OR 2005-1094 Issuance of Refunding Bonds, Series 2005ORDINANCE NO. 2005-1094 AUTHORIZING THE ISSUANCE OF CITY OF COPPELL,
TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005; APPROVING AN
OFFICIAL STATEMENT; AUTHORIZING THE EXECUTION OF A PURCHASE
AGREEMENT AND AN ESCROW AGREEMENT; MAKING PROVISIONS FOR THE
SECURITY THEREOF; AND ORDAINING OTHER MATTERS RELATING TO THE
SUBJECT
THE STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL
WHEREAS, the City of Coppell, Texas (the "Issuer") has duly issued and there is now
outstanding, the following series or issues of bonds and certificates of obligation which are secured by a
pledge by the Issuer to levy ad valorem taxes sufficient to pay principal of and interest on the bonds and
certificates of obligation as they become due and a pledge of surplus water and sewer system revenues to
further secure the certificates of obligation:
CITY OF COPPELL, TEXAS General Obligation Refunding and Improvement Bonds,
Series 1997, dated August 15, 1997, maturihes February 1, 2006 through February 1,
2017, in the aggregate principal amount of $5,680,000 (the "Series 1997 Bonds");
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of
Obligation, Series 1997, dated August 15, 1997, maturities February 1, 2006 through
February 1, 2017, in the aggregate pnncipal amount of $1,420,000 (the "Series 1997
Certificates of Obligation");
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of
Obligation, Series 1997-A, dated October 1, 1997, maturities February 1, 2006 through
February 1, 2017, in the aggregate principal amount of $2,250,000 (the "Series 1997-A
Certificates of Obligation"); and
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of
Obligation, Series 1999, dated January 15, 1999, maturities February 1, 2006 through
February 1, 2019, in the aggregate principal amount of $2,595,000 (the "Series 1999
Certificates of Obligation"); and
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of
Obligation, Series 1999A, dated September 1, 1999, maturities August 1, 2005 through
August 1, 2019, in the aggregate principal amount of $3,740,000 (the "Series 1999A
Certificates of Obligation"); and
CITY OF COPPELL, TEXAS General Obligation Bonds, Series 2000, dated May I,
2000, maturities August 1, 2005 through August 1, 2020, in the aggregate principal
amount of $8,725,000 (the "Series 2000 Bonds"); and
WHEREAS, the Issuer now desires to refund a portion of the maturities 2008 through 2017 of
the Series 1997 Bonds, in the principal mount of $2,210,000, a portion of the maturities 2008 through
2017 of the Series 1997 Certificates of Obligation, in the principal amount of $565,000, maturities 2008
through 2017 of the Series 1997-A Certificates of Obligation, in the principal amount of $1,965,000,
maturities 2009 through 2019 of the Series 1999 Certificates of Obligation, in the principal mount of
$2,175,000, maturities 2009 through 2019 of the Series 1999A Certificates of Obligation in the principal
amount of $3,020,000 and maturities 2009 through 2020 of the Series 2000 Bonds, in the principal amount
of $7,235,000; for a total aggregate amount of $17,170,000 (the "Refunded Obligations"); and
WHEREAS, the City Council of the Issuer deems it advisable to refund the Refunded Obligations
in order to achieve a debt service savings of approximately $1,759,227 and a net present value savings of
approximately $1,152,130; and
WHEREAS, Chapter 1207, Texas Government Code, authorizes the Issuer to issue refunding
bonds and to deposit the proceeds from the sale thereof, together with any other available funds or
resources, directly with a place of payment or paying agent or a trust company or commercial bank that
does not act as a depository for the Issuer and is named in these proceedings for the Refunded Obligations,
and such deposit, if made before such payment dates, shall constitute the making of firm banking and
financial arrangements for the discharge and final payment of the Refunded Obligations; and
WHEREAS, Chapter 1207, Texas Government Code, further authorizes the Issuer to enter into
an escrow agreement with the paying agent, or a trust company or commercial bank, for the Refunded
Obligations with respect to the safekeeping, investment, reinvestment, administration and disposition of
any such deposit, upon such terms and conditions as the Issuer and such escrow agent may agree, provided
that such deposits may be invested and reinvested including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, and which shall mature and bear
interest payable at such times and in such amounts as will be sufficient to provide for the scheduled
payment or prepayment of the Refunded Obligations; and
WHEREAS, the Escrow Agreement hereinafter authorized between the Issuer and Wachovia
Bank, National Association, Houston, Texas, constitutes an agreement of the kind authorized and permitted
by said Chapter 1207, Texas Government Code, and Wachovia Bank, National Association, Houston,
Texas, is so named as the Escrow Agent in accordance with Section 1207.061, Texas Government Code;
and
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity
within 20 years of the date of the bonds hereinafter author/zed; and
WHEREAS, the bonds hereinafter authorized and designated are to be issued and delivered
pursuant to Chapter 1207, Texas Government Code; and
WHEREAS, the meeting at which this Ordinance has been adopted 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.
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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 ofthe CITY
OF COPPELL, TEXAS (the "Issuer") are hereby authorized to be issued and delivered in the aggregate
pnncipal amount of $17,345,000 for the purpose of refunding the Refunded Obligations.
Section2. DESIGNATIONOFTHEBONDS. Eachbondissuedpursuanttothis Ordinance
shall be designated: "CITY OF COPPELL, TEXAS GENERAL OBLIGATION REFUNDING
BOND, SERIES 2005", and initially there shall be issued, sold, and delivered hereunder a single fully
registered bond, without interest coupons, payable in annual installments of principal (the "Initial Bond"),
but the Initial Bond may be assigned and transferred and/or convened into and exchanged for a like
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. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNEP~ AND CHARACTERISTICS OF THE flViTIAL BOND. (a) The Initial Bond
is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered Bond, without
interest coupons, dated February 1, 2005, in the denomination and aggregate principal amount of
$17,345,000 numbered R-l, payable in annual installments of principal to the initial registered owner
thereof, to-wit MORGAN KEEGAN & COMPANY, INC., or to the registered assignee or assignees of
said Bond or any portion or portions thereof (in each case, the "registered owner"), with the annual
installments of pnncipal of the Initial Bond to be payable on the dates, respectively, and in the principal
amounts, respectively, stated in the FORM OF INITIAL 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 o£ principal thereof, (ii) may be assigned and transferred, (iii) may be convened 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 ~ BOND set forth in ~is Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Bond shall bear interest
from the date of the Initial Bond and will be calculated on the basis ora 360-day year of ~elve 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 rates and on the dates stated in the FORM OF INITIAL BOND set forth in this
Ordinance.
Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the
Imtial Bond, shall be substantially as follows:
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NO. R-1
FORM OF INITIAL BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL, TEXAS
GENERAL OBLIGATION REFUNDING BOND, SERIES 2005
$17,345,000
The CITY OF COPPELL, in DALLAS AND DENTON COLTNTIES (the "Issuer"), being a
political subdivision of the State of Texas, hereby promises to pay to
MORGAN KEEGAN & COMPANY, INC.
or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each case, the
"registered owner") the aggregate principal amount of
SEVENTEEN MILLION THREE HUNDRED FORTY-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
2006 $90,000 2014 $1,480,000
2007 95,000 2015 1,545,000
2008 505,000 2016 1,620,000
2009 1,305,000 2017 1,710,000
2010 1,360,000 2018 1,235,000
2011 1,420,000 2019 1,295,000
2012 1,475,000 2020 720,000
2013 1,490,000
and to pay interest, from the date of this Bond hereinafter stated, on the balance of each such installment
of principal, respectively, from time to time remaining unpaid, at the rates as follows:
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matUrity 2006, 2.50
matUrity 2007, 2.50
maturity 2008, 3.00
maturity 2009, 3.00
maturity 2010, 4.50
maturity 2011, 3.25
maturity 2012, 3.50
maturity 2013, 3.50
maturity 2014,
maturity 2015,
maturity 2016,
maturity 2017,
maturity 2018,
matunt, 2019,
maturity 2020,
3.75
5.00
5.00
5.00
5.00
5.00
5.00
with said interest being payable on August 1, 2005, and semiannually on each February 1 and August 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 Agent/Registrar 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 Agen'dRegistrar 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 154 day of the month next preceding each such date (the "Record
Date") on the Registration Books kept by the Paying AgenffR. egistrar, as hereinafter described, or by such
other method acceptable to the Paying Agent/Registrar 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 will make available to the Paying Agent/Registrar,
from 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 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 holiday, 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 author/zed 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 shall be dated February 1, 2005, and has been authorized in accordance with the
Constitution and laws of the State of Texas, in the principal amount of $17,345,000 for the purpose of
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refunding certain outstanding obligations of the Issuer.
ON FEBRUARY 1,2014, or 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, and the mount 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 this Bond may be redeemed only in 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 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 send, mail, or 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 with or as a prereqms~te
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 published and if due provision 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 fight 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. Ifa portion of any Bond shall be redeemed
a substitute Bond or Bonds having the same maturity date, beating interest at the same rate, tn 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, 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 Agent/Registrar for cancellation, together with proper instruments of assignment,
in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment
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 this 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 evidence the assignment of this Bond or any such portion
or portions hereof by the initial registered owner hereo£ 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 imtial 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/Registrar 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 this 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 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~
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid or
unredeemed principal balance hereof, may be convened into and exchanged for a like 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 hereof, or to the initial registered owner as to any
portion of this Bond which is not being assigned and transferred by the imtial registered owner, in any
denomination or denominations in any integral 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 AgenffRegistrar 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 convened 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 this Bond or portion hereof for which the substitute bond is being exchanged, and shall bear interest at
the rate applicable to and bome 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 installment of principal of this 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 this Bond or any portion hereof may be
assigned and transferred, and convened, subsequently, as provided in the Bond Ordinance. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, 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 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 prepayment or redemption prior to maturity, within 45 days prior to its prepayment or
redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond 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 owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, sold, and delivered; that ail 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 ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Bond, as such mterest and principai come due, have
been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for
such payment, within 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,
acknowledges 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.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer and countersigned with the manuai or facsimile signature
of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed, or placed
in facsimile, on this Bond.
City Secretary
Mayor
(CITY SEAL)
FORM OF REGISTRATION CERTII~ICATE
OF TIIE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public
Accounts of the State of Texas.
Wimess my signature and seai this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. (a) ~
Transfer. The Issuer shall keep or cause to be kept at the principal corporate trust office of WACHOVIA
BANK, 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/Registrar as its registrar and transfer agent to keep such books or records and
8
make such transfers and registrations under such reasonable regulations as the Issuer and Paying
Agent/Registrar 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 it 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 required by law, shall not permit their inspection
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 denominations of any integral multiple
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 SUBS'II1 U lk~ 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 which 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 imtial 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 exchanged. 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 author/zed 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 transfer 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 porUon or poraons
thereof, in the same form and manner, and with the same effect, as provided in Section 6(d), below, for
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the conversion and exchange of Bonds by any registered owner of aBond. The Issuer shall pay the Paying
Agent/Registrar'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 govemmental
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, (ii) with respect to any Bond or any portion thereof called for redemption prior
to maturity, within 30 days prior to its redemption date.
(b) ~ 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 this 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 valid and effectual to satisfy and discharge the liability 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 Ager[t/Registrar
to act as the paYing agent for paying the principal of and interest on the Bonds, and to act as ~ts 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 this 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 (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business
days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of
each 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; Authenhcation. Each Bond issued and delivered
pursuant to this Ordinance, to the extent of the unpaid or unredeemed pnnc~pal balance or principal amount
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 SUBSIrrLrrE BOND set forth in this
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 whtmg
by such registered owner or such assignee or assignees, in an aggregate principal mount 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
10
Initial Bond shall have a single stated principal mattmly 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 which 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 a portion of any Bond (other than the imtial Bond) shall be redeemed
prior to its scheduled maturity as provided herein, a substitute Bond or Bonds having the same maturity
date, beating interest at the same rate, 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, will be issued to the registered owner upon surrender thereof for cancellation. If any Bond
or portion thereof (other than the Initial 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 registered bond delivered in conversion of and exchange for or
replacement of any Bond or portion thereof as permitted 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 bnt 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 it 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. TH]E 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 is 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 ofabond, bonds, or aporfion of a bond or bonds of an issue which originally was approved
by the Attomey 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 Representat~
An authorized 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
11
outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all
Bonds surrendered for 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 Initial Bond which originally was issued
pursuant to this Ordinance, approved by the Attomey General, and registered by the Comptroller of Public
Accounts. The Issuer shall pay the Paying Agent/Registrar'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 exemise of such privilege of conversion and exchange. The
Paying Agent/Registrar shall not be required to make 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 General. 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, (iii) 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 SUBS 1[1 U'I~ 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 AgenffRegistrar 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 AgenffRegistrar 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 Payin~ A~ent/Re~istrar. The Issuer covenants with the registered owners of the
Bonds that at all times while the Bonds are outstanding the Issuer will provide a competent and legally
qualified bank, trust company, financial institution, or other agency to 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 Agent/Registrar (or its successor by merger, acquisition, or other method) should resign
12
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/Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all 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 will cause a written notice
thereof to be sent by the new Paying Agent/Registrar 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
AgenffRegistrar. By accepting the position and performing 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 AgentfRegistrar.
(h) Book-En~. The Bonds issued in exchange for the Bonds initially issued to the
purchaser specified herein shall be initially issued in the form of a separate single fully registered Bond for
each of the maturities thereo£ Upon initial issuance, the ownership of each such Bond shall be registered
in the name of Cede & Co., as nominee of Depository Trust Company of New York CDTC"), and except
as provided in subsection (i) 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 limiting the
immediately preceding sentence, the Issuer and the PaYing Agent/Registrar shall have no responsibility or
obligataon w/th respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with
respect to any ownership interest in 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 (iii) 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 principal of,
premium, if any, or interest on, as the case may be, the Bonds. Notwithstanding any other provision 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, with
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 provided
in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be
valid and effective to fully satisfy and discharge the Issuers obligations with respect to payment of
principal of, premium, if any, and interest on, or as the case may be, the Bonds to the extent of the sum or
sums so paid. No person other than an owner, as shown in the Registration Books, shall receive a Bond
certificate evidencing 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
AgenffRegistrar 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
mailed to the registered owner at the close of business on the Record Date, the word "Cede & Co." in this
13
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 in the representation letter of the Issuer to DTC and that it is in the
best interest of the 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 securihes depository or (ii) notify DTC and DTC Participants 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 Registration Books in 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 of this Ordinance.
0) .P_3yments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrmy, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments
with respect to principal of, premium, if any, and interest on, or as the case may be, such Bond and all
notices with respect 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, with such appropriate
variations, omissions, or insertions as are permitted or required by this Ordinance.
FORM OF SUBSTITUTE BOND
NO.
PRINCIPAL AMOUNT
$
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL, TEXAS
GENERAL OBLIGATION REFUNDING BOND, SERIES 2005
INTEREST RATE
MATURITY DATE DATE OF ORIGINAL ISSUE
Febmaxy 1, 2005
CUSIP NO.
ON THE MATURITY DATE specified above, the CITY OF COPPELL, in DALLAS AND
DENTON COUNT[ES, TEXAS (the "Issuer"), being a political subdivision of the State of Texas, hereby
14
promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered (~wner") the principal
amount of
and to pay interest thereon from February 1, 2005 to the maturity date specified above, at the interest rate
per annum specified above; with interest being payable on August 1, 2005 and semiannually thereafter on
each February 1 and August 1, except that if the date of authentication of this Bond is later than July 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 United
States of America, without exchange or collection charges. The principal of this Bond shall be paid 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 mast office of WACHOVIA BANK,
NATIONAL ASSOCIATION, HOUSTON, TEXAS, which is the "Paying Agent/Registrar" for this
Bond. The payment ofinterest 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 hereinafter provided; and such check or draft shall be sent by the
Paying Agent/Registrar by United States Mall, 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/Registrar 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, mterest payment date, and accrued interest
payment date for this Bond it will make available to the Paying Agent/Registrar, from 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 holiday, 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 if made on the original date payment was due.
TH/S BOND is one of an issue of Bonds initially dated February 1, 2005, authorized in accordance
with the Constitution and laws of the State of Texas in the principal amount of $17,345,000 for the purpose
15
of refunding certain outstanding obligations of the Issuer.
ON FEBRUARY 1,2014, or 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, 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 this Bond may be redeemed only in an integral multiple of $5,000), at the redemption price of
the pnncipal amount, plus accrued interest to the date fixed for prepayment or 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 send, mail, or 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 ~u~h
notice as required above shall be the only notice actually required in connection with or as a prereqms~te
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 AgenXYRegistrar 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 published and if due provision 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, beating interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the whtten 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 ORPORTIONS 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 assignment and transfer, this Bond
must be presented and surrendered to the Paying AgenffRegistrar, together with proper instruments of
assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing
assignment 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 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 attomey or representative, to evidence the assignment 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 preWous registered owner in the case of the assignment
16
and transfer of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion
of and exchange for this Bond, ail in the form and manner as provided in the next paragraph hereof for the
conversion and exchange of other Bonds. The Issuer shail pay the Paying Agent/Registrar's standard or
customary fees and charges for making such transfer, but the one requesting such transfer shail pay any
taxes or other govemmentai charges required to be paid with respect thereto. The Paying Agent/Registrar
shail not be required to make transfers of registration of this Bond or any portion hereof (i) during the
period commencmg with the close of business on any Record Date and ending with the opening of business
on the next following principai or interest payment date, or, (ii) with respect to any Bond or any pomon
thereof cailed for redemption prior to maturity, within 45 days prior to its redemption date. The registered
owner of this Bond shail be deemed and treated by the Issuer and the Paying Agent/Registrar as the
absolute owner hereof for ail 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, this
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 principai amount of fully registered
bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as
the case may be, having the same maturity date, and beating interest at the same rate, in any denomination
or denominations in any integrai 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, ail in accordance with the form and procedures set forth in the Bond
Ordinance. The Issuer shail pay the Paying Agent/Registrar'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 govemmentai 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 shail not be required to make any such conversion and exchange (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 principai or interest payment date, or, (ii) with respect to any Bond or portion thereof
cailed for redemption prior to maturily, 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
otherV~se ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will
appoint a competent and legaily quaiified 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 this Bond has been duly and vaiidly
authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorizataon, issuance, and delivery of this Bond have
been performed, existed, and been done in accordance with law; that ad vaiorem taxes sufficient to provide
for the payment of the interest on and principai of this Bond, as such interest and principai come due, have
been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged for
such payment, within the limit prescribed by law.
17
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,
acknowledges 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 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 of the Issuer and countersigned with the manual or facsimile signature
of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or
placed in facsimile, on this Bond.
City Secretary
Mayor
(CITY SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION 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 is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described
in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or in 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
By.
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized representaUve
or attorney thereof, hereby assigns this Bond to
18
(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 regtstratlon of this Bond on the Paying Agent/Reglstrar's Registration Books vnth 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.
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 depositmy 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 goveming
body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient
to raise and produce the money required to pay the interest on the Bonds as such interest comes due, and
to provide and mamtam 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 sinking fund each year).
Said tax shall be based on the latest approved tax rolls of the Issuer, with 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 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.
Chapter 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 valid, effective, and perfected. Should Texas law
be amended at any time while the Bonds are outstanding and unpaid, the result of such amendment being
that the pledge of the taxes granted by the Issuer under this Section is to be subject to the filing
requirements 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
19
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") within the meaning of this
Ordinance, except to the extent provided in subsection (d) of this 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 will insure the availability, without reinvestment, of sufficient money to provide for
such payment, and when proper arrangements have been made by the Issuer with the Paying
Agent/Registrar for the payment of its services until 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 Ordinance, 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 which 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 Sectmfies or the substitution of other Defeasance Securities upon the satisfaction
of the requirements specified in subsection 9(a)(i) or (ii). All income from such Defeasance Sectmties
received by the Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with
respect to which 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 that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the
date oft_he purchase thereof are rated as to investment quality by a nationally recognized investment rating
firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a
county, municipality, or other political subdivision of a state that have been refunded and that, on the date
the goveming body of the Issuer adopts or approves the proceedings authorizing the financial arrangements
are rated as to investment quality by a nationally recognized investment rating finn not less than AAA or
its equivalent.
(d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall
20
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. Application for replacement of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made by the registered owner thereof to the Paying AgenffRegistrar.
In every case of loss, theft, or destruction of a Bond, the registered owner applying for a replacement bond
shall furnish to the Issuer and to the Paying Agent/Registrar 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 furmsh 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 Default 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 pnncipal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the
payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead
of issuing a replacement Bond, provided security or indemnity is fUrmshed as above provided in this
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 in 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
with any and all other Bonds duly issued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. 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 provided in Section 6(d) of this Ordinance for Bonds issued in
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conversion and exchange for other Bonds.
Section 11. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION; CUSIP NUMBERS; AND CONTfNGENT INSURANCE PROVISION, IP
OBTAINED. The Mayor of the Issuer is hereby authorized 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 Pubtic Accounts (or a deputy designated in writing to act for said Comptroller)
shall manually sign the Comptroller's Registration Certificate on the Initial Bond, and the seal of said
Comptroller shall be impressed, or placed in facsimile, on the lmtial Bond. The approving legal opinion
of the Issuer's 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 provided by the Insurer.
Section 12. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend
this Ordinance subject to the following terms and conditions, to-mt:
(a) The Issuer may from time to time, without the consent of any holder, except as otherwise
required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity,
defect or omission in this Ordinance that does not materially adversely affect the interests of the holders,
(ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not
be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the
interests of the holders, (v) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or
corresponding provisions of federal laws from time to time in effect, or (iv) make such other provisions
in regard to matters or questions arising under this Ordinance as shall not be inconsistent with the
provisions of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially
adversely affect the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in principal
amount 51% of the aggregate principal amount of then outstanding Bonds that are the subject of a
proposed amendment shall have the right from time to time to approve any amendment hereto that may
be deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of
the holders in aggregate principal amount of the then outstanding Bonds, nothing herein contained shall
permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the
Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce the rate of interest bome by any of the outstanding Bonds;
(3)
Reduce the amount of the principal of, or redemption premium, if any, payable on
any outstanding Bonds;
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(4)
Modil~ the terms of payment of principal or of interest or redemption premium on
outstanding Bonds or any of them or impose any condition with respect to such
payment; or
(5)
Change the mimmum percentage of the principal amount of any series of Bonds
necessary for consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer
shall send by U.S. mail to each registered owner of the affected Bonds a copy of the proposed amendment
and cause notice of the proposed amendment to be published at least once in a financial publication
published in The City of New York, New York or in the State of Texas. Such published notice shall briefly
set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the office of
the Issuer for inspection by all holders of such Bonds.
(d) Whenever at any time within one year from the date of publication of such notice the Issuer
shall receive an instrument or instruments executed by the holders of at least 51% in aggregate principal
amount of all of the Bonds then outstanding that are required for the amendment, which instrument or
instruments shall refer to the proposed amendment and that shall specifically consent to and approve such
amendment, the Issuer may adopt the amendment in substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section,
this Ordinance shall be deemed to be modified and amended in accordance with such amendatory
Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders of such affected
Bonds shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment.
(f) Any consent given by the holder of a Bond pursuant to the provisions of this Section shall
be irrevocable for a period of six months from the date of the publication of the notice provided for in this
Section, and shall be conclusive and binding upon all furore holders of the same Bond during such period.
Such consent may be revoked at any time after six months from the date of the publication of said notice
by the holder who gave such consent, or by a successor in rifle, by filing notice with the Issuer, but such
revocation shall not be effective if the holders of 51% in aggregate principal amount of the affected Bonds
then outstanding, have, prior to the attempted revocation, consented to and approved the amendment.
For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon the
registration of the ownership of such Bonds on the registration books kept by the Paying Agent/Registrar.
Section 13. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS. (a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any
action that would adversely affect, the treatment of the Bonds as Obligation described in section 103 of
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:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds (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, if more than 10 percent of the proceeds or the
23
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 Ordinance 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;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) 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" that is "related" and not "disproportionate," within
the meaning of section 141(b)(3) of the Code, to the govemmental use;
(3) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percem of the proceeds of the Bonds (less amounts deposited into a reserve fund,
if any) is directly or indirectly used to finance loans to persons, other than state or local
govemmental umts, in contravention of section 141 (c) of the Code;
(4) to refrain from taking any action that would otherwise result in the Bonds being
treated as "private acfiv/ty bonds" within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment
property (as defined in section 148(b)(2) of the Code) that produces a matehally higher yield over
the term of the Bonds, other than investment property acquired with -
(A) proceeds of the Bonds invested for a reasonable temporary period of 3
years or less or, in the case of an advance refunding bond, for a period of 30 days or less
until such proceeds are needed for the purpose for which the bonds are issued, and in the
case of a current refunding bond, for a period of 90 days or less,
(B) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148-1 (b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(7) 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 applicable, section
149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once dunng each five-year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of
24
the "Excess Earnings," within the meamng of section 148(f) of the Code and to pay to the United
States of Amehca, 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.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate Fund"
is hereby established by the Issuer for the sole benefit of the United States of America, and such Fund shall
not be subject to the claim of any other person, including without lirmtation the Bondholders. The Rebate
Fund is established for the additional purpose of compliance with section 148 of the Code.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer
understands that the term "proceeds" includes "disposition proceeds" as defined in 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 compliance with the Code and any regulations or ratings
promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or
rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Bonds,
the Issuer will not be required to comply with any covenant contained herein to the extent that such failure
to comply, in the opinion of nationally recognized 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 that impose additional requirements 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 interest
on the Bonds under section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes
and directs the Mayor to execute any documents, certificates or reports required by the Code and to make
such elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the
purpose for the issuance of the Bonds.
(d) Disposition of Proiect. The Issuer covenants that the Project 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 opinion 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 in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not
be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not
adversely affect the excludability for federal income tax proposes from gross income of the interest.
Section 14. CONTINUINGDISCLOSURE. (a) AnnualReports. (i)TheIssuer shall provide
annually to each NRMSIR and any SID, within four months after the end of each fiscal year ending in or
after 2005, financial information and operating data with respect to the Issuer of the general type included
in the final Official Statement authorized by Section 16 of this Ordinance, being the information described
in Exhibit A. Any financial statements so to be provided shall be prepared in accordance with the
accounting principles described in Exhibit 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
comrmssions an audit of such statements and the audit is completed within the period during which they
must be provided. If the audit of such financial statements is not completed within such period, then the
25
Issuer shall provide unaudited financial statements by the required time and shall provide audited financial
statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report on
such statements become available.
(ii) If the Issuer changes its fiscal year, it 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
required to provide financial information and operating data pursuant to this Section. The financial
information and operating data to be provided pursuant to this Section may be set forth in full in one or
more documents or may be included by specific reference to any document (including an official statement
or other offering document, if it is 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 NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is
material within the meaning of the federal securities laws:
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
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 tax 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
Rating 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 in accordance with this Ordinance or applicable law that
causes Bonds no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the holders and beneficial owners of
the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable
right, remedy, or claim hereunder to any other person. The 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
26
as expressly provided herein. The Issuer does not make any representation or warranty concenUng such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
(iii) LrNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE HOLDER
ORBENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CoNrrRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED
1N 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 default 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 (1) the provisions of this Section, as
so amended, would have permitted an underwhter to purchase or sell Bonds in the primary offering of the
Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule
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 Ordinance that
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 ofthe holders and beneficial owners ofthe Bonds. 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. 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.
(d) Definitions. As used in this Section, the folloWing terms have the meanings ascribed to such
terms below:
"MSRB" means the Mumcipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time
to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
27
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department, officer, or
agency thereof as, and determmed by the SEC or its staff to be, a state information depository
within the meanmg of the Rule from time to time.
Section 15. SALE OF BONDS. (a) The Bonds are hereby sold and shall be delivered to
MORGAN KEEGAN & COMPANY, INC. AND SOU'IlqWEST SECURITIES (the "Underwriters")
for the purchase price of $18,165,486.11 (representing the par mount of the Bonds of plus a net
reoffering premium of $933,434.00 less an Underwriters' discount on the Bonds of $112,947.89) plus
interest accrued (accrued interest to be deposited into the Interest and Sinking Fund) thereon to date of
delivery pursuant to the terms and provisions of a bond purchase agreement w/th the Underwriters. It is
hereby officially found, deterrmned, and declared that the Bonds have been sold pursuant to the terms and
provisions ora bond purchase agreement in substantially the form attached hereto as Exhibit B, which the
Mayor 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 obtainable. The Initial Bond
shall be registered in the name of MORGAN KEEGAN & COMPANY, 1NC.
(b) The Mayor and Mayor Pro Tem, the City Manager, City Secretary and Director of Finance,
and each of them, shall be and are hereby expressly author/zed, empowered and directed from time to time
and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the
name and under the corporate seal and on behalf of the Issuer a Paying Agent/Registrar Agreement with
the Paying Agent]Registrar and all other instruments, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bonds, the sale
of the Bonds and the Official Statement. In case any officer whose signature shall appear on any Bond
shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid
and sufficient for all purposes the same as if such officer had remained in office until such delivery.
Section 16. 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 disthbution of such Official Statement in the re, offering 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 Preliminary Official Statement, dated February 1, 2005, 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 17. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. The
Mayor of the Issuer is hereby authorized and directed to execute and deliver and the City Secretary of the
Issuer is hereby author/zed and directed to attest an Escrow Agreement in substantially the form attached
hereto as Exhibit C In Addition, the Mayor is author/zed to execute such subscription for the purchase
ofU. S. Treasury Securities, State and Local Government Series, or the purchase of direct obligations of
the United States of America as may be necessary for the Escrow Fund, and to authorize such
contributions as may be necessary for the Escrow Fund.
28
Section 18. REDEMPTION OF REFUNDED OBLIGATIONS. (a) The Issuer hereby directs
that the Refunded Obligations be called for redemption on the dates set forth in Exhibit D attached hereto.
Each of such Refunded Obligations shall be redeemed at the redemption price of par plus accrued interest.
The City Secretary is hereby authorized and directed to issue or cause to be issued the Notice of
Redemption of the Refunded Obligations in substantially the form set forth in Exhibits D-land D-2
attached hereto, to Wells Fargo Bank Minnesota, N.A. and The Bank of New York Trust Company, N.A.,
respectively, the paYing agents for the Refunded Obligations.
(b) In addition, the paying agents for the Refunded Obligations are hereby directed to provide
the appropriate notices of redemption as specified by the ordinances authorizing the issuance of Refunded
Obligations and are hereby directed to make approphate arrangements so that the Refunded Obligations
may be redeemed on their redemption dates. The Refunded Obligations shall be presented for redemption
at the paying agent therefor, and shall not bear interest after the date fixed for redemption.
(c) The source of funds for payment of the principal of and interest on the Refunded Obligations
on their respective maturity or redemption dates shall be from the funds deposited pursuant to the Escrow
Agreement approved in Section 17 of this Ordinance.
(d) The refunding of the Refunded Obligations will result in the partial refunding of certain
maturities of the Refunded Obligations. The paying agent/registrar for the Refunded Series 1997 Bonds
and the Series 1997 Certificates of Obligation is instructed to designate at random and by lot which of the
Series 1997 Bonds and the Series 1997 Certificates of Obligation will be payable from and secured solely
from ad valorem taxes of the Issuer pursuant to the ordinances of the Issuer authorizing the issuance of
such Series 1997 Bonds and Series 1997 Certificates of Obligation. For purposes of such determination
and designation, all Series 1997 Bonds and Series 1997 Certificates of Obligation registered in
denominations greater than $5,000 shall be considered to be registered in separate $5,000 denominations.
The paying agent/registrar for such obligations shall notify by first-class mall all registered owners of all
affected Series 1997 Bonds and Series 1997 Certificates of Obligation of such maturities that: (i) a portion
of such Series 1997 Bonds and Series 1997 Certificates of Obligation have been refunded and are secured
until final maturity solely with cash and investments maintained by the Escrow Agent in the Escrow Fund,
(ii) the principal amount of all affected Series 1997 Bonds and Series 1997 Certificates of Obligation of
such maturities registered in the name of such registered owner that have been refunded and are payable
solely from cash and investments in the Escrow Fund and that the remaining principal amount of all
affected Series 1997 Bonds and Series 1997 Certificates of Obligation of such maturities registered in the
name of such registered owner, if any, have not been refunded and are payable and secured solely from
ad valorem taxes of the Issuer described in the respective ordinances authorizing the issuance of such
Series 1997 Bonds and Series 1997 Certificates of Obligation, (iii) the registered owner is required to
submit his or her Series 1997 Bonds and Series 1997 Certificates of Obligation to the paying
agent/registrar, for the purposes ofreregistermg such registered owner's bonds and assigning new CUSIP
numbers in order to distinguish the source of payment for the principal and interest on such Series 1997
Bonds and Series 1997 Certificates of Obligation, and (iv) payment of principal of and interest on such
Series 1997 Bonds and the Series 1997 Certificates of Obligation may, in some circumstances, be delayed
until such Series 1997 Bonds and Series 1997 Certificates of Obligation have been reregistered and new
CUSIP numbers have been assigned as required by (iii) above.
29
Section 19. REASONS FOR REFUNDING. The Issuer deems it advisable to issue the
refunding bonds in order to achieve a gross savings of approximately $1,759,227 and a present value
savings of approximately $1,152,130.
Section 20. INSURANCE. The Issuer approves the insurance of the Bonds by XL Capital
Assurance Inc. and the payment of such premium, and agrees to comply with the terms of the "Provisions
Relating to Bond Insurance" attached hereto as Exhibit E and incorporated herein.
Section 21. PUBLIC NOTICE. It is hereby officially found and determined that public notice
of the time, place and purpose of this meeting at which this Ordinance has been adopted was given, all as
required by Chapter 551, Texas Government Code.
Section 22.
passage.
EFFECTIVE DATE. This Ordinance shall become effective immediately upon
30
APPROVED THIS THE 8th DAY OF FEBRU
City Attomey ~///
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 16 of this 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 in such Section are the accounting principles described in the
notes to the financial statements referred to in paragraph 1 above.
EXHIBIT B
PURCHASE AGREEMENT
THE PURCHASE AGREEMENT HAS BEEN OMITTED AT THIS POINT AS IT
APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT.
EXHIBIT C
ESCROW AGREEMENT
THE ESCROW AGREEMENT HAS BEEN OMITTED AT THIS POINT AS IT
APPEARS IN EXECUTED FORM ELSEWHERE IN THIS TRANSCRIPT.
EXHIBIT D-1
CITY OF COPPELL, TEXAS
NOTICE OF REDEMPTION
CUSI~ NO. PREFIX 217482
NOTICE IS HEREBY GIVEN that the City of Coppell, Texas has called for redemption thc outstanding
Bonds and Certificates of Obligation of the City described as follows:
CITY OF COPPELL, TEXAS General Obligation Refunding and Improvement Bonds, Series
1997, dated August 15, 1997, maturities February 1, 2008 through February 1, 2017, with the
principal amotmt being redeemed as shown below, to the call date of the Bonds so called for
redemption at The Bank of New York Trust Company, N.A., at a redemption price equal to the
principal amount to be redeemed plus accrued interest to the call date. Call Date: February 1, 2007·
ORIGINAL
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT
BEING REDEEMED
02/01/2008 460,000 210,000
02/01/2009 480,000 220,000
02/01/2010 505,000 230,000
02/01/2011 525,000 240,000
02/01/2012 565,000 260,000
02/01/2013 535,000 245,000
02/01/2014 405,000 185,000
02/01/2015 430,000 195,000
02/01/2016 450,000 205,000
02/01/2017 475,000 220,000
On February' 1, 2007, interest on the Bonds shall cease to accrue and be payable.
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of Obligation, Series
1997, dated August 15, 1997, maturities February 1, 2008 through February 1, 2017, with the
principal amount being redeemed as shown below, to the call date of the Certificates of Obligation
so called for redemption at The Bank of New York Trust Company, N.A., at a redemption price
equal to the principal amount to be redeemed plus accrued interest to the call date. Call date:
February 1, 2007.
ORIGINAL
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT
BEING REDEEMED
02/01/2008 95,000 45,000
02/01/2009 100,000 45,000
02/01/2010 110,000 50,000
02/01/2011 115,000 55,000
02/01/2012 120,000 55,000
02/01/2013 125,000 55,000
02/01/2014 130,000 60,000
02/01/2015 140,000 65,000
02/01/2016 145,000 65,000
02/01/2017 155,000 70,000
On FebruaD' 1. 2007, interest on the Certificates of Obligation shall cease to accrue and be payable.
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of Obligation, Series
1997-A. dated October 1, 1997, maturities February 1, 2008 through February 1, 2017, now
outstanding in the principal amount of $1,965,000, to the call date of the Certificates of Obligation
so called for redemption at The Bank of New York Trust Company, N.A.. at a redemption price
equal to the principal amount to be redeemed plus accrued interest to the call date. Call Date:
February 1, 2007.
On February I. 2007. interest on the Certificates of Obligation shall cease to accrue and be payable.
THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the
issuance of the aforementioned Bonds and Certificates of Obligation and in accordance with the recitals and provisions
of said Bonds and Certificates of Obligation.
NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment
of said Bonds and Certificates of Obligation called for redemption with funds sufficient to pay the principal amount
of said Bonds and Certificates of Obligation and the interest thereon to the redemption date. In the event said Bonds
and Certificates of Obligation, or any of them are not presented for redemption by the date fixed for their redemption~
they shall not thereafter bear interest.
IN COMPLIANCE with Section 3406 of the Internal Revenue Code of 1986, as amended, the redeeming
institution is required to withhold a tax on your holdings redeemed unless they am provided with a W-9 Form certifying
your social security number or federal employer tax identification number. Any questions regarding this notice may
be addressed to Wells Fargo Bank Minnesota, N.A., Corporate Trust Operations, Attention: Bondholder
Communication, 1-800-344-5128.
NOTICE IS FURTHER GIVEN that the Bonds and Certificates of Obligation should be submitted to either
of the following addresses:
For certified or registered mail:
Wells Fargo Bank Minnesota, N.A.
Corporate Trust Operations
P. O. Box 1517
Minneapolis, Minnesota 55480-1517
For overnight delivery:
Wells Fargo Bank Minnesota,
N.A.
Corporate Trust Operations
6th and Marquette
Minneapolis, Minnesota 55479
For hand delivery:
Wells Fargo Bank Minnesota.
N.A.
Corporate Trust Operations
608 2nd Avenue South, 12th
Floor
Minneapolis, Minnesota 55479
Doug Stover, Mayor
City of Koppel
EXHIBIT D-2
CITY OF COPPELL, TEXAS
NOTICE OF REDEMPTION
CUSIP NO. PREFIX 217482
NOTICE IS HEREBY GIVEN that the City of Coppell, Texas has called for redemption the outstanding Bonds and
Certificates of Obligation of the City described as follows:
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of Obligation, Series 1999, dated
January 15, 1999, maturities February 1, 2009 through February 1, 2019, now outstanding in the principal
amount of $2,175,000, to the call date of the Certificates of Obligation so called for redemption at The Bank
of New York Trust Company, N.A., at a redemption price equal to the principal amount to be redeemed plus
accrued interest to the call date. Call Date: February 1, 2007.
On February 1, 2007, imerest on the Certificates of Obligation shall cease to accrue and be payable.
CITY OF COPPELL, TEXAS Combination Tax and Revenue Certificates of Obligation, Series 1999A,
dated September 1, 1999, maturities August 1, 2009 through August 1, 2019, now outstanding in the
principal amount of $3,020,000, to the call date of the Certificates of Obligation so called for redemption
at The Bank of New York Trust Company', N.A., at a redemption price equal to the principal amount to be
redeemed plus accrued interest to the call date. Call Date: August 1, 2008.
On August 1, 2008, interest on the Certificates of Obligation shall cease to accrue and be payable.
CITY OF COPPELL, TEXAS General Obligation Bonds, Series 2000, dated May 1, 2000, maturities
August 1, 2009 through August 1, 2020, now outstanding in the principal amount of $7,235,000, to the call
date of the Bonds so called for redemption at The Bank of New York Trust Company, N.A., at a redemption
price equal to the principal amount to be redeemed plus accrued interest to the call date. Call Date: August
1, 2008.
On August 1, 2008, interest on the Bonds shall cease to accrue and be payable.
THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the issuance
of the aforementioned Bonds and Certificates of Obligation and in accordance with the recitals and provisions of said Bonds
and Certificates of Obligation.
NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment of said
Bonds and Certificates of Obligation called for redemption with funds sufficient to pay the principal amount of said Bonds and
Certificates of Obligation and the interest thereon to the redemption date. In the event said Bonds and Certificates of
Obligation, or any of them are not presented for redemption by the date fixed for their redemption, they shall not thereatter
bear interest.
IN COMPLIANCE with Section 3406 of the Internal Revenue Code of 1986, as amended, the redeeming institution
is required to withhold a tax on your holdings redeemed unless they' am provided with a W-9 Form certifying your social
security number or federal employer tax identification number. Any' questions regarding this notice may be addressed to The
Bank of New York, New York, Corporate Trust Depamnent, Attention: Bondholder Relations, 1-800-882-6559.
NOTICE IS FURTHER GIVEN that the Bonds and Certificates of Obligation should be submitted to the following
address:
Mail Delivery or Hand DelivetW
The Bank of New York
Corporate Trust Operations
111 Sanders Creek Parkway
E. Syracuse, N.Y. 13057
Doug Stover, Mayor
City of Koppel
EXHIBIT E
PROVISIONS RELATING TO BOND INSURANCE
Notwithstanding anything to the contrary set forth in the Ordinance, the provisions set forth in this Exhibit
E shall control so long as the Bonds are insured by XL Capital Assurance Inc. CXLCA") and XLCA is not in
default under the insurance policy issued by XLCA guaranteeing the scheduled payment of principal of and
interest on the Bonds when due (the "Insurance Policy").
In accordance with the terms and conditions applicable to the insurance provided by XLCA, the City
covenants and agrees that, in the event the principal and interest due on the Bonds shall be paid by XLCA
pursuant to the policy referred to in this Section, the assignment and pledge of all funds and all covenants,
agreements and other obligations of the City to the registered owners of the Bonds shall continue to exist and
XLCA shall be subrogated to the rights of such owners; and furthermore, the City covenants and agrees that:
(a) If on the third Business Day prior to the related scheduled interest payment date or principal
payment date ("Payment Date"), there is not on deposit with the City under this Ordinance, after making all
transfers and deposits required under this Ordinance, money sufficient to pay the principal of, and interest on, the
Bonds due on such Payment Date, the City shall give notice to XLCA and to its designated agent (if any) (the
"Insurer's Fiscal Agent"), by telephone or telecopy, of the amount of such deficiency by 10:00 A.M., New York
City time, on such Business Day. If, on the Business Day prior to the related Payment Date, there is not on
deposit with the Paying Agent/Registrar moneys sufficient to pay the principal of, and interest on, the Bonds due
on such Payment Date, the Paying Agent/Registrar shall make a claim under the Insurance Policy and give notice
to XLCA and XLCA' s Fiscal Agent (if any) by telephone of the amount of any deficiency in the amount available
to pay principal and interest, and the allocation of such deficiency between the amount required to pay interest on
the Bonds and the amount required to pay prmcipai of the Bonds, confirmed in writing to XLCA and XLCA's
Fiscal Agent by 10:00 A.M, New York City time, on such Business Day, by delivering the Notice of Nonpayment
and Certificate.
(b) For the purposes of the preceding paragraph, "Notice" means telephonic or telecopied notice,
subsequently confirmed in a signed writing, or written notice by registered or certified mail, from the Paying
Agent/Registrar to XLCA, which notice shall specit~ (1) the name of the enhly making the claim, (2) the policy
number, (3) the claimed amount and (4) the date such claimed amount will become Due for Payment.
"Nonpayment" means the failure of the City to have provided sufficient funds to the Paying Agent/Registrar for
payment in full of all principal of, and interest on, the Bonds that are Due for Payment. "Due for Payment," when
referring to the principal of Bonds, means when the stated mamrily date or mandatory redemption date for the
application of a required sinking fund installment has been reached and does not refer to any earlier date on which
payment is due by reason of call for redemption (other than by the application of required sinking fund
installments), acceleration or other advancement of maturity, unless XLCA shall elect, in its sole discretion, to
pay such principal due upon such acceleration; and when referring to interest on Bonds, means when the stated
date for the payment of interest has been reached. "Certificate" means a certificate in form and substance
satisfactory to XLCA as to the Paying Agent/Registrar's right to receive payment under the Insurance Policy.
(c) The Paying Agent/Registrar shall designate any portion of paymem of principal on Bonds paid
by XLCA at maturity on its books as a reduction in the principal amount of Bonds registered to the then current
owner, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to XLCA, registered in the
name of XLCA, as the case may be, in a principal amount equal to the amount ofprmcipai so paid (without regard
to authorized denominations); provided that the Paying Agent/Registrar's failure to so designate any payment or
issue any replacement Bond shall have no effect on the amount of principal or interest payable by the City on any
Bond or the subrogation fights of XLCA.
(d) The PaYing Agent/Registrar shall keep a complete and accurate record of all funds deposited by
XLCA into the Policy Payments Account (as hereinafter defined) and the allocation of such funds to payment of
interest on and principal paid with respect to any Bond. XLCA shall have the fight to inspect such records at
reasonable times upon reasonable notice to the Paying Agent/Registrar.
(e) Upon payment of a claim under the Insurance Policy, the Paying Agent/Registrar shall establish
a separate special purpose trust account for the benefit of the registered owners of Bonds referred to herein as the
"Policy Payments Account" and over which the Paying Agent/Registrar shall have exclusive control and sole right
of withdrawal. The Paying Agent/Registrar shall receive any amount paid under the Insurance Policy in trust on
behalf of registered owners of Bonds and shall deposit any such amount in the Policy Payments Account and
distribute such amount only for purposes of making the payments for which a claim was made. Such amounts
shall be disbursed by the Paying Agent/Registrar to registered owners of Bonds in the same manner as principal
and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of
Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the
check or wire transfer used to pay debt service with other funds available to make such payments.
(f) Funds held in the Policy Payments Account shall not be invested by the Paying Agent/Registrar
and may not be applied to satis~ any costs, expenses or liabilities of the Paying Agent/Registrar.
(g) Any funds remaining in the Policy Payments Account following a Bond payment date shall
promptly be remitted to XLCA.