OR 97-806 Series 1997 combination tax & revenue certificates of obligation
CERTIFICATE FOR ORDINANCE NO 97806
THE STATE OF TEXAS §
COUNTIES OF DALLAS AND DENTON §
CITY OF COPPELL §
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in REGULAR MEETING ON THE 26TH
DAY OF AUGUST, 1997, at the City Hall, and the roll was called of the duly constituted officers
and members of said City Council, to-wit:
Candy Sheehan, Mayor
Marshall Tunnell, Mayor Pro Tem
Norman Alexander
Chuck Sturges
Danny Watson
Lanny Mayo
Larry Wheeler
Bill York
Kathleen Roach, City Secretary
and all of said persons were present, except the following absentees: /\/'~ ~ v thus
f 11o l
constituting a quorum. Whereupon, among other business, the following was transacted at said
Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF COPPELL,
TEXAS COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 1997, APPROVING AN OFFICIAL STATEMENT,
AUTHORIZING THE EXECUTION OF A PURCHASE CONTRACT, AND
MAKING PROVISIONS FOR THE SECURITY THEREOF, AND
ORDAINING OTHER MATTERS RELATING TO THE SUBJECT
was duly introduced for the consideration of said City Council and read in full. It was then duly
moved and seconded that said Ordinance be passed; and, after due discussion, said motion
carrying with it the passage of said Ordinance, prevailed and carried by the following vote:
AYES: All members of said City Council shown present above voted "Aye".
NOES: None
2. That a true, full and correct copy of the aforesaid Ordinance passed at the Meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above
and foregoing paragraph is a true, full and correct excerpt from said City Council' s minutes of
said Meeting pertaining to the passage of said Ordinance; that the persons named in the above and
foregoing paragraph are the duly chosen, qualified and acting officers and members of said City
Council as indicated therein; that each of the officers and members of said City Council was duly
and sufficiently notified officially and personally, in advance, of the time, place and purpose of
the aforesaid Meeting, and that said Ordinance would be introduced and considered for passage
at said Meeting, and each of said officers and members consented, in advance, to the holding of
said Meeting for such purpose, and that said Meeting was open to the public and public notice of
the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas
Government Code.
3. That the Mayor of said City has approved and hereby approves the aforesaid
Ordinance; that the Mayor and the City Secretary of said City have duly signed said Ordinance;
/~nd that the Mayor and the City Secretary of said City hereby declare that their signing of this
Certificate shall constitute the signing of the attached and following copy of said Ordinance for
all purposes.
SIGNED AND SEALED the 261h day of August, 1997.
City Secretary
SEAL
ORDINANCE NO. 97806
AUTHORIZING THE ISSUANCE OF CITY OF COPPELL, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERW, S 1997, APPROVING AN OFFICIAL STATEMENT, AUTHORIZING
THE EXECUTION OF A PURCHASE CONTRACT, AND MAKING PROVI-
SIONS FOR THE SECURITY THEREOF, AND ORDAINING OTHER
MATTERS RELATING TO THE SUBJECT
THE STATE OF TEXAS §
COUNTIES OF DALLAS AND DENTON §
CITY OF COPPELL §
WHEREAS, the City deems it advisable to give notice of intention to issue Combination
Tax and Revenue Certificates of Obligation, in the amount of $2,000,000, for paying all or a
portion of the City's contractual obligations for the purpose of constructing and improving the
City's streets, and for paying legal and fiscal fees in connection with this project.
WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be
issued and delivered for cash pursuant to Article 2368a.1, V.A.T.C.S., now known as Subchapter
C of Chapter 271 of the Local Government Code; and
WHEREAS, the City Council has heretofore, on the 28th day of July, 1997, adopted a
Resolution authorizing and directing the City Secretary to give notice of intention to issue Certifi-
cates of Obligation; and
WHEREAS, said notice has been duly published in The Citizens Advocate, which is a
newspaper of general circulation in said City, in its issues of August 11, 1997 and August 18,
1997; and
WHEREAS, the City received no petition from the qualified electors of the City protesting
the issuance of such Certificates of Obligation.
WHEREAS, the meeting was open to the public and public notice of the time, place and
purpose of said meeting was given pursuant to Chapter 551, Texas Government Code.
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COPPELL:
Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES OF OBLIGATION.
The certificate of obligation or certificates of obligation of the City of Coppell (the "Issuer") are
hereby authorized to be issued and delivered in the aggregate principal amount of $2,000,000 for
paying all or a portion of the City's contractual obligations for the purpose of constructing and
improving the City's streets, and for paying legal and fiscal fees in connection with this project.
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Section 2. DESIGNATION OF THE CERTIFICATES OF OBLIGATION. Each
certificate of obligation issued pursuant to this Ordinance shall be designated: "CITY OF
COPPELL, TEXAS COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGA-
TION, SERIES 1997", and initially there shall be issued, sold, and delivered hereunder a single
fully registered certificate of obligation, without interest coupons, payable in installments of
principal (the "Initial Certificate of Obligation"), but the Initial Certificate of Obligation may be
assigned and transferred and/or converted into and exchanged for a like aggregate principal
amount of fully registered certificates of obligation, without interest coupons, having serial
maturities, and in the denomination or denominations of $5,000 or any integral multiple of
$5,000, all in the manner hereinafter provided. The term "Certificates of Obligation" as used in
this Ordinance shall mean and include collectively the Initial Certificate of Obligation and all
substitute certificates of obligation exchanged therefor, as well as all other substitute certificates
of obligation and replacement certificates of obligation issued pursuant hereto, and the term
"Certificate of Obligation" shall mean any of the Certificates of Obligation.
Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL
REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE OF
OBLIGATION. (a) The Initial Certificate of Obligation is hereby authorized to be issued, sold,
and delivered hereunder as a single fully registered Certificate of Obligation, without interest
coupons, dated August 15, 1997, in the denomination and aggregate principal amount of
$2,000,000, numbered R-l, payable in annual installments of principal to the initial registered
owner thereof, to-wit: Rauscher Pierce Refsnes, Inc., or to the registered assignee or assignees
of said Certificate of Obligation or any portion or portions thereof (in each case, the "registered
owner"), with the annual installments of principal of the Initial Certificate of Obligation to be
payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM
OF INITIAL CERTIFICATE OF OBLIGATION set forth in this Ordinance.
(b) The Initial Certificate of Obligation (i) may be prepaid or redeemed prior to the
respective scheduled due dates of installments of principal thereof, (ii) may be assigned and
transferred, (iii) may be converted and exchanged for other Certificates of Obligation, (iv) shall
have the characteristics, and (v) shall be signed and sealed, and the principal of and interest on
the Initial Certificate of Obligation shall be payable, all as provided, and in the manner required
or indicated, in the FORM OF INITIAL CERTIFICATE OF OBLIGATION set forth in this
Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Certificate of
Obligation shall bear interest from the date of the Initial Certificate of Obligation, and will be
calculated on the basis of a 360-day year of twelve 30-day months to the respective scheduled due
dates, or to the respective dates of prepayment or redemption, of the installments of principal of
the Initial Certificate of Obligation, and said interest shall be payable, all in the manner provided
and at the rates and on the dates stated in the FORM OF INITIAL CERTIFICATE OF OBLIGA-
TION set forth in this Ordinance.
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Section 5. FORM OF INITIAL CERTIFICATE OF OBLIGATION. The form of the
Initial Certificate of Obligation, including the form of Registration Certificate of the Comptroller
of Public Accounts of the State of Texas to be endorsed on the Initial Certificate of Obligation,
shall be substantially as follows:
FORM OF INITIAL CERTIFICATE OF OBLIGATION
NO. R-1 $2,000,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION
SERIES 1997
CITY OF COPPELL, in Dallas and Denton Counties (the "Issuer"), being a political
~ubdivision of the State of Texas, hereby promises to pay to
RAUSCHER PIERCE REFSNES, INC.
or to the registered assignee or assignees of this Certificate of Obligation or any portion or
portions hereof (in each case, the "registered owner") the aggregate principal amount of
TWO MILLION DOLLARS
in annual installments of principal due and payable on February 1 in each of the years, and in the
respective principal amounts, as set forth in the following schedule:
YEAR AMOUNT YEAR AMOUNT
1998 $65,000 2008 $ 95,000
1999 65,000 2009 100,000
2000 65,000 2010 110,000
2001 70,000 2011 115,000
2002 75,000 2012 120,000
2003 75,000 2013 125,000
2004 80,000 2014 130,000
2005 85,000
2006 90,000
2007 95,000 2017 440,000
and to pay interest, from the date of this Initial Certificate of Obligation, on the balance of each
such installment of principal, respectively, from time to time remaining unpaid, at the rates as
follows:
maturity 1998, 4.25% maturity 2008, 5.00%
maturity 1999, 4.10% maturity 2009, 5.00%
maturity 2000, 4.25% maturity 2010, 5.10%
maturity 2001, 4.35% maturity 2011, 5.10%
maturity 2002, 4.45 % maturity 2012, 5.20%
maturity 2003, 5.50 % maturity 2013, 5.25 %
maturity 2004, 4.60% maturity 2014, 5.25%
maturity 2005, 5.00%
maturity 2006, 4.80 %
maturity 2007, 4.90% maturity 2017, 5.25%
with said interest being payable on February 1, 1998 and semiannually on each August 1 and
February 1 thereafter while this Certiftcate of Obligation or any portion hereof is outstanding and
finpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate
of Obligation are payable in lawful money of the United States of America, without exchange or
collection charges. The installments of principal and the interest on this Certificate of Obligation
are payable to the registered owner hereof through the services of Norwest Bank Texas, N.A.,
Dallas, Texas, which is the "Paying Agent/Registrar" for this Certificate of Obligation. Payment
of all principal of and interest on this Certificate of Obligation shall be made by the Paying
Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by
check or draft, dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely
from, funds of the Issuer required by the ordinance authorizing the issuance of this Certificate of
Obligation (the "Certificate of Obligation Ordinance") to be on deposit with the Paying
Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent
by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such
principal and/or interest payment date, to the registered owner hereof, at the address of the regis-
tered owner, as it appeared on the 15th day of the month next preceding each such date (the
"Record Date ") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter des-
cribed, or by such other method acceptable to Paying Agent/Registrar requested by, and at the risk
and expense of, the registered owner. The Issuer covenants with the registered owner of this
Certificate of Obligation that on or before each principal and/or interest payment date for this
Certificate of Obligation it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the Certificate of Obligation Ordinance, the amounts required to
provide for the payment, in immediately available funds, of all principal of and interest on this
Certificate of Obligation, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate of
Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions
in the city where the Paying Agent/Registrar is located are authorized by law or executive order
to close, then the date for such payment shall be the next succeeding day which is not such a
Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE OF OBLIGATION has been authorized in accordance with the
Constitution and laws of the State of Texas, in the principal amount of $2,000,000, for paying all
or a portion of the City's contractual obligations for the purpose of constructing and improving
the City's streets, and for paying legal and fiscal fees in connection with this project.
ON FEBRUARY 1, 2007, or any date thereafter, the unpaid installments of principal of
this Certificate of Obligation may be prepaid or redeemed prior to their scheduled due dates, at
the option of the Issuer, with funds derived from any available source, as a whole, or in part, and,
if in part, the Issuer shall select and designate the maturity, or maturities, and the amount that is
io be redeemed, and if less than a whole maturity is to be called, the Issuer shall direct the Paying
Agent/Registrar to call by lot (provided that a portion of this Certificate of Obligation may be
redeemed only in an integral multiple of $5,000), at the redemption price of the principal amount,
plus accrued interest to the date fixed for prepayment or redemption.
THE CERTIFICATES OF OBLIGATION of this Series scheduled to mature on
FEBRUARY 1, 2017 are subject to mandatory redemption prior to their scheduled maturities,
and shall be redeemed by the Issuer, in part, prior to their scheduled maturities, with money from
the Mandatory Redemption Account of the Interest and Sinking Fund, with the particular
Certificates of Obligation or portion thereof to be redeemed to be selected by the Paying
Agent/Registrar, by lot or other customary method (provided that a portion of a Certificate of
Obligation may be redeemed only in an integral multiple of $5,000) at a redemption price equal
to the par or principal amount thereof and accrued interest to the date of redemption, on the dates,
and in the principal amounts, respectively, as shown in the following schedules:
February 1. 2017 Maturity
Mandatory Redemption Dates Principal Amounts
February 1, 2015 $140,000
February 1, 2016 $145,000
February 1, 2017 $155,000 *payable at maturity
The principal amount of the Certificates of Obligation required to be redeemed on each such
redemption date pursuant to the foregoing operation of the Mandatory Redemption Account shall
be reduced, at the option of the Issuer, by the principal amount of any Certificate of Obligation,
which at least 45 days prior to the mandatory sinking fund redemption date, (1) shall have been
acquired by the Issuer and delivered to the Paying Agent/Registrar for cancellation, or (2) at a
price not exceeding the par or principal amount of such Certificate of Obligation or (3) have been
redeemed pursuant to the optional redemption provisions set forth above and not theretofore
credited against a mandatory sinking fund redemption. During any period in which ownership
of the Certificate of Obligation is determined by a book entry at a securities depository for the
Certificate of Obligation, if fewer than all of the Certificates of Obligation of the same maturity
and bearing the same interest rate are to be redeemed, the particular Certificate of Obligation of
such maturity and bearing such interest rate shall be selected in accordance with the arrangements
between the Issuer and the securities depository.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a
written notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar
to the registered owner hereof. By the date fkxed for any such prepayment or redemption due
provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the
required prepayment or redemption price for this Certificate of Obligation or the portion hereof
which is to be so prepaid or redeemed, plus accrued interest thereon to the date fixed for prepay-
ment or redemption. If such written notice of prepayment or redemption is given, and if due
provision for such payment is made, all as provided above, this Certificate of Obligation, or the
portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated as
brepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date freed
for its prepayment or redemption, and shall not be regarded as being outstanding except for the
right of the registered owner to receive the prepayment or redemption price plus accrued interest
to the date freed for prepayment or redemption from the Paying Agent/Registrar out of the funds
provided for such payment. The Paying Agent/Registrar shall record in the Registration Books
all such prepayments or redemptions of principal of this Certificate of Obligation or any portion
hereof.
THIS CERTIFICATE OF OBLIGATION, to the extent of the unpaid or unredeemed
principal balance hereof, or any unpaid and unredeemed portion hereof in any integral multiple
of $5,000, may be assigned by the initial registered owner hereof and shall be transferred only
in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity
of registrar for this Certificate of Obligation, upon the terms and conditions set forth in the
Certificate of Obligation Ordinance. Among other requirements for such transfer, this Certificate
of Obligation must be presented and surrendered to the Paying Agent/Registrar for cancellation,
together with proper instruments of assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/Registrar, evidencing assignment by the initial registered owner of this
Certificate of Obligation, or any portion or portions hereof in any integral multiple of $5,000, to
the assignee or assignees in whose name or names this Certificate of Obligation or any such
portion or portions hereof is or are to be transferred and registered. Any instrument or instru-
ments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the
assignment of this Certificate of Obligation or any such portion or portions hereof by the initial
registered owner hereof. A new certificate of obligation or certificates of obligation payable to
such assignee or assignees (which then will be the new registered owner or owners of such new
certificate of obligation or certificates of obligation) or to the initial registered owner as to any
portion of this Certificate of Obligation which is not being assigned and transferred by the initial
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registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange
for this Certificate of Obligation or any portion or portions hereof, but solely in the form and
manner as provided in the next paragraph hereof for the conversion and exchange of this
Certificate of Obligation or any portion hereof. The registered owner of this Certificate of
Obligation shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the
absolute owner hereof for all purposes, including payment and discharge of liability upon this
Certificate of Obligation to the extent of such payment, and the Issuer and the Paying
Agent/Registrar shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Certificate of Obligation Ordinance, this Certificate of
Obligation, to the extent of the unpaid or unredeemed principal balance hereof, may be converted
into and exchanged for a like aggregate principal amount of fully registered certificates of
obligation, without interest coupons, payable to the assignee or assignees duly designated in
writing by the initial registered owner hereof, or to the initial registered owner as to any portion
of this Certificate of Obligation which is not being assigned and transferred by the initial
registered owner, in any denomination or denominations in any integral multiple of $5,000
(subject to the requirement hereinafter stated that each substitute certificate of obligation issued
in exchange for any portion of this Certificate of Obligation shall have a single stated principal
maturity date), upon surrender of this Certificate of Obligation to the Paying Agent/Registrar for
cancellation, all in accordance with the form and procedures set forth in the Certificate of Obliga-
tion Ordinance. If this Certificate of Obligation or any portion hereof is assigned and transferred
or converted each certificate of obligation issued in exchange for any portion hereof shall have
a single stated principal maturity date corresponding to the due date of the installment of principal
of this Certificate of Obligation or portion hereof for which the substitute certificate of obligation
is being exchanged, and shall bear interest at the rate applicable to and borne by such installment
of principal or portion thereof. Such certificates of obligation, respectively, shall be subject to
redemption prior to maturity on the same dates and for the same prices as the corresponding
installment of principal of this Certificate of Obligation or portion hereof for which they are being
exchanged. No such certificate of obligation shall be payable in installments, but shall have only
one stated principal maturity date. AS PROVIDED IN THE CERTIFICATE OF OBLIGATION
ORDINANCE, THIS CERTIFICATE OF OBLIGATION IN ITS PRESENT FORM MAY BE
ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more
assignees, but the certificates of obligation issued and delivered in exchange for this Certificate
of Obligation or any portion hereof may be assigned, transferred and converted, subsequently, as
provided in the Certificate of Obligation Ordinance. The Issuer shall pay the Paying
Agent/Registrar's standard or customary fees and charges for transferring, converting, and
exchanging this Certificate of Obligation or any portion thereof, but the one requesting such
transfer, conversion, and exchange shall pay any taxes or governmental charges required to be
paid with respect thereto. The Paying Agent/Registrar shall not be required to make any such
assignment, conversion, or exchange (i) during the period commencing with the close of business
on any Record Date and ending with the opening of business on the next following principal or
interest payment date, or, (ii) with respect to any Certificate of Obligation or portion thereof
called for prepayment or redemption prior to maturity, within 45 days prior to its prepayment or
redemption date.
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IN THE EVENT any Paying Agent/Registrar for this Certificate of Obligation is changed
by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the
Certificate of Obligation Ordinance that it promptly will appoint a competent and legally qualified
substitute therefor, and promptly will cause written notice thereof to be mailed to the registered
owner of this Certificate of Obligation.
IT IS HEREBY certified, recited, and covenanted that this Certificate of Obligation has
been duly and validly authorized, issued, sold, and delivered; that all acts, conditions, and things
required or proper to be performed, exist, and be done precedent to or in the authorization,
issuance, and delivery of this Certificate of Obligation have been performed, existed, and been
done in accordance with law; that this Certificate of Obligation is a general obligation of the
Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Certificate of Obligation, as such interest
and principal come due, have been levied and ordered to be levied against all taxable properly in
the Issuer, and have been pledged for such payment, within the limit prescribed by law, and that
this Certificate of Obligation is additionally secured by and payable from the surplus revenues of
the Issuer's combined Waterworks and Sewer System, remaining after payment of all operation
and maintenance expenses thereof, and all debt service, reserve, and other requirements in
connection with all of the Issuer's revenue Certificate of Obligations or other obligations (now or
hereafter outstanding), which are payable from all or any pan of the Net Revenues of the Issuer's
combined Waterworks and Sewer System.
BY BECOMING the registered owner of this Certificate of Obligation, the registered
owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation Ordi-
nance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of
Obligation Ordinance is duly recorded and available for inspection in the official minutes and
records of the governing body of the Issuer, and agrees that the terms and provisions of this
Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between
the registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed
with the manual signature of the Mayor of the Issuer, countersigned with the manual signature of
the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed
on this Certificate of Obligation to be dated August 15, 1997.
City Secretary Mayor
CITY SEAL
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FORM OF REGISTRATION CERTIFICATE OF THE
COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE
REGISTER NO.
I hereby certify that this Certificate of Obligation has been examined, certified as to
validity, and approved by the Attorney General of the State of Texas, and that this Certificate of
Obligation has been registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES OF
OBLIGATION. Registration and Transfer. (a) The Issuer shall keep or cause to be kept at the
principal corporate trust office of Norwest Bank Texas, N.A., Dallas,, Texas (the "Paying
Agent/Registrar") books or records of the registration and transfer of the Certificates of Obligation
(the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and make such transfers and registra-
tions under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe;
and the Paying Agent/Registrar shall make such transfers and registrations as herein provided.
The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the
registered owner of each Certificate of Obligation to which payments with respect to the Certifi-
cates of Obligation shall be mailed, as herein provided; but it shall be the duty of each registered
owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be
mailed, and such interest payments shall not be mailed unless such notice has been given. The
Issuer shall have the right to inspect the Registration Books during regular business hours of the
Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration
Books confidential and, unless otherwise required by law, shall not permit their inspection by any
other entity. Registration of each Certificate of Obligation may be transferred in the Registration
Books only upon presentation and surrender of such Certificate of Obligation to the Paying
Agent/Registrar for transfer of registration and cancellation, together with proper written
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, (i) evidencing the assignment of the Certificate of Obligation, or any portion
thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and (ii) the right
of such assignee or assignees to have the Certificate of Obligation or any such portion thereof
registered in the name of such assignee or assignees. Upon the assignment and transfer of any
Certificate of Obligation or any portion thereof, a new substitute Certificate of Obligation or
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Certificates of Obligation shall be issued in conversion and exchange therefor in the manner herein
provided. The Initial Certificate of Obligation, to the extent of the unpaid or unredeemed princi-
pal balance thereof, may be assigned and transferred by the initial registered owner thereof once
only, and to one or more assignees designated in writing by the initial registered owner thereof.
All Certificates of Obligation issued and delivered in conversion of and exchange for the Initial
Certificate of Obligation shall be in any denomination or denominations of any integral multiple
of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate of
Obligation shall have a single stated principal maturity date), shall be in the form prescribed in
the FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION set forth in this Ordinance, and
shall have the characteristics, and may be assigned, transferred, and converted as hereinafter
provided. If the Initial Certificate of Obligation or any portion thereof is assigned and transferred
or converted the Initial Certificate of Obligation must be surrendered to the Paying Agent/Regis-
trar for cancellation, and each Certificate of Obligation issued in exchange for any portion of the
Initial Certificate of Obligation shall have a single stated principal maturity date, and shall not be
payable in installments; and each such Certificate of Obligation shall have a principal maturity
date corresponding to the due date of the installment of principal or portion thereof for which the
substitute Certificate of Obligation is being exchanged; and each such Certificate of Obligation
ihall bear interest at the single rate applicable to and borne by such installment of principal or
portion thereof for which it is being exchanged. If only a portion of the Initial Certificate of
Obligation is assigned and transferred, there shall be delivered to and registered in the name of
the initial registered owner substitute Certificates of Obligation in exchange for the unassigned
balance of the Initial Certificate of Obligation in the same manner as if the initial registered owner
were the assignee thereof. If any Certificate of Obligation or portion thereof other than the Initial
Certificate of Obligation is assigned and transferred or converted each Certificate of Obligation
issued in exchange therefor shall have the same principal maturity date and bear interest at the
same rate as the Certificate of Obligation for which it is exchanged. A form of assignment shall
be printed or endorsed on each Certificate of Obligation, excepting the Initial Certificate of
Obligation, which shall be executed by the registered owner or its duly authorized attorney or
representative to evidence an assignment thereof. Upon surrender of any Certificates of
Obligation or any portion or portions thereof for transfer of registration, an authorized
representative of the Paying Agent/Registrar shall make such transfer in the Registration Books,
and shall deliver a new fully registered substitute Certificate of Obligation or Certificates of
Obligation, having the characteristics herein described, payable to such assignee or assignees
(which then will be the registered owner or owners of such new Certificate of Obligation or
Certificates of Obligation), or to the previous registered owner in case only a portion of a Certif-
icate of Obligation is being assigned and transferred, all in conversion of and exchange for said
assigned Certificate of Obligation or Certificates of Obligation or any portion or portions thereof,
in the same form and manner, and with the same effect, as provided in Section 6(d), below, for
the conversion and exchange of Certificates of Obligation by any registered owner of a Certificate
of Obligation. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and
charges for making such transfer and delivery of a substitute Certificate of Obligation or
Certificates of Obligation, but the one requesting such transfer shall pay any taxes or other
governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall
10
not be required to make transfers of registration of any Certificate of Obligation or any portion
thereof (i) during the period commencing with the close of business on any Record Date and
ending with the opening of business on the next following principal or interest payment date, or,
(ii) with respect to any Certificate of Obligation or any portion thereof called for redemption prior
to maturity, within 45 days prior to its redemption date.
(b) Ownership of Certificates of Obligation. The entity in whose name any Certificate
of Obligation shall be registered in the Registration Books at any time shall be deemed and treated
as the absolute owner thereof for all purposes of this Ordinance, whether or not such Certificate
of Obligation shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected
by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any,
and interest on any such Certificate of Obligation shall be made only to such registered owner.
All such payments shall be valid and effectual to satisfy and discharge the liability upon such Cer-
tificate of Obligation to the extent of the sum or sums so paid.
(c) Payment of Certificates of Obligation and Interest. The Issuer hereby further appoints
the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on
the Certificates of Obligation, and to act as its agent to convert and exchange or replace
Certificates of Obligation, all as provided in this Ordinance. The Paying Agent/Registrar shall
keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with
respect to the Certificates of Obligation, and of all conversions and exchanges of Certificates of
Obligation, and all replacements of Certificates of Obligation, as provided in this Ordinance.
However, in the event of a nonpayment of interest on a scheduled payment date, and for thirty
(30) days thereafter, a new record date for such interest payment )a "Special Record Date") will
be established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the Issuer. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (which shall be fifteen (15) days after the Special Record
Date) shall be sent at least five (5) business days prior to the Special Record Date by United States
mail, first class postage prepaid, to the address of each Certificate of Obligation holder appearing
on the Security Register at the close of business on the 15th day next preceding the date of mailing
of such notice.
(d) Conversion and Exchange or Replacement: Authentication. Each Certificate of
Obligation issued and delivered pursuant to this Ordinance, to the extent of the unpaid or
unredeemed principal balance or principal amount thereof, may, upon surrender of such
Certificate of Obligation at the principal corporate trust office of the Paying Agent/Registrar,
together with a written request therefor duly executed by the registered owner or the assignee or
assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of
signatures satisfactory to the Paying Agent/Registrar, may, at the option of the registered owner
or such assignee or assignees, as appropriate, be converted into and exchanged for fully registered
certificates of obligation, without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE CERTIFICATE OF OBLIGATION set forth in this Ordinance, in the denomina-
tion of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated
11
that each substitute Certificate of Obligation shall have a single stated maturity date), as requested
in writing by such registered owner or such assignee or assignees, in an aggregate principal
amount equal to the unpaid or unredeemed principal balance or principal amount of any Certificate
of Obligation or Certificates of Obligation so surrendered, and payable to the appropriate
registered owner, assignee, or assignees, as the case may be. If the Initial Certificate of
Obligation is assigned and transferred or converted each substitute Certificate of Obligation issued
in exchange for any portion of the Initial Certificate of Obligation shall have a single stated
principal maturity date, and shall not be payable in installments; and each such Certificate of
Obligation shall have a principal maturity date corresponding to the due date of the installment
of principal or portion thereof for which the substitute Certificate of Obligation is being
exchanged; and each such Certificate of Obligation shall bear interest at the single rate applicable
to and borne by such installment of principal or portion thereof for which it is being exchanged.
If a portion of any Certificate of Obligation (other than the Initial Certificate of Obligation) shall
be redeemed prior to its scheduled maturity as provided herein, a substitute Certificate of
Obligation or Certificates of Obligation having the same maturity date, bearing interest at the same
rate, in the denomination or denominations of any integral multiple of $5,000 at the request of the
registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will
be issued to the registered owner upon surrender thereof for cancellation. If any Certificate of
Obligation or portion thereof (other than the Initial Certificate of Obligation) is assigned and
transferred or converted, each Certificate of Obligation issued in exchange therefor shall have the
same principal maturity date and bear interest at the same rate as the Certificate of Obligation for
which it is being exchanged. Each substitute Certificate of Obligation shall bear a letter and/or
number to distinguish it from each other Certificate of Obligation. The Paying Agent/Registrar
shall convert and exchange or replace Certificates of Obligation as provided herein, and each fully
registered certificate of obligation delivered in conversion of and exchange for or replacement of
any Certificate of Obligation or portion thereof as permitted or required by any provision of this
Ordinance shall constitute one of the Certificates of Obligation for all purposes of this Ordinance,
and may again be converted and exchanged or replaced. It is specifically provided that any
Certificate of Obligation authenticated in conversion of and exchange for or replacement of
another Certificate of Obligation on or prior to the first scheduled Record Date for the Initial
Certificate of Obligation shall bear interest from the date of the Initial Certificate of Obligation,
but each substitute Certificate of Obligation so authenticated after such f~rst scheduled Record
Date shall bear interest from the interest payment date next preceding the date on which such
substitute Certificate of Obligation was so authenticatedr unless such Certificate of Obligation is
authenticated after any Record Date but on or before the next following interest payment date, in
which case it shall bear interest from such next following interest payment date; provided,
however, that if at the time of delivery of any substitute Certificate of Obligation the interest on
the Certificate of Obligation for which it is being exchanged is due but has not been paid, then
such Certificate of Obligation shall bear interest from the date to which such interest has been paid
in full. THE INITIAL CERTIFICATE OF OBLIGATION issued and delivered pursuant to this
Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar,
but on each substitute Certificate of Obligation issued in conversion of and exchange for or
12
replacement of any Certificate of Obligation or Certificates of Obligation issued under this
Ordinance there shall be printed a certificate, in the form substantially as follows:
"PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIHCATE
It is hereby certified that this Certificate of Obligation has been issued under the provisions
of the Certificate of Obligation Ordinance described on the face of this Certificate of Obligation;
and that this Certificate of Obligation has been issued in conversion of and exchange for or
replacement of a certificate of obligation, certificates of obligation, or a portion of a certificate
of obligation or certificates of obligation of an issue which originally was approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of
the State of Texas.
Paying Agent/Registrar
Dated By
Authorized Representative"
An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
Certificate of Obligation, date and manually sign the above Certificate, and no such Certificate
of Obligation shall be deemed to be issued or outstanding unless such Certificate is so executed.
The Paying Agent/Registrar promptly shall cancel all Certificates of Obligation surrendered for
conversion and exchange or replacement. No additional ordinances, orders, or resolutions need
be passed or adopted by the governing body of the Issuer or any other body or person so as to
accomplish the foregoing conversion and exchange or replacement of any Certificate of Obligation
or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and
delivery of the substitute Certificates of Obligation in the manner prescribed herein, and said
Certificates of Obligation shall be of type composition printed on paper with lithographed or steel
engraved borders of customary weight and strength. Pursuant to Vernon's Ann. Tex. Civ. St.
Art. 717k-6, and particularly Section 6 thereof, the duty of conversion and exchange or
replacement of Certificates of Obligation as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication
Certificate, the converted and exchanged or replaced Certificate of Obligation shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the Initial
Certificate of Obligation which originally was issued pursuant to this Ordinance, approved by the
Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay
the Paying Agent/Registrar's standard or customary fees and charges for transferring, convert'rag,
and exchanging any Certificate of Obligation or any portion thereof, but the one requesting any
such transfer, conversion, and exchange shall pay any taxes or governmental charges required to
be paid with respect thereto as a condition precedent to the exercise of such privilege of
conversion and exchange. The Paying Agent/Registrar shall not be required to make any such
conversion and exchange or replacement of Certificates of Obligation or any portion thereof (i)
during the period commencing with the close of business on any Record Date and ending with the
13
opening of business on the next following principal or interest payment date, or, (ii) with respect
to any Certificate of Obligation or portion thereof called for redemption prior to maturity, within
45 days prior to its redemption date.
(e) In General. All Certificates of Obligation issued in conversion and exchange or
replacement of any other Certificate of Obligation or portion thereof, (i) shall be issued in fully
registered form, without interest coupons, with the principal of and interest on such Certificates
of Obligation to be payable only to the registered owners thereof, (ii) may be redeemed prior to
their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and ex-
changed for other Certificates of Obligation, (v) shall have the characteristics, (vi) shall be signed
and sealed, and (vii) the principal of and interest on the Certificates of Obligation shall be payable,
all as provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE
CERTIFICATE OF OBLIGATION set forth in this Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners
of the Certificates of Obligation that it will (i) pay the standard or customary fees and charges of
the Paying Agent/Registrar for its services with respect to the payment of the principal of and
interest on the Certificates of Obligation, when due, and (ii) pay the fees and charges of the
Paying Agent/Registrar for services with respect to the transfer of registration of Certificates of
Obligation, and with respect to the conversion and exchange of Certificates of Obligation solely
to the extent above provided in this Ordinance.
(g) Substitute Payirtg Agent/Registrar. The Issuer covenants with the registered owners
of the Certificates of Obligation that at all times while the Certificates of Obligation are
outstanding the Issuer will provide a competent and legally qualified bank, trust company,
financial institution, or other agency to act as and perform the services of Paying Agent/Registrar
for the Certificates of Obligation under this Ordinance, and that the Paying Agent/Registrar will
be one entity. The Issuer reserves the right to, and may, at its option, change the Paying
Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be
effective not later than 60 days prior to the next principal or interest payment date after such
notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor
by merger, acquisition, or other method) should resign or otherwise cease to act as such, the
Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar
promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Certificates of Obligation, to the new Paying
Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying
Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new
Paying Agent/Registrar to each registered owner of the Certificates of Obligation, by United
States mail, ftrst-class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar
14
shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
(h) Book-Entry Onl.v System. The Certificates of Obligation issued in exchange for the
Certificates of Obligation initially issued to the purchaser specified herein shall be initially issued
in the form of a separate single fully registered Certificate of Obligation for each of the maturities
thereof. Upon initial issuance, the ownership of each such Certificate of Obligation shall be
registered in the name of Cede & Co., as nominee of Depository Trust Company of New York
CDTC"), and except as provided in subsection (f) hereof, all of the outstanding Certificates of
Obligation shall be registered in the name of Cede & Co., as nominee of DTC.
With respect to Certificates of Obligation registered in the name of Cede & Co., as
nominee of DTC, the Issuer and the Paying Agent/Registrar shall have no responsibility or
obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant
holds an interest on the Certificates of Obligation. Without limiting the immediately preceding
sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with
iespect to any ownership interest in the Certificates of Obligation, (ii) the delivery to any DTC
Participant or any other person, other than a Certificate of Obligation holder, as shown on the
Registration Books, of any notice with respect to the Certificates of Obligation, including any
notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than
a Certificate of Obligation holder, as shown in the Registration Books of any amount with respect
to principal of, premium, if any, or interest on, as the case may be, the Certificates of Obligation.
Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate
of Obligation is registered in the Registration Books as the absolute owner of such Certificate of
Obligation for the purpose of payment of principal, premium, if any, and interest, as the case may
be, with respect to such Certificate of Obligation, for the purpose of giving notices of redemption
and other matters with respect to such Certificate of Obligation, for the purpose of registering
transfers with respect to such Certificate of Obligation, and for all other purposes whatsoever.
The Paying Agent/Registrar shall pay all principal of, premium, if any, and interest on the
Certificates of Obligation only to or upon the order of the respective owners, as shown in the
Registration Books as provided in this Ordinance, or their respective attorneys duly authorized
in writing, and all such payments shall be valid and effective to fully satisfy and discharge the
Issuer's obligations with respect to payment of principal of, premium, if any, and interest on, or
as the case may be, the Certificates of Obligation to the extent of the sum or sums so paid. No
person other than an owner, as shown in the Registration Books, shall receive a Certificate of
Obligation certificate evidencing the obligation of the Issuer to make payments of principal,
premium, if any, and interest, as the case may be, pursuant to this Ordinance. Upon delivery by
DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., and subject to the provisions in this Ordinance
with respect to interest checks being mailed to the registered owner at the close of business on the
15
Record Date, the word "Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(i) Successor Securities Depository: Transfers Outside Book-Entry Only System. In the
event that the Issuer or the Paying Agent/Registrar determines that DTC is incapable of
discharging its responsibilities described herein and in the representation letter of the Issuer to
DTC and that it is in the best interest of the beneficial owners of the Certificates of Obligation that
they be able to obtain certificated Certificates of Obligation, the Issuer or the Paying
Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Certificates of Obligation to such successor securities depository or (ii) notify DTC and
DTC Participants of the availability through DTC of Certificates of Obligation and transfer one
or more separate Certificates of Obligation to DTC Participants having Certificates of Obligation
credited to their DTC accounts. In such event, the Certificates of Obligation shall no longer be
restricted to being registered in the Registration Books in the name of Cede & Co., as nominee
of DTC, but may be registered in the name of the successor securities depository, or its nominee,
or in whatever name or names Certificate of Obligation holders transferring or exchanging
Certificates of Obligation shall designate, in accordance with the provisions of this Ordinance.
(j) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Certificate of Obligation is registered in the name of Cede & Co., as
nominee of DTC, all payments with respect to principal of, premium, if any, and interest on, or
as the case may be, such Certificate of Obligation and all notices with respect to such Certificate
of Obligation shall be made and given, respectively, in the manner provided in the representation
letter of the Issuer to DTC.
Section 7. FORM OF SUBSTITUTE CERTIFICATES OF OBLIGATION. The form of
all Certificates of Obligation issued in conversion and exchange or replacement of any other
Certificate of Obligation or portion thereof, including the form of Paying Agent/Registrar's
Certificate to be printed on each of such Certificates of Obligation, and the Form of Assignment
to be printed on each of the Certificates of Obligation, shall be, respectively, substantially as fol-
lows, with such appropriate variations, omissions, or insertions as are permitted or required by
this Ordinance.
16
FORM OF SUBSTITUTE CERTIFICATE OF OBLIGATION
NO. PRINCIPAL
AMOUNT
$
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF DALLAS AND DENTON
CITY OF COPPELL, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION
SERIES 1997
Interest Rate Maturity Date Original Date of Issue Cusip No.
August 15, 1997
ON THE MATURITY DATE specified above, the CITY OF COPPELL (the "Issuer") in
Dallas and Denton Counties, being a political subdivision of the State of Texas, hereby promises
to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner") the
principal amount of
and to pay interest thereon from August 15, 1997 to the maturity date specified above, or the date
of redemption prior to maturity, at the interest rate per annum specified above with interest being
payable on February 1, 1998, and semiannually on each August I and February I thereafter;
except that if the date of authentication of this Certificate of Obligation is later than January 15,
1998, such principal amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is after any Record Date (hereinafier de-
fined) but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Certificate of Obligation are payable in
lawful money of the United States of America, without exchange or collection charges. The
principal of this Certificate of Obligation shall be paid to the registered owner hereof upon
presentation and surrender of this Certificate of Obligation at maturity or upon the date fixed for
its redemption prior to maturity, at the principal corporate trust office of Norwest Bank Texas,
N.A., Dallas, Texas, which is the "Paying Agent/Registrar" for this Certificate of Obligation.
The payment of interest on this Certificate of Obligation shall be made by the Paying
Agent/Registrar to the registered owner hereof on the interest payment date by check or draft,
dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable
solely from, funds of the Issuer required by the Ordinance authorizing the issuance of the
17
Certificates of Obligation (the "Certificate of Obligation Ordinance") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafier provided; and such check or draft shall
be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each
such interest payment date, to the registered owner hereof, at the address of the registered owner,
as it appeared on the 15th day of the month next preceding such date (the "Record Date") on the
Registration Books kept by the Paying Agent/Registrar, as hereinafter described, or by such other
method acceptable to the Paying Agent/Registrar requested by, and at the risk and expense of, the
registered owner. Any accrued interest due upon the redemption of this Certificate of Obligation
prior to maturity as provided herein shall be paid to the registered owner at the principal corporate
trust office of the Paying Agent/Registrar upon presentation and surrender of this Certificate of
Obligation for redemption and payment at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the registered owner of this Certificate of Obligation
that on or before each principal payment date, interest payment date, and accrued interest payment
date for this Certificate of Obligation, it will make available to the Paying Agent/Registrar, from
the "Interest and Sinking Fund" created by the Certificate of Obligation Ordinance, the amounts
required to provide for the payment, in immediately available funds, of all principal of and
interest on the Certificates of Obligation, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate of
Obligation shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions
in the city where the Paying Agent/Registrar is located are authorized by law or executive order
to close, then the date for such payment shall be the next succeeding day which is not such a
Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE OF OBLIGATION is one of an issue of Certificates of Obligation
initially dated August 15, 1997, authorized in accordance with the Constitution and laws of the
State of Texas in the original principal amount of $2,000,000, for paying all or a portion of the
City's contractual obligations for the purpose of constructing and improving the City's streets, and
for paying legal and fiscal fees in connection with this project.
ON FEBRUARY 1, 2007, or any date thereafter, the Certificates of Obligation of this
Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds
derived from any available source, as a whole, or in part, and, if in part, the maturity or maturi-
ties of Certificates of Obligation and the amounts thereof, to be redeemed shall be selected and
designated by the Issuer, and the Issuer shall direct the Paying Agent/Registrar to call by lot
Certificates of Obligation, or portions thereof within such maturities and in such principal
amounts, for redemption (provided that a portion of this Certificate of Obligation may be
redeemed only in an integral multiple of $5,000), at the prepayment or redemption price of the
principal amount thereof, plus accrued interest to the date fixed for prepayment or redemption.
18
THE CERTIFICATES OF OBLIGATION of this Series scheduled to mature on
FEBRUARY 1, 2017 are subject to mandatory redemption prior to their scheduled maturities,
and shall be redeemed by the Issuer, in part, prior to their scheduled maturities, with money from
the Mandatory Redemption Account of the Interest and Sinking Fund, with the particular
Certificates of Obligation or portion thereof to be redeemed to be selected by the Paying
Agent/Registrar, by lot or other customary method (provided that a portion of a Certificate of
Obligation may be redeemed only in an integral multiple of $5,000) at a redemption price equal
to the par or principal amount thereof and accrued interest to the date of redemption, on the dates,
and in the principal amounts, respectively, as shown in the following schedules:
February 1. 2017 Maturity
Mandatory Redemption Dates Principal Amounts
February 1, 2015 $140,000
February 1, 2016 $145,000
February 1, 2017 $155,000 *payable at maturity
The principal amount of the Certificates of Obligation required to be redeemed on each such
redemption date pursuant to the foregoing operation of the Mandatory Redemption Account shall
be reduced, at the option of the Issuer, by the principal amount of any Certificate of Obligation,
which at least 45 days prior to the mandatory sinking fund redemption date, (1) shall have been
acquired by the Issuer and delivered to the Paying Agent/Registrar for cancellation, or (2) at a
price not exceeding the par or principal amount of such Certificate of Obligation or (3) have been
redeemed pursuant to the optional redemption provisions set forth above and not theretofore
credited against a mandatory sinking fund redemption. During any period in which ownership
of the Certificate of Obligation is determined by a book entry at a securities depository for the
Certificate of Obligation, if fewer than all of the Certificates of Obligation of the same maturity
and bearing the same interest rate are to be redeemed, the particular Certificate of Obligation of
such maturity and bearing such interest rate shall be selected in accordance with the arrangements
between the Issuer and the securities depository.
AT LEAST 30 days prior to the date fixed for any redemption of Certificates of Obligation
or portions thereof prior to maturity a written notice of such redemption shall be published once
in a financial publication, journal, or reporter of general circulation among securities dealers in
the City of New York, New York (including, but not limited to, The Certificate of Obligation
Buyer and The Wall Street Journal), or in the State of Texas (including, but not limited to, The
Texas Bond Reporter). Such notice also shall be sent by the Paying Agent/Registrar by United
States mail, first-class postage prepaid, not less than 30 days prior to the date fixed for any such
redemption, to the registered owner of each Certificate of Obligation to be redeemed at its address
as it appeared on the 45th day prior to such redemption date; provided, however, that the failure
to send, mail or receive such notice, or any defect therein or in the sending or mailing thereof,
shall not affect the validity or effectiveness of the proceedings for the redemption of any
Certificate of Obligation, and it is hereby specifically provided that the publication of such notice
19
as required above shall be the only notice actually required in connection with or as a prerequisite
to the redemption of any Certificates of Obligation or portions thereof. By the date fixed for any
such redemption due provision shall be made with the Paying Agent Registrar for the payment of
the required redemption price for the Certificates of Obligation or portions thereof which are to
be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written
notice of redemption is published and if due provision for such payment is made, all as provided
above, the Certificates of Obligation or portions thereof which are to be so redeemed thereby
automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not
bear interest after the date fixed for redemption, and they shall not be regarded as being
outstanding except for the right of the registered owner to receive the redemption price plus
accrued interest from the Paying Agent/Registrar out of the funds provided for such payment.
If a portion of any Certificate of Obligation shall be redeemed a substitute Certificate of
Obligation or Certificates of Obligation having the same maturity date, bearing interest at the same
rate, in any denomination or denominations in any integral multiple of $5,000, at the written
request of the registered owner, and in aggregate principal amount equal to the unredeemed
portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation,
at the expense of the Issuer, all as provided in the Certificate of Obligation Ordinance.
THIS CERTIFICATE OF OBLIGATION OR ANY PORTION OR PORTIONS HEREOF
IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in
the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of
registrar for the Certificates of Obligation, upon the terms and conditions set forth in the
Certificate of Obligation Ordinance. Among other requirements for such assignment and transfer,
this Certificate of Obligation must be presented and surrendered to the Paying Agent/Registrar,
together with proper instntments of assignment, in form and with guarantee of signatures satisfac-
tory to the Paying Agent/Registrar, evidencing assignment of this Certificate of Obligation or any
portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose
name or names this Certificate of Obligation or any such portion or portions hereof is or are to
be transferred and registered. The form of Assignment printed or endorsed on this Certificate of
Obligation shall be executed by the registered owner or its duly authorized attorney or representa-
tire to evidence the assignment hereof. A new Certificate of Obligation or Certificates of
Obligation payable to such assignee or assignees (which then will be the new registered owner or
owners of such new Certificate of Obligation or Certificates of Obligation), or to the previous
registered owner in the case of the assignment and transfer of only a portion of this Certificate of
Obligation, may be delivered by the Paying Agent/Registrar in conversion of and exchange for
this Certificate of Obligation, all in the form and manner as provided in the next paragraph hereof
for the conversion and exchange of other Certificates of Obligation. The Issuer shall pay the
Paying Agent/Registrar's standard or customary fees and charges for making such transfer, but
the one requesting such transfer shall pay any taxes or other governmental charges required to be
paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of
registration of this Certificate of Obligation or any portion hereof (i) during the period
commencing with the close of business on any Record Date and ending with the opening of
business on the next following principal or interest payment date, or, (ii) with respect to any
20
Certificate of Obligation or any portion thereof called for redemption prior to maturity, within 45
days prior to its redemption date. The registered owner of this Certificate of Obligation shall be
deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for
all purposes, including payment and discharge of liability upon this Certificate of Obligation to
the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected
by any notice to the contrary.
ALL CERTIFICATES OF OBLIGATION OF THIS SERIES are issuable solely as fully
registered certificates of obligation, without interest coupons, in the denomination of any integral
multiple of $5,000. As provided in the Certificate of Obligation Ordinance, this Certificate of
Obligation, or any unredeemed portion hereof, may, at the request of the registered owner or the
assignee or assignees hereof, be converted into and exchanged for a like aggregate principal
amount of fully registered Certificates of Obligation, without interest coupons, payable to the
appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity
date, and bearing interest at the same rate, in any denomination or denominations in any integral
multiple of $5,000 as requested in writing by the appropriate registered owner, assignee, or
assignees, as the case may be, upon surrender of this Certificate of Obligation to the Paying
)~gent/Registrar for cancellation, all in accordance with the form and procedures set forth in the
Certificate of Obligation Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard
or customary fees and charges for transferring, converting, and exchanging any Certificate of
Obligation or any portion thereof, but the one requesting such transfer, conversion, and exchange
shall pay any taxes or governmental charges required to be paid with respect thereto as a condition
precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Regis-
trar shall not be required to make any such conversion and exchange (i) during the period
commencing with the close of business on any Record Date and ending with the opening of
business on the next following principal or interest payment date, or, (ii) with respect to any
Certificate of Obligation or portion thereof called for redemption prior to maturity, within 45 days
prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates of Obligation is changed
by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the
Certificate of Obligation Ordinance that it promptly will appoint a competent and legally qualified
substitute therefor, and promptly will cause written notice thereof to be mailed to the registered
owners of the Certificates of Obligation.
IT IS HEREBY certified, recited, and covenanted that this Certificate of Obligation has
been duly and validly authorized, issued, sold, and delivered; that all acts, conditions, and things
required or proper to be performed, exist, and be done precedent to or in the authorization,
issuance, and delivery of this Certificate of Obligation have been performed, existed, and been
done in accordance with law; that this Certificate of Obligation is a general obligation of the
Issuer, issued on the full faith and credit thereof; and that ad valorem taxes sufficient to provide
for the payment of the interest on and principal of this Certificate of Obligation, as such interest
and principal come due, have been levied and ordered to be levied against all taxable property in
21
the Issuer, and have been pledged for such payment, within the limit prescribed by law, and that
this Certificate of Obligation is additionally secured by and payable from the surplus revenues of
the Issuer's combined Waterworks and Sewer System, remaining after paymere of all operation
and maintenance expenses thereof, and all debt service, reserve, and other requirements in
connection with all of the Issuer's revenue Certificate of Obligations or other obligations (now or
hereafter outstanding), which are payable from all or any part of the Net Revenues of the Issuer's
combined Waterworks and Sewer System.
BY BECOMING the registered owner of this Certificate of Obligation, the registered
owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation
Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate
of Obligation Ordinance is duly recorded and available for inspection in the official minutes and
records of the governing body of the Issuer, and agrees that the terms and provisions of this
Certificate of Obligation and the Certificate of Obligation Ordinance constitute a contract between
each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Certificate of Obligation to be signed
ivith the manual or facsimile signature of the Mayor of the Issuer and countersigned with the
manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal
of the Issuer to be duly impressed, or placed in facsimile, on this Certificate of Obligation.
City Secretary Mayor
CITY SEAL
22
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate of Obligation is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Certificate of Obligation has been issued under the provisions of the Certificate
of Obligation Ordinance described on the face of this Certificate of Obligation; and that this Certificate of Obligation
has been issued in conversion of and exchange for or replacement of a certificate of obligation, certificates of
obligation, or a portion of a certificate of obligation or certificates of obligation of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the
State of Texas.
Dated Norwest Bank Texas, N.A.
Paying Agent/Registrar
By
Authorized Representative
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Certificate of Obligation, or duly
authorized representative or attorney thereof, hereby assigns this Certificate of Obligation to
/ /
(Assignce's Social Security (print or type Assignee's name
or Taxpayer Identification Number) and address, including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Certificate of Obligation on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated
Signature Guaranteed:
NOTICE: This signature must be guaranteed by a member of the New York Stock Exchange or a
commercial bank or trust company.
Registered Owner
NOTICE: This signature must correspond with the name of the Registered Owner appearing on the face of
this Certificate of Obligation in every particular without alteration or enlargement or any change whatsoever.
23
Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking
Fund") is hereby created solely for the benefit of the Certificates of Obligation, together with a
Mandatory Redemption Account which shall mean that account established within the Interest and
Sinking Fund as provided herein, and the Interest and Sinking Fund shall be established and
maintained by the Issuer at an official depository bank of the Issuer. The Interest and Sinking
Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and shall
be used only for paying the interest on and principal of the Certificates of Obligation. All ad
valorem taxes levied and collected for and on account of the Certificates of Obligation shall be
deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while
any of the Certificates of Obligation or interest thereon are outstanding and unpaid, the governing
body of the Issuer shall compute and ascertain a rate and amount of ad valorera tax which will be
sufficient to raise and produce the money required to pay the interest on the Certificates of
Obligation as such interest comes due, and to provide and maintain a sinking fund adequate to pay
the principal of its Certificates of Obligation as such principal matures (but never less than 2%
of the original principal amount of the Certificates of Obligation as a sinking fund each year),
including such amounts to satisfy the mandatory redemption schedule for the Certificates of
Obligation maturing February 1, 2017 which shall be deposited into the Mandatory Redemption
Account, with such mandatory redemption of principal and interest constituting payment at
maturity, on the dates and for the amount as follows:
February 1. 2017 Maturity
Mandatory Redemption Dates Principal Amounts
February 1, 2015 $140,000
February 1, 2016 $145,000
February 1, 2017 $155,000 *payable at maturity
Said tax shall be based on the latest approved tax rolls of the Issuer, with full allowance being
made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax
is hereby levied, and is hereby ordered to be levied, against all taxable property in the Issuer for
each year while any of the Certificates of Obligation or interest thereon are outstanding and
unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of
the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the pay-
ment of the interest on and principal of the Certificates of Obligation, as such interest comes due
and such principal matures, are hereby pledged for such payment, within the limit prescribed by
law.
Section 9. REDEMPTION OF CERTIFICATES OF OBLIGATION. The Issuer shall
redeem Certificates of Obligation maturing on February 1, 2017 in principal amounts equal to the
stated principal amounts for the respective Mandatory Redemption Dates all as set forth above.
The principal amount of the Certificates of Obligation maturing February 1, 2017 required to be
redeemed pursuant to the operation of such mandatory redemption provisions shall be reduced,
at the option of the Issuer, by the principal amount of any Certificates of Obligation maturing
February 1, 2017, which at least 45 days prior to the mandatory redemption date, (1) shall have
24
been acquired by the Issuer at a price not exceeding the principal amount of such Certificates of
Obligation plus accrued interest to the date of purchase thereof, and delivered to the Paying
Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the Paying
Agent/Registrar at the request of the Issuer with moneys in the Interest and Sinking Fund, at a
price not exceeding the principal amount of such Certificates of Obligation and (3) has been
redeemed pursuant to the optional redemption provision set forth herein and not theretofore
credited against a mandatory redemption requirement. On the maturity date of any Certificates
of Obligation maturing February 1, 2017, the Issuer shall apply the moneys on hand in the Interest
and Sinking Fund for the payment of principal and interest of the maturing Certificates of
Obligation.
Section 10. REVENUES. That said Certificates of Obligation, together with other
obligations of the Issuer, are additionally secured by and shall be payable from and secured by
and payable from the surplus revenues of the Issuer's combined Waterworks and Sewer System,
remaining after payment of all expenses of operation and maintenance thereof, and all debt
service, reserve, and other requirements in connection with all of the Issuer's revenue Certificate
of Obligations or other obligations (now or hereafter outstanding), which are payable from all or
tiny part of the Net Revenues of the Issuer's combined Waterworks and Sewer System, with such
amount not exceeding $1,000, constituting "Surplus Revenues", The Issuer shall deposit such
Surplus Revenues, if any, that may be used to pay the Certificates of Obligation to the credit of
the Interest and Sinking Fund created pursuant to Section 8, to the extent necessary to pay the
principal and interest on the Certificates of Obligation. Notwithstanding the requirements of
Section 8, if Surplus Revenues are actually on deposit or budgeted for deposit in the Interest and
Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any
year, then the amount of taxes which otherwise would have been required to be levied pursuant
to Section 8 may be reduced to the extent and by the amount of the Surplus Revenues then on
deposit in the Interest and Sinking Fund or budgeted for deposit therein.
Section 11. TRANSFER. That the Mayor and the City Secretary are hereby ordered to
do any and all things necessary to accomplish the transfer of monies to the Interest and Sinking
Fund of this issue in ample time to pay such items of principal and interest.
Section 12. DEFEASANCE OF CERTIFICATES OF OBLIGATION. (a) Any
Certificate of Obligation and the interest thereon shall be deemed to be paid, retired, and no
longer outstanding (a "Defeased Certificate of Obligation") within the meaning of this Ordinance,
except to the extent provided in subsection (d) of this Section 11, when payment of the principal
of such Certificate of Obligation, plus interest thereon to the due date (whether such due date be
by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused
to be made in accordance with the terms thereof (including the giving of any required notice of
redemption, or (ii) shall have been provided for on or before such due date by irrevocably deposit-
ing with or making available to the Paying Agent/Registrar for such payment (1) lawful money
of the United States of America sufficient to make such payment or (2) Government Obligations
which mature as to principal and interest in such amounts and at such times as will insure the
25
availability, without reinvesUnent, of sufficiem money to provide for such payment, and when
proper arrangements have been made by the Issuer with the Paying Agent/Registrar for the
payment of its services until all Defeased Certificates of Obligation shall have become due and
payable. At such time as a Certificate of Obligation shall be deemed to be a Defeased Certificate
of Obligation hereunder, as aforesaid, such Certificate of Obligation and the interest thereon shall
no longer be secured by, payable from, or entitled to the benefits of, the ad valorera taxes herein
levied and revenues pledged as provided in this Ordinance, and such principal and interest shall
be payable solely from such money or Government Obligations.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction
of the Issuer also be invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from such Government Obligations received by the Paying
Agent/Registrar which is not required for the payment of the Certificates of Obligation and inter-
est thereon, with respect to which such money has been so deposited, shall be turned over to the
Issuer, or deposited as directed in writing by the Issuer.
(c) The term "Government Obligations" as used in this Section, shall mean direct
6bligations of the United States of America, including obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America, which may be United
States Treasury obligations such as its State and Local Government Series, which may be hi book-
entry form.
(d) Until all Defeased Certificates of Obligation shall have become due and payable, the
Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased
Certificates of Obligation the same as if they had not been defeased, and the Issuer shall make
proper arrangements to provide and pay for such services as required by this Ordinance.
Section 13. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES OF OBLIGATION. (a) Replacement Certificates of Obligation. In the event
any outstanding Certificate of Obligation is damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new certificate of
obligation of the same principal amount, maturity, and interest rate, as the damaged, mutilated,
lost, stolen, or destroyed Certificate of Obligation, in replacement for such Certificate of
Obligation in the manner hereinafter provided.
Co) Application for Replacement Certificates of Obligation. Application for replacement
of damaged, mutilated, lost, stolen, or destroyed Certificates of Obligation shall be made by the
registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruc-
tion of a Certificate of Obligation, the registered owner applying for a replacement certificate of
obligation shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity
as may be required by them to save each of them harmless from any loss or damage with respect
thereto. Also, in every case of loss, theft, or destruction of a Certificate of Obligation, the
registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their
26
satisfaction of the loss, theft, or destruction of such Certificate of Obligation, as the case may be.
In every case of damage or mutilation of a Certificate of Obligation, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Certificate of Obligation so damaged
or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Certificate of Obligation shall have matured, and no default has occurred which
is then continuing in the payment of the principal of, redemption premium, if any, or interest on
the Certificate of Obligation, the Issuer may authorize the payment of the same (without surrender
thereof except in the case of a damaged or mutilated Certificate of Obligation) instead of issuing
a replacement Certificate of Obligation, provided security or indemnity is furnished as above
provided in this Section.
(d) Charge for Issuing Replacement Certificates of Obligation. Prior to the issuance of
any replacement certificate of obligation, the Paying Agent/Registrar shall charge the registered
owner of such Certificate of Obligation with all legal, printing, and other expenses in connection
therewith. Every replacement certificate of obligation issued pursuant to the provisions of this
Section by virtue of the fact that any Certificate of Obligation is lost, stolen, or destroyed shall
constitute a contractual obligation of the Issuer whether or not the lost, stolen, or destroyed Certif-
icate of Obligation shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Ordinance equally and proportionately with any and all other Certificates
of Obligation duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates of Obligation. In accordance with
Section 6 of Vernon's Ann. TeL Civ. St. Art. 717k-6, this Section 13 of this Ordinance shall
constitute authority for the issuance of any such replacement certificate of obligation without
necessity of further action by the governing body of the Issuer or any other body or person, and
the duty of the replacement of such certificates of obligation is hereby authorized and imposed
upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver
such Certificates of Obligation in the form and manner and with the effect, as provided in Section
6(d) of this Ordinance for Certificates of Obligation issued in conversion and exchange for other
Certificates of Obligation.
Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES OF
OBLIGATION; Certificate of Obligation COUNSEL'S OPINION; CUSIP NUMBERS AND
CONTINGENT INSURANCE PROVISION, IF OBTAINED. The Mayor of the Issuer is hereby
authorized to have control of the Initial Certificate of Obligation issued hereunder and all
necessary records and proceedings pertaining to the Initial Certificate of Obligation pending its
delivery and its investigation, examination, and approval by the Attorney General of the State of
Texas, and its registration by the Comptroller of Public Accounts of the State of Texas. Upon
registration of the Initial Certificate of Obligation said Comptroller of Public Accounts (or a
deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's
Registration Certificate on the Initial Certificate of Obligation, and the seal of said Comptroller
27
shall be impressed, or placed in facsimile, on the Initial Certificate of Obligation. The approving
legal opinion of the Issuer's Certificate of Obligation counsel and the assigned CUSIP numbers
may, at the option of the Issuer, be printed on the Initial Certificate of Obligation or on any
Certificates of Obligation issued and delivered in conversion of and exchange or replacement of
any Certificate of Obligation, but neither shall have any legal effect, and shall be solely for the
convenience and information of the registered owners of the Certificates of Obligation. In
addition, if Certificate of Obligation insurance is obtained, the Certificates of Obligation may bear
an appropriate legend as provided by the insurer.
Section 15. COVENANTS REGARDING TAX EXEMPTION. The Issuer covenants to
refrain from taking any action which would adversely affect, and to take any required action to
ensure, the treatment of the Certificates of Obligation as obligations described in Section 103 of
the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not
includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the
Certificates of Obligation or the projects f'manced therewith (less amounts deposited to a reserve
fund, if any) are used for any "private business use," as def'med in Section 141(b)(6) of the Code
or, if more than 10 percent of the proceeds or the projects financed therewith are so used, such
amounts, whether or not received by the Issuer, with respect to such private business use, do not,
under the terms of this Ordinance, or any underlying arrangement, directly or indirectly, secure
or provide for the payment of more than 10 percent of the debt service on the Certificates of
Obligation, in contravention of Section 141Co)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described
in Subsection (a) hereof exceeds 5 percent of the proceeds of the Certificates of Obligation or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount
in excess of 5 percent is used for a "private business use" which is "related" and not "dispro-
portionate," within the meaning of Section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certificates of Obligation (less amounts deposited
into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of Section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Certificates of
Obligation being treated as "private activity Certificates of Obligation" within the meaning of
Section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Certificates of Obligation
being "federally guaranteed" within the meaning of Section 149(b) of the Code;
28
(f) to refrain from using any portion of the proceeds of the Certificates of Obligation,
directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to
acquire investment property (as defmed in Section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Certificates of Obligation, other than investment
property acquired with --
(1) proceeds of the Certificates of Obligation invested for a reasonable temporary
period of 3 years or less or, in the case of a refunding Certificate of Obligation, for a
period of 30 days or less until such proceeds are needed for the purpose for which the
Certificates of Obligation are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
Section 1.148-1(1>) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund to
the extent such amounts do not exceed 10 percent of the proceeds of the Certificates of
Obligation;
(g) to otherwise restrict the use of the proceeds of the Certificates of Obligation or
amounts treated as proceeds of the Certificates of Obligation, as may be necessary, so that the
Certificates of Obligation do not otherwise contravene the requirements of Section 148 of the
Code (relafmg to arbitrage) and, to the extent applicable, Section 149(d) of the Code (relating to
advance refundings); and
(h) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Certificates of Obligation) an amount that is at least equal
to 90 percent of the "Excess Earnings," within the meaning of Section 148(f) of the Code and to
pay to the United States of America, not later than 60 days after the Certificates of Obligation
have been paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under Section 148(f) of the Code.
The Issuer understands that the term "proceeds" includes "disposition proceeds" as defmed
in the Treasury Regulations and, in the case of refunding Certificates of Obligation, transferred
proceeds (if any) and proceeds of the refunded Certificates of Obligation expended prior to the
date of issuance of the Certificates of Obligation. It is the understanding of the Issuer that the
covenants contained herein are intended to assure compliance with the Code and any regulations
or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that
regulations or rulings are hereafter promulgated which modify or expand provisions of the Code,
as applicable to the Certificates of Obligation, the Issuer will not be required to comply with any
covenant contained herein to the extent that such failure to comply, in the opinion of nationally-
recognized Certificate of Obligation counsel, will not adversely affect the exemption from federal
income taxation of interest on the Certificates of Obligation under Section 103 of the Code. In
the event that regulations or rulings are hereafter promulgated which impose additional require-
29
ments which are applicable to the Certificates of Obligation, the Issuer agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally-recognized Certificate
of Obligation counsel, to preserve the exemption from federal income taxation of interest on the
Certificates of Obligation under Section 103 of the Code. In furtherance of such intention, the
Issuer hereby authorizes and directs the Mayor of the Issuer to execute any documents, certificates
or reports required by the Code and to make such elections, on behalf of the Issuer, which may
be permitted by the Code as are consistent with the purpose for the issuance of the Certificates
of Obligation.
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby
established by the Issuer for the sole benefit of the United States of America, and such Fund shall
not be subject to the claim of any other person, including without limitation the Certificate of
Obligation holders. The Rebate Fund is established for the additional purpose of compliance with
Section 148 of the Code.
Section 16. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. The Issuer covenants to account for the expenditure of sale proceeds and investment
~amings to be used for the purposes described in Section 1 of this Ordinance (the "Project") on
its books and records by allocating proceeds to expenditures within 18 months of the later of the
date that (1) the expenditure is made, or (2) the Project is completed. The foregoing
notwithstanding, the Issuer shall not expend sale proceeds or investment earnings thereon more
than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Certificates of
Obligation, or (2) the date the Certificates of Obligation are retired, unless the Issuer obtains an
opinion of nationally-recognized Certificate of Obligation counsel that such expenditure will not
adversely affect the tax-exempt status of the Certificates of Obligation. For purposes hereof, the
Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure
to comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
Section 17. DISPOSITION OF PROJECT. The Issuer covenants that the property
constituting the Project will not be sold or otherwise disposed in a transaction resulting in the
receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of
nationally-recognized Certificate of Obligation counsel that such sale or other disposition will not
adversely affect the tax-exempt status of the Certificates of Obligation. For purposes of the
foregoing, the portion of the property comprising personal property and disposed in the ordinary
course shall not be treated as a transaction resulting in the receipt of cash or other compensation.
For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains
an opinion that such failure to comply will not adversely affect the excludability for federal
income tax purposes from gross income of the interest.
Section 18. CONTINUING DISCLOSURE. (a) Annual Reports. (i) The Issuer shall
provide annually to each NRMSIR and any SID, within four months after the end of each fiscal year
ending in or after 1997, financial information and operating data with respect to the Issuer of the
30
general type included in the final Official Statement authorized by Section 19 of this Ordinance,
being the information described in Exhibit A. Any financial statements so to be provided shall be
prepared in accordance with the accounting principles described in Exhibit A thereto, or such other
accounting principles as the Issuer may be required to employ from time to time pursuant to state
law or regulation, and audited, if the Issuer commissions an audit of such statements and the audit
is completed within the period during which they must be provided. If the audit of such financial
statements is not complete within such period, then the Issuer shall provide audited financial
statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report
on such statements become available.
(ii) If the Issuer changes its fiscal year, it will notify each NRMSIR and any SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the Issuer
otherwise would be required to provide financial information and operating data pursuant to this
Section. The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The Issuer shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Certificates of
Obligation, if such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates of
Obligation;
7. Modifications to rights of holders of the Certificates of Obligation;
8. Certificate of Obligation calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates of
Obligation; and
11. Rating changes.
The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the Issuer to provide financial information or operating data in accordance with subsection
(a) of this Section by the time required by such subsection.
(c) Limitations. Disclaimers. and Amendments. (i) The Issuer shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the Issuer
remains an "obligated person" with respect to the Certificates of Obligation within the meaning of
31
the Rule, except that the Issuer in any event will give notice of any deposit made in accordance with
this Ordinance or applicable law that causes Certificates of Obligation no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the holders and beneficial
owners of the Certificates of Obligation, and nothing in this Section, express or implied, shall give
any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The
Issuer undertakes to provide only the financial information, operating data, fmancial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the Issuer's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly provided
herein. The Issuer does not make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Certificates of Obligation at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY Certificate of Obligation OR ANY OTHER
PERSON, 1N CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN TIllS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
(iv) No default by the Issuer in observing or performing its obligations under this Section
shall comprise a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt
to changed cimumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the Issuer, but only if(1 ) the provisions
of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates
of Obligation in the primary offering of the Certificates of Obligation in compliance with the Rule,
taking into account any amendments or interpretations of the Rule since such offering as well as such
changed circumstances and (2) either (a) the holders of a majority in aggregate principal amount (or
any greater amount required by any other provision of this Ordinance that authorizes such an
amendment) of the outstanding Certificates of Obligation consent to such amendment or (b) a person
that is unaffiliated with the Issuer (such as bond counsel) determined that such amendment will not
materially impair the interest of the holders and beneficial owners of the Certificates of Obligation.
If the Issuer so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (a) of this Section an
explanation, in narrative form, of the reason for the amendment and of the impact of any change in
the type of ~nanciai information or operating data so provided. The Issuer may also amend or repeal
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the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Certificates of Obligation in the primary offering
of the Certificates of Obligation.
(d) Definitions. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a nationally
recognized mtmicipal securities information repository within the meaning of the Rule from
time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
Section 19. SALE OF INITIAL CERTIFICATE OF OBLIGATION. The Initial
Certificate of Obligation is hereby sold and shall be delivered to Rauscher Pierce Refsnes, Inc.
(the "Underwriter") for cash for the price of $1,970,679.25 thereof and accrued interest thereon
to date of delivery, (such price includes a discount to the Underwriter of $16,315 and an original
issue discount to the Underwriter of $13,005.75) pursuant to the terms and provisions of a
Purchase Contract with the Underwriter. It is hereby officially found, determined, and declared
that the Initial Certificate of Obligation has been sold pursuant to the terms and provisions of a
Purchase Contract in substantially the form attached hereto as Exlibit B, which the Mayor of the
Issuer is hereby authorized and directed to execute and deliver and which the City Secretary of
the issuer is hereby authorized and directed to attest. It is hereby officially found, determined,
and declared that the terms of this sale are the most advantageous reasonably obtainable. The
Initial Certificate of Obligation shall be registered in the name of Rauscher Pierce Refsnes, Inc.
Section 20. APPROVAL OF OFFICIAL STATEMENT. The Issuer hereby approves the
form and content of the Official Statement relating to the Certificates of Obligation and any
addenda, supplement or amendment thereto, and approves the distribution of such Official
Statement in the reoffering of the Certificates of Obligation by the Underwriter in final form, with
such changes therein or additions thereto as the officer executing the same may deem advisable,
such determination to be conclusively evidenced by his execution thereof.
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Section 21. INTEREST EARNINGS ON CERTIFICATES OF OBLIGATION
PROCEEDS. The earnings derived from the investment of proceeds from the sale of the
Certificates of Obligation shall be used along with other Certificates of Obligation proceeds as
described in Section I hereof; provided that after completion of such project, if any of such
interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provided, however, that interest earnings on the Certificates of
Obligation proceeds which are required to be rebated to the United States of America pursuant
to Section 15 hereof in order to prevent the Certificates of Obligation from being arbitrage
Certificates of Obligation shall be so rebated and not considered as interest earnings for the
purpose of this Section. Accrued interest shall be deposited into the Interest and Sinking Fund.
Section 22. APPROPRIATION. There is hereby appropriated for transfer into the Interest
and Sinking Fund, from available funds of the Issuer, moneys sufficient to pay the principal and
interest coming due on the Certificates of Obligation on February 1, 1998.
Section 23. EFFECTIVE DATE. This Ordinance shall become effective after passage
by the City Council, and that no petition was received from the qualified electors of the Issuer
protesting the issuance of such Certificates of Obligation.
Section 24. PUBLIC NOTICE. It is hereby officially found and determined that public
notice of the time, place and purpose of said meeting was given, all as required by Chapter 551,
Texas Government Code.
APPROVED this the 26th day of August, 1997.
APPROVIi AS T~ F;RM:
City Atto 9
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EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 18 of this Ordinance.
l. Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually in accordance
with such Section are as specified (and included in the Appendix or under the headings of the Official Statement and
Tables referred to) below:
Tables I through 6 and 8 through 14 and in Appendix B
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the notes to
the financial statements referred to in paragraph I above.