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OR 2008-1211 Issurance of combination certificates of obligationCERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTIES OF DALLAS AND DENTON § CITY OF COPPELL § We, the undersigned officers of said City, hereby certify as follows: 1. The City Council of said City convened in REGULAR MEETING ON THE 14TH DAY OF OCTOBER, 2008, at the City Hall, and the roll was called of the duly constituted officers and members of said City Council, to-wit: Douglas N. Stover, Mayor Marvin Franklin, Mayor Pro Tem Tim Brancheau Jayne P. Peters Brianna Hinojosa-Flores Marsha Tunnell Billy Faught Karen Hunt Libby Ball, City Secretary and all of said persons were present, except the following absentees: ~AQ~-~-+ ~Rw~C~~ thus constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF COPPELL, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, TAXABLE SERIES 2008B, IN THE PRINCIPAL AMOUNT OF $6,500,000, APPROVING AN OFFICIAL STATEMENT AUTHORIZING THE EXECUTION OF A PURCHASE AGREEMENT, MAKING PROVISIONS FOR THE SECURITY THEREOF, AND ORDAINING OTHER MATTERS RELATING TO THE SUBJECT was duly introduced for the consideration of said City Council and read in full. It was then duly moved and seconded that said Ordinance be adopted; and, after due discussion, said motion carrying with it the adoption of said Ordinance, prevailed and carved by the following vote: AYES: All members of said City Council shown present above voted "Aye". NOES: None. 2. That a true, full and correct copy of the aforesaid Ordinance adopted at the Meeting described it the above and foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the adoption of .said Ordinance; that the persons named in the above and foregoing paragraph are the duly chaser, qualified and acting o~.cers and members of said Ci tS' Council as indicated therein; that each of the o~.cers and members of said City Council was duly and su~ciently notified officially and personally, in advance, of the time, place and p ase of the ~. aforesaid Meetuag, and that said Ordinance would be introduced and considered for adoption at said Meeting, and each of said o~cers and members consented, in advance, to the holding of said Meetin ~ ' ~ ~ ~ ~ far such purpose, and that said Meeting was open to the public and public notice of the tune, place and purpose of said meeting was given, all as re aired b Cha ter 5 51 Texas Government Cade. q Y p a 3. That the Mayor of said City has approved and hereby approves the aforesaid Ordinance; that the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the Mayor and the City Secretary of said City hereby declare that their signing of this Certificate shall constitute the signing of the attached and followui~ co~v of said Ordinance for all nurno~es. SIGNED AND SEALED THE 14TTH DAY GF t City Secr mayor (CITY SEAL) ORDINANCE NO.2oos- ~~~ ORDINANCE AUTHORIZING THE ISSUANCE OF CITY GF COPPELL, TEXAS COMBINATION TAX AND REVENUE CERTIFICATES GF OBLIGATION, TAXABLE SERIES 2DDSB, IN THE PRINCIPAL AMOUNT OF $6,SDD,D00, APPROVING AN OFFICIAL STATEMENT AUTHORIZING THE EXECUTION OF A PURCHASE 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 .deems it advisable to give notice of intention to issue Combinattion Tax and Certificates of Obligation, Taxable Series 2008B, ~"Certificates of Obligation"} in the maximum amaunt of $b,50D,000, for the acquisition of approximately 115 acres, together with the acquisition of approximately 3b0 acres fram the proceeds of the City's Combination Tax and Revenue Certificates of Obligatian, Series 200$A; being a total of approximately 475 acres all out of a txact of land of approximately ~4D acres known as Na~thLake property owned by Luminant, being located east of south Beltline, south of east Beltline, west of Valley Ranch Road being located in Irving and north of Hackberry Road, to be used in part for water system improvements including storage facilities and pumping station and in part for future municipal improvements, facilities and purposes, and for paying legal, fiscal, and engineering fees in connection with such projects; and WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be issued and delivered for cash pursuant to Subchapter C of Chapter 271 of the Local Government Code, together with the City of Cappella Texas Combination Tax and Revenue Certificates of Obligation, Series 2DD8A, in the principal amount of $2D,ODO,ODD, being authorized concurrently herewith; and WHEREAS, the City Council has heretofore, on the 12th day of August, 2008, adopted a resolution authorizing and directing the City Secretary to give notice of intention to issue Certificates of Obligation; and WHEREAS, said notice has been duly published in the Citizens Advocate, which is a newspaper of general circulation in said City, in its issues of August 15, 2008, August 2~, 2008, September 12, 20D8 and September l9, 2008; and WHEREAS, the City Council by Resolution of September ~3, DDB approved, ratified and affirmed such published Notice of Intention to issue Certificates of Obligation; and WHEREAS, the City received no petition from the qualified electors ofthe City protesting the issuance of such Certificates of Obligation; and WHEREAS, the meeting was open to the public and public notice of the time, place and purpose of said meeting was given pursuant to Chapter 55 1, Texas Government Code. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL CF THE CITY CF COPPELL: Section 1. AMOUNT` AND PURPOSE OF THE CERTIFICATES OF OBLIGATION. The certificate of obligation or certificates of obligation of the City of Goppell the "Issuer"}are hereby authorized to be issued and delivered, in the aggregate principal amount of $6,5DD,000, for the acquisition of approximately 115 acres, together with. the acquisition of approximately 360 acres from the proceeds of the City's Combination Tax and Revenue Certificates of Obligation, Series 2008A; being a total of approximately 475 acres all out of a tract of land of approximately 940 acres lmown as NorthLake property owned by Lununant, being located east of south Beltline, south of east Beltline, west of Ya11ey Ranch Road being located in Irving and north of Hackbeny Road, to be used in part for water system improvements including storage facilities and pumping station and in part for future municipal improvements, facilities and purposes, and for paying ~ega~, fiscal, and engineering fees in connection with such projects. Section 2. DESIGNATION OF THE CERTIFICATES OF OBLIGATION. Each certificate of obligation issued pursuant to this Ordinance shall be designated: "CITY OF COPPELL, TEXAS COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION, TAXABLE SERIES 2008E", and initially there shall be issued, sold, and delivered hereunder a single fu11y registered certificate of obligation, without interest coupons, payable in installments of principal the "Initial Certificate of Obligation"}, but the Initial Certificate of Obligation may be assigned and transferred andlor converted into and exchanged for a like aggregate principal amount of fully registered certificates of obligation, without interest coupons, having serial 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 "Certificates of Obligation" as used in this Ordinance shall mean and include collectively the Initial Certificate of Obligation and all substitute certificates of obligation exchanged therefor, as well as all other substitute certificates of obligation and replacement cert~icates of obligation issued pursuant hereto, and the term "Certificate of Obligation" shall mean any of the Certificates of Obligation. Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE OF OBLIGATION. ~a} The Initial Certificate of Obligation is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered Certificate of Obligation, without interest coupons, dated October 1, 2008, in the denomination and aggregate principal amount of $6,500,000, numbered R-1, 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 Certificate of Obligation or any portion or portions thereof din each case, the "registered owner"'}, with the annual installments of principal of the Initial Certificate of Obligation to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL CERTIFICATE OF OBLIGATION set forth in this Ordinance, (b) The Initial Certificate of Obligation (i) may be assigned and transferred, (ii) may be converted and exchanged for other Certificaxes of Obligation, (iii) shall have the characteristics, and (iv) shall be signed and sealed, and the principal of and ianterest on the initial Certificate of Obligation shall be payable, all as provided, and in the manner required or indicated, in the FORM OF INITIAL CERTIFICATE OF OBLIGATION set forth in this Ordinance. Section 4. INTEREST, The unpaid principal balance of the Initial Certificate of Obligation shall bear interest from the date of delivery of the Initial Certificate of Obligation, and will be calculated on the basis of a 3 60-day year of twelve 3 0-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 Certificate of Obligation, 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 CERTIFICATE OF OBLIGATION set forth in this Ordinance. 2 Section 5. FORM OF INITIAL CERTIFICATE OF OBLIGATION, The form of the Initial Certificate of Obligation, including the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the Initial Certificate of Obligation, shall be substantially as follows: N0. R-1 FORM OF INITIAL CERTIFICATE OF OBLIGATrON $6,5U~,4Q4 UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF DALLAS AND DENTUN CITY OF COPPELL, TEXAS COMBINATIGN TAX AND REVENUE CERTIFICATE 4F GBLIGATIGN, TAXABLE SERIES ZOOSB THE CITY OF COPPELL, IN DALLAS AND DENTON COUNTIES the "Issuer"},being apolitical subdivision of the State of Texas, hereby promises to pay to MGRGAN I~EEGAN & CG,, INC. or to the registered assignee or assignees of this Certificate of Obligation or any portion or portions hereof din each case, the "registered owner"}the aggregate principal amount of SIX MILLIGN FIVE HUNDRED THaUSAND DGLLARS in annual installments of principal due and payable on February I in each of the years, and in the respective principal amounts, as set forth in the following schedule; YEAR. AMOUNT zalo ~I,SI~,ooo toll I,5I5,ooo zDlz I,Slo,ooo zD I3 I,5 I D,DDD zD14 45D,DDD and to pay interest, from the date of delivery this Initial Certificate of Obligation which date appears on the back hereof}, on the balance of each such installment of principal, respectively, from time to time remaining unpaid, at the rates as follows: maturity z0I4, 4.z5% maturity zD I I, 4.G5% maturity zo Iz, 5.00% maturity zD 13, S .zD% maturity zD I4, 5.4D% with said interest being payable on August I, zDD9, and semiannually on each February 1 and August 1 thereafter while this Certificate of Obligation or any portian hereof is outstanding and unpaid. 3 TIC INSTALLMENTS OF PRINCIPAL DF AND THE INTEREST ON this Certificate of Obligation are payable in lawful money of the United States of America., without exchange or coilec~.on charges. The installments of principal and the interest on this Certificate of Obligafion are payable to the registered owner hereof through the services of U.S. Bank Nafional Associafion, Houston, Texas, which is the "Paying AgentlRegistrar" for this Certificate of Obligation. Payment of all principal of and interest an this Certificate of Obligation shall be made by the Paying AgentlRegistrar to the registered owner hereof on each principal andlor interest payment date by check or draft, dated as of such date, drawn by the Paying AgentlRegistrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of this Certificate of Obligation the "Certificate of Obligation Ordinance"} to be on deposit with the Paying AgentlRegistrarfnr such purpose as hereinafter provided; and such check or draft shall be sent by the Paying AgentlRegistrar by United States mail, first-class postage prepaid, on each such principal andlor interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared on the 15th day of the month next preceding each such date the "Retard Date"} an the Registration Books kept by the Paying AgentlRegistrar, as hereinafter described. The Issuer covenants with the registered owner of this Certificate of Obligation that on or before each principal andlor interest payment date for this Certificate of Obligation it will make available to the Paying Agentl Registrar, from the "Interest and Sinking Fund" created by the Certificate of Obligation Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on this Certificate of Obligation, when due. IF THE DATE for the payment of the principal of or interest on this Certificate of Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institufions in the city where the Paying AgentfRegistrar 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 an such date shall have the same force and effect as if made on the original date payment was due. THIS CERTIFICATE OF OBLIGATION has been authorized in accordance with the Constitution and laws of the State of Texas, in the principal amount of $6,500,000, for the acquisition of approximately 115 acres, together with the acquisition of approximately 360 acres from the proceeds of the City's Combination Tax and Revenue Certificates of Obligation, Series 2008A; being a total of approximately 475 acres all out of a tract of land of approximately 940 acres known as NorthLake property owned by Luminant, being located east of south Beltline, south of east Beltline, west of Valley Ranch Road being located in Irving and north of Hackberry Road, to be used in part for water system improvements including storage facilities and pumping station and in part for future municipal improvements, facilities and purposes, and for paying legal, fiscal, and engineering fees in connection with such projects. THIS CERTIFICATE OF OBLIGATION, to the extent of the unpaid principal balance hereof, or any unpaid 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 AgentlRegistrar acting in the capacity of registrar for this Certificate of Obligation, upon the terms and conditions set forth in the Certificate of Obligation Ordinance. Among other requirements for suchtransfer, this Certificate of Obligation must be presented and surrendered to the Paying AgentlRegistrar for cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying AgentlRegistrax, evidencing assignment by the initial registered owner of this Certificate of Obligation, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names this Certificate of Obligation or any such portion ar portions hereof is or are to be transferred and registered. Any 4 instrument or instruments of assignment satisfactory to the Paying AgentlRegistrar may be used to evidence the assignment of this Certificate of Obligation or any such portion or portions hereof by the initial registered owner hereof, Anew certificate of obligation or certificates of obligation payable to such assignee ar assignees which then will be the new registered owner or owners of such new certificate of obligation or certificates of obligation) or to the inifial registered owner as to any portion of this Certificate of Obligation which is not being assigned and transferred by the initial registered owner, shall be delivered by the Paying AgentlRegistrar in conversion of and exchange for this Certificate of Obligation 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 Certificate of Obligation or any portion hereof. The registered owner of this Certificate of Obligation shall be deemed and treated by the Issuer and the Paying AgentlRegistrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate of Obligation to the extent of such payment, and the Issuer and the Paying AgentlRegistrar shall not be affected by any notice to the contrary. AS PROVIDED above and in the Certificate of Obligation Ordinance, this Certificate of Obligation, to the extent of the unpaid principal balance hereof, may be converted into and exchanged for a like aggregate principal amount of fully registered certificates of obligation, 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 Cert:~cate of Obligation which is not being assigned and transferred by the initial registered owner, in any denomination or denominations in any integral multiple of $5,00 subject to the requirement hereinafter stated that each substitute certificate of obligation issued in exchange for any portion of this Certificate of Obligation shall have a single stated principal maturity date}, upon surrender of this Certificate of Obligation to the Paying AgentlRegistrar far cancellation, all in accordance with the form and procedures set forth in the Certifiicate of Obligation Ordinance. If this Certificate of Obligation or any portion hereof is assigned and transferred or converted each certificate of obligation 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 Certificate of Obligation or portion hereof for which the subsfiitute certificate of obligation is being exchanged, and shall bear interest at the rate applicable to and borne by such installment of principal ar portion thereof. No such certificate of obligation shall be payable in installments, but shall have only one stated principal maturity date. AS PROVIDED IN THE CERTIFICATE OF OBLIGATION ORDINANCE, THiS CERTIFICATE OF OBLIGATION IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees, but the certificates of obligation issued and delivered in exchange for this Certificate of Obligation or any portion hereof may be assigned, transferred and converted, subsequently, as provided in the Certificate of Obligation Ordnance. The Issuer shall pay the Paying AgentlRegistrar's standard or customary fees and charges for transferring, converting, and exchanging this Certificate of Obligation 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 AgentJRegistrar shall not be required to make any such assignment, conversion, or exchange 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 ar interest payment date. IN THE EVENT any Paying AgentlRegistrar for this Certificate of Obligation is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate of Obligation 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 Certificate of Obligation. IT IS HEREBY certified, recited, and covenanted that this Certificate of Qbligation has been duly and validly authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be 5 performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Certificate of Obligation have been performed, existed, and been done in accordance with Iaw; that this Certificate of Obligation is a general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate of Obligation, as such interest and principal 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 Iaw, and that this Certificate of Obligation is additionally secured by and payable from the limited surplus revenues of the Issuer's waterworks and Sewer System, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connecfion with all of the Issuer's obligations know or hereafrer outstanding, which are payable from all or any part of the Net Revenues of the Issuer's waterworks and Sewer System. BY BECOMING the registered owner of this Certificate of Obligation, the registered owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of Obligation 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 Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between the registered owner hereof and the Issuer, IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer, 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 Certificate of Obligation to be dated October I, 2~~8. City Secretary (CIT'Y SEAL) Mayor DATE OF DELIVERY This Certificate of Obligation was delivered to the purchaser thereof on October 23, 208. Paying AgentlRegistrar 6 FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER N0. I hereby certify that this Cert~cate of Obligation has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been registered by the Comptroller of Public Accounts of the State of Texas. witness my signature and seal this Comptroller of Public Accounts of the State of Texas COMPTROLLER'S SEAL} Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES CF OBLIGATION. Registration and Transfer.~a} The Issuer shall keep or cause to be kept at the principal corporate trust office of U. S . Bank National Association, Houston, Texas, the "Paying AgentlRegistrar"} books or records of the registration and transfer of the Certificates of Obligation the "Registration Books"}, and the Issuer hereby appoints the Paying AgentlRegistrar as its registrar and transfer agent to keep such books or records and make such transfers and registrations under such reasonable regulations as the Issuer and Paying AgentlRegistrarmoy prescribe; and the Paying AgentlRegistrar shall make such transfers and registrations as herein provided. The Paying AgentfRegistrarsholl .obtain and record in the Registration Books the address of the registered owner of each Certificate of Obligation to which payments with respect to the Certifficates of Obligation shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify the Paying AgentlRegistxar 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 AgentlRegistrar ,shall keep the Registration Books confidential and, unless otherwise required by law, shall not pernut their inspection by any other entity. Registration of each Certificate of Obligation may be transferred in the Registration Books only upon presentation and surrender of such Certificate of Obligation to the Paying AgentlRegistrar far transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agentl Registrar, ~i}evidencing the assignment of the Certificate of Obligation, or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and iii} the right of such assignee or assignees to have the Certificate of Obligation or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Certificate of Obligation or any portion thereof, a new substitute Certificate of Obligation or Certificates of Obligation shall be issued in conversion and exchange therefor in the manner herein provided. The Initial Certificate of Obligarion, to the extent of the unpaid principal balance thereof, may be assigned and transferred by the initial registered owner thereof once only, and to one ar more assignees designated in writing by the initial registered owner thereof, AlI Certificates of Obligafion issued and delivered in conversion of and exchange for the Initial Certificate of Obligation shall be in any denomination or denominations of any integral multiple of $5,000 ~sub~ect to the requirement hereinafter stated that each substitute Certificate of Obligation shall have a single stated principal maturity date}, shall be in the form prescribed in the FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION set forth in this Ordinance, and shall have the characteristics, and maybe assigned, transferred, and converted as hereinafter provided. If the Initial Certificate of Obligation or any portion thereof is assigned and transferred or converted the Initial 7 Certificate of Obligation must be surrendered to the Paying AgentlRegistrar for cancellation, and each Certificate of Obligation issued in exchange for any portion of the Initial Certificate of Obligation sha11 have a single stated principal maturity date, and shall not be payable in installments; and each such Certificate of Obligation shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Certificate of Obligation is being exchanged; and each such Certificate of Obligation 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 Certificate of Obligation is assigned and transferred, there shall be delivered to and registered in the name of the initial registered owner substitute Certificates of Obligation in exchange for the unassigned balance of the Initial Certificate of Obligation in the same manner as if the initial registered owner were the assignee thereof If any Certificate of Obligation or portion thereof other than the Initial Certificate of Obligation is assigned and transferred or converted each Certificate of Obligation issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate of Obligation for which it is exchanged, A form of assignment shall be printed or endorsed on each Certificate of Obligation, excepting the Initial Certificate of Obligation, which shall be executed by the registered owner ar its duly authorized attorney or representative to evidence an assignment thereof. Upon surrender of any Certificates of Obligation or any portion or portions thereof for transfer of registration, an authorized representative of the Paying AgentlRegistrar shall make such transfer in the Registration Books, and shall deliver a new fully registered substitute Certificate of Obligation ar Certificates of Obligation, having the characteristics herein described, payable t4 such assignee or assignees which then will be the registered owner or owners of such new Certificate of Obligation or Certificates of Obligation}, or to the previous registered owner incase only a portion of a Certificate of Obligation is being assigned and transferred, all in conversion of and exchange for said assigned Certificate of Obligation or Certificates of Obligation or any portion or portions thereof, in the same form and mariner, and with the same effect, as provided in Section bid}, below, forthe conversion and exchange of Certificates of Obligation by any registered owner of a Certificate of Obligation. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer and delivery of a substitute Certificate of Obligation or Certificates of Obligation, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying AgentlRegistrar shall not be required to make transfers of registration of any Certificate of Obligation or any portion thereof during the period commencing with the close of business on any Record Date and ending with the opening of business on the next fallowing principal or interest payment date. To the extent required by the Code and the Regulations, since the Certificates of Obligation are deemed "taxable", it shall be the duty of the Paying AgentlRegistrar, on behalf of the Issuer, to report to the owners of the Certificates of Obligation and the Internal Revenue Service (i} the amount of "reportable payments", if any, subject to backup withholding during each year and the amount of tax withheld, if any, with respect to payments of the Certificates of Obligation and iii} the amount of interest or amount treated as interest on the Certificates of Obligation and required to be included in grass income of the owner thereof. (b} Ownership of Certificates of Obligation. The entity in whose name any Cerrificate of Obligation sha11 be registered in the Registration Books at anytime sha11 be deemed and treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Certificate of Obligation sha11 be overdue, and the Issuer and the Paying AgentlRegistrarsholl not be affected by any notice to the contrary; and payment of, or an account af, the principal of, premium, if any, and interest on any such Certificate of Obligation shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Certificate of Obligation to the extent of the sum or sums so paid. ~c} Payment of Certificates ofObligation and Interest. The Issuer hereby further appoints the Paying Agent~Registrar to act as the paying agent for paying the principal of and interest on the Certificates of Obligation, and to act as its agent to convert and exchange or replace Certificates of Obligation, all as provided in this Ordinance. The Paying AgentlRegistrar shall keep proper records of all payments made by the Issuer and the Paying AgentlR.egistrar with respect to the Certificates of Obligation, and of all conversions and exchanges of Certificates of Obligation, and all replacements of Certificates of Obligation, as provided in this Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and for thirty ~3 0} days thereafter, a new record date for such interest payment }a "Special Record Date"} will be established by the Paying AgentlRegistrar, 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 fifteen ~ 15}days after the Special Record Date} shall be sent at least five ~5} business days prier to the Special Record Date by United States mail, first class postage prepaid, to the address of each Certificate of Obligation holder appearing an the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. ~d} Conversion and Exchange or Replacement; Authentication. Each Certificate of Obligation issued and delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance or principal amount thereof, may, upon surrender of such Certificate of Obligation at the principal corporate trust office of the Paying AgentlRegistrar, 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 AgentlRegistrar, may, at the option of the registered owner or such assignee or assignees, as appropriate, be converted into and exchanged for fully registered certificates of obligation, without interest coupons, in the form prescribed in the FORM OF SUBST'ITU'TE CERTIFICATE OF OBLIGATION 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 Certificate of Obligation shall have a single stated maturity date}, as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or principal amount of any Certificate of Obligation or Certificates of Obligation so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be. If the Initial Certificate of Obligation is assigned and transferred or converted each substitute Certificate of Obligation issued in exchange for any por~an of the Initial Certificate of Obligation shall have a single stated principal maturity date, and shall not be payable in installments; and each such Certificate of Obligation shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Certificate of Obligation is being exchanged; and each such Certificate of Obligation 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 Certificate of Obligation bother than the Initial Certificate of Obligation} shall be redeemed prior to its scheduled maturity as provided herein, a substitute Certificate of Obligation or Certificates of Obligation having the same maturity date, bearing interest at the same rate, in the denomination ar 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, wi11 be issued to the registered owner upon surrender thereof for cancellation. If any Certificate of Obligation or portion thereof bother than the Initial Certificate of obligation} is assigned and transferred or converted, each Certificate of Obligation issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate of Obligation for which it is being exchanged. Each substitute Certificate of Obligation shall bear a letter andlor number to distinguish it from each other Certificate of Obligation. The Paying AgentlRegistrarsholl convert and exchange or replace Certificates of Obligation as provided herein, and each fully registered certificate of obligation delivered in conversion of and exchange for or replacement of any Certificate of Obligation or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Certificates of Obligation for all purposes of this Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that any Certificate of Obligation authenticated in conversion of and exchange for ar replacement of another Certificate of Obligation on ar prior to the first scheduled Record Date for the Initial Certificate of Obligation shall bear interest from the date of the Initial Certificate of Obligation, but each substitute Certificate of Obligation so authenticated after such first scheduled Record Date shall bear interest from the interest payment date next preceding the date on which such substitute Certificate of Obligation was so authenticated, unless such Certificate of Obligation is authenficated after any Record Date but on or before the next following interest payment date, in which case it shall bear interest from such next following interest payment date; provided, however, that if at the time of delivery of any substitute Certificate of Obligation the interest on the Certificate of Obligation for which it is being exchanged is due but has not been paid, then such Certificate of Obligation shall bear interest from the date to which such interest has been paid in full. THE INITIAL CERTIFICATE OF OBLIGATION issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying AgentlRegistrar, but on each substitute Certificate of Obligation issued in conversion of and exchange far or replacement of any Certificate of Obligation or Certificates of Obligation issued under this Ordinance there shall be printed a certificate, in the form substantially as follows: "PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate of Obligation has been issued under the provisions of the Certificate of Obligation Ordinance described on the face of this Certificate of Obligation; and that this Certificate of Obligation has been issued in conversion of and exchange for or replacement of a certificate of obligation, certificates of obligation, or a portion of a certificate of obligation or certificates of obligation of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated Paying AgentlRegistxar By Authorized Representative" An authorized representative of the Paying AgentlR.egistrar shall, before the delivery of any such Certificate of Obligation, date and manually sign the above Certificate, and no such Certificate of Obligation shall be deemed to be issued or outstanding unless such Certificate is so executed. The Paying AgentlRegistrar promptly shall cancel all Certificates of Obligation surrendered for conversion and exchange or replacement. Na 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 Certificate of Obligation or portion thereof, and the Paying AgentlRegistrar shall provide far the printing, execution, and delivery of the substitute Certificates of Obligation in the manner prescribed herein, and said Certificates of Obligation shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter I201, Texas Government Code, the duty of conversion and exchange or replacement of Certificates of Obligation as aforesaid is hereby imposed upon the Paying AgentJRegistrar, and, upon the execution of the above Paying AgentlRegistrar's Authentication Certificate, the converted and exchanged or replaced Certificate of Obligation shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Certificate of Obligation which originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying AgentlRegistrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate of Obligation or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or governmental charges required 1Q to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying AgentlRegistrar shall not be required to make any such conversion and exchange yr replacement of Certificates of Obligation or any portian 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, iii} with respect to any Certificate of Obligation or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. fie} In General. All Certificates of Obligation issued in conversion and exchange ar replacement of any other Certificate of Obligatian or pardon thereof, ~i} shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Certificates of Obligation to be payable only to the registered owners thereof, iii} may be transferred and assigned, viii} may be converted and exchanged for other Certificates of Obligation, Div} shah have the characteristics, ~v} sha11 be signed and sealed, and Zvi} the principal of and interest on the Certificates of Obligation shall be payable, all as provided, and in the manner required or indicated, in the FARM OF SUBSTITUTE CERTIFICATE OF OBLIGATION set Earth in this Ordinance. (fl Payment of Fees and Charges. The Issuer hereby covenants with the registered owners of the Certificates of Obligation that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Certificates of Obligation, when due, and (ii) pay the fees and charges of the Paying Agent/Registxar for services with respect to the transfer of registration of Certificates of Obligation, and with respect to the conversion and exchange of Certificates of Obligation solely to the extent above provided in this Ordinance. fig} Substitute Paying AgentlRegistrar. The Issuer covenants with the registered owners of the Certificates of Obligation that at all times while the Certificates of Obligation 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 AgentlRegistrar for the Certificates of Obligation under this Ordinance, and that the Paying AgentlRegistrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying AgentlRegistrar upon not less than l20 days written notice to the Paying AgentlRegistxar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice. Tn the event that the entity at any time acting as Paying AgentlRegistrar for its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency to act as Paying AgentlRegistrarundeithis Ordinance. Upon any change in the Paying AgentJRegistrar, the previous Paying AgentlRegistrarpiomptly shall transfer and deliver the Registration Baaks for a copy thereof, along with all other pertinent books and records relating to the Certificates of Obligation, to the new Paying AgentlRegistrardesigriated and appointed by the Issuer. Upon any change in the Paying AgentlRegistrar, the Issuer promptly will cause a written notice thereof tv be sent by the new Paying AgentlRegistrar to each registered owner of the Certificates of Obligation, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying AgentlRegistrar. By accepting the position and performing as such, each Paying AgentlRegistrarshall bedeemed tohave agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying AgentlRegistrar. ~h} Book-Entry Only System, The Certificates of Obligation issued in exchange far the Certificates of Obligation initially issued to the purchaser specified herein sha11 be initially issued in the form of a separate single fully registered Certificate of Obligation for each of the maturities thereof, Upon initial issuance, the ownership of each such Certificate of Obligation shall be registered in the name of Cede & Co., as nominee li of Depository Trust Company of New York ~"DTC"}, and except as provided in subsection ~~} hereof, alI of the outstanding Certificates of Obligation shall be registered in the name of Cede & Co., as nominee of DTC. with respect to Certificates of Obligation registered in the name of Cede & Co., as nominee of DTC, the Issuer and the,Paying AgentlRegistrarsholl have no responsibility or obligation to any DTC Participant or to any person on behalf of wham such a DTC Participant holds an interest on the Certificates of Obligation. without limiting the immediately preceding sentence, the Issuer and the Paying AgentlRegistxar shall have no responsibility or obligation with respect to (i}the accuracy of the records of DTC, Cede & Ca. or any DTC Participant with respect to any ownership interest in the Certificates of Obligation, iii}the delivery to any DTC Participant or any other person, other than a Certificate of Obligation holder, as shown on the Registration Books, of any notice with respect to the Certificates of Obligation, including any notice of redemption, ar viii} the payment to any DTC Participant or any other person, other than a Certificate of Dbligafion holder, as shown in the Registration Books of any amount with respect to principal of, premium, if any, or interest on, as the case maybe, the Certificates of Obligation. Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying AgentlRegistrar shall be entitled to treat and consider the person in whose name each Certificate of Obligation is registered in the Regis~xation Books as the absolute owner of such Certificate of Obligation for the purpose of payment of principal, premium, if any, and interest, as the case may be, with respect to such Certificate of Obligation, for the purpose of giving notices of redempfion and other matters with respect to such Certificate of Obligation, for the purpose of registering transfers with respect to such Certificate of Obligation, and for all other purposes whatsoever. The Paying AgentlRegistrar sha11pay all principal of, premium, if any, and interest on the Certificates of Obligation 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 Issuer's obligations with respect to payment of principal of,premium, if any, and interest on, ar as the case maybe, the Certificates of Obligation to the extent of the sum or sums so paid. No person other than an owner, as shown in the Registrafion Books, shall receive a Certificate of Obligation certificate evidencing the obligation of the Issuer to make payments of principal, premium, if any, and interest, as the case maybe, pursuant to this Ordinance. Upon delivery by DTC to the Paying AgentlRegistrar 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 Ordinance shall refer to such new nominee of OTC. ~i} Successor Securities Depositary; Transfers Outside Book-Entry Duly System. In the event that the Issuer or the Paying AgentlRegistrar 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 Certificates of Obligation that they be able to obtain certificated Certificates of Obligation, the Issuer or the Paying AgentlRegistrar shall ~i} appoint a successor securities depository, qualified to act as such under Section 17~a} of the Securities and Exchange Act of I934, as amended, notify DTC and DTC Participants of the appointment ofsuch successor securities depositary andtransfer one ormvre separate Certificates of Obligation to such successor securities depositary or iii} notify DTC and DTC Participants of the availability through DTC of Certificates of Obligation and transfer one or mare separate Certificates of Obligation to DTC Participants having Certificates of Obligation credited to their DTC accounts, In such event, the Certificates of Obligation 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 Certificate of Obligation holders transferring or exchanging Certificates of Obligation shall designate, in accordance with the provisions of this Ordinance. I2 ~j} Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Certificate of Obligation is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and.interest an, or as the case may be, such Cert~icate of Obligation and all notices with respect to such Certificate of Obligation shall be made and given, respectively, in the manner provided in the representation letter of the Issuer to DTC. Section 7. FORM OF SUBSTITUTE CERTIFICATES OF OBLIGATION. The farm of all Certificates of Obligation issued in conversion and exchange or replacement of any other Certificate of Obligation or portion thereof, including the form of Paying AgentlRegistrar's Certificate to be printed on each of such Certificates of Obligation, and the Form of Assignment to be printed on each of the Certificates of Obligation, shall be, respectively, substantially as follows, with such appropriate variations, omissions, ar insertions as are permitted or required by this Ordinance. FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION N0. UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF DALLAS AND DENTON CITY OF COPPELL, TEXAS COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION, TAXABLE SERIES 2D08B PRINCIPAL AMOUNT Initial Date of Delivery Interest Rate Ma~rity Date Date of Original Issue Cusip No. October 1, 2008 ON THE MATURI'I`~ DATE specified above, THE CITY OF COPPELL the "Issuer"} ha the COUNTIES OF DALLAS AND DENTON, being a political subdivision of the State of Texas, hereby promises to pay to orto the registered assignee hereof neither being hereinafter called the "registered owner"}the principal amount of and to pay interest thereon from initial date of delivery, to the maturity date specified above, at the interest rate per annum specified above with interest being payable on August 1, 2009, and semiannually on each February 1 and August 1 thereafter; except that if the date of authenfication of this Certificate of Obligation is later than July 15, ZOD9, 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 thereinafter 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 Certificate of Obligation are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Certificate of Obligation shall be paid to the registered owner hereof upon presentation and surrender of this 13 Certificate of Obligation at maturity or upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of U.S. Bank National Association, Houston, Texas, which is the '"Paying AgentlRegistrar" for this Certificate of Obligation. The payment of interest on this Certificate of Obligation shall be made by the Paying AgentlRegistrar to the registered owner hereof on the interest payment date by check or draft, dated as of such interest payment date, drawn by the Paying AgentlRegistrar on, and payable solely from, funds of the Issuer required by the Ordinance authorizing the issuance of the Certificates of Obligation the "Certificate of Obligation Ordinance"} to be an deposit with the Paying AgentlRegistrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying AgentJRegistrar by United States mail, 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 15th day of the month next preceding such date the "Record Date"} on the Registration Books kept by the Paying AgentlRegistrar, as hereinafter described, or by such other method acceptable to the Paying AgentlRegistrar requested by, and at the risk and expense of, the registered owner, Any accrued interest due upon the redemption of this Certificate of Obligation prior to maturity as provided herein shall be paid to the registered owner at the principal corporate trust office of the Paying AgentlRegistrar upon presentation and surrender of this Certificate of Obligation for redemption and payment at the principal corporate trust office of the Paying Agent~Registrar. The Issuer covenants with the registered owner of this Certificate of Obligation that on or before each principal payment date, interest payment date, and accrued interest payment date for this Certificate of Obligation, it will make available to the Paying AgentlRegistrar, from the "Interest and Sinking Fund" created by the Certificate of Obligation Ordinance, the amounts required to provide far the payment, in immediately available funds, of all principal of and interest an the Certificates of Obligation, when due. IF THE DATE for the payment of the principal of or interest on this Certificate of Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Paying AgentlRegistrar is located are authorized by law or executive order to close, then the date far such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS CERTIFICATE OF OBLIGATION is one of an issue of Certificates of Obligation initially dated October 1, 2DDS, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $b,500,D00, for the acquisition of approximately 115 acres, together with the acquisition of approximately 3b0 acres from the proceeds of the City's Combination Tax and Revenue Certificates of Obligation, Series 2008A; being a total of approximately 475 acres all out of a fact of land of approximately 940 acres known as NorthLake property owned by Luminant, being located east of south Beltline, south of east Beltline, west of Valley Ranch Road being located in Irving and north of Hackberry Road, to be used in part for water system improvements including storage facilities and pumping station and in part for future mu~ucipal improvements, facilities and purposes, and for paying legal, fiscal, and engineering fees in connection with such projects. THIS CERTIFICATE OF OBLIGATION OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/RRegistrar acting in the capacity of registrar for the Certificates of Obligation, upon the teens and conditions set forth in the Certificate of Obligation Ordinance. Among other requirements for such assignment and transfer, this Certificate of Obligation must be presented and surrendered to the Paying AgentJRegistrar, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying AgentlRegistrar, evidencing assignment of this Certificate of Obligation or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate of Obligation or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Certificate of Obligation shall be executed by 14 the registered owner or its duly authorized attorney or representative to evidence the assignment hereof. Anew Certificate of Obligation or Certificates of Obligation payable to such assignee or assignees which then will be the new registered owner or owners of such new Certificate of Obligation or Certificates of Obligation}, or to the previous registered owner in the case of the assignment and transfer of only a portion afthis Certificate of obligation, may be delivered by the Paying AgentlRegistrar in conversion of and exchange for this Certificate of Obligation, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of other Certificates of Obligation. The Issuer shall pay the Paying AgentCRegistrar's standard or customary fees and charges for making such transfer, but the one requesting such transfer shall pay any taxes or other. governmenta,I charges ~ required to be paid with respect thereto, The Paying AgentlRegistrarsholl not be required to make transfers of registration of this Certificate of Obligation or any portion hereof 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. The registered owner of this Certificate of Obligation shall be deemed and treated by the Issuer and the Paying AgentlRegistrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate of Obligation to the extent of such payment, and the issuer and the Paying AgentlRegistrarsholl not be affected by any notice to the contrary. ALL CERTIFICATES OF OBLIGATION OF THIS SERIES are issuable solely as fully registered certificates of obligation, without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate of Obligation Ordinance, this Certificate of Obligation, at the request of the registered owner or the assignee or assignees hereof, be converted into and exchanged far a Tike aggregate principal amount of fully registered Certificates of Obligation, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or denonvnations in any integral multiple of $5,400 as requested in writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon surrender of this Certificate of Obligation to the Paying AgentlRegistxar far cancellation, all in accordance with the form and procedures set forth in the Certificate of Obligation Ordinance. The Issuer shall pay the Paying AgentlRegistrar's standard or customary fees and charges for transfemng, converting, and exchanging any Certificate of Obligation or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying ~AgentlRegistrar shall 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 fallowing principal or interest payment date, or, ~ii~ with respect to any Certificate of Obligation or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. IN THE EVENT any Paying AgentlRegistrar for the Certificates of Obligation is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate of Obligation Ordinance that it promptly will appoint a competent and legally qualified subsfitute therefor, and promptly wi11 cause written notice thereof to be mailed to the registered owners of the Certificates of Obligation, IT IS HEREBY certified, recited, and covenanted that this Certificate of Obligation has been duly and validly 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 authorization., issuance, and delivery of this Certificate of Obligation have been performed, existed, and been done in accordance with law; that this Certificate of Obligation is a general obligation of the Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate of Obligation, as 15 such interest and principal 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, and that this Certificate of Obligation is additionally secured by and payable from the limited surplus revenues of the Issuer's Waterworks and Sewer System, remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the Issuer's obligations know or hereafter outstanding}, which are payable from all or any part of the net revenues of the Issuer's Waterworks and Sewer System. BY BECOMING the registered owner of this Certificate of Obligation, the registered owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of Obligatian 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 Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between each registered owner hereof and the Issuer, IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual yr facsimile signature of the City Secretary of the Issuer, and has caused fine official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate of Obligation. City Secretary (CITY SEAL) Mayor FORM OF PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENTIREGISTRAR'S AUTHENTICATION CERTIFICATE ~To be executed if this Certificate of Obligation 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 Certificate of Obligation has been issued under the previsions of the Certificate of Obligation Ordinance described on the face of this Certificate of Obligation; and that this Certificate of Obligation has been issued in conversion of and exchange for yr replacement of a certificate of obligation, certificates of obligation, or a portion of a certificate of obligation or certif cafes of obligation of an issue which originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated U. S, Bank, National Association By: Authorized Representative 16 FORM OF ASSIGNMENT: ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Certificate of Obligation, or duly authorized representative or attorney thereof, hereby assigns this Certificate of Obligation to Assignee's Social Security or Tax payer Identi~ cation Number} and hereby irrevocably constitutes and appoints Print or type Assignee's Name and Address Including Zip Code) attorney, to transfer the registration of this Certificate of Obligation on the Paying AgentlRegistrar's Registration Books with full power of substitution in the premises. Dated NOTICE: This signature must be guaranteed by a NOTICE: This signature must correspond with the member of the New York Stock Exchange or a name of the Registered Owner appearing on the face of commercial bank or trust company. this Certificate of Obligation. Section 8. TAX LEVY. A special Interest and Sulkuag Fund the "Interest and Sinking Fund"} is hereby created solely for the benefit of the Certificates of Obligation, and the Interest and Sinking Fund shall be established and maintained by the Issuer at an official depositary bank of the Issuer. The Interest and Snaking Fund shall be kept separate and apaxt from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and principal of the Certiificates of Obligation. All ad valorem taxes levied and collected far and on account of the Certificates of Obligation shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Certificates of Obligation or interest thereon are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Certificates of Obligation as such interest comes due, and to provide and maintain a sinking fund adequate to pay the principal of its Certificates of Obligation as such principal matures abut never less than 2% of the original. principal amount of the Certificates of Obligation 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 far 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 Certificates of Obligation 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 Certificates of Obligation, a.s such interest comes due and such principal matures, axe hereby pledged for such payment, within the limit prescribed by law. Chapter 1208, Government Code, applies to the issuance of the Certificates of Obligation and the pledge of the taxes granted by the Issuer under this Section, and is therefore valid, effective, and perfected. 17 Should Texas Iaw be amended at any time while the Certificates of Obligation 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 Certificates of Obligation a security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing of a security interest in said pledge to occur. Section g.. REVENUES. That said Certificates of Obligation, together with other obligations of the Issuer, are additionally secured by and shall be payable from and secured by the collection of the revenues of the Issuer's waterworks and Sewer System, after payment of all operation and maintenance expenses thereof, and all debt service, reserve, and other requirements in connection with all of the Issuer's revenue bonds or other obligations know or hereafter outstanding}, which are payable from all or any part of the net revenues of the issuer's waterworks and Sewer System, not to exceed $1,00, constituting "Surplus Revenues". The Issuer shall deposit such Surplus Revenues to the credit of the Interest and Sinking Fund created pursuant to Section 8, to the extent necessary to pay the principal and interest on the Certificates of Obligation, Notwithstandingche requirements of Section 8, if revenues are actually on deposit or budgeted for deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied far any year, then the amount of taxes which otherwise would have been required to be levied pursuant to Section S may be reduced to the extent and by the amount of the revenues then on deposit in the Interest and Sinking Fund ar budgeted for deposit therein. Section l~, TRANSFER. That the Mayor and the City Secretary are hereby ordered to do any and all things necessary to accomplish the transfer of monies to the Interest and Sinking Fund of this issue iii ample time to pay such items of principal and interest. Section 11. DEFEASANCE DF CERTIFICATES CF OBLIGATION. ~a} Any Certificate of Obligation and the interest thereon shall be deemed to be paid, retired, and no longer outstanding ~a "Defeased Certificate of Obligation"} within the meaning of this Ordinance, except to the extent provided in subsection ~d} of this Section, when payment of the principal of such Certificate of Obligation, 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 iii} shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying AgentlRegistrar inaccordance 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 AgentlRegistrar for the payment of its services until all Defeased Certificates of Obligation shall have become due and payable. At such time as a Certificate of Obligation shall be deemed to be a Defeased Certificate of Obligation hereunder, as aforesaid, such Certificate of Obligation and the interest thereon shall no longer be secured by,payable from, or entitled to the benefits af, 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. fib} Any moneys so deposited with the Paying AgentlRegistrax 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 AgentlRegistrarthat is not required for the payment of the Certificates of Obligation 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 l8 Future Escrow Agreement pursuant to which the money and/or Defeasance Securities are held for the payxnern of Defeased Certificates of Obligation may contain provisions permitting the investrnent or reinveshnent of such moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the satisfaction ofthe requirements specified in subsection 11(a)(i) or (n). All income from such Defeasance Securities received by the Paying AgentlRegistrar which is not required for the payment of the Defeased Certificates of Obligation, with respect to which such money has been so deposited, sha11 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., iii} 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 of the purchase thereof are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii} noncallable obligations of a state or an agency or a county, municipality, ar other political subdivision of a state that have been refunded and that, on the date the governing 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 firm not less than AAA or its equivalent. (d) Until all Defeased Certificates of Obligation sha11 have become due and payable, the Paying Agent/Registrax shall perform the services of Paying Agent/Registrar for such Defeased Certificates of Obligation the same as if they had not been defeased, and the Issuer sha11 make proper arrangements to provide and pay for such services as required by this Ordinance. fie) In the event that the Issuer elects to defea.se less than all of the principal amount of Certificates of Obligation of a maturity, the Paying AgentlRegistrar shall select, or cause to be selected, such amount of Certificates of Obligation by such random method as it deems fair and appropriate. Section 12. DAMAGED, MUTILATED, LOST, STOLEN, ORDESTROYED CERTIFICATES OF OBLIGATION. ~a} Replacement Certificates of Obligation. In the event any outstanding Certificate of Obligation is damaged, mutilated, last, stolen, or destroyed, the Paying AgentlRegistrar sha11 cause to be printed, executed, and delivered, a new certificate of obligation ofthe same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate of Obligation, in replacement for such Certificate of Obligation in the manner hereinafter provided. fib} Application far Replacement Certificates of Obligation. Application for replacement of damaged, mutilated, lost, stolen, or destxoyed Certificates of Obligation shall be made by the registered owner thereof to the Paying AgentlRegistrar. In every case of loss, theft, or destruction of a Certificate of Obligation, the registered owner applying for a replacement certificate of obligation shall furnish to the Issuer and to the Paying AgentlRegistrar such security ar 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 destn~ction of a Certificate of Obligation, the registered owner shall furnish to the Issuer and to the Paying AgentlRegistrar evidence to their satisfaction ofthe loss,theft, or destruction of such Certificate of Obligation, as the case maybe. In every case of damage or mutilation of a Certificate of Obligation, the registered owner shall surrender to the Paying AgentlRegistrar for cancellation the Certificate of Obligation so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Certificaxe of Obligation sha11 have matured, and no default has occurred which is then continuing in the 19 payment of the principal of, redemption premium, if any, or interest on the Certificate of Obligation, the Issuer may authorize the payment of the same ~withaut surrender thereof except in the case of a damaged or mutilated Certificate of Obligation} instead of issuing a replacement Certificate of Obligation, provided security or indemnity is furnished as above provided in this Section. ~d} Charge for Issuing Replacement Certificates of Obligation. Prior to the issuance of any replacement certificate of obligation, the Paying AgentlRegistrar shall charge the registered owner of such Certificate of Obligation with all legal, printing, and other expenses in connection therewith. Every replacement certificate of obligation issued pursuant to the provisions of this Section by virtue of the fact that any Certificate of Obligation is lost, stolen, or destroyed shall constitute a contractual obligation of the Issuer whether or not the Lost, stolen, or destroyed Certificate of Obligation shall be found at any tune, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Certificates of Obligation duly issued under this Ordinance. fie} Authority far Issuing Replacement Certificates of Obligation. In accordance with Chapter 1~~1, Local Government Code, this Section 12 of this Ordinance shall constitute authority for the issuance of any such replacement certificate of obligation 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 certificates of obligation is hereby authorized and imposed upon the Paying AgentlRegistrar, and the Paying AgentlRegistrar shall authenticate and deliver such Certificates of Obligation in the form and manner and with the effect, as provided in Section bid} of this Orclinance for Certificates of Obligation issued in conversion and exchange for other Certificates of Obligation. Section 13. CUSTODY, .APPROVAL, AND REGISTRATION OF CERTIFICATES OF OBLIGATION; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED. The Mayor of the Issuer is hereby authorized to have control of the Initial Certificate of Obligation issued hereunder and all necessary records and proceedings pertaini~ag to the Initial Certificate of Obligation pending its delivery and its investigation, exanunation, and approval by the Attorney General of the State of Texas, and its registration by the Comptxoller of Public Accounts of the State of Texas. Upon registration of the Initial Certificate of Obligation said Comptroller of Public Accounts far a deputy designated in writing to act for said Comptroller} shall manually sign the Comptroller's Registration Certificate on the Initial Certificate of Obligation, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the Initial Certificate of Obligation. The approving legal opinion of the Issuer's bond counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed an the Initial Certificate of Obligation or on any Certificates of Obligation issued and delivered in conversion of and exchange or replacement of any Certificate of Obligation, but neither shall have any legal effect, and shall be solely for the convenience and information of the registered owners of the Certificates of Obligation. In addition, if bond insurance is obtained, the Certificates of Obligation may bear an appropriate legend as provided by the insurer. Section 14. TAX EXEMPTION. The Issuer does not intend to issue Certificates of Obligation authorized by this Ordinance in a manner such that the Certificates of Obligation would constitute obligations described in Section 103(a) of the Internal Revenue Tax Code of 1986. Section 15. CONTINUING DISCLOSURE. ~a} Annual Reports. ~i} The Issuer shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after 2D08, financial information and operating data with respect to the Issuer of the general type included in the final Official Statement authorized by Section 17 of 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 commissions 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 complete within such period, then the Issuer shall provide unaudited financial statements for such period, 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 yeax 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 maybe 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 sha11 notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Certificates of Obligation, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4 , Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates of Obligation; 7. Madificatians to rights of holders of the Certificates of Obligation; 8. Certificate of Obligation calls; 9, ~ Defeasances; 10. Release, substitution, yr sale of property securing repayment of the Certificates of Obligation; and 11. 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 sha11 be abligatedto 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 Certificates of Obligation 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 Certificates of Obligation no longer to be outstanding. iii} The provisions of this Section are for the sole benefit of the holders and beneficial owners of the Certificates of Obligation, 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 21 or material to a complete presentation of the Issuer's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The Issuer does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Certificates of Obligation at any future date. viii} UNDERNG CIRCUMSTANCES SHALL THE IS SUER BE LIABLE TD THE HOLDER CR BENEFICIAL OWNER OF ANY CERTIFICATE OF OBLIGATION OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE DR IN PART FROM ANY BREACH BY THE ISSUER, wHETHERNEGLIGENT ORwITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT DR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TD AN ACTION FCR MANDAMUS DR 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 tune 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, ar type of operations of the Issuer, but only if ~ 1 }the provisions of this S ecfion, as so amended, would have permitted an underwriter to purchase or sell Certificates of Obligation in the primary offering of the Certificates of Obligation 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 for any greater amount required by any other provision of this Ordinance that authorizes such an amendment} of the outstanding Certificates of Obligation consent to such amendment or fib} a person that is unaffiliated with the Issuer such as bond counsel} determined that such amendment will not materially impair the interest of the holders and beneficial owners of the Certificates of Obligation. 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 unpact of any change m the type of financial information or operating data so provided. The Issuer may also amend or repeal the provisions of this continuing disclosure agreement ifthe 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 Certificates of Obligation in the primary offering of the Certificates of Obligation, (d) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR"means each person whomthe SEC or its staffhas determmedto be anationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule i5c2-12, as amended from time to time. 22 "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, offiicer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to 3time. Section 16. SALE OF CERTIFICATES CF OBLIGATION AND USE DF NET PREMIUM. ~a} The Initial Certificate of Obligation is hereby sold and shall be delivered to MORGAN KEEGAN & CO., INC. the "Underwater"} for cash for the pace of $6,458,494.25, being the par value thereof, less an Underwriter's discount of $41,549.75, pursuant to the terms and provisions of a Purchase Agreement with the Underwriter,. It is hereby officially found, determined, and declared that the Initial Certificate of Obligation has been sold pursuant to the terms and provisions of a Purchase Agreement in substantially the form attached hereto as Exhibit B, which the Mayor of the Issuer is hereby authorized and directed to execute and deliver and which the City Secretary of the issuer is hereby authorized and directed to attest. It is hereby officially found, determined, and declared that the terms of this sale are the most advantageous reasonably obtainable. The Initial Certificate of Obligation shall be registered ~, the name of MORGAN KEEGAN & CO., INC. Section 17. APPROVAL CF OFFICIAL STATEMENT. The Issuer hereby approves the form and content of the Official Statement relating to the Certificates of Obligation and any addenda, supplement or amendment thereto, and approves the distribution of such Official Statement in the reoffering of the Certificates of Obligation 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 October 6, 2DD8, is hereby approved and deemed final as of its date, as required by SEC Rule IS-2-12, and the distribution and use of the Preliminary Official Statement prior to the date hereof is hereby ratified and confirmed. Section 18. INTEREST EARNINGS ON CERTIFICATES OF OBLIGATION PROCEEDS. The earnings derived from the investment of proceeds from the sale of the Certificates of Obligation shall be used along with other Certificates of Obligation proceeds as described in Section 1 hereof; provided that after completion of such project, if any of such interest earnings remain on hand, such interest earnings shall be deposited ~ the Interest and Sir.~ing Fund. It is further provided, however, that interest earnings on the Certificates of Obligation proceeds which are required to be rebated to the United States of America pursuant to Section 14 hereof in order to prevent the Certificates of Obligation from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purpose of this Section, Section 19. PUBLIC NOTICE, It is hereby officially found and determined that public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code, and no petition was received from the qualified electors of the Issuer protesting the issuance of such Certificates of Obligation. 23 ExHIBIT A DESCRIPTIQN DF ANNUAL FINANCIAL 1NF~RMATI~N The following information is referred to in Section 15 of this Ordinance. Y, 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: 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 IS QMITTED AT THIS PGxNT AS IT APPEARS ELSE'V~HERE IN THE TRANSCRIPT, Certificate Purchase Agreement City of Coppell, Texas $6,500,000 Combination Tax and Revenue Certificates of Obligation, Taxable Series 2008B October 14, 2008 City of Coppell, Texas 255 Parkway Blvd. Coppell, Texas 75019 Ladies and Gentlemen: The undersigned Morgan Keegan & Company, Inc. and Southwest Securities, Inc. (collectively, the "Underwriters"), acting through Morgan Keegan & Company, Inc. (in such capacity on behalf of the Underwriters, the "Representative"), acting solely on behalf of the Underwriters, and not acting as fiduciary or agent for you, offers to enter into the following agreement (this "Agreement") with the City of Coppell, Texas (the "Issuer ") which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the Underwriters. This offer is made subject to the Issuer's written acceptance hereof on or before 11:00 p.m., Dallas, Texas time, on October 14, 2008, and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Issuer at any time prior to the acceptance hereof by the Issuer. Terms not otherwise defined in this Agreement shall have the same meanings set forth in the Ordinance (as defined herein) or in the Official Statement (as defined herein). 1. Purchase and Sale of the Certificates. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby agree to purchase, jointly and severally, from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriters, all, but not less than all, of the Issuer's $6,500,000 Combination Tax and Revenue Certificates of Obligation, Taxable Series 2008B (the "Certificates"). Inasmuch as this purchase and sale represents a negotiated transaction, the Issuer understands, and hereby confirms, that the Representative is not acting as a fiduciary of the Issuer, but rather is acting solely in its capacity as the representative of the Underwriters. The principal amount of the Certificates to be issued, the dated date therefor, the maturities, sinking fund (if any) and optional redemption provisions and interest rates per annum are set forth in Schedule I hereto. The Certificates shall be as described in, and shall be issued and secured under and pursuant to the provisions of the ordinance adopted by the City Council of the Issuer on October 14, 2008 (the "Ordinance "). The purchase price for the Certificates shall be $6,458,490.25, which reflects the principal amount of the Certificates, less an underwriting discount of $41,509.75. Delivered to the Issuer herewith as a good faith deposit is a check payable to the order of the Issuer in clearing house funds in the amount of $100,000.00. In the event you accept this offer, such check shall be held uncashed by you until the time of Closing, at which time such check shall be returned uncashed to the Representative. In the event that the Issuer does not accept this Agreement, such check will be immediately returned to the Representative. Should the Issuer fail to deliver the Certificates at the Closing, or should the Issuer be unable to satisfy the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the Certificates, as set forth in this Agreement (unless waived by the Representative), or should such obligations of the Underwriters be terminated for any reason permitted by this Agreement, such check shall immediately be returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and pay for the DAL:OS 87633/00024:1800451v2 Certificates at the Closing as herein provided, such check shall be cashed and the amount thereof retained by the Issuer as and for fully liquidated damages for such failure of the Underwriters, and, except as set forth in Sections 8 and 10 hereof, no party shall have any further rights against the other hereunder. The Underwriters and the Issuer understand that in such event the Issuer's actual damages may be greater or may be less than such amount. Accordingly, the Underwriters hereby waive any right to claim that the Issuer's actual damages are less than such amount, and the Issuer's acceptance of this offer shall constitute a waiver of any right the Issuer may have to additional damages from the Underwriters. 2. Public Offering. The Underwriters agree to make a bona fide public offering of all of the Certificates at a price not to exceed the public offering price set forth on the inside cover of the Official Statement and may subsequently change such offering price without any requirement of prior notice. The Underwriters may offer and sell Certificates to certain dealers (including dealers depositing Certificates into investment trusts) and others at prices lower than the public offering price stated on the inside cover of the Official Statement. The Official Statement. (a) Attached hereto as Exhibit A is either a draft of the final Official Statement or a copy of the Preliminary Official Statement dated October 6, 2008 (the "Preliminary Official Statement"), including the cover page and Appendices thereto, of the Issuer relating to the Certificates. Such draft of the final Official Statement or copy of the Preliminary Official Statement, as amended to reflect the changes marked or otherwise indicated on Exhibit A hereto, is hereinafter called the "O~cial Statement. " (b) The Preliminary Official Statement has been prepared for use by the Underwriters in connection with the public offering, sale and distribution of the Certificates. The Issuer hereby represents and warrants that the Preliminary Official Statement was deemed final by the Issuer as of its date, except for the omission of such information which is dependent upon the final pricing of the Certificates for completion, all as permitted to be excluded by Section (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule "). (c) The Issuer hereby authorizes the Official Statement and the information therein contained to be used by the Underwriters in connection with the public offering and the sale of the Certificates. The Issuer consents to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Certificates. The Issuer shall provide, or cause to be provided, to the Representative as soon as practicable after the date of the Issuer's acceptance of this Agreement (but, in any event, not later than within seven business days after the Issuer's acceptance of this Agreement and in sufficient time to accompany any confirmation that requests payment from any customer) copies of the Official Statement which is complete as of the date of its delivery to the Representative in such quantity as the Representative shall request in order for the Underwriters to comply with Section (b)(4) of the Rule and the Hiles of the Municipal Securities Rulemaking Board. (d) If, after the date of this Agreement to and including the date the Underwriters are no longer required to provide an Official Statement to potential customers who request the same pursuant to the Rule (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in the Rule) and (ii) the time when the Official Statement is available to any person from a nationally recognized municipal securities repository, but in no case less than 25 days after the "end of the underwriting period" for the Certificates), the Issuer becomes aware of any fact or event which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the Issuer will notify the Representative (and for the purposes of this clause provide the Representative with such information as it may from time to time request), and if, in the reasonable opinion of the Representative, such fact or event requires preparation and publication of a supplement or amendment to the Official Statement, the Issuer will forthwith prepare and furnish, at the Issuer's own expense (in a form and manner approved by the Representative), areasonable number of copies of either amendments or supplements to the DAL:O S 87633/00024:1800451 v2 Official Statement so that the statements in the Official Statement as so amended and supplemented will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or so that the Official Statement will comply with law. If such notification shall be subsequent to the Closing, the Issuer shall furnish such legal opinions, certificates, instruments and other documents as the Representative may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. (e) The Representative hereby agrees to file the Official Statement with a nationally recognized municipal securities information repository. Unless otherwise notified in writing by the Representative, the Issuer can assume that the "end of the underwriting period" for purposes of the Rule is the date of the Closing. 4. Representations, Warranties and Covenants of the Issuer. The Issuer hereby represents and warrants to and covenants with the Underwriters that: (a) The Issuer is a political subdivision of the State of Texas (the "State ") duly created, organized and existing under the laws of the State, and has full legal right, power and authority under Chapter 271, Texas Local Government Code, as amended (the "Act"), and the Issuer's Home Rule Charter and at the date of the Closing will have full legal right, power and authority under the Act and the Ordinance (i) to enter into, execute and deliver this Agreement, the Ordinance and all documents required hereunder and thereunder to be executed and delivered by the Issuer (this Agreement, the Ordinance and the other documents referred to in this clause (i) other than the Official Statement are hereinafter referred to as the `Issuer Documents"), (ii) to sell, issue and deliver the Certificates to the Representative as provided herein, and (iii) to carry out and consummate the transactions contemplated by the Issuer Documents and the Official Statement and (iv) to utilize the proceeds from the sale of the Certificates for the purposes set forth in the Ordinance and the Official Statement (the "Project "), and the Issuer has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the Issuer Documents as they pertain to such transactions; (b) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it for (i) the adoption of the Ordinance and the issuance and sale of the Certificates, (ii) the approval, execution and delivery of, and the performance by the Issuer of the obligations on its part, contained in the Certificates and the Issuer Documents and (iii) the consummation by it of all other transactions contemplated by the Official Statement, and the Issuer Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the Issuer in order to carry out, give effect to, and consummate the transactions contemplated herein and in the Official Statement; (c) The Issuer Documents constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; the Certificates, when issued, delivered and paid for, in accordance with the Ordinance and this Agreement, will constitute legal, valid and binding obligations of the Issuer entitled to the benefits of the Ordinance and enforceable in accordance with their terms, subject to principles of sovereign immunity and bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; upon the issuance, authentication and delivery of the Certificates as aforesaid, the Ordinance will provide, for the benefit of the holders, from time to time, of the Certificates, the legally valid and binding pledge of and lien it purports to create as set forth in the Ordinance; (d) The Issuer is not in breach of or default in any material respect under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is otherwise subject, and no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a DAL:0587633/00024:1800451v2 default or event of default by the Issuer under any of the foregoing; and the execution and delivery of the Certificates, the Issuer Documents and the adoption of the Ordinance and compliance with the provisions on the Issuer's part contained therein, will not conflict with or constitute a breach of or default under any constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is otherwise subject or under the terms of any such law, regulation or instrument, except as provided by the Certificates and the Ordinance; (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer of its obligations under the Issuer Documents, and the Certificates have been duly obtained, except for (i) the approval of the Certificates by the Attorney General of the State of Texas (and registration of the Certificates by the Comptroller of Public Accounts of the State of Texas); and (ii) such approvals, consents and orders as may be required under the Blue Sky or securities laws of any jurisdiction in connection with the offering and sale of the Certificates; (f) The Certificates and the Ordinance conform to the descriptions thereof contained in the Official Statement under the captions "The Certificates" (excluding information under the caption "Book- Entry-Only System" thereunder) and "Official Statement Summary"; and the proceeds of the sale of the Certificates will be applied generally as described in the Official Statement under the captions "The Certificates -Sources and Uses of Certificate Proceeds" and "Official Statement Summary -Use of Proceeds." (g) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the Issuer after due inquiry, threatened against the Issuer, affecting the existence of the Issuer or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Certificates, the collection of the ad valorem taxes or the implementation of the Project pursuant to the Ordinance or in any way contesting or affecting the validity or enforceability of the Certificates, the Issuer Documents, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto, or contesting the powers of the Issuer or any authority for the issuance of the Certificates, the adoption of the Ordinance or the execution and delivery of the Issuer Documents, nor, to the best knowledge of the Issuer, is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Certificates or the Issuer Documents; (h) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (i) At the time of the Issuer's acceptance hereof and (unless the Official Statement is amended or supplemented pursuant to paragraph (d) of Section 3 of this Agreement) at all times subsequent thereto during the period up to and including the date of Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (j) If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 3 of this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to and including the date of Closing the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which made, not misleading; DAL:O S 87633/00024:1800451 v2 (k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Certificates as provided in and subject to all of the terms and provisions of the Ordinance; (1) The Issuer will furnish such information and execute such instruments and take such action in cooperation with the Representative as the Representative may reasonably request (A) to (y) qualify the Certificates for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Representative may designate and (z) determine the eligibility of the Certificates for investment under the laws of such states and other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of the Certificates (provided, however, that the Issuer will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any jurisdiction) and will advise the Representative immediately of receipt by the Issuer of any notification with respect to the suspension of the qualification of the Certificates for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; (m) The financial statements of, and other financial information regarding the Issuer, in the Official Statement fairly present the financial position and results of the Issuer as of the dates and for the periods therein set forth. Prior to the Closing, the Issuer will not take any action within or under its control that will cause any adverse change of a material nature in such financial position, results of operations or condition, financial or otherwise, of the Issuer. The Issuer is not a party to any litigation or other proceeding pending or, to its knowledge, threatened which, if decided adversely to the Issuer, would have a materially adverse effect on the financial condition of the Issuer; (n) Prior to the Closing the Issuer will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by any of the revenues or assets which will secure the Certificates; and (o) Any certificate, signed by any official of the Issuer authorized to do so in connection with the transactions contemplated by this Agreement, shall be deemed a representation and warranty by the Issuer to the Representative as to the statements made therein. 5. Closing. (a) At 10:00 a.m., Dallas, Texas time, on October 23, 2008, or at such other time and date as shall have been mutually agreed upon by the Issuer and the Representative (the "Closing Date"), the Issuer will, subject to the terms and conditions hereof, deliver to the Representative the initial Certificates registered in the name of the Representative, in temporary form, together with the other documents hereinafter mentioned, and will have available for immediate exchange definitive Certificates deposited with The Depository Trust Company, New York, New York ("DTC"), or deposited with the Paying Agent/Registrar, if the Certificates are to be held in safekeeping for DTC by the Paying Agent/Registrar pursuant to DTC's FAST system and the Ordinance, duly executed and authenticated in the form and manner contemplated below, and the Underwriters will, subject to the terms and conditions hereof, accept such delivery and pay the purchase price of the Certificates as set forth in Section 1 hereof in immediately available funds (such events being referred to herein as the "Closing"). Concurrently with such payment by the Underwriters, the Issuer shall return to the Representative, the check referred to in Section 1 hereof. Payment for the Certificates as aforesaid shall be made at the offices of the paying agent/registrar or such other place as shall have been mutually agreed upon by the Issuer and the Representative. (b) Delivery of the definitive Certificates in exchange for the initial Certificates shall be made through DTC, utilizing the book-entry only form of issuance, and the Issuer agrees to enter into such agreement, including a "Letter of Representations," as may be required to allow for the use of such book-entry only system. The definitive Certificates shall be delivered in fully registered form bearing CUSIP numbers without coupons with one Certificate for each maturity of the Certificates, registered in the name of CEDE & CO. and shall be made available to the Representative at least one business day before the Closing Date for DAL:O S 87633/00024: 1800451 v2 purposes of inspection, except that the failure to include CUSIP numbers or the printing of an incorrect CUSIP number on any Certificate shall not be a default under this Agreement. 6. Closing Conditions. The Underwriters have entered into this Agreement in reliance upon the representations, warranties and agreements of the Issuer contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Agreement to purchase, to accept delivery of and to pay for the Certificates shall be conditioned upon the performance by the Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Representative: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) The Issuer shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing; (c) At the time of the Closing, (i) the Issuer Documents and the Certificates shall be in full force and effect in the form heretofore approved by the Representative and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Representative; and (ii) all actions of the Issuer required to be taken by the Issuer shall be performed in order for Bond Counsel to deliver its opinions referred to hereafter; (d) At the time of the Closing, all official action of the Issuer relating to the Certificates and the Issuer Documents shall be in full force and effect and shall not have been amended, modified or supplemented; (e) At or prior to the Closing, the Ordinance shall have been duly executed and delivered by the Issuer and the Issuer shall have duly executed and delivered and the Registrar shall have duly authenticated the Certificates; (f) At the time of the Closing, there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or in the revenues or operations of the Issuer, from that set forth in the Official Statement that in the reasonable judgment of the Representative, is material and adverse and that makes it, in the reasonable judgment of the Representative, impracticable to market the Certificates on the terms and in the manner contemplated in the Official Statement; (g) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (h) All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in legal form and effect to the Representative; (k) At or prior to the Closing, the Representative shall have received copies of each of the following documents: (1) the Official Statement, and each supplement or amendment thereto, if any, executed on behalf of the Issuer by its Mayor, or such other official as may have been agreed to by the Representative; DAL:0587633/00024:1800451 v2 (2) the Ordinance with such supplements or amendments as may have been agreed to by the Representative; (3) the approving opinion of Bond Counsel with respect to the Certificates, in substantially the form attached to the Official Statement; (4) a supplemental opinion of Bond Counsel addressed to the Underwriters, substantially to the effect that: (i) the Certificates are exempted securities under the Securities Act of 1933, as amended (the "1933 Act "), and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act ") and it is not necessary, in connection with the offering and sale of the Certificates, to register the Certificates under the 1933 Act or to qualify the Ordinance under the Trust Indenture Act; and (ii) except to the extent noted therein, said firm has not verified and is not passing upon, and does not assume any responsibility for the accuracy, completeness or fairness of the statements and information contained in the Official Statement but that said firm has reviewed the statements and information contained in the Official Statement under the captions and subcaptions, "The Certificates" (except for the information under the captions "Book-Entry-Only System," "Certificateholders' Remedies" and "Sources and Uses of Certificate Proceeds"), "Certain Federal Income Tax Considerations for the 2008B Certificates," "Continuing Disclosure of Information" (except for the information under the subcaption "Compliance with Prior Undertakings"), "Other Information -Legal Opinions (except for the last sentence of the first paragraph thereof)," "Other Information - Registration and Qualification of Certificates for Sale" and "Other Information -Legal Investments and Eligibility to Secure Public Funds in Texas" and such firm is of the opinion that the statements and information relating to the Certificates and the legal issues contained under such captions and subcaptions are an accurate and fair descriptions of the laws and legal issues addressed therein and, with respect to the Certificates, such information conforms to the Ordinance; (5) An opinion, dated the date of the Closing and addressed to the Underwriters, of counsel for the Underwriters, to the effect that: (i) the Certificates are exempt securities under the 1933 Act and the Trust Indenture Act and it is not necessary, in connection with the offering and sale of the Certificates, to register the Certificates under the 1933 Act and the Ordinance need not be qualified under the Trust Indenture Act; and (ii) based upon their participation in the preparation of the Official Statement as counsel for the Underwriters and their participation at conferences at which the Official Statement was discussed, but without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, such counsel has no reason to believe that the Official Statement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except for any financial, forecast, technical and statistical statements and data included in the Official Statement and the information regarding the certificate insurer and the Depository and its book-entry system, as to which no view need be expressed); (6) A certificate, dated the date of Closing, of the Mayor and City Manager of the Issuer to the effect that (i) the representations and warranties of the Issuer contained herein are true DAL:O S 87633/00024:1800451 v2 and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation or proceeding or material tax challenge against it is pending or, to their knowledge, threatened in any court or administrative body nor to their knowledge is there a basis for litigation which would (a) contest the right of the members or officials of the Issuer to hold and exercise their respective positions, (b) contest the due organization and valid existence of the Issuer, (c) contest the validity, due authorization and execution of the Certificates or the Issuer Documents or (d) attempt to limit, enjoin or otherwise restrict or prevent the Issuer from functioning and collecting revenues, including payments on the Certificates, pursuant to the Ordinance, and other income or the anticipated receipt of ad valorem taxes, or the pledge thereof; (iii) the Ordinance has been duly adopted by the Issuer, is in full force and effect and has not been modified, amended or repealed, and (iv) to the best of their knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein, in light of the circumstances under which made, not misleading in any respect as of the time of Closing, and the information contained in the Official Statement is correct in all material respects and, as of the date of the Official Statement did not, and as of the date of the Closing does not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (7) A certificate of the Issuer in form and substance satisfactory to Bond Counsel and counsel to the Underwriters setting forth the facts, estimates and circumstances in existence on the date of the Closing, which establish that it is not expected that the proceeds of the Certificates will be used in a manner that would cause the Certificates to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "), and any applicable regulations (whether final, temporary or proposed), issued pursuant to the Code; (8) Any other certificates and opinions required by the Ordinance for the issuance thereunder of the Certificates; (9) Evidence satisfactory to the Representative that the Certificates have been rated Aa3 and AAA by Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, respectively, and that both such ratings are in effect as of the date of Closing; and (10) Such additional legal opinions, certificates, instruments and other documents as the Representative or counsel to the Underwriters may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer on or prior to the date of the Closing of all the respective agreements then to be performed and conditions then to be satisfied by the Issuer. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel and the Representative. If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Certificates contained in this Agreement, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Certificates shall be terminated for any reason permitted by this Agreement, this Agreement shall terminate and neither the Underwriters nor the Issuer shall be under any further obligation hereunder, except that the respective obligations of the Issuer and the Underwriters set forth in Sections 4 and 8(c) hereof shall continue in full force and effect. DAL:0587633/00024:1800451v2 7. Termination. The Underwriters shall have the right to cancel their obligation to purchase the Certificates if, between the date of this Agreement and the Closing, the market price or marketability of the Certificates shall be materially adversely affected, in the sole judgment of the Representative, reasonably exercised, by the occurrence of any of the following: (a) legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or any member of the Congress or the State legislature or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of which would be to impose, directly or indirectly, federal income taxation upon revenues or other income of the general character to be derived by the Issuer pursuant to the Ordinance, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences of any of the transactions contemplated herein; (b) legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Certificates, including any or all underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or that the Ordinance is not exempt from qualification under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of obligations of the general character of the Certificates, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; (c) any state blue sky or securities commission or other governmental agency or body shall have withheld registration, exemption or clearance of the offering of the Certificates as described herein, or issued a stop order or similar ruling relating thereto; (d) a general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange, the establishment of minimum prices on either such exchange, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, a general banking moratorium declared by federal, State of New York, or State officials authorized to do so; (e) the New York Stock Exchange or other national securities exchange or any governmental authority, shall impose, as to the Certificates or as to obligations of the general character of the Certificates, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriters; (f) any amendment to the federal or state Constitution or action by any federal or state court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Issuer, its property, income securities (or interest thereon), or the validity or enforceability of the assessments or the levy of taxes to pay principal of and interest on the Certificates; (g) any event occurring, or information becoming known which, in the reasonable judgment of the Representative, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits DAL:0587633/00024:1800451 v2 to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (h) there shall have occurred since the date of this Agreement any materially adverse change in the affairs or financial condition of the Issuer; (i) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities or a national or international calamity or crisis, financial or otherwise; (k) any fact or event shall exist or have existed that, in the Representative's reasonable judgment, requires or has required an amendment of or supplement to the Official Statement; (1) there shall have occurred any downgrading, or any notice shall have been given of (A) any intended or potential downgrading or (B) any review or possible change that does not indicate a possible upgrade, in the rating accorded any of the Issuer's obligations (including the rating to be accorded the Certificates); and (m) the purchase of and payment for the Certificates by the Underwriters, or the resale of the Certificates by the Underwriters, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission and such prohibition is not the result of the Underwriters' acts or failure to act. Expenses. (a) The Underwriters shall be under no obligation to pay, and the Issuer shall pay, any expenses incident to the performance of the Issuer's obligations hereunder, including, but not limited to (i) the cost of preparation and printing of the Certificates; (ii) the fees and disbursements of Bond Counsel; (iii) the fees and disbursements of the Financial Advisor to the Issuer; (iv) the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the Issuer; and (v) the fees for bond ratings. (b) The Underwriters shall pay (i) the cost of preparation and printing of this Agreement, the Blue Sky Survey and Legal Investment Memorandum (if any); (ii) all advertising expenses in connection with the public offering of the Certificates; and (iii) all other expenses incurred by them in connection with the public offering of the Certificates, including the fees and disbursements of counsel retained by the Underwriters. 9. Notices. Any notice or other communication to be given to the Issuer under this Agreement may be given by delivering the same in writing at City of Coppell, Texas, 255 Parkway Blvd., Coppell, Texas 75019, Attention: City Manager, and any notice or other communication to be given to the Representative under this Agreement may be given by delivering the same in writing to Morgan Keegan & Company, Inc., 5956 Sherry Lane, Suite 1900, Dallas, Texas 75225, Attention: Thomas K. Oppenheim. 10. Parties in Interest. This Agreement as heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the Issuer and the Underwriters (including successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. This Agreement may not be assigned by the Issuer. All of the Issuer's representations, warranties and agreements contained in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of any of the Underwriters; (ii) delivery of and payment for the Certificates pursuant to this Agreement; and (iii) any termination of this Agreement. 10 DAL:0 5 87633/00024:1800451 v2 11. Effectiveness. This Agreement shall become effective upon the acceptance hereof by the Issuer and shall be valid and enforceable at the time of such acceptance. 12. Choice oJLaw. This Agreement shall be governed by and construed in accordance with the law of the State. 13. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever. 14. Business Day. For purposes of this Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 15. Section Headings. Section headings have been inserted in this Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement. 16. Counterparts. This Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. [The remainder of this page is intentionally blank) 11 DAL:O S 87633/00024:1800451 v2 If you agree with the foregoing, please sign the enclosed counterpart of this Agreement and return it to the Representative. This Agreement shall become a binding agreement between you and the Underwriters when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Very truly yours, MORGAN KEEGAN & COMPANY, INC. SOUTHWEST SECURITIES, INC. By: MORGAN KEEGAN & COMPANY, INC., as Representative By: I ~ o Authorized Officer Accepted and agreed to this 14th y October, 2008 at ' ~t~m. CITY CO PELL, TEX~ / By / Name: O'llC~ ~S N. f7~"Y~~ "title: ~f ~7 ~n 12 DAL:0587633/00024:1800451 v 1 SCHEDULEI THE CERTIFICATES Maturity Amount($) (February 1) Rate(%) Yield(%) 1,515,000 2010 4.250 4.250 1,515,000 2011 4.650 4.650 1,510,000 2012 5.000 5.000 1,510,000 2013 5.200 5.200 450,000 2014 5.400 5.400 (Interest will accrue from Date of Delivery) The Certificates are not callable prior to stated maturity. DAL:0587633/00024:1800451 v2 [Attach Official Statement] DAL:0587633/00024:1800451v2