OR 2004-1073 Issuance of General Obligation Bonds, Series 2004CERTIFICATE FOR ORDINANCE NO. 2004- I 0 rl 3
THE STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in REGULAR MEETING ON THE 27TH
DAY OF APRIL, 2003, at the City Hall, and the roll was called of the duly constituted officers and
members of said City Council, to-wit:
Jayne Peters, Mayor Pro Tem
Tim Brancheau
Diana R~nes
Marsha Tu~ell
~my r augur
Thom Suhy
Bill York
Libby D~.
Cathy Wilkerson, Deputy City Secretary
and all of said persons were present, except the following absentees:
~o,~ M ~+o,o-. ~,~nr, ~ ll[u tfo~,%~-~ ~,~&,, thus constituting a quo~m. ~ereupon,
~ng ot~er business, th~ f~ll6~ing~was transacted at[said Meeting: a written ~
O~ANCE NO. 2004- l 0 ~ 3 AUTHORIZ~G THE ISSUANCE OF CI~ OF COPPELL,
TEXAS GENE~L OBLIGATION BONDS, SERIES 2004; APPROV~G AN OFFIC~L
STATEMENT; AUTHORinG THE EXECUTION OF A PURC~SE AGREEMENT;
~~G PROVISIONS FOR THE SECURITY THEREOF; AND O~A~G OTHER
~TTERS RELAT~G TO THE SUBJECT
was duly introduced for the consideration of said City Council and read in full. It was then duly
moved and seconded that said OrdinanCe be adopted; and, after due discussion, said motion carrying
with it the adoption of said Ordinance, prevailed and carried by the following vote:
AYES' All members of said City Council shown present above voted "Aye".
NOES: None.
2. That a true, full and correct copy of the aforesaid Ordinance adopted at the Meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and
foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said
Meeting pertaining to the adoption of said Ordinance; that the persons named in the above and
foregoing paragraph are the duly chosen, qualified and acting officers and members of said City
Council as indicated therein; that each of the officers and members of said City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place and purpose of the
aforesaid Meeting, and that said Ordinance would be introduced and considered for adoption at said
Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting
for such purpose, and that said Meeting was open to the public and public notice of the time, place
and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code.
3. That the Mayor Pro Tem of said City has approved and hereby approves the aforesaid
Ordinance; that the Mayor Pro Tern and the Deputy City Secretary of said City have duly signed
said Ordinance; and that the Mayor Pro Tem and the Deputy City Secretary of said City hereby
declare that their signing of this Certificate shall constitute the signing of the attached and following
copy of said Ordinance for all purposes.
SIGNED AND SEALED THE 27TH DAY OF APRH,, 2003.
~/Dep~ecretary
MVayor ~'ro Tem
(CITY SEAL)
ORDINANCE NO. 2004-/0r/.~ AUTHORIZING THE ISSUANCE OF CITY OF COPPELL,
TEXAS GENERAL OBLIGATION BONDS, SERIES 2004; APPROVING AN OFFICIAL
STATEMENT; AUTHORIZING THE EXECUTION OF A PURCHASE AGREEMENT;
MAKING PROVISIONS FOR THE SECURITY THEREOF; ANqD ORDAINTNG OTHER
MATTERS RELATING TO THE SUBJECT
THE STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL
WHEREAS, the City has voted on November 2, 1999 the following general obligations and have
issued the amounts shown:
Date Amount Previously Amount Unissued
Purpose Authorized Authorized Issued Being Issued Balance
Park Improvements 11/02/99 $ 8,685,000 $ 6,205,000 $ 1,280,000 $1,200,000
Drainage Improvements 11/02/99 1,700,000 295,000 405,000 1,000,000
Street Improvements 11/02/99 30,345,000 9,100,000 12,000,000 9,245,000
WHEREAS, it is deemed necessary and advisable to authorize, issue, and deliver an installment of
series of bonds in the amount of $1,280,000 for the purpose of park improvements and $12,000,000 for street
improvements and $405,000 for drainage improvements in connection therewith; and
WHEREAS, the bonds hereinafl~ authorized and designated are to be issued and delivered pursuant
to Subchapter E of Chapter 51 of Local Government Code, Chapter 1331 and Chapter 1207, Texas
Government Code; and
WHEREAS, the meeting was open to the public and public notice of the time, place and purpose of
said meeting was given pursuant to Chapter 551, Texas Government Code.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COPPELL, TEXAS:
Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of the CITY
OF COPPELL, TEXAS (the "Issuer") are hereby authorized to be issued and delivered in the aggregate
principal mount of $13,685,000 for providing $12,000,000 for the purpose of constructing, improving, and
equipping permanent public improvements, to-wit: the City's streets, including but not limited to West Sandy
Lake Road (Denton Tap Road to S.I-L 121); East Sandy Lake Road (Kimbet Court to east city limits); Bethel
Road I (Freeport Parkway to west city limits); Bethel Road II (Freeport Parkway to Denton Tap Road);
Coppell Road (West Sandy Lake Road to Bethel Road); Creekview Road (Ruby Rd./State Rck West along
south edge of Wagon Wheel Park); and Freeport Parkway (Bethel Road to I.H. 635); $1,280,000 for the
purpose of acquiring, constructing, equipping and improving permanent public Lmprovements for the City's
parks, including but not limited to MacArthur Park Development; Wagon Wheel Park Development (Phase
2); Andrew Brown Park East multi-purpose fields; extension of Trail System in North Zone; construction of
a new Senior Citizen Center; development of tennis courts; development of the Town Center Master Plan;
and renovation of Grapevine Springs, and $405,0000 for the purpose acquLdng, constructing and improv/ng
permanent public improvements for the City's drainage, including but not lirrdted to Kaye Street, Meadow
Creek Road, Stream G-2, Stream G-6, Sandy Knoll/Shadow Crest, the Meadows Subdivision, Cottonwood
Estates and Hunterwood Park.
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance
shall be designated: "CITY OF COPPELL, TEXAS GENERAL OBLIGATION BOND, SERIES
2004", and inil/ally there shall be issued, sold, and delivered hereunder a single fully registered bond, without
interest coupons, payable in annual installments of principal (the "Irfitial Bond"), but the Initial Bond may be
assigned and transferred and/or converted into and exchanged for a l/ke aggregate principal amount of fully
registered bonds, without interest coupons, having serial and annual maturities, and in the denomination or
denominations of $5,000 or any integral multiple of $5,000, all in the manner hereinafter provided. The term
"Bonds" as used in this Ordinance shall mean and include collectively the Initial Bond and all substitute bonds
exchanged therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and
the term "Bond" shall mean any of the Bonds.
Section 3. INITLKL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND. (a) The Initial Bond
ks hereby authorized to be issued, sold, and dehvered hereunder as a single fully registered Bond, without
interest coupons, dated April 15, 2004, in the denomination and aggregate principal amount of $13,685,000
numbered R-l, payable in annual installments of principal to the initial registered owner thereof, to-wit: BANC
OF AMERICA SECURITIES LLC, or to the registered assignee or assignees of said Bond or any portion
or portions thereof (in each case, the "registered owner"), w/th the annual installments of principal of the Initial
Bond to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM
OF 12X]ITIAL BOND set forth in this Ordinance.
(b) The Initial Bond (i) may be prepaid or redeemed prior to the respective scheduled due dates of
installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted and exchanged
for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed, and the principal of and
interest on the Initial Bond shall be payable, all as provided, and in the manner required or indicated, in the
FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Irdtial Bond shall bear interest from
the date of the In/rial Bond and will be calculated on the basis of a 360-day year of twelve 30-day months to
the respective scheduled due dates, or to the respective dates of prepayment or redemption, of the
installments of principal of the Initial Bond, and said interest shall be payable, all in the manner provided and
at the rotes and on the dates stated in the FORM OF INITIAL BOND set forth in tiffs Ordinance.
Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including the form of
Regkstmtion Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the
Initial Bond, shall be substantially as follows:
2
NO. R-1
FORM OF INITIAL BOND
UNITED STATES OF ASiERICA
STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL, TEXAS
GENERAL OBLIGATION BOND, SERIES 2004
$13,685,000
BANC OF AMERICA SECURITIES LLC
or to the registered assignee or assignees of tiffs Bond or any portion or portions hereof (in each case, the
"registered owner") the aggregate principal amount of
THIRTEEN MILLION SIX HUNDRED EIGHTY FIVE THOUSAND DOLLARS
in annual installments of principal due and payable on FEBRUARY 1 in each of the years, and in the
respective principal amounts, as set forth in the following schedule:
YEAR AMOUNT YEAR AMOUNT
2005 330,000 2015 675,000
2006 500,000 2016 705,000
2007 510,000 2017 735,000
2008 525,000 2018 765,000
2009 540,000 2019 800,000
2010 555,000 2020 840,000
2011 575,000 2021 875,000
2012 595,000 2022 920,000
2013 620,000 2023 965,000
2014 645,000 2024 1,010,000
and to pay interest, from the date of th/s Bond hereinafter stated, on the balance of each such installment of
principal, respectively, from time to time remaining unpaid, at the rotes as follows:
The CITY OF COPPELL, in DAI I.AS AND DENTON COUNTIES (the "Issuer"), being a political
subdivision of the State of Texas, hereby promises to pay to
maturity 2005, 2.000 % maturity 2015, 4.125 %
maturity 2006, 2.000 % maturity 2016, 4.250 %
maturity 2007, 2.250 % maturity 2017, 4.300 %
maturity 2008, 2.750 % maturity 2018, 4.375 %
maturity 2009, 3.000 % maturity 2019, 4.500 %
maturity 2010, 3.125 % maturity 2020, 4.500 %
maturity2011, 3.500 % maturity2021, 4.625 %
maturity 2012, 4.000 % maturity 2022, 4.750 %
maturity 2013, 4.000 % maturity 2023, 4.750 %
maturity 2014, 4.250 % maturity 2024, 4.750 %
with said interest being payable on February 1, 2005, and semiannually on each August 1 and February 1
thereafter while this Bond or any portion hereof is outstanding and unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are payable
in lawful money of the United States of America, without exchange or collection charges. The installments
of principal and the interest on this Bond are payable to the registered owner hereof through the services of
WACHOVIA BANK NATIONAL ASSOCIATION, HOUSTON, TEXAS, which is the "Paying
Agent/Registrar" for this Bond. Payment of all principal of and interest on this Bond shall be made by the
Paying AgenffRegislrar to the registered owner hereof on each principal and/or interest payment date by
check or draft, dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds
of the Issuer required by the ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be
on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft
shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such
principal and/or interest payment date, to the registered owner hereof, at the address of the registered owner,
as it appeared on the 15~ day of the month next preceding each such date (the "Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described, or by such other method
acceptable to the Paying Agent/Regqstrar requested by, and at the risk and expense of, the registered owner.
The Issuer covenants with the registered owner of this Bond that on or before each principal and/or interest
payment date for this Bond it w/Il make available to the Paying Agent/Registrar, from the "Imerest and
Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in
mediately available funds, of all principal of and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal hol/day, or a day on which banking institutions in the city where 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 on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as/f made on the original
date payment was due.
THIS BOND has been authorized in accordance with the Constitution and laws of the State of Texas,
in the principal amount of $13,685,000 for providing $12,000,000 for the purpose of constructing, improving,
and equipping permanent public improvements, to-wit: the City's streets, including but not limited to West
Sandy Lake Road (Denton Tap Road to S.H. 121); East Sandy Lake Road (Kimbel Court to east city limits);
Bethel Road I (Freeport Parkway to west city limits); Bethel Road II (Freeport Parkway to Denton Tap
Road); Coppell Road (West Sandy Lake Road to Bethel Road); Creekview Road (Ruby Rd./State Rd. West
along south edge of Wagon Wheel Park); and Freeport Parkway (Bethel Road to I.H. 635); $1,280,000 for
the purpose of acquiring, constructing, equipping and improving permanent public improvements for the City's
parks, including but not limited to MacArthur Park Development; Wagon Wheel Park Development (Phase
2); Andrew Brown Park East multi-purpose fields; extension of Trail System in North Zone; construction of
a new Senior Citizen Center; development of tennis courts; development of the Town Center Master Plan;
and renovation of Grapevine Springs, and $405,0000 for the purpose acquiring, constructing and improving
permanent public improvements for the City's drainage, including but not limited to Kaye Street, Meadow
Creek Road, Stream G-2, Stream G-6, Sandy Knoll/Shadow Crest, the Meadows Subdivision, Cottonwood
Estates and Hunterwood Park.
ON FEBRUARY 1, 2014, or on any date thereafter, the unpaid installments of principal of this Bond
may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived
from any available source, as a whole, or in part, and, if in part, the Issuer shall select and designate the
maturity, or maturities, andthe amount that is to be redeemed, and if less than a whole maturity is to be called,
the Issuer shall direct the Paying Agent/Registrar to call by lot (prov/ded that a portion of this Bond may be
redeemed only ha an integral multiple of $5,000), at the redemption price of the principal amount, plus accrued
interest to the date fixed for prepayment or redemption.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption, a written notice
of such prepayment or redemption shall be mailed by United States mail, first class postage pre-paid, by the
Paying Agent/Registrar to the registered owner hereof. By the date fixed for any such prepayment or
redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Bond or the portion hereof which is to be so prepaid or
redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption. If such written
notice of prepayment or redemption is given, and if due provision for such payment is made, all as provided
above, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall
be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date
fixed for its prepayment or redemption, and shall not be regarded as being outstanding except for the right
of the registered owner to receive the prepayment or redemption price plus accrued interest to the date fixed
for prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment.
The Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of
principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any unpaid and
unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner
hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying
Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in
the Bond Ordinance. Among other requirements for such transfer, this Bond must be presented and
surrendered to the Paying AgentJRegistmr for cancellation, together with proper instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying AgentrRegistrar, evidencing ass/gnment
by the initial registered owner of this Bond, or any portion or portions hereof in any integral multiple of $5,000,
to the assignee or assignees in whose name or names tiffs Bond or any such portion or portions hereof is or
are to be transferred and registered. Any instrument or instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to ev/dence the assignment of tiffs Bond or any such portion or portions hereof
by the irfitial registered owner hereof. A new bond or bonds payable to such assignee or assignees (which
then will be the new registered owner or owners of such new Bond or Bonds) or to the initial registered
owner as to any portion of this Bond which is not being assigned and transferred by the initial registered
owner, shall be delivered by the Paying Agent/Regislrar in conversion of and exchange for this Bond or any
portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof for the
conversion and exchange of this Bond or any portion hereof. The registered owner of th/s Bond shall be
deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all
purposes, including payment and discharge of liability upon th/s Bond to the extent of such payment, and the
Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, th/s Bond, to the extent of the unpaid or
unredeemed principal balance hereof, may be converted into and exchanged for a l~e aggregate principal
amount of fully registered bonds, without interest coupons, payable to the assignee or assignees duly
designated in writing by the initial registered owner hereofi or to the in/rial registered owner as to any portion
of this Bond which is not being assigned and transferred by the initial registered owner, in any denomination
or denominations in any hategral multiple of $5,000 (subject to the requirement hereinafter stated that each
substitute bond issued in exchange for any portion of this Bond shall have a single stated principal maturity
date), upon surrender of this Bond to the Paying Agem/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Bond Ordinance. If this Bond or any portion hereof is assigned and
transferred or conve~cted each bond issued in exchange for any portion hereof shall have a single stated
principal maturity date corresponding to the due date of the installment of principal of tiffs Bond or portion
hereof for which the substitute bond is being exchanged, and shall bear interest at the rate applicable to and
borne by such installment of principal or portion thereof. Such bonds, respectively, shall be subject to
redemption prior to maturity on the same dates and for the same prices as the corresponding hnstallment of
principal ofth/s Bond or portion hereof for which they are being exchanged. No such bond shall be payable
in installments, but shall have only one stated principal maturity date. AS PROVIDED IN THE BOND
ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED
OR CONVERTED ONCE ONLY, and to one or more assignees, but the bonds issued and delivered in
exchange for tiffs Bond or any portion hereof may be assigned and transferred, and converted, subsequently,
as provided Ln the Bond Ordinance. The Issuer shall pay the Paying Agent/RegSstrar's standard or customary
fees and charges for Izansferring, converting, and exchanging this Bond or any portion thereof, but the one
requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to
be paid with respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing w/th the close of business on any Record Date and
ending with the opening of business on the next following principal or interest payment date, or, (ii) w/th
respect to any Bond or portion thereof called for prepayment or redemption prior to maturity, w/thin 45 days
prior to its prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for th/s Bond is changed by the Issuer, resigns, or
otherw/se ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
mailed m the registered owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that tiffs Bond has been duly and validly authorized,
issued, sold, and del/vered; that all acts, conditions, and things required or proper to be performed, exist, and
be done precedent to or in the authorization, issuance, and delivery of this Bond have been performed, existed,
and been done in accordance with law; that fids Bond/s a general obligation of the Issuer, issued on the full
faith and credit thereofi and that ad valorem taxes sufficient to provide for the payment of the/nterest on and
principal of tiffs Bond, as such interest and principal come due, have been levied and ordered to be levied
against all taxable property/n the Issuer, and have been pledged for such payment, with/n the limit prescribed
by law.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all
of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
aclmowledges that the Bond Ordinance is duly recorded and available for inspection in the official minutes
and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and
the Bond Ordinance constitute a contract between the registered owner hereof and the Issuer.
1N WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual signature
of the Mayor Pro Tern of the Issuer and countersigned with the manual signature of the Deputy City
Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed on this Bond, and has
caused this Bond to be dated April 15, 2004.
Deputy City Secretary
Mayor Pro Tem
(CITY SEAL)
FORM OF REGISTRATION CERTIFICATE
OF THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIb---ICATE:
REGISTER NO.
I hereby certify that this Bond has been exam/ned, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public
Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. (a) Registration and
Transfer. The Issuer shall keep or cause to be kept at the principal corporate trust office of WACHOVIA
BAN](, NATIONAL ASSOCIATION, HOUSTON, TEXAS (the "Paying Agent/Registrar") books or
records of the registration and transfer of the Bonds (the "Registration Books"), and the Issuer hereby
appoints the Paying Agent/RegisWar as its registrar and transfer agent to keep such books or records and
make such transfers and registrations under such reasonable regulations as the Issuer and Paying
AgentJRegisWar may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations
as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address
of the registered owner of each Bond to which payments with respect to the Bonds shall be mailed, as herein
provided; but Jt shall be the duty of each registered owner to notify the Paying Agent/Registrar in writing of
the address to which payments shall be mailed, and such interest payments shall not be mailed unless such
notice has been given. The Issuer shall have the right to inspect the Registration Books during regular
business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the
Registration Books confidential and, unless otherwise requked by law, shall not permit their haspection by any
other entity. Registration of each Bond may be transferred in the Registration Books only upon presentation
and surrender of such Bond to the Paying Agent/Registrar for transfer of registration and cancellation,
together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory
to the Paying Agent/Registrar, (i) evidencing the assignment of the Bond, or any portion thereof in any integral
multiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such assignee or assignees to have
the Bond or any such portion thereof registered in the name of such assignee or assignees. Upon the
assignment and transfer of any Bond or any portion thereof, a new substitute Bond or Bonds shall be issued
in conversion and exchange therefor in the manner herein provided. The Initial Bond, to the extent of the
unpaid or unredeemed principal balance thereof, may be assigned and transferred by the initial registered
owner thereof once only, and to one or more assignees designated in writing by the initial registered owner
thereof. All Bonds issued and delivered in conversion of and exchange for the Initial Bond shall be in any
denomination or denorninatiens of any integralmultiple of $5,000 (subject to the requirement hereinafter stated
that each substitute Bond shall have a single stated principal maturity date), shall be in the form prescribed
in the FORM OF SUBSTYFUTE BOND set forth in this Ordinance, and shall have the characteristics, and
may be assigned, transferred, and converted as hereinafter provided. If the Initial Bond or any portion thereof
is assigned and transferred or converted the Initial Bond must be surrendered to the Paying Agent/Registrar
for cancellation, and each Bond issued in exchange for any portion of the Initial Bond shall have a single
stated principal maturity date, and shall not be payable in installments; and each such Bond shall have a
principal maturity date corresponding to the due date of the installment of principal or portion thereof for
whfich the substitute Bond is being exchanged; and each such Bond shall bear interest at the single rate
applicable to and borne by such installment of principal or portion thereof for which it is being exchanged.
If only a portion of the Initial Bond is assigned and transferred, there shall be delivered to and registered in
the name of the initial registered owner substitute Bonds in exchange for the unassigned balance of the initial
Bond in the same manner as if the initial registered owner were the assignee thereof. If any Bond or portion
thereof other than the Initial Bond is assigned and transferred or converted each Bond issued in exchange
shall have the same principal maturity date and bear interest at the same rate as the Bond for which it is
exchangec[ A form of assignment shall be printed or endorsed on each Bond, excepting the Initial Bond,
which shall be executed by the registered owner or its duly authorized attorney or representative to evidence
an assignment thereof. Upon surrender of any Bonds or any portion or portions thereof for transfer of
registration, an authorized representative of the Paying Agent/Registrar shall make such mnsfer in the
Registration Books, and shall deliver a new fully registered substitute Bond or Bonds, having the
characteristics herein described, payable to such assignee or assignees (which then will be the registered
owner or owners of such new Bond or Bonds), or to the previous registered owner in case only a portion of
a Bond is being assigned and transferred, all in conversion of and exchange for said assigned Bond or Bonds
or any portion or portions thereof, in the same form and manner, and with the same effect, as provided in
Sect/on 6(d), below, for the conversion and exchange of Bonds by any registered owner of a Bond. The
Issuer shall pay the Paying AgenVRegistrar's standard or customary fees and charges for making such
transfer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall pay any taxes
or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall
not be required to make transfers of registration of any Bond or any portion thereof (i) during the period
commencing with the close of business on any Record Date and ending with the opening of business on the
next following principal or interest payment date, or, (i/) withrespectto any Bond or any portion thereof called
for redemption prior to maturity, with_in 30 days prior m its redemption date.
(b) Ownerskdp of Bonds. The entity in whose name any Bond shall be registered in the Registration
Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of tl-ds
Ordinance, whether or not such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall
not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium,
if any, and interest on any such Bond shall be made only to such registered owner. All such payments shall
be vatid and effectual to satisfy and discharge the 1/ability upon such Bond to the extent of the sum or sums
so paid
(c) Payment of Bonds and Interest. The Issuer hereby further appoints the Paying Agent/Registrar
to act as the paying agent for paying the principal of and interest on the Bonds, and to act as its agent to
convert and exchange or replace Bonds, all as provided in this Ordinance. The Paying Agent/Registrar shall
keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the
Bonds, and of all conversions and exchanges of Bonds, and all replacements of Bonds, as provided in tiffs
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and for thirty
(30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been
received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (wkich 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
Bondholder appearing on the Registration Books at the close of business on the last business day next
preceding the date of mailing of such notice.
(d) Conversion and Exchange or Replacement; Authentication. Each Bond issued and delivered
pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance or principal amoum
thereof, may, upon surrender of such Bond at the principal corporate trust office of the Paying
Agent/Registrar, together with a written request therefor duly executed by the registered owner or the
assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of
signatures satisfactory to the Paying Agent/Registrar, may, at the option of the registered owner or such
assignee or assignees, as appropriate, be converted into and exchanged for fully registered bonds, without
interest coupons, in the form prescribed in the FORM OF SUBSTITUTE BOND set forth in th/s Ordinance,
in the denomination of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated
that each substitute Bond shall have a single stated maturity date), as requested in writing by such registered
owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or unredeemed
principal balance or principal amount of any Bond or Bonds so surrendered, and payable to the appropriate
registered owner, assignee, or assignees, as the case may be. If the Initial Bond is assigned and transferred
or converted each substitute Bond issued in exchange for any portion of the Initial Bond shall have a single
stated principal maturity date, and shall not be payable in installments; and each such Bond shall have a
principal maturity date corresponding to the due date of the installment of principal or portion thereof for
wh/ch the substitute Bond is being exchanged; and each such Bond shall bear interest at the single rate
applicable to and home by such installment of principal or portion thereof for which it is being exchanged.
If a port/on of any Bond (other than the Initial Bond) shall be redeemed prior to its scheduled matur/ty as
provided herein, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rote,
in the denomination or denominations of any integral multiple of $5,000 at the request of the registered owner,
and in aggregate principal amount equal to the unredeemed portion thereof, w/il be issued to the registered
owner upon surrender thereof for cancellation. If any Bond or portion thereof (other than the Irfitial Bond)
is assigned and transferred or converted, each Bond issued in exchange therefor shall have the same principal
maturity date and bear interest at the same rate as the Bond for which it is being exchanged. Each substitute
Bond shall bear a letter and/or number to distinguish it from each other Bond. The Paying Agent/Registrar
shall convert and exchange or replace Bonds as provided herein, and each fully reg/stered bond delivered in
conversion of and exchange for or replacement of any Bond or portion thereof as penn/Red or required by
any provision of this Ordinance shall constitute one of the Bonds for all purposes of this Ordinance, and may
again be converted and exchanged or replaced. It is specifically provided that any Bond authenticated in
conversion of and exchange for or replacement of another Bond on or prior to the first scheduled Record
Date for the Initial Bond shall bear interest from the date of the Initial Bond, but each substitute Bond so
authenticated after such first scheduled Record Date shall bear interest from the interest payment date next
preceding the date on which such substitute Bond was so authenticated, unless such Bond is authenticated
after any Record Date but on or before the next following interest payment date, in which case it shall bear
interest from such next following interest payment date; provided, however, that if at the time of delivery of
any substitute Bond the interest on the Bond for which k is being exchanged is due but has not been paid, then
such Bond shall bear interest from the date to which such interest has been paid in full. THE INITIAL
BOND issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated
by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for or
replacement of any Bond or Bonds issued under this Ordinance there shall be printed a certificate, in the form
substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It /s hereby certified that this Bond has been issued under the provisions of the Bond Ordinance
described on the face of this Bond; and that this Bond has been issued in conversion of and exchange for or
replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was approved by
the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State
of Texas.
Paying Agent/Registrar
Dated By
Authorized Representative"
An author/zed representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date
and manually sign the above Certificate, and no such Bond shall be deemed to be issued or outstanding unless
such Certificate/s so executed. The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for
10
conversion and exchange or replacement. No additional ordinances, orders, or resolutions need be passed
or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing
conversion and exchange or replacement of any Bond or portion thereof, and the Paying Agent/Registrar shall
provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed herein, and
said Bonds shall be of type composition printed on paper with lithographed or steel engraved borders of
customary weight and strength. Pursuant to Chapter 1207, Texas Government Code, the duty of conversion
and exchange or replacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and,
upon the execution of the above Paying Agent/Registrar's Authentication Certificate, the converted and
exchanged or replaced Bond shall be valid, incontestable, and enforceable in the same manner and with the
same effect as the Irfitiai Bond which originally was issued pursuant to this Ordinance, approved by the
Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying
AgentfRegistmr's standard or customary fees and charges for transferring, converting, and exchanging any
Bond or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay
any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the
exercise of such privilege of conversion and exchange. The Paying AgentfRegistmr shall not be required to
maice any such conversion and exchange or replacement of Bonds or any portion thereof (i) during the period
commencing with the close of business on any Record Date and ending with the opening of business on the
next following principal or interest payment date, or, (ii) with respect to any Bond or portion thereof called
for redemption prior to maturity, within 45 days prior to its redemption date.
(e) In Genera[ All Bonds issued in conversion and exchange or replacement of any other Bond or
portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and
interest on such Bonds to be payable only to the registered owners thereof, (ii) may be redeemed prior to their
scheduled maturities, ('fii) may be transferred and assigned, (iv) may be converted and exchanged for other
Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest
on the Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM OF
SUBSTITUTE BOND set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners of the
Bonds that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its
services with respect to the payment of the principal of and interest on the Bonds, when due, and (ii) pay the
fees and charges of the Paying Agent/Registrar for services with respect to the transfer of registration of
Bonds, and with respect to the conversion and exchange of Bonds solely to the extent above provided in this
Ordinance.
(g) Substitute Paving Agent/Registrar. The Issuer covenants with the registered owners of the
Bonds that at all limes while the Bonds are outstanding the Issuer will provide a competent and legally
qualified bank, trust company, financial institution, or other agency t9 act as and perform the services of
Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be one
entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not
less than 120 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior
to the next principal or interest payment date after such notice. In the event that the entity at any time acting
as Paying AgentfReg/swar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally
qualified bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar under
this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/RegisWar
11
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with ali other pertinent
books and records relating to the Bonds, to the new Paying Agent/Registrar designated and appointed by the
Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly w/il cause a written notice
thereof to be sent by the new Paying AgenffRegistmr to each registered owner of the Bonds, by United
States mail, first-class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and perfom4ng as such, each Paying Agent;Registrar shall be
deemed to have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be
delivered to each Paying Agent/Registrar.
(h) Book-Entry Only Systerr~ The Bonds issued in exchange for the Bonds irdtially issued to the
purchaser specified herein shall be init/ally issued in the form of a separate single fully registered Bond for
each of the maturities thereof. Upon irfitial issuance, the ownersh/p of each such Bond shall be registered
in the name of Cede & Co., as nominee of Depository Trust Company of New York ("DTC"), and except
as provided in subsection (/) hereof, all of the outstanding Bonds shall be registered in the name of Cede &
Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer and
the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person
on behalf of whom such a DTC Participant holds an interest on the Bonds. Without 1/miring the immediately
preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation w/th
respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant w/th respect to any
ownersh/p interest ha the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a
Bondholder, as shown on the Registration Books, of any notice with respect to the Bonds, including any notice
of redemption, or (fi/) the payment to any DTC Participant or any other person, other than a Bondholder, as
shown in the Registration Books of any amount with respect to pr/nc/pal of, premium, if any, or interest on,
as the case may be, the Bonds. Notwithstanding any other prov/sion of this Ordinance to the contrary, the
Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each
Bond is registered in the Registration Books as the absolute owner of such Bond for the purpose of payment
of principal, premium, if any, and interest, as the case may be, w/th respect to such Bond, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for the purpose of registering
transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall
pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective
owners, as shown in the Registration Books as pmv/ded in th/s Ordinance, or their respective attorneys duly
authorized/n writing, and all such payments shall be valid and effective to fully satisfy and discharge the
Issuer's obligations with respect to payment of principal of, prem/urn, if any, and interest on, or as the case
may be, the Bonds to the extent of the sum or sums so pa/& No person other than an owner, as shown in
the Registration Books, shall receive a Bond certificate exddencing the obligation of the Issuer to make
payments of principal, premium, if any, and interest, as the case may be, pursuant to this Ordinance. Upon
delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect
to interest checks being ma/led to the registered owner at the close of business on the Record Date, the word
"Cede & Co." in th/s Ordinance shall refer to such new nominee of DTC.
(i) Successor Securities Depository_; Transfers Outside Book-Entry Only System. In the event that
the Issuer or the Paying Agent/Registrar determines that DTC is incapable of discharging its responsibilities
described herein and ha the representation letter of the Issuer to DTC and that it is in the best interest of the
12
beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Issuer or the Paying
Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a)
of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Bonds to such
successor securities depository or (~) notify DTC and DTC Partic~)ants of the availability through DTC of
Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC
accounts. In such event, the Bonds shall no longer be restricted to being registered in the Reg/stration Books
~n the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or names Bondholders transferring or exchanging
Bonds shall designate, in accordance with the provisions ofth/s Ordinance.
(j) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary,
so long as any Bond ~s registered in the name of Cede & Co., as nom/nee of DTC, all payments w/th respect
to principal of, premium, if any, and interest on, or as the case may be, such Bond and all notices withrespect
to such Bond shall be made and given, respectively, in the manner provided in the representation letter of the
Issuer to DTC.
Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion
and exchange or replacement of any other Bond or portion thereof, including the form of Paying
Agent/Registrar's Certificate to be printed on each of such Bonds, and the Form of Assignment to be printed
on each of the Bonds, shall be, respectively, substantially as follows, w/th such appropriate variations,
omissions, or insertions as are permitted or required by this Ordinance.
FORM OF SUBSTITUTE BOND
PRINCIPAL AMOUNT
NO.__ $
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL, TEXAS
GENERAL OBLIGATION BOND, SERIES 2004
MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP NO.
ON THE MATURITY DATE specified above, the CITY OF COPPELL, in DALLAS AND
DENTON COUNTD~S, TEXAS (the "Issuer"), being a political subdivision of the State of Texas, hereby
promises to pay to
or to the registered assignee hereof (e/ther being hereinafter called the "registered owner") the principal
amount of
13
and to pay interest thereon from April 15, 2004 to the maturity date specified above, or the date of redemption
prior to maturity, at the interest rote per annum specified above; with interest being payable on February 1,
2005 and semiannually thereafter on each August 1 and February 1, except that if the date of authentication
of this Bond is later than January 15, 2005, such principal amount shall bear interest from the interest payment
date next preceding the date of authentication, unless such date of authentication is after any Record Date
(hereinafter defined) but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the Un/ted
States of America. without exchange or collection charges. The principal of th/s Bond shall be pa/d to the
registered owner hereof upon presentation and surrender of this Bond at maturity or upon the date fixed for
its redemption prior to maturity, at the principal corporate trust office of WACHOVIA BANK,
NATIONAL ASSOCIATION, HOUSTON, TEXAS, which is the "Paying Agent/Registrar" for tiffs Bond.
The payment of interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner
hereof on each interest payment date by check or draft, dated as of such interest payment date, drawn by
the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance
authorizing the issuance of the Bonds (the "Bond Ordinance") to be on deposit with the Paying
Agent/Registrar for such purpose as here/miler provided; and such check or draft shall be sent by the Paying
Agent/Registrar by Un/ted States Marl, first-class postage prepaid, on each such interest payment date, to the
registered owner hereof, at the address of the registered owner, as it appeared on the fifteenth business day
of the month next preceding each such date (the "Record Date") on the Registration Books kept by the
Paying Agent/Registrar, as hereinafter described, or by such other method acceptable to the Paying
Agent/RegisWar requested by, and the risk and expense of, the registered owner. Any accrued interest due
upon the redemption of this Bond prior to maturity as provided herein shall be paid to the registered owner
upon presentation and surrender of this Bond for redemption and payment at the principal corporate trust
office of the Paying Agent/Registrar. The Issuer covenants with the registered owner of this Bond that on
or before each principal payment date, interest payment date, and accrued interest payment date for this Bond
it will make available to the Paying Agent/Regiswar, t~om the "Interest and Sinking Fund" created by the Bond
Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal
of and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal hol/day, or a day on which banldng institutions in the City where the Paying Agent/Reg/strar
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 on which 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.
THIS BOND is one of an issue of Bonds initially dated April 15, 2004, authorized in accordance with
the Constitution and laws of the State of Texas in the principal amount of $13,685,000 for providing
$12,000,000 for the purpose of constructing, improving, and eqtfipping permanent public improvements, to-wit:
the City's streets, including but not limited to West Sandy Lake Road (Denton Tap Road to S.H. 121); East
Sandy Lake Road (Kimbel Court to east city limits); Bethel Road I (Freeport Parkway to west city 1/m/ts);
Bethel Road II (Freeport Parkway to Denton Tap Road); Coppell Road (West Sandy Lake Road to Bethel
Road); Creekview Road (Ruby Rd./State Rd. West along south edge of Wagon Wheel Park); and Freeport
14
Parkway (Bethel Road to I.H. 635); $1,280,000 for the purpose of acquiring, constructing, equipping and
improving permanent public improvements for the City's parks, including but not lirrdted to MacArthur Park
Development; Wagon Wheel Park Development (Phase 2); Andrew Brown Park East multi-purpose fields;
extension of Trail System in North Zone; construction of a new Senior Citizen Center; development of tennis
courts; development of the Town Center Master Plan; and renovation of Grapevine Springs, and $405,0000
for the purpose acquiring, constructing and improving permanent public improvements forthe City's drainage,
including but not limited to Kaye Street, Meadow Creek Road, Stream G-2, Stream G-6, Sandy Knoll/Shadow
Crest, the Meadows Subdivision, Cottonwood Estates and Hunterwood Park.
ON FEBRUARY 1, 2014, or any date thereafter, the Bonds of this Series may be redeemed prior
to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful
source, as a whole, or in part, and, if in part, the Issuer shall select and designate the maturity or maturities
and the amount that is to be redeemed, and if less than a whole maturity is to be called, the Issuer shall direct
the Paying Agent/Registrar to call by lot (provided that a portion of a Bond may be redeemed only in an
integral multiple of $5,000), at the redemption price of the principal amount thereof, plus accrued interest to
the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof prior to
maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States
mail, first class postage prepaid, not less than 30 days prior to the date fixed for any such redemption, to the
registered owner of each Bond to be redeemed at its address as it appeared on the 45th day prior to such
redemption date; provided, however, that the failure to receive such notice, or any defect therein or in the
sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption
of any Bond, and it is hereby specifically provided that the mailing of such notice as required above shall be
the only notice actually required in connection w/th or as a prerequisite to the redemption of any Bonds or
portions thereof. By the date fixed for any such redemption due provision shall be made with the Paying
Agent/Registrar for the payment of the required redemption price for the Bonds or portions thereof which
are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written notice
of redemption is mailed and ff due pmvis~on for such payment is made, all as provided above, the Bonds or
portions thereof which are to be so redeemed thereby automatically shall be treated as redeemed prior to their
scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall not
be regarded as being outstanding except for the right of the registered owner to receive the redemption price
plus accrued interest from the Paying Agent/Registrar out of the funds provided for such payment. If a
portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing
interest at the same rote, in any denomination or denominations in any integral multiple of $5,000, at the
written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion
thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of
the Issuer, all as provided in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE
OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer kept by the
Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set
forth in the Bond Ordinance. Among other requirements for such assigm'nent and transfer, this Bond must
be presented and surrendered to the Paying Agent/Regiswar, together w/th proper instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assigmnent
of this Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees
15
in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and
registered. The form of Assignment printed or endorsed on this Bond shall be executed by the registered
owner or its duly authorized attorney or representative, to evidence the assignment hereof. A new Bond or
Bonds payable to such assignee or assignees (wh/ch then will be the new registered owner or owners of such
new Bond or Bonds), or to the previous registered owner in the case of the assigrnnent and transfer of only
a portion of this Bond, may be delivered by the Paying Agent/Registrar/n conversion of and exchange for
this Bond, all in the form and manner as provided in the next paragraph hereof for the conversion and
exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and
charges for making such transfer, but the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid with respect thereto. The Paying Agent/l%g/strar shall not be
required to malce transfers of registration of this Bond or any portion hereof (i) during the period commencing
with the close of business on any Record Date and ending with the operfing of business on the next following
principal or interest payment date, or, (ii) with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its redemption date. The registered owner of this Bond
shall be deemed and treated by the Issuer and the Paying Agent/RegisU'ar as the absolute owner hereof for
all purposes, including payment and discharge of liability upon this Bond to the extent of such payment, and
the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance, tiffs
Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or
assignees hereof, be converted into and exchanged for a like aggregate principal amount of fully reg/stered
bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the
case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate registered owner,
assignee, or assignees, as the case may be, upon surrender of this Bond to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. The Issuer
shall pay the Paying Agent/Regisuar's standard or customary fees and charges for transferring, converting,
and exchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, and
exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall
not be required to mal(e any such conversion and exchange O) during the period commencing with the close
of business on any Record Date and ending with the opening of business on the next following principal or
interest payment date, or, (~) with respect to any Bond or portion thereof called for redemption prior to
maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns, or
otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint
a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be
mailed to the registered owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that th/s Bond has been duly and validly authorized,
issued, sold, and dehvered; that all acts, conditions, and things required or proper to be performed, exist, and
be done precedent to or in the authorization, issuance, and delivery of this Bond have been performed, existed,
and been done in accordance with law; that this Bond is a general obligation of the Issuer, issued on the full
faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and
16
principal of this Bond, as such interest and principal come due, have been levied and ordered to be levied
against all taxable property ha the Issuer, and have been pledged for such payment, with/n the lirrdt prescribed
by law.
BY BECOMING the registered owner of this Bond, the registered owner thereby acknowledges all
of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions,
aclmowledges that the Bond Ordinance is duly recorded and available for inspection ha the official minutes
and records of the governing body of the Issuer, and agrees that the terms and provisions of th/s Bond and
the Bond Ordinance constitute a contract between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile
signature of the Mayor Pro Tem of the Issuer and countersigned w/th the manual or lacs/ri'file signature of
the Deputy City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly h'npressed,
or placed in facsimile, on this Bonck
Deputy City Secretary
Mayor Pro Tern
(crrY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S ALrrHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTI-IENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed
Registration Certificate of the Comptroller of Public Accounts of the State of Texas)
It ks hereby certified that tiffs Bond has been issued under the provisions of the Bond Ordinance described
in the text oft/tis Bond; and that this Bondhas been issued in conversion or replacement of, or ha exchange for,
a bond, bonds, or a portion of a bond or bonds of a Series which originally was approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated
Wachovia Bank, National Association, Houston, Texas
Authorized Representative
17
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly
representative or attorney thereof, hereby assigns this Bond to
authorized
(Assignee's Social Security or Tax Payer
Identification Number)
and hereby irrevocably constitutes and appoints
(Print or type Assignee's Name and Address Including Zip
Code)
Attorney, to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books with full
power of substitution in the premises.
Dated
NOTICE: This signature must be guaranteed by
a member of the New York Stock Exchange or
a commercial bank or trust company.
NOTICE: This signature must correspond with the
name of the Registered Owner appearing on the face
of this Bond in every particular without alteration or
enlargement or any change whatsoever.
Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund")
is hereby created solely for the benefit of the Bonds, and the Interest and Sinking Fund shall be established
and maintained by the Issuer at an official depository bank of the Issuer. The Interest and Sinking Fund shall
be kept separate and apart from all other funds and accounts of the Issuer, and shall be used only for paying
the interest on and principal of the Bonds. All ad valorem taxes levied and collected for and on account of
the Bonds shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year
while any of the Bonds or interest thereon are outstanding and unpaid, the governing body of the Issuer shall
compute and ascertain a rate and amount of ad valorem tax which will be sufficient to m/se and produce the
money required to pay the interest on the Bonds as such interest comes due, and to provide and maintain a
sinking fund adequate to pay the principal of its Bonds as such principal matures (but never less than 2% of
the original principal amount of the Bonds as a sinldng fund each year).
Said tax shall be based on the latest approved tax rolls of the Issuer, w/th full allowance being made
for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied,
and is hereby ordered to be levied, against all taxable property in the Issuer for each year while any of the
18
Bonds or interest thereon are outstanding and unpaid; and said tax shall be assessed and collected each such
year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient
to provide for the payment of the interest on and principal of the Bonds, as such interest comes due and such
principal matures, are hereby pledged for such payment, within the limit prescribed by law.
Article 1208, Government Code, applies to the issuance of the Bonds and the pledge of the taxes
granted by the Issuer under this Section, and is therefore val/d, effective, and perfected. Should Texas law
be amended at any t/me while the Bonds are outstanding and tmpa/d, the result of such amendment being that
the pledge of the taxes granted by the Issuer under tiffs Section is to be subject to the filing requkements of
Chapter 9, Business & Commerce Code, in order to preserve to the registered owners of the Bonds a security
interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary
under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and
enable a filing of a security interest in said pledge to occur.
Section 9. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be
deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") with,in the meaning of this
Ordinance, except to the extent provided in subsection (d) of tiffs Section, when payment of the principal of
such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity or
otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or making available
to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future
Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make
such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts and at
such times as w/il insure the availability, without reinvestment, of sufficient money to prov/de for such
payment, and when proper arrangements have been made by the Issuer with the Paying Agent/Regislrar for
the payment of its services unt~ all Defeased Bonds shall have become due and payable. At such time as
a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon
shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied
and pledged as provided in this Orct/nance, and such principal and interest shall be payable solely from such
money or Defeasance Securities.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the
Issuer also be invested in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth,
and all income from such Defeasance Securities received by the Paying Agent/Registrar that is not required
for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited,
shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow
Agreement pursuant to wi'rich the money and/or Defeasance Securities are held for the payment of Defeased
Bonds may contain provisions permitting the investment or reinvestment of such moneys in Defeasance
Securities or the substitution of other Defeasance Securities upon the satisfaction of the requirements
specified in subsection 9(a)(i) or (i/). All income from such Defeasance Securities received by the Paying
Agent/Registrar which is not required for the payment of the Defeased Bonds, with respect to wiffch such
money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the Issuer.
(c) The term "Defeasance Securities" means (i) direct, noncallable obligations of the United States
of America, including obligations that are unconditionally guaranteed by the United States of America., (ii)
noncallable obligations of an agency or instrumentality of the United States of America, including obligations
19
that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the
purchase thereof are rated as to investment quality by a nationally recognized investment rating firm not less
than AAA or its equivalent, and ('fii) noncallable obhgations of a state or an agency or a county, municipality,
or other pol/tical subdivision of a state that have been refunded and that, on the date the governing body of
the Issuer adopts or approves the pmceedLngs authorizing the financial arrangements are rated as to
investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall
perform the services of Paying Agent/Registrar for such Defeased Bonds the same as if they had not been
defeased, and the Issuer shall make proper arrangements to provide and pay for such services as required
by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds of a
maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds by such
random method as it deems fair and appropriate.
Section 10. DAMAGED. MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a)
Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal
amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement
for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Appl/cation for replacement of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying Agent/Registrar. In
every case of loss, theft, or destruction ora Bond, the registered owner applying for a replacement bond shall
furrdsh to the Issuer and to the Paying AgentiRegistmr such security or indemnity as may be required by them
to save each of them harmless from any loss or damage with respect thereto. Also, in every case of loss,
theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Bond, as the case may
be. In every case of damage or mutilation of a Bond, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or mutilated
(c) No Defauk Occurred. Notwithstanding the foregoing provisions of this Section, in the event any
such Bond shall have matured, and no default has occurred which is then continuing in the payment of the
principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment of the
same (w/thout surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a
replacement Bond, provided security or indenmity is furnished as above provided in th/s Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement bond, the
Paying Agent/Registrar shall charge the registered owner of such Bond with all legal, printing, and other
expenses ~n connection therewith. Every replacement bond issued pursuant to the provisions of this Section
by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by
anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately w/th any and all
other Bonds duly issued under this Ordinance.
20
(e) Authority_ for Issuing Replacement B0nd~. In accordance with Chapter 1207, Texas Government
Code, this Section 10 of this Ordinance shall constitute authority for the issuance of any such replacement
bond without necessity of further action by the governing body of the Issuer or any other body or person, and
the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar,
and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with
the effect, as prov/ded in Section 6(d) of this Ordinance for Bonds issued in conversion and exchange for
other Bonds.
Section 11. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS: AND CONTINGENT INSURANCE PROVISION, IF
OBTAINED. The Mayor Pro Tem of the Issuer is hereby author/zed to have control of the Initial Bond
issued hereunder and all necessary records and proceedings pertaining to the Initial Bond pending its delivery
and its investigation, examination, and approval by the Attorney General of the State of Texas, and its
registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Initial Bond
said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall
manually sign the Comptrollers Registration Certificate on the Initial Bond, and the seal of said Comptroller
shall be impressed, or placed in facsim/le, on the Initial Bond. The approving legal opinion of the Issuegs bond
counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Bond or any
Bonds issued and delivered in conversion of and exchange or replacement of any Bond, but neither shall have
any legal effect, and shall be solely for the convenience and information of the registered owners of the
Bonds. In addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as pmwided by
the Insurer.
Section 12. COVENANTS REGARDING TAX EXEMPTION. The Issuer covenants to refrain
from talcing any action which would adversely affect, and to take any required action to ensure, the treatment
of the Bonds as obligations described in Section 103 of the Internal Revenue Code of 1986, as emended (the
"Code"), the interest on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any "private
business use," as defined in Section 141(b)(6) of the Code or, fl?more than 10 percent of the proceeds or the
projects financed therewith are so used, such amounts, whether or not received by the Issuer, with respect
to such private business use, do not, under the terms of this Ord/nance, or any underlying arrangement,
directly or indirectly, secure or provide for the payment of more than 10 percent of the debt service on the
Bonds, in contravention of Section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described in
Subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds or the projects financed therewith (less
amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private
business use" which is "related" and not "disproportionate," within the meaning of Section 141(b)(3) of the
Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or 5
percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or
/ndirectly used to finance loans to persons, other than state or local governmental units, in contravention of
21
Section 141(c) of the Code;
(d) to refrain from talcing any action which would otherwise result in the Bonds bcqng treated as
"private activity bonds" w/thin the meaning of Section 141(b) of the Code;
(e) to refrain from talcing any action that would result in the Bonds being "federally guaranteed"
within the meaning of Section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire
or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in
Section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other
than investment property acquired with --
(1) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less or,
in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed for the
purpose for which the Bonds are issued,
(2) amounts invested in a bona fide debt service fund, w/thin the meaning of Section 1.148-
l(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund m the extent
such amounts do not exceed 10 percent of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds of the
Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements of Section 148
of the Code (relating to arbitrage) and, to the extent apphcable, Section 149(d) of the Code (relating to
advance refundings); and
(h) to pay to the Un/ted States of America at least once during each five-year period (beginning on
the date of del/very of the Bonds) an mount that is at least equal to 90 percent of the "Excess Earnings,"
w/thin the meaning of Section 148(0 of the Code and to pay to the United States of America, not later than
60 days after the Bonds have been paid in full, 100 percent of the amount then required to be paid as a result
of Excess Earnings under Section 148(0 of the Code.
The Issuer understands that the term "proceeds" includes "disposition proceeds" as defined/n the
Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the
refunded bonds expended prior to the date of issuance of the Bonds. It is the understanding of the Issuer
that the covenants contained herein are intended to assure compl/ance with the Code and any regulations or
rulings promulgated by the U.S. DeparUnent of the Treasury pursuant thereto. In the event that regulations
or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the
Bonds, the Issuer will not be required to comply w/th any covenant contained herein to the extent that such
failure to comply, in the opinion ofnationally-recogrdzed bond counsel, will not adversely affect the exemption
from federal income taxation of interest on the Bonds under Section 103 of the Code. In the event that
regulations or rulings are hereafter promulgated which impose additional requirements which are applicable
to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary, in the
opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of
22
interest on the Bonds under Section 103 of the Code. In furtherance of such intention, the Issuer hereby
authorizes and directs the Mayor Pro Tem of the Issuer to execute any documents, certificates or reports
required by the Code and to make such elections, on behalf of the Issuer, wkich may be permitted by the
Code as are consistent with the purpose for the issuance of the Bonds.
In order to facilitate comphance with the above covenant (h), a "Rebate Fund" is hereby established
by the Issuer for the sole benefit of the Un/ted States of America, and such Fund shall not be subject to the
claim of any other person, including without limitation the bondholders. The Rebate Fund is established for
the additional purpose of comphance with Sect/on 148 of the Code.
Section 13. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. The Issuer covenants to account for the expenditure of sale proceeds and investment earnings
to be used for the purposes described in Section 1 of th/s Ordinance (the "Project") on its books and records
by allocating proceeds to expenditures within 18 months of the later of the date that (1) the expenditure is
made, or (2) the Project is completed. The foregoing notwithstanding, the Issuer shall not expend sale
proceeds or/nvestment earnings thereon more than 60 days after the earl/er of (1) the fifth anrdversary of
the del/very of the Bonds, or (2) the date the Bonds are ret/red, unless the Issuer obtains an opinion of
nationally-recognized bond counsel that such expenditure will not adversely affect the tax-exempt status of
the Bonds. For purposes hereof, the Issuer shall not be obligated to comply w/th this covenant if it obtains
an opirfion that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
Section 14. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting
the Projects financed by the Bonds will not be sold or otherwise disposed in a transaction resulting in the
receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opirdon of nationally-
recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of
the Bonds. For purposes of the foregoing, the portion of the property comprising personal property and
disposed in the ordinary course shall not be treated as a transaction resulting ha the receipt of cash or other
compensation. For purposes hereof, the Issuer shall notbe obligated to comply with this covenant if it obtains
an opirdon that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
Section 15. CONTINUING DISCLOSURE. (a) Annual Reports. (/) The Issuer shall provide
annually to each NRMSIR and any SID, with/n six months after the end of each fiscal year ending in or after
2004, financial information and operating data with respect to the Issuer of the general type included in the
final Official Statement authorized by Section 17 of th/s Ordinance, being the information described [n Exhibit
A. Any financial statements so to be provided shall be prepared in accordance with the accounting principles
described in Ex_h/bit A thereto, or such other accounting principles as the Issuer may be required to employ
from time to time pursuant to state law or regulation, and audited, if the Issuer commissions an audit of such
statements and the audit is completed w/thin the period during which they must be provide& If the audit of
such financial statements is not complete w/thin such period, then the Issuer shall provide audited financial
statements for the applicable fiscal year to each NRMS[R and any SID, when and ff the audit report on such
statements become available.
(ii) If the Issuer changes its fiscal year, k will notify each NRMSIR and any SID of the change (and
of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be requked
23
to provide financial information and operating data pursuant to this Section. The financial information and
operating data to be provided pursuant to tl'fis Section may be set forth in full in one or more documents or
may be included by specific reference to any document (including an official statement or other offering
document, if it/s available from the MSRB) that theretofore has been provided to each NRMSIR and any
SID or filed with the SEC.
(b) Material Event Notices. The Issuer shall notify any SID and either each NR_MSIR or the
MSRB, in a timely manner, of any of the following events w/th respect to the Bonds, if such event is material
within the meaning of the federal securities laws:
2.
3.
4.
5.
6.
7.
8.
9.
10.
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse mx opinions or events affecting the tax-exempt status of the Bonds;
Modifications to rights of holders of the Bonds;
Bond calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the Bonds; and
Paring changes.
The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure
by the Issuer to provide financial information or operating data in accordance with subsection (a) of this
Section by the time required by such subsection.
(c) Limitations, Disclaimers, and Amendments. (i) The Issuer shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an
"obLigated person" with respect to the Bonds within the meaning of the Rule, except that the Issuer in any
event will give notice of any deposit made/n accordance with th/s Ordinance or applicable law that causes
Bonds no longer to be outstanding.
(ii) The provisions of tlm 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 fight,
remedy, or claim hereunder to any other person. The Issuer 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 Issuer'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 Issuer 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.
Cfi/) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE HOLDER
OR BENEHCIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY TI-IE ISSUER,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED
24
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.
(iv) No defauk by the Issuer in observing or performing its obligations under this Section shall
comprise a breach of or default under the 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 Issuer
under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change in the
identity, nature, status, or type of operations of the Issuer, but only if(i) the provisions of tlxis Section, as so
amended, would have perrrfitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds
/n compliance with the Rule, taking into account any amendments or interpretations of the Rule since such
offering 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 Ordinancethat authorizes such
an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with
the Issuer (such as bond counsel) determined that such amendment will not materially impair the interest of
the holders and beneficial owners of the Bonds. If the Issuer so amends the provisions of this Section, it shall
include with any amended financial information or operating data next provided in accordance with subsection
(a) of this Section an explanation, in narrative form, of the reason for the amendment and of the impact of
any change in the type of financial information or operating data so provided. The Issuer may also amend
or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,
but only if and to the extent that the provisions of this sentence would not prevent an underwriter from
lawfully purchasing or selling Bonds in the primary offering of the Bonds.
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to such
terms below:
means the Mtmicipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized murdcipal securities/nformation repository within the meaning of the Rule from time to
time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC' means the Un/ted States Securities and Exchange Comm/ssiorz
"SID" means any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and detem~ned by the SEC or its staff to be, a state information depository within
the meaning of the Rule from time to time.
Section 16. SALE OF BONDS. The Bonds are hereby sold and shall be delivered to BANC
OF AMERICA SECURITIES LLC (the '~Jnderwriter") for the purchase price of $13,488,160.79
25
(representing the par mount of the Bonds of less an original issue discount of $109,471.55 less an
Undenvfiter's discount on the Bonds of $87,367.66) plus/nterest accrued (accrued interest to be deposited
into the Interest and Sinldng Fund) thereon to date of delivery pursuant to the terms and provisions of a
Purchase Agreement with the Underwriter. It is hereby officially found, determined, and declared that the
Bonds have been sold pursuant to the terms and provisions of a Purchase Agreement in substantially the form
attached hereto as Exhibit B, which the Mayor Pro Tem of the Issuer is hereby authorized and directed to
execute. It is hereby officially found, determined, and declared that the terms of this sale are the most
advantageous reasonably obtahnable. The Initial Bond shall be registered in the name of BANC OF
AMERICA SECURITIES LLC.
Section 17. APPROVAL OF OFFICIAL STATEMENT. The Issuer hereby approves the form
and content of the Official Statement relating to the Bonds and any addenda, supplement or amendment
thereto, and approves the dislribution of such Official Statement in the reoffering of the Bonds by the
Underwriter in final form, with such changes therein or additions thereto as the officer executing the same
may deem advisable, such determination to be conclusively evidenced by his execution thereof. The
Prelflrdnaxy Official Statement, dated April 20, 2004, is hereby approved and deemed final as of its date, as
required by SEC Rule 15-2-12, and the distribution and use of the Preliminary Official Statement prior to the
date hereof is hereby ratified and confirmed.
Section 18. INTEREST EARNINGS ON BOND PROCEEDS. The earnings derived from the
investment of proceeds from the sale of the Bonds shall be used along with other Bonds proceeds as
described in Section 1 hereof; provided that afl~r completion of such project, if any of such interest earnings
remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further
provided, however, that interest earnings on the Bonds proceeds which are required to be rebated to the
Un/ted States of America pursuant to Section 12 hereof in order to prevent the Bonds from being arbitrage
bonds shall be so rebated and not considered as interest earnings for the purpose of this Section.
Section 19. APPROPRIATION. There is hereby appropriated for transfer to the Interest and
Sinldng Fund, from available funds, moneys sufficient to pay the principal and interest coming due on the
Bonds on February 1, 2005.
Section 20. INSIIRANCE. The Issuer approves the insurance of the Bonds by AMBAC
ASSURANCE CORPORATION and the payment of such prerrdum and covenant to comply with all of
the terms of the insurance commitment, acopy of which is attached hereto as Exh/bit E and is hereby adopted
by th/s Ordinance.
Section 21. PUBLIC NOTICE. It is hereby officially found and determined that public notice
of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Govemment
Code.
26
EXHIBIT A
DESCRIPTION OF ANNWAL FINANCIAL INFORMATION
The follow/ng information is referred to in Section 15 of tiffs Ordinance.
I. Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually in
accordance with such Section are as specified (and included in the Appendix or under the headings of the
Official Statement and Tables referred to) below:
TABLE 1 through 6, and 8 through 15 and in Appendix B
Accounting Principles
The accounting principles referred to ha such Section are the accounting principles described in the
notes to the financial statements referred to in paragraph 1 above.
EXHIBIT B
INSURANCE COMMll'MENT
The Insurance Commitment has omitted at this point, as it appears elsewhere in the transcript.
CITY OF COPPELL, TEXAS
(Dallas and Denton Counties)
$13,685,000
General Obligation Bonds, Series 2004
PURCHASE CONTRACT
April 27, 2004
Mayor and City Council
City of Coppell
255 Parkway Boulevard
Coppell, Texas 75019
Ladies and Gentlemen:
The undersigned, Banc of America Securities LLC (the "Underwriter'), offers to enter into
the following agreement with the City of Coppell, Texas (the "City'S, which, upon the City's
written acceptance of this offer, will be binding upon the City and the Underwriter. This offer is
made subject to the City's written acceptance hereof on or before 10:00 p.m., Central time, on
April 27, 2004, and, if not so accepted, will be subject to withdrawal by the Underwriter upon
notice delivered to the City at any time prior to the acceptance hereof by the City. Terms not
otherwise defined in this Purchase Contract (this "Purchase Contract") shall have the same
meanings set forth in the Ordinance (as defined herein) or in the Official Statement (as defined
herein).
1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in
reliance upon the representations, warranties, and agreements set forth herein, the Underwriter
hereby agrees to purchase from the City, and the City hereby agrees to sell and deliver to the
Underwriter, all, but not less than all, of the City's $13,685,000 General Obligation Bonds,
Series 2004 (the "Bonds'3. Inasmuch as this purchase and sale represents a negotiated
transaction, the City understands, and hereby confirms, that the Underwriter is not acting as a
fiduciary of the City, but rather is acting solely in its capacity as Underwriter for its own account.
The principal amount of the Bonds to be issued, the dated date therefor, the maturities,
sinking fund, and the optional redemption provisions and interest rates per annum are set forth
in the Official Statement attached hereto as Exhibit A and further described below. The Bonds
shall be as described in, and shall be issued and secured under and pursuant to the provisions
of an ordinance adopted by the City on April 27, 2004 (the "Ordinance").
The purchase price for the Bonds shall be $13,446,176.69 (representing the par amount
of the Bonds, less a net original issue discount of $151,455.65 and less an underwriting
DAL:497606.2
discount of $87,367.66), plus accrued interest on the Bonds calculated on the basis of a 360-
day year of twelve 30-day months from the dated date of the Bonds to the date of the Closing
described below.
Delivered to the City herewith is the Underwriter's good faith corporate check payable to
the order of the City in the amount of $136,850 (the "Checl¢'). In the event the City does not
accept this offer, the Check shall be promptly returned to the Underwriter. Upon the City's
acceptance and countersignature of this offer, the Check (i) shall not be cashed or negotiated
but shall be held and retained in safekeeping by the City as security for the performance by the
Underwriter of its obligations, subject to the terms and conditions herein set forth, to purchase
and accept delivery of the Bonds at the Closing, and (ii) shall be applied and disposed of by the
City solely as provided in this Purchase Contract. In the event of the Underwriter's compliance
with such obligation to purchase and accept delivery of the Bonds at the Closing, the Check
shall be returned to the Underwriter at the Closing. In the event of the failure by the City to
deliver the Bonds at the Closing, or if the City shall be unable to satisfy the conditions to the
obligations of the Underwriter contained in this Purchase Contract, or if the obligations of the
Underwriter shall be terminated for any reason permitted by this Purchase Contract, the Check
shall be returned promptly to the Underwriter. In the event that the Underwriter fails (other than
for a reason permitted hereunder) to purchase and accept delivery of the Bonds at the Closing,
the City shall become entitled to cash or negotiate the Check, and the proceeds thereof shall be
retained by the City as and for fully liquidated damages for such failure of the Underwriter, and,
except as set forth in Section 8 hereof, no party shall have any further rights against the other
hereunder. The Underwriter and the City understand that in such event the City's actual
damages may be greater or may be less than such amount. Accordingly, the Underwriter
hereby waives any right to claim that the City's actual damages are less than such amount, and
the City's acceptance of this offer shall constitute a waiver of any right the City may have to
additional damages from the Underwriter.
2. Public Offering. The Underwriter agrees to make a bona fide public offedng of all
of the Bonds at prices not to exceed the public offering prices set forth on the inside cover of the
Official Statement and may subsequently change such offering pdces without any requirement
of prior notice. The Underwriter may offer and sell Bonds to certain dealers (including dealers
depositing Bonds into investment trusts) and others at prices lower than the public offedng
prices stated on the inside cover of the Official Statement.
3. The Official Statement. (a) Attached hereto as Exhibit A is either a draft of the
final Official Statement or a copy of the Preliminary Official Statement dated April 20, 2004 (the
"Preliminary Official Statement'), including the cover page and Appendices thereto, of the City
relating to the Bonds. Such draft of the final Official Statement or copy of the Preliminary
Official Statement, as amended to reflect the changes marked or otherwise indicated on
Exhibit A hereto, is hereinafter called the "Official Statement."
(b) The Preliminary Official Statement has been prepared for use in connection with
the public offering, sale, and distribution of the Bonds by the Underwriter. The City hereby
represents and warrants that the Preliminary Official Statement is deemed final by the City as of
its date, except for the omission of such information which is dependent upon the final pricing of
the Bonds for completion, all as permitted to be excluded by Section (b)(1) of Rule 15c2-12
under the Securities Exchange Act of 1934 (the "Rule').
(c) The City hereby authorizes the Official Statement and the information therein
contained to be used by the Underwriter in connection with the public offering and the sale of
DAL:497606.2
the Bonds. The City consents to the use by the Underwriter pdor to the date hereof of the
Preliminary Official Statement in connection with the public offering of the Bonds. The City shall
provide, or cause to be provided, to the Underwriter as soon as practicable after the date of the
City's acceptance of this Purchase Contract (but, in any event, not later than within seven
business days after the City's acceptance of this Purchase Contract and in sufficient time to
accompany any confirmation that requests payment from any customer) copies of the Official
Statement which are complete as of the date of their delivery to the Underwriter in such quantity
as the Underwriter shall request in order for the Underwriter to comply with Section (b)(4) of the
Rule and the rules of the Municipal Securities Rulemaking Board.
(d) If, after the date of this Purchase Contract to and including the date the
Underwriter is no longer required to provide an Official Statement to potential customers who
request the same pursuant to the Rule (the earlier of (i) 90 days from the "end of the
underwriting period" (as defined in Rule) and (ii) the time when the Official Statement is
available to any person from a nationally recognized municipal securities information repository,
but in no case less than 25 days after the "end of the underwriting period" for the Bonds), the
City becomes aware of any fact or event which might or would cause the Official Statement, as
then supplemented or amended, to contain any untrue statement of a material fact or to omit to
state a material fact required to be stated therein or necessary to make the statements therein
not misleading, or if it is necessary to amend or supplement the Official Statement to comply
with law, the City will notify the Underwriter (and for the purposes of this clause provide the
Underwriter with such information as it may from time to time request), and if, in the opinion of
the Underwriter, such fact or event requires preparation and publication of a supplement or
amendment to the Official Statement, the City will forthwith prepare and furnish, at the City's
own expense (in a form and manner approved by the Underwriter), a reasonable number of
copies of either amendments or supplements to the Official Statement so that the statements in
the Official Statement as so amended and supplemented will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or so that the Official Statement will comply with
law. If such notification shall be subsequent to the Closing, the City shall furnish such legal
opinions, certificates, instruments, and other documents as the Underwriter may reasonably
deem necessary to evidence the truth and accuracy of such supplement or amendment to the
Official Statement.
(e) The Underwriter hereby agrees to timely file the Official Statement with a
nationally recognized municipal securities information repository. Unless otherwise notified in
writing by the Underwriter, the City can assume that the "end of the underwriting period" for
purposes of the Rule is the date of the Closing.
4. Representations, Warranties, and Covenants of the City. The City hereby
represents and warrants to and covenants with the Underwriter that:
(a) The City is a home rule city duly created, organized, and existing under the laws
of the State of Texas (the "State'), and has full legal right, power, and authority, and at the date
of the Closing will have full legal right, power, and authority (i) to enter into, execute, and deliver
this Purchase Contract, the Ordinance, and the Undertaking (as defined in Section 6(i)(3)
hereof) and all documents required hereunder and thereunder to be executed and delivered by
the City (this Purchase Contract, the Ordinance, the Undertaking, and the other documents
referred to in this clause (a) are hereinafter referred to as the "City Documents'), (ii) to sell,
issue, and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and
consummate the transactions contemplated by the City Documents and the Official Statement,
DAL:497606.2
and the City has complied, and will at the Closing be in compliance in all respects, with the
terms of the City Documents as they pertain to such transactions;
(b) By all necessary official action of the City prior to or concurrently with the
acceptance hereof, the City has duly authorized all necessary action to be taken by it for (i) the
adoption of the Ordinance and the issuance and sale of the Bonds, (ii) the approval, execution,
and delivery of, and the performance by the City of the obligations on its part, contained in the
Bonds and the City Documents, and (iii) the consummation by it of all other transactions
contemplated by the Official Statement and the City Documents and any and all such other
agreements and documents as may be required to be executed, delivered, and/or received by
the City in order to carry out, give effect to, and consummate the transactions contemplated
herein and in the Official Statement;
(c) The City Documents constitute legal, valid, and binding obligations of the City,
enforceable in accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium, and other similar laws and principles of equity relating to or
affecting the enforcement of creditoCs rights; the Bonds, when issued, delivered, and paid for, in
accordance with the Ordinance and this Purchase Contract, will constitute legal, valid, and
binding obligations of the City entitled to the benefits of the Ordinance and enforceable in
accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium, and
other similar laws and principles of equity relating to or affecting the enforcement of creditors'
rights; upon the issuance, authentication, and delivery of the Bonds as aforesaid, the Ordinance
will provide, for the benefit of the owners of the Bonds, the legally valid and binding pledge of
and lien it purports to create as set forth in the Ordinance;
(d) The City is not in breach of or default in any material respect under any
applicable constitutional provision, law, or administrative regulation of the State or the United
States or any applicable judgment or decree or any loan agreement, indenture, bond, note,
resolution, agreement, or other instrument to which the City is a party or to which the City is
otherwise subject, and no event which would have a material and adverse effect upon the
business or financial condition of the City has occurred and is continuing which constitutes or
with the passage of time or the giving of notice, or both, would constitute a default or event of
default by the City under any of the foregoing; and the execution and delivery of the Bonds, the
City Documents, and the adoption of the Ordinance and compliance with the provisions
contained therein on the City's part, will not conflict with or constitute a breach of or default
under any constitutional provision, administrative regulation, judgment, decree, loan agreement,
indenture, bond, note, resolution, agreement, or other instrument to which the City is a party or
to which the City is otherwise subject or under the terms of any such law, regulation, or
instrument, except as provided by the Bonds and the Ordinance;
(e) All authorizations, approvals, licenses, permits, consents, and orders of any
governmental authority, legislative body, board, agency, or commission having jurisdiction of the
matter which are required for the due authorization of, which would constitute a condition
precedent to, or the absence of which would materially adversely affect the due performance by
the City of its obligations under the City Documents and the Bonds have been duly obtained,
except for the approval of the Bonds by the Attorney General of the State of Texas and the
registration of the Bonds by the Comptroller of Public Accounts of the State of Texas and such
approvals, consents, and orders as may be required under the Blue Sky or securities laws of
any jurisdiction in connection with the offering and sale of the Bonds;
DAL:497606.2
(f) The Bonds and the Ordinance conform to the descriptions thereof contained in
the Official Statement under the caption "THE BONDS;" the proceeds of the sale of the Bonds
will be applied generally as described in the Official Statement under the caption "THE BONDS
- Sources and Uses of Bond Proceeds;" and the Undertaking conforms to the description
thereof contained in the Official Statement under the caption "CONTINUING DISCLOSURE OF
INFORMATION."
(g) There is no legislation, action, suit, proceeding, inquiry, or investigation, at law or
in equity, before or by any court, government agency, public board, or body, pending or, to the
best knowledge of the City after due inquiry, threatened against the City, affecting the existence
of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit,
restrain, or enjoin the sale, issuance, or delivery of the Bonds or the collection of taxes or
revenues pledged to the payment of principal of and interest on the Bonds pursuant to the
Ordinance or in any way contesting or affecting the validity or enforceability of the Bonds or the
City Documents, or contesting the exclusion from gross income of interest on the Bonds for
federal income tax purposes, or contesting in any way the completeness or accuracy of the
Preliminary Official Statement or the Official Statement or any supplement or amendment
thereto, or contesting the powers of the City or any authority for the issuance of the Bonds, the
adoption of the Ordinance, or the execution and delivery of the City Documents, nor, to the best
knowledge of the City, is there any basis therefor, wherein an unfavorable decision, ruling, or
finding would materially adversely affect the validity or enforceability of the Bonds or the City
Documents;
(h) As of the date thereof, the Preliminary Official Statement did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(i) At the time of the City's acceptance hereof and (unless the Official Statement is
amended or supplemented pursuant to Section 3(d) of this Purchase Contract) at all times
subsequent thereto during the period up to and including the date of Closing, the Official
Statement does not and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(j) If the Official Statement is supplemented or amended pursuant to Section 3(d) of
this Purchase Contract, at the time of each supplement or amendment thereto and (unless
subsequently again supplemented or amended pursuant to such Section 3(d)) at all times
subsequent thereto during the period up to and including the date of Closing, the Official
Statement as so supplemented or amended will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading;
(k) The City will apply, or cause to be applied, the proceeds from the sale of the
Bonds as provided in and subject to all of the terms and provisions of the Ordinance and will not
take or omit to take any action which action or omission will adversely affect the exclusion from
gross income for federal income tax purposes of the interest on the Bonds;
(I) The City will furnish such information and execute such instruments and take
such action in cooperation with the Underwriter as the Underwriter may reasonably request (A)
to (i) qualify the Bonds for offer and sale under the Blue Sky or other securities laws and
DAL:497606.2
regulations of such states and other jurisdictions in the United States as the Underwriter may
designate and (ii) determine the eligibility of the Bonds for investment under the laws of such
states and other jurisdictions and (B) to continue such qualifications in effect so long as required
for the distribution of the Bonds (provided, however, that the City will not be required to qualify
as a foreign corporation or to file any general or special consents to service of process under
the laws of any jurisdiction) and will advise the Underwriter immediately of receipt by the City of
any notification with respect to the suspension of the qualification of the Bonds for sale in any
jurisdiction or the initiation or threat of any proceeding for that purpose;
(m) The financial statements of and other financial information regarding the City in
the Official Statement fairly present the financial position and results of the City as of the dates
and for the periods therein set forth. Prior to the Closing, there will be no adverse change of a
material nature in such financial position, results of operations, or condition, financial or
otherwise, of the City. Other than as described in the Official Statement, the City is not a party
to any litigation or other proceeding pending or, to its knowledge, threatened which, if decided
adversely to the City, would have a materially adverse effect on the financial condition of the
City;
(n) Prior to the Closing the City will not offer or issue any bonds, notes, or other
obligations for borrowed money or incur any material liabilities, direct or contingent, payable
from or secured by any of the taxes which will secure the Bonds without the prior approval of the
Underwriter;
(o) Any certificate signed by any official of the City authorized so to do in connection
with the transactions contemplated by this Purchase Contract shall be deemed a representation
and warranty by the City to the Underwriter as to the statements made therein; and
(p) The City covenants that between the date hereof and the Closing it will take no
actions which will cause the representations and warranties made in this Section to be untrue as
of the Closing.
By delivering an executed copy of the Official Statement to the Underwriter as set forth
in Section 6(i)(1), the City shall be deemed to have reaffirmed, with respect to the Official
Statement, the representations, warranties, and covenants set forth above with respect to the
Preliminary Official Statement.
5. Closing. (a) At 10:00 a.m. Central time, on May 27, 2004, or at such other time
and date as shall have been mutually agreed upon by the City and the Underwriter, the City will,
subject to the terms and conditions hereof, deliver to the Underwriter the initial Bonds registered
in the name of the Underwriter, in temporary form, together with the other documents
hereinafter mentioned, and will have available for immediate exchange definitive Bonds
deposited with The Depository Trust Company, New York, New York ("DTC'), or with Wachovia
Bank, National Association, Houston, Texas, the initial paying agent/registrar for the Bonds (the
"Registrar'), if the Bonds are to be kept in safekeeping for DTC by the Registrar pursuant to
DTC's FAST System, duly executed and authenticated in the form and manner contemplated
below, and the Underwriter will, subject to the terms and conditions hereof, accept such delivery
and pay the purchase price of the Bonds, as set forth in Section 1 of this Purchase Contract, in
immediately available funds by federal funds wire transfer to or for the account of the City (such
events being referred to herein as the "Closing"). Concurrently with such payment by the
Underwriter, the City shall return to the Underwriter the Check referred to in Section 1 hereof.
DAL:497606.2
Payment for the Bonds as aforesaid shall be made at the offices of the Registrar, or such other
place as shall have been mutually agreed upon by the City and the Underwriter.
(b) Delivery of the Bonds in definitive form shall be made to The Depository Trust
Company, New York, New York. The Bonds shall be delivered in fully registered form, bearing
CUSIP numbers without coupons, with one secudty certificate for each maturity of the Bonds,
registered in the name of Cede & Co., all as provided in the Ordinance, and shall be made
available to the Underwriter at least one business day before the Closing for purposes of
inspection.
6. Closing Conditions. The Underwriter has entered into this Purchase Contract in
reliance upon the representations, warranties, and agreements of the City contained herein, and
in reliance upon the representations, warranties, and agreements to be contained in the
documents and instruments to be delivered at the Closing and upon the performance by the City
of its obligations hereunder, both as of the date hereof and as of the date of the Closing.
Accordingly, the Underwriter's obligations under this Purchase Contract to purchase, accept
delivery of, and pay for the Bonds shall be conditioned upon the performance by the City of its
obligations to be performed hereunder and under the City Documents at or prior to the Closing,
and shall also be subject to the following additional conditions, including the delivery by the City
of such documents as are enumerated herein, in form and substance reasonably satisfactory to
the Underwriter:
(a) The representations and warranties of the City contained herein shall be true,
complete, and correct in all matedal respects on the date hereof and on and as of the date of
the Closing, as if made on the date of the Closing;
(b) The City shall have performed and complied with all agreements and conditions
required by this Purchase Contract to be performed or complied with by it pdor to or at the
Closing;
(c) At the time of the Closing, (i) the City Documents and the Bonds shall be in full
force and effect and shall not have been amended, modified, or supplemented, and the Official
Statement shall not have been supplemented or amended, except in any such case as may
have been agreed to by the Underwriter; and (ii) all actions of the City required to be taken by
the City shall be performed in order for Bond Counsel to deliver its opinions referred to
hereafter;
(d) At the time of the Closing, all official action of the City relating to the Bonds and
the City Documents shall be in full force and effect and shall not have been amended, modified,
or supplemented;
(e) At or prior to the Closing, the Ordinance shall have been duly adopted, executed,
and delivered by the City and the City shall have duly executed and delivered and the Registrar
shall have duly authenticated the Bonds;
(f) At the time of the Closing, there shall not have occurred any change or any
development involving a prospective change in the condition, financial or otherwise, or in the
revenues or operations of the City, from that set forth in the Official Statement that in the
judgment of the Underwriter, is material and adverse and that makes it, in the reasonable
judgment of the Underwriter, impracticable to market the Bonds on the terms and in the manner
contemplated in the Official Statement;
DAL:497606.2
(g) The City shall not have failed to pay principal or interest when due on any of its
outstanding obligations for borrowed money;
(h) All steps to be taken and all instruments and other documents to be executed,
and all other legal matters in connection with the transactions contemplated by this Purchase
Contract shall be satisfactory in legal form and effect to the Underwriter;
(i) At or prior to the Closing, the Underwriter shall have received copies of each of
the following documents:
(1) The Official Statement, and each supplement or amendment thereto, if
any, executed on behalf of the City by the manual or facsimile signature of its Mayor;
(2) The Ordinance with such supplements or amendments as may have been
agreed to by the Underwriter;
(3) The undertaking of the City (the "Undertaking") which satisfies the
requirements of section (b)(5)(i) of the Rule;
(4) The approving opinion of Bond Counsel with respect to the Bonds, in
substantially the form attached to the Qfficial Statement;
(5) A supplemental opinion of Bond Counsel addressed to the City and the
Underwriter substantially to the effect that:
(i) the Bonds are exempt securities that do not require registration
under the Securities Act of 1933, as amended (the "1933 Act"), and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and that it is not
necessary, in connection with Bonds, to register the Bonds under the 1933 Act or
to qualify the Ordinance under the Trust Indenture Act; and
(ii) based upon their participation in the preparation of the Official
Statement, but without having undertaken to determine independently or assume
any responsibility for the accuracy, completeness, or fairness of the statements
contained in the Official Statement, such Bond Counsel has no reason to believe
that the Official Statement contains any untrue statement of a material fact or
omits to state a matedal fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (except for any
financial, forecast, technical, and statistical statements and data included in the
Official Statement and the information regarding The Depository Trust Company
and its book-entry system, in each case as to which no view need be expressed).
(6) A certificate, dated the date of Closing, of an appropriate official of the
City to the effect that (i) the representations and warranties of the City contained herein
are true and correct in all material respects on and as of the date of Closing as if made
on the date of Closing; (ii) no litigation or proceeding against it is pending or, to its
knowledge, threatened in any court or administrative body nor is there a basis for
litigation which would (a) contest the right of the officials of the City to hold and exercise
their respective positions, (b) contest the due organization and valid existence of the
City, (c) contest the validity, due authorization, and execution of the Bonds or the City
Documents, or (d) attempt to limit, enjoin, or otherwise restrict or prevent the City from
DAL:497606.2
functioning and collecting revenues and other income or the levy or collection of the
taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the
pledge thereof pursuant to the Ordinance; (iii) all official actions of the City authorizing
the execution, delivery, and/or performance of the Official Statement, the Bonds, and the
City Documents have been duly adopted by the City, are in full force and effect, and
have not been modified, amended, or repealed, and (iv) to the best of his or her
knowledge, no event affecting the City has occurred since the date of the Official
Statement which should be disclosed in the Official Statement for the purpose for which
it is to be used or which it is necessary to disclose therein in order to make the
statements and information therein, in light of the circumstances under which made, not
misleading in any material respect as of the time of Closing, and the information
contained in the Official Statement is correct in all material respects and, as of the date
of the Official Statement did not, and as of the date of the Closing does not, contain any
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;
(7) A certificate of the City in form and substance satisfactory to Bond
Counsel and counsel to the Underwriter (a) setting forth the facts, estimates, and
circumstances in existence on the date of the Closing, which establish that it is not
expected that the proceeds of the Bonds will be used in a manner that would cause the
Bonds to be "arbitrage bonds" within the meaning of section 148 of the Internal Revenue
Code of 1986, as amended (the "Code'), and any applicable regulations (whether final,
temporary, or proposed), issued pursuant to the Code, and (b) certifying that to the best
of the knowledge and belief of the City there are no other facts, estimates, or
circumstances that would materially change the conclusions, representations, and
expectations contained in such certificate;
(8) Any other Bonds and opinions required by the Ordinance for the issuance
thereunder of the Bonds;
(9) The approving opinion of the Attorney General of the State of Texas;
(10) The registration certificate of the Comptroller of Public Accounts of the
State of Texas;
(11)
Bonds;
A copy of the policy of bond insurance acquired by the City covering the
(12) Evidence satisfactory to the Underwriter that the Bonds have been
assigned the ratings of "Aaa" by Moody's Investors Service, Inc. and "AAA" by Standard
and Poor's Rating Services, a Division of The McGraw Hill Companies and that such
ratings are in effect as of the date of the Closing; and
(13) Such additional legal opinions, certificates, instruments, and other
documents as the Underwriter or counsel to the Underwriter may reasonably request to
evidence the truth and accuracy, as of the date hereof and as of the date of the Closing,
of the City's representations and warranties contained herein and of the statements and
information contained in the Official Statement and the due performance or satisfaction
by the City on or prior to the date of the Closing of all the respective agreements then to
be performed and conditions then to be satisfied by the City.
DAL:497606.2
All of the opinions, letters, certificates, instruments, and other documents mentioned
above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the
provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to
purchase, accept delivery of, and pay for the Bonds contained in this Purchase Contract, or if
the obligations of the Underwriter to purchase, accept delivery of, and pay for the Bonds shall
be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall
terminate and neither the Underwriter nor the City shall be under any further obligation
hereunder, except that the respective obligations of the City and the Underwriter set forth in
Section 1 hereof (with respect to the Check) shall continue in full force and effect.
7. Termination. The Underwriter shall have the right to cancel its obligation to
purchase the Bonds if, between the date of this Purchase Contract and the Closing, the market
price or marketability of the Bonds shall be materially adversely affected, in the sole judgment of
the Underwriter (as evidenced by a written notice to the City terminating the obligation of the
Underwriter to accept delivery of and pay for the Bonds), by the occurrence of any of the
following:
(a) legislation shall be enacted by or introduced in the Congress of the United States
or recommended to the Congress for passage by the President of the United States, or the
Treasury Department of the United States or the Internal Revenue Service or favorably reported
for passage to either House of the Congress by any committee of such House to which such
legislation has been referred for consideration, a decision by a court of the United States or of
the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final,
temporary, or proposed), press release, statement, or other form of notice by or on behalf of the
Treasury Department of the United States, the Internal Revenue Service, or other governmental
agency shall be made or proposed, the effect of any or all of which would be to impose, directly
or indirectly, federal income taxation upon interest received on obligations of the general
character of the Bonds, or of the interest on the Bonds, or other action or events shall have
transpired which may have the purpose or effect, directly or indirectly, of changing the federal
income tax consequences of the transaction contemplated herein;
(b) legislation introduced in or enacted (or a resolution passed) by the Congress or
an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling,
regulation (final, temporary, or proposed), press release, or other form of notice issued or made
by or on behalf of the Securities and Exchange Commission, or any other governmental agency
having jurisdiction of the subject matter, to the effect that obligations of the general character of
the Bonds, including any or all underlying arrangements, are not exempt from registration under
or other requirements of the 1933 Act, or that the Ordinance is not exempt from qualification
under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of
obligations of the general character of the Bonds, including any or all underlying arrangements,
as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of
the federal securities law as amended and then in effect;
(c) any state blue sky or securities commission or other governmental agency or
body in any state where the Bonds have been offered and sold shall have withheld registration,
exemption, or clearance of the offering of the Bonds as described herein, or issued a stop order
or similar ruling relating thereto;
10
DAL:497606.2
(d) a general suspension of trading in securities on the New York Stock Exchange or
the American Stock Exchange, the establishment of minimum prices on either such exchange,
the establishment of material restrictions (not in force as of the date hereof) upon trading
securities generally by any governmental authority or any national securities exchange, or a
general banking moratorium declared by federal, State of New York, or State officials authorized
so to do;
(e) the New York Stock Exchange or other national securities exchange or any
governmental authority shall impose, as to the Bonds or as to obligations of the general
character of the Bonds, any material restrictions not now in force, or increase materially those
now in force, with respect to the extension of credit by, or the charge to the net capital
requirements of, underwriters;
(f) any amendment to the federal or state Constitution or action by any federal or
state court, legislative body, regulatory body, or other authority materially adversely affecting the
tax status of the City, its property, income, securities (or interest thereon), or the validity or
enforceability of the assessments or the levy of taxes to pay principal of and interest on the
Bonds;
(g) any event occurring, or information becoming known which, in the judgment of
the Underwriter, makes untrue in any material respect any material statement or information
contained in the Official Statement, or has the effect that the Official Statement contains any
untrue statement of material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(h) there shall have occurred since the date of this Purchase Contract any materially
adverse change in the affairs or financial condition of the City;
(i) the United States shall have become engaged in hostilities which have resulted
in a declaration of war or a national emergency or there shall have occurred any other outbreak
or escalation of hostilities or a national or international calamity or crisis, financial or otherwise,
the effect of such outbreak, calamity, or crisis on the financial markets of the United States
being such as, in the reasonable opinion of the Underwriter, would materially adversely affect
the ability of the Underwriter to market the Bonds;
(j) any fact or event shall exist or have existed that, in the Underwriter's judgment,
requires or has required an amendment of or supplement to the Official Statement;
(k) there shall have occurred any downgrading, or any notice shall have been given
of (i) any intended or potential downgrading or (ii) any review or possible change that does not
indicate the direction of a possible change, in the rating accorded any of the City's obligations
(including the rating to be accorded the Bonds) by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the 1933 Act; and
(I) the purchase of and payment for the Bonds by the Underwriter, or the resale of
the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited
by any applicable law, governmental authority, board, agency, or commission.
8. Expenses. (a) The Underwriter shall be under no obligation to pay, and the City
shall pay, any expenses incident to the performance of the City's obligations hereunder,
1!
DAL:497606.2
including, but not limited to (i) the cost of preparation and printing of the Bonds; (ii) the fees and
disbursements of Bond Counsel; (iii) the fees and disbursements of the Financial Advisor to the
City; (iv) the fees and disbursements of any engineers, accountants, and other experts,
consultants, or advisers retained by the City; (v) the fees for bond ratings and bond insurance;
(vi) the costs of preparing, printing, and mailing the Preliminary Official Statement and the
Official Statement; (vi) the fees and expenses of the Registrar; (vii) advertising expenses
(except any advertising expenses of the Underwriter as set forth below); (viii) the out-of-pocket,
miscellaneous, and closing expenses, including the cost of travel, of the officers and officials of
the City; and (ix) any other expenses mutually agreed to by the City and the Underwriter to be
reasonably considered expenses of the City which are incident to the transactions contemplated
hereby.
(b) The Underwriter shall pay (i) the cost of preparation and printing of this Purchase
Contract, any Blue Sky Survey, and any Legal Investment Memorandum; (ii) all advertising
expenses in connection with the public offering of the Bonds; and (iii) all other expenses
incurred by it in connection with the public offering of the Bonds, including the fees and
disbursements of counsel retained by the Underwriter.
(c) If this Purchase Contract shall be terminated by the Underwriter because of any
failure or refusal on the part of the City to comply with the terms or to fulfill any of the conditions
of this Purchase Contract, or if for any reason the City shall be unable to perform its obligations
under this Purchase Contract, the City will reimburse the Underwriter for all out-of-pocket
expenses (including the fees and disbursements of counsel to the Underwriter) reasonably
incurred by the Underwriter in connection with this Purchase Contract or the offering
contemplated hereunder.
9. Notices. Any notice or other communication to be given to the City under this
Purchase Contract may be given by delivering the same in writing to City of Coppell, Texas, 255
Parkway Boulevard, Coppell, Texas 75019, Attention: Jim Witt, City Manager; and any notice or
other communication to be given to the Underwriter under this Purchase Contract may be given
by delivering the same in writing to Banc of America Securities LLC, 901 Main Street, 63rd Floor,
Dallas, Texas 75202, Attention: Jerry Robinson.
10. Parties in Interest. This Purchase Contract as heretofore specified shall
constitute the entire agreement between us and is made solely for the benefit of the City and the
Underwriter (including successors or assigns of the Underwriter) and no other person shall
acquire or have any right hereunder or by virtue hereof. This Purchase Contract may not be
assigned by the City. All of the City's representations, warranties, and agreements contained in
this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any
investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the
Bonds pursuant to this Purchase Contract; and (iii) any termination of this Purchase Contract.
11. Effectiveness. This Purchase Contract shall become effective upon the
acceptance hereof by the City and shall be valid and enforceable at the time of such
acceptance.
12. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State.
13. Severability. If any provision of this Purchase Contract shall be held or deemed
to be or shall, in fact, be invalid, inoperative, or unenforceable as applied in any particular case
12
DAL:497606.2
in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provision or
provisions of any Constitution, statute, rule, or public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question invalid,
inoperative, or unenforceable in any other case or circumstance, or of rendering any other
provision or provisions of this Purchase Contract invalid, inoperative, or unenforceable to any
extent whatever.
14. Business Day. For purposes of this Purchase Contract, "business day" means
any day on which the New York Stock Exchange is open for trading.
15. Section Headings. Section headings have been inserted in this Purchase
Contract as a matter of convenience of reference only, and it is agreed that such section
headings are not a part of this Purchase Contract and will not be used in the interpretation of
any provision of this Purchase Contract.
16. Counterparts. This Purchase Contract may be executed in several counterparts
each of which shall be regarded as an original (with the same effect as if the signatures thereto
and hereto were upon the same document) and all of which shall constitute one and the same
document.
[The remainder of this page intentiona/ly left b/ank.]
13
DAL:497606.2
EXHIBIT A
OFFICIAL STATEMENT
DAL:497606.2
If you agree with the foregoing, please sign the enclosed counterpart of this Purchase
Contract and return it to the Underwriter. This Purchase Contract shall become a binding
agreement between you and the Underwriter when at least the counterpart shall have been
signed by or on behalf of each of the parties hereto.
Very truly yours,
BANC OF AMERICA SECURITIES LLC
By
,/~d't'horized Officer
APPROVED AND ACCEPTED as of the date hereof:
CITY OF COPPELL, TEXAS
ATTEST:
DAL:497606.1