1041 ORDINANCE NO. 1 y
AN ORDINANCE authorizing the issuance of "CITY OF SOUTHLAKE,
TEXAS, GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2012 "; specifying the terms and features of said bonds; levying a
continuing direct annual ad valorem tax for the payment of said bonds;
providing for the redemption of certain outstanding obligations of the
City; 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 Special Escrow Agreement
and the approval and distribution of an Official Statement; 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 original
principal amount $10,750,000 of the following issues or series (hereinafter collectively referred
to as the "Refunded Obligations "), to wit:
(1) "City of Southlake, Texas, General Obligation Refunding Bonds,
Series 2002," dated November 15, 2002, scheduled to mature on February 15 in
each of the years 2013 through 2018, inclusive, and aggregating in the principal
amount of $2,355,000 (the "Series 2002 Refunded Bonds ");
(2) "City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2004A," dated June 1, 2004,
being the portion of such certificates eligible to be refunded under federal tax
laws and scheduled to mature on February 15 in each of the years 2015 through
2022, and 2024, and aggregating in the principal amount of $295,000 (the "Series
2004A Refunded Certificates ") and further described as follows:
Year of Principal Amount Principal Amount Eligible to be
Maturity Outstanding ($) Refunded /Being Refunded ($)
2015 145,000 25,000
2016 150,000 25,000
2017 160,000 25,000
2018 165,000 25,000
2019 175,000 30,000
2020 185,000 30,000
2021 195,000 30,000
2022 205,000 35,000
2024* 440,000 70,000
* term certificate
(3) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 2004, dated June 1,
2004, being the portion of such certificates eligible to be refunded under federal
52186325.4/11205039
tax laws and scheduled to mature on February 15 in each of the years 2015
through 2022, and 2024, and aggregating in the principal amount of $305,000 (the
"Series 2004 Refunded Certificates ") and further described as follows:
Year of Principal Amount Principal Amount Eligible to be
Maturity Outstanding ($) Refunded /Being Refunded ($)
2015 145,000 25,000
2016 155,000 25,000
2017 160,000 25,000
2018 170,000 30,000
2019 180,000 30,000
2020 185,000 30,000
2021 195,000 30,000
2022 205,000 35,000
2024* 445,000 75,000
* term certificate
(4) City of Southlake, Texas, General Obligation Refunding Bonds,
Series 2004, dated May 15, 2004, being the portion of such bonds eligible to be
refunded under federal tax laws and scheduled to mature on February 15 in each
of the years 2015 through 2026, and aggregating in the principal amount of
$4,290,000 (the "Series 2004 Refunded Bonds ") and further described as follows:
Year of Principal Amount Principal Amount Eligible to be
Maturity Outstanding ($) Refunded /Being Refunded ($)
2015 610,000 100,000
2016 620,000 105,000
2017 650,000 110,000
2018 930,000 155,000
2019 2,075,000 345,000
2020 2,695,000 450,000
2021 2,810,000 465,000
2022 2,940,000 490,000
2023 3,085,000 515,000
2024 3,235,000 540,000
2025 2,970,000 495,000
2026 3,125,000 520,000
(5) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 2006, dated January
15, 2006, scheduled to mature on February 15 in each of the years 2016 through
2026, inclusive, and aggregating in the principal amount of $3,505,000 (the
"Series 2006 Refunded Certificates "); and
WHEREAS, pursuant to the provisions of Texas Government Code, Chapter 1207, as
amended ( "Chapter 1207 "), the City Council is authorized to issue refunding bonds and deposit
52186325.4/11205039 2
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, 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 the Refunded Obligations
should be refunded at this time, and such refunding will result in the City saving approximately
$1,761,393.94 in debt service payments on such indebtedness and further provide net present
value savings of approximately $1,530,299.55; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE,
TEXAS:
SECTION 1: Authorization — Designation - Principal Amount - Purpose. General
obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate
principal amount of $9,965,000 to be designated and bear the title "CITY OF SOUTHLAKE,
TEXAS, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012" (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 the
Constitution and laws of the State of Texas, including Chapter 1207.
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 August 15, 2012 (the "Bond Date "), shall be in denominations of $5,000 or any
integral multiple (within a Stated Maturity) thereof, and shall become due and payable on
February 15 in each of the years and in the principal amounts (the "Stated Maturities ") and bear
interest at the rate(s) per annum in accordance with the following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
2013 $ 580,000 3.000%
2014 320,000 3.000%
2015 465,000 3.000%
2016 755,000 3.000%
2017 775,000 3.000%
2018 840,000 3.000%
2019 680,000 3.000%
2020 605,000 3.000%
2021 785,000 3.000%
2022 815,000 3.000%
2023 845,000 5.000%
2024 890,000 5.000%
2025 790,000 5.000%
2026 820,000 4.000%
The Bonds shall bear interest on the unpaid principal amounts from the date of initial
delivery of the Bonds at the rate(s) per annum shown above in this Section (calculated on the
52186325.4/11205039 3
basis of a 360 -day year of twelve 30 -day months). Interest on the Bonds shall be payable on
February 15 and August 15 in each year, commencing February 15, 2013, until maturity.
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 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, transfer and exchange of the
Bonds (the "Security Register ") shall at all times be kept and maintained on behalf of the City by
the Paying Agent/Registrar, as provided herein and in accordance with the terms and provisions
of a "Paying Agent/Registrar Agreement ", substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City
may prescribe. The Mayor and City Secretary are authorized to execute and deliver such 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 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
only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its
designated offices initially in East Syracuse, New York 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 names appear in the Security
Register at the close of business on the Record Date (the last business day of the month next
preceding each interest payment date) and shall be paid by the Paying Agent /Registrar (i) by
check sent United States Mail, first class postage prepaid, to the address of the Holder recorded
in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar,
requested by, and at the risk and expense of, the Holder. If the date for the payment of the
principal of or interest on the 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
52186325.4/11205039 4
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: No Redemption. The Bonds are not subject to redemption prior to
maturity.
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 Holder of the Bonds issued under and pursuant to the provisions of this
Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged
for Bonds of other authorized denominations by the Holder, in person or by his duly authorized
agent, upon surrender of such Bond to the Paying Agent/Registrar at the Designated
Payment/Transfer Office for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Bond (other than the Initial Bond(s) referenced in Section 8
hereof) for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Bonds of authorized denominations and having the same 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 Initial Bond(s) referenced in Section 8
hereof) 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
52186325.4/11205039 5
the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered, and delivered in lieu thereof pursuant to the provisions of Section 11 hereof and such
new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
SECTION 6: Book - Entry -Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3 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
Representations, by and between the City and DTC (the "Depository Agreement ").
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants ").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond
(the "Beneficial Owners ") being recorded in the records of DTC and DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the Bonds
or otherwise ceases to provide book -entry clearance and settlement of securities transactions in
general or the City determines that DTC is incapable of properly discharging its duties as
securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds
to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued
and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the
Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register
maintained by the Paying Agent /Registrar and payment of such Bonds shall be made in
accordance with the provisions of Sections 3 and 5 hereof.
SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the
City by the Mayor or Mayor Pro Tem 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 Bond Date shall be deemed to be duly executed on behalf
of the City, notwithstanding that one or more of the individuals 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 9(c), manually executed by the Comptroller of
Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 9(d), manually executed by an authorized officer,
employee or representative of the Paying Agent /Registrar, and either such certificate duly signed
52186325.4/11205039 6
upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been
duly certified, registered, and delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the aggregate 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 year of
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 9: Forms.
(a) Forms Generally. The Bonds, the Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar,
and the form of Assignment to be printed on each of the Bonds, shall be substantially in the
forms set forth in this Section with such appropriate insertions, omissions, substitutions, and
other variations as are permitted or required by this Ordinance and may have such letters,
numbers, or other marks of identification (including identifying numbers and letters of the
Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends 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
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, engraved,
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
52186325.4/11205039 7
CITY OF SOUTHLAKE, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 2012
Bond Date: Interest Rate: Stated Maturity CUSIP NO:
August 15, 2012 % 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 (the "Registered Owner "), on the Stated Maturity date
specified above the Principal Amount hereinabove stated (without right of prior redemption) and
to pay interest on the unpaid principal amount hereof from the interest payment date next
preceding the "Registration Date" of this Bond appearing below (unless this Bond bears a
"Registration Date" as of an interest payment date, in which case it shall bear interest from such
date, or unless the "Registration Date" of this Bond is prior to the initial interest payment date in
which case it shall bear interest from the date of initial delivery of the Bonds) at the per annum
rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day
months; such interest being payable on February 15 and August 15 in each year, commencing
February 15, 2013, until maturity. Principal of this Bond is payable at its Stated Maturity 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 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. 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 $9,965,000 (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, and to pay costs of
52186325.4/11205039 8
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 are not subject to redemption prior to maturity.
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 and (iii) on any other date as
the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any
agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest
on a scheduled payment date and for thirty (30) days thereafter, a new record date for such
interest payment (a "Special Record Date ") will be established by the Paying Agent/Registrar, if
and when funds for the payment of such interest have been received from the City. Notice of the
Special Record Date and of the scheduled payment date of the past due interest (which shall be
15 days after the Special Record Date) shall be sent at least five (5) business days prior to the
Special Record Date by United States Mail, first class postage prepaid, to the address of each
Holder appearing on the Security Register at the close of business on the last business day next
preceding the date of mailing of such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the 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
52186325.4/11205039 9
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 Bond Date.
CITY OF SOUTHLAKE, TEXAS
Mayor
COUNTERSIGNED:
City Secretary
(SEAL)
(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 )
52186325.4/11205039 1
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 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 East Syracuse, New York is the
"Designated Payment/Transfer Office" for this Bond.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., Dallas, Texas, as
Paying Agent/Registrar
Registration date:
By:
Authorized Signature
52186325.4/11205039 1 1
(e) Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print
or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number ) the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power
of substitution in the premises.
DATED:
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 $9,965,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF SOUTHLAKE, TEXAS
GENERAL OBLIGATION REFUNDING BOND
SERIES 2012
Bond Date: August 15, 2012
Registered Owner: ROBERT W. BAIRD & CO., INC.
Principal Amount: NINE MILLION NINE HUNDRED SIXTY -FIVE THOUSAND
DOLLARS
The City of Southlake (hereinafter referred to as the "City "), a body corporate and
municipal corporation in the Counties of Tarrant and Denton, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the registered owner named
above, or the registered assigns thereof (the "Registered Owner "), the Principal Amount
52186325.4/11205039 12
hereinabove stated on February 15 in each of the years and in principal installments in
accordance with the following schedule:
STATED PRINCIPAL INTEREST
MATURITY INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(without right of prior redemption) and to pay interest on the unpaid Principal Amount hereof
from the date of initial delivery of the Bonds at the per annum rates of interest specified above
computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable
on February 15 and August 15 in each year, commencing February 15, 2013, until maturity.
Principal installments of this Bond are payable on the Stated Maturity dates to the registered
owner hereof by The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the
"Paying Agent/Registrar "), upon its presentation and surrender at its designated offices, initially
in East Syracuse, New York, or, with respect to a successor paying agent/registrar, at the
designated office 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 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. All payments of principal of, premium, if any, and interest
on this Bond shall be without exchange or collection charges to the owner hereof and in any coin
or currency of the United States of America which at the time of payment is legal tender for the
payment of public and private debts.
SECTION 10: 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 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 2012 Bond Account" (the "Interest and
Sinking Fund ") maintained on the records of the City and deposited in a special fund maintained
52186325.4/11205039 13
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 Manager, Assistant City Manager, Director of Finance
and City Secretary of the City, individually or jointly, 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.
SECTION 11: 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 12: 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.
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, 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,
52186325.4/11205039 14
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. 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 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, shall mean (i) direct noncallable
obligations of the United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, (ii) noncallable
obligations of an agency or instrumentality of the United States, including obligations
unconditionally guaranteed or insured by the agency or instrumentality and, on the date of their
acquisition or purchase by the City, are rated as to investment quality by a nationally recognized
investment rating firm not less than AAA or its equivalent, (iii) noncallable obligations of a state
or an agency or a county, municipality, or other political subdivision of a state that have been
refunded and 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 and (iv) any other then authorized securities or obligations that may be used to
defease obligations such as the Bonds under the then applicable laws of the State of Texas.
SECTION 13: 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 and in Section 29 hereof. The City may, without the consent
of or notice to any Holders, from time to time and at any time, amend this Ordinance in any
manner not detrimental to the interests of the Holders, including the curing of any ambiguity,
inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of
Holders holding a majority in aggregate principal amount of the 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, 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.
52186325.4/11205039 15
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 12 hereof; and
(3) those mutilated, destroyed, lost, or stolen Bonds which have been
replaced with Bonds registered and delivered in lieu thereof as provided in
Section 11 hereof.
SECTION 14: Covenants to Maintain Tax - Exempt Status.
(a) Definitions. When used in this Section, the following terms 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.
"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.
52186325.4/11205039 16
"Yield" of (1) any Investment has the meaning set forth in Section 1.148 -5
of the Regulations and (2) 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.
(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
52186325.4/11205039 17
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(0 of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account separately
and apart from all other funds (and receipts, expenditures and investments
thereof) and shall retain all records of accounting for at least six years after the
day on which the last outstanding Bond is discharged. However, to the extent
permitted by law, the City may commingle Gross Proceeds of the Bonds with
other money of the City, provided that the City separately accounts for each
receipt and expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in Section 148(0
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to induce
such purchase by measures designed to insure the excludability of the interest
thereon from the gross income of the owners thereof for federal income tax
purposes, the City shall pay to the United States out of its general fund, other
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,
52186325.4/11205039 18
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, Assistant City Manager and Director of Finance, individually or jointly, to make
elections permitted or required pursuant to the provisions of the Code or the Regulations, as they
deem necessary or appropriate in connection with the 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.
(1) Current Refunding of the Series 2002 Refunded Bonds. The Bonds are a current
refunding of the Series 2002 Refunded Bonds (the "Currently Refunded Obligations ") in that the
Currently Refunded Obligations are to be paid and redeemed in full within 90 days of the
delivery date of the Bonds.
(m) Qualified Advance Refunding of the Series 2004A Refunded Certificates, the
Series 2004 Refunded Certificates, the Series 2004 Refunded Bonds and Series 2006 Refunded
Certificates. The Bonds are issued in part to refund the portion of the Series 2004A Refunded
Certificates, the Series 2004 Refunded Certificates and the Series 2004 Refunded Bonds eligible
to be advanced refunded and to refund all of the Series 2006 Refunded Certificates (collectively,
the "Eligible Advance Refunded Obligations "), and the Bonds will be issued more than 90 days
before the redemption of the Eligible Advance Refunded Obligations. The City represents as
follows:
52186325.4/11205039 19
(1) The Bonds are the first advance refunding of the Eligible Advance
Refunded Obligations within the meaning of Section 149(d)(3) of the Code.
(2) The Eligible Advance Refunded Obligations are being called for
redemption, and will be redeemed not later than the earliest date on which such
obligations may be redeemed and on which the City will realize present value
debt service savings (determined without regard to administrative expenses) on
the issue.
(3) The initial temporary period under Section 148(c) of the Code will
end: (i) with respect to the proceeds of the Bonds not later than 30 days after the
date of issue of the Bonds; and (ii) with respect to proceeds of the Eligible
Advance Refunded Obligations on the Closing Date if not ended prior thereto.
(4) On and after the date of issue of the Bonds, no proceeds of the
Eligible Advance Refunded Obligations will be invested in Nonpurpose
Investments having a Yield in excess of the Yield on the Eligible Advance
Refunded Obligations.
(5) The Bonds are being issued for the purposes stated in the preamble
of this Ordinance. There is a present value savings associated with the refunding.
In the issuance of the Bonds the City has neither: (i) overburdened the tax - exempt
bond market by issuing more bonds, issuing bonds earlier or allowing bonds to
remain outstanding longer than reasonably necessary to accomplish the
governmental purposes for which the Bonds were issued; (ii) employed on
"abusive arbitrage device" within the meaning of Section 1.148 -10(a) of the
Regulations; nor (iii) employed a "device" to obtain a material financial
advantage based on arbitrage, within the meaning of Section 149(d)(4) of the
Code, apart from savings attributable to lower interest rates and reduced debt
service payments in early years.
SECTION 15: Sale of Bonds - Official Statement Approval. Pursuant to a public sale for
the Bonds, the bid submitted by Robert W. Baird & Co., Inc., C.L. King, Coastal Securities, Inc.,
SAMCO Capital Markets, Fidelity Capital, Kildare Capital, Edward D. Jones & Co., Crews &
Associates, Duncan - Williams, Inc., Incapital, LLC, Vining Sparks, BLN, Davenport & Co.,
LLC, Ross Sinclaire Associate, Isaak Bond Investment, Corby Capital Market, Loop Capital,
Wedbush, AZ, Castle Oak Sec., Cronin & Co., Inc., Stifel, Nicolaus & Company, Incorporated,
BOSC, Inc. and .Comerica Securities (herein referred to collectively as the "Purchasers ") is
declared to be the best bid received producing the lowest true interest cost rate to the City, and
the sale of the Bonds to said Purchasers at the price of par plus a cash premium of $1,260,052.83
is hereby determined to be in the best interests of the City and is approved and confirmed.
Delivery of the Bonds to the Purchasers shall occur as soon as possible upon payment being
made therefor in accordance with the terms of sale. The Initial Certificate shall be registered in
the name of Robert W. Baird & Co., Inc.
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
52186325.4/11205039 20
with such changes approved by the Mayor, Mayor Pro Tem, City Manager, Assistant City
Manager, Director of Finance or City Secretary, any one or more of said officials), shall be and is
hereby in all respects approved and the Purchasers are hereby authorized to use and distribute
said final Official Statement, dated August 7, 2012, in the reoffering, sale and delivery of the
Bonds to the public. The Mayor and City Secretary are further authorized to 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 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 16: Special Escrow Agreement Approval and Execution. The "Special
Escrow Agreement" (the "Agreement ") by and between the City and The Bank of New York
Mellon Trust Company, N.A., Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit B
and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby
approved as to form and content, and such Agreement in substantially the form and substance
attached hereto, together with such changes or revisions as may be necessary to accomplish the
refunding or benefit the City, is hereby authorized to be executed by the Mayor or Mayor Pro
Tem and City Secretary for and on behalf of the City and as the act and deed of this City
Council; and such Agreement as executed by said officials shall be deemed approved by this
Council and constitute the Agreement herein approved.
Furthermore, the Mayor, Mayor Pro Tem, City Manager, Assistant City Manager,
Director of Finance and City Secretary of the City, individually or jointly, in cooperation with
the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the
purchase of the escrowed securities referenced in the Agreement and the delivery thereof to the
Escrow Agent on the day of delivery of the Bonds to the Purchaser for deposit to the credit of the
"SPECIAL 2012 CITY OF SOUTHLAKE, TEXAS, REFUNDING BOND ESCROW FUND"
(the "Escrow Fund "); all as contemplated and provided in Chapter 1207, this Ordinance and the
Agreement.
SECTION 17: Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the Purchasers.
SECTION 18: Proceeds of Sale. Immediately following the delivery of the Bonds, the
proceeds of sale (less those proceeds of sale designated to pay costs of issuance and any accrued
interest received from the Purchasers and additional proceeds being deposited to the Interest and
Sinking Fund) shall be deposited with the Escrow Agent for application and disbursement in
accordance with the provisions of the Agreement. The proceeds of sale of the Bonds not so
deposited with the Escrow Agent for the refunding of the Refunded Obligations shall be
disbursed for payment of costs of issuance, or deposited in the Interest and Sinking Fund for the
Bonds. Such proceeds of sale may be invested in authorized investments and any investment
earnings realized may be (with respect to the accrued interest received from the Purchasers)
deposited in the Interest and Sinking Fund as shall be determined by the City Council of the City.
52186325.4/11205039 21
SECTION 19: Redemption of Refunded Obligations.
(a) The Series 2002 Refunded Bonds shall be redeemed and the same are hereby
called for redemption on September 10, 2012, at the price of par plus 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. (successor paying
agent/registrar to The Bank of New York Trust Company of Florida, N.A.), in accordance with
the redemption provisions applicable to such certificates of obligation; 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) The Series 2004A Refunded Certificates shall be redeemed and the same are
hereby called for redemption on February 15, 2013, at the price of par plus 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 (successor paying agent/registrar to
Wachovia Bank, National Association), in accordance with the redemption provisions applicable
to such certificates of obligation; 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) The Series 2004 Refunded Certificates shall be redeemed and the same are hereby
called for redemption on February 15, 2013, at the price of par plus 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 (successor paying agent/registrar to
Wachovia Bank, National Association), in accordance with the redemption provisions applicable
to such certificates of obligation; 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) The Series 2004 Refunded Bonds shall be redeemed and the same are hereby
called for redemption on February 15, 2013, at the price of par plus 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 (successor paying agent/registrar to Wachovia Bank,
National Association), in accordance with the redemption provisions applicable to such bonds;
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) The Series 2006 Refunded Bonds shall be redeemed and the same are hereby
called for redemption on February 15, 2014, at the price of par plus 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 Regions Bank (the current paying agent/registrar), in accordance with the redemption
provisions applicable to such bonds; such suggested form of notice of redemption being attached
52186325.4/11205039 22
hereto as Exhibit C -5 and incorporated herein by reference as a part of this Ordinance for all
purposes.
(0 The redemption of the Refunded Obligations described above being associated
with the refunding of such Refunded Obligations, the approval, authorization and arrangements
herein given and provided for the redemption of such Refunded Obligations on the respective
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 dates and in the manner herein provided
and in accordance with the ordinances authorizing the issuance of such Refunded Obligations
and this Ordinance.
SECTION 20: Notices to Holders - Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder appearing in the Security Register at the 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 21: Cancellation. All Bonds surrendered for payment, transfer, exchange or
replacement, if surrendered to the Paying Agent /Registrar, shall be promptly cancelled by it and,
if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent /Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Bonds held by the Paying Agent/Registrar shall be returned to the City.
SECTION 22: Legal Opinion. The obligation of the Purchasers to accept delivery of the
Bonds is subject to being furnished a final legal opinion of Fulbright & Jaworski L.L.P.
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 is hereby
authorized to be printed on or attached to the definitive Bonds or an executed counterpart thereof
shall accompany the global Bonds deposited with DTC.
SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the
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
52186325.4/11205039 23
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, this Ordinance and all its provisions being
intended to be and being 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 of
reference 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: 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 (1) within six
months after the end of each fiscal year, beginning in or after 2012, financial information and
operating data with respect to the City of the general type included in the final Official
Statement, being the information described in Exhibit D hereto, and (2) if not provided as part of
such financial information and operating data, audited financial statements of the City, when and
if available. Any financial statements so provided shall be prepared in accordance with the
accounting principles described in Exhibit D hereto, or such other accounting principles as the
City may be required to employ from time to time pursuant to state law or regulation, and
audited, if the City commissions an audit of such statements and the audit is completed within
the period during which they must be provided.
52186325.4/11205039 24
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document available to the public on the MSRB's Internet Web site or filed with the SEC.
(c) Notice of Certain Events. The City shall provide notice of any of the following
events with respect to the Bonds to the MSRB in a timely manner and not more than ten (10)
business days after occurrence of the event:
1. Principal and interest payment delinquencies;
2. Non - payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -
TEB), or other material notices or determinations with respect to the tax status of
the Bonds, or other material events affecting the tax status of the Bonds;
7. Modifications to rights of holders of the Bonds, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds, if
material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership, or similar event of the City, which shall
occur as described below;
13. The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of its assets, other than in the ordinary course
of business, the entry into of a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than
pursuant to its terms, if material; and
14. Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
For these purposes, any event described in the immediately preceding subsection (c)12 is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
assumed jurisdiction over substantially all of the assets or business of the City, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the City.
52186325.4/11205039 25
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with subsection (b) of this Section by the
time required by such Section.
(d) Filings with the MSRB. All financial information, operating data, financial
statements, notices and other documents provided to the MSRB in accordance with this Section
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
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 to the contrary in this Ordinance, the provisions of this Section
may be amended by the City from time to time to adapt to changed circumstances resulting from
a change in legal requirements, a change in law, or a change in the identity, nature, status, or type
of operations of the City, but only if (1) the provisions of this Section, as so amended, would
have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in
compliance with the Rule, taking into account any amendments or interpretations of the Rule to
52186325.4/11205039 26
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 pursuant to
subsection (b) hereof 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 30: 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 31: 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 of the Bonds. In addition, prior to the initial delivery of the Bonds, the Mayor,
Mayor Pro Tem, City Manager, Assistant City Manager, Director of Finance or Bond Counsel to
the City are each hereby authorized and directed to approve any changes or corrections to this
Ordinance or to any of the documents authorized and approved by this Ordinance: (i) in order to
cure any ambiguity, formal defect, or omission in the Ordinance or such other document; or
(ii) as requested by the Attorney General of the State of Texas or his representative to obtain the
approval of the Bonds by the Attorney General and if such officer or counsel determines that
such changes are consistent with the intent and purpose of the Ordinance, which determination
shall be final. 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 32: 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 33: 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.
52186325.4/11205039 27
SECTION 34: Effective Date. In accordance with the provisions of Texas Government
Code, Section 1201.028, as amended, this Ordinance shall be in force and effect from and after
its passage on the date shown below and it is so ordained.
[Remainder of page left blank intentionally.]
52186325.4/11205039 28
PASSED AND APPROVED, this the August 7, 2012.
CITY OF SOUTHLAKE, TEXAS
4I
Mayor
ATTEST:
%%%% %,,,,,,,,,,,,
City Secretary
v•
(City Seal)
APPROVED AS TO FORM:
City Attorney )(:)—
521863254/11205039 S -1
EXHIBIT A
PAYING AGENT /REGISTRAR AGREEMENT
52186325.4/11205039 A -1
PAYING AGENT /REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of August 7 (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 2012"
(the "Securities "), dated August 15, 2012, such Securities scheduled to be delivered to the initial
purchasers thereof on or about September 5, 2012; 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
52175307.2/11205039
the provisions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01 Defmitions. 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.
"Financial Advisor" means First Southwest Company.
"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
52175307.2/11205039 2
Officer or Assistant Trust Officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of
the Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the 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/Courier By Hand Only
The Bank of New York Mellon The Bank of New York Mellon The Bank of New York Mellon Trust
Trust Company, N.A. Trust Company, N.A. Company, N.A.
Global Corporate Trust Global Corporate Trust Global Corporate Trust
P.O. Box 396 111 Sanders Creek Pkwy. Corporate Trust Window
East Syracuse, NY 13057 East Syracuse, NY 13057 101 Barclay Street, 1st Floor East
New York, NY 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.
52175307.2/11205039 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
52175307.2/11205039 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.
52175307.2/11205039 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, the 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.
52175307.2/11205039 6
Section 5.05 Moneys Held by Bank - Paying Agent Account/Collateralization. A
paying agent account shall at all times be kept and maintained by the Bank for the receipt,
safekeeping, and disbursement of moneys received from the Issuer under this Agreement for the
payment of the Securities, and money deposited to the credit of such account until paid to the
Holders of the Securities shall be continuously collateralized by securities or obligations which
qualify and are eligible under both the laws of the State of Texas and the laws of the United
States of America to secure and be pledged as collateral for paying agent accounts to the extent
such money is not insured by the Federal Deposit Insurance Corporation. Payments made from
such paying agent account shall be made by check drawn on such account unless the owner of
the Securities shall, at its own expense and risk, request an alternative method of payment.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal of, premium (if any), or interest on any
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be held by the Bank and disposed of only in accordance with Title 6 of the
Texas Property Code, as amended. The Bank shall have no liability by virtue of actions taken in
compliance with this provision.
The Bank is not obligated to pay interest on any money received by it under this
Agreement.
This Agreement relates solely to money deposited for the purposes described herein, and
the parties agree that the Bank may serve as depository for other funds of the Issuer, act as
trustee under indentures authorizing other bond transactions of the Issuer, or act in any other
capacity not in conflict with its duties hereunder.
Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the state and county where the
administrative office of the Issuer is located, and agree that service of process by certified or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State
of Texas to determine the rights of any Person claiming any interest herein.
In the event the Bank becomes involved in litigation in connection with this Section, the
Issuer, to the extent permitted by law, agrees to indemnify and save the Bank harmless from all
loss, cost, damages, expenses, and attorney fees suffered or incurred by the Bank as a result. The
obligations of the Bank under this Agreement shall be performable at the principal corporate
office of the Bank in the City of Dallas, Texas.
52175307.2/11205039 7
Section 5.08 DTC Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements ", which
establishes requirements for securities to be eligible for such type depository trust services,
including, but not limited to, requirements for the timeliness of payments and funds availability,
transfer turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02 Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03 Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on the signature page hereof.
Section 6.04 Effect of Headings. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 6.05 Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06 Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07 Merger, Conversion, Consolidation, or Succession. Any corporation or
association into which the Bank may be merged or converted or with which it may be
consolidated, or any corporation or association resulting from any merger, conversion, or
consolidation to which the Bank shall be a party, or any corporation or association succeeding to
all or substantially all of the corporate trust business of the Bank shall be the successor of the
Bank as Paying Agent under this Agreement without the execution or filing of any paper or any
further act on the part of either parties hereto.
Section 6.08 Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy, or claim hereunder.
Section 6.09 Entire Agreement. This Agreement and the Authorizing Document
constitute the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent /Registrar and if any conflict exists between this Agreement and the Authorizing
Document, the Authorizing Document shall govern.
52175307.2/11205039 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.]
52175307.2/11205039 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:
Address: 2001 Bryan Street, 11 th Floor
Dallas, Texas 75201
Attest:
Title:
CITY OF SOUTHLAKE, TEXAS
By:
Mayor
Address: 1400 Main Street
Southlake, Texas 76092
Attest:
City Secretary
52175307.2/11205039 S -1
ANNEX A
52175307.2/11205039 A -1
BNY MELLON
CORPORATE TRUST
City of Southlake, Texas General Obligation Refunding Bonds, Series 2012
Fee Schedule
July 10, 2012
Acceptance Fee None
A one -time charge covering the Bank Officer's review of governing documents, communication with members
of the closing party, including representatives of the issuer, investment banker(s) and attorney(s), establishment
of procedures and controls, set -up of trust accounts and tickler suspense items and the receipt and
disbursement/investment of bond proceeds. This fee is payable on the closing date.
Annual Paying Agent Administration Fee $500
An annual charge covering the normal paying agent duties related to account administration and bondholder
services. Our pricing is based on the assumption that the bonds are DTC- eligible /book -entry only. If the bonds
are certificated or physical, then we will have to charge an additional $1000 per year as a paying agent. This
fee is payable annually, in advance.
Escrow Agent Fee: $1500
The Escrow Agent Fee covers the consideration of documents and the normal administrative duties of the
escrow agent according to the governing documents. For a full year or partial year escrow the fee is $750 per
year. Should the escrow account or depository account be open for less than two months, then we will reduce
our fee to $375. Should we not open an escrow, depository or similar account, we will not charge for such
services. This fee is payable on the closing date.
Pricing for Call or Redemptions of Bonds Per Call $300 $300
Call Pricing includes distribution of the call notice to holders of record, redemption processing, and notification
to EMMA. Any publication expenses (i.e. Bond Buyer, regional periodical, financial periodicals, etc.) for the
call notice will be billed to the Issuer at cost.
Extraordinary Services /Misc Fees At Appraisal
The charges for performing extraordinary or other services not contemplated at the time of the execution of the
transaction or not specifically covered elsewhere in this schedule will be commensurate with the service to be
provided and may be charged in BNY Mellon's sole discretion. If it is contemplated that the Trustee hold
and /or value collateral or enter into any investment contract, forward purchase or similar or other agreement,
additional acceptance, administration and counsel review fees will be applicable to the agreement governing
such services. If the bonds are converted to certificated form, additional annual fees will be charged for any
applicable tender agent and/or registrar /paying agent services. Additional information will be provided at such
time. Should this transaction terminate prior to closing, all out -of- pocket expenses incurred, including legal
fees, will be billed at cost. If all outstanding bonds of a series are defeased or called in full prior to their
maturity, a termination fee may be assessed at that time.
2001 Bryan — 1 l t° Floor Dallas, TX 75201
BNY MELLON
CORPORATE TRUST
These extraordinary services may include, but are not limited to, supplemental agreements, consent operations,
unusual releases, tender processing, sinking fund redemptions, failed remarketing processing, the preparation
of special or interim reports, custody of collateral, a one -time fee to be charged upon termination of an
engagement. Counsel, accountants, special agents and others will be charged at the actual amount of fees and
expenses billed, UCC filing fees, money market sweep fees, auditor confirmation fees, wire transfer fees,
transaction fees to settle third -party trades and reconcilement fees to balance trust account balances to third -
party investment provider statements
Annual fees include one standard audit confirmation per year without charge. Standard audit confirmations
include the final maturity date, principal paid, principal outstanding, interest cycle, interest paid, cash and asset
information, interest rate, and asset statement information. Non - standard audit confirmation requests may be
assessed an additional fee. Periodic tenders, sinking fund, optional or extraordinary call redemptions will be
assessed at $300 per event. FDIC or other governmental charges will be passed along to you as incurred.
Terms and Disclosures
Terms of Proposal
Final acceptance of the appointment under the Indenture is subject to approval of authorized officers of BNYM
and full review and execution of all documentation related hereto. Please note that if this transaction does not
close, you will be responsible for paying any expenses incurred, including Counsel Fees. We reserve the right
to terminate this offer if we do not enter into final written documents within three months from the date this
document is first transmitted to you. Fees may be subject to adjustment during the life of the engagement.
Customer Notice Required by the USA Patriot Act
To help the US government fight the funding of terrorism and money laundering activities, US Federal law
requires all financial institutions to obtain, verify, and record information that identifies each person (whether
an individual or organization) for which a relationship is established.
What this means to you: When you establish a relationship with BNYM, we will ask you to provide certain
information (and documents) that will help us to identify you. We will ask for your organization's name,
physical address, tax identification or other government registration number and other information that will
help us to identify you. We may also ask for a Certificate of Incorporation or similar document or other
pertinent identifying documentation for your type of organization.
We thank you for your assistance.
2001 Bryan — 11` Floor Dallas, TX 75201
EXHIBIT B
SPECIAL ESCROW AGREEMENT
52186325.4/11205039 B -1
SPECIAL ESCROW AGREEMENT
THIS SPECIAL ESCROW AGREEMENT (the "Agreement "), made and entered into as
of July 17, 2012, by and between the City of Southlake, Texas (the "City "), and The Bank of
New York Mellon Trust Company, N.A., Dallas, Texas (the "Escrow Agent "), a national
banking association organized and existing under the laws of the United States of America,
WITNESSETH:
WHEREAS, the City Council of the City has heretofore issued, sold, and delivered and
there is currently outstanding obligations in the aggregate principal amount of $10,750,000 of the
following issues or series (collectively, hereinafter referred to as the "Refunded Obligations "), to
wit:
(1) "City of Southlake, Texas, General Obligation Refunding Bonds, Series
2002," dated November 15, 2002, scheduled to mature on February 15 in
each of the years 2013 through 2018, inclusive, and aggregating in the
principal amount of $2,355,000 (the "Series 2002 Refunded Bonds ");
(2) "City of Southlake, Texas, Tax and Waterworks and Sewer System
Surplus Revenue Certificates of Obligation, Series 2004A," dated June 1,
2004, being the portion of such certificates eligible to be refunded under
federal tax laws and scheduled to mature on February 15 in each of the
years 2015 through 2022, and 2024, and aggregating in the principal
amount of $295,000 (the "Series 2004A Refunded Certificates ") and
further described as follows:
Year of Principal Amount Principal Amount Eligible to be
Maturity Outstanding ($) Refunded /Being Refunded ($)
2015 145,000 25,000
2016 150,000 25,000
2017 160,000 25,000
2018 165,000 25,000
2019 175,000 30,000
2020 185,000 30,000
2021 195,000 30,000
2022 205,000 35,000
2024* 440,000 70,000
* term bond
(3) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 2004, dated
June 1, 2004, being the portion of such certificates eligible to be refunded
under federal tax laws and scheduled to mature on February 15 in each of
the years 2015 through 2022, and 2024, and aggregating in the principal
amount of $305,000 (the "Series 2004 Refunded Certificates ") and further
described as follows:
52192122.1/11205039
Year of Principal Amount Principal Amount Eligible to be
Maturity Outstanding ($) Refunded /Being Refunded ($)
2015 145,000 25,000
2016 155,000 25,000
2017 160,000 25,000
2018 170,000 30,000
2019 180,000 30,000
2020 185,000 30,000
2021 195,000 30,000
2022 205,000 35,000
2024* 445,000 75,000
* term bond
(4) City of Southlake, Texas, General Obligation Refunding Bonds, Series
2004, dated May 15, 2004, being the portion of such bonds eligible to be
refunded under federal tax laws and scheduled to mature on February 15
in each of the years 2015 through 2026, and aggregating in the principal
amount of $4,290,000 (the "Series 2004 Refunded Bonds ") and further
described as follows:
Year of Principal Amount Principal Amount Eligible to be
Maturity Outstanding ($) Refunded/Being Refunded ($)
2015 610,000 100,000
2016 620,000 105,000
2017 650,000 110,000
2018 930,000 155,000
2019 2,075,000 345,000
2020 2,695,000 450,000
2021 2,810,000 465,000
2022 2,940,000 490,000
2023 3,085,000 515,000
2024 3,235,000 540,000
2025 2,970,000 495,000
2026 3,125,000 520,000
(5) City of Southlake, Texas, Tax and Waterworks and Sewer System
(Limited Pledge) Revenue Certificates of Obligation, Series 2006, dated
January 15, 2006, scheduled to mature on February 15 in each of the years
2016 through 2026, inclusive, and aggregating in the principal amount of
$3,505,000 (the "Series 2006 Refunded Certificates ");
AND WHEREAS, in accordance with the provisions of Texas Government Code,
Chapter 1207, as amended (the "Act "), the City is authorized to sell refunding bonds in an
amount sufficient to provide for the payment of the Refunded Obligations, deposit the proceeds
of such refunding bonds with any place of payment for the obligations being refunded, or other
authorized depository, and enter into an escrow or similar agreement with such place of payment
52192122.1/11205039 2
for the safekeeping, investment, reinvestment, administration and disposition of such deposit,
upon such terms and conditions as the parties may agree, provided such deposits may be invested
only (i) direct noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United States of
America, (ii) noncallable obligations of an agency or instrumentality of the United States,
including obligations unconditionally guaranteed or insured by the agency or instrumentality and
on the date of their acquisition or purchase by the City are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent and
(iii) noncallable obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent (hereinafter called "Governmental Securities ") that mature
and /or bear interest payable at such times and in such amounts as will be sufficient to provide for
the scheduled payment of the Refunded Obligations; and
WHEREAS, the Refunded Obligations are scheduled to mature, or be redeemed, and
interest thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto
and incorporated herein by reference as a part of this Agreement for all purposes; and
WHEREAS, the City on the 7 day of July, 2012, pursuant to an ordinance duly passed
and adopted by the City Council (the "Ordinance "), authorized the issuance of bonds known as
"City of Southlake, Texas, General Obligation Refunding Bonds, Series 2012" (the "Bonds "),
and such Bonds are being issued to refund, discharge and make final payment of the principal of
and interest on the Refunded Obligations; and
WHEREAS, upon the delivery of the Bonds, the proceeds of sale are to be used in part to
purchase the Governmental Securities listed and identified in Exhibit B attached hereto and
incorporated herein by reference as a part of this Agreement for all purposes (together with
substituted securities therefor in accordance with the provisions of Section 11 hereof hereinafter
referred to as the "Escrowed Securities ") ; and
WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Escrow Agent in accordance with this
Agreement; and
WHEREAS, the Escrowed Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Obligations and the
accrued interest thereon, as the same shall become due in accordance with the terms of the
ordinances authorizing the issuance of the Refunded Obligations and as set forth in Exhibit A
attached hereto; and
WHEREAS, the City has completed all arrangements for the purchase of the Escrowed
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Escrow Agent is a banking association organized and existing under the
laws of the United States of America, possessing trust powers and is fully qualified and
52192122.1/11205039 3
empowered to enter into this Agreement and satisfies the requirements of section
1207.061(a)(3)(A) of the Texas Government Code, as amended; and
WHEREAS, in Section 16 of the Ordinance, the City Council duly approved and
authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action
necessary to call, pay, redeem and retire said Refunded Obligations in accordance with the
provisions thereof, including, without limitation, all actions required by the ordinances
authorizing the Refunded Obligations, the Act, the Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to
secure the payment of the principal of and the interest on the Refunded Obligations as the same
shall become due, the City and the Escrow Agent hereby mutually undertake, promise and agree
as follows:
SECTION 1: Receipt of Refunded Obligations Ordinances and Ordinance. Receipt of
true and correct copies of the ordinances authorizing the issuance of the Refunded Obligations
and the Ordinance are hereby acknowledged by the Escrow Agent. Reference herein to or
citation herein of any provision of said documents shall be deemed an incorporation of such
provision as a part hereof in the same manner and with the same effect as if it were fully set forth
herein.
SECTION 2: Escrow Fund Creation/Funding. There is hereby created by the City with
the Escrow Agent a special segregated and irrevocable trust fund designated "SPECIAL 2012
CITY OF SOUTHLAKE, TEXAS, GENERAL OBLIGATION REFUNDING BOND ESCROW
FUND" (hereinafter called the "Escrow Fund ") for the benefit of the holders of the Refunded
Obligations, and, immediately following the delivery of the Bonds, the City agrees and
covenants to cause to be deposited with the Escrow Agent the following:
$8,729,479.00 for the purchase of the Escrowed Securities listed in
Exhibit B to be held for the account of the Escrow
Fund;
$2,361,593.92 for deposit in the Escrow Fund as a beginning cash
balance.
The Escrow Agent hereby accepts the Escrow Fund and further agrees to receive said
moneys, apply the same as set forth herein, and to hold the cash and Escrowed Securities
deposited and credited to the Escrow Fund for application and disbursement for the purposes and
in the manner provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the
cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the
credit of the Escrow Fund will be sufficient to pay the principal of and premium, if any, and
interest on the Refunded Obligations as the same shall become due and payable, and such
Refunded Obligations, and the interest thereon, are to mature or be redeemed and shall be paid at
the times and in the amounts set forth and identified in Exhibit A attached hereto.
52192122.1/11205039 4
FURTHERMORE, the Escrow Agent acknowledges receipt of a copy of the Ordinance
which provides for the redemption of (1) the Series 2002 Refunded Bonds on September 10,
2012 at the price of par plus accrued interest to the date of redemption, (2) the Series 2004A
Refunded Certificates, the Series 2004 Refunded Certificates, and the Series 2004 Refunded
Bonds on February 15, 2013 at the price of par plus accrued interest to the date of redemption,
and (3) the Series 2006 Refunded Certificates on February 15, 2014; all in accordance with the
provisions of the respective notice requirements applicable to said Refunded Obligations and the
notice requirements contained in the ordinances authorizing the issuance of the Refunded
Obligations.
The Escrow Agent, as paying agent/registrar for the Series 2002 Refunded Bonds, agrees
to cause a notice of redemption pertaining to such Series 2002 Refunded Bonds to be sent to the
registered owners thereof appearing on the registration books at least thirty (30) days prior to the
redemption date therefor in accordance with the ordinance authorizing the Series 2002 Refunded
Bonds.
SECTION 4: Pledge of Escrow. The Escrow Agent agrees that all cash and Escrowed
Securities, together with any income or interest earned thereon, held in the Escrow Fund shall be
and is hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Obligations which will mature and become due on and after the date of this Agreement, and such
funds initially deposited and to be received from maturing principal and interest on the Escrowed
Securities in the Escrow Fund shall be applied solely in accordance with the provisions of this
Agreement.
SECTION 5: Escrow Insufficiency -City Warranty to Cure. If, for any reason, the funds
on hand in the Escrow Fund shall be insufficient to make the payments set forth in Exhibit A
attached hereto, as the same becomes due and payable, the City shall make timely deposits to the
Escrow Fund, from lawfully available funds, of additional funds in the amounts required to make
such payments. Notice of any such insufficiency shall be immediately given by the Escrow
Agent to the City by the fastest means possible, but the Escrow Agent shall in no manner be
responsible for the City's failure to make such deposits.
SECTION 6: Escrow Fund Securities /Segregation. The Escrow Agent shall hold said
Escrowed Securities and moneys in the Escrow Fund at all times as a special and separate trust
fund for the benefit of the holders of the Refunded Obligations, wholly segregated from other
moneys and securities on deposit with the Escrow Agent; shall never commingle said Escrowed
Securities and moneys with other moneys or securities of the Escrow Agent; and shall hold and
dispose of the assets therein only as set forth herein. Nothing herein contained shall be construed
as requiring the Escrow Agent to keep the identical moneys, or any part thereof, in said Escrow
Fund, if it is impractical, but moneys of an equal amount, except to the extent such are
represented by the Escrowed Securities, shall always be maintained on deposit in the Escrow
Fund by the Escrow Agent and a special account evidencing such facts shall at all times be
maintained on the books of the Escrow Agent.
SECTION 7: Escrow Fund Collections /Payments. The Escrow Agent shall from time to
time collect and receive the principal of and interest on the Escrowed Securities as they
respectively mature and become due and credit the same to the Escrow Fund. On or before each
52192122.1/11205039 5
principal and /or interest payment date or redemption date, as the case may be, for the Refunded
Obligations shown in Exhibit A attached hereto, the Escrow Agent, without further direction
from anyone, including the City, shall cause to be withdrawn from the Escrow Fund the amount
required to pay the accrued interest on the Refunded Obligations due and payable on said
payment date and the principal of the Refunded Obligations due and payable on said payment
date or redemption date, as the case may be, and the amount withdrawn from the Escrow Fund
shall be immediately transmitted and deposited with the paying agent for the Refunded
Obligations to be paid with such amount. The paying agent for the Series 2002 Refunded Bonds
is the Escrow Agent. The paying agent for the Series 2004A Refunded Certificates, Series 2004
Refunded Certificates, and the Series 2004 Refunded Bonds is U.S. Bank National Association.
The paying agent for the Series 2006 Refunded Certificates is Regions Bank.
SECTION 8: Disposal of Series 2002 Refunded Bonds. All Series 2002 Refunded
Bonds cancelled on account of payment by the Escrow Agent shall be cremated or otherwise
destroyed by the Escrow Agent, and an appropriate certificate of destruction furnished to the
City.
SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be
irrevocable and the holders of the Refunded Obligations shall have an express lien on all moneys
and Escrowed Securities in the Escrow Fund until paid out, used and applied in accordance with
this Agreement.
Unless disbursed in payment of the Refunded Obligations, all funds and the Escrowed
Securities received by the Escrow Agent for the account of the City hereunder shall be and
remain the property of the Escrow Fund and the City and the owners of the Refunded
Obligations shall be entitled to a preferred claim and shall have a first lien upon such funds and
Escrowed Securities enjoyed by a trust beneficiary. The funds and Escrowed Securities received
by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the
City and the Escrow Agent and the City shall have no right or title with respect thereto, except as
otherwise provided herein. Such funds and Escrowed Securities shall not be subject to checks or
drafts drawn by the City.
SECTION 10: Absence of Claim/Lien on Escrow Fund. The Escrow Agent shall have no
lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for payment
of services rendered hereunder, services rendered as paying agent/registrar for the Series 2002
Refunded Bonds, or for any costs or expenses incurred hereunder and reimbursable from the
City.
SECTION 11: Substitution/Reinvestments. The Escrow Agent shall be authorized to
accept initially and temporarily cash and /or substituted Governmental Securities pending the
delivery of the Escrowed Securities identified in the Exhibit B attached hereto, or shall be
authorized to redeem the Escrowed Securities and reinvest the proceeds thereof, together with
other moneys held in the Escrow Fund in Governmental Securities, provided such early
redemption and reinvestment of proceeds does not change the repayment schedule of the
Refunded Obligations appearing in Exhibit A and the Escrow Agent receives the following:
52192122.1/11205039 6
(1) an opinion by an independent certified public accountant to the
effect that (i) the initial and/or temporary substitution of cash and /or securities for
one or more of the Escrowed Securities identified in Exhibit B pending the
receipt and delivery thereof to the Escrow Agent or (ii) the redemption of one or
more of the Escrowed Securities and the reinvestment of such funds in one or
more substituted Governmental Securities, together with the interest thereon and
other available moneys then held in the Escrow Fund, will, in either case, be
sufficient without reinvestment to pay, as the same become due in accordance
with Exhibit A, the principal of, and interest on, the Refunded Obligations which
have not previously been paid, and
(2) with respect to an early redemption of Escrowed Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Obligations to be included in the gross
income for federal income tax purposes, under the Code and related regulations as
in effect on the date of such investment, or otherwise make the interest on the
Bonds or the Refunded Obligations subject to Federal income taxation and
(b) such reinvestment complies with the Constitution and laws of the State of
Texas and with all relevant documents relating to the issuance of the Refunded
Obligations and the Bonds.
(b) If on the date and in the amount shown in Exhibit C attached hereto there exists
cash in the Escrow Fund, the Escrow Agent and the City agree at least fifteen (15) days prior to
such date, to subscribe for the purchase of United States Treasury Securities - State and Local
Government Series ( "SLGS ") bearing zero interest (0 %) and on such date, in the amount and
scheduled to mature as provided in Exhibit C and subscription forms prepared therefor as may
be then required by the United States Department of the Treasury; provided that the then existing
rules and regulations and policy of United States Department of the Treasury permit and
authorize such investments. Should the policy, rules and regulations of the United States
Department of Treasury not permit or authorize the purchase of such SLGS at such time or
times, such cash balance or balances shall remain uninvested and held in trust for the benefit of
the holders of the Refunded Obligations and used for the payment of the Refunded Obligations
on the dates and in the amount such moneys would have been expended had such SLGS been
acquired and matured.
SECTION 12: Restriction Re: Escrow Fund Investments/ Re- investment. Except as
provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed
Securities listed in Exhibit B and neither the City nor the Escrow Agent shall reinvest any
moneys deposited in the Escrow Fund except as specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through redemption or cancellation of the
Refunded Obligations there exists or will exist excesses of interest on or maturing principal of
the Escrowed Securities in excess of the amounts necessary hereunder for the Refunded
Obligations, the Escrow Agent may transfer such excess amounts to or on the order of the City,
provided that the City delivers to the Escrow Agent the following:
52192122.1/11205039 7
(1) an opinion by an independent certified public accountant that after
the transfer of such excess, the principal amount of securities in the Escrow Fund,
together with the interest thereon and other available monies then held in the
Escrow Fund, will be sufficient to pay, as the same become due, in accordance
with Exhibit A, the principal of, and interest on, the Refunded Obligations which
have not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transfer will not cause interest on the Bonds or
the Refunded Obligations to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded Obligations
subject to Federal income taxation, and (b) such transfer complies with the
Constitution and laws of the State of Texas and with all relevant documents
relating to the issuance of the Refunded Obligations or the Bonds.
SECTION 14: Collateralization. The Escrow Agent shall continuously secure the monies
in the Escrow Fund not invested in Escrowed Securities by a pledge of direct obligations of the
United States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Escrow Agent's Liability Re: Investments. The Escrow Agent
shall not be liable or responsible for any loss resulting from any investment made in the
Escrowed Securities or substitute securities as provided in Section 11 hereof.
SECTION 16: Escrow Agent's Compensation - Escrow Administration Settlement of
Paying Agents' Charges. The City agrees to pay the Escrow Agent for the performance of
services hereunder and as reimbursement for anticipated expenses to be incurred hereunder the
amount of $1,500 and, except for reimbursement of costs and expenses incurred by the Escrow
Agent pursuant to Sections 3, 11, and 19 hereof, the Escrow Agent hereby agrees said amount is
full and complete payment for the administration of this Agreement.
The City also agrees to deposit with the Escrow Agent on the effective date of this
Agreement, the sum of $1,500 which represents the total charges due the paying agents for the
Refunded Obligations and the City acknowledges and agrees that (1) $300 of such amount is and
represents the total amount of compensation due Escrow Agent, for services rendered as the
paying agent for the Series 2002 Refunded Bonds, (2) $900 of such amount is and represents the
total amount of compensation due U.S. Bank National Association for services rendered as the
paying agent for the Series 2004A Refunded Certificates, Series 2004 Refunded Certificates, and
Series 2004 Refunded Bonds, and (3) $300 of such amount is and represents the total amount of
compensation due Regions Bank for services rendered as the paying agent for the Series 2006
Refunded Certificates. The Escrow Agent hereby agrees to transmit to U.S. Bank National
Association, such amount for paying agent services to be rendered for the Series 2004A
Refunded Certificates, Series 2004 Refunded Certificates, and Series 2004 Refunded Bonds in
accordance with the City's instructions. The Escrow Agent hereby agrees to transmit to Regions
Bank, such amount for paying agent services to be rendered for the Series 2006 Refunded
52192122.1/11205039 8
Certificates in accordance with the City's instructions. The Escrow Agent hereby agrees to pay,
assume and be fully responsible for any additional charges that it may incur in the performance
of its duties and responsibilities as paying agent for the Series 2002 Bonds.
SECTION 17: Escrow Agent's Duties /Responsibilities /Liability. The Escrow Agent
shall not be responsible for any recital herein, except with respect to its organization and its
powers and authority. As to the existence or nonexistence of any fact relating to the City or as to
the sufficiency or validity of any instrument, paper or proceedings relating to the City, the
Escrow Agent shall be entitled to rely upon a certificate signed on behalf of the City by its City
Secretary or City Manager or Director of Finance of the City as sufficient evidence of the facts
therein contained. The Escrow Agent may accept a certificate of the City Secretary under the
City's seal, to the effect that a resolution or other instrument in the form therein set forth has
been adopted by the City Council of the City, as conclusive evidence that such resolution or
other instrument has been duly adopted and is in full force and effect.
The duties and obligations of the Escrow Agent shall be determined solely by the express
provisions of this Agreement and the Escrow Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this Agreement, and no
implied covenants or obligations shall be read into this Agreement against the Escrow Agent.
In the absence of bad faith on the part of the Escrow Agent, the Escrow Agent may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificate or opinion furnished to the Escrow Agent, conforming to the
requirements of this Agreement; but notwithstanding any provision of this Agreement to the
contrary, in the case of any such certificate or opinion or any evidence which by any provision
hereof is specifically required to be furnished to the Escrow Agent, the Escrow Agent shall be
under a duty to examine the same to determine whether it conforms to the requirements of this
Agreement.
The Escrow Agent shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Escrow Agent unless it shall be proven that the Escrow
Agent was negligent in ascertaining or acting upon the pertinent facts.
The Escrow Agent shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the holders of not less than a
majority in aggregate principal amount of all said Refunded Obligations at the time outstanding
relating to the time, method and place of conducting any proceeding for any remedy available to
the Escrow Agent not in conflict with the intent and purpose of this Agreement. For the
purposes of determining whether the holders of the required principal amount of said Refunded
Obligations have concurred in any such direction, Refunded Obligations owned by any obligor
upon the Refunded Obligations, or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with such obligor, shall be disregarded, except that
for the purposes of determining whether the Escrow Agent shall be protected in relying on any
such direction only Refunded Obligations which the Escrow Agent actually knows are so owned
shall be so disregarded unless all Refunded Obligations are so owned.
52192122.1/11205039 9
The term "Responsible Officers" of the Escrow Agent, as used in this Agreement, shall
mean and include the Chairman of the Board of Directors, the President, any Vice President and
any Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Escrow Agent
customarily performing functions similar to those performed by the persons who at the time shall
be officers, respectively, or to whom any corporate trust matter is referred, because of his
knowledge of and familiarity with a particular subject; and the term "Responsible Officer" of the
Escrow Agent, as used in this Agreement, shall mean and include any of said officers or persons.
The Escrow Agent may consult with "independent legal counsel" (such term does not
include an attorney who is an employee of the Escrow Agent) and the Escrow Agent shall be
entitled to conclusively rely on such advice of such independent legal counsel in good faith.
Such advice or opinion of independent legal counsel, relied upon in good faith, shall be full and
complete authorization and protection in respect of any action taken, suffered or omitted by it in
accordance with such advice. The Escrow Agent may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its agents or attorneys
and may in all cases pay reasonable compensation to any agent or attorney retained or employed
by it in connection therewith. The Escrow Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, written investment direction, statement,
instrument, opinion, notice or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party. The Escrow Agent need not investigate any fact or
matter stated in the document. None of the provisions of this Agreement shall require the
Escrow Agent to expend or risk its own funds or otherwise to incur any liability, financial or
otherwise, in the performance of any of its duties hereunder.
To the extent permitted by law, the City shall indemnify, defend and hold harmless the
Escrow Agent and its officers, directors, employees, representatives and agents, from and against
and reimburse the Escrow Agent for any and all claims, obligations, liabilities, losses, damages,
actions, suits, judgments, reasonable costs and expenses (including reasonable attorneys' and
agents' fees and expenses) of whatever kind or nature regardless of their merit, demanded,
asserted or claimed against the Escrow Agent directly or indirectly relating to, or arising from,
claims against the Escrow Agent by reason of its participation in the transactions contemplated
hereby, except to the extent caused by the Escrow Agent's negligence or willful misconduct.
The foregoing indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Escrow Agent.
Any bank, corporation or association into which the Escrow Agent may be merged or
converted or with which it may be consolidated, or any bank, corporation or association resulting
from any merger, conversion or consolidation to which the Escrow Agent shall be a party, or any
bank, corporation or association succeeding to all or substantially all of the corporate trust
business of the Escrow Agent shall be the successor of the Escrow Agent hereunder without the
execution or filing of any paper with any party hereto or any further act on the part of any of the
parties hereto except on the part of any of the parties hereto where an instrument of transfer or
assignment is required by law to effect such succession, anything herein to the contrary
notwithstanding.
52192122.1/11205039 10
SECTION 18: Limitation Re: Escrow Agent's Duties /Responsibilities /Liabilities to Third
Parties. The Escrow Agent shall not be responsible or liable to any person in any manner
whatever for the sufficiency, correctness, genuineness, effectiveness, or validity of this
Agreement with respect to the City, or for the identity or authority of any person making or
executing this Agreement for and on behalf of the City. The Escrow Agent is authorized by the
City to rely upon the representations of the City with respect to this Agreement and the deposits
made pursuant hereto and as to the City's right and power to execute and deliver this Agreement,
and the Escrow Agent shall not be liable in any manner as a result of such reliance. The duty of
the Escrow Agent hereunder shall only be to the City and the holders of the Refunded
Obligations. Neither the City nor the Escrow Agent shall assign or attempt to assign or transfer
any interest hereunder or any portion of any such interest; provided, however, that such
assignment or transfer by the Escrow Agent shall be permitted if such assignment or transfer is
due to a merger, consolidation, conversion, or business sale of the Escrow Agent as described in
the last paragraph of Section 17 hereof. Any such assignment or attempted assignment shall be
in direct conflict with this Agreement and be without effect.
SECTION 19: Interpleader. In the event conflicting demands or notices are made upon
the Escrow Agent growing out of or relating to this Agreement or the Escrow Agent in good
faith is in doubt as to what action should be taken hereunder, the Escrow Agent shall have the
right at its election to:
(a) Withhold and stop all further proceedings in, and performance of, this Agreement
with respect to the issue in question and of all instructions received hereunder in regard to such
issue; and
(b) File a suit in interpleader and obtain an order from a court of appropriate jurisdiction
in the State of Texas requiring all persons involved to interplead and litigate in such court their
several claims and rights among themselves.
In the event the Escrow Agent becomes involved in litigation in connection with this
Section, the City to the extent permitted by law agrees to indemnify and save the Escrow Agent
harmless from all loss, cost, damages, expenses and attorney fees suffered or incurred by the
Escrow Agent as a result thereof. The obligations of the Escrow Agent under this Agreement
shall be performable at the corporate office of the Escrow Agent in the City of Dallas, Texas. To
the extent permitted by law, and subject to any applicable statutes of limitation, the foregoing
indemnification shall survive the resignation or removal of the Escrow Agent or the termination
of this Agreement.
The Escrow Agent may advise with legal counsel in the event of any dispute or question
regarding the construction of any of the provisions hereof or its duties hereunder, and in the
absence of negligence or bad faith on the part of the Escrow Agent, no liability shall be incurred
by the Escrow Agent for any action taken pursuant to this Section and the Escrow Agent shall be
fully protected in acting in accordance with the opinion and instructions of legal counsel that is
knowledgeable and has expertise in the field of law addressed in any such legal opinion or with
respect to the instructions given.
52192122.1/11205039 11
SECTION 20: Accounting - Annual Report. Promptly after September 30 of each year,
commencing with the year 2012, so long as the Escrow Fund is maintained under this
Agreement, the Escrow Agent shall forward by letter to the City, to the attention of the Director
of Finance, or other designated official of the City, a statement in detail of the Escrowed
Securities and monies held, and the current income and maturities thereof, and the withdrawals
of money from the Escrow Fund for the preceding 12 month period ending September 30 of
each year.
SECTION 21: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
CITY OF SOUTHLAKE
1400 Main Street, Suite 440
Southlake, Texas 76092
Attention: Director of Finance
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
2001 Bryan Street, 11 Floor
Dallas, Texas 75201
Attention: Corporate Trust Division
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Obligations, shall be a Sunday or a legal holiday or a day on which the
Escrow Agent is authorized by law to close, then the performance thereof, including the payment
of principal of and interest on the Refunded Obligations, need not be made on such date but may
be performed or paid, as the case may be, on the next succeeding business day of the Escrow
Agent with the same force and effect as if made on the date of performance or payment and with
respect to a payment, no interest shall accrue for the period after such date.
SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow Agreement.
The City covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in any and every said
Refunded Obligation as executed, authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Obligations shall have been modified as provided in this Agreement.
The City covenants that it is duly authorized under the Constitution and laws of the State of
Texas to execute and deliver this Agreement, that all actions on its part for the payment of said
Refunded Obligations as provided herein and the execution and delivery of this Agreement have
been duly and effectively taken and that said Refunded Obligations and coupons in the hands of
52192122.1/11205039 12
the holders and owners thereof are and will be valid and enforceable obligations of the City
according to the import thereof as provided in this Agreement.
SECTION 24: Severability. If any one or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Agreement. In the event
any covenant or agreement contained in this Agreement is declared to be severable from the
other provisions of this Agreement, written notice of such event shall immediately be given to
each national rating service (Moody's Investors Service [ "Moody's "], Standard & Poor's Ratings
Serivces, a Standard & Poor's Financial Service LLC business [ "S &P "], or Fitch Investors
Service [ "Fitch "]) which has rated the Refunded Obligations on the basis of this Agreement.
SECTION 25: Termination. This Agreement shall terminate when the Refunded
Obligations, including interest due thereon, have been paid and discharged in accordance with
the provisions of this Agreement. If any Refunded Obligations are not presented for payment
when due and payable, the nonpayment thereof shall not prevent the termination of this
Agreement. Funds for the payment of any nonpresented Refunded Obligations and accrued
interest thereon shall upon termination of this Agreement be held by the Escrow Agent for such
purpose in accordance with Section 7 hereof. Any moneys or Escrowed Securities held in the
Escrow Fund at termination and not needed for the payment of the principal of or interest on any
of the Refunded Obligations shall be paid or transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by this Agreement.
SECTION 27: Successors /Assigns.
(a) Should the Escrow Agent not be able to legally serve or perform the duties and
obligations under this Agreement, or should the Escrow Agent be declared to be insolvent or
closed for any reason by federal or state regulatory authorities or a court of competent
jurisdiction, the City, upon being notified or discovering the Escrow Agent's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Escrow
Agent, and upon being notified of such appointment, the Escrow Agent shall (i) transfer all funds
and securities held hereunder, together with all books, records and accounts relating to the
Escrow Fund and the Refunded Obligations, to such successor and (ii) assign all rights, duties
and obligations under this Agreement to such successor. If the City should fail to appoint such a
successor within sixty (60) days from the date the City discovers, or is notified of, the event or
circumstance causing the Escrow Agent's inability or disqualification to serve hereunder, the
Escrow Agent, or a bondholder of the Refunded Obligations, may apply, at the expense of the
City, to a court of competent jurisdiction to appoint a successor or assigns of the Escrow Agent
and such court, upon determining the Escrow Agent is unable to continue to serve, shall appoint
a successor to serve under this Agreement and the amount of compensation, if any, to be paid to
such successor for the remainder of the term of this Agreement for services to be rendered both
for administering the Escrow Fund and for paying agent duties and responsibilities for the
Refunded Obligations.
52192122.1/11205039 13
(b) Furthermore, the Escrow Agent may resign and be discharged from performing its
duties and responsibilities under this Agreement upon notifying the City in writing of its
intention to resign and requesting the City to appoint a successor. No such resignation shall take
effect until a successor has been appointed by the City and such successor has accepted such
appointment and agreed to perform all duties and obligations hereunder for a total compensation
equal to the unearned proportional amount paid the Escrow Agent under Section 16 hereof for
the administration of this Agreement and the unearned proportional amount of the paying agents
fees for the Refunded Obligations due the Escrow Agent. If the City does not make such
appointment within sixty (60) days of the date that such resignation notice is sent to the City, the
Escrow Agent shall be entitled to petition of a court of competent jurisdiction for the
appointment of a successor.
Any successor to the Escrow Agent shall be a bank, trust company or other financial
institution that is duly qualified under applicable law (the Act, or other appropriate statute) to
serve as escrow agent hereunder and authorized and empowered to perform the duties and
obligations contemplated by this Agreement and organized and doing business under the laws of
the United States or the State of Texas, having an office and place of business in the State of
Texas, having a combined capital and surplus of at least $50,000,000 and be subject to the
supervision or examination by Federal or State authority.
Any successor or assigns to the Escrow Agent shall execute, acknowledge and deliver to
the City and the Escrow Agent, or its successor or assigns, an instrument accepting such
appointment hereunder, and the Escrow Agent shall execute and deliver an instrument
transferring to such successor, subject to the terms of this Agreement, all the rights, powers and
trusts created and established and to be performed under this Agreement. Upon the request of
any such successor Escrow Agent, the City shall execute any and all instruments in writing for
more fully and certainly vesting in and confirming to such successor Escrow Agent all such
rights, powers and duties. The term "Escrow Agent" as used herein shall be the Escrow Agent
and its legal assigns and successor hereunder.
SECTION 28: Escrow Agreement - Amendment/Modification. This Agreement shall be
binding upon the City and the Escrow Agent and their respective successors and legal
representatives and shall inure solely to the benefit of the holders of the Refunded Obligations,
the City, the Escrow Agent and their respective successors and legal representatives.
Furthermore, no alteration, amendment or modification of any provision of this Agreement (1)
shall alter the firm financial arrangements made for the payment of the Refunded Bonds or (2)
shall be effective unless (i) prior written consent of such alteration, amendment or modification
shall have been obtained from the holders of all Refunded Obligations outstanding at the time of
such alteration, amendment or modification and (ii) such alteration, amendment or modification
is in writing and signed by the parties hereto; provided, however, the City and the Escrow Agent
may, without the consent of the holders of the Refunded Obligations, amend or modify the terms
and provisions of this Agreement to cure in a manner not materially adverse to the holders of the
Refunded Obligations as evidenced by an opinion of counsel delivered to the Escrow Agent any
ambiguity, formal defect or omission in this Agreement. If the parties hereto agree to any
amendment or modification to this Agreement, prior written notice of such amendment or
proposed modification, together with the legal documents amending or modifying this
Agreement, shall be furnished to each national rating service (Moody's, S &P, or Fitch) which
52192122 14
has rated the Refunded Obligations on the basis of this Agreement, prior to such amendment or
modification being executed.
SECTION 29: Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 30: Executed Counterparts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
SECTION 31: Governing Law. This Agreement shall be governed by the laws of the
State of Texas and shall be effective as of the date of the delivery of the Bonds.
[remainder of page left blank intentionally]
52192122.1/11205039 15
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers their corporate seals to be hereunto affixed and
attested as of the date first above written.
CITY OF SOUTHLAKE, TEXAS
Mayor
ATTEST:
City Secretary
(City Seal)
[signature page to Special Escrow Agreement — signatures continue on next page]
52192122.1/11205039 S- 1
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., Dallas, Texas,
as Escrow Agent
Title:
ATTEST:
Title:
(Bank Seal)
[signature page to Special Escrow Agreement]
52192122.1/11205039 S -2
EXHIBIT C -1
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2002
Dated November 15, 2002
NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on and after
February 15, 2013, and aggregating in the principal amount of $2,355,000, have been called for
redemption on September 10, 2012 at the redemption price of par and accrued interest to the date
of redemption, such bonds being identified as follows:
Year of CUSIP
Maturity Principal Amount Number
2013 $ 575,000
2014 330,000
2015 340,000
2016 355,000
2017 370,000
2018 385,000
ALL SUCH BONDS shall become due and payable on September 10, 2012, and interest
thereon shall cease to accrue from and after said redemption date and payment of the redemption
price of said bonds shall be paid to the registered owners of the bonds only upon presentation
and surrender thereof to The Bank of New York Mellon Trust Company, N.A. (successor paying
agent/registrar to The Bank of New York Trust Company of Florida, N.A.) at its designated
offices at the following addresses:
First Class/Registered /Certified Express Delivery/Courier By Hand Only
The Bank of New York Mellon The Bank of New York The Bank of New York
Trust Company, N.A. Mellon Trust Company, N.A. Mellon Trust Company, N.A.
Global Corporate Trust Global Corporate Trust Corporate Trust Window
P.O. Box 396 111 Sanders Creek Pkwy. 101 Barclay Street, 1st Floor East
East Syracuse, NY 13057 East Syracuse, NY 13057 New York, New York 10286
THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for
the redemption of said bonds 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.,
as Paying Agent /Registrar
2001 Bryan Street, 11 Floor
Dallas, Texas 75201
52186325.4/11205039 C -1
EXHIBIT C -2
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2004A
Dated June 1, 2004
NOTICE IS HEREBY GIVEN that a portion of the certificates of obligation of the above
series maturing on and after February 15, 2015, and aggregating in the principal amount of
$295,000, have been called for redemption on February 15, 2013 at the redemption price of par
and accrued interest to the date of redemption, such certificates being identified as follows:
Year Principal Principal
of Amount Amount CUSIP
Maturity Outstanding Redeemed Number
2015 $ 145,000 $ 25,000
2016 150,000 25,000
2017 160,000 25,000
2018 165,000 25,000
2019 175,000 30,000
2020 185,000 30,000
2021 195,000 30,000
2022 205,000 35,000
2024 440,000 70,000
* Term certificate.
ALL SUCH CERTIFICATES shall become due and payable on February 15, 2013 and
interest thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said certificates shall be paid to the registered owners of the certificates only
upon presentation and surrender thereof to U.S. Bank National Association (successor paying
agent /registrar to Wachovia Bank, National Association) at its designated office at the following
address: 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
as Paying Agent /Registrar
14241 Dallas Parkway, Suite 490
Dallas, Texas 75254
52186325.4/11205039 C -2
EXHIBIT C -3
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2004
Dated June 1, 2004
NOTICE IS HEREBY GIVEN that a portion of the certificates of obligation of the above
series maturing on and after February 15, 2015, and aggregating in the principal amount of
$305,000, have been called for redemption on February 15, 2013 at the redemption price of par
and accrued interest to the date of redemption, such certificates being identified as follows:
Year Principal Principal
of Amount Amount CUSIP
Maturity Outstanding Redeemed Number
2015 $ 145,000 $ 25,000
2016 155,000 25,000
2017 160,000 25,000
2018 170,000 30,000
2019 180,000 30,000
2020 185,000 30,000
2021 195,000 30,000
2022 205,000 35,000
2024 445,000 75,000
* Term certificate.
ALL SUCH CERTIFICATES shall become due and payable on February 15, 2013 and
interest thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said certificates shall be paid to the registered owners of the certificates only
upon presentation and surrender thereof to U.S. Bank National Association (successor paying
agent/registrar to Wachovia Bank, National Association) at its designated office at the following
address: 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
as Paying Agent/Registrar
14241 Dallas Parkway, Suite 490
Dallas, Texas 75254
52186325.4/11205039 C -3
EXHIBIT C -4
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2004
Dated May 15, 2004
NOTICE IS HEREBY GIVEN that a portion of the bonds of the above series maturing
on and after February 15, 2015, and aggregating in the principal amount of $4,290,000, have
been called for redemption on February 15, 2013 at the redemption price of par and accrued
interest to the date of redemption, such bonds being identified as follows:
Year Principal Principal
of Amount Amount CUSIP
Maturity Outstanding Redeemed Number
2015 $ 610,000 $ 100,000
2016 620,000 105,000
2017 650,000 110,000
2018 930,000 155,000
2019 2,075,000 345,000
2020 2,695,000 450,000
2021 2,810,000 465,000
2022 2,940,000 490,000
2023 3,085,000 515,000
2024 3,235,000 540,000
2025 2,970,000 495,000
2026 3,125,000 520,000
ALL SUCH BONDS shall become due and payable on February 15, 2013 and interest
thereon shall cease to accrue from and after said redemption date and payment of the redemption
price of said bonds shall be paid to the registered owners of the bonds only upon presentation
and surrender thereof to U.S. Bank National Association (successor paying agent /registrar to
Wachovia Bank, National Association) at its designated office at the following address:
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 bonds and pursuant to an ordinance by the City Council of the City of
Southlake, Texas.
U.S. BANK NATIONAL ASSOCIATION
as Paying Agent /Registrar
14241 Dallas Parkway, Suite 490
Dallas, Texas 75254
52186325.4/11205039 C -4
EXHIBIT C -5
NOTICE OF REDEMPTION
CITY OF SOUTHLAKE, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE) REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2006
Dated January 15, 2006
NOTICE IS HEREBY GIVEN that the certificates of obligation of the above series
maturing on and after February 15, 2016, and aggregating in the principal amount of $3,505,000,
have been called for redemption on February 15, 2014 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
2016 $ 275,000
2017 285,000
2018 295,000
2019 310,000
2020 145,000
2021 330,000
2022 340,000
2023 355,000
2024 375,000
2025 390,000
2026 405,000
ALL SUCH CERTIFICATES shall become due and payable on February 15, 2014 and
interest thereon shall cease to accrue from and after said redemption date and payment of the
redemption price of said certificates shall be paid to the registered owners of the certificates only
upon presentation and surrender thereof to Regions Bank, the paying agent/registrar for said
certificates, at its designated office at the following address:
Regions Bank
250 Riverchase Parkway East, 5 Floor
Hoover, Alabama 35244
Attention: Corporate Trust Operations
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.
REGIONS BANK
as Paying Agent/Registrar
1111 W. Mockingbird Lane, Suite 1200
Dallas, Texas 75247
52186325.4/1 120503 9 C -5
EXHIBIT D
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 29 of this Ordinance.
Annual Financial Information 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 Appendix B or under
the Tables of the Official Statement referred to) below:
1. Financial information of the general type included in the Official
Statement as Appendix B for the most recently concluded fiscal year.
2. The information included in Tables 1 through 6 and 8 through 15
of the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are generally those described in
Appendix B to the Official Statement, as such principles may be changed from time to time to
comply with state law or regulation.
52186325.4/ 11205039 D -1