice shall also give the address of the new Paying
Agent/Registrar.
Principal of and premium, if any, on the Certificates shall be payable at the Stated
Maturities or the redemption thereof only upon presentation and surrender of the Certificates to
the Paying Agent/Registrar at its designated offices initially in Pittsburgh, Pennslyvania; or, with
respect to a successor Paying Agent/Registrar, at the designated offices of such successor (the
"Designated Payment/Transfer Office"). Interest on the Certificates shall be paid to the Holders
whose names appear in the Security Register at the close of business on the Record Date (the
last business day of the month next preceding each interest payment date) and shall be paid by
the Paying Agent/Registrar (i) by check sent United States mail, first class postage prepaid, to
the address of the Holder recorded in the Security Register or (ii) by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
Holder. If the date for the payment of the principal of or interest on the Certificates shall be a
Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by
law or executive order to close, then the date for such payment shall be the next succeeding day
which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made
on the original date payment was due.
In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be 15 days after the Special Record Date) shall
be sent at least five (5) business days prior to the Special Record Date by United States mail, first
class postage prepaid, to the address of each Holder appearing on the Security Register at the
close of business on the last business day next preceding the date of mailing of such notice.
SECTION 4: Redemption.
(a) Optional Redemption. The Certificates having Stated Maturities on and after
February 15, 20 shall be subject to redemption prior to maturity, at the option of the City, in
whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a
Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 20 or on any date
thereafter at the redemption price of par plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option. At least forty-five (45) days prior to an optional
redemption date for the Certificates (unless a shorter notification period shall be satisfactory to
the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date
of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall
be entered in the minutes of the governing body of the City.
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(c) JMandatory Redemption. The Certificates having a Stated Maturity of February
15, 20 (the "Term Certificates") shall be subject to mandatory redemption in part prior to
maturity at the redemption price of par and accrued interest to the date of redemption on the
respective dates and in principal amounts as follows:
Principal
Redemption Date Amount ($)
February 15, 20_ ,000
February 15, 20_ (maturity) ,000
At least forty-five (45) days prior to the mandatory redemption date for the Term
Certificates, the Paying Agent/Registrar shall select by lot the numbers of the Term Certificates
to be redeemed on the next following February 15 from moneys set aside for that purpose in the
Certificate Fund (as hereinafter defined). Any Term Certificate not selected for prior redemption
shall be paid on the date of its Stated Maturity.
The principal amount of the Term Certificates required to be redeemed on a mandatory
redemption date may be reduced, at the option of the City, by the principal amount of Term
Certificates which, at least fifty (50) days prior to the mandatory redemption date, (1) shall have
been acquired by the City at a price not exceeding the principal amount of such Term Certificates
plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar
for cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions
set forth in paragraph (a) of this Section and not theretofore credited against a mandatory
redemption requirement.]
(d) Selection of Certificates for Redemption. If less than all Outstanding Certificates
of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar
shall treat such Certificates as representing the number of Certificates Outstanding which is
obtained by dividing the principal amount of such Certificates by $5,000 and shall select the
Certificates to be redeemed within such Stated Maturity by lot.
(e) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for
the Certificates, a notice of redemption shall be sent by United States mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a Certificate to be
redeemed in whole or in part at the address of the Holder appearing on the Security Register 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 or not received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Certificates,
(ii) identify the Certificates to be redeemed and, in the case of a portion of the principal amount to
be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Certificates, or the
principal amount thereof to be redeemed, shall be made at Designated Payment Transfer Office
of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a
Certificate is subject by its terms to prior redemption and has been called for redemption and
201954024.2/1001303467 4
notice of redemption thereof has been duly given as hereinabove provided, such Certificate (or
the principal amount thereof to be redeemed) shall become due and payable and interest thereon
shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for
the payment of such Certificate (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.
(f) Conditional Notice of Redemption. With respect to any optional redemption of the
Certificates, unless moneys sufficient to pay the principal of and premium, if any, and interest on
the Certificates to be redeemed shall have been received by the Paying Agent/Registrar prior to
the giving of such notice of redemption, such notice may, at the option of the City, state that said
redemption is conditional upon the receipt of such moneys by the Paying Agent/Registrar on or
prior to the date fixed for such redemption, or upon the satisfaction of any prerequisites set forth
in such notice of redemption; and, if sufficient moneys are not received, such notice shall be of
no force and effect, the City shall not redeem such Certificates and the Paying Agent/Registrar
shall give notice, in the manner in which the notice of redemption was given, to the effect that the
Certificates have not been redeemed.
SECTION 5: Registration - Transfer - Exchange of Certificates - Predecessor
Certificates. The Paying Agent/Registrar shall obtain, record, and maintain in the Security
Register the name and address of each and every owner of the Certificates issued under and
pursuant to the provisions of this Ordinance, or, if appropriate, the nominee thereof. Any
Certificate may be transferred or exchanged for Certificates of other authorized denominations by
the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the
Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Certificate (other than the Initial Certificate(s) authorized in Section
8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar,
the Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of authorized denominations and having the same
Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates
surrendered for transfer.
At the option of the Holder, Certificates (other than the Initial Certificate(s) authorized in
Section 8 hereof) may be exchanged for other Certificates of authorized denominations and
having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal
amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be
exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever
any Certificates are surrendered for exchange, the Paying Agent/Registrar shall register and
deliver new Certificates to the Holder requesting the exchange.
All Certificates issued in any transfer or exchange of Certificates shall be delivered to the
Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by
United States mail, first class, postage prepaid to the Holders, and, upon the registration and
delivery thereof, the same shall be valid obligations of the City, evidencing the same obligation to
pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in
such transfer or exchange.
201954024.2/1001303467 5
All transfers or exchanges of Certificates pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Certificates cancelled by reason of an exchange or transfer pursuant to the provisions
hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the
case may be, of the same obligation to pay evidenced by the new Certificate or Certificates
registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor
Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for which a
replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the
provisions of Section 20 hereof and such new replacement Certificate shall be deemed to
evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an
assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of
the date fixed for redemption of such Certificate; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Certificate called for redemption in part.
SECTION 6: Book-Entrv-Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange
of the Certificates, the City hereby approves and authorizes the use of "Book -Entry -Only"
securities clearance, settlement and transfer system provided by The Depository Trust Company
(DTC), a limited purpose trust company organized under the laws of the State of New York, in
accordance with the operational arrangements referenced in the Blanket Issuer Letter of
Representations, by and between the City and DTC (the "Depository Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be
deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants").
While the Certificates are held by DTC under the Depository Agreement, the Holder of the
Certificates on the Security Register for all purposes, including payment and notices, shall be
Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or
owner of each Certificate (the "Beneficial Owners") being recorded in the records of DTC and
DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book -entry clearance and settlement of securities
transactions in general or the City decides to discontinue use of the system of book -entry transfers
through DTC, the City covenants and agrees with the Holders of the Certificates to cause
Certificates to be printed in definitive form and provide for the Certificates to be issued and
delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the
Certificates in definitive form shall be assigned, transferred and exchanged on the Security
Register maintained by the Paying Agent/Registrar and payment of such Certificates shall be
made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Registration. The Certificates shall be executed on behalf of
the City by the Mayor or Mayor Pro Tern under its seal reproduced or impressed thereon and
countersigned by the City Secretary or Deputy City Secretary. The signature of said officers and
the seal of the City on the Certificates may be manual or facsimile. Certificates bearing the
201954024.2/1001303467 6
manual or facsimile signatures of individuals who are or were the proper officers of the City on
the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding
that one or more of the individuals executing the same shall cease to be such officer at the time
of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered
in subsequent exchanges and transfers, all as authorized and provided in Texas Government
Code, Chapter 1201, as amended.
No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Certificate either a certificate of
registration substantially in the form provided in Section 9C, executed manually or by facsimile 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, executed manually or
by facsimile by an authorized officer, employee or representative of the Paying Agent/Registrar,
and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly certified, registered and delivered.
SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially
issued either (i) as a single fully registered certificate in the total principal amount stated in Section
1 hereof with principal installments to become due and payable as provided in Section 2 hereof
and numbered T-1, or (ii) as multiple fully registered certificates, being one certificate for each
year of maturity in the applicable principal amount and denomination and to be numbered
consecutively from T-1 and upward (hereinafter called the "Initial Certificate(s)") and, in either
case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the
designee thereof. The Initial Certificate(s) shall be the Certificates submitted to the Office of the
Attorney General of the State of Texas for approval, certified and registered by the Office of the
Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any
time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to written
instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial
Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized
denominations, Stated Maturities, principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to
and in accordance with such written instructions from the initial purchaser(s), or the designee
thereof, and such other information and documentation as the Paying Agent/Registrar may
reasonably require.
SECTION 9: Forms. A. Forms Generallv. The Certificates, the Registration Certificate
of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
Agent/Registrar, and the form of Assignment to be printed on each of the Certificates, shall be
substantially in the forms set forth in this Section with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance and may have
such letters, numbers, or other marks of identification (including identifying numbers and letters
of the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends in the event the
Certificates, or any maturities thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be established by the City or
determined by the officers executing such Certificates as evidenced by their execution. Any
portion of the text of any Certificate may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the certificate.
201954024.2/1001303467 7
The definitive Certificates and the Initial Certificate(s) shall be printed, lithographed, or
engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as
determined by the officers executing such Certificates as evidenced by their execution.
B. Form of Definitive Certificates.
REGISTERED
NO.
REGISTERED
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2024
Certificate Date: Interest Rate: Stated Maturity: CUSIP NO:
August 1, 2024 % February 15, 20_
Registered Owner:
Principal Amount: DOLLARS
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, on the Stated Maturity date specified above, the Principal
Amount hereinabove stated (or so much thereof as shall not have been paid upon prior
redemption) and to pay interest on the unpaid principal amount hereof from the interest payment
date next preceding the "Registration Date" of this Certificate appearing below (unless this
Certificate bears a "Registration Date" as of an interest payment date, in which case it shall bear
interest from such date, or unless the "Registration Date" of this Certificate is prior to the initial
interest payment date in which case it shall bear interest from the date of delivery to the initial
purchasers) 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, 2025, until maturity or prior redemption. Principal of this
Certificate is payable at its Stated Maturity or redemption to the registered owner hereof, upon
presentation and surrender, at the designated offices of the Paying Agent/Registrar executing the
registration certificate appearing hereon, initially in Pittsburgh, Pennslyvania, or with respect to a
successor Paying Agent/Registrar, at the designated offices of such successor (the "Designated
Payment/Transfer Office"). Interest is payable to the registered owner of this Certificate (or one
or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose
name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close
of business on the "Record Date", which is the last business day of the month next preceding
each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check
sent United States mail, first class postage prepaid, to the address of the registered owner
recorded in the Security Register on the Record Date or by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If
the date for the payment of the principal of or interest on the Certificates shall be a Saturday,
Sunday, a legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
201954024.2/1001303467 8
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original
date payment was due. All payments of principal of, premium, if any, and interest on this
Certificate shall be without exchange or collection charges to the registered owner hereof and in
any coin or currency of the United States of America which at the time of payment is legal tender
for the payment of public and private debts.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of $ (herein referred to as the "Certificates") for the purpose of paying contractual
obligations to be incurred for (i) constructing, improving, extending and equipping the City's
combined waterworks and sewer system, including the purchase of land and rights -of -way
therefor; (ii) designing, constructing and equipping a City administrative facility supporting various
City divisions, including the utility billing/customer service, streets and drainage, water,
wastewater, environmental services and traffic divisions and (iii) professional services rendered
in connection therewith, under and in strict conformity with the Constitution and laws of the State
of Texas, particularly Texas Local Government Code, Subchapter C of Chapter 271, as amended,
and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the
"Ordinance").
[The Certificates maturing on February 15, 20_ (the "Term Certificates") are subject to
mandatory redemption prior to maturity with funds on deposit in the Certificate Fund established
and maintained for the payment thereof in the Ordinance, and shall be redeemed in part prior to
maturity at the price of par and accrued interest thereon to the mandatory redemption date on the
respective dates and in principal amounts as follows:
Principal
Redemption Date Amount M
February 15, 20_ ,000
February 15, 20_ (maturity) ,000
The particular Term Certificates of a stated maturity to be redeemed on each redemption
date shall be chosen by lot by the Paying Agent/Registrar; provided, however, that the principal
amount of Term Certificates for a stated maturity required to be redeemed on a mandatory
redemption date may be reduced, at the option of the City, by the principal amount of Term
Certificates of like stated maturity which, at least fifty (50) days prior to the mandatory redemption
date, (1) shall have been acquired by the City at a price not exceeding the principal amount of
such Term Certificates plus accrued interest to the date of purchase thereof, and delivered to the
Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional
redemption provisions appearing below and not theretofore credited against a mandatory
redemption requirement.]
The Certificates having Stated Maturities on and after February 15, 20 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, 20 or on any date thereafter, at the redemption price
of par, together with accrued interest to the date of redemption.
At least thirty (30) days prior to a redemption date, the City shall cause a written notice of
such redemption to be sent by United States mail, first class postage prepaid, to the registered
201954024.2/1001303467 9
owners of each Certificate to be redeemed at the address shown on the Security Register and
subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate
(or any portion of its principal sum) shall have been duly called for redemption and notice of such
redemption duly given, then upon the redemption date such Certificate (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of
the redemption price and the interest accrued on the principal amount to be redeemed to the date
of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest
shall cease to accrue and be payable from and after the redemption date on the principal amount
redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a
new Certificate or Certificates of like maturity and interest rate in any authorized denominations
provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in whole
or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Certificate
to an assignee of the registered owner within forty-five (45) days of the redemption date therefor;
provided, however, such limitation on transferability shall not be applicable to an exchange by the
registered owner of the unredeemed balance of a Certificate redeemed in part.
With respect to any optional redemption of the Certificates, unless moneys sufficient to
pay the principal of and premium, if any, and interest on the Certificates to be redeemed shall
have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption,
such notice may, at the option of the City, state that said redemption is conditional upon the receipt
of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption,
or upon the satisfaction of any prerequisites set forth in such notice of redemption; and, if sufficient
moneys are not received, such notice shall be of no force and effect, the City shall not redeem
such Certificates and the Paying Agent/Registrar shall give notice, in the manner in which the
notice of redemption was given, to the effect that the Certificates have not been redeemed.
The Certificates are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City and from a limited pledge of the
Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sewer
System (the "System"), such pledge being limited to an amount of $1,000 and being junior and
subordinate to the lien on and pledge of such Net Revenues securing the payment of "Prior Lien
Obligations" (identified and defined in the Ordinance) hereafter issued by the City. In the
Ordinance, the City reserves and retains the right to issue Prior Lien Obligations without limitation
as to principal amount but subject to any applicable terms, conditions or restrictions under law or
otherwise.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the
owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of
terms; the description of and the nature and extent of the tax levied for the payment of the
Certificates; the Net Revenues pledged to the payment of the principal of and interest on the
Certificates; the nature and extent and manner of enforcement of the pledge; the terms and
conditions relating to the transfer or exchange of this Certificate; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions
upon which the tax levy and the pledges, charges and covenants made therein may be discharged
at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer
201954024.2/1001303467 10
Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized
terms used herein have the meanings assigned in the Ordinance.
This Certificate, subject to certain limitations contained in the Ordinance, may be
transferred on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying
Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent.
When a transfer on the Security Register occurs, one or more new fully registered Certificates of
the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of
the same aggregate principal amount will be issued by the Paying Agent/Registrar to the
designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered
owner whose name appears on the Security Register (i) on the Record Date as the owner entitled
to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner entitled
to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii)
on any other date as the owner for all other purposes, and neither the City nor the Paying
Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of
nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
City. Notice of the Special Record Date and of the scheduled payment date of the past due
interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States mail, first class postage prepaid,
to the address of each registered owner appearing on the Security Register at the close of
business on the last business day next preceding the date of mailing of such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the Constitution
and laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that
all acts, conditions and things required to exist and be done precedent to and in the issuance of
the Certificates to render the same lawful and valid obligations of the City have been properly
done, have happened and have been performed in regular and due time, form and manner as
required by the Constitution and laws of the State of Texas, and the Ordinance; that the
Certificates do not exceed any Constitutional or statutory limitation; and that due provision has
been made for the payment of the principal of and interest on the Certificates as aforestated. In
case any provision in this Certificate shall be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
The terms and provisions of this Certificate and the Ordinance shall be construed in accordance
with and shall be governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be
duly executed under the official seal of the City as of the Certificate Date.
CITY OF SOUTHLAKE, TEXAS
[Mayor][Mayor Pro Tem]
COUNTERSIGNED:
201954024.2/1001303467 11
[City Secretary][Deputy City Secretary]
(Seal)
C. Form of Reaistration Certificate of Comptroller of Public Accounts to appear on
Initial Certificate(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS ) REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
(SEAL)
only.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
D. Form of Certificate of Pavina Aaent/Reaistrar to appear on Definitive Certificates
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Certificate has been duly issued and registered under the provisions of the within -
mentioned Ordinance; the certificate or certificates of the above entitled and designated series
originally delivered having been approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated office of the Paying Agent/Registrar located in Pittsburgh, Pennslyvania,
is the "Designated Payment/Transfer Office" for this Certificate.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., Houston, Texas,
as Paying Agent/Registrar
Registration Date:
go
Authorized Signature
201954024.2/1001303467 12
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print
or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number ) the within
Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Certificate on the books kept for registration thereof, with full power
of substitution in the premises.
DATED:
NOTICE: The signature on this
assignment must correspond with the
Signature guaranteed: name of the registered owner as it appears
on the face of the within Certificate in every
particular.
F. The Initial Certificate(s) shall be in the form set forth in paragraph B of this
Section, except that the form of a sinale fullv reaistered Initial Certificate shall be modified
as follows:
The heading and the first full paragraph shall read:
REGISTERED
NO. T-1
REGISTERED
$ ,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2024
Certificate Date: August 1, 2024
Registered Owner:
Principal Amount: MILLION HUNDRED THOUSAND DOLLARS
The City of Southlake (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
201954024.2/1001303467 13
above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15
in each of the years and in principal installments in accordance with the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS ($) RATE (%)
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been redeemed prior to maturity) and to pay interest on the
unpaid Principal Amount from the interest payment date next preceding the "Registration Date"
of this Certificate appearing below (unless this Certificate bears a "Registration Date" as of an
interest payment date, in which case it shall bear interest from such date, or unless the
"Registration Date" of this Certificate is prior to the initial interest payment date, in which case it
shall bear interest from the date of the delivery to the initial purchasers) at the per annum rate(s)
of interest specified above computed on the basis of a 360-day year of twelve 30-day months;
such interest being payable on February 15 and August 15 of each year, commencing February
15, 2025. Principal installments of this Certificate are payable at its Stated Maturity to the
registered owner hereof by The Bank of New York Mellon Trust Company, N.A., Houston, Texas
(the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in
Pittsburgh, Pennslyvania; or with respect to a successor paying agent/registrar, at the designated
offices of such successor (the "Designated Payment/Transfer Office"). Interest is payable to the
registered owner of this Certificate whose name appears on the "Security Register" maintained
by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last
business day of the month next preceding each interest payment date hereof and interest shall
be paid by the Paying Agent/Registrar by check sent United States mail, first class postage
prepaid, to the address of the registered owner recorded in the Security Register or by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of,
the registered owner. If the date for the payment of the principal of or interest on the Certificates
shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where
the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized
by law or executive order to close, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made
on the original date payment was due. All payments of principal of, premium, if any, and interest
on this Certificate shall be without exchange or collection charges to the registered owner hereof
and in any coin or currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.
SECTION 10: Definitions. For purposes of this Ordinance and for clarity with respect to
the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net
Revenues therefor, the following words or terms, whenever the same appear herein without
qualifying language, are defined to mean as follows:
(a) The term "Certificates" shall mean the "CITY OF SOUTHLAKE,
TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2024" authorized by this
Ordinance.
(b) The term "Certificate Fund" shall mean the special Fund created
and established under the provisions of Section 11 of this Ordinance.
201954024.2/1001303467 14
(c) The term "Collection Date" shall mean, when reference is being
made to the levy and collection of annual ad valorem taxes, the date annual ad
valorem taxes levied each year by the City become delinquent.
(d) The term "Fiscal Year" shall mean the twelve month accounting
period used by the City in connection with the operation of the System which may
be any twelve consecutive month period established by the City.
(e) The term "Government Securities" shall mean (i) direct noncallable
obligations of the United States of America, including obligations the principal of
and interest on which are unconditionally guaranteed by the United 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, (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 and (iv) any other then authorized securities or obligations
that may be used to defease obligations such as the Certificates under the then
applicable laws of the State of Texas.
(f) The term "Gross Revenues" shall mean all income, receipts and
revenues of every nature derived or received from the operation and ownership
(excluding refundable meter deposits, restricted gifts and grants in aid of
construction) of the System, including earnings and income derived from the
investment or deposit of moneys in any special funds or accounts created and
established for the payment and security of any Prior Lien Obligations and other
obligations payable solely from and secured only by a lien on and pledge of the
Net Revenues.
(g) The term "Maintenance and Operating Expenses" shall mean all
current expenses of operating and maintaining the System, including all salaries,
labor, materials, repairs and extensions necessary to render efficient service;
provided, however, that only such repairs and extensions, as in the judgment of
the City Council, reasonably and fairly exercised, are necessary to maintain the
operations and render adequate service to the City and the inhabitants thereof, or
such as might be necessary to meet some physical accident or condition which
would otherwise impair obligations payable from Net Revenues shall be deducted
in determining "Net Revenues". Depreciation charges shall not be considered
Maintenance and Operating Expenses. Maintenance and Operating Expenses
shall include payments under contracts for the purchase of water supply, treatment
of sewage or other materials, goods, services, or facilities for the System to the
extent authorized by law and the provisions of such contract.
(h) The term "Net Revenues" shall mean the Gross Revenues of the
System, with respect to any period, after deducting the System's Maintenance and
Operating Expenses during such period.
201954024.2/1001303467 15
(i) The term "Outstanding" when used in this Ordinance with respect
to Certificates means, as of the date of determination, all Certificates theretofore
issued and delivered under this Ordinance, except:
(1) those Certificates cancelled by the Paying
Agent/Registrar or delivered to the Paying Agent/Registrar for
cancellation;
(2) those Certificates deemed to be duly paid by the City
in accordance with the provisions of Section 21 hereof; and
(3) those mutilated, destroyed, lost, or stolen
Certificates which have been replaced with Certificates registered
and delivered in lieu thereof as provided in Section 20 hereof.
0) The term "Prior Lien Obligations" shall mean obligations hereafter
issued which by the terms of the authorizing ordinance are made payable from and
secured by a lien on and pledge of the Net Revenues of the System ranking prior
and superior to the lien and pledge securing the payment of the Certificates.
(k) The term "System" shall mean all properties, facilities and plants
currently owned, operated and maintained by the City for the supply, treatment,
transmission and distribution of treated potable water and the collection, treatment
and disposal of water -carried wastes, together with all future extensions,
improvements, replacements and additions thereto.
SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide
a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and
is hereby created a special account or fund on the books and records of the City known as the
"SPECIAL SERIES 2024 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND" (the
"Certificate Fund"), and all moneys deposited to the credit of such Fund shall be shall be kept and
maintained in a special banking account at the City's depository bank. The Mayor, Mayor Pro
Tem, City Manager, Chief Financial Officer and City Secretary of the City, individually or jointly,
are hereby authorized and directed to make withdrawals from said Certificate Fund sufficient to
pay the principal of and interest on the Certificates as the same become due and payable, and,
shall cause to be transferred to the Paying Agent/Registrar from moneys on deposit in the
Certificate Fund an amount sufficient to pay the amount of principal and/or interest falling due on
the Certificates, such transfer of funds to the Paying Agent/Registrar to be made in such manner
as will cause immediately available funds to be deposited with the Paying Agent/Registrar on or
before the last business day next preceding each interest and principal payment date for the
Certificates.
Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund
may, at the option of the City, be invested in obligations identified in, and in accordance with the
provisions of the "Public Funds Investment Act" (Texas Government Code, Chapter 2256, as
amended) relating to the investment of "bond proceeds"; provided that all such investments shall
be made in such a manner that the money required to be expended from said Fund will be
available at the proper time or times. All interest and income derived from deposits and
investments in said Certificate Fund shall be credited to, and any losses debited to, the said
Certificate Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Certificates.
SECTION 12: Tax Levv. To provide for the payment of the "Debt Service Requirements"
on the Certificates being (i) the interest on said Certificates and (ii) a sinking fund for their
201954024.2/1001303467 16
redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there
shall be and there is hereby levied for the current year and each succeeding year thereafter while
said Certificates or any interest thereon shall remain Outstanding, a sufficient tax on each one
hundred dollars' valuation of taxable property in said City, within the limitations prescribed by law,
adequate to pay such Debt Service Requirements, full allowance being made for delinquencies
and costs of collection; said tax shall be assessed and collected each year and applied to the
payment of the Debt Service Requirements, and the same shall not be diverted to any other
purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The City
Council hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient
to pay the said Debt Service Requirements, it having been determined that the existing and
available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax
in consideration of all other outstanding indebtedness.
SECTION 13: Limited Pledae of Revenues. The City hereby covenants and agrees that,
subject to the prior lien on and pledge of the Net Revenues of the System to the payment and
security of Prior Lien Obligations, if any, the Net Revenues of the System in an aggregate amount
of $1,000 are hereby irrevocably pledged to the payment of the principal of and interest on the
Certificates, and the limited pledge of $1,000 of the Net Revenues of the System herein made for
the payment of the Certificates shall constitute a lien on the Net Revenues of the System until
such time as the City shall pay all of such $1,000, after which time the pledge shall cease, all in
accordance with the terms and provisions hereof. Furthermore, such lien on and pledge of the
Net Revenues securing the payment of the Certificates shall be valid and binding and fully
perfected from and after the date of adoption of this Ordinance without physical delivery or transfer
or transfer of control of the Net Revenues, the filing of this Ordinance or any other act; all as
provided in Chapter 1208 of the Texas Government Code, as amended.
Chapter 1208, Texas Government Code, as amended, applies to the issuance of the
Certificates and the pledge of the Net Revenues of the System granted by the City under this
Section 13, and such pledge is therefore valid, effective and perfected. If Texas law is amended
at any time while the Certificates are Outstanding such that the pledge of the Net Revenues of
the System granted by the City under this Section 13 is to be subject to the filing requirements of
Chapter 9, Texas Business and Commerce Code, as amended, then in order to preserve to the
registered owners of the Certificates the perfection of the security interest in said pledge, the City
agrees to take such measures as it determines are reasonable and necessary under Texas law
to comply with the applicable provisions of Chapter 9, Texas Business and Commerce Code, as
amended, and enable a filing to perfect the security interest in said pledge to occur.
SECTION 14: Svstem Fund. The City hereby covenants and agrees that all Gross
Revenues (excluding earnings from the investment of money held in any special funds or
accounts created for the payment and security of Prior Lien Obligations, if any) shall be deposited
as collected into a fund maintained at an official depository of the City and known on the books of
the City as the "City of Southlake Waterworks and Sanitary Sewer System Fund" (hereinafter
called the "System Fund"). All moneys deposited to the credit of the System Fund shall be
allocated, appropriated and budgeted to the extent required for the following purposes and in the
order of priority shown, to wit:
First: To the payment of Operating and Maintenance Expenses of the System as
defined herein or required by statute to be a first charge on and claim against the
Gross Revenues of the System.
201954024.2/1001303467 17
Second: To the payment of all amounts required to be deposited in the special
Funds created and established for the payment, security and benefit of Prior Lien
Obligations in accordance with the terms and provisions of any ordinances
authorizing the issuance of Prior Lien Obligations.
Third: Equally and ratably, to the payment of the limited amounts pledged to the
payment of the Certificates.
Any Net Revenues remaining in the System Fund after satisfying the foregoing payments,
or making adequate and sufficient provision for the payment thereof, may be appropriated and
used for any other City purpose now or hereafter permitted by law.
SECTION 15: Deposits to Certificate Fund. Subject to the provisions of Section 13
hereof, the City hereby covenants and agrees to cause to be deposited in the Certificate Fund
from the pledged Net Revenues of the System in the System Fund, the amount of Net Revenues
of the System pledged to the payment of the Certificates.
The City covenants and agrees that the amount of pledged Net Revenues of the System
($1,000), together with other lawfully available revenues appropriated by the City for payment of
the debt service requirements on the Certificates and ad valorem taxes levied, collected, and
deposited in the Certificate Fund for and on behalf of the Certificates, will be an amount equal to
one hundred percent (100%) of the amount required to fully pay the interest and principal due and
payable on the Certificates. In addition, any surplus proceeds from the sale of the Certificates
not expended for authorized purposes shall be deposited in the Certificate Fund, and such
amounts so deposited shall reduce the sums otherwise required to be deposited in said Fund
from ad valorem taxes and the Net Revenues of the System.
SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly invested)
shall be secured in the manner and to the fullest extent required by the laws of Texas for the
security of public funds, and moneys on deposit in such Funds shall be used only for the purposes
permitted by this Ordinance.
SECTION 17: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the Net Revenues of the System
to the payment of the Certificates in the manner herein contemplated and has
lawfully exercised such power under the Constitution and laws of the State of
Texas, including said power existing under Texas Government Code, Chapter
1502, as amended, and Texas Local Government Code, Subchapter C of Chapter
271, as amended.
(b) Other than for the payment of the outstanding limited pledge
relating to the Certificates, the Net Revenues of the System have not in any
manner been pledged to the payment of any debt or obligation of the City or of the
System.
SECTION 18: Issuance of Prior Lien Obligations and Additional Paritv Obligations. The
City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation
as to principal amount but subject to any terms, conditions or restrictions applicable thereto under
201954024.2/1001303467 18
law or otherwise, and such Prior Lien Obligations hereafter issued may be payable, in whole or in
part, from the Net Revenues (without impairment of the obligation of contract with the Holders of
the Certificates) upon such terms and secured in such manner as the City Council may determine.
Additionally, the City reserves the right without any limitations or restrictions to issue additional
obligations payable (in whole or in part) from and secured by lien on and pledge of the Net
Revenues of the System of equal rank and dignity with the lien on and pledge of such Net
Revenues securing the payment of the Certificates.
SECTION 19: Application of Prior Lien Obligations Covenants and Agreements. It is the
intention of this governing body and accordingly hereby recognized and stipulated that the
provisions, agreements and covenants contained herein bearing upon the management and
operations of the System, and the administering and application of revenues derived from the
operation thereof, shall to the extent possible be harmonized with like provisions, agreements and
covenants contained in any ordinances authorizing the issuance of any Prior Lien Obligations, if
issued, and to the extent of any irreconcilable conflict between the provisions contained herein
and in the ordinances authorizing the issuance of any Prior Lien Obligations, the provisions,
agreements and covenants contained therein shall prevail to the extent of such conflict and be
applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any,
conferred thereby to the holders of Prior Lien Obligations. Notwithstanding the above, any change
or modification affecting the application of revenues derived from the operation of the System
shall not impair the obligation of contract with respect to the pledge of revenues herein made for
the payment and security of the Certificates.
SECTION 20: Mutilated - Destroyed - Lost and Stolen Certificates. In case any
Certificate shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute
and deliver a replacement Certificate of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange and substitution for such
mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate,
only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying
Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or
theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to
the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the
Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and
with the preparation, execution and delivery of a replacement Certificate shall be borne by the
Holder of the mutilated, destroyed, lost or stolen Certificates.
Every replacement Certificate issued pursuant to this Section shall be a valid and binding
obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all
other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Certificates.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost or stolen Certificates.
SECTION 21: Satisfaction of Obliqation of Citv. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of
taxes levied under this Ordinance and the Net Revenues of the System (to the extent such pledge
of Net Revenues shall not have been discharged or terminated by prior payment of principal of or
201954024.2/1001303467 19
interest on the Certificates) and all covenants, agreements, and other obligations of the City to
the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Certificates or any principal amount(s) thereof shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section when (i) money sufficient to pay
in full such Certificates or the principal amount(s) thereof at maturity, 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 or consulting
firm to mature as to principal and interest in such amounts and at such times as will insure the
availability, without reinvestment, of sufficient money, together with any moneys deposited
therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal
amount(s) thereof, on and prior to the Stated Maturity thereof. The City covenants that no deposit
of moneys or Government Securities will be made under this Section and no use made of any
such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the
meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations
adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow agent,
and all income from Government Securities held in trust by the Paying Agent/Registrar, or an
authorized escrow agent, pursuant to this Section which is not required for the payment of the
Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the City.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the Certificates and remaining unclaimed for a period of three (3) years after the
Stated Maturity of the Certificates such moneys were deposited and are held in trust to pay shall
upon the request of the City be remitted to the City against a written receipt therefor.
Notwithstanding the above and foregoing, any remittance of funds from the Paying
Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State
of Texas.
SECTION 22: Ordinance a Contract -Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City while any Certificates remain Outstanding except as permitted in this Section
and in Section 37 hereof. The City may, without the consent of or notice to any Holders, from
time to time and at any time, amend this Ordinance in any manner not detrimental to the interests
of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission
herein. In addition, the City may, with the consent of Holders holding a majority in aggregate
principal amount of the Certificates then Outstanding, amend, add to, or rescind any of the
provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding
Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of
payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal
amount thereof or the rate of interest thereon, or in any other way modify the terms of payment of
the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any
Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates
required to be held by Holders for consent to any such amendment, addition, or rescission.
SECTION 23: Covenants to Maintain Tax -Exempt Status. (a) Definitions. When used in
this Section, the following terms have the following meanings:
201954024.2/1001303467 20
"Closing Date" means the date on which the Certificates are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations,
of the Certificates.
"investment" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b) of
the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to
carry out the governmental purposes of the Certificates.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross Proceeds)
in a manner which if made or omitted, respectively, would cause the interest on any Certificate to
become includable in the gross income, as defined in section 61 of the Code, of the owner thereof
for federal income tax purposes. Without limiting the generality of the foregoing, unless and until
the City receives a written opinion of counsel nationally recognized in the field of municipal bond
law to the effect that failure to comply with such covenant will not adversely affect the exemption
from federal income tax of the interest on any Certificate, the City shall comply with each of the
specific covenants in this Section.
(c) No Private Use or Private Pavments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated
Maturity of Certificates:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
than those applicable to the general public) or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or
201954024.2/1001303467 21
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds,
other than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates
to make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens
and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or
improved with such Gross Proceeds are otherwise transferred in a transaction which is the
economic equivalent of a loan.
(e) Not to Invest at Hiqher Yield. Except to the extent permitted by Section 148 of the
Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final
Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced
thereby), whether then held or previously disposed of, exceeds the Yield of the Certificates.
(f) Not Federallv Guaranteed. Except to the extent permitted by Section 149(b) of the
Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action
which would cause the Certificates to be federally guaranteed within the meaning of Section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by
Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form
and in such place as the Secretary may prescribe.
(h) Rebate of Arbitraqe Profits. Except to the extent otherwise provided in
Section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof) and
shall retain all records of accounting for at least six years after the day on which
the last outstanding Certificate is discharged. However, to the extent permitted by
law, the City may commingle Gross Proceeds of the Certificates with other money
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
201954024.2/1001303467 22
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in Section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Certificates until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Certificates by
the Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States from the construction fund,
other appropriate fund, or if as permitted by applicable Texas statute, regulation or
opinion of the Attorney General of the State of Texas, the Certificate Fund, the
amount that when added to the future value of previous rebate payments made for
the Certificates equals (i) in the case of a Final Computation Date as defined in
Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the
Rebate Amount on such date; and (ii) in the case of any other Computation Date,
ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate
payments shall be made at the times, in the installments, to the place and in the
manner as is or may be required by Section 148(f) of the Code and the Regulations
and rulings thereunder, and shall be accompanied by Form 8038-T or such other
forms and information as is or may be required by Section 148(f) of the Code and
the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors
are made in the calculations and payments required by paragraphs (2) and (3),
and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitraqe Profits. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Certificates not been
relevant to either party.
0) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem, City
Manager, Chief Financial Officer 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 Certificates, in the Certificate as to Tax Exemption
or similar or other appropriate certificate, form or document.
SECTION 24: Sale of Certificates - Official Statement Approval. Pursuant to a public sale
for the Certificates, the bid submitted by (herein referred to as the "Purchaser") is
declared to be the best bid received producing the lowest true interest cost rate to the City, and
the sale of the Certificates to said Purchasers at the price of par plus a cash premium of $
is hereby determined to be in the best interests of the City and is approved and confirmed.
201954024.2/1001303467 23
Delivery of the Certificates to the Purchasers shall occur as soon as possible upon payment being
made therefor in accordance with the terms of sale. The Initial Certificate shall be registered in
the name as provided in the winning bid.
Furthermore, the use of the Preliminary Official Statement by the Purchasers in connection
with the public offering and sale of the Certificates is hereby ratified, confirmed and approved in
all respects. The final Official Statement, which reflects the terms of sale (together with such
changes approved by the Mayor, Mayor Pro Tem, City Manager, Chief Financial Officer, City
Secretary or Deputy City Secretary, individually or collectively), shall be and is hereby in all
respects approved, and the Purchasers are hereby authorized to use and distribute said final
Official Statement, dated August 6, 2024, in the reoffering, sale and delivery of the Certificates to
the public. The Mayor or Mayor Pro Tem and City Secretary or Deputy City Secretary are further
authorized and directed to manually execute and deliver for and on behalf of the City copies of
said Official Statement in final form as may be required by the Purchasers, and such final Official
Statement in the form and content manually executed by said officials shall be deemed to be
approved by the City Council and shall constitute the Official Statement authorized for distribution
and use by the Purchasers.
SECTION 25: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the
amount to be used to pay the costs of issuing the Certificates, shall be deposited in a fund
maintained at a depository bank of the City. Pending expenditure for authorized projects and
purposes, such proceeds of sale may be invested in authorized investments and any investment
earnings realized shall be expended for such authorized projects and purposes or deposited in
the Certificate Fund as shall be determined by the City Council. Any surplus proceeds of sale of
the Certificates, including investment earnings, remaining after completion of all authorized
projects or purposes shall be deposited to the credit of the Certificate Fund.
SECTION 26: Control and Custodv of Certificates. The Mayor or Mayor Pro Tem of the
City shall be and is hereby authorized to take and have charge of all necessary orders and records
pending the sale of the Certificates, the investigation by the Attorney General of the State of
Texas, including the printing and supply of definitive Certificates, and shall take and have charge
and control of the Initial Certificate(s) pending the approval thereof by the Attorney General, the
registration thereof by the Comptroller of Public Accounts and the delivery thereof to the
Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Manager, Chief Financial Officer, City
Secretary and Deputy City Secretary, any one or more of said officials, are hereby authorized and
directed to furnish and execute such documents and certifications relating to the City and the
issuance of the Certificates, including a certification as to facts, estimates, circumstances and
reasonable expectations pertaining to the use and expenditure and investment of the proceeds
of the Certificates as may be necessary for the approval of the Attorney General and their
registration by the Comptroller of Public Accounts. In addition, such officials, together with the
City's financial advisor, bond counsel and the Paying Agent/Registrar, are authorized and directed
to make the necessary arrangements for the delivery of the Initial Certificate(s) to the Purchasers
and the initial exchange thereof for definitive Certificates.
SECTION 27: Notices to Holders - Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and sent by United States mail, first class postage prepaid, to the address
of each Holder appearing in the Security Register at the close of business on the business day
next preceding the mailing of such notice.
201954024.2/1001303467 24
In any case where notice to Holders is given by mail, neither the failure to mail such notice
to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Certificates. Where this Ordinance provides for notice in any
manner, such notice may be waived in writing by the Holder entitled to receive such notice, either
before or after the event with respect to which such notice is given, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 28: Cancellation. All Certificates surrendered for payment, transfer, exchange,
or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it
and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Certificates previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Certificates so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Certificates held by the Paying Agent/Registrar shall be returned to the City.
SECTION 29: Bond Counsel's Opinion. The Purchasers' obligation to accept delivery of
the Certificates is subject to being furnished a final opinion of Norton Rose Fulbright US LLP,
Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for the Certificates. An executed counterpart of said
opinion shall accompany the global certificates deposited with The Depository Trust Company or
a reproduction thereof shall be printed on the definitive Certificates in the event the book entry
only system shall be discontinued. The City Council confirms the continuation of the engagement
of Norton Rose Fulbright US LLP as the City's bond counsel.
SECTION 30: CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Certificates shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving the Certificates as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates.
SECTION 31: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is
intended to be and shall be for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 32: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 33: Governina Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 34: Effect of Headinqs. The Section headings herein are for convenience only
and shall not affect the construction hereof.
201954024.2/1001303467 25
SECTION 35: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural number
shall be considered to include the singular, and words of the masculine, feminine or neuter gender
shall be considered to include the other genders.
SECTION 36: Severability. If any provision of this Ordinance or the application thereof to
any circumstance shall be held to be invalid, the remainder of this Ordinance and the application
thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares
that this Ordinance would have been enacted without such invalid provision.
SECTION 37: Continuina Disclosure Undertakinq. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that
"financial obligation" shall not include municipal securities (as defined in the Securities and
Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule)
has been provided to the MSRB consistent with the Rule.
WSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports. The City shall provide annually to the MSRB (1) within six months
after the end of each fiscal year (beginning with the fiscal year ending September 30, 2024)
financial information and operating data with respect to the City of the general type in Tables 1
through 6 and 8 through 15 of the Official Statement and (2) if not provided as part of such financial
information and operating data in item (1), audited financial statements of the City within 12
months after the end of each fiscal year ending in or after 2024. If the audit of such financial
statements is not complete within 12 months after any such fiscal year end, then the City shall file
unaudited financial statements within such 12-month period and audited financial statements for
such fiscal year when and if the audit report on such statements becomes available. Any financial
statements so provided shall be prepared in accordance with the accounting principles described
in Appendix B to the Official Statement and 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 the City changes its fiscal year, it will notify the MSRB 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 available to the public on the MSRB's Internet web site or filed with the SEC.
(c) Notice of Certain Events. The City shall provide notice of any of the following
events with respect to the Certificates to the MSRB in a timely manner and not more than 10
business days after occurrence of the event:
201954024.2/1001303467 26
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
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, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or
other material notices or determinations with respect to the tax status of the
Certificates, or other material events affecting the tax status of the Certificates;
7. Modifications to rights of holders of the Certificates, if material;
8. Certificate calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates, if
material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership, or similar event of the City, which shall occur
as described below;
13. The consummation of a merger, consolidation, or acquisition involving the City or the
sale of all or substantially all of its assets, other than in the ordinary course of business,
the entry into of a definitive agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other than pursuant to its terms,
if material;
14. Appointment of a successor or additional trustee or the change of name of a trustee,
if material;
15. Incurrence of a Financial Obligation of the City, if material, or agreement to covenants,
events of default, remedies, priority rights, or other similar terms of a Financial
Obligation of the City, any of which affect security holders, if material; and
16. Default, event of acceleration, termination event, modification of terms, or other similar
events under the terms of a Financial Obligation of the City, any of which reflect
financial difficulties.
For these purposes, (a) any event described in the immediately preceding item 12 is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
assumed jurisdiction over substantially all of the assets or business of the City, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the City and (b) the City intends the words used in the immediately preceding items
15 and 16 in this Section to have the same meanings as when they are used in the Rule, as
evidenced by SEC Release No. 34-83885, dated August 20, 2018.
The City shall notify 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) Filings with the MSRB. All financial information, operating data, financial
statements, notices, and other documents provided to the MSRB in accordance with this Section
201954024.2/1001303467 27
shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by
identifying information as prescribed by the MSRB.
(e) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Certificates within the meaning of the Rule,
except that the City in any event will give the notice required by subsection (c) of this Section of
any Certificate calls and defeasance that cause the City to be no longer such an "obligated
person."
The provisions of this Section are for the sole benefit of the Holders and beneficial owners
of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Section and does not hereby undertake to
provide any other information that may be relevant or material to a complete presentation of the
City's financial results, condition, or prospects or hereby undertake to update any information
provided in accordance with this Section or otherwise, except as expressly provided herein. The
City does not make any representation or warranty concerning such information or its usefulness
to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances resulting from a change
in legal requirements, a change in law, or a change in the identity, nature, status, or type of
operations of the City, but only if (1) the provisions of this Section, as so amended, would have
permitted underwriters to purchase or sell Certificates in the primary offering of the Certificates in
compliance with the Rule, taking into account any amendments or interpretations of the Rule to
the date of such amendment, as well as such changed circumstances, and (2) either (a) the
Holders of a majority in aggregate principal amount (or any greater amount required by any other
provision of this Ordinance that authorizes such an amendment) of the Outstanding Certificates
consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interests
of the Holders and beneficial owners of the Certificates. The provisions of this Section may also
be amended from time to time or repealed by the City if the SEC amends or repeals the applicable
provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid,
but only if and to the extent that reservation of the City's right to do so would not prevent
201954024.2/1001303467 28
underwriters of the initial public offering of the Certificates from lawfully purchasing or selling
Certificates in such offering. If the City so amends the provisions of this Section, it shall include
with any amended financial information or operating data next provided in accordance with
subsection (b) 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 38: Further Procedures. Any one or more of the Mayor, Mayor Pro Tem, City
Manager, Chief Financial Officer, City Secretary and Deputy City Secretary are hereby expressly
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and on behalf of the City
all agreements, instruments, certificates or other documents, whether mentioned herein or not,
as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance
and the issuance, sale and delivery of the Certificates. In addition, prior to the delivery of the
Certificates, the Mayor, Mayor Pro Tem, City Manager, Chief Financial Officer, City Secretary,
Deputy City Secretary or Bond Counsel to the City are each hereby authorized and directed to
approve any changes or corrections to this Ordinance or to any of the documents authorized and
approved by this Ordinance: (i) in order to cure any ambiguity, formal defect, or omission in the
Ordinance or such other document, or (ii) as requested by the Attorney General of the State of
Texas or his representative to obtain the approval of the Certificates by the Attorney General. In
the event that any officer of the City whose signature shall appear on any document shall cease
to be such officer before the delivery of such document, such signature nevertheless shall be valid
and sufficient for all purposes the same as if such officer had remained in office until such delivery.
SECTION 39: Incorporation of Findings and Determinations. The findings and
determinations of the City Council contained in the preamble of this Ordinance are hereby
incorporated by reference and made a part of this Ordinance for all purposes as if the same were
related in full in this Section.
SECTION 40: 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 Texas Government Code, Chapter 551, as amended.
SECTION 41: 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 Texas Government Code,
Section 1201.028, as amended.
[remainder of page left blank intentionally]
201954024.2/1001303467 29
PASSED AND ADOPTED, this August 6, 2024
CITY OF SOUTHLAKE, TEXAS
Mayor
ATTEST:
City Secretary
(City Seal)
APPROVED AS TO FORM:
City Attorney
201954024.2/1001303467 S-1
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
201954024.2/1001303467 A-1
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of August 6, 2024 (this "Agreement"), by and
between The Bank of New York Mellon Trust Company, N.A., a banking association duly
organized and existing under the laws of the United States of America (the "Bank") and the City
of Southlake, Texas (the "Issuer"),
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Southlake, Texas Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates
of Obligation, Series 2024" (the "Securities"), dated August 1, 2024, such Securities scheduled to
be delivered to the initial purchasers thereof on or about August 29, 2024; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section 1.01 Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, 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 "Authorizing Document" (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 Authorizing Document.
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; provided however, notwithstanding anything herein or in Annex A to
the contrary, the aggregate value of this agreement shall be less than the dollar limitation set forth
in Sections 2271.002(a)(2), 2274.002(a)(2) and 2276.002(a)(2) of the Texas Government Code,
as amended.
In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of
202 321183.2/ 1001303467
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, if any, 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.
"Authorizing Document" means the resolution, order, or ordinance of the
governing body of the Issuer pursuant to which the Securities are issued, as the
same may be amended or modified, including any pricing certificate related
thereto, certified by the secretary or any other officer of the Issuer and delivered to
the Bank.
"Bank Office" means the designated office of the Bank at the address
shown in Section 3.01 hereof. The Bank will notify the Issuer in writing of any
change in location of the Bank Office.
"Financial Advisor" means Hilltop Securities Inc.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"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 Authorizing
Document).
"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
Authorizing Document.
"Responsible Officer", when used with respect to the Bank, means any
managing director, President, Vice President, senior associate, associate, 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.
202321183.2/1001303467 2
"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 Authorizing Document 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 Pavinq Aqent. As Paying Agent, the Bank shall pay, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer,
on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date or
Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following
address:
First Class/Reaistered/Certified
Express Delivery/Courier
or by hand:
The Bank of New York Mellon Trust Company, N.A.
Corporate Trust
500 Ross Street, Suite 625
Pittsburgh, PA 15262
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 (as defined in the Authorizing Document). 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 paying agent 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 Pavment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities on the dates specified in the Authorizing Document.
ARTICLE FOUR
REGISTRAR
Section 4.01 Securitv 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
202321183.2/1001303467 3
information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and the Bank may prescribe. All transfers, exchanges and replacements
of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed by
an officer of a federal or state bank or a member of the Financial Industry Regulatory Authority,
such written instrument to be in a form satisfactory to the Bank and duly executed by the Holder
thereof or his agent duly authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re -registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in not
more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly executed
by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying
Agent/Registrar.
Section 4.02 Securities. The Issuer shall provide additional Securities when needed to
facilitate transfers or exchanges thereof. The Bank covenants that such additional Securities, if
and when provided, 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 Securitv 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 Securitv Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up-to-date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the contents
of the Security Register.
202321183.2/1001303467 4
Section 4.05 Return of Cancelled Securities. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, all Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06 Mutilated, Destroved, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of the Authorizing Document, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as
the same does not result in an overissuance.
In case any Security shall be mutilated, destroyed, lost or stolen, the Bank 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 mutilated, 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, 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.
(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
202321183.2/1001303467 5
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 the Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
(g) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the Securities in the manner disclosed in the closing memorandum or letter as prepared
by the Issuer, the Financial Advisor or other agent. The Bank may act on an e-mail transmission
of the closing memorandum or letter acknowledged by the Issuer, the Issuer's financial advisor
or other agent as the final closing memorandum or letter. The Bank shall not be liable for any
losses, costs or expenses arising directly or indirectly from the Bank's reliance upon and
compliance with such instructions.
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 Mav Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05 Monevs Held by Bank - Pavinq Aqent Account/Col lateral ization. A
paying agent account shall at all times be kept and maintained by the Bank for the receipt,
safekeeping, and disbursement of moneys received from the Issuer under this Agreement 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 paying agent accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation. Payments made from such
paying agent account shall be made by check drawn on such account unless the owner of the
Securities shall, at its own expense and risk, request an alternative method of payment.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal of, premium (if any), or interest on any
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be held by the Bank and disposed of only in accordance with Title 6 of the
Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in
compliance with this provision.
202321183.2/1001303467 6
The Bank is not obligated to pay interest on any money received by it under this
Agreement.
This Agreement relates solely to money deposited for the purposes described herein, and
the parties agree that the Bank may serve as depository for other funds of the Issuer, act as
trustee under indentures authorizing other bond transactions of the Issuer, or act in any other
capacity not in conflict with its duties hereunder.
Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without
negligence or willful misconduct on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or liability
in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the state and county where the
administrative office of the Issuer is located, and agree that service of process by certified or
registered mail, return 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.
In the event the Bank becomes involved in litigation in connection with this Section, the
Issuer, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses, and attorney fees suffered or incurred by the Bank as a result.
The obligations of the Bank under this Agreement shall be performable at the principal corporate
office of the Bank in the City of Houston, Texas.
Section 5.08 DTC Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements", which establishes
requirements for securities to be eligible for such type depository trust services, including, but not
limited to, requirements for the timeliness of payments and funds availability, transfer turnaround
time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02 Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03 Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on the signature page(s) hereof.
202321183.2/1001303467 7
Section 6.04 Effect of Headings. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 6.05 Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06 Severabilitv. 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 Merger, Conversion, Consolidation, or Succession. Any corporation or
association into which the Bank may be merged or converted or with which it may be consolidated,
or any corporation or association resulting from any merger, conversion, or consolidation to which
the Bank shall be a party, or any corporation or association succeeding to all or substantially all
of the corporate trust business of the Bank shall be the successor of the Bank as Paying Agent
under this Agreement without the execution or filing of any paper or any further act on the part of
either parties hereto.
Section 6.08 Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy, or claim hereunder.
Section 6.09 Entire Agreement. This Agreement and the Authorizing Document
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 Authorizing Document,
the Authorizing Document shall govern.
Section 6.10 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 6.11 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
has been given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. However, if the Issuer fails to appoint a successor Paying Agent/Registrar within
a reasonable time, the Bank may petition a court of competent jurisdiction within the State of
Texas to appoint a successor. Furthermore, the Bank and the Issuer mutually agree that the
effective date of an early termination of this Agreement shall not occur at any time which would
disrupt, delay or otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with the 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.
202321183.2/1001303467 8
Section 6.12 Iran, Sudan or Foreiqn Terrorist Organizations. The Bank represents
that neither it nor any of its parent company, wholly- or majority -owned subsidiaries, and other
affiliates is a company identified on a list prepared and maintained by the Texas Comptroller of
Public Accounts under Section 2252.153 or Section 2270.0201, Texas Government Code, and
posted on any of the following page of such officer's internet website:
https://comptroller.texas.gov/purchasing/publications/divestment.php
The foregoing representation is made solely to comply with Section 2252.152, Texas
Government Code, and excludes the Bank and each of its parent company, wholly- or majority -
owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively
declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal
sanctions regime relating to a foreign terrorist organization. The Bank understands "affiliate" to
mean any entity that controls, is controlled by, or is under common control with the Bank and
exists to make a profit.
Notwithstanding anything contained herein, the representations and covenants contained
in this Section 6.12 shall survive the termination of this Agreement until the statute of limitations
has run.
Section 6.13 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
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202321183.2/1001303467 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as paying agent
as
Title:
Address: [500 Ross Street, Suite 625
Pittsburgh, PA 15262]
[601 Travis Street, Floor 16
Houston, TX 77002]
202321183/1001303467 Signature Page to Paying Agent/Registrar Agreement
Attest:
City Secretary
CITY OF SOUTHLAKE, TEXAS
By:
Mayor
Address: 1400 Main Street
Southlake, Texas 76092
202321183/1001303467 Signature Page to Paying Agent/Registrar Agreement
ANNEX A
202321183.2/1001303467 A- 1