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0973 OFFICIAL RECORD ORDINANCE NO. 973 AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010 specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval and execution of a Paying Agent/Registrar Agreement, and a Purchase Agreement; providing for the redemption of certain outstanding obligations of the City; and providing an effective date. WHEREAS, the City Council of the City of Southlake, Texas (the "City has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $27,655,000 (collectively, the "Refunded Obligations more particularly described as follows: (1) City of Southlake, Texas, Tax and Waterworks and Sewer System (Limited Pledge) Revenue Certificates of Obligation, Series 1999, dated April 1, 1999, scheduled to mature on February 15 in each of the years 2011 and 2012, and aggregating in principal amount of $1,755,000 (the "Series 1999 Refunded Obligations (2) City of Southlake, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2000A, dated March 1, 2000, scheduled to mature on February 15, 2011, in the aggregate principal amount of $455,000 (the "Series 2000A Refunded Obligations (3) City of Southlake, Texas, Tax and Limited Pledge Revenue Certificates of Obligation, Series 2000C, dated December 1, 2000, scheduled to mature on August 15 in each of the years 2011 through 2013, inclusive, and aggregating in principal amount of $470,000 (the "Series 2000C Refunded Obligations (4) City of Southlake, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2000D, dated December 1, 2000, scheduled to mature on February 15 in each of the years 2011 through 2013, inclusive, and aggregating in principal amount of $1,180,000 (the "Series 2000D Refunded Obligations (5) City of Southlake, Texas, Tax and Tax Increment Revenue Certificates of Obligation (Reinvestment Zone #1), Series 2000E, dated December 1, 2000, scheduled to mature on February 15 in each of the years 2011 through 2018, inclusive, and aggregating in principal amount of $1,130,000 (the "Series 2000E Refunded Obligations (6) City of Southlake, Texas, General Obligation Refunding and Improvement Bonds, Series 2003, dated April 15, 2003, scheduled to mature on 90005479 February 15 in each of the years 2011 through 2018, inclusive, and aggregating in principal amount of $2,195,000 (the "Series 2003 Refunded Bonds (7) City of Southlake, Texas, Tax and Tax Increment Revenue Certificates of Obligation (Reinvestment Zone #1), Series 2003A, dated April 15, 2003, scheduled to mature on February 15 in each of the years 2011 through 2018, inclusive, and aggregating in principal amount of $4,045,000 (the "Series 2003A Refunded Certificates (8) City of Southlake, Texas, Tax and Tax Increment Revenue Refunding Bonds (Reinvestment Zone #1), Series 2003A, dated April 15, 2003, scheduled to mature on February 15 in each of the years 2011 through 2018, inclusive, and aggregating in principal amount of $8,785,000 (the "Series 2003A Refunded Bonds (9) City of Southlake, Texas, Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Series 2003, dated April 15, 2003, scheduled to mature on February 15 in each of the years 2011 through 2023, inclusive, and aggregating in principal amount of $7,650,000 (the "Series 2003 Refunded Certificates AND WHEREAS, pursuant to the provisions of Texas Government Code, Chapter 1207, as amended, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale directly with the place of payment for the Refunded Obligations, or other authorized depository, and such deposit, when made in accordance with said statute, and the ordinances authorizing the issuance of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; and WHEREAS, the City Council hereby finds and determines that general obligation refunding bonds should be issued at this time to refund the Refunded Obligations, and such refunding will result in the City saving approximately $2,402,210.06 in debt service payments on such indebtedness and further provide present value savings of approximately $2,196,738.59; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: SECTION 1: Authorization Designation Principal Amount Purpose. General obligation refunding bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $26,730,000 to be designated and bear the title "CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010" (hereinafter referred to as the "Bonds for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Obligations and to pay costs of issuance, in accordance with authority conferred by and in conformity with the Constitution and laws of the State of Texas, including Texas Government Code, Chapter 1207. 90005479.3/11000319 2 SECTION 2: Fully Registered Obligations Bond Date Authorized Denominations Stated Maturities Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated May 1, 2010 (the "Issue Date shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity, except for the single Initial Bond referenced in Section 8) thereof, and shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities and bear interest at the rate(s) per annum in accordance with the following schedule: YEAR OF PRINCIPAL INTEREST MATURITY AMOUNT RATE(S) 2011 4,590,000 3.00% 2012 3,850,000 4.00% 2013 3,250,000 4.00% 2014 2,860,000 4.00% 2015 2,995,000 4.00% 2016 2,760,000 3.00% 2017 2,845,000 3.00% 2018 2,940,000 4.00% 2019 120,000 3.25% 2020 125,000 3.50% 2021 125,000 3.50% 2022 130,000 3.50% 2023 140,000 4.00% The Bonds shall bear interest on the unpaid principal amounts from Issue Date at the rates per annum shown above in this Section (calculated on the basis of a 360 -day year of twelve 30 -day months). Interest on the Bonds shall be payable on February 15 and August 15 in each year, commencing August 15, 2010. SECTION 3: Terms of Payment Paying Agent/Registrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders appearing on the registration and transfer books maintained by the Paying Agent/Registrar, and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, exchange and transfer of the Bonds (the "Security Register shall at all times be kept and maintained on behalf of the City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying Agent/Registrar Agreement substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor or Mayor Pro Tem and City Secretary are hereby authorized to execute and deliver such Paying Agent /Registrar Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying Agent /Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent /Registrar shall be a 90005479.3/11000319 3 commercial bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent /Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent /Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or redemption, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices 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 Bonds shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent /Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date will be established by the Paying Agent/ Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated Maturities 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 Bonds (unless a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the City. 90005479.3/11000319 4 (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or the principal amount thereof, to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. (e) Conditional Notice of Redemption. With respect to any optional redemption of the Bonds, unless moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received by the Paying Agent /Registrar prior to the giving of such notice of redemption, such notice may 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 Bonds and the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed. SECTION 5: Registration Transfer Exchange of Bonds Predecessor Bonds. The Paying Agent /Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Paying Agent /Registrar at the Designated 900054793/11000319 5 Payment/Transfer Office for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender of any Bond (except for the single Initial Bond referenced in Section 7 hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, one or more new Bonds shall be registered and issued to the assignee or transferee of the previous Holder; such Bonds to be in authorized denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds (other than the single Initial Bond referenced in Section 7) may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment /Transfer Office of the Paying Agent/ Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent /Registrar shall register and deliver new Bonds to the Holder requesting the exchange. All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent /Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 10 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. 90005479.3/11000319 6 SECTION 6: Execution Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Issue Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in Texas Government Code, Chapter 1201, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 8(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 8(d), manually executed by an authorized officer, employee or representative of the Paying Agent /Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. SECTION 7: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond 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 bonds, being one bond for each stated maturity in the applicable principal amount and denomination and to be numbered consecutively from T -1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bond(s) submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 8: Forms. (a) Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends in the event the Bonds, 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 90005479 7 determined by the officers executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved or typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. (b) Form of Definitive Bond. REGISTERED REGISTERED NO. UNITED STATES OF AMERICA STATE OF TEXAS CITY OF SOUTHLAKE, TEXAS GENERAL OBLIGATION REFUNDING BOND SERIES 2010 Issue Date: Interest Rate: Stated Maturity: CUSIP NO: May 1, 2010 February 15, 20 Registered Owner: Principal Amount: 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 Issue Date at the per annum rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on February 15 and August 15 in each year, commencing August 15, 2010. Principal of this Bond is payable at its Stated Maturity or upon prior 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. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, a legal 90005479.3/11000319 8 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 a 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 Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the series specified in its title issued in the aggregate principal amount of $26,730,000 (herein referred to as the "Bonds for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the Ordinance hereinafter referenced and referred to as the "Refunded Obligations and to pay costs of issuance, under and in strict conformity with the Constitution and laws of the State of Texas, including Texas Government Code, Chapter 1207, as amended, and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance The Bonds maturing on and after February 15, 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 the date fixed for any redemption of Bonds, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the registered owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terms and provisions relating thereto contained in the Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date such Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event a portion of the principal amount of a Bond is to be redeemed and the registered owner is someone other than Cede Co., payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the City and the Paying Agent /Registrar shall not be required to transfer such Bond to an assignee of the registered owner within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the registered owner of the unredeemed balance of a Bond redeemed in part. 90005479 9 With respect to any optional redemption of the Bonds, unless moneys sufficient to pay the principal of and premium if any, and interest on the Bonds to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice may 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 Bonds, and the Paying Agent/Registrar shall give notice, in the same manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent /Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity, or upon its prior 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, 90005479.3/11000319 10 first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Issue Date. CITY OF SOUTHLAKE, TEXAS Mayor COUNTERSIGNED: City Secretary (SEAL) 90005479.3/11000319 1 1 (c) Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bond(s) only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS REGISTER NO. THE STATE OF TEXAS I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) (d) Form of Certificate of Paying Agent/Registrar to appear on Definitive Bonds only. REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR This Bond has been duly issued and registered in the name of the Registered Owner shown above under the provisions of the within mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated office of the Paying Agent/Registrar in Dallas, Texas, is the Designated Payment/Transfer Office for this Bond. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., Dallas, Texas, Registration date: as Paying Agent/Registrar By: Authorized Signature 90005479.3/11000319 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 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: 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 Bond in every particular. (f) The Initial Bond(s) shall be in the form set forth in paragraph (b)of this Section, except that the form of the single fully registered Initial Bond shall be modified as follows: Heading and first paragraph shall read as follows: REGISTERED REGISTERED NO T -1 $26,730,000 UNITED STATES OF AMERICA STATE OF TEXAS CITY OF SOUTHLAKE, TEXAS GENERAL OBLIGATION REFUNDING BOND SERIES 2010 Issue Date: May 1, 2010 Registered Owner: SOUTHWEST SECURITIES, INC. Principal Amount: TWENTY -SIX MILLION SEVEN HUNDRED THIRTY 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 90005479.3/11000319 13 above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: YEAR OF PRINCIPAL INTEREST MATURITY INSTALLMENTS RATE (information to be inserted from schedule in section 2 hereof). (or so much principal thereof as shall not have been prepaid prior to maturity) and to pay interest on the unpaid Principal Amount hereof from the Issue Date at the per annum rates of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on February 15 and August 15 in each year, commencing August 15, 2010. Principal installments of this Bond are payable in the year of maturity 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 Bond whose name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of business on the "Record Date which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date for the payment of the principal of or interest on this Bond 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 Bond shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 9: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their payment at maturity or redemption or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 2010 Refunding Bond 90005479.3/11000319 14 Account" (the "Interest and Sinking Fund maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. The Mayor, Mayor Pro Tem, City Secretary, City Manager and Director of Finance of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. PROVIDED, however, in regard to the payments to become due on the Bonds on August 15, 2010, sufficient current funds will be available and are hereby appropriated to make such payments; and the Mayor, Mayor Pro Tem, City Secretary, City Manager and Director of Finance of the City are hereby authorized and directed to transfer and deposit in the Interest and Sinking Fund such current funds which, together with the accrued interest received from the initial purchasers, will be sufficient to pay the payments on the Bonds on August 15, 2010. SECTION 10: Mutilated Destroyed Lost and Stolen Bonds. In case any Bond shall be mutilated, destroyed, lost or stolen, the Paying Agent /Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/ Registrar of evidence satisfactory to the Paying Agent/ Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/ Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, destroyed, lost or stolen. Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 11: Satisfaction of 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 Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. 900054793/11000319 15 Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. The term "Government Securities as used herein, means (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the City are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. SECTION 12: Ordinance a Contract Amendments Outstanding Bonds. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any 900054793/11000319 16 Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 11 hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 10 hereof. SECTION 13: Covenants to Maintain Tax Exempt Status. (a) Definitions. When used in this Section, the following terms shall have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148 -1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148 -1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Nonpurpose Investment" means any investment property, as defined in Section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. 900054793/11000319 17 "Rebate Amount" has the meaning set forth in Section 1.148 -1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (i) any Investment has the meaning set forth in Section 1.148 -5 of the Regulations; and (ii) the Bonds has the meaning set forth in Section 1.148 -4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any Bond to become includable in the gross income, as defined in Section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by Section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds (including property financed with Gross Proceeds of the Refunded Obligations), and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Obligations), other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. 90005479.3/11000319 18 (d) No Private Loan. Except to the extent permitted by Section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file 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 Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in Section 148(0 of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. 90005479.3/11000319 19 (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States from an appropriate fund, or if permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the Interest and Sinking Fund, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148 3(e)(2) of the Regulations, one hundred percent (100 of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90 of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by Section 148(0 of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038 -T or such other forms and information as is or may be required by Section 148(0 of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148 -3(h) of the Regulations. (i) Not to Divert 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 Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. (j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem, City Manager, Director of Finance, Assistant City Manager and City Secretary, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. (k) Bonds Not Hedge Bonds. (1) At the time the original obligations refunded by the Bonds were issued, the City reasonably expected to spend at least 85% of the spendable proceeds of such obligations within three years after such obligations were issued and (2) not more than 50% of the proceeds of the original obligations refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. 90005479.3/11000319 20 (1) Current Refunding. The Bonds are a current refunding of the Refunded Obligations in that the Bonds will be issued less than 90 days before the redemption of the Refunded Obligations. SECTION 14: Sale of Bonds Official Statement Approval. The sale of the Bonds authorized by this Ordinance to Southwest Securities, Inc., RBC Capital Markets Corporation, Stifel, Nicolaus Company, Inc., and Morgan Keegan Company, Inc. (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 Bonds 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 Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 15: Book Entry -Only Transfers and Transactions. Notwithstanding the provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer /exchange of the Bonds, the City hereby approves and authorizes the use of "Book- Entry-Only" securities clearance, settlement and transfer system provided by The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York "DTC 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 Bonds shall be deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book -entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its duties as 90005479.3/11000319 21 securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4, and 5 hereof. SECTION 16: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, Mayor Pro Tem, City Manager, Assistant City Manager, Director of Finance, and City Secretary, any one or more of said officials, are hereby authorized and directed to furnish and execute such agreements, documents and certifications relating to the City and the issuance, sale and delivery of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure and investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Purchasers, and, together with the City's bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 17: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale, excluding the accrued interest received from the purchasers and amounts to pay costs of issuance, in an amount sufficient to refund the Refunded Obligations shall be deposited with The Bank of New York Mellon Trust Company, N.A. (the current paying agent for the Refunded Obligations and hereinafter called the "Deposit Agent for the payment and discharge of the Refunded Obligations. The proceeds of sale of the Bonds not so deposited with the Deposit Agent for the refunding of the Refunded Obligations shall be disbursed and deposited for the payment of costs of issuance. Any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund. Accrued interest received from the Purchasers as well as all surplus proceeds of sale of the Bonds, including investment earnings, remaining after refunding the Refunded Obligations shall be deposited to the credit of the Interest and Sinking Fund. Additionally, on or immediately prior to the date of delivery of the Bonds to the Purchasers, the Director of Finance shall cause to be transferred in immediately available funds to the Deposit Agent from moneys on deposit in the interest and sinking funds maintained for the payment of the Refunded Obligations the sum of $225,000 to accomplish the refunding. SECTION 18: Redemption of Refunded Obligations. (a) In order to provide for the refunding, discharge and retirement of the Series 1999 Refunded Obligations, the Series 1999 Refunded Obligations shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is 90005479.3/11000319 22 hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (successor paying agent /registrar to Chase Bank of Texas, National Association, Dallas, Texas) in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -1 and incorporated herein by reference as a part of this Ordinance for all purposes. (b) In order to provide for the refunding, discharge and retirement of the Series 2000A Refunded Obligations, the Series 2000A Refunded Obligations shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association, Dallas, Texas), in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -2 and incorporated herein by reference as a part of this Ordinance for all purposes. (c) In order to provide for the refunding, discharge and retirement of the Series 2000C Refunded Obligations, the Series 2000C Refunded Obligations shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (successor paying agent /registrar to U.S. Trust Company of Texas, N.A., Dallas, Texas), in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -3 and incorporated herein by reference as a part of this Ordinance for all purposes. (d) In order to provide for the refunding, discharge and retirement of the Series 2000D Refunded Obligations, the Series 2000D Refunded Obligations are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to U.S. Trust Company of Texas, N.A., Dallas, Texas), in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -4 and incorporated herein by reference as a part of this Ordinance for all purposes. (e) In order to provide for the refunding, discharge and retirement of the Series 2000E Refunded Obligations, the Series 2000E Refunded Obligations shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (successor paying agent /registrar to U.S. Trust Company of Texas, N.A., Dallas, Texas), in 900054793/11000319 23 accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -5 and incorporated herein by reference as a part of this Ordinance for all purposes. (f) In order to provide for the refunding, discharge and retirement of the Series 2003 Refunded Bonds, the Series 2003 Refunded Bonds shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with U.S. Bank National Association, Dallas, Texas (successor paying agent/registrar to Wachovia Bank, N.A., Houston, Texas) in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -6 and incorporated herein by reference as a part of this Ordinance for all purposes. (g) In order to provide for the refunding, discharge and retirement of the Series 2003A Refunded Certificates, the Series 2003A Refunded Certificates shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with U.S. Bank National Association, Dallas, Texas (successor paying agent/registrar to Wachovia Bank, N.A., Houston, Texas), in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -7 and incorporated herein by reference as a part of this Ordinance for all purposes. (h) In order to provide for the refunding, discharge and retirement of the Series 2003A Refunded Bonds, the Series 2003A Refunded Bonds shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to bondholders, with U.S. Bank National Association, Dallas, Texas (successor paying agent/registrar to Wachovia Bank, N.A., Houston, Texas), in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -8 and incorporated herein by reference as a part of this Ordinance for all purposes. (i) In order to provide for the refunding, discharge and retirement of the Series 2003 Refunded Certificates, the Series 2003 Refunded Certificates shall be redeemed and the same are hereby called for redemption on May 27, 2010, at the price of par and accrued interest to the date of redemption. The City Secretary is hereby authorized and directed to file a copy of this Ordinance, together with a suggested form of notice of redemption to be sent to certificateholders, with U.S. Bank National Association, Dallas, Texas (successor paying agent/registrar to Wachovia Bank, N.A., Houston, Texas), in accordance with the redemption provisions applicable to such obligations; such suggested form of notice of redemption being attached hereto as Exhibit C -9 and incorporated herein by reference as a part of this Ordinance for all purposes. The redemption of the obligations described above being associated with the refunding of such Refunded Obligations, the approval, authorization and arrangements herein given and 90005479 24 provided for the redemption of such Refunded Obligations on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the City Secretary is hereby authorized and directed to make all arrangements necessary to notify the holders of such Refunded Obligations of the City's decision to redeem such Refunded Obligations on the date and in the manner herein provided and in accordance with the ordinances authorizing the issuance of the Refunded Obligations and this Ordinance. SECTION 19: Notices to Holders Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be 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 20: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/ Registrar. The City may at any time deliver to the Paying Agent /Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying Agent /Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 21: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "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 14 of this Ordinance, being the information described in Exhibit D hereto. Financial statements to be provided shall be (1) prepared in 90005479.3/11000319 25 accordance with the accounting principles described in Exhibit D 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. (c) Material Events Notices. The City shall notify the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11. Rating changes. The City shall notify the MSRB, in a timely manner, of any failure by the City to provide the 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 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 Bonds within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) hereof of any Bond calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby 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 900054793/11000319 26 provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. 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 Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data 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 22: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. A true and correct reproduction of said opinion or an executed counterpart thereof is hereby authorized to be either printed on definitive printed obligations or deposited with DTC along with the global certificates for the 90005479.3/11000319 27 implementation and use of the Book Entry -Only System used in the settlement and transfer of the Bonds. SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the Bonds deposited with The Depository Trust Company or on printed definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, and this Ordinance and all its provisions is intended to be and shall be for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 25: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 26: 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 27: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 28: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 29: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 30: 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 Bonds. In addition, prior to the delivery of the Bonds, 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 900054793/1 1000319 28 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 Bonds 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 31: Incorporation of Findings and Determinations. The findings and determinations of the City Council contained in the preamble hereof are hereby incorporated by reference and made a part of this Ordinance for all purposes as if the same were restated in full in this Section. SECTION 32: 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 33: Effective Date. This Ordinance shall take effect and be in full force from and after its adoption on the date shown below in accordance with Texas Government Code, Section 1201.028. [remainder of page left blank intentionally] 90005479.3/11000319 29 PASSED AND ADOPTED, this April 20, 2010. CITY OF SOUTHLAKE, TEXAS Mayor ATTEST: City Secretary ,`P4`443 e6 o f o u 1 tli d oe w.e AAJJ N• .OY_•7� (City Seal) o' A A F. l.a e U fij r 90005479.2/11000319 S -1 APPROVED AS ORM: City Attorney 90005479.2/11000319 S -2 EXHIBIT A PAYING AGENT /REGISTRAR AGREEMENT 90005479.3/11000319 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, General Obligation Refunding Bonds, 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 900495841/11000319 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 90049584.1/11000319 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 Paying 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. 90049584.1/11000319 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 90049584.1/11000319 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. 90049584.1/11000319 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 May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. 90049584 6 Section 5.05 Moneys Held by Bank Paving 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. 900495841/11000319 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 Severabilitv. In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07 Merger, Conversion, Consolidation, or Succession. Any corporation or association into which the Bank may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion, or consolidation to which the Bank shall be a party, or any corporation or association succeeding to all or substantially all of the corporate trust business of the Bank shall be the successor of the Bank as Paying Agent under this Agreement without the execution or filing of any paper or any further act on the part of either parties hereto. Section 6.08 Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.09 Entire Agreement. This Agreement and the Authorizing Document constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Authorizing Document, the Authorizing Document shall govern. 900495841/11000319 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.] 90049584.1/11000319 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: th 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 90049584 S -1 ANNEX A 90049584.1/11000319 A -1 EXHIBIT B PURCHASE AGREEMENT 90005479.3/11000319 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()", $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 "Preh'minary 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 deemed 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. 3 (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, 4 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) \ll 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 m 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 financial 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 1 0: 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; (c) 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 snakes 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; (0 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' Remedies "TAX MAI LERS "CONTINUING DISCLOSURE OF INFORMATION" (except for the information under the subcaption "Compliance with Prior Undertakings and the subcaptions 'Registration and Qualification o f Obligations for Sale," 'Legal Investments and Eligibility to Secure Pub& Funds in Texas and `Legal 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 thc 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 thc 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 thc 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, are 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 m 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 m 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 Undenvriters; (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 a ffected; (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 arc 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. Severability. 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. [The remainder of this page has been intentionally left blank.) 1 3 Respectfully submitted, SOUfI IWI?S'I' SI ?CURITIES, INC. RBC CAPIGVI. AIARKI`IS CORPORATION S "1'll l;l, NICOI.,AUS CO., INC. MORGAN KI?I ?GAN CO., INC. By: Southwest Securities, Inc. By: Name: Title Date: [REPRESENTATIVE'S SIGNATURE PAGE FOR CITY OF SOUTHLAKE, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010 AND 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 OIL SOM 11,AK TEXAS By: Name: John Terrell Title: Mayor ISSUER'S SIGNATURE PAGE FOR CITY OF SOUTHLAKE, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2010 AND TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION, SERIES 2010 PURCHASEAGREEMENTJ SCHEDULE I LIST OF UNDERWRITERS SOUL I IWI:SI' Si CURIITHS, INC. RBC C,APIT;A1, MARKETS CORPORATION STIFF] NICOI..AUS CO., INC. MORGAN KNI',,G,AN CO., INC 11 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. 151 Rate Yield Amount (Feb. 15) Rate Yield $720,000 2011 3.000% 0.450% $640,000 2021 3.500% 3.550% 915,000 201 3.000% 0.950% 670,000 2022 4.000% 3.700 %(1) 945,000 2013 4.000% 1.290% 695,000 2023 4.000°/o 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°/o 2.900% 845,000 2028 4.125% 4.200% 595,000 2019 3.500°/o 3.130% 885,000 2029 4.200% 4.250% 620,000 2020 3.500% 3.350 %0; 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. (1) Yield shown is to first call date, February 15, 2019. 111 EXHIBIT C -1 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATIONS SERIES 1999 NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $1,755,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Maturity Amount Number 2011 855,000 2012 900,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment /transfer office in Dallas, Texas of The Bank of New York Mellon Trust Company, N.A., (successor in interest to Chase Bank of Texas, N.A., Dallas, Texas) at its designated offices as follows: 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 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Address: 2001 Bryan Street, 1 1th Floor Dallas, Texas 75201 90005479.3/11000319 C -1 EXHIBIT C -2 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATIONS SERIES 2000A NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on February 15, 2011, and aggregating in the principal amount of $455,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Maturity Amount Number 2011 455,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of The Bank of New York Mellon Trust Company, N.A., (successor in interest to Chase Bank of Texas, N.A., Dallas, Texas) at its designated offices as follows: 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 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Address: 2001 Bryan Street, 11 Floor Dallas, Texas 75201 90005479.3/11000319 C -2 EXHIBIT C -3 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF OBLIGATIONS SERIES 2000C NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after August 15, 2011, and aggregating in the principal amount of $470,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Maturity Amount Number 2011 150,000 2012 155,000 2013 165,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of The Bank of New York Mellon Trust Company, N.A., (successor in interest to U.S. Trust Company of Texas, N.A., Dallas, Texas) at its designated offices as follows: 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 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Address: 2001 Bryan Street, 1 l Floor Dallas, Texas 75201 90005479.3/11000319 C -3 EXHIBIT C -4 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATIONS SERIES 2000D NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $1,180,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Maturity Amount Number 2011 375,000 2012 390,000 2013 415,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of The Bank of New York Mellon Trust Company, N.A., (successor in interest to U.S. Trust Company, N.A., Dallas, Texas) at its designated offices as follows: 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 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Address: 2001 Bryan Street, 11 Floor Dallas, Texas 75201 90005479.3/11000319 C -4 EXHIBIT C -5 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND TAX INCREMENT REVENUE CERTIFICATES OF OBLIGATIONS (REINVESTMENT ZONE #1) SERIES 2000E NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $1,130,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Year of Principal CUSIP Maturity Amount Number Maturity Amount Number 2011 635,000 2015 70,000 2012 60,000 2016 75,000 2013 65,000 2017 80,000 2014 65,000 2018 80,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of The Bank of New York Mellon Trust Company, N.A., (successor in interest to U.S. Trust Company, N.A., Dallas, Texas) at its designated offices as follows: 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 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Address: 2001 Bryan Street, 11 Floor Dallas, Texas 75201 900054793/11000319 C -5 EXHIBIT C -6 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS SERIES 2003 NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $2,1950,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Year of Principal CUSIP Maturity Amount Number Maturity Amount Number 2011 410,000 2015 385,000 2012 435,000 2016 50,000 2013 445,000 2017 50,000 2014 365,000 2018 55,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of U.S. Bank, National Association, Dallas, Texas, (successor in interest to Wachovia Bank, N.A., Houston, Texas) at its designated offices as follows: U.S. Bank National Association Attention: Bond Operations 60 Livingston Avenue, First Floor St. Paul, Minnesota 55107 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. U.S. BANK NATIONAL ASSOCIATION, Address: 14241 Dallas Parkway, Suite 490 Dallas, Texas 75254 90005479.3/11000319 C -6 EXHIBIT C -7 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND TAX INCREMENT REVENUE (REINVESTMENT ZONE #1) CERTIFICATES OF OBLIGATION SERIES 2003A NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $4,045,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Year of Principal CUSIP Maturity Amount Number Maturity Amount Number 2011 440,000 2015 515,000 2012 455,000 2016 535,000 2013 475,000 2017 555,000 2014 490,000 2018 580,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of U.S. Bank, National Association, Dallas, Texas, (successor in interest to Wachovia Bank, N.A., Houston, Texas) at its designated offices as follows: U.S. Bank National Association Attention: Bond Operations 60 Livingston Avenue, First Floor St. Paul, Minnesota 55107 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. U.S. BANK NATIONAL ASSOCIATION, Address: 14241 Dallas Parkway, Suite 490 Dallas, Texas 75254 90005479.3/11000319 C -7 EXHIBIT C -8 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND TAX INCREMENT REVENUE (REINVESTMENT ZONE #1) REFUNDING BONDS SERIES 2003A NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $8,785,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Year of Principal CUSIP Maturity Amount Number Maturity Amount Number 2011 545,000 2015 1,235,000 2012 740,000 2016 1,305,000 2013 950,000 2017 1,380,000 2014 1,180,000 2018 1,450,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of U.S. Bank, National Association, Dallas, Texas, (successor in interest to Wachovia Bank, N.A., Houston, Texas) at its designated offices as follows: U.S. Bank National Association Attention: Bond Operations 60 Livingston Avenue, First Floor St. Paul, Minnesota 55107 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. U.S. BANK NATIONAL ASSOCIATION, Address: 14241 Dallas Parkway, Suite 490 Dallas, Texas 75254 90005479.3/11000319 C-8 EXHIBIT C -9 NOTICE OF REDEMPTION CITY OF SOUTHLAKE, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION SERIES 2003 NOTICE IS HEREBY GIVEN that certificates of obligation of the above series maturing on and after February 15, 2011, and aggregating in the principal amount of $7,650,000 have been called for redemption on May 27, 2010 at the redemption price of par and accrued interest to the date of redemption, such certificates being identified as follows: Year of Principal CUSIP Year of Principal CUSIP Maturity Amount Number Maturity Amount Number 2011 685,000 2018 895,000 2012 705,000 2019 255,000 2013 730,000 2020 265,000 2014 760,000 2021 275,000 2015 795,000 2022 290,000 2016 830,000 2023 305,000 2017 860,000 ALL OF SUCH REFUNDED CERTIFICATES shall become due and payable on May 27, 2010 and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said refunded certificates shall be paid to the registered owners of such certificates only upon presentation and surrender of such certificates to the designated payment/transfer office in Dallas, Texas of U.S. Bank, National Association, Dallas, Texas, (successor in interest to Wachovia Bank, N.A., Houston, Texas) at its designated offices as follows: U.S. Bank National Association Attention: Bond Operations 60 Livingston Avenue, First Floor St. Paul, Minnesota 55107 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said certificates and pursuant to an Ordinance by the City Council of the City of Southlake, Texas. U.S. BANK NATIONAL ASSOCIATION, Address: 14241 Dallas Parkway, Suite 490 Dallas, Texas 75254 90005479 C -9 EXHIBIT D DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA The following information is referred to in Section 21 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. 90005479 D -1