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Ordinance 1989-14 ORDINANCE NO. R9 AN ORDINANCE authorizing the issuance of "CITY OF WYLIE, TEXAS, TAX AND WATERWORKS AND SEWER SUBORDINATE LIEN REVENUE CERTIFICATES OF OBLIGATION, SERIES 1989 specifying the terms and features of said certificates; providing for the payment of said certificates of obligation by the levy of an ad valorem tax upon all taxable property within the City and a lien on and pledge of the net revenues from the operation of the City's Waterworks and Sanitary Sewer System; and resolving other matters incident and relating to the issuance, payment, security, sale and delivery of said Certificates; and providing an effective date. WHEREAS, notice of the City Council's intention to issue certificates of obligation in the maximum principal amount of $200,000 for the purpose of acquiring land, rights -of -way and easements for sewer system improvements and extensions and to pay contracts for professional services, has been duly published in the Wylie News, a newspaper hereby found and determined to be of general circulation in the City of Wylie, Texas, on May 24, 1989 and May 31, 1989, the date of the first publication of such notice being not less than fifteen (15) days prior to the tentative date stated therein for the passage of the ordinance authorizing the issuance of such certificates; and WHEREAS, no petition protesting the issuance of the certificates of obligation described in the aforesaid notice, signed by at least 5% of the qualified electors of the City, has been presented to or filed with the City Secretary on or prior to the date of the passage of this ordinance; and WHEREAS, the Council hereby finds and determines that all of the certificates of obligation described in such notice should be issued at this time; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: SECTION 1: Authorization, Designation, Principal Amount, Purpose. Certificates of obligation of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $200,000, to be designated and bear the title "CITY OF WYLIE, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM SUBORDINATE LIEN REVENUE CERTIFICATES OF OBLIGATION, SERIES 1989" (hereinafter referred to as the "Certificates for the purpose of acquiring land, rights -of -way and easements for sewer system improvements and extensions and to pay contracts for professional services, pursuant to authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.S., Local Government Code, Subchapter C of Chapter 271, as amended. SECTION 2: Fully Registered Obligations Authorized Denominations Stated Maturities -Date. The Certificates are issuable in fully registered form only; shall be dated June 15, 1989 (the "Certificate Date and shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the Certificates shall become due and payable on February 15 in each of the years and in principal amounts (the "Stated Maturities and bear interest at the per annum rate(s) in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate 1990 15,000 1991 15,000 1992 15,000 1993 20,000 1994 20,000 1995 20,000 1996 20,000 1997 25,000 1998 25,000 1999 25,000 The Certificates shall bear interest on the unpaid principal amounts from the Certificate Date at the rate(s) per annum shown above in this Section (calculated on the basis of a 360 -day year of twelve 30 -day months). Interest on the Certificates shall be payable on February 15 and August 15 of each year, commencing February 15, 1990. SECTION 3: Terms of Payment- Paying Agent /Registrar. The principal of, premium, if any, and the interest on the Certificates, due and payable by reason of maturity shall be payable only to the registered owners or holders of the Certificates (hereinafter called the "Holders appearing on the registration and transfer books (the "Security Register maintained by the Paying Agent /Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. -2- The selection and appointment of MTrust Corp, National Association to serve as Paying Agent /Registrar for the Certificates is hereby approved and confirmed. The City covenants to maintain and provide a Paying Agent /Registrar at all times until the Certificates are paid and discharged, and any successor Paying Agent /Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent /Registrar. Upon any change in the Paying Agent /Registrar for the Certificates, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent /Registrar. Principal of and premium, if any, on the Certificates shall be payable at the Stated Maturities only upon presentation and surrender of the Certificates to the Paying Agent /Registrar at its principal offices in Dallas, Texas (the "Designated Payment /Transfer Office Interest on the Certificates shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the last business day of the month next preceding each interest payment date) and shall be paid by the Paying Agent /Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent /Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a legal holiday, or a day when 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 when 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. 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 City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business next preceding the date of mailing of such notice. -3- SECTION 4: Non Redeemable. The Certificates shall not be subject to redemption prior to maturity at the option of the City. SECTION 5: Registration Transfer Exchange of Certificates Predecessor Certificates. A Security Register relating to the registration, payment, and transfer or exchange of the Certificates shall at all times be kept and maintained by the City at the Designated Payment /Transfer Office of the Paying Agent /Registrar, as provided herein and in accordance with the provisions of an agreement with the Paying Agent /Registrar and such rules and regulations as the Paying Agent /Registrar and the City may prescribe. The Paying Agent /Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Certificates issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Certificate may be transferred or exchanged for Certificates of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the Paying Agent /Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent /Registrar. Upon surrender of any Certificate for transfer at the Designated Payment /Transfer Office of the Paying Agent /Registrar, the Paying Agent /Registrar shall register and deliver, in the name of the designated transferee or transferees, one or more new Certificates of authorized denominations and having the same Stated Maturity and of a like aggregate principal amount as the Certificate or Certificates surrendered for transfer. At the option of the Holder, Certificates may be exchanged for other Certificates of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Certificates surrendered for exchange, upon surrender of the Certificates to be exchanged at the Designated Payment /Transfer Office of the Paying Agent/ Registrar. Whenever any Certificates are surrendered for exchange, the Paying Agent /Registrar shall register and deliver new Certificates to the Holder requesting the exchange. All Certificates issued in any transfer or exchange of Certificates shall be delivered to the Holders at the Designated Payment /Transfer Office of the Paying Agent /Registrar or sent by United States Mail, first class, postage prepaid to the Holders, and, upon the registration and -4- delivery thereof, the same shall be the valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or exchange. All transfers or exchanges of Certificates pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent /Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Certificates cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Certificate or Certificates registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for which a replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 23 hereof and such new replacement Certificate shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate. SECTION 6: Execution Registration. The Certificates shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Certificate Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to be such officer at the time of delivery of the Certificates to the initial purchaser(s) and with respect to Certificates delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Certificate either a certificate of registration substantially in the form provided in Section 8C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 8D, manually executed by an authorized -5- officer, employee or representative of the Paying Agent /Registrar, and either such certificate duly signed upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly certified, registered and delivered. SECTION 7: Initial Certificate(s). The Certificates herein authorized shall be initially issued either (i) as a single fully registered certificate in the total principal amount of $200,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T -1, or (ii) as ten (10) fully registered certificates, being one certificate for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T -1 and upward (hereinafter called the "Initial Certificate(s)") and, in either case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Certificate(E,) shall be the Certificates submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Certificate(s), the Paying Agent /Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent /Registrar may reasonably require. SECTION 8: Forms. A. Forms Generally. The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent /Registrar, and the form of Assignment to be printed on each of the Certificates, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including ;_assurance legends in the event the Certificates, or any maturities thereof, are purchased with -6- insurance and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Certificates as evidenced by their execution. Any portion of the text of any Certificates may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the certificate. The definitive Certificates shall be printed, lithographed, or engraved or produced in any other similar manner, all as determined by the officers executing such Certificates as evidenced by their execution, but the Initial Certificate submitted to the Attorney General of Texas may be typewritten or photocopied or otherwise reproduced. B. Form of Certificates. REGISTERED REGISTERED NO. UNITED STATES OF AMERICA STATE OF TEXAS CITY OF WYLIE, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM SUBORDINATE LIEN REVENUE CERTIFICATE OF OBLIGATION, SERIES 1989 Certificate Date: Interest Rate: Stated Maturity: CUSIP NO: June 15, 1989 Registered Owner: Principal Amount: DOLLARS The City of Wylie (hereinafter referred to as the "City a body corporate and political subdivision in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated, without right of prior redemption or prepayment of principal, and to pay interest on the unpaid principal amount hereof from the Certificate Date at the per annum rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on February 15 and August 15 in each year, -7- commencing February 15, 1990. Principal of this Certificate is payable at its Stated Maturity to the registered owner hereof, upon presentation and surrender, at the Designated Payment /Transfer Office of the Paying Agent /Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Certificate (or one or more Predecessor Certificates, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying Agent /Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent /Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent /Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Certificate is one of the series specified in its title issued in the aggregate principal amount of $200,000 (herein referred to as the "Certificates for the purpose of acquiring land, rights -of -way and easements for sewer system improvements and extensions and to pay contracts for professional services, under and in strict conformity with the Constitution and laws of the State of Texas, particularly V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended, and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance The Certificates are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City and are additionally payable from and secured by a lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sanitary Sewer System (the "System such lien and pledge, however, being junior and subordinate to the lien on and pledge of the Net Revenues of the System securing the payment of "Prior Lien Obligations" (defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance, the City reserves and retains the right to issue Prior Lien Obligations while the Certificates are outstanding without limitation as to principal amount but subject to any terms, conditions or restrictions as may be applicable thereto under law or otherwise. -8- Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment /Transfer Office of the Paying Agent /Registrar, and to all the provisions of which the owner or holder of this Certificate by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Certificates; the properties constituting the System; the Net Revenues pledged to the payment of the principal of and interest on the Certificates; the nature and extent and manner of enforcement of the pledge; the terms and conditions relating to the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent /Registrar; the terms and provisions upon which the tax levy and the pledges, charges and covenants made therein may be discharged at or prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the meanings assigned in the Ordinance. This Certificate, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Payment /Transfer Office of the Paying Agent /Registrar, with the Assignment hereon duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent /Registrar duly executed by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register occurs, one or more new fully registered Certificates of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent /Registrar to the designated transferee or transferees. The City and the Paying Agent /Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner entitled to payment of principal hereof at its Stated Maturity, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent /Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of 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 City. Notice of the Special Record Date and of the scheduled payment -9- date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Certificates to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Certificates as aforestated. In case any provision in this Certificate shall be invalid, illegal, or unenforceable, the valid legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be duly executed under the official seal of the City as of the Certificate Date. CITY OF WYLIE, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) -10- C. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Certificate only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS REGISTER NO. THE STATE OF TEXAS I HEREBY CERTIFY that this Certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) D. Form of Certificate of Paying Agent /Registrar to appear on Definitive Certificates only. REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR This Certificate has been duly issued and registered under the provisions of the within- mentioned Ordinance; the certificate or certificates of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent /Registrar. The principal offices of the Paying Agent /Registrar located in Dallas, Texas, is the "Designated Payment /Transfer Office" for this Certificate. Registration Date: MTRUST CORP, NATIONAL ASSOCIATION as Paying Agent /Registrar By Authorized Signature *NOTE TO PRINTER: Do Not Print on Definitive Certificates -11- E. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name., address, and zip code of transferee:) (Social Security or other identifying number: the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. DATED: NOTICE: The signature on this assign Signature guaranteed: assignment must correspond with the name of the registered owner as it appears on the face of the within Certificate in every particular. F. The Initial Certificate(s) shall be in the form set forth in paragraph B of this Section, except that the form of a single fully registered Initial Certificate shall be modified as follows: (i) immediately under the name of the certificate the headings "Interest Rate and "Stated Maturity shall both be omitted; (ii) paragraph one shall read as follows: Registered Owner: Principal Amount: Dollars The City of Wylie (hereinafter referred to as the "City a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on February 15 in each of the years and in principal installments in accordance with the following schedule: -12- PRINCIPAL INTEREST YEAR INSTALLMENTS RATE (Information to be inserted from schedule in Section 2 hereof). (without right of prepayment prior to maturity) and to pay interest on the unpaid principal amounts hereof from the Certificate Date at the per annum rate(s) of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on February 15 and August 15 of each year, commencing February 15, 1990. Principal of this Certificate is payable at its Stated Maturity to the registered owner hereof by MTrust Corp, National Association (the "Paying Agent /Registrar upon its presentation and surrender, at its principal offices in Dallas, Texas (the "Designated Payment /Transfer Office" of the Paying Agent/ Registrar). Interest is payable to the registered owner of this Certificate whose name appears on the "Security Register" maintained by the Paying Agent /Registrar at the close of business on the "Record Date which is the last business day of the month next preceding each interest payment date hereof and interest shall be paid by the Paying Agent /Registrar by check sent United States Mail, first class postage prepaid, to the address of the registered owner recorded in the Security Register or by such other method, acceptable to the Paying Agent/ Registrar, requested by, and at the risk and expense of, the registered owner. All payments of principal of, premium, if any, and interest on this Certificate shall be without exchange or collection charges to the owner hereof and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 9: Definitions. That for purposes of this Ordinance and for clarity with respect to the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net Revenues therefor, the following words or terms, whenever the same appears herein without qualifying language, are defined to mean as follows: (a) The term "Additional Certificates" shall mean combination tax and revenue certificates of obligation hereafter issued under and pursuant to the provisions of V.T.C.A., Local Government Code, Subchapter C of Chapter 271, or similar law hereafter enacted and payable from ad valorem taxes and additionally payable from and secured by a lien on -1.3- and pledge of the Net Revenues of the System on a parity with and of equal rank and dignity with the lien and pledge securing the payment of the Certificates. (b) The term "Certificates" shall mean the $200,000 "City of Wylie, Texas, Tax and Waterworks and Sewer System Subordinate Lien Revenue Certificates of Obligation, Series 1989" authorized by this Ordinance. (c) The term "Certificate Fund" shall mean the special Fund created and established under the provisions of Section 10 of this Ordinance. (d) The term "Collection Date" shall mean, when reference is being made to the levy and collection of annual ad valorem taxes, the date the annual ad valorem taxes levied each year by the City become delinquent. (e) The term "Fiscal Year" shall mean the twelve months' period ending September 30th of each year. (f) The term "Government Securities" shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and United States Treasury obligations such as its State and Local Government Series in book -entry form. (g) The term "Net Revenues" shall mean the gross revenues of the System less the expense of operation and maintenance, including salaries, labor, materials, interest, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair any obligations payable from and secured by a lien on and pledge of the Net Revenues of the System shall be deducting in determining "Net Revenues -14- (h) The term "Outstanding" when used in this Ordinance with respect to Certificates means, as of the date of determination, all Certificates theretofore issued and delivered under this Ordinance, except: (1) those Certificates cancelled by the Paying Agent /Registrar or delivered to the Paying Agent /Registrar for cancellation; (2) those Certificates for which payment has been duly provided by the City in accordance with the provisions of Section 24 hereof by the irrevocable deposit with the Paying Agent /Registrar, or an authorized escrow agent, of money or Government Securities, or both, in the amount necessary to fully pay the principal of, premium, if any, and interest thereon to maturity, or waived; and (3) those Certificates that have been mutilated, destroyed, lost, or stolen and replacement Certificates have been registered and delivered in lieu thereof as provided in Section 23 hereof. (i) The term "Prior Lien Obligations" shall mean all revenue bonds payable solely from and secured by a lien on and pledge of the Net Revenues of the System, including, but not limited to, the outstanding and unpaid (1) "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1971 dated March 1, 1971, and issued in the original principal amount of $300,000, (2) "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1980 dated March 1, 1980, and issued in the original principal amount of $400,000, and (3) "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1986 dated July 1, 1986, and issued in the original principal amount of $160,000. (j) The term "System" shall mean the City's combined Waterworks and Sanitary Sewer System, including all properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the City of Wylie through purchase, construction or otherwise, and used in connection with the System and in anywise appertaining thereto, whether situated within or without the limits of the City. -15- SECTION 10: Certificate Fund. That, for the purpose of paying the interest on and to provide a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and is hereby created a special Fund to be designated "SPECIAL SERIES 1989 TAX AND REVENUE CERTIFICATE OF OBLIGATIQN FUND which Fund shall be kept and maintained at the City's depository bank, and moneys deposited in said Fund shall be used for no other purpose. Authorized officials of the City are hereby authorized and directed to make withdrawals from said Fund sufficient to pay the principal of and interest on the Certificates as the same become due and payable, and, shall cause to be transferred to the Paying Agent /Registrar from moneys on deposit in the Certificate Fund an amount sufficient to pay the amount of principal and /or interest falling due on the Certificates, such transfer of funds to the Paying Agent /Registrar to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent /Registrar on or before the last business day next preceding each interest and principal payment date for the Certificates. Pending the transfer of funds to the Paying Agent /Registrar, money in the Certificate Fund may, at the option of the City, be invested in obligations identified in, and in accordance with the provisions of the "Public Funds Investment Act of 1987" relating to the investment of "bond proceeds provided that all such investments shall be made in such a manner that the money required to be expended from said Fund will be available at the proper time or times. All interest and income derived from deposits and investments in said Certificate Fund shall be credited to, and any losses debited to, the said Certificate Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Certificates. SECTION 11: Tax Levy. That to provide for the payment of the "Debt Service Requirements" on the Certificates being (i) the interest on said Certificates and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there shall be and there is hereby levied for the current year and each succeeding year thereafter while said Certificates or any interest thereon shall remain Outstanding, a sufficient tax on each one hundred dollars' valuation of taxable property in said City, adequate to pay such Debt Service Requirements, full allowance being made for delinquencies and costs of collection; said tax shall be assessed and collected each year and applied to the payment of the Debt Service Requirements, and the same shall not be diverted to any other purpose. The taxes so levied and -16- collected shall be deposited to the credit of the Certificate Fund. This governing body hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay the said Debt Service Requirements, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness. The amount of taxes to be provided annually for the payment of the principal of and interest on the Certificates shall be determined and accomplished in the following manner: (a) Prior to the date the City Council establishes the annual tax rate and passes an ordinance levying ad valorem taxes each year, the City Council shall determine: (1) The amount on deposit in the Certificate Fund after (a) deducting therefrom the total amount of Debt Service Requirements to become due on Certificates prior to the Collection Date for the ad valorem taxes to be levied and (b) adding thereto the amount of Net Revenues of the System appropriated and allocated to pay such Debt Service Requirements prior to the Collection Date for the ad valorem taxes to be levied. (2) The amount of Net Revenues if any, appropriated and to be set aside for the payment of the Debt Service Requirements on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (3) The amount of Debt Service Requirements to become due and payable on the Certificates between the Collection Date for the taxes then to be levied and the Collection Date for the taxes to be levied during the next succeeding calendar year. (b) The amount of taxes to be levied annually each year to pay the Debt Service Requirements on the Certificates shall be the amount established in paragraph (3) above less the sum total of the amounts established in paragraphs (1) and (2), after taking into consideration delinquencies and costs of collecting such annual taxes. SECTION 12: Pledge of Revenues. The City hereby covenants and agrees that, subject only to a prior lien on and pledge of the Net Revenues of the System for the payment and -17- security of Prior Lien Obligations, the Net Revenues of the System, with the exception of those in excess of the amounts required to be deposited to the Certificate Fund as hereafter provided, are hereby irrevocably pledged, equally and ratably, to the payment of the principal of and interest on the Certificates and Additional Certificates, if issued, as herein provided, and the pledge of the Net Revenues of the System herein made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System in accordance with the terms and provisions hereof and be valid and binding without any physical delivery thereof or further act by the City. SECTION 13: System Fund. The City covenants and agrees that revenues derived from the operation of the System shall be accounted for separate and apart from all other funds, accounts and moneys of the City, and all such revenues shall be deposited as collected into a fund maintained at an official depository of the City and known on the books of the City as the "waterworks and Sewer System Fund" (hereinafter called the "System Fund All moneys deposited to the credit of the System Fund shall be allocated, appropriated and budgeted to the extent required for the following purposes and in the order of priority shown, to wit: First: To the payment of all necessary and reasonable maintenance and operating expenses of the System as defined herein or required by statute to be a first charge on and claim against the revenues thereof, Second: To the payment of all amounts required to be deposited in the special Funds created and established for the payment, security and benefit of Prior Lien Obligations in accordance with the terms and provisions of the ordinances authorizing the issuance of Prior Lien Obligations. Third: To the payment, equally and ratably, of the amounts required to be deposited in the special funds and accounts created and established for the payment of the Certificates (the Certificate Fund) and Additional Certificates. Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other City purpose now or hereafter permitted by law. -18- SECTION 14: Deposits to Certificate Fund. The City hereby covenants and agrees to cause to be deposited in the Certificate Fund prior to each interest and principal payment date from the Net Revenues of the System, after deduction of all payments required to be made to special Funds or accounts created for the payment and security of the Prior Lien Obligations, an amount equal to one hundred per centum (100 of the amount required to fully pay the interest and principal payments then due and payable on the Certificates, such deposits to pay accruing interest and maturing principal on the Certificates to be made in substantially equal monthly installments on or before the 1st day of each month beginning the 1st day of the month next following the date of delivery of the Certificates to the initial purchaser. The monthly deposits to the Certificate Fund, as hereinabove provided, shall be made until such time as such Fund contains an amount equal to pay the principal of and interest on the Certificates to maturity. Ad valorem taxes levied, collected and deposited in the Certificate Fund for and on behalf of the Certificates may be taken into consideration and reduce the amount of the monthly deposits otherwise required to be deposited in the Certificate Fund from the Net Revenues of the System. In addition, any proceeds of sale of the Certificates in excess of the amount required to pay the contractual obligations to be incurred (including change orders to a construction contract) shall be deposited in the Certificate Fund, which amount shall reduce the sums otherwise required to be deposited in said Fund from ad valorem taxes and the Net Revenues of the System. SECTION 15: Security of Funds. That all moneys on deposit in the Funds for which this Ordinance makes provision (except any portion thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this Ordinance. SECTION 16: Maintenance of System Insurance. That the City covenants and agrees that while the Certificates remain Outstanding, it will maintain and operate the System with all possible efficiency and maintain casualty and other insurance on the properties of the System and its operations of a kind and in such amounts customarily carried by municipal corporations in the State of Texas engaged in a similar type business; that it will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Texas. -19- SECTION 17: Rates and Charges. That the City hereby covenants and agrees with the Holders that rates and charges for water and sewer services afforded by the System will be established and maintained, on the basis of all available information and experience and with due allowance for contingencies, that are reasonably expected to provide revenues each Fiscal Year to pay: (a) all operating, maintenance, depreciation, replacement, betterment and other costs incurred in the maintenance and operation of the System; and (b) all indebtedness payable from and secured by a lien on and /or pledge of all or any portion of the Net Revenues of the System to the extent required, and the funding of all special funds or accounts created and established for the payment and security thereof, including, but not limited to, the Prior Lien Obligations and the Certificates. SECTION 18: Remedies in Event of Default. That, in addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in the payments to be made to the Certificate Fund, or (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the owner or owners of any of the Certificates shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the governing body of the City and other officers of the City to observe and perform any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescense therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specification of such remedies shall not be deemed to be exclusive. SECTION 19: Records and Accounts Annual Audit. The City further covenants and agrees that while any of the Certificates remain Outstanding, it will keep and maintain accurate and complete records and accounts pertaining to the operations of the System in which complete and correct entries shall be made of all transactions relating thereto. The Holders of the Certificates or any duly authorized agent or agents of such Holders shall have the right to inspect the -20- System and all properties comprising the same. The City further agrees that following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent firm of Certified Public Accountants. Copies of each annual audit shall be furnished to the Executive Director of the Municipal Advisory Council of Texas at his office in Austin, Texas, and upon written request, to any Holder of the Certificates. SECTION 20: Special Covenants. That the City hereby further covenants as follows: (a) That it has the lawful power to pledge the Net Revenues of the System to the payment of the Certificates in the manner herein contemplated and has lawfully exercised such power under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 et seq., V.A.T.C.S. and V.T.C.A., Local Government Code, Subchapter C of Chapter 271, as amended. (b) That other than for the payment of the outstanding Prior Lien Obligations identified in Section 9(i) hereof, the Certificates, and the outstanding "City of Wylie, Texas, Tax and Waterworks and Sewer System Limited Pledge Revenue Certificates of Obligation, Series 1988 dated May 15, 1988, the Net Revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. (c) That, while any Certificates remain Outstanding, the City will not sell, lease or encumber the System or any substantial part thereof, provided that this covenant shall not be construed to prohibit the sale of such machinery, or other properties or equipment which has become obsolete or otherwise unsuited to the efficient operation of the System. (d) That to the extent that it legally may, the City further covenants and agrees that, while any of the Certificates are Outstanding, no franchise shall be granted for the installation or operation of any competing waterworks and sanitary sewer systems other than those owned by the City, and the operation of any such systems by anyone other than the City is hereby prohibited. -21- SECTION 21: Issuance of Prior Lien Obligations and Additional Certificates. That the City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without limitation as to principal amount but subject to any terms, conditions or restrictions applicable thereto under law or otherwise. In addition, the City reserves the right to issue Additional Certificates payable from and secured by a lien on and pledge of the Net Revenues of the System of equal rank and dignity, and on a parity in all respects, with the lien and pledge securing the payment of the Certificates. SECTION 22: Application of Prior Lien Obligations Covenants and Agreements. It is the intention of this governing body and accordingly hereby recognized and stipulated that the provisions, agreements and covenants contained herein bearing upon the management and operations of the System, and the administering and application of revenues derived from the operation thereof, shall to the extent possible be harmonized with like provisions, agreements and covenants contained in the ordinances authorizing the issuance of the Prior Lien Obligations, and to the extent of any irreconcilable conflict between the provisions contained herein and in the ordinances authorizing the issuance of the Prior Lien Obligations, the provisions, agreements and covenants contained therein shall prevail to the extent of such conflict and be applicable to this Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby to the holders of the Prior Lien Obligations. SECTION 23: Mutilated Destroyed Lost and Stolen Certificates. In case any Certificate sh.;ll be mutilated, or destroyed, lost or stolen, the Paying Agent /Registrar may execute and deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent /Registrar of evidence satisfactory to the Paying Agent /Registrar of the destruction, loss or theft of such Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent /Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent /Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder of the Certificate mutilated, or destroyed, lost or stolen. -22- Every replacement Certificate issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Certificates. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Certificates. SECTION 24: Satisfaction of Obligation of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and the Net Revenues of the System (to the extent such limited pledge of Net Revenues shall not have been discharged or terminated by prior payment of principal of or interest on the Certificates) and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Certificates or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Certificates or the principal amount(s) thereof at maturity or the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent /Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent /Registrar, or an authorized escrow agent, which Government Securities have been certified by an indepenient accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Certificates, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. -23- Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent /Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent /Registrar for the payment of the principal of and interest on the Certificates and remaining unclaimed for a period of four (4) years after the Stated Maturity of the Certificates such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent /Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 25: Ordinance a Contract Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Certificate remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Certificates then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal amount of Certificates required to be held by Holders for consent to any such amendment, addition, or rescission. SECTION 26: Covenants to Maintain Tax Exempt Status. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner which, -24- if made or omitted, respectively, would cause the interest on any Certificate to become includable in the gross income, as defined in section 61 of the Code, of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the City shall have received a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Certificate pursuant to Section 103 of the Code, the City agrees, covenants and represents that: (a) Definitions. When used in this Section, the following terms have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Gross Proceeds" when used with respect to the Certificates or any other issue of obligations of the City, means original proceeds, amounts received (including repayments of principal) as a result of investing the original proceeds of the issue, transferred proceeds, sinking fund proceeds, amounts invested in a reasonably required reserve or replacement fund, securities or obligations pledged by the City as security for payment of debt service on the Certificates or such other issue, and any other amounts used to pay debt service on the Certificates or such other issue, together with earnings from the investment of the foregoing. "Investment" means (1) a share of stock in a corporation or a right to subscribe for or to receive such a share, (2) any obligation, including United States Treasury bonds, notes, and bills and bank deposits, whether or not certified or interest bearing, but excluding obligations the interest on which is, in the opinion of counsel nationally recognized in the field of municipal bond law, excludable from the gross income of any owner thereof and is not included in computing the alternative minimum taxable income of individuals under the Code or the Internal Revenue Code of 1954, as amended to the date of issuance of such obligations, -25- (3) any annuity contract, or any other deferred payment contract acquired to fund an obligation of the City, or (4) any other property held for investment. "Issue Date" means the date on which the Certificates are first authenticated and delivered to the initial purchasers against payment therefor. "Issue Price" of the Certificates of each Stated Maturity means the aggregate initial offering price of all the Certificates of such Stated Maturity to the public (exclusive of underwriters, dealers, bondhouses, brokers, and similar persons or organizations acting in the capacity of underwriters or wholesalers) at which a substantial number of Certificates of such Stated Maturity are sold to the public, including accrued interest to the Issue Date, if any. "Nonpurpose Investment" means any Investment in which Gross Proceeds of the Certificates are invested and which is not acquired to carry out the governmental purpose of the Certificates. "Purchase Price" of any Investment means (1) if a United States Treasury obligation acquired directly from the United States Treasury, the amount paid therefor, (2) if a certificate of deposit issued by a commercial bank, the bona fide bid price quoted by a dealer who maintains an active secondary market in such certificates of deposit, and (3) otherwise, generally the mean of the bid price and the offered price therefor on an established market on the day on which such Investment is purchased or contracted for or, if there are no bid prices and offered prices on such date, on the first day preceding such date for which there are bid prices and offered prices. -26- "Yield" of (1) any Investment means the discount factor which, when used in computing the present value of all scheduled payments of principal of and interest on such Investment on the date such Investment is purchased with Gross Proceeds or otherwise allocated to Gross Proceeds, results in an amount equal to the Purchase Price thereof (but excluding any commissions), compounding semiannually, and (2) the Certificates means the discount factor which, when used in computing the present value on the Issue Date of all scheduled payments of principal of and interest on the Certificates, results in an amount equal to aggregate Issue Prices of the Certificates of each Stated Maturity, compounding semiannually. (b) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the regulations and rulings thereunder, the City shall, at all times prior to the last Stated Maturity of Certificates, (1) exclusively own, operate, and possess the System and all properties constituting the System and its components, and all property the acquisition, construction, or improvement of which is to be financed directly or indirectly with Gross Proceeds of the Certificates and not use or permit the use of such Gross Proceeds or the properties constituting the System or any property acquired, constructed, or improved with such Gross Proceeds in any activity carried on by any person or entity other than a state or local government, unless such use is solely as a member of the general public, or (2) not directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds of the Certificates or any property the acquisition, construction, or improvement of which is to be financed directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. -27- (c) No Private Loan. Except to the extent permitted by section 141 of the Code and the regulations and rulings thereunder, the City shall not use Gross Proceeds of the Certificates to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if (1) property acquired, constructed, or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes, (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed, or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (d) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the regulations and rulings thereunder, the City shall not, at any time prior to the final Stated Maturity of the Certificates, directly or indirectly invest Gross Proceeds of the Certificates in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Issue Date of all Investments acquired with such Gross Proceeds (or with money replaced thereby) whether then held or previously disposed of, exceeds the Yield of the Certificates. (e) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the regulations and rulings thereunder, the City shall not take or omit to take any action which would cause the Certificates to be federally guaranteed within the meaning of section 149(b) of the Code and the regulations and rulings thereunder. (f) Information Report. The City shall timely file with the Secretary of the Treasury the information required by section 149(e) of the Code with respect to the Certificates on such form and in such place as such Secretary may prescribe. (g) No Rebate Required. The City warrants and represents that it satisfies the requirements of paragraph (2) and (3) of section 148(f) of the Code with respect to the Certificates without making the payments for the United States described in such section. Specifically, the City warrants and represents that (1) the City is a governmental unit with general taxing powers; -28- (2) at least 95% of the Gross Proceeds of the Certificates will be used for the local governmental activities of the City; (3) the aggregate face amount of all tax exempt obligations issued or expected to be issued by the City (and all subordinate entities thereof) in the calendar year 1989 are issued is not reasonably expected to exceed $5,000,000. SECTION 27: Sale of the Certificates. The sale of the Certificates to (herein referred to as the "Purchasers at the price of par and accrued interest to the date of delivery is hereby approved and confirmed. Delivery of the Certificates to the Purchasers shall occur as soon as possible upon payment being made therefor in accordance with the terms of sale. SECTION 28: Qualified Tax Exempt Obligations. That in accordance with the provisions of paragraph 3 of subsection b of Section 265 of the Code, the City hereby designates the Certificates to be "qualified tax exempt obligations" in that the Certificates are not "private activity bonds" as defined in the Code and the reasonably anticipated amount of "qualified tax exempt obligations" to be issued by the City (including all subordinate entities of the City) for the calendar year 1989 will not exceed $10,000,000. SECTION 29: Proceeds of Sale. The proceeds of sale of the Certificates, excluding the accrued interest received from the Purchasers, will be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments and any investment earnings realized may be expended for such authorized projects and purposes or deposited in the Certificate Fund as shall be determined by the City Council. All surplus proceeds of sale of the Certificates, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Certificate Fund. SECTION 30: Control and Custody of Certificates. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Certificates, and shall take and have charge and control of the Initial Certificate pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and its delivery to the Purchasers. -29- Furthermore, the Mayor, City Secretary, City Manager and Director of Finance, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Certificates, including a certification as to facts, estimates, circumstances and reasonable expectations pertaining to the use and expenditure and investment of the proceeds of the Certificates as may be necessary for the approval of the Attorney General, registration by the Comptroller of Public Accounts and delivery of the Certificates to the purchasers thereof and, together with the City's financial advisor, bond counsel and the Paying Agent/ Registrar, make the necessary arrangements for the delivery of the Initial Certificate(s) to the purchasers. SECTION 31: Notices to Holders Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Certificates. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent /Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 32: Cancellation. All Certificates surrendered for payment, transfer, exchange, or replacement, if surrendered to the Paying Agent /Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent /Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent /Registrar. The City may at any time deliver to the Paying Agent /Registrar for cancellation any Certificates previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly cancelled by the Paying Agent /Registrar. All cancelled Certificates held by the Paying Agent /Registrar shall be returned to the City. -30- SECTION 33: Printed Opinion. The Purchasers' obligation to accept delivery of the Certificates is subject to being furnished a final opinion of Fulbright Jaworski, Attorneys, Dallas, Texas, approving the Certificates as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Certificates. Printing of a true and correct reproduction of said opinion on the reverse side of each of the definitive Certificates is hereby approved and authorized. SECTION 34: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Certificates shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving the Certificates as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates. SECTION 35: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent /Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent /Registrar and the Holders. SECTION 36: Inconsistent Provisions. All ordinances, orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 37: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 38: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 39: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. -31- SECTION 40: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 41: Public Meeting. It is officially found, determined, and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by Article 6252 -17, Vernon's Texas Civil Statutes, as amended. SECTION 42: Effective Date. That this Ordinance shall take effect and be in force immediately from and after its passage, and it is so ordained. PASSED AND ADOPTED, this June 13, 1989. CITY ria1y TEXAS Mayor ATTEST: 7 City S c'etarr (City Seal) oO y in s 36645 rr 4A SEAL i fdint#dlll4loL -32- NOTICE OF INTENTION TO ISSUE CITY OF WYLIE, TEXAS, CERTIFICATES OF OBLIGATION TAKE NOTICE that the City Council of the City of Wylie, Texas, shall convene at 7 o'clock y o .M. on the /3 day of 1989, at its regular meeting place at the City Hall, 2000 Highway 78 North, Wylie, Texas, and, during such meeting, the City Council will consider the passage of an ordinance authorizing the issuance of certificates of obligation in an amount not to exceed $200,000 for the purpose of acquiring land, rights -of -way and easements for sewer system improvements and extensions and to pay contracts for professional services, such certificates to be payable from ad valorem taxes and a lien on and pledge of the net revenues derived from the operation of the City's combined Waterworks and Sanitary Sewer System. The certificates are to be issued, and this notice is given, under and pursuant to the provisions of V.T.C.A., Local Government Code, Subchapter C of Chapter 271. \``t �t4ttttlllF f it um /r i O 1C� City Sec a ary "ity of a===1 Wylie, exas SEAL 3 3 7 7 s J