0972 OFFICIAL RECORD
ORDINANCE NO. 972
AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE,
TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2010"; 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,
including the approval and execution of a Paying Agent/Registrar
Agreement and a Purchase 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 $16,250,000 for the purpose of
paying contractual obligations to be incurred for (i) the construction of public works, to wit:
(a) constructing and improving streets and sidewalks, including the acquisition of land and
rights -of -way therefor, (b) improvements and extensions to the City's combined Waterworks and
Sewer System, (c) acquiring, constructing, improving and equipping criminal justice facilities,
including the acquisition of land therefor, and (d) acquiring, constructing, improving and
equipping park and recreation facilities, including the acquisition of land therefor, and
(ii) professional services rendered in relation to such projects and the financing thereof, has been
duly published in The Fort Worth Star Telegram on January 27, 2010 and February 2, 2010, the
date the first publication of such notice being not less than thirty -one (31) days prior to the
tentative date stated therein for the adoption of the ordinance authorizing the issuance of such
certificates; and
WHEREAS, no petition protesting the issuance of the certificates of obligation and
bearing valid petition signatures of at least 5% of the qualified electors of the City, has been
presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to
the date of the passage of this ordinance; and
WHEREAS, the City hereby finds and determines that the certificates of obligation
described in the aforesaid notice should be issued and sold at this time in the amount and manner
as hereinafter provided; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE,
TEXAS:
SECTION 1: Authorization, 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 $15,745,000 to be designated and bear the title "CITY OF SOUTHLAKE,
TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2010" (hereinafter referred to as the
"Certificates for the purpose of paying contractual obligations to be incurred for (i) the
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construction of public works, to wit: (a) constructing and improving streets and sidewalks,
including the acquisition of land and rights -of -way therefor, (b) improvements and extensions to
the City's combined Waterworks and Sewer System, (c) acquiring, constructing, improving and
equipping criminal justice facilities, including the acquisition of land therefor, and
(ii) professional services rendered in relation to such projects and the financing thereof, pursuant
to authority conferred by and in conformity 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 Registered Obligations Authorized Denominations- Stated
Maturities -Date. The Certificates are issuable in fully registered form only; shall be dated May
1, 2010 (the "Certificate Date and shall be in denominations of $5,000 or any integral multiple
thereof (within a Stated Maturity) and the Certificates shall become due and payable on
February 15 in each of the years and in principal amounts (the "Stated Maturities and bear
interest at the per annum rate(s) in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate
2011 720,000 3.000%
2012 915,000 3.000%
2013 945,000 4.000%
2014 990,000 4.000%
2015 1,025,000 4.000%
2016 1,075,000 4.000%
2017 560,000 3.000%
2018 575,000 3.000%
2019 595,000 3.500%
2020 620,000 3.500%
2021 640,000 3.500%
2022 670,000 4.000%
2023 695,000 4.000%
2024 720,000 4.000%
2025 755,000 4.000%
2026 780,000 4.000%
2027 815,000 4.000%
2028 845,000 4.125%
2029 885,000 4.200%
2030 920,000 4.250%
The Certificates shall bear interest on the unpaid principal amounts from the Certificate
Date at the rate per annum shown above in this Section (calculated on the basis of a 360 -day year
of twelve 30 -day months), and such interest shall be payable on February 15 and August 15 of
each year, commencing February 15, 2011.
SECTION 3: Terms of Payment Paving Agent/Registrar. The principal of, premium,
if any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or
otherwise, shall be payable only to the registered owners or holders of the Certificates
(hereinafter called the "Holders appearing on the registration and transfer books maintained by
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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.,
Dallas, Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and
confirmed. Books and records relating to the registration, payment, transfer and exchange of the
Certificates (the "Security Register shall at all times be kept and maintained on behalf of the
City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and
provisions of a "Paying Agent/Registrar Agreement substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City
may prescribe. The Mayor and City Secretary are authorized to execute and deliver such
Agreement in connection with the delivery of the Certificates. The City covenants to maintain
and provide a Paying Agent/Registrar at all times until the Certificates are paid and discharged,
and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or
other entity qualified and authorized to serve in such capacity and perform the duties and
services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the
Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder
by United States Mail, first class postage prepaid, which notice shall also give the address of the
new Paying 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 Dallas, Texas; 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 name
appears in the Security Register at the close of business on the Record Date (the last business day
of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of
the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the 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 next preceding the date of mailing of such notice.
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SECTION 4: Redemption. (a) Optional Redemption. The Certificates maturing on
and after February 15, 2020 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, 2019 or on any
date thereafter at the redemption price of par plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option. At least forty -five (45) days prior to a
redemption date for the Certificates (unless a shorter notification period shall be satisfactory to
the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to
redeem Certificates, the principal amount of each Stated Maturity to be redeemed, and the date
of redemption therefor. The decision of the City to exercise the right to redeem Certificates shall
be entered in the minutes of the governing body of the City.
(c) Selection of Certificates for Redemption. If less than all Outstanding
Certificates of the same Stated 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.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Certificates, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a 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 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, provided moneys sufficient for the payment of such Certificate (or the principal amount
thereof to be redeemed) at the then applicable redemption price are held for the purpose of such
payment by the Paying Agent/Registrar and (v) specify that payment of the redemption price for
the Certificates, or the principal amount thereof to be redeemed, shall be made at the Designated
Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender of
the Certificates. If a Certificate is subject by its terms to prior redemption and has been called
for redemption and notice of redemption has been duly given as hereinabove provided, such
Certificate (or the principal amount thereof to be redeemed) shall become due and payable and
interest thereon shall cease to accrue from and after the redemption date therefor.
(e) 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 shall state that said
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redemption may, at the option of the City, be 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.
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
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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 forty -five
(45) days of the date fixed for the redemption of such Certificate; provided, however, such
limitation on transferability shall not be applicable to an exchange by the Holder of the
unredeemed balance of a Certificate called for redemption in part.
SECTION 6: Book -Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer /exchange
of the Certificates, the City hereby approves and authorizes the use of "Book -Entry Only"
securities clearance, settlement and transfer system provided by The Depository Trust Company
(DTC), a limited purpose trust company organized under the laws of the State of New York, in
accordance with the operational arrangements referenced in the Blanket Issuer Letter of
Representation, by and between the City and DTC (the "Depository Agreement
Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be
deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants
While the Certificates are held by DTC under the Depository Agreement, the Holder of the
Certificates on the Security Register for all purposes, including payment and notices, shall be
Cede Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or
owner of each Certificate (the "Beneficial Owners being recorded in the records of DTC and
DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book -entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Certificates, the City covenants and agrees with the
Holders of the Certificates to cause Certificates to be printed in definitive form and provide for
the Certificate certificates to be issued and delivered to DTC Participants and Beneficial Owners,
as the case may be. Thereafter, the Certificates in definitive form shall be assigned, transferred
and exchanged on the Security Register maintained by the Paying 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 under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals who are or were the proper
officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the
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
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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 9(C), manually executed by the
Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a
certificate of registration substantially in the form provided in Section 9(D), manually executed
by an authorized officer, employee or representative of the Paying Agent/Registrar, and either
such certificate duly signed upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly certified, registered and delivered.
SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially
issued either (i) as a single fully registered certificate in the total principal amount stated in
Section 1 hereof with principal installments to become due and payable as provided in Section 2
hereof and numbered 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 Generally. The Certificates, the Registration
Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration
Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the
Certificates, shall be substantially in the forms set forth in this Section with such appropriate
insertions, omissions, substitutions, and other variations as are permitted or required by this
Ordinance and may have such letters, numbers, or other marks of identification (including
identifying numbers and letters of the Committee on Uniform Securities Identification
Procedures of the American Bankers Association) and such legends and endorsements (including
insurance legends in the event the Certificates, or any maturities thereof, are purchased with
insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith,
be established by the City or determined by the officers executing such Certificates as evidenced
by their execution. Any portion of the text of any Certificate may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the certificate.
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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 Defmitive Certificates.
REGISTERED REGISTERED
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2010
Certificate Date: Interest Rate: Stated Maturity: CUSIP NO:
May 1, 2010 February 15,
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 Certificate Date) at the per
annum rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day
months; such interest being payable on February 15 and August 15 in each year, commencing
February 15, 2011. Principal of this Certificate is payable at its Stated Maturity or redemption to
the registered owner hereof, upon presentation and surrender, at the Designated
Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate
appearing hereon, or its successor; provided, however, while this Certificate is registered to Cede
Co., the payment of principal upon a partial redemption of the principal amount hereof may be
accomplished without presentation and surrender of this Certificate. 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 or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
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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 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 $15,745,000 (herein referred to as the "Certificates for the purpose of paying
contractual obligations to be incurred for (i) the construction of public works, to wit:
(a) constructing and improving streets and sidewalks, including the acquisition of land and
rights -of -way therefor, (b) improvements and extensions to the City's combined Waterworks and
Sewer System, (c) acquiring, constructing, improving and equipping criminal justice facilities,
including the acquisition of land therefor, and (ii) professional services rendered in relation to
such projects and the financing thereof, 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 and after February 15, 2020, 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, 2019, 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
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
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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 shall state that said redemption may, at the option of the City, be
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, together with a
parity pledge securing the payment of the Previously Issued Certificates, 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) now outstanding and 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 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
90005473.2/11000319 10
agent. When a transfer on the Security Register occurs, one or more new fully registered
Certificates of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the
registered owner whose name appears on the Security Register (i) on the Record Date as the
owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the
owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or
in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the
Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the
event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter,
a new record date for such interest payment (a "Special Record Date will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the Certificates is duly
authorized by law; that all acts, conditions and things required to exist and be done precedent to
and in the issuance of the Certificates to render the same lawful and valid obligations of the City
have been properly done, have happened and have been performed in regular and due time, form
and manner as required by the Constitution and laws of the State of Texas, and the Ordinance;
that the Certificates do not exceed any Constitutional or statutory limitation; and that due
provision has been made for the payment of the principal of and interest on the Certificates as
aforestated. In case any provision in this Certificate shall be invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be
construed in accordance with and shall be govemed 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
COUNTERSIGNED:
City Secretary
(Seal)
90005473 1 1
C. Form of Registration Certificate of Comptroller of Public Accounts to
appear on Initial Certificate(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS 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.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
D. Form of Certificate of Paving Agent/Registrar to appear on Definitive
Certificates only.
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 Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Certificate.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., Dallas, Texas,
as Paying Agent/Registrar
Registration Date:
By
Authorized Signature
90005473 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 single fully registered Initial Certificate shall be
modified as follows:
The heading and the first full paragraph shall read:
REGISTERED REGISTERED
NO. T -1 $15,745,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2010
Certificate Date: May 1, 2010
Registered Owner: SOUTHWEST SECURITIES, INC.
Principal Amount: FIFTEEN MILLION SEVEN HUNDRED FORTY -FIVE 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
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:
90005473.2/11000319 13
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the
unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) of interest
specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest
being payable on February 15 and August 15 of each year, commencing February 15, 2011.
Principal installments of this Certificate are payable at its Stated Maturity or on a prepayment
date to the registered owner hereof by The Bank of New York Mellon Trust Company, N.A.,
Dallas, Texas (the "Paying Agent/Registrar upon presentation and surrender, at its designated
offices in Dallas, Texas; 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 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: Defmitions. 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
appears 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 2010"
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.
(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.
90005473 14
(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 and (iii) noncallable obligations of
a state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(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 the 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.
(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:
90005473 15
(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.
(j) The term "Previously Issued Certificates" shall mean the
outstanding and unpaid "City of South lake, Texas, Tax and Waterworks and
Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1999
dated April 1, 1999, "City of South lake, Texas, Tax and Limited Pledge Revenue
Certificates of Obligation, Series 2000 -C dated December 1, 2000, "City of
South lake, Texas, Tax and Waterworks and Sewer System (Limited Pledge)
Revenue Certificates of Obligation, Series 2004 dated June 1, 2004, "City of
Southlake, Texas, Tax and Waterworks and Sewer System (Limited Pledge)
Revenue Certificates of Obligation, Series 2006 dated January 15, 2006, "City
of South lake, Texas, Tax and Waterworks and Sewer System (Limited Pledge)
Revenue Certificates of Obligation, Series 2007 dated October 1, 2007, "City of
Southlake, Texas, Tax and Waterworks and Sewer System (Limited Pledge)
Revenue Certificates of Obligation, Series 2008 dated February 15, 2008, and
the "City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited
Pledge) Revenue Certificates of Obligation, Series 2009 dated May 1, 2009.
(k) The term "Prior Lien Obligations" shall mean (i) the outstanding
and unpaid (1) "City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2000 -A dated March 1, 2000,
(2) "City of Southlake, Texas, Tax and Waterworks and Sewer System Surplus
Revenue Certificates of Obligation, Series 2000 -D dated December 1, 2000, (3)
"City of Southlake, Texas, Tax and Waterworks and Sewer System Surplus
Revenue Certificates of Obligation, Series 2003 dated April 15, 2003, and (4)
"City of Southlake, Texas, Tax and Waterworks and Sewer System Surplus
Revenue Certificates of Obligation, Series 2004A dated June 1, 2004, and (ii)
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 Previously Issued Certificates and the Certificates.
(1) 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.
90005473.2/11000319 16
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 2010 TAX AND REVENUE CERTIFICATE OF OBLIGATION
FUND and all moneys deposited to the credit of such Fund shall be shall be kept and
maintained in a special banking account at the City's depository bank. The Mayor, Mayor Pro
Tem, City Manager, Director of Finance and City Secretary of the City, individually or jointly,
are hereby authorized and directed to make withdrawals from said Fund sufficient to pay the
principal of and interest on the Certificates as the same become due and payable, and, shall cause
to be transferred to the Paying Agent/Registrar from moneys on deposit in the Certificate Fund
an amount sufficient to pay the amount of principal and/or interest falling due on the Certificates,
such transfer of funds to the Paying Agent/Registrar to be made in such manner as will cause
immediately available funds to be deposited with the Paying Agent/Registrar on or before the
last business day next preceding each interest and principal payment date for the Certificates.
Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate
Fund may, at the option of the City, be invested in obligations identified in, and in accordance
with the provisions of the "Public Funds Investment Act" (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 Levy. To provide for the payment of the "Debt Service
Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking
fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the
greater), there shall be and there is hereby levied for the current year and each succeeding year
thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient tax
on each one hundred dollars' valuation of taxable property in said City, within the limitations
prescribed by law, adequate to pay such Debt Service Requirements, full allowance being made
for delinquencies and costs of collection; said tax shall be assessed and collected each year and
applied to the payment of the Debt Service Requirements, and the same shall not be diverted to
any other purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The
City Council hereby declares its purpose and intent to provide and levy a tax legally and fully
sufficient to pay the said Debt Service Requirements, it having been determined that the existing
and available taxing authority of the City for such purpose is adequate to permit a legally
sufficient tax in consideration of all other outstanding indebtedness.
Accrued interest received from the purchasers of the Certificates shall be deposited to the
Certificate Fund. 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.
90005473.2/11000319 17
SECTION 13: Limited Pledge 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, 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 in accordance with the terms and provisions hereof and shall be on a parity in all respects
with the lien on the Net Revenues securing the payment of the Previously Issued Certificates.
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 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 Commerce Code, as
amended, and enable a filing to perfect the security interest in said pledge to occur.
SECTION 14: System 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) 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.
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 the 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 Previously Issued Certificates and the Certificates.
90005473.2/11000319 18
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 Prior Lien
Obligations, Previously Issued Certificates and 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 Parity
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 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
90005473.2/11000319 19
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 Previously Issued
Certificates and 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 the ordinances authorizing the issuance of the
Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions
contained herein and in the ordinances authorizing the issuance of the 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 the 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 Obligation of City. If the City shall pay or cause
to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the
pledge of taxes levied under this Ordinance and the Net Revenues of the System (to the extent
such pledge of Net Revenues shall not have been discharged or terminated by prior payment of
90005473.2/11000319 20
principal of or interest on the Certificates) and all covenants, agreements, and other obligations
of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Certificates or any principal amount(s) thereof shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section when (i) money sufficient to pay
in full such Certificates or the principal amount(s) thereof at maturity or the redemption date
therefor, together with all interest due thereon, shall have been irrevocably deposited with and
held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Securities have been certified by an independent
accounting firm to mature as to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or
the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants
that no deposit of moneys or Government Securities will be made under this Section and no use
made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or
regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or
an authorized escrow agent, pursuant to this Section which is not required for the payment of the
Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the City.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the Certificates and remaining unclaimed for a period of three (3) years after the
Stated Maturity, or applicable redemption date, of the Certificates such moneys were deposited
and are held in trust to pay shall upon the request of the City be remitted to the City against a
written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from
the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws
of the State of Texas.
SECTION 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, the redemption price or the rate of interest thereon, or in any other
way modify the terms of payment of the principal of, premium, if any, or interest on the
90005473.2/11000319 21
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:
"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.
90005473.2/11000319 22
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Certificates:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
than those applicable to the general public) or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of
which is to be financed or refinanced directly or indirectly with such Gross
Proceeds, other than taxes of general application within the City or interest earned
on investments acquired with such Gross Proceeds pending application for their
intended purposes.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates
to make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income tax
purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed
or improved with such Gross Proceeds are otherwise transferred in a transaction which is the
economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the 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.
(1) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Certificates to be federally guaranteed within the meaning of
Section 149(b) of the Code and the Regulations and rulings thereunder.
90005473 23
(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 Arbitrage 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.
(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
90005473.2/11000319 24
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 Arbitrage 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.
(j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
City Secretary, City Manager and Director of Finance, individually or jointly, to make elections
permitted or required pursuant to the provisions of the Code or the Regulations, as they deem
necessary or appropriate in connection with the Certificates, in the Certificate as to Tax
Exemption or similar or other appropriate certificate, form or document.
SECTION 24: Sale of Certificates Official Statement Approval. The sale of
the Certificates authorized by this Ordinance to Southwest Securities, Inc., RBC Capital Markets
Corporation, Stifel, Nicolause Company, Inc., and Morgan Keegan Company (herein
referred to as the "Purchasers in accordance with the Purchase Agreement, dated April 20,
2010, attached hereto as Exhibit B and incorporated herein by reference as a part of this
Ordinance for all purposes. The Mayor or Mayor Pro Tem is hereby authorized and directed to
execute said Purchase Agreement for and on behalf of the City and as the act and deed of this
Council, and in regard to the approval and execution of the Purchase Agreement, the Council
hereby finds, determines and declares that the representations, warranties and agreements of the
City contained in the Purchase Agreement are true and correct in all material respects and shall
be honored and performed by the City.
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, Director of Finance
or 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
April 20, 2010 in the reoffering, sale and delivery of the Certificates to the public. The Mayor
and City Secretary are further authorized and directed to manually execute and 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 constitute the Official
Statement authorized for distribution and use by the Purchasers.
SECTION 25: Proceeds of Sale. The proceeds of sale of the Certificates received
from the Purchasers, excluding the accrued interest and amounts to pay costs of issuance, shall
be deposited in a construction fund maintained at a City depository bank. Pending expenditure
for authorized projects and purposes, such proceeds of sale may be invested in authorized
investments in accordance with the provisions of Texas Government Code, Chapter 2256, as
90005473.2/11000319 25
amended, and any investment earnings realized may be expended for such authorized projects
and purposes or deposited in the Certificate Fund as shall be determined by the City Council.
Accrued interest, as well as all surplus proceeds of sale of the Certificates, including investment
earnings, remaining after completion of all authorized projects or purposes shall be deposited to
the credit of the Certificate Fund.
SECTION 26: Control and Custody of Certificates. The Mayor of the City
shall be and is hereby authorized to take and have charge of all necessary orders and records
pending the sale of the Certificates, the investigation by the Attorney General of the State of
Texas, including the printing and supply of definitive Certificates, and shall take and have charge
and control of the Initial Certificate(s) pending the approval thereof by the Attorney General, the
registration thereof by the Comptroller of Public Accounts and the delivery thereof to the
Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Manager, Director of Finance and 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.
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,
redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar,
shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying
Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying
Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for
cancellation any 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
90005473.2/11000319 26
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 Fulbright Jaworski
L.L.P., Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and
delivered as of the date of delivery and payment for the Certificates. An executed counterpart of
said opinion shall accompany the global certificates deposited with The Depository Trust
Company or a reproduction thereof shall be printed on the definitive Certificates in the event the
book entry only system shall be discontinued.
SECTION 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: Governing 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 Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
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: Continuing Disclosure Undertaking. (a) Definitions. As used
in this Section, the following terms have the meanings ascribed to such terms below:
90005473.2/11000319 27
"MSRB" 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 within six months
after the end of each fiscal year (beginning with the fiscal year ending September 30, 2010)
financial information and operating data with respect to the City of the general type included in
the final Official Statement approved by Section 24 of this Ordinance, being the information
described in Exhibit C hereto. Financial statements to be provided shall be (1) prepared in
accordance with the accounting principles described in Exhibit C hereto and (2) audited, if the
City commissions an audit of such statements and the audit is completed within the period during
which they must be provided. If audited financial statements are not available at the time the
financial information and operating data must be provided, then the City shall provide unaudited
financial statements for the applicable fiscal year and will file the annual audit report when and if
the same becomes available.
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
documents available to the public on the MSRB's Internet web site or filed with the SEC.
(c) Material Event Notices. The City shall notify the MSRB, in a timely manner, of
any of the following events with respect to the Certificates, if such event is material within the
meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax- exempt status of the Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates; and
11. Rating changes.
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
90005473 28
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 while, but only while, the City
remains an "obligated person" with respect to the Certificates within the meaning of the Rule,
except that the City in any event will give the notice required by subsection (c) hereof of any
Certificate calls and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit
or any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR
IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR
WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS
SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN
CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
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
90005473.2/11000319 29
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 underwriters of the initial public offering of the Certificates from lawfully
purchasing or selling Certificates in such offering. If the City so amends the provisions of this
Section, it shall include with any amended financial information or operating data next provided
in accordance with subsection (b) an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of financial information or operating
data so provided.
SECTION 38: Further Procedures. Any one or more of the Mayor, Mayor Pro
Tem, City Manager, Assistant City Manager, Director of Finance, and 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, Assistant
City Manager, Director of Finance, 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 Meeting. It is officially found, determined, and declared
that the meeting at which this Ordinance is adopted was open to the public and public notice of
the time, place, and subject matter of the public business to be considered at such meeting,
including this Ordinance, was given, all as required by 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.
[remainder of page left blank intentionally]
90005473.2/11000319 30
PASSED AND ADOPTED, this April 20, 2010.
CITY OF SOUTHLAKE, TEXAS
a, a
Mayor
ATTEST:
k p
City Secretary
f
(City Seal) v
90005473.2/11000319 S -1
APPROVED AS 91 FO'
City Attorney
90005473.2/11000319 S-2
EXHIBIT A
PAYING AGENT /REGISTRAR AGREEMENT
900054732/11000319 A -1
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of April 20, 2010 (this "Agreement by and
between The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, 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 2010" (the "Securities dated May 1, 2010, such Securities
scheduled to be delivered to the initial purchasers thereof on or about May 27, 2010; 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.
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
900495771/11000319
the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which
the principal or any or all installments of interest, or both, are due and payable on
any Security which has become accelerated pursuant to the terms of the Security.
"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.
"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 the
Chairman or Vice Chairman of the Board of Directors, the Chairman or
Vice Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust
Officer or Assistant Trust Officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the above designated
90049577 2
officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of
the Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the 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 Paving Agent. 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/
Registered/Certified Express Delivery Only By Hand Only
The Bank of New York The Bank of New York Mellon The Bank of New York Mellon
Mellon Trust Company, N.A. Trust Company, N.A. Trust Company, N.A.
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P. O. Box 2320 2001 Bryan Street, 9 Floor Corporate Trust Window
Dallas, Texas 75221 -2320 Dallas, Texas 75201 101 Barclay Street, 1 Floor East
New York, New York 10286
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 Payment 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.
90049577.1/11000319 3
ARTICLE FOUR
REGISTRAR
Section 4.01 Security Register Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and 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 National Association of Securities
Dealers, such written instrument to be in a form satisfactory to the Bank and duly executed by
the Holder thereof or his agent duly authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re- registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in not
more than three (3) business days after the receipt of the Securities to be 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 Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities in
accordance with the Bank's general practices and procedures in effect from time to time. The
Bank shall not be obligated to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04 List of Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained in
the Security Register. The Issuer may also inspect the information contained in the Security
90049577.1/11000319 4
Register at any time the Bank is customarily open for business, provided that reasonable time is
allowed the Bank to provide an up -to -date listing or to convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the contents
of the Security Register.
Section 4.05 Return of Cancelled 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, Destroyed, 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.
90049577.1/11000319 5
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties. Without limiting the generality
of the foregoing statement, the Bank need not examine the ownership of any Securities, but is
protected in acting upon receipt of Securities containing an endorsement or instruction of transfer
or power of transfer which appears on its face to be signed by the Holder or an agent of the
Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in
a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security or other paper or document supplied by 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, Issuer's financial advisor or other agent. The Bank may act on a
facsimile or 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.
90049577 6
Section 5.05 Moneys Held by Bank Paying Agent Account/Collateralization. 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.
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 bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the state and county where the
administrative office of the Issuer is located, and agree that service of process by certified or
registered mail, return 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 Dallas, Texas.
90049577.1/11000319 7
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 hereof.
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 Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07 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.
90049577.1/11000319 8
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.
Section 6.12 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
[Remainder of page left blank intentionally.]
90049577.1/11000319 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., Dallas, Texas
By:
Title:
in
Address: 2001 Bryan Street, 11 Floor
Dallas, Texas 75201
Attest:
Title:
CITY OF SOUTHLAKE, TEXAS,
By:
Mayor
Address: City of Southlake, Texas
1400 Main Street
Southlake, Texas 76092
Attest:
City Secretary
90049577.1/11000319 S -1
ANNEX A
90049577.1/11000319 A -1
EXHIBIT B
PURCHASE AGREEMENT
90005473.2/11000319 B -1
CITY OF SOUTHLAKE, TEXAS
(TARRANT AND DENTON COUNTIES, TEXAS)
$26,730,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010
$15,745,000 TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2010
PURCHASE AGREEMENT
April 20, 2010
The Honorable Mayor and Members of the City Council
City of Southlake, Texas
1400 Main Street, Suite 440
Southlake, Texas 76092
Ladies and Gentlemen:
The undersigned, Southwest Securities, Inc. (the 'Representative') acting on its own behalf and on
behalf of the other underwriters listed on Schedule I hereto (collectively, the "Underwriters'), and not acting as
a fiduciary or agent for you, offers to enter into this Purchase Agreement (the "Agreement with the City of
Southlake, Texas (the "Issuer" or the "City') which, upon the Issuer's written acceptance of this offer, will be
binding upon the Issuer and upon the Underwriters. This offer is made subject to the Issuer's written
acceptance hereof on or before 10:00 p.m., Central Time, on April 20, 2010, and, if not so accepted, will be
subject to withdrawal by the Underwriters upon written notice delivered to the Issuer at any time prior to the
acceptance hereof by the Issuer. Terms not otherwise defined in this Agreement shall have the same
meanings set forth in the respective Ordinances (as defined herein) or in the Official Statement (as defined
herein).
1. Purchase and Sale of the Bonds and the Certificates. Subject to the terms and conditions and in
reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby agree,
jointly and severally, to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the
Underwriters, all, but not less than all, of the Issuer's $26,730,000 General Obligation Refunding Bonds,
Series 2010 (the `Bonds') and all, but not less than all, of the Issuer's $15,745,000 Tax and Waterworks and
Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 2010 (the "Certificates'). Inasmuch
as this purchase and sale represents a negotiated transaction, the Issuer understands, and hereby confirms,
that the Underwriters are not acting as fiduciaries of the Issuer, but rather are acting solely in their capacity as
Underwriters for their own accounts. The Representative has been duly authorized to execute this
Agreement and to act hereunder.
The principal amount of the Bonds and the Certificates (collectively, the "Obligations to be issued,
the maturities, yields redemption provisions and interest rates per annum are set forth in Schedule II hereto.
The Bonds shall be as described in, and shall be issued and secured under and pursuant to the ordinance
authorizing the issuance and sale of the Bonds adopted by the Issuer on April 20, 2010 (the "Bond Ordinance
The Certificates shall be as described in, and shall be issued and secured under and pursuant to the ordinance
authorizing the issuance and sale of the Certificates adopted by the Issuer on April 20, 2010 (the "Certificate
Ordinance" and together with the Bond Ordinance collectively referred to as the 'Ordinances').
1
The purchase price for the Bonds shall be $27,978,486.44 (representing the par amount of the
Bonds, plus a re- offering premium of $1,388,712.70, and less an underwriting discount of $140,226.26), plus
accrued interest calculated on the basis of a 360 -day year of twelve 30 -day months, from May 1, 2010 to the
date of Closing (as hereinafter defined).
The purchase price for the Certificates shall be $16,053,522.88 (representing the par amount of the
Certificates, plus a re- offering premium of $407,159.40, and less an underwriting discount of $98,636.52), plus
accrued interest calculated on the basis of a 360 -day year of twelve 30 -day months, from May 1, 2010 to the
date of the Closing.
Delivered to the Issuer herewith are the Representative's two good faith corporate checks payable to
the order of the Issuer in the total amount of $442.000 (the "Check(s) $280,000 for the Bonds, and $162,000
for the Certificates). In the event that the Issuer accepts this Agreement for each series of the Obligations,
the respective Checks shall be held uncashed by the Issuer until the time of Closing, at which time the Checks
shall be returned uncashed to the Representative. In the event that the Issuer does not accept this Agreement
with respect to either or both series of Obligations, the respective Check or Checks shall be immediately
returned to the Representative. Should the Issuer fail to deliver either or both series of the Obligations at the
Closing, or should the Issuer be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, accept delivery of and pay for either series of the Obligations, as set forth in this Agreement (unless
waived by the Representative), or should such obligations of the Underwriters be terminated for any reason
permitted by this Agreement, the Check for the undelivered series of Obligations shall immediately be
returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted
hereunder) to purchase, accept delivery of and pay for either or both series of the Obligations at the Closing
as herein provided, the Check for the undelivered series of Obligations shall be cashed and the amount
thereof retained by the Issuer as and for fully liquidated damages for such failure of the Underwriters, and,
except as set forth in Sections 8 and 10 of this Agreement, no party shall have any further rights against the
other hereunder. The Underwriters and the Issuer understand that in such event the Issuer's actual damages
may be greater or may be less than such amount. Accordingly, the Underwriters hereby waive any right to
claim that the Issuer's actual damages are less than such amount, and the Issuer's acceptance of this
Agreement shall constitute a waiver of any right the Issuer may have to additional damages from the
Underwriters. The Underwriters hereby agree not to stop or cause payment on the Checks to be stopped
unless the Issuer has breached any material terms of this Agreement.
2. Public Offering. The Underwriters agree to make a bona fide public offering of all of the
Obligations at a price not to exceed the public offering price set forth on pages 2 and 4 of the Official
Statement and may subsequently change such offering price without any requirement of prior notice. On or
before Closing, the Representative shall certify, in a form prepared by Bond Counsel (herein defined), the
initial offering prices to the public at which a substantial amount of each stated maturity of the Obligations
were reasonably expected to be sold or were in fact sold to the public. The Underwriters may offer and sell
Obligations to certain dealers (including dealers depositing Obligations into investment trusts) and others at
prices lower than the public offering price stated on pages 2 and 4 of the Official Statement.
3. The Official Statement (a) The Issuer previously has delivered copies of the Preliminary Official
Statement dated April 13, 2010 (the "Preliminary Official Statement') to the Underwriters. The Issuer will
prepare a final Official Statement relating to the Obligations, which will be (i) dated the date of this
Agreement, (ii) complete within the meaning of Rule 15c2 -12 of the United States Securities and Exchange
Commission, as amended (the "Rule and (iii) substantially in the form of the most recent version of the
Preliminary Official Statement provided to the Underwriters before the execution hereof. Such final Official
Statement, including the cover pages thereto, all exhibits, appendices, maps, charts, pictures, diagrams,
reports, and statements included or incorporated therein or attached thereto, and all amendments and
supplements thereto that may be authorized for use with respect to the Obligations, is herein referred to as
the "Official Statement." Until the Official Statement has been prepared and is available for distribution, the
2
Issuer shall provide to the Underwriters sufficient quantities (which may be in a "designated format" as
defined in MSRB Rule G -32) of the Preliminary Official Statement as the Representative deems reasonably
necessary to satisfy the obligations of the Underwriters under the Rule with respect to distribution to each
potential customer, upon request, of a copy of the Preliminary Official Statement.
(b) The Preliminary Official Statement has been prepared for use by the Underwriters in
connection with the public offering, sale and distribution of the Obligations by the Underwriters. The Issuer
hereby represents and warrants that the Preliminary Official Statement is deemed final by the Issuer as of its
date, except for the omission of such information which is dependent upon the final pricing of the
Obligations for completion, all as permitted to be excluded by Section (b)(1) of the Rule.
(c) The Issuer hereby authorizes the Official Statement and the information therein contained
to be used by the Underwriters in connection with the public offering and the sale of the Obligations. The
Issuer consents to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement
in connection with the public offering of the Obligations. The Issuer shall provide, or cause to be provided,
to the Underwriters as soon as practicable after the date of the Issuer's acceptance of this Agreement (but, in
any event, not later than within seven (7) business days after the Issuer's acceptance of this Agreement and in
sufficient time to accompany any confirmation that requests payment from any customer) copies of the
Official Statement which is complete as of the date of its delivery to the Underwriters in such reasonable
quantity as the Representative shall reasonably request in order for the Underwriters to comply with Section
(b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board (the `MSRB'). The
Underwriters hereby agree to timely file the Official Statement with the MSRB.
(d) If, after the date of this Agreement up to and including the date the Underwriters are no
longer required to provide an Official Statement to potential customers who request the same pursuant to the
Rule (the earlier of (i) ninety (90) days from the "end of the underwriting period" (as defined in the Rule) and
(ii) the time when the Official Statement is available to any person from a nationally recognized municipal
securities information repository, but in no case less than 25 days after the "end of the underwriting period"
for the Obligations), the Issuer becomes aware of any fact or event which might or would cause the Official
Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to
state a material fact required to be stated therein or necessary to make the statements therein not misleading,
or if it is necessary to amend or supplement the Official Statement to comply with law, the Issuer will notify
the Representative (and for the purposes of this clause provide the Representative with such information as
the Representative may from time to time reasonably request), and if, in the reasonable opinion of the
Representative, such fact or event requires preparation and publication of a supplement or amendment to the
Official Statement, the Issuer will forthwith prepare and furnish, at the Issuer's own expense (in a form and
manner approved by the Representative), a reasonable number of copies of either amendments or
supplements to the Official Statement so that the statements in the Official Statement as so amended and
supplemented will not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading or so that the Official
Statement will comply with law provided, however, that for all purposes of this Agreement and any certificate
delivered by the Issuer in accordance herewith, the Issuer makes no representations with respect to the
descriptions in the Preliminary Official Statement or the Official Statement of The Depository Trust
Company, New York, New York "DTC or its book -entry -only system. If such notification shall be
subsequent to the Closing, the Issuer shall furnish such legal opinions, certificates, instruments and other
documents as the Representative may reasonably deem necessary to evidence the truth and accuracy of such
supplement or amendment to the Official Statement. Unless otherwise notified in writing by the
Representative, the Issuer can assume that the "end of the underwriting period" for purposes of the Rule is
the date of Closing.
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(e) The Representative hereby agrees to timely file the Official Statement with the MSRB.
Unless otherwise notified in writing by the Representative, the Issuer can assume that the "end of the
underwriting period" for purposes of the Rule is the date of the Closing.
4. Representations, Warranties, and Covenants of the Issuer. The Issuer hereby represents and
warrants to and covenants with the Underwriters that
(a) The Issuer is a home rule municipality and a political subdivision of the State of Texas (the
"State'), and a body politic and corporate, and has full legal right, power and authority to (i) enter into this
Agreement, to adopt the Ordinances, to sell the Obligations, and to issue and deliver the Obligations to the
Underwriters as provided herein and to carry out and consummate all other transactions described in the
Ordinances, this Agreement, and the Continuing Disclosure Undertaking (as referenced in Section 6(h)(2) of
this Agreement), and all documents required hereunder and thereunder to be executed and delivered by the
Issuer, (ii) to sell, issue and deliver the Obligations to the Underwriters as provided herein, and (iii) to carry
out and consummate the transactions described in this Agreement, the Ordinances and the Official
Statement, and the Issuer has complied, and will at the Closing be in compliance in all respects with the terms
of the general laws of the State, including particularly Texas Government Code Chapter 1207, as amended,
(with regard to the Bonds) and Texas Local Government Code, Subchapter C of Chapter 271, as amended,
(with regard to the Certificates), this Agreement and the Ordinances as they pertain to such transactions;
(b) By all necessary official action of the Issuer prior to or concurrently with the acceptance
hereof, the Issuer has duly authorized all necessary action to be taken by it for (i) the adoption of the
Ordinances and the issuance and sale of the Obligations (ii) the approval, execution and delivery of and the
performance by the Issuer of the obligations on its part, contained in the Obligations, the Ordinances, and
this Agreement, and (iii) the consummation by it of all other transactions described in the Official Statement,
the Ordinances, this Agreement, and any and all such other agreements and documents as may be required to
be executed, delivered and /or received by the Issuer in order to carry out, give effect to, and consummate the
transactions described herein and in the Official Statement;
(c) The Ordinances and this Agreement constitute, legal, valid and binding obligations of the
Issuer entitled to the benefits of the Ordinances and enforceable in accordance with their respective terms,
subject to principles of sovereign immunity of political subdivisions, bankruptcy, insolvency, reorganization,
moratorium and other similar laws and principles of equity relating to or affecting the enforcement of
creditors' rights; upon the issuance, authentication and delivery of the Obligations as aforesaid, the Bond
Ordinance will provide for the payment of the Bonds by the levy, assessment and collection of a direct and
continuing ad valorem tax, within the limits prescribed by law, on all taxable property located with the City,
and the Certificate Ordinance will provide for the payment of the Certificates by the levy, assessment and
collection of a direct and continuing ad valorem tax, within the limits prescribed by law, on all taxable
property located within the City and a limited pledge (not to exceed $1,000.00) of the Net Revenues of the
Issuer's Waterworks and Sewer System;
(d) To the best of its knowledge, the Issuer is not in material breach of or default in any material
respect under any applicable constitutional provision, law or administrative regulation of the State or the
United States, relating to the issuance of the Obligations, or any applicable judgment or decree or any loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or
to which the Issuer is otherwise subject, and no event which would have a material and adverse effect upon
the business or financial condition of the Issuer has occurred and is continuing which constitutes or with the
passage of time or the giving of notice, or both, would constitute a material breach or event of default by the
Issuer under any of the foregoing; and the execution and delivery of the Obligations, this Agreement, and the
adoption of the Ordinances and compliance with the provisions on the Issuer's part contained therein, will
not conflict with or constitute a material breach of or default under any constitutional provision,
administrative regulation relating to the issuance of bonds, judgment, decree, loan agreement, indenture,
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bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is
or to which any of its property or assets are otherwise subject or under the terms of any such law, regulation
or instrument, except as provided by the Obligations and the Ordinances;
(e) All authorizations, approvals, licenses, permits, consents and orders of any governmental
authority, legislative body, board, agency or commission having jurisdiction of the matter which are required
for the due authorization of which would constitute a condition precedent to, or the absence of which would
materially adversely affect the due performance by the Issuer of its obligations under this Agreement, the
Ordinances, and the Obligations have been duly obtained, except for the approval of the Obligations by the
Attorney General of the State of Texas and the registration of the Obligations by the Comptroller of Public
Accounts of the State of Texas (each of which will be obtained prior to Closing) and except for such
approvals, consents and orders as may be required under the Blue Sky or securities laws of any jurisdiction in
connection with the offering and sale of the Obligations;
(f) The Obligations and the Ordinances conform to the descriptions thereof contained in the
Official Statement under the caption `THE OBLIGATIONS" the proceeds from the sale of the Bonds and
the Certificates will be applied generally as described in the Official Statement under the caption `PLAN OF
FINANCING Sources and Uses of Bond Proceeds", `PLAN OF FINANCING Sources and Uses of Certificate
Proceeds", and the Continuing Disclosure Undertaking conforms to the description thereof contained in the
Official Statement under the caption "CONTINUING DISCLOSURE OF INFORMATION"
(g) On the date hereof, there is no litigation, action, suit, proceeding, inquiry or investigation, at
law or in equity, before or by any court, government agency, public board or body, pending or, to the best
knowledge of the Issuer, threatened against the Issuer, affecting the existence of the Issuer or the titles of its
officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or
delivery of the Obligations or the collection of taxes pledged to the payment of principal of and interest on the
Obligations pursuant to the Ordinances or in any way contesting or affecting the validity or enforceability of
the Obligations, this Agreement, or contesting the exclusion from gross income of interest on the Obligations
for federal income tax purposes, or contesting in any way the completeness or accuracy of the Preliminary
Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the
powers of the Issuer or any authority for the issuance of the Obligations, the adoption of the Ordinances or
the execution and delivery of this Agreement, nor, to the best knowledge of the Issuer, is there any basis
therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or
enforceability of the Obligations, the Ordinances or this Agreement;
(h) As of the date thereof, the Preliminary Official Statement did not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were made, not misleading;
(i) At the time of the Issuer's acceptance hereof and (unless the Official Statement is amended
or supplemented pursuant to paragraph (d) of Section 3 of this Agreement) at all times subsequent thereto
during the period up to and including twenty-five (25) days subsequent to the end of the underwriting period,
the Official Statement does not and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(j) If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 3
of this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again
supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up
to and including twenty-five (25) days subsequent to the end of the underwriting period the Official
Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to
5
state any material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which made, not misleading;
(k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Bonds
provided in and subject to all of the terms and provisions of the Bond Ordinance and will not take or omit to
take any action which action or omission will adversely affect the exclusion from gross income for federal
income tax purposes of the interest on the Bonds;
The Issuer will apply, or cause to be applied, the proceeds from the sale of the Certificates as
provided in and subject to all of the terms and provisions of the Certificate Ordinance and will not take or
omit to take any action which action or omission will adversely affect the exclusion from gross income for
federal income tax purposes of the interest on the Certificates;
(1) The Issuer will furnish such information and execute such instruments and take such action
in cooperation with the Underwriters as the Representative, at the sole expense of the Underwriters, may
reasonably request (A) to (y) qualify the Obligations for offer and sale under the Blue Sky or other securities
laws and regulations of such states and other jurisdictions in the United States as the Representative may
designate and (z) determine the eligibility of the Obligations for investment under the laws of such states and
other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of
the Obligations (provided, however, that the Issuer will not be required to qualify as a foreign corporation or
to file any general or special consents to service of process under the laws of any jurisdiction) and will advise
the Representative immediately of receipt by the Issuer of any notification with respect to the suspension of
the qualification of the Obligations for sale in any jurisdiction or the initiation or threat of any proceeding for
that purpose;
(m) The financial statements of, and other financial information regarding, the Issuer, in the
Official Statement fairly present the finanrinl position, results of operations and condition of the Issuer as of
the dates and for the periods therein set forth. Prior to the Closing, the Issuer will not take any action within
or under its control that will cause any adverse change of a material nature in such financial position, results
of operations or condition, financial or otherwise, of the Issuer. The Issuer is not a party to any litigation or
other proceeding which, if decided adversely to the Issuer, would have a materially adverse effect on the
financial condition of the Issuer;
(n) Prior to the Closing, the Issuer will not offer or issue any bonds, notes or other obligations
for borrowed money or incur any material liabilities (except in the ordinary course of business), direct or
contingent, payable from or secured by any of the Issuer's ad valorem taxes and the limited pledge (not to
exceed $1,000.00) of the Net Revenues of the Issuer's Waterworks and Sewer System which will secure the
Obligations without the prior approval of the Representative, such approval not to be unreasonably withheld;
and
(o) Any certificate, signed by any official of the Issuer authorized to do so in connection with
the transactions described in this Agreement, shall be deemed a representation and warranty by the Issuer to
the Underwriters as to the statements made therein.
5. Closing. (a) At or before 10:00 a.m. Central Time, on May 27, 2010, or at such other time and date
as shall have been mutually agreed upon by the Issuer and the Representative (the "Closing'), the Issuer will,
subject to the terms and conditions hereof, deliver the Obligations to the Representative, duly executed and
authenticated and the Representative will, subject to the terms and conditions hereof, accept such delivery
and pay the purchase price of the Obligations, as set forth in Section 1 of this Agreement, by a federal wire
transfer, payable in immediately available funds, to the order of the Issuer. Payment for the Obligations as
aforesaid shall be made at the offices of The Bank of New York Mellon Trust Company, N.A., Dallas, Texas
6
(the "Paying Agent /Registrar or such other place as shall have been mutually agreed upon by the Issuer
and the Representative. The initial Obligations shall be registered in the name of the Representative.
(b) Delivery of the Obligations in definitive form shall be made to DTC. The definitive
Obligations shall be delivered in fully registered form, bearing CUSIP numbers without coupons, with one
certificate for each maturity of the Obligations, registered in the name of Cede Co., all as provided in the
Ordinances, and shall be made available to the Representative at least one business day before Closing for
purposes of inspection (i) at DTC or (ii) at the office of the Paying Agent /Registrar, if the definitive
Obligations are to be held in safekeeping for DTC by the Paying Agent /Registrar pursuant to DTC's FAST
System.
6. Closing Conditions. The Underwriters have entered into this Agreement in reliance upon the
representations, warranties and agreements of the Issuer contained herein, and in reliance upon the
representations, warranties and agreements to be contained in the documents and instruments to be delivered
at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof
and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Agreement to
purchase, to accept delivery of and to pay for the Obligations shall be conditioned upon the performance by
the Issuer of its obligations to be performed hereunder and under such documents and instruments at or
prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by
the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to the
Representative:
(a) The representations and warranties of the Issuer contained herein shall be true, complete
and correct in all material respects on the date hereof and on and as of the date of the Closing, as if made on
the date of the Closing;
(b) The Issuer shall have performed and complied with all agreements and conditions required
by this Agreement to be performed or complied with by it prior to or at the Closing;
(c) At the time of the Closing, (i) this Agreement, the Ordinances and the Obligations shall be
in full force and effect and shall not have been amended, modified or supplemented, and the Official
Statement shall not have been supplemented or amended, except in any such case as may have been agreed to
by the Representative; and (ii) all actions of the Issuer required to be taken by the Issuer shall be performed in
order for Bond Counsel and counsel to the Underwriters to deliver their respective opinions referred to
hereafter;
(d) At or prior to the Closing, the Ordinances each shall have been duly adopted by the
governing body of the Issuer and the Issuer shall have duly executed and delivered and the Paying
Agent /Registrar shall have duly authenticated the definitive Obligations;
(e) At the time of the Closing, there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or in the revenues or operations of
the Issuer, from that set forth in the Official Statement that, in the reasonable judgment of the
Representative, is material and adverse and that makes it, in the reasonable judgment of the Representative,
impracticable to market the Obligations on the terms and in the manner contemplated in the Official
Statement;
(f) The Issuer shall not have failed to pay principal or interest when due on any of its
outstanding obligations for borrowed money;
7
(g) All steps to be taken and all instruments and other documents to be executed, and all other
legal matters in connection with the transactions described in this Agreement shall be reasonably satisfactory
in legal form and effect to the Representative; and
(h) At or prior to the Closing, the Underwriters, or their counsel, shall have received one (1)
copy of each of the following documents:
(1) The Official Statement, and each supplement or amendment thereto, if any, as may
have been agreed to by the Representative, or a conformed copy thereof;
(2) The Bond Ordinance and the Certificate Ordinance (each including the continuing
disclosure undertaking of the Issuer which satisfies the requirements of section (b)(5)(i) of the Rule,
the "Continuing Disclosure Undertaking') with such supplements or amendments as may have been
agreed to by the Representative;
(3) the opinion of Fulbright Jaworski L.L.P., Dallas, Texas (`Bond Counsel') with
respect to each series of the Obligations, in substantially the forms attached to the Official Statement;
(4) a supplemental opinion of Bond Counsel addressed to the Issuer and the
Underwriters, substantially to the effect that
(i) the Obligations are exempted securities within the meaning of Section
3(a)(2) of the Securities Act of 1933, as amended (the "1933 Act'), and it is not necessary, in
connection with the offering and sale of the Obligations, to register the Obligations under
the 1933 Act or to qualify the Ordinances under the Trust Indenture Act of 1939, as
amended (the `Trust Indenture Act'); and
(ii) the statements and information contained in the Official Statement under
the captions `PLAN OF FINANCE" (except under the subcations "Sources and Uses of Bond
Proceeds" and "Sources and Uses of Certificate Proceeds'), `THE OBLIGATIONS" (except under
subcaptions "Book- Entry -Only System," and "Obligationholders' Remedie/" "TAX MAI LERS",
"CONTINUING DISCLOSURE OF INFORMATION" (except for the information under
the subcaption "Compliance with Prior Undertakings"), and the subcaptions `Registration and
Qualification of Obligations for Sale," 'Legal Investments and Eligibility to Secure Public Funds in Texas"
and `L.egal Matters" (except for the last two sentences of the first paragraph thereof)" under
the caption "OTHER INFORMATION" are an accurate and fair description of the laws and
legal issues addressed therein and conform to the provisions of the respective Ordinances;
(5) An opinion of West Associates, L.L.P., Underwriters' Counsel, dated the date of
Closing and addressed to the Underwriters, to the effect that:
(i) the Obligations are exempted securities under the 1933 Act and the Trust
Indenture Act and it is not necessary, in connection with the offering and sale of the
Obligations, to register the Obligations under the 1933 Act and the Ordinances need not be
qualified under the Trust Indenture Act; and
(ii) based upon their participation in the preparation of the Official Statement
as counsel for the Underwriters and their participation at conferences at which the Official
Statement was discussed, but without having undertaken to determine independently the
accuracy, completeness or fairness of the statements contained in the Official Statement,
such counsel has no reason to believe that the Official Statement contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements
8
therein, in light of the circumstances under which they were made, not misleading (except
for any financial, forecast, technical and statistical statements and data included in the
Official Statement and the information regarding DTC and its book -entry system, as to
which no view need be expressed);
(6) A certificate, dated the date of Closing, of an appropriate official of the Issuer to the
effect that (i) the representations and warranties of the Issuer contained herein are true and correct in
all material respects on and as of the date of Closing as if made on the date of Closing; (ii) except as
disclosed in the Official Statement, no litigation or proceeding against the Issuer is pending or, to the
best of his or her knowledge, threatened in any court or administrative body, nor is there a basis for
litigation which would (a) contest the right of the councilmembers or officials of the Issuer to hold
and exercise their respective positions, (b) contest the due organization and valid existence of the
Issuer, (c) contest the validity, due authorization and execution of the Obligations, this Agreement,
or the Ordinances or (d) attempt to enjoin or otherwise prevent the Issuer from functioning and
collecting taxes pursuant to the Ordinances, and other income or the levy or collection of the taxes
to pay the principal of and interest on the Obligations, or the pledge thereof, or with respect to the
Certificates, from collecting System revenues pledged or to be pledged to the payment of principal of
and interest on the Certificates; (iii) all official actions of the Issuer relating to the Official Statement,
the Obligations, this Agreement, and the Ordinances have been duly taken by the Issuer, are in full
force and effect and have not been modified, amended or repealed, and (iv) to the best of his or her
knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which
should be disclosed in the Official Statement for the purpose for which it is to be used or which it is
necessary to disclose therein in order to make the statements and information therein, in light of the
circumstances under which made, not misleading in any material respect as of the time of Closing,
and the information contained in the Official Statement is correct in all material respects and, as of
the date of the Official Statement did not, and as of the date of the Closing does not, contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances under which they
were made, not misleading;
(7) A certificate of the Issuer in form and substance satisfactory to Bond Counsel
setting forth the facts, estimates and circumstances in existence on the date of the Closing, which
establish that it is not expected that the proceeds of the Obligations will be used in a manner that
would cause the Obligations to be "arbitrage bonds" within the meaning of Section 148 of the
Internal Revenue Code of 1986, as amended (the "Code"), and any applicable regulations (whether
final, temporary or proposed), issued pursuant to the Code;
(8) The approving opinion of the Attorney General of the State of Texas and the
registration certificate of the Comptroller of Public Accounts of the State of Texas with respect to
the initial Bond;
The approving opinion of the Attorney General of the State of Texas and the registration
certificate of the Comptroller of Public Accounts of the State of Texas with respect to the initial
Certificate;
(9) Evidence satisfactory to the Representative that the Bonds and the Certificates each
have been assigned a rating of "AA" (positive outlook) by Fitch Ratings and "AAA" (stable outlook)
by Standard Poor's Ratings Services, a Standard and Poor's Financial Services LLC business,
without regard to credit enhancement, and that such ratings are in effect as of the date of Closing;
(10) A sufficiency certificate duly executed by the Refunded Obligations Paying Agent
which certifies that the proceeds of the sale of the Bonds, received from the Underwirters and
9
deposited in the trust clearing account described in the Bond Ordinance, axe sufficient to accomplish
the discharge and final payment of the Refunded Obligations on their respective redemption dates;
and
(11) Such additional legal opinions, certificates, instruments and other documents as
may be required by the Ordinances or as Bond Counsel, the Representative or counsel to the
Underwriters may reasonably request to evidence the truth and accuracy, as of the date hereof and as
of the date of the Closing, of the Issuer's representations and warranties contained herein and of the
statements and information contained in the Official Statement and the due performance or
satisfaction by the Issuer on or prior to the date of the Closing of all the respective agreements then
to be performed and conditions then to be satisfied by the Issuer.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof if but only if
they are in form and substance reasonably satisfactory to the Representative.
If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, to accept delivery of and to pay for the Obligations contained in this Agreement, or if the
obligations of the Underwriters to purchase, to accept delivery of and to pay for each series of the
Obligations shall be terminated for any reason permitted by this Agreement, as it relates to such series of the
Obligations, this Agreement shall terminate and neither the Underwriters nor the Issuer shall be under any
further obligation hereunder, except that the respective obligations of the Issuer and the Underwriters set
forth in Section 1 (with respect to the Check(s)) and 8 hereof shall continue in full force and effect.
7. Termination. The Underwriters shall have the right to cancel their obligation to purchase either or
both series of the Obligations if, between the date of this Agreement and the Closing, the market price or
marketability of either or both series of the Obligations shall be materially adversely affected, in the
reasonable judgment of the Representative, as evidenced by a written notice to the Issuer terminating the
obligation of the Underwriters to accept delivery of and pay for the Obligations by the occurrence of any of
the following:
(a) legislation shall be enacted by or introduced in the Congress of the United States or
recommended to the Congress for passage by the President of the United States, or the Treasury Department
of the United States or the Internal Revenue Service or any member of the Congress or favorably reported
for passage to either House of the Congress by any committee of such House to which such legislation has
been referred for consideration, a decision by a court of the United States or of the State or the United States
Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release,
statement or other form of notice by or on behalf of the Treasury Department of the United States, the
Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of
which would be to impose, directly or indirectly, federal income taxation upon interest received on
obligations of the general character of the Obligations;
(b) legislation introduced in or enacted (or resolution passed) by the Congress or an order,
decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final,
temporary, or proposed), press release or other form of notice issued or made by or on behalf of the
Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject
matter, to the effect that obligations of the general character of the Obligations, including any or all
underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or
that either of the Ordinances is not exempt from qualification under or other requirements of the Trust
Indenture Act, or that the issuance, offering, or sale of obligations of the general character of the Obligations,
including any or all underlying arrangements, as described herein or on the Official Statement or otherwise, is
or would be in violation of the federal securities law as amended and then in effect;
10
(c) a general suspension of trading in securities on the New York Stock Exchange or the
American Stock Exchange, the establishment of minimum prices on either such exchange, the establishment
of material restrictions (not in force as of the date hereof) upon trading securities generally by any
governmental authority or any national securities exchange, a general banking moratorium declared by federal,
State of New York, or State officials authorized to do so;
(d) the New York Stock Exchange or other national securities exchange or any governmental
authority, shall impose, as to the Obligations or as to obligations of the general character of the Obligations,
any material restrictions not now in force, or increase materially those now in force, with respect to the
extension of credit by, or the charge to the net capital requirements of, the Underwriters, which change shall
occur subsequent to the date hereof and shall not be due to the malfeasance, misfeasance, or nonfeasance of
the Underwriters;
(e) any amendment to the federal or state Constitution or action by any federal or State court,
legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Issuer,
its property, income securities (or interest thereon), or the validity or enforceability of the assessments or the
levy of taxes to pay principal of and interest on the Obligations;
(f) any event occurring, or information becoming known which, in the reasonable judgment of
the Representative, makes untrue in any material respect any material statement or information contained in
the Official Statement, or has the effect that the Official Statement contains any untrue statement of material
fact or omits to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and any amendment or
supplement of the Official Statement that, in the reasonable opinion of the Representative, will result in the
market price or marketability of the Obligations to be materially adversely affected;
(g) there shall have occurred since the date of this Agreement any materially adverse change in
the affairs or financial condition of the Issuer, except for changes which the Official Statement discloses are
expected to occur;
(h) the United States shall have either become engaged in hostilities that did not exist prior to
the date hereof or issued a declaration of war or a national emergency, or there shall have occurred a new
material outbreak or escalation of hostilities or a national or international calamity or crisis, financial or
otherwise, the effect of such outbreak, calamity or crisis on the financial markets of the United States being
such as, in the reasonable opinion of the Representative, would materially and adversely affect the ability of
the Underwriters to market the Obligations;
(i) any fact or event shall exist or have existed that, in the Representative's reasonable judgment,
requires or has required an amendment of or supplement to the Official Statement and the Issuer has failed
to amend or supplement the Official Statement in compliance with this Agreement;
(j) there shall have occurred or any notice shall have been given of any review, downgrading,
suspension, withdrawal, or negative change in credit watch status by any national rating service to the
underlying rating accorded any of the Issuer's obligations (including the ratings to be accorded the
Obligations) that will result in the market price or marketability of the Obligations being materially adversely
affected;
(k) the purchase of and payment for 10% or more of the Obligations by the Underwriters, or
the resale of 10% or more of the Obligations by the Underwriters, on the terms and conditions herein
provided shall be prohibited by any applicable law, governmental authority, board, agency or commission;
provided, however, that such prohibition is not caused by any intentional act, or failure to act, of the
Underwriters; and
11
With respect to the condition described in subparagraph (k) above, the Underwriters are not aware of
any current, pending or proposed law or government inquiry or investigation as of the date of execution of
this Agreement which would permit the Underwriters to invoke their termination rights thereunder.
8. Expenses. (a) The Underwriters shall be under no obligation to pay, and the Issuer shall pay, any
expenses incident to the performance of the Issuer's obligations hereunder, including, but not limited to (i)
the cost of preparation and printing of the Obligations, (ii) the fees and disbursements of Bond Counsel; (iii)
the fees and disbursements of the Financial Advisor to the Issuer; (iv) the fees and disbursements of any
other engineers, accountants, and other experts, consultants or advisers retained by the Issuer; (v) the fees for
bond ratings; (vi) the costs of preparing, printing and mailing the Preliminary Official Statement and the
Official Statement; (vii) the fees and expenses of the Paying Agent /Registrar (viii) advertising expenses
(except any advertising expenses of the Underwriters as set forth below); (ix) the out -of- pocket, miscellaneous
and closing expenses, including the cost of travel, of the officers and trustees of the Issuer; and (x) any other
expenses mutually agreed to by the Issuer and the Representative to be reasonably considered expenses of the
Issuer which are incident to the transactions described herein.
(b) The Underwriters shall pay (i) the cost of preparation and printing of this Agreement, the
Blue Sky Survey and Legal Investment Memorandum, if any; (ii) all advertising expenses in connection with
the public offering of the Obligations; and (iii) all other expenses incurred by it in connection with the public
offering of the Obligations, including the fees and disbursements of counsel retained by the Underwriters.
9. Notices. Any notice or other communication to be given to the Issuer under this Agreement may
be given by delivering the same in writing to the City of Southlake, Texas, 1400 Main Street, Suite 400,
Southlake, Texas 76092, Attention: Sharen Jackson, CPA, Director of Finance and any notice or other
communication to be given to the Underwriters under this Agreement may be given by delivering the same in
writing to Southwest Securities, Inc., 1201 Elm Street, Suite 4300, Dallas, Texas 75270, Attention: Dan
Almon.
10. Parties in Interest. This Agreement as heretofore specified shall constitute the entire agreement
between us and is made solely for the benefit of the Issuer and the Underwriters (including successors or
assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue
hereof. This Agreement may not be assigned by the Issuer. All of the Issuer's representations, warranties
and agreements contained in this Agreement shall remain operative and in full force and effect, regardless of
(i) any investigations made by or on behalf of any of the Underwriters; (ii) delivery of and payment for the
Obligations pursuant to this Agreement; and (iii) any termination of this Agreement.
11. Effectiveness. This Agreement shall become effective upon the acceptance hereof by the Issuer and
shall be valid and enforceable at the time of such acceptance.
12. Choice of Law. This Agreement shall be governed by and construed in accordance with the law of
the State of Texas.
13. Severabi ity. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be
invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions because it conflicts with any provision or provisions of any Constitution, statute, rule of
public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other
provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever.
14. Business Day. For purposes of this Agreement, "business day" means any day on which the New
York Stock Exchange is open for trading.
12
15. Section Headings. Section headings have been inserted in this Agreement as a matter of
convenience of reference only, and it is agreed that such section headings are not a part of this Agreement
and will not be used in the interpretation of any provisions of this Agreement.
16. Counterparts. This Agreement may be executed in several counterparts each of which shall be
regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same
document) and all of which shall constitute one and the same document.
17. No Personal Liability. None of the members of the City Council, nor any officer, agent, or
employee of the Issuer, shall be charged personally by the Underwriters with any liability, or be held liable to
the Underwriters under any term or provision of this Agreement, or because of execution or attempted
execution, or because of any breach or attempted or alleged breach, of this Agreement.
18. Entire Agreement. This Agreement represents the entire agreement between the Issuer and the
Underwriters with respect to the preparation of the Official Statement, and the conduct of the offering, and
the purchase and sale of the Obligations.
If you agree with the foregoing, please sign the enclosed counterpart of this Agreement and return it
to the Representative. This Agreement shall become a binding agreement between you and the Underwriters
when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties
hereto.
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Respectfully submitted,
SOUTHWEST SECURITIES, INC.
RBC CAPITAL MARKETS CORPORATION
STIFEL, NICOLAUS CO., INC.
MORGAN KEEGAN CO., INC.
By: Southwest Securities, Inc.
By:
Name:
Title
Date:
[REPRESENTATIVE'S SIGNATURE PA G E FOR CI T Y OF S O U T HL A KE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010AND TAX AND WATERWORKS
AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2010 PURCHASE AGREEMENT]
ACCEPTANCE
ACCEPTED this 20th day of April, 2010 at a.m. /p.m..
CITY OF SOUTHLAKE TEXAS
By:
Name: John Terrell
Title: Mayor
ISSUER'S SIGNATURE PAGE FOR CITYOFSOUTHLAKE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010 AND TAX AND
WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2010 PURCHASEAGREEMENTJ
I
SCHEDULE I
LIST OF UNDERWRITERS
SOUTHWEST SECURITIES, INC.
RBC CAPITAL MARKETS CORPORATION
STIFEL, NICOLAUS CO., INC.
MORGAN KEEGAN CO., INC
II
SCHEDULE II
$26,730,000 City of Southlake, Texas
General Obligation Refunding Bonds, Series 2010
Interest Accrues From: May 1, 2010
Principal Maturity Interest Principal Maturity Interest
Amount (Feb. 15) Rate Yield Amount (Feb 15) Rate Yield
$4,590,000 2011 3.000% 0.500% $2,940,000 2018 4.000% 2.900%
3,850,000 2012 4.000% 0.950% 120,000 2019 3.250% 3.130%
3,250,000 2013 4.000% 1.290% 125,000 2020 3.500% 3.350 %(1)
2,860,000 2014 4.000% 1.650% 125,000 2021 3.500% 3.550%
2,995,000 2015 4.000% 2.000% 130,000 2022 3.500% 3.700%
2,760,000 2016 3.000% 2.400% 140,000 2023 4.000% 3.800 %(1)
2,845,000 2017 3.000% 2.700%
$15,745,000 City of Southlake, Texas*
Tax and Waterworks and Sewer System (Limited Pledge) Revenue
Certificates of Obligation, Series 2010
Interest Accrues From: May 1, 2010
Initial
Principal Maturity Interest Principal Maturity Interest Reoffering
Amount (Feb. 15) Rate Yield Amount (Feb. 15) Rate Yield
$720,000 2011 3.000% 0.450% $640,000 2021 3.500% 3.550%
915,000 2012 3.000% 0.950% 670,000 2022 4.000% 3.700 %(1)
945,000 2013 4.000% 1.290% 695,000 2023 4.000% 3.800 %(1)
990,000 2014 4.000% 1.650% 720,000 2024 4.000% 3.900 %(1)
1,025,000 2015 4.000% 2.000% 755,000 2025 4.000% 3.970 %(1)
1,075,000 2016 4.000% 2.400% 780,000 2026 4.000% 4.060%
560,000 2017 3.000% 2.700% 815,000 2027 4.000% 4.120%
575,000 2018 3.000% 2.900% 845,000 2028 4.125% 4.200%
595,000 2019 3.500% 3.130% 885,000 2029 4.200% 4.250%
620,000 2020 3.500% 3.350 %(1) 920,000 2030 4.250% 4.320%
The City reserves the right at it's option to redeem Obligations having stated maturities on and after February 15, 2020 in whole or in part in
principal amounts of $5000 or any integral multiple thereof, on February 15, 2019, or any date thereafter, at the par value thereof plus accrued
interest to the date of redemption.
(I) Yield shown is to first call date, February 15, 2019.
III
EXHIBIT C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 37 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2. The information in the Official Statement contained in Tables 1 through 6 and 8
through 14.
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
90005473.2/11000319 C -1