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OR 183 Authorizes the Issuance of $225,000 to City of Coppell Combination Tax & Junior Lien Water & Sewer Revenue Certificates AN ORDINANCE N0. 183 BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, AUTHORIZING THE ISSUANCE OF $225,000 "CITY OF COPPELL, TEXAS, COMBINATION TAX AND JUNIOR LIEN WATER AND SEWER REVENUE CERTIFICATES OF OBLIGATION SERIES 1978," DATED JUNE 15, 1978, UNDER AND PURSUANT TO THE AUTHORITY CONTAINED IN THE CERTIFICATE OF OBLIGATION ACT OF 1971, AS AMENDED; MAKING PROVISION FOR THE PAYMENT AND SECURITY OF SUCH OBLIGATIONS; PROVIDING FOR THE SALE AND DELIVERY THEREOF; AND ENACTING OTHER PROVISIONS INCIDENT AND RELATING TO THE PURPOSE AND SUBJECT OF THIS ORDINANCE WHEREASt under the provisions of Article 2368a. 1, V.A.T.C.S., the governing body of a city is authorized to issue Certificates of Obligation For the purpose of purchasingt repairing, improving and extending the existing sbnltary sewer system in and for the City and For the payment of necessary and incidental expenses related thereto; and WHEREAS, the City is authorized to provide that such obligations will be payable from and secured by ad valorem taxes in combination with the net revenues of the City's water and sewer system, and to sell the same For cash as herein provided; and WHEREAS, the City Council has found and determined that it is necessary and in the best interest of the City and its citizens that it issue the Combination Tax and Junior Lien Water and Sewer Revenue Certificates of Obligation authorized by this ordinance; and WHEREAS, pursuant to an ordinance heretofore passed by this governing body~ notice of intention to issue Certificates of gbllgatlon of this City payable from net revenues of the City's water and sewer system and from ad valorem taxes, in an amount not to exceed $250,000 for the purpose of purchasing, repairing, improving and extending the existing sanitary sewer system in and for said City and for the payment of necessary and incidental expenses related thereto, was published in a newspalter of general circulation in said City on the 27th day of May 1978, and the 3rd day of June · 1978· the date ~rst publication of said Noticebelng 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 members of the Council or any other official of the City, protesting the issuance of such Certificates; and WHEREAS, this Council is now authorized and empowered to proceed with the issuance of said Certificates of Obligation and to sell the same for cash; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS: Section 1. That for the purpose of purchasing, repairing, improving and extending the existing sanitary sewer system in and ~or said City and for the payment of necessary and incidental expenses related thereto, there shall be and there is hereby ordered to be issued, under and by virtue of the Constitution and laws of the State of Texas, particularly Article 2368a. 1, V.A.T. C.S., a series of Certificates of Obligation of the City of Coppell, Texas, to be known as "CITY OF COPPELL, TEXAS, COMBINATION TAX AND JUNIOR LIEN WATER AND SEWER REVENUE CERTIFICATES OF OBLIGATION, SERIES 1978," in the principal amount of TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($225,000). Section 2. That said Certificates shall be dated June 15, 1978, shall be numbered consecutlvely from One (1) through Forty-Five (45), shall each be in the denominaHon of Five Thousand Dollars ($5,000.00), and shall become due and payable sellally on June 15 in each of the years in accordance with the Following schedule: CERTIFICATE NUMBERS (all inclusive) YEAR (June 15) AMOUNT 1 1980 2 1981 3 - 4 1982 5 - 6 1983 7 - 8 1984 9 - 10 1985 11 - 12 1986 13 - 14 1987 15 - 16 1988 17 - 18 1989 19 - 21 1990 5,000 5;000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 15,000 -2- CERTIFICATE NUMBERS (all inclusive) YEAR (June 15) AMOUNT 22 - 24 1991 $ 15,000 25 - 27 1992 15tOOO 28 - 30 1993 15,000 31 - 33 1994 15,000 34 - 36 1995 15,000 37 - 40 1996 20,000 41 - 45 1997 25,000 PROVIDEDt HOWEVERt that the City reserves the right at its option to redeem the Certificates of this series maturing on June 15, 1990 through June 15, 1997, both inclusive~ in whole, or in any part thereof, on June 15, 1989, or on any interest payment date thereaftert for the principal amount thereof and accrued interest to the date of redemption; PROVIDED FURTHER, that at least thirty (30) days prior to any interest payment date upon which any of said Certificates are to be redeemed~ notice of redemption signed by the City Secretary (specifying the serial numbers and amount of Certificates to be redeemed) shall have been filed with the Mercantile National Bank at Dallas~ Dallas~ Texas (the paying agent named in each of said Certificates), and if by the date so fixed for redemption the City shall have made available to the paying agent bank funds in amounts sufficient to pay the Certificates and accrued interest thereon to the date of redemptlont pursuant to such notice, the same shall cease to bear interest from and after the date so fixed for redemption and shall not be deemed to be outstanding for any purpose except for the purpose of receiving such funds. Section 3. That each of said Certificates of Obligation shall bear interest from their date and while outstanding to their respective maturities or earlier redemption at the following rates per annum, to-wit: All bonds scheduled to mature during the years 1980 through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through All bonds scheduled to mature during the years through %; %; %; %; %; %; % -3- All bonds scheduled to mature during the years__ through ....... All bonds scheduled to mature during the years through All bonds scheduled to mature during the years__ through ....... with said interest to be evidenced by interest coupons payable on June 15, 1979, and semi-annually thereafter on each December 15 and June 15. Both principal of and interest on this issue of Certificates shall be payable in lawful money of the United States of America, without exchange or collection charges to the owner or holder, at the Mercantile National Bank at Dallast Dallast Texas, upon presentation and surrender of Certificates or proper interest coupons~ Section 4. That the seal of said City may be impressed on each of said Certificates ort in the alternatlve~ a facsimile of such seal may be printed on said Certificates. The Certificates and interest coupons appurtenant thereto may be executed by the imprinted facsimile signatures of the Mayor and City Secretary of the City, and execution in such manner shall have the same effect as if such Certificates and coupons had been signed by the Mayor and City Secretary in person by their manual signatures. Inasmuch as such Certificates are required to be registered by the Comptroller of Public Accounts for the State of Texas, only his signature (or that of a deputy designated in writing to act for the Comptroller) shall be required to be manually subscribed to such Certificates in connection with hlsregistration certificate to appear thereon~ as hereinafter providedr all in accordance with the provisions of Article 717j-lt V.A.T.C.S. Section 5. The Certificates shall be in substantially the following form: UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DALLAS CITY OF COPPELL~ TEXAS COMBINATION TAX AND JUNIOR LIEN WATER AND SEWER REVENUE CERTIFICATE OF OBLIGATION SERIES 1978 The City of Co~pell, a municipal corporation of the State of Texas, certifies and acknowledges itself to be indebted to and For Value Received, hereby promises to pay to bearer~ on the FIFTEENTH DAY OF JUNE~ , ~ the sum of FIVE THOUSAND DOLLARS ($5,000), in lawful money of the United States of America, with interest thereon from the date hereof to maturity or earlier redemption at the rate of % per annum~ payable on June 15t 1979~ and semi-annually thereafter on each Decem"B~er 15 and June 15; and -4- interest falling due on or prior to maturity hereof is payable only upon presentation and surrender of the interest coupons attached hereto as they severally become due. BOTH PRINCIPAL OF AND INTEREST on this Certificate are hereby made payable at the Mercantile National Bank at Dallas, Dallas, Texas, without exchange or collection charges to the owner or holder; and for the prompt payment of this Certificate and the interest thereon as the same becomes due, the City of Cappall, Texas, has levied a tax upon all taxable property within said City and has pledged the net revenues of the City's water and sewer system; PROVIDED, HOWEVER, such pledge of net revenues is subject and subordinate to the pledge made ~or the security and payment of certain heretofore issued prior llen bonds (as defined in the ordinance authorizing the series of Certificates of which this Certificate is a part), as well as, any additional prior lien bonds, which the City expressly reserves the right to issue, all of said prior llen bonds being payable from and secured by a first and superior lien upon the net revenues of the City's water and sewer system. THIS CERTIFICATE is one of a series of Certificates, numbered consecutlvely from One (1) through Forty-Five (45), each in denomination of Five Thousand Dollars ($5,000), aggregating the principal sum of TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($225,000), issued ~or the purpose of purchasing, repairing, improving and extending the existing sanitary sewer system in and for said City and for the payment of necessary and incidental expenses related thereto, under and by virtue of the Constitution and laws of the State of Texas, including Article 2368a. 1 · V.A.T.C. S., and in accordance with an ordinance duly passed and adopted by the City Council of the City of Coppall, Texas, and of record in the minutes of the said City Council. AS SPECIFIED in the ordinance herelnabove mentioned, the City reserves the right to redeem the Certificates maturing June 15· 1990, through June 15, 1997, both inclusive· in whole, or in any part thereof, on June 15t 1989, or on any interest payment date thereafter, for the principal amount thereof and accrued interest to the date of redemption; PROVIDED· HOWEVER, that at least thirty (30) days prior to any interest payment date upon which any of said Certificates are to be redeemed, notice of redemption signed by the City Secretary (specifying the serial numbers and amounts of Certificates to be redeemed) shall have been Filed with the aforesaid paying agent, and if by the date so fixed For redemption the City shall have made available to the paying agent bank funds in amounts sufficient to pay the Certificates and accrued interest thereon to the date of redemption· pursuant to such notice, the same shall cease to bear interest from and after the date so fixed for redemption. -5- IT IS HEREBY CERTIFIED· RECITED AND REPRESENTED 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 timer form and manner as required by law; that proper provisions have been made for the payment of principal of and interest on this Certificate and the series of which it is a part, by the levy of a direct and continuing annual ad valorem tax against all taxable property within the said City and by a pledge of the net revenues of the City's water and sanitary sewer system, subject and subordinate to any pledge made or to be made For the security and payment of the aforementioned prior lien bonds; and that the total indebtedness of the City, including this Certificate and the series of which it is a part, does not exceed any constitutional or statutory limitation. IN TESTIMONY WHEREOF· the City Council of the City, in accordance with the provisions of Article 717j-I, V. A. T.C.S., has caused the seal of said City to be impressed or a Facsimile thereof to be printed hereon· and this Certificate and its appurtenant coupons to be executed with the Facsimile signatures of the Mayor and City Secretary of the said Cityt the date of this CortiFicatet in conformity with the ordinance herelnabove mentioned, being the FIFTEENTH DAY OF JUNE, 1978. Mayor, City of Coppall, Texas COUNTERSIGNED: City Secretaryt City of Coppall, Texas Section 6. The Form of said interest coupons shall be substantially as Follows: NO. $ ON THE · 19 The City of CoppelI, in the County of Dallas, State, of Texas, unless due provision has been made For the redemption prior to maturity of the Certificate to which this interest coupon appertainst promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to bearer, at the Mercantile National Bank at Dallas, Dallas, Texas, said amount being interest due that day on the Certificate, bearing the number herelnafter designated, of that issue of City of Coppail, Texast Combination Tax and Junior Lien Water and Sewer Revenue Certificates of Obllg~tlon, Series 1978, dated June 15, 1978, Certificate No. City Secretary Mayor -6- Section 7. That the following certificate shall be printed on the back of said Certificates of Obl igatlon: OFFICE OF COMPTROLLER ]( STATE OF TE)C~S ~ REGISTER NO. 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 of Obligation has been examined by him as required by law, and that it is a valid and binding obligation upon the City of Coppall, Texas, and said Certificate has this day been registered by me. WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas, Comptroller of Public Accounts for the State of Texas Section 8. For all purposes of this ordinance and for clarity with respect to the issuance of the Certificates hereln authorized, and the levy of taxes and appropriation of net revenues therefor, the following definitions are provided: a. The term "System" as used in this Ordinance shall mean the City's combined Waterworks and Sanitary Sewer System, including all present and future additions, extensions, replacements and improvements thereto. b. The term "Net Revenues" shall mean the gross revenues of the System less the expense of operation and maintenance as said expenses are defined by Statute (Article 1113, V.A.T.C.S.). c. The term "Certificates" shall mean the combination tax and junior lien water and sewer revenue Certificates of Obligation authorized by this ordinance and additional combination tax and junior lien water and sewer revenue certificates of obligation, if any, issued on a parity therewith. d. The term "Certificate Fund" shall mean the special fund created under the provisions of Section 9 of this ordinance. e. The term "Prior Lien Bonds" shall mean the City's presently outstanding City of Coppall, Texas, Water and Sewer System Revenue Bonds, Series 1966, dated May 1, 1966, originally issued in the principal amount of $345,000 and any additional bonds or refunding bonds hereafter issued, payable from and secured by a first lien on the Net Revenues of the City's System; the right to issue said Prior Lien Bonds being hereln and hereby expressly reserved by the City. f. The term "Fiscal Year" whenever the same appears without any qualifying language, shall mean the twelve-month operational period for the system ending on September 30 of each year. Section 9. That for the purpose of paying the interest on and to provide a sinking fund for the payment, redemptlont and retirement of the Certificates, there is hereby created and established a special fund to be designated "SPECIAL CITY OF COPPELL, TEXAS, COMBINATION TAX AND JUNIOR LIEN WATER AND SEWER REVENUE CERTIFICATES OF OBLIGATION FUND," and all monies deposited therein shall be used for no other purpose, This fund shall be deposited w~th the Mercantile National Bank at Dallas, Dallas, Texas, and said custodian of the Fund is hereby authorized and directed to make withdrawals from said Fund in such amounts required to pay the principal of and interest on the Certificates as the same become due and mature. Section 10o That to provide for the payment of the debt service requirements of the Certiflcatest being (1) the interest on the Certificatesf and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% per annum, (whichever amount shall be the greater)f there shall be and there is hereby levied for the current year and each succeeding year thereafter while the Certificates or any interest thereon shall remain outstanding and unpald~ a sufficient tax on each one hundred dollars' valuation of taxable property jn said City, adequate to pay such debt service requlrements~ full allowance being made for del inquencles and costs of collection; sajd 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 purpose. The taxes so levied and collected shall be paid ~nto the Certificate Fund° This governing body hereby declares its purposes 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 ~n 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 Cjtyf (ji) the amount on deposit in the Certificate Fund, as of the date such budget is prepared (after giving effect to any payments required to be made during the remainder of the then current Fiscal Year) and (ill) the amount of Net Revenues of the System estimated and budgeted to be available for the payment of such debt service requirements on the Certificates during 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 exceed the sum of (1) the amount shown to be on deposit in the Certificate Fund at the time the annual budget is preparedf and (ii) the Net Revenues of the System shown to be budgeted and available for payment of said debt service requirements after taking into consideration the debt service re- quirements and other Fund requirements of the Prior Lien Bonds. c. Following 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 sufficient to produce taxes in the amount determined in paragraph b, above, to be utilized For purposes of paying the principal of and interest on the Certificates in the next succeeding Fiscal Year of the City. Section 11. The City hereby covenants and agrees that subject only to the pledge of the Net Revenues of the System to the payment of principal, interest and all special Fund requirements of the Prior Lien Bonds and the means and methods of accumulating and maintaining all funds required therefor under the provisions of the ordinances and proceedings pertaining to the authorization of the Prior Lien Bonds, all the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Certificate Fund as hereafter provided, are hereby irrevocably pledged to the payment of the principal of and interest on the Certificates as the same become due. Section 12. Thatf as may be provided andZ permitted in the ordinances authorizing the issuance of the Prior Lien Bondst the City affirms that as received all revenues and income of every nature derived From the operation of the City's System shall be first deposited in an account of the City designated Water and Sewer System Revenue Fundr hereinafter called "System Fundr" and shall be pledged and appropriated as Follows: FIRST: to the payment of all necessary and reasonable expenses of operating and maintaining the System. SECOND: to the Water and Sewer System Revenue Bond and Interest Sinking Fund, herelnafter called "Interest Sinking Fund," For the payrr;ent of the principal of and interest on the Prior Lien Bands. THIRD: to the Water and Sewer System Replacement and Repair Fund. FOURTH: to any additional special fund or accounts created pursuant to the terms of any future issues of additional bonds or refunding bonds, or Prior Lien Bonds, and as herelnabove authorized and permitted. After satisfying all payments required under the terms and provisions of the ordinances authorizing the Prior Lien Bonds, all monies and revenues remaining in the System Fund which are attributable to the System shall be and are hereby pledged and the same shall be appropriated For the following purposes and in the order of precedence shown, as follows: FIRST: to the "SPECIAL CITY OF COPPELL, TEXAS, COMBINATION TAX AND JUNIOR LIEN WATER AND SEWER REVENUE CERTIFICATES OF OBLIGATION FUND," hereinafter called the "C. erfificate Fund" to the extent as provided in Section 13, and SECOND: to any other proper city purposes now or hereafter permitted by law. Section 13. That from the pledged Net Revenues of the System in the System Fund, the City shall cause to be deposited in the Certificate Fund the ~ollowlng amounts on the following dates, to-wit: such amounts in equal monthly installments, made on or before the 1st day of each month commencing January I, 1979, as will be sufficient to pay the interest scheduled to come due on the Certificates on the next interest payment date, or all pledged Net Revenues of the Syste, remaining in the Revenue Fund on such dates, whichever amount is the lesser, and such amounts in equal monthly installments, made on or before the 1st day ol~ each month commencing July 1, 1979, as will be sufficient to pay the next maturing principal of the Certificates or all the pledged Net Revenues of the System, remaining in the Revenue Fund on such date, whichever is the lesser. The monthly deposits to be made to the Certificate Fund, as hereln- above provided, shall be made until such time as such Fund contains an amount equal to pay the principal of and interest on the Certificates to final maturity. Section 14. All Funds for which this ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas For the security of public funds, and such Funds shall be used for the purposes permitted by this Ordinance, Section 15. The City covenants and agrees with the holder or holders of the Certificates that it will maintain and operate the System with all possible efficiency while any Certificates remain outstanding and unpaldt that it will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Texas~ including the making and collecting of reasonable and sufficlent' rates for services supplied by the System and the segregatior~ and application of the revenues of the System as required by the provisions of the ordlnancesauthorizlng the issuance of the Prior Lien Bonds and this ordinance; and that no free services shall be rendered by the System to any customers including the City and its various departments, and that water and sewer service used by the City and its various departments shall be paid for at the same rates charged other customers. Section 16. The City further covenants and agrees to keep proper books of records and accounts in which complete and correct entries shall be made of all transactions relating to the S,ystem. The City shall furnish to any holder of any of the Certificates at the written request of such holder, not more than Sixty (60) days after the close of each Fiscal Year, complete operating and income statements of the System in reasonable detail, certified by independent auditors. Section 17. Any holder or holders of twenty-five percentum (25%) of the principal amount of the outstanding Certificates shall have the right at all reasonable times to inspect the System and all records, accounts and data of the City relating thereto. Section 18. In addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City defaults in the payment of principal of or interest on any of the Certificates authorized and permitted hereby when due, or failure to make the payments required in the Certificate Fund or defaults in the observance or per- forrnance of any of the covenants, conditions or obligations set forth in this Ordinance, the holder or holders of any of the Certificates shall be entitled to a writ of mandamus issued by a Court of proper jurisdiction compelling and requiring the governing body of the City and other officers of the City to observe and perform such covenants, condltlonst or obligations. -11- No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescense therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient, The specific remedies herein provided shall be cumulative of all other existing ~emedies and the specification to such remedies shall not be deemed to be exclusive. Section 19. The City hereby Further covenants as Follows: ao That it has the lawful power to pledge the revenues supporting this issue of Certificates and has lawfully exercised said powers under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 · et seq., and Article 2368a o I, VoA .T ° Co S. that the Certificates shall be ratably secured under said pledge of income in such manner that one Certificate shall have no preference over any other Certificate of said issue° bo That other than For the payment of the Prior Lien Bonds and the Certificates, the rents, revenuesr and income of the System have not jn any manner been pledged to the payment of any debt or obligation of the City or of the System. c° That as long as any Certificates or any interest thereon remain outstandingt the City will not sellt lease, or encumber the System or any substantial part thereof, provided that this shall not be construed to prohibit the sale of such machinery, or other properties or equipment which has become obsolete or othenvlse unsuited to the efficient operation of the System; also~ with the exception of Prior Lien Bonds which may be issued and secured as provided elsewhere herein and additional Certificates to be secured by both taxes and Net Revenues of the System hereby expressly permitted to be issued (which may be issued on a parity, insofar as Net Revenues are concerned, with the series of Certificates), it will not encumber the revenues of the System thereof unless such encumbrance is made junior and subordinate to all of the provisions of the Certificates herein authorized° d° To the extent that it legally can, the City further covenants and agrees that, as long as any of the Certificates or any interest thereon are outstanding, no franchise shall be granted For the -12- installation or operation of any competing System, that the City will prohibit the operation of any System other than that owned by the City and the operation of any such System by anyone other than the City is hereby prohibited. Section 20. It is the intention of this governing body and accordingly here recognized and stipulated that any provisionst conditions and other recitals which may be contained in the ordinances authorizing Prior Lien Bonds which bear upon the management of the affairs of the System and methods providing and administering its Net Revenues shall be applicable as appropriate to the Certificates herein authorized but in all respects subject to the priorities of the Prior Lien Bonds. Section 21. Each of the Certificates herein authorized shall be deemed and construed to be a "security," and as such a negotiable instrument, within the meaning of Article 8 of the Uniform Commercial Code. Section 22. That the proceeds to be realized from the sale of the Certificates hereln authorized shall be expertdeal and the same are hereby budgeted and appropriated for the following purposes, to-wit: purchasing, repairing, improving and extending the exlstjng sanitary sewer system in and for the City and for the payment of necessary and incidental expenses related thereto. Section 23. That all of said Certificates, being numbered One (1) through Forty-Five (45), both inclusive, are hereby sold in accordance with law and shall be delivered to the FIRST SOUTHWEST COMPANY, Dallas, Texas, for the principal amount thereof plus accrued interest to the date of delivery. Section 24. That the purchasers' obligation to accept delivery of the Certificates hereln authorized is subject to their being Furnished a final opinion of Messrs. Hutchlson Price Boyle & Brooks, Attorneys, Dallas, Texas, approving such Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment ~or such Certificates. Printing of a true and correct copy of said opinion on the reverse side of each of such Certificates, with appropriate certificate pertaining thereto executed by Facsimile signature of the City Secretary is hereby approved and authorized. Section 25. The Mayor of the City shall be and he is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texast and shall take and have charge and control of the Certificates herein authorized pending their approval by the Attorney General, registration by the Comptroller of Public Accounts, and delivery to the purchaser thereof, Section 26° Defeasance° As may now or hereafter be provided and authorized by any applicable law, all terms, covenants, pledges and security under this ordinance shall in all respects be released, annul led and defeased upon the occurrence of either of the events as follows: (1) All of the Certificates and coupons shall have been paid or redeemed; or (2) The Cjty shall have provided for the payment or redemption of all the Certificates and coupons appertainlng thereto then outstanding by irrevocably depositing in escrow t:or the benefit off the holders of said Certificates and coupons the entire amount in cash or principal amount of Governmental Obligations necessary for the payment or redemption off said Certificates and coupons; or (3) The City shall have provided for the payment or redemption of all the Certificates and coupons appertaining thereto then outstanding by irrevocably depositing in escrow ffor the benefit of the holders of said Certificates and coupons Governmental Obligations which will mature, bear interest, and be payable, at such times and in such amounts as will provide and produce to a mathematical certainty, the money (together with any unlnvested money) required for the payment of said Certificates upon maturity or the date fixed for redemption, the payment of any redemption premium thereon, the payment off said coupons as the same are due and payable, plus the amount required to pay the service charges off any paying agent for said Certificates, Cash or Governmental Obligations deposited for the payment off Certificates and coupons under the provisions hereof shall be held as a special trust fund for the account of the holder or holders of such Certificates and coupons and shall be applied to the payment off such Certificates and coupons upon the presentation and surrender thereof, After the deposit off such cash, or Governmental Obligations, such Certificates and coupons shall not be entitled to any benefits of this ordinance. The term "Governmental Obligations" as used in this section means direct obligations of the United States of America, or obligations which the principal of and interest on are unconditionally guaranteed by the United States of America, or obligations whlchr in the opinion of the Attorney General of the United States of Amerlcat are general obligations of the United States of America and backed by its full faith and credit. -14- Section 27° That the City covenants that the proceeds from the sale of said Certificates will be used as soon as practicable for the purpose of which said Certificates are issued; that such proceeds will not be invested in any securities or obligations except for the temporary period pending such use; and that such proceeds will not be used directly or indirectly so as to cause all or any part of said CertiFicates to be or become "arbitrage"obligations within the meaning of Section 103(c) of the Internal Revenue Code oF 1954~ as amended, or any regulation or rulings prescribed or made pursuant thereto° PASSED AND APPROVED this the 27th day oF June, 1978, ATTEST: it I, Texas City of Coppell, Texas [SEAL]