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OR 86-363 Combination Tax & Revenue Certificates for $2,100,000 ORDINANCE NO. 86363 $2,100,000 CITY OF COPPELL, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION SERIES 1986 Adopted: October 7, 1986 Dated: October 1, 1986 TABLE OF CONTENTS Page Recitals 1 ARTICLE I Definitions and Other Preliminary Matters Section 1.01. Definitions 2 Section 1.02. Findings 3 Section 1.03. Table of Contents, Titles and Headings 3 Section 1.04. Interpretation 3 ARTICLE H Security for the Certificates Section 2.01. Payment of the Certificates 4 Section 2.02. Interest and Sinking Fund 5 Section 2.03. Surplus Revenue Fund 5 ARTICLE lIl Authorization; General Terms and Provisions Regarding the Certificates Section 3.01. Authorization 6 Section 3.02. Date, Denomination, Maturities and Interest 6 Section 3.03. Medium, Method and Place of Payment 7 Section 3.04. Execution and Registration of Certificates 7 Section 3.05. Ownership 8 Section 3.06. Registration, Transfer and Exchange 9 Section 3.07. Cancellation 10 Section 3.08. Temporary Certificates 10 Section 3.09. Replacement Certificates 10 Section 3.10. Additional Obligations 11 ARTICLE IV Redemption of Certificates Before Maturity Section 4.01. Limitation on Redemption 11 Section 4.02. Optional Redemption 12 Section 4.03. Partial Redemption 12 Section 4.04. Notice of Redemption to Owners 12 Section 4.05. Payment Upon Redemption 13 Section 4.06. Effect of Redemption 13 Section 4.07. Lapse of Payment 13 (i) Page ARTICLE V Paying Agent/Registrar Section 5.01. Appointment of Initial Paying Agent/Registrar 14 Section 5.02. (~ualifications 14 Section 5.03. Maintaining Paying Agent/Registrar 14 Section 5.04. Termination 14 Section 5.05. Notice of Change to Ow~ers 14 Section 5.06. Agreement to Perform Duties and Functions 14 Section 5.07. Delivery of Records to Successor 15 ARTICLE VI Form of the Certificates Section 6.01. Form Generally 15 Section 6.02. Form of the Certificates 15 Section 6.03. CUSIP Registration 21 Section 6.04. Legal Opinion 21 ARTICLE VII Sale and Delivery of Certificates, Deposit of Proceeds Section 7.01. Sale of Certificates, Official Statement 21 Section 7.02. Control and Delivery of Certificates 22 Section 7.03. Deposit of Proceeds 22 ARTICLE VIII Investments Section 8.01. Investments 22 Section 8.02. Investment Income 22 ARTICLE IX Particular Representations and Covenants Section 9.01. Payment of the Certificates 23 Section 9.02. Other Representations and Covenants 23 ARTICLE X Default and Remedies Section 10.01. Events of Default 24 Section 10.02. Remedies for Default 24 Section 10.03. Remedies Not Exclusive 25 (ii) Page ARTICLE X1 Discharge Section 11.01. Discharge by Payment 25 Section 11.02. Discharge by Deposit 25 EXECUTION 27 (iii) ORDINANCE NO. 86-363 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY OF COPPELL, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 1986, IN THE ENACTING OTHER PROVISIONS RELATING TO THE AGGREGATE PRINCIPAL AMOUNT OF $2,100,000; AND PURPOSES AND SUBJECT OF THIS ORDINANCE WHEREAS, under the provisions of Article 2368a.1, Vernon's Texas Civil Statutes, as amended ("V.T.C.S."), the City of Coppell, Texas (the "City"), is authorized to issue certificates of obligation for the purposes specified in this Ordinance and for the payment of all or a portion of the contractual obligations for ~rofessional services of engineers, attorneys and financial advisors in connection therewith, and to sell the same for cash as herein provided; and WHEREAS, the City is authorized to provide that such obligations will be payable from and secured by the levy of a direct and continuing ad valorem tax against all taxable property within the City, in combination with all or a part of any revenues the City's combined waterworks and sewer system (the "System") remaining after payment of any obligations of the City payable in whole or in part from a lien or pledge of such revenues which would be equal to or superior to the obligations to be authorized herein; and WHEREAS, the City Council has found and determined that it is necessary and in the best interests of the City and its citizens that it issue such certificates of obligation authorized by this Ordinance; and WHEREAS, pursuant to a resolution heretofore passed by this governing body, notice of intention to issue certificates of obligation of the City payable as provided in this Ordinance, in an amount not to exceed $2,100,000 for the purpose of paying a contractual obligation to be incurred for the construction of a public work, to wit: improving and constructing streets for and within the City, and for paying all or a portion of the contractual obligations for professional services of engineers, attot~eys and financial advisors in connection therewith, was published in a newspaper of general circulation in the City on September 19, 1986 and September 26, 1986, the date of the first publication of said notice being at least fourteen (14) days prior to the date set for the passage of this Ordinance; and WHEREAS, no petition of any kind has been filed with the City Secretary, any member of the City Council or any other official of the City, protesting the issuance of such certificates of obligation; and WHEREAS, this City Council is now authorized and empowered to proceed with the issuance of said certificates of obligation and to set[ the same for cash; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions. Unless otherwise expressly provided or unless the context elea~ly requires otherwise in this Ordinance, the following terms shall have the meanings specified below: "Certificate' means any of the Certificates. 'Certificate Date" means the date designated as the initial date of the Certificates by Section 3.02(a) of this Ordinance. 'Certificates' means the certificates authorized to be issued by Section 3.01 of this Ordinance and designated as "City of Coppell, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1986;' in the aggpegate principal amount of $2,100,000. "City" means the City of Coppell, Texas. 'Closing Date" means the date of the initial deliver~j of and payment for the Certificates. "Code" means the Internal Revenue Code of 1954, as amended, ineinding the eegnlations and published rulings thereunder and any successor thereto or replacement thereof. "Event of Default' means any event of default as defined in Section 10.01 of this Ordinance. "Fiscal Year" means such fiscal year as shah from time to time be set by the City Council. "Initial Certificate' means the initial eeFtifieate authorized by Section 3.04 of this 0cdinanee. 'Inte~st and Sinking Fund" means the interest and sinking fund established by Section 2.02 of this Ordinance. 'Interest Payment Date" means the date or dates upon which interest on each Certificate is sehednied to be paid until their ~espeetive dates of maturity or prior redemption, such dates being Feb~uat~ i and August 1 of each year commencing Februa~j 1, 1988. "Net Revenues" means the gross revenues of the System less the expenses of operation and maintenance as said expenses are defined by Article 1113, V.T.C.S. "Owner" means the person who is the registered owner of a Certificate or Certificates, as shown in the Register. 0601D -~- "Paying Agent/Registrar" means initially First City Bank of Dallas, Dallas, Texas, or any successor thereto as provided in this Ordinm~ce. "Prior Lien Bonds" means troy and all bonds ur other obligations of the City presently outstanding or that may be hereafter issued, payable from and secured by a first Hen on and pledge of the Net Revenues. "Record Date" means the 15th day of the month next preceding an Interest Payment Date. "Register" means the Register specified in Section 3.06(a) of this Ordinance. "Special Payment Date" means the date which is 15 days after the Special Record Date. "Special Record Date" means that special record date established pursuant to Section 3.03(f) of this Ordinance. "Surplus Revenues" memos the revenues of the System remaining after payment of all operational and maintentmce expenses thereof, and all debt service, reserve and other reqnirements in connection with the City's Prior Lien Bonds. "Surplus Revenue Fmid" means the surplus revenue fund established by Section 2.03 of this Ordinance. "System" as used in this Ordinm~ce means the City's combined waterworks and sewer system, including all present and future additions, extensions, replacements and improvements thereto. Section 1.02. Findings. The declarations, determinations and findings declured, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. Section 1.03. Table of Contents, Titles and Headings. The table of contents, titles and headings of the Articles and Sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof a~d shall never be considered or given any effect in construing this Ordinance ur any provision hereof ur in ascertaining intent, if any question of intent should arise. Section 1.04. Interpretation. (a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. (b) This Ordin~u~ce and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II SECURITY FOR THE CERTIFICATES Section 2.01. Payment of the Certificates. Pursuant to the authority granted by the Constitution and laws of the State of Texas, there shall be levied and there is hereby levied for the current year and each succeeding year thereafter while the Certificates or any interest thereon is outstanding and unpaid, an ad valorem tax within legal limitations on each $100 valuation of taxable property in the City, at a rate sufficient within the limit prescribed by law to pay the debt service requirements on the Certificates, being (i) the interest on the Certificates and (ii) a sinking fund for their payment at maturity ~r a sinking fund of two percent per annum (whichever amount is the greater), when due and payable, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the debt service requirements, and the same shall not be diverted to any other parpose. The taxes so levied and collected shall be paid into the Interest and Sinking Fund. This governing body hereby declares its parpose and intent to provide and levy a tax legally and fully sufficient to pay the said debt service requirements, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding obligations. The amount of taxes to be provided annually for the payment of principal of and interest on the Certificates shall be determined and accomplished in the following manner: (a) The City's annual budget shall reflect (i) the amount of debt service requirements to become due on the Certificates in the next succeeding Fiscal Year of the City, (ii) the amount on deposit in the Sarplas Revenue Fund and the Interest and Sinking Fund, as of the date such budget is prepared (after giving effect to a~y payments required to be made daring the remainder of the then current Fiscal Year), and (iii) the amount of Sarplns Revenues estimated und budgeted to be available for the payment of such debt service requirements on the Certificates daring the next succeeding Fiscal Year of the City. (b) The amount required to be provided in the succeeding Fiscal Year of the City from ad valorem taxes shall be the amount, if any, the debt service requirements to be paid on the Certificates in the next succeeding Fiscal Year of the City exceeds the sum of (i) the amoant shown to be on deposit in the Surplus Revenue Fund and the Interest and Sinking Fund (after giving effect to any payments required to be made daring the remainder of the then cun'ent Fiscal Year) at the time the annual budget is prepared, and (ii) the Sarplns Revenues shown to be budgeted and available for payment of said debt service requirements. (c) Following the final approval of the annual budget of the City, the governing body of the City shall, by ordinance, levy an ad valorem tax at a rate -4- sufficient to produce taxes in the amount determined in paragraph (b) above, to be utilized for parposes of paying the principal of and interest on the Certificates in the next succeeding Fiscal Year of the City. The City hereby covenants and agrees that the Surplus Revenues are hereby irrevocably pledged to the payment of the principal of, redemption premium, if any, and interest on the Certificates as the same becomes due. If the Hens and provisions of this Ordinance shall be released in a marelet permitted by Article XI hereof, then the collection of such ad valorem tax may be suspended or appropriately reduced, as the facts may permit, mid farther deposits to the Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may permit. In determining the aggregate principal amount of outstanding Certificates, there shall be subtracted the amount of any Certificates that have been duly called for redemption and for which money has been deposited with the Paying Agent/Registrar for such redemption. Section 2.02. Interest and Sinking Fund. (a) The City hereby establishes a special fund or account to be desig~ated the "City of Coppell, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1986, Interest and Sinking Fund," said fund to be maintained at an official depository bm~k of the City separate mid apart from all other funds and accounts of the City. (b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Certificates when and as due and payable in accordance with their terms and this Ordinance. Section 2.03. Surplus Revenue Fund. The City hereby establishes a special fm~d or account to be designated the "City of Coppell, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1986, Surplus Revenue Fund," said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City, and shall in no event be diverted or drawn upon for any purpose other thmi those herein provided. All Surplus Revenues shall be paid over and deposited into the Surplus Revenue Fund. The Surplus Revenues shall be appropriated and employed in the following order: (a) First: For deposit to the interest and Sinking Fund to provide for the payment of the debt seawire requirements of the Certificates in accordance with the terms and conditions of this Ordinance; and (b) Second: After all the requirements of subparagraph (a) above have been provided for, whether by the collection of an ad valorem tax levied in this Ordh~ance or by the use of the pledged Surplus Revenues, the Surplus Revenues may be used for any lawful purpose. 0601D ARTICLE III AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE CERTIFICATES Section 3.01. Authorization. The City's certificates of obligation to be designated "City of Coppell, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1986" (the "Certificates"), are hereby authorized to be issued and delivered in accordance with the Constitution and laws of the State of Texas. The Certificates shall be issued in the aggregate principal amount of $2,100,000 for the purpose of paying a contractual obligation to be incurred for the consttn~ction of a public work, to wit: improving fred constructing streets for and within the City, and for paying all or a portion of the contractual obligations for professional services of engineers, '. attorneys and financial advisors in connection with said public improvements and the Certificates. Section 3.02. Date, Denomination, Maturities and Interest. (a) The Certificates shall be dated October 1, 1986. The Certificates shall be in fully registered form, without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Certificate, which shah be numbered T-1. (b) The Certificates shall mature on February 1 in the years and in the principal amounts set forth in the following schedule: Principal Interest Principal Interest Year Installntents Rate Year Installments Rate 1989 $ 50,000 6.70% 1998 $100 000 6.70% 1990 50,000 6.70% 1999 125 000 6.70% 1991 75,000 6.70% 2000 125 000 6.80% 1992 75,000 6.70% 2001 150 000 6.85% 1993 75,000 6.700/0 2002 150 000 6.90% 1994 75,000 6.70% 2003 175 000 6.95% 1995 100,000 6.700/0 2004 175 )00 7.00% 1996 100,000 6.70% 2005 200,000 7.00% 1997 100,000 6.70% 2006 200,000 7.00% (c) Interest shall accrue and be paid on each Certificate respectively until its redemption or prior maturity from the later of the Certificate Date or the most recent Interest Payment Date to which interest has been paid or provided for at the rates per annum for each respective maturity specified in the schedule contained In subsection (b) above. Such interest shall be payable semiannually on February 1 and August 1 of each year, commencing on February 1, 1988. 0601D -~- Section 3.03. Medium, Method and Place of Payment. (a) The principal of, redemption premium, if any, and interest on the Certificates shall be paid in lawful money of the United States of America. (b) Interest on the Certificates shall be payable to the Owners as shown in the Register at the close of business on the Record Date. (c) Interest shah be paid by check, dated as of the Interest Payment Date, and sent by the Paying Agent/Registrar to each Owner, first class United States mail, postage prepaid, to the address of each Owner as it appears In the Register, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and each Owner to whom interest is to be paid; provided, however, that the Owner shah bear all risk and expenses of such customary beufidng arrangements. (d) The principal of each Certificate shall be paid to the Owner thereof on the due date (whether at the maturity date or the date of prior redemption thereof) upon presentation and surrender of such Certificate at the principal corporate trust office of the Paying Agent/Registrar. (e) If the date for the payment of tile principal of or interest on the Certificates shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying Agent/Registrar is located are required ur authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not a Saturday, Sanday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shah for aH purposes be deemed to have been made on the due date thereof as specified in this Section. (f) In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date" which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Owner of a Certificate appearing on the books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. Section 3.04. Execution and Registration of Certificates. (a) The Certificates shall be executed on behalf of the City by the Mayor and the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates had been signed manually and In person by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal of the City had been manually impressed upon each of the Certificates. 06OLD -7- (b) In the event that any officer of the City whose manual or facsimile signature appears on the Certificates ceases to be such officer before the authentication of such Certificates or before the delivery thereof, such facsimile signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office. (c) Except as provided below, no Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on aH of the Certificates. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Certificate delivered at the Closing Date shall have attached thereto the Comptroller's Registration Certificate substantially In the form provided herein, -manually executed by the Comptroller of Public Accounts of the State of Texas, or by his duly authorized agent, which Certificate shall be evidence that the Certificate has been duly approved by the Attorney General of the State of Texas and that it is a valid and bInding obligation of the City, and has been registered by the Comptroller of Public Accounts of the State of Texas. (d) On the Closing Date, one Initial Certificate representing the entire principal amom~t of all Certificates, payable in stated installments to the initial purchaser, or its designee, manually signed by the Mayor and City Secretary of the City, approved by the Attorney General, and registered and manually signed by the Comptroller of Public Arcomits, will be delivered to the initial purchaser or its designee. Upon payment for the Initial Certificate, the Paying Agent/P~egistrar shall cancel the lnitial Certificate and deliver registered definitive Certificates, each definitive Certificate having a single, specified maturity and interest rate, in integral multiples of $5,000, in accordance with instructions received from the initial purchaser or its desig~ee. It shall be the duty of the initial purchaser or its designee to furnish to the Paying Agent/Registrar, at least five (5) business days prior to the Closing Date, written instructions on forms which the purchaser or its designee must request of and obtain from, and which shall be provided by, the Paying Agent/Registrar designating the names in which such definitive Certificates are to be registered, the addresses of the Owners, the respective maturities, interest rates and denominations. If such written instructions are not received within the specified time period, the cancellation of the Initial Certificate and delivery of definitive Certificates in exchange therefor may be delayed until such instructions are received. Section 3.05. Ownership. (a) The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute owner of such Certificate for the purpose of making and receiving payment of the principal thereof and redemption premium, if any, thereon, for the further purpose of making and receiving payment of the interest thereon, and for aH other purposes, whether or not such Certificate is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. (b) All payments made to the Owner of a Certificate shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to the extent of the sums paid. Section 3.06. Registration, Trm~sfer and Exchange. (a) So long as any Certificates remain outstanding, the City shall cause the Paying Agent/Registrar to keep at its principal corporate trust office a register in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Certificates in accordance with this Ordinance. (b) The ownership of a Certificate may be transferred only upon the presentation mid surrender of the Certificate at the principal corporate trust office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar. No transfer of any Certificate shall be effective until entered in the Register. (c) The Certificates shall be exchangeable upon the presentation and surrender thereof at the principal corporate trust office of the Paying Agent/ Registrar for a Certificate or Certificates of the same maturity and interest rate and in a denomination or denominations of any integral multiple of $5,000, and in an aggregate principal amount equal to the unpaid principal amount of the Certificates presented for exchange. The Paying Ageut/Registrar is hereby authorized to authenticate and deliver Certificates exchm}ged for other Certificates in accordance with this Section. (d) Each exchange Certificate delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such exchange Certificate is delivered. (e) No service charge shall be made to the Om~er for the initial registration or any subsequent transfer of Certificates, but the Paying Agent/Registrar will require the Owner to pay the reasonable cost incurred by the Paying Agent/Registrar in co~mection with the exchange of a Certificate or Certificates for a different denomination where no simultaneous transfer of the Certificate or Certificates to a new Owner also occurs. In addition, the Paying Agent/Registrar may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed In connection with the registration, transfer or exchange of a Certificate. (f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer, or exchange any Certificate or portion thereof called for redemption prior to maturity within 30 days prior to the date fixed for redemption; provided, however, such limitation of trmnsfer shall not be applicable to an exchange by the Owner of an unredeemed balance of a Certificate called for redemption in part. 0601D Section 3.07. Cancellation. All Certificates paid or redeemed before scheduled maturity in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and delivered in accordance with this Ordinance, shall be cancelled and destroyed upon the making of proper records regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shah periodically funfish the City with certificates of destruction of such Certificates. Section 3.08. Temporary Certificates. (a) Following the delivery and registration of the Initial Certificate and pending the preparation of definitive Certificates, the City may execute and, upon the City's request, the Paying Agent/Registrar shah authenticate and deliver, one or more temporary Certificates that are printed, lithographed, typewritten, .mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Certificates in lieu of which they are delivered, without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers of the City executing such temporary Certificates may determine, as evidenced by their sighting of such temporary Certificates. (b) Until exchanged for Certificates in definitive form, such Certificates in temporary form shall be entitled to the benefit and security of this Ordinance. (c) The City, without unreasonable delay, shall prepare, execute and deliver to the Paying Agent/Registrar, and thereupon, upon the presentation and surrender of the Certificate or Certificates in temporary form to the Paying Agent/Registrar, the Paying Agent/Registrar shah authenticate and deliver in exchange therefor a Certificate or Certificates of the same matttrity and series, in definitive form, in the authorized denomination, and in the same aggregate principal amount, as the Certificate or Certificates in temporary form surrendered. Such exchange shall be made without the making of any charge therefor to any Owner. Section 3.09. Replacement Certificates. (a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Certificate, the Paying Agent/Registr~tr shah authenticate and deliver in exchange therefor a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneoasly outstanding. The City or the Paying Agent/Registrar may require the Owner of such Certificate to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith. (b) in the event that any Certificate is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Certificate of like tenor and principal amount, bearing a number not contemporaneonsly outstanding, provided that the Owner first complies with the following requirements: 0601D (i) funfishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Certificate; (ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar, and acceptable to the City, to save the Paying Agent/Registrar and the City hm'mless; (iii) pays all expenses and charges in com~ection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental chm:ge that is authorized to be imposed; and (iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar. (c) If, after the delivery of such replacement Certificate, a bona fide pdrchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrur in connection therewith. (d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Certificate, may pay such Certificate. (e) Each replacement Certificate delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such replacement Certificate is delivered. Section 3.10. Additional Obligations. The City reserves the right to issue any obligations authorized by law and such obligations may be payable from the same source and secured in the same manner on a parity with the Certificates. ARTICLE IV REDEMPTION OF CERTIFICATES BEFORE MATURITY Section 4.01. Limitation on Redemption. The Certificates shall be subject to redemption before scheduled maturity only as provided in this Article IV. 0601D Section 4.02. Optional Redemption. (a) The City reserves the option to redeem Certificates maturing on and after February 1, 1997, in whole or any part, before their respective scheduled maturity dates, on February 1, 1996, or on any Interest Payment Date thereafter (such redemption date or dates to be fixed by the City) at a price equal to the principal mount of the Certificates called for redemption plus accrued interest to the date fixed for redemption. (b) The City, at least 45 days before the redemption date (unless a shorter period shall be satisfactory to the Paying Agent/Registrar), shah notify the Paying Agent/Registrar of such redemption date and of the maturity or maturities and the amounts thereof to be redeemed. Section 4.03. Partial Redemption. (a) If less them all of the Certificates are to be redeemed, the City shall aircot the Paying Agent/Registrar to call by lot the Certificates, or portions thereof within such maturity and in such principal amounts for redemption. (b) A portion of a single Certificate of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Certificate is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion of the Certificate as though it were a single Certificate for parposes of selection for redemption. (c) Upon surrender of any Certificate for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver an exchange Certificate or Certificates in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered, such exchange being without charge, notwithstanding any provision of Section 3.06 to the contrgfy. (d) The Paying Agent/Registrar shall promptly notify the City in writing of the principal amomR to be redeemed of any Certificate as to which only a portion thereof is to be redeemed. Section 4.04. Notice of Redemption to Owners. (a) The Paying Agent/Registrar shah give notice of any redemption of Certificates by sending notice by first class United States mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the Owner of each Certificate (or part thereof) to be redeemed, at the address shown on the Register. (b) The notice shah state the redemption date, the redemption price, the place at which the Certificates are to be surrendered for payment, and, if less than all the Certificates outstanding are to be redeemed, an identification of the Certificates or portions thereof to be redeemed. (c) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice. 0601D Section 4.05. Payment Upon Redemption. (a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Certificates to be redeemed on such date by setting aside and holding in trust such amounts received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of, premium, if any, and accrued interest on the Certificates being redeemed. (b) Upon presentation and surrender of any Certificate called for redemption at the principal corporate trust office of the Paying Agent/Registrar on or after the date fixed for redemption, the Paying Agent/Registrar shah pay the principal of, redemption premium, if any, and accrued interest on such Certificate to the date of redemption from the money set aside for such purpose. Section 4.06. Effect of Redemption. (a) Notice of redemption having been given as provided in Section 4.04 of this Ordinance, the Certificates or portions thereof called for redemption shall become due m~d payable on the date fixed for redemption and, unless the City defaults in its obligation to make provision for the payment of the principal thereof, premium, if any, or accrued interest thereon, such Certificates or portions thereof shall cease to bear interest from and after the date fixed for redemption, whether or not such Certificates are presented and surrendered for payment on such date. (b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Certificate or portion thereof called for redemption shah continue to bea~ interest at the rate stated on the Certificate until paid or until due provision is made for the payment of same by the City. Section 4.07. Lapse of Payment. (a) Money set aside for the redemption of Certificates and remaining unclaimed by the Owners of such Certificates after the redemption date shall be segregated in a special escrow account and held in trust, uninvested, without interest, for the account of such Owners. (b) Money set aside for the redemption of Certificates and remaining unclaimed by the Owners of such Certificates for three years after the date of redemption shall be applied to the next payment or payments on the Ce,~ificates thereafter coming due and, to the extent any such money remains after the retirement of all outstanding Certificates, shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any Owners of such Certificates for any further payment of such unclaimed moneys or on account of any such Certificates, subject to any applicable escheat law or similar law. 0601D ARTICLE V PAYING AGENT/REGISTRAR Section 5.01. Appointment of Initial Paying Agent/Registrar. First City Bank of Dallas, Dallas, Texas, is hereby appointed as the initial Paying Agent/Registrar for the Certificates. Section 5.02. Qualifications. Each Paying Agent/Registrar shall be (i) a banking corporation, a banking association or a financial institution organized and doing business under the laws of the United States or of any state thereof, (ii) authorized under such laws to exercise trust powers and (iii) subject to supervision or examination by a federal or state governmental authority. Section 5.03. Maintaining Paying Agent/Registrar. (a) At all times while any Certificates are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance. The Mayor is hereby authorized and directed to execute an agreement with the Paying Agent/Registrar specifying the duties and responsibilities of the City and the Paying Agent/Registrar. The signature of the Mayor shall be attested by the City Seeretard of the City. (b) If the Paying Agent/Registrar resigns or otherwise ceases to serve eks such, the City will promptly appoint a replacement. Section 5.04. Termination. The City, upon not less than 60 days notice, reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated written notice of such termination. Section 5.05. Notice of Change to Owners. Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by first class United States mail, postage prepaid, at the address in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar. Section 5.06. Agreement to Perform Duties and Functions. By accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed thereby. o601n Section 5.07. Delivery of Records to Successor. If a Paying Agent/Registrar is replaced, such Paying Agent, promptly upon the appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent boo-ks and records relating to the Certificates to the successor Paying Agent/Registrar. ARTICLE VI FORM OF THE CERTIFICATES Section 6.01. Form Generally. (a) The Certificates, including the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of the Paying .Agent/Registrar, and the Assignment form to appear on each of the Certificates, (i) shah be substantially in the form set forth in this Article, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) m~d such legends and endorsements (including a~y reproduction of an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the officers executing such Certificates, as evidenced by their execution thereof. (b) Any portion of the text of any Certificates may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Certificates. (c) The definitive Certificates, if any, shall be printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar mam~er, all as determined by the officers executing such Certificates, as evidenced by their execution thereof. (d) The hfitial Certificate submitted to the Attorney General of the State of Texas may be typewritten and photocopied or otherwise reproduced. Section 6.02. Form of the Certificates. The form of the Certificates, including the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially as follows: osox~ -15- (a) Form of Certificate. REGISTERED REGISTERED No.__ $ United States of America State of Texas COUNTY OF DALLAS CITY OF COPPELL, TEXAS COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION SERIES 1986 INTEREST RATE: DUE DATE: CERTIFICATE DATE: CUSIP NUMBER: October 1, 1986 The City of Coppell (the "City"), in the Comity of Dallas, State of Texas, for value received, hereby promises to pay to or registered assigns, on the due date specified above, the sum of DOLLARS unless this Certificate shall have been sooner called for redemption and the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the later of the Certificate Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal areomit has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiammally on February 1 and August 1 of each year, commencing February 1, 1988. The principal of this Certificate shall be payable without exehunge or collection charges in lawful money of the United States of America upon presentation and surrender of this Certificate at the principal corporate trust office of the Paying Agent/Registrar executing the registration certificate appearing hereon. Interest on this Certificate is payable by cheek dated as of the Interest payment date, mailed by the Paying Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar. For the purpose of the payment of interest on this Certificate, the registered owner shah be the person In whose name tt~s Certificate is registered at the close of business on the "Record Date," which shall be the fifteenth dsy of the month next preceding such interest payment date. In the event of a non-l~ayment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such Interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such Interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (the "Special Payment Date" which shah be 15 0601D days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each registered owner of a Certificate appearing on the books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. If the date for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day which is not a Saturday, Sm~day, legal holiday, or day on which banking institutions are required or 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 is one of a series of fully registered certificates specified in the title hereof issued in the aggregate principal amount of $2,100,000 (herein referred to as the "Certificates"), issued pursuant to a certain ordinance of the City (the "Ordinance") for the purpose of paying a contractual obligation to be incurred for the construction of a public work, to wit: improving and constructing streets for and within the City, and for paying aH or a portion of the contractual obligations for professional services of engineers, attorneys and financial advisors in connection with said public improvements and the Certificates. The City has reserved the option to redeem the Certificates maturing on or after February 1, 1997, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 1, 1996, or on any interest payment date thereafter, at a price equal to the principal amount of the Certificates so called for redemption plus accrued interest to the date fixed for redemption. If less thm~ all of the Certificates are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Certificates, or portions thereof, within such maturity and in such principal amounts, for redemption. Notice of such redemption or redemptions shall be given by first class mail, postage prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each of the Certificates to be redeemed in whole or in part. Notice having been so given, the Certificates or portions thereof designated for redemption shah become due and payable on the redemption date specified in such notice, and from and after such date, notwithstanding that any of the Certificates or portions thereof so called for redemption shall not have been surrendered for payment, interest on such Certificates or portions thereof shall cease to accrue. As provided in the Ordinance, and subject to certain limitations therein set forth, this Certificate is transferable upon surrender of this Certificate for transfer at the principal corporate trust office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/ Registrar, and, thereupon, one or more new fully registered Certificates of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal areomit will be issued to the designated transferce or transferees. Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Certificate or portion thereof called for redemption prior to maturity within 30 days prior to the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the owner of an unredeemed balance of a Certificate called for redemption in part. The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Certificate is registered on the Record Date, or Special Record Date, as applicable) and for all other purposes, whether or not this Certificate be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the series of which it is a part is duly authorized by law; that all acts, conditions and things to be done precedent to and in the issuance of this Certificate and the series of which it is a part, have been properly done, have happened and have been performed in regular and due time, form and mam~er as required by law; that proper provisions have been made for the levy and collection annually of taxes upon all taxable property in said City sufficient within the limits prescribed by law to pay the interest on this Certificate and the series of which it is a part as due and to provide for the payment of the principal as the same matures; and that, in addition to said tax, further provisions have been made for the payment of the principal hereof and the interest hereon, and of the series of which this Certificate is a part, by pledging to such purposes all or a portion of the Surplus Revenues, as defined in the Ordinance, derived by the City from the operation of the combined waterwor-ks and sewer system, that when so collected, such taxes and SiLopins Revenues shall be appropriated to such purposes; and that the total indebtedness of the City, including the Certificates, does not exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Secretary, and the official seal of the City has been duly impressed or placed in facsimile on this Certificate. Mayor, City of Coppell, Texas City Secretary, City of Coppell, Texas [SEAL] -18- (b) Form of Comptroller's Registration Certificate. The following ComptroHer's Registration Certificate may be deleted from the definitive Certificates if such certificate on the Initial Certificate is fully executed. OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. OF THE STATE OF TEXAS § I hereby certify that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this Certificate has been examined by him as required by law, that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that this Certificate has this day been registered by me. Witness my hand and seal of office at Austin, Texas, [SEAL] Comptroller of Public Accounts of the State of Texas (c) Form of Certificate of Paying Agent/Registrar. The following Certificate of Paying Agent/Registrar may be deleted from the Initial Certificate if the Comptroller's Registration Certificate appears thereon. CERTIFICATE OF PAYING AGENT/REGISTRAR The records of the Paying Agent/Registrar show that the Initial Certificate of this series of certificates was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates referred to in the within-mentioned Ordinance. FIRST CITY BANK OF DALLAS, as Paying Agent/Registrar Dated: By: Authorized Signatory 06OLD -19- (d) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or tSq~ewrite name, address and Zip Code of transfe~ee): (Social Security or other identifying number: ) the within Certificate and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration hereof, with full power of substitution in the premises. Dated: NOTICE: The signature on this Assignment Signature Guaranteed By: must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular and must be guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers. Authorized Signatory (e) The Initial Certificate shall be substantially in the form set forth in subsections (a) through (d) of this Section, except for the following alterations: (i) immediately under the name of the Certificate the headings "interest Rate" and "Due Date" shall both be completed with the expression 'As show~l below"; (ii) in the first pax'agraph of the Certificate, the words "on the due date specified above" shall be deleted and the following will be inserted: "on February 1 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Principal Interest Year Installments Rate" (Information to be inserted from schedule in Section 3.02 hereof.) (iii) in the second paragraph, the words "executing the registration certificate appearing hereon" shall be deleted and m~ additional sentence shah be added to the paragraph as follows: "The initial Paying Agent/Registrar is First City Bank of Dallas, Dallas, Texas."; m~d 0601D (iv) the Initial Certificate shah be nmnbered T-1. Section 6.03. CUSIP Registration_. The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor's Corporation, New York, New York, and may authorize the printing of such numbers on the face of the Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor the attorneys approving said Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Certificates. Section 6.04. Legal Opinion. The approving legal opinion of Hutchison Price Boyle & Brooks, Bond Counsel, may be printed on the reverse side of each Certificate over the certification of the .City Secretary of the City, which may be executed in facsimile. ARTICLE VII SALE AND DELIVERY OF CERTIFICATES, DEPOSIT OF PROCEEDS Section 7.01. Sale of Certificates, Official Statement. (a) The Certificates are hereby sold and shall be delivered to InterFirst Bank Dallas, N.A. and Associates, for a price of par plus accrued interest to the Closing Date, and a discomit of $31,411.00. (b) The Official Statement and the Official Notice of Sale, both dated September 22, 1986, and the Official Bid Form dated October 7, 1986, aH of which have been prepaz~ed and distributed in connection with the sale of the Certificates are hereby approved, confirmed and adopted as official documents and statements of the City. (c) The use of such Official Statement and the Official Notice of Sale and all addenda, if any, thereto, in the offering and sale of the Certificates is hereby approved, authorized and ratified. (d) The signing of the Official Statement by the Mayor and the City Secretary are hereby approved, authorized and ratified. (e) All officers of the City are authorized to execute such documents, certificates and receipts as they may deem appropriate in order to cousummate the delivery of the Certificates In accordance with the terms of sale therefor. (f) The obligation of the purchaser identified in subsection (a) of this Section to accept delivery of the Certificates is sub}eel to such purchaser being furnished with the final, approving opinion of Hutchison Price Boyle & Brooks, bond counsel for the City, which opinion shall be dated and delivered the Closing Date. -21- Section 7.02. Control and DeliveLW of Bonds. (a) The Mayor of the City is hereby authorized to have control of the Initial Certificate and all necessary records and proceedings pertaining thereto pendIng investigation, examination and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State and registration with, and initial exchange or transfer by, the Paying Agent/Registrar. (b) After registration by the Comptroller of Public Accounts, delivery of the Certificates shah be made to the initial purchasers thereof under and subject to the general supervision and direction of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale. Section 7.03. Deposit of Proceeds. (a) First: All amounts received on the Closing Date as accrued interest o.n the Certificates from the Certificate Date to the Closing Date shall be deposited to the Interest and Sinking Fund. (b) Second: The remaining balance received on the Closing Date shall be deposited to the general fund of the City or as otherwise may be directed by an authorized officer of the City, such moneys to be dedicated and used solely for the purposes for which the Certificates are being issued as herein provided. ARTICLE VIII INVESTMENTS Section 8.01. Investments. (a) Money in the Interest and Sinking Fmid or the Surplus Revenue Fund created by this Ordina~ee, at the option of the City, may be invested in such securities or obligations as permitted under applicable law. (b) Any securities or obligations in which such money is so invested shall be kept and held in trust for the benefit of the Owners and shall be sold and the proeeeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. Section 8.02. Investment Income. Interest and income derived from investment of the Interest and Sinking Fund and the Surplus Revenue Fund shall be eredited to such Fund, respeetively. -22- ARTICLE IX PARTICULAR REPRESENTATIONS AND COVENANTS Section 9.01. Pa.Vment of the Certificates. On or before each interest payment date of the Certificates and while any of the Certificates are outstanding and unpaid, them shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such interest on and principal of the Certificates as will accrue ur mature on the applicable interest payment date. Section 9.02. Other Representations and Covenants. (a) The City will faithfully perform, at all times, any and all covenants, andevtakings, stipulations, and provisions contained in this Ordinance and in each Qertifieate; the City will promptly pay or eanse to be paid the principal of and interest on each Certificate on the dates and at the places and mam~er prescribed in such Ceaifieate; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or eanse to be deposited the amounts of money specified by this Ordinance. (b) The City is duly anthovized under the laws of the State of Texas to issue the Certificates; all action on its part for the creation and issuance of the CeFdfieates has been duly and effectively taken; and the Certificates in the hands of the Ow~evs thereof are and will be valid and enforceable obligations of the City in accordance with their terms. (e) The City hereby represents that the proceeds of the Certificates are needed at this time to finance the costs of the capital improvements for which the Certificates were issued (as specified in this Ordinance); that based on current facts, estimates, and circumstances, it is reasonably expected that final disbursement of the proceeds of the Certificates will occur within three years after the Closing Date, that substantial binding obligatious to commence such improvements will be incurred within six months after such date, and that the construction or acquisition of the improvements will proceed with due diligence to completion; that it is not reasonably expected that the proceeds of the Certificates or money deposited in the Interest and Sinking Fund, the Surplns Revenue Fund or the Reserve Fund will be used or invested in a manner that would eanse the Certificates to be or become "arbitrage bonds," within the meaning of Section 103(e) of the Code. (d) The City will not take any action or fail to take any artinn with respect to the investment of the proceeds of the Certificates or any other fm~ds of the City, including amounts received from the investment of any of the foregoing, that, based upon the facts, estimates, and circumstances known on the Closing Date, would result in constituting the Certificates "arbitrage bonds," within the mea~fing of such Section 103(e) of the Code, sued the City will not take any deliberate action motivated by arbitrage that would have such result. (e) Proper officers of the City charged with the responsibility of issuing the Certificates are hereby directed to make, execute and deliver certifications as 0601D to facts, estimates and circumstances in existence as of the Closing Date and stating whether there are any facts, estimates or circumstances that would materially change the City's current expectations. (f) The City will comply with provisions of Section 148(f) of the proposed internal Revenue Code of 1986 (if it becomes law) which relate to the rebate to the Unjted States of the excess arbitrage earnings as detailed in a letter of instructions to be delivered to the City upon issuance of the Certificates. (g) The Certificates are hereby designated "Qualified Ta.x Exempt Obligations" for purposes of Section 265(b)3(B) of the proposed Internal Revenue Code of 1986. The Certificates are not "private activity bonds" as defined in the said proposal Code and neither the City nor any of its subordinate entities, if any, reasonably expect to issue in excess of $10,000,000 aggregate areomit of such bonds during calendar year 1986, and the City hereby covenants not to designate more than $10,000,000 aggregate amount of Qualified Tax Exempt Obligations dm'ing calendar year 1986." (h) The covenants and representations made or required by this Section are for the benefit of the Owners and may be relied upon by the Owners and bond counsel for the City. ARTICLE X DEFAULT AND REMEDIES Section 10.01. Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an "Event of Default," to wit: (i) the failure to make payment of the principal of, redemption premium, if any, or interest on any of the Certificates when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the City, the failure to perform which materially, adversely affects the rights of the Owners, including but not limited to, their prospect or ability to be repaid in accordance with this Ordina~ce, and the continuation thereof for a period of 60 days after notice of such default is given by any Owner to the City. Section 10.02. Remedies for Default. (a) Upon the happening of any Event of Default, then and in every case any Owner or an authorized representative thereof, including but not limited to, a trustee or trustees therefor, may proceed against the City for the purpose of protecting and enforcing the rights of the Owners under this Ordinance, by mandamas or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to 0601D -~- enjoin any act or thing that may be unlawful or in violation of any fight of the Owners hemunder or any combination of such remedies. (b) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Owners of Certificates then outstanding. Section 10.03. Remedies Not Exclusive. (a) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shah be in addition to every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates shall not be available us a remedy under this Ordinance. (b) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. ARTICLE XI DISCHARGE Section 11.01. Discharge by Payment. When all Certificates have been paid in full as to principal and as to intet'est and redemption premium, if any, or when all Certificates have become due and payable, whether at maturity or by prior redemption or otherwise, and the City shall have provided for the payment of the whole amotmt due or to become due on all Certificates then outstanding, including all interest that has accrued thereon or that may accrue to the date of maturity or prior redemption, and any premium due or that may become due at maturity or prior redemption, by depositing with the Paying Agent/Registrar, for payment of the principal of such outstanding Certificates and the interest accrued thereon and any redemption premium due thereon, the entire amount due or to become due thereon, m~d the City shall also have paid or caused to be paid all sums payable under this Ordinance by the City, including the compensation due or to become due the Paying Agent/Registrar, then the Paying Agent/Registrar, upon receipt of a letter of instructlinks from the City requesting the same, shall discharge and release the Hen of this Ordinance and execute and deliver to the City such reteases or other instruments as shall be requisite to release the lien hereof. Section 11.02. Discharge by Deposit. (a) The City may discharge its obligation to pay the principal of, redemption premium, if any, and interest on all or any portion of the Certificates and its obligation to pay other stuns payable or to become payable under this Ordinance by the City, including the compensation due or to become due the Paying Agent/Registras', in accordance with the following provisions: (i) depositing or causing to be deposited with the Paying Agent/Registrar an amount of money that, together with the interest earned on or capital gains or profits to be realized from the investment of such money, will be sufficient to pay the principal of, redemption premium, if any, and accrued interest on such Certificates to maturity or to the date fixed for prior redemption of such Certificates, and to pay such other amounts as may be reasonably estimated by the Paying Agent/Registrar to become payable under this Ordinance with respect to the Certificates being provided for, including the compensation due or to become due the Paying Agent/Registrar; and (ii) providing the Paying Agent/Registrar with an opinion of nationally recognized bond counsel acceptable to the Paying Agent/Registrar to the effect that the deposit specified in subdivision (i) of this subsection (a) will not cause the interest on any of the Certificates to become subject to federal income t~xation. (b) Subject to subsection (c) of this Section, upon compliance with subsection (a) of this Section, the Certificates for the payment of which provision is thus made shall no longer be regarded as outstanding and unpaid, and the Paying Agent/Registrar, upon receipt of a letter of instructions from the City requesting the same, shall discharge and release the Hen of this Ordinance as to such Certificates and shall execute and deliver to the City such releases or other instruments as shall be requisite to release the lien hereof. (c) Before the discharge and release of any portion of the lien of this Ordinance pursuant to this Section, the City shall make the following provisions with the Paying Agent/Registrar: (i) the establishment of a sepurate escrow account fund with the Paying Agent/Registrar for the deposit pursuant to subsection (a)(i) of this Section; (ii) the payment to the Owners at the date of maturity or at the date fixed for prior redemption, as applicable, of the full amount to which the Owners of the appropriate Certificates would be entitled by way of principal, redemption premium, if any, and interest to the date of such maturity or prior redemption; (iii) the investment of such moneys by the Paying Agent/ Registrar in securities or obligations maturing in sufficient time, in the judgment of the Paying Agent/Registrar, to make available the moneys required for such purposes; (iv) the sending of written notice by registered or certified United States mail to the Owner of each appropriate Certificate then outstanding within 30 days following the date of such deposit that such moneys are so available for such payment; and (v) the payment to the City, periodically or following final payment of the principal of, redemption premium, if any, and interest on the appropriate Certificates, of any moneys, interest earnings, profits or capital gains over and above the atommrs necessary for such purposes. 0601D FINALLY PASSED, APPROVED AND EFFECTIVE this 7th day of October, 1986. Mayor, City ~3oppell, Texas -~TTEST: [SEAL] 0601D