Ordinance 2005-02
ORDINANCE NO. 2005-02
AN ORDINANCE authorizing the issuance of "CITY OF WYLIE,
TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2005"; 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 limited pledge of the net revenues from the
operation of the City's Waterworks and Sewer System; and
resolving other matters incident and relating to the issuance,
payment, security, sale and delivery of said Certificates, including
the approval and execution of a Paying Agent/Registrar Agreement
and a Purchase Contract and the approval and distribution of an
Official Statement; and providing an effective date.
WHEREAS, notice of the City Council's intention to issue certificates of obligation in the
maximum principal amount of $6,350,000 for the purpose of paying contractual obligations to be
incurred for (1) the purchase of land for authorized needs and purposes, to wit: (i) a City
municipal government complex and (ii) City recreational facilities and (2) professional services
rendered in relation to such projects and the financing thereof; has been duly published in The
Wylie News on December 22, 2004 and December 29, 2004, the date the first publication of
such notice being not less than fifteen (15) days prior to the tentative date stated therein for the
adoption of the ordinance authorizing the issuance of such certificates; and
WHEREAS, no petition protesting the issuance of the certificates of obligation and
bearing valid petition signatures of at least 5% of the qualified electors of the City, has been
presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to
the date of the passage of this ordinance; and
WHEREAS, the Council hereby finds and determines that the certificates of obligation
described in the aforesaid notice should be issued and sold at this time in the amount and
manner as hereinafter provided; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS:
SECTION 1: Authorization, Desiqnation, Principal Amount, Purpose. Certificates of
obligation of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $6,225,000, to be designated and bear the title "CITY OF WYLIE, TEXAS,
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2005"
(hereinafter referred to as the "Certificates"), for the purpose of paying contractual obligations to
be incurred for (1) the purchase of land for authorized needs and purposes, to wit: (i) a City
municipal government complex and (ii) City recreational facilities and (2) professional services
rendered in relation to such projects and the financing thereof; pursuant to authority conferred
by and in conformity with the Constitution and laws of the State of Texas, including VTC.A,
Local Government Code, Subchapter C of Chapter 271, as amended.
SECTION 2: Fullv Reqistered Obliqations - Authorized Denominations-Stated
Maturities-Date. The Certificates are issuable in fully registered form only; shall be dated
January 1, 2005 (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:
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Year of Principal Interest
Stated Maturity Amount Rate( s)
2006 $215,000 3.000%
2007 220,000 3.000%
2008 230,000 3.000%
2009 235,000 3.000%
2010 240,000 3.000%
2011 250,000 4.000%
2012 260,000 4.000%
2013 270,000 4.000%
2014 285,000 4.000%
2015 295,000 4.000%
2016 305,000 4.000%
2017 320,000 4.000%
2018 330,000 4.100%
2019 345,000 4.150%
2020 360,000 4.200%
2021 375,000 4.250%
2022 395,000 4.375%
2025 1,295,000 5.000%
The Certificates shall bear interest on the unpaid principal amounts from the Certificate
Date at the rate per annum shown above in this Section (calculated on the basis of a 360-day
year of twelve 30-day months), and such interest shall be payable on February 15 and August
15 of each year, commencing August 15, 2005.
SECTION 3: Terms of Pavment-Pavinq Aqent/Reqistrar. The principal of, premium, if
any, and the interest on the Certificates, due and payable by reason of maturity, redemption, or
otherwise, shall be payable only to the registered owners or holders of the Certificates
(hereinafter called the "Holders") appearing on the registration and transfer books 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.
The selection and appointment of JPMorgan Chase Bank, National Association, Dallas,
Texas to serve as Paying Agent/Registrar for the Certificates is hereby approved and confirmed.
Books and records relating to the registration, payment, transfer and exchange of the
Certificates (the "Security Register") shall at all times be kept and maintained on behalf of the
City by the Paying Agent/Registrar, as provided herein and in accordance with the terms and
provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as
Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City
may prescribe. The Mayor and City Secretary are authorized to execute and deliver such
Agreement in connection with the delivery of the Certificates. 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
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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 or the redemption thereof only upon presentation and surrender of the Certificates to
the Paying Agent/Registrar at its designated 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 Designated
Payment/Transfer Office of 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.
SECTION 4: Redemption. (a) Optional Redemption. The Certificates maturing on and
after February 15, 2016 shall be subject to redemption prior to maturity, at the option of the City,
in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a
Stated Maturity by lot by the Paying Agent/Registrar), on February 15, 2015, or on any date
thereafter at the redemption price of par plus accrued interest to the date of redemption.
At least forty-five (45) days prior to a redemption date for the Certificates (unless a
shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall
notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of
each Stated Maturity to be redeemed, and the date of redemption.therefor. The decision of the
City to exercise the right to redeem Certificates shall be entered in the minutes of the governing
body of the City.
(b) Mandatory Redemption. The Certificates having Stated Maturities of
February 15, 2025 the "Term Certificates") shall be subject to mandatory redemption in part
prior to maturity at the redemption price of par and accrued interest to the date of redemption on
the respective dates and in principal amounts as follows:
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PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of January 11, 2005 (this "Agreement"), by and
between the City of Wylie, Texas (the "Issuer"), and JPMorgan Chase Bank, National
Association, a banking corporation organized and existing under the laws of the United States of
America (the "Bank"),
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the execution and delivery
of its "City of Wylie, Texas, Combination Tax and Revenue Certificates of Obligation, Series
2005" (the "Securities"), dated January 1, 2005, such Securities scheduled to be delivered to the
initial purchasers thereof on or about January 27, 2005; and
WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in
connection with the payment of the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange thereof by the registered owners
thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the
Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the
Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01 Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02 Compensation, As compensation for the Bank's services as Paying
Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in
Annex A attached hereto for the first year of this Agreement and thereafter the fees and
amounts set forth in the Bank's current fee schedule then in effect for services as Paying
Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days
prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the
following Fiscal Year.
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EXHIBIT A
of the provIsions hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which
the principal or any or all installments of interest, or both, are due and payable on
any Security which has become accelerated pursuant to the terms of the
Security.
"Bank Office" means the designated office of the Bank in Dallas, Texas at
the address shown in Section 3.01 hereof. The Bank will notify the Issuer in
writing of any change in location of the Bank Office. '
"Bond Resolution" means the resolution, order, or ordinance of the
governing body of the Issuer pursuant to which the Securities are issued,
certified by the Secretary or any other officer of the Issuer and delivered to the
Bank.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder" each means the Person in whose name a
Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order
signed in the name of the Issuer by the Mayor, City Secretary, City Manager,
Assistant City Manager, or Finance Director, anyone or more of said officials,
and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized
to be closed.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision of a government.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by
such particular Security (and, for the purposes of this definition, any mutilated,
lost, destroyed, or stolen Security for which a replacement Security has been
registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Resolution).
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption pursuant to the terms of the
Bond Resolution.
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EXHIBIT A
"Responsible Officer" when used with respect to the Bank means the
Chairman or Vice-Chairman of the Board of Directors, the Chairman or
Vice-Chairman of the Executive Committee of the Board of Directors, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any
Trust Officer or Assistant Trust Officer, or any other officer of the Bank
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of
the Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the
principal of a Security is scheduled to be due and payable.
Section 2.02 Other Definitions. The terms "Bank," "Issuer," and "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01 Duties of Pavinq Aqent. As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 2001 Bryan
Street, 9th Floor, Dallas, Texas 75201, Attention: Operations.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the
Record Date. All payments of principal and/or interest on the -Securities to the registered
owners shall be accomplished (1) by the issuance of checks, payable to the registered owners,
drawn on the paying agent account provided in Section 5.05 hereof, sent by United States mail,
first class, postage prepaid, to the address appearing on the Security Register or (2) by such
other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk
and expense.
Section 3.02 Payment Dates, The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
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EXHIBIT A
ARTICLE FOUR
REGISTRAR
Section 4.01 Security Reqister - Transfers and Exchanqes. The Sank agrees to keep
and maintain for and on behalf of the Issuer at the Sank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Sank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Sank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Sank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02 Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Sank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Sank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Sank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03 Form of Security Reqister. The Sank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
in accordance with the Sank's general practices and procedures in effect from time to time. The
Sank shall not be obligated to maintain such Security Register in any form other than those
which the Sank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04 List of Security Holders. The Sank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
Register at any time the Sank is customarily open for business, provided that reasonable time is
allowed the Sank to provide an up-to-date listing or to convert the information into written form.
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EXHIBIT A
The Bank will not release or disclose the contents of the Security Register to any person
other than to, or at the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such rel~ase or disclosure of the
contents of the Security Register.
Section 4.05 Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06 Mutilated, Destroved, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of the Bond Resolution, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as
the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
Section 4.07 Transaction Information to Issuer. The Bank will, within a reasonable
time after receipt of written request from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in
exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to
Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01 Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02 Reliance on Documents, Etc. (a) The Bank may conclusively rely, as
to the truth of the statements and correctness of the opinions expressed therein, on certificates
or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
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EXHIBIT A
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Sank may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, security, or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Sank need not examine the ownership of any
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Sank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
(e) The Sank may consult with counsel, and the written advice of such counselor
any opinion of counsel shall be full and complete authorization and protection with respect to
any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(f) The Sank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Sank.
Section 5.03 Recitals of Issuer. The recitals contained herein with respect to the
Issuer and in the Securities shall be taken as the statements of the Issuer, and the Sank
assumes no responsibility for their correctness.
The Sank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04 May Hold Securities. The Sank, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the
same rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05 Moneys Held by Sank - Payinq Aqent Account/Collateralization. Money
deposited by the Issuer with the Sank of the principal (or Redemption Price, if applicable) of or
interest on any Securities shall be segregated from other funds of the Sank and the Issuer and
shall be held in trust for the benefit of the Holders of such Securities. .
All money deposited with the Sank hereunder shall be secured in the manner and to the
fullest extent required by law for the security of funds of the Issuer.
Amounts held by the Sank which represent principal of and interest on the Securities
remaining unclaimed by the owner after the expiration of three years from the date such
amounts have become due and payable shall be reported and disposed of by the Sank in
accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the
Texas Property Code, as amended, The Sank shall have no liability by virtue of actions taken in
compliance with this provision.
The Sank is not obligated to pay interest on any money received by it hereunder.
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EXHIBIT A
This Agreement relates solely to money deposited for the purposes described herein,
and the parties agree that the Bank may serve as depository for other funds of the Issuer, act as
trustee under indentures authorizing other bond transactions of the Issuer, or act in any other
capacity not in conflict with its duties hereunder.
Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
Agreement.
Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where the
administrative offices of the Issuer is located, and agree that service of process by certified or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State
of Texas to determine the rights of any Person claiming any interest herein.
Section 5.08 DT Services. It is hereby represented and warranted that, in the event
the Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements", which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02 Assiqnment. This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03 Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9,
Section 6.04 Effect of Headinqs. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05 Successors and Assiqns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
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EXHIBIT A
Section 6.06 Severability. In case any provIsion herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 6.07 Benefits of Aoreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08 Entire Aqreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one
and the same Agreement.
Section 6.10 Termination. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.11 Governino Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
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EXHIBIT A
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
BY:
Title:
[SEAL]
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
Attest:
Title:
CITY OF WYLIE, TEXAS
BY:
Mayor
Address: 2000 Highway 78 North
Wylie, Texas 75098
(CITY SEAL)
Attest:
City Secretary
45552972.1
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EXHIBIT A
EXHIBIT B
$6,225,000
CITY OF WYLIE, TEXAS
Combination Tax and Revenue Certificates of Obligation,
Series 2005
PURCHASE CONTRACT
January 11, 2005
The Honorable Mayor and Members of the City Council
City of Wylie
2000 Highway 78 North
Wylie, Texas 75098
Dear Mayor and Members of the City Council:
Southwest Securities, Inc. (the "Authorized Representative"), acting on its own behalf and
on behalf of the other underwriters listed on Schedule I hereto (collectively, the "Underwriters"),
offers to enter into this Purchase Contract with the City of Wylie, Texas (the "City"). This offer is
made subject to the City's acceptance of this Purchase Contract on or before 10:00 p.m. Central
Daylight Time on January 11,2005.
1. Purc~ase and Sale ofthe Certificates. Upon the terms and conditions and upon the
basis of the representations set forth herein, the Underwriters hereby agree, jointly and seyerally,
to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters, an
aggregate of$6,225,000 principal amount of City of Wylie, Texas Combination Tax and Revenue
Certificates of Obligation, Series 2005 (the "Certificates"). The Certificates shall have the
maturities, interest rates and be subject to redemption in accordance with the provisions of Exhibit
A hereto and shall be issued and secured under the provisions of the Ordinance (as defmed below).
The purchase price for the Certificates shall be $6,302,696.12, representing the principal amount of
the Certificates of$6,225,000, less an Underwriters' discount on the Certificates of$40, 177 .25, plus
an aggregate initial issue premium on the Certificates of $99 ,490 .20, and plus accrued interest in the
amount of$18,383.17.
2. Ordinance. The Certificates shall be as described in and shall be issued and secured
under the provisions ofthe Ordinance authorizing the issuance and sale of the Certificates adopted
by the City on January 11, 2005 (the "Ordinance"). The Certificates shall be secured and payable
as provided in the Ordinance.
3, Public Offering. It shall be a condition of the obligations of the City to sell and
deliver the Certificates to the Underwriters, and of the obligations of the Underwriters to purchase
and accept delivery of the Certificates, that the entire principal amount of the Certificates authorized
by the Ordinance shall be sold and delivered by the City and accepted and paid for by the
Underwriters at the Closing (as hereinafter defined). The Underwriters agree to make a bona fide
public offering of all of the Certificates, at not in excess of the initial public offering prices, as set
forth in the Official Statement; provided however at least ten percent (10%) of the principal amount
of the Certificates of each maturity shall be sold to the "public" (exclusive of dealers, brokers and
investment bankers, etc.) at the initial offering price set forth ,in the Official Statement.
4. Security Deposit. Delivered to the City herewith is a corporate check of the
Authorized Representative payable to the order of the City in the amount of$63,500.00. The City
agrees to hold such check uncashed until the Closing to ensure the performance by the Underwriters
of their obligation to purchase, accept delivery of and pay for the Certificates at the Closing.
Concurrently with the payment by the Underwriters of the purchase price ofthe Certificates, the City
shall return such check to the Authorized Representative as provided in Paragraphs 7 and 8 hereof.
Should the City fail to deliver the Certificates at the Closing, or should the City be unable to satisfy
the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the
Certificates, as set forth in this Purchase Contract (unless waived by the Underwriters), or should
such obligations of the Underwriters be terminated for any reason permitted by this Purchase
Contract, such check shall immediately be returned to the Authorized Representative. In the event
the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of
and pay for the Certificates at the Closing as herein provided, such check shall be retained by the
City as and for full liquidated damages for such failure of the Underwriters and for any defaults
hereunder on the part ofthe Underwriters. The Authorized Representative hereby agrees not to stop
or cause payment on said check to be stopped unless the City has breached any of the terms of this
Purchase Contract.
5. Offic~al Statement. The Official Statement, including the cover pages and
Appendices thereto, of the City, dated January 11,2005 with respectto the Certificates, asfurther
amended only in the manner herein provided, is hereinafter called the "Official Statement." The
City hereby authorizes the Ordinance and the Official Statement and the information therein
contained to be used by the Underwriters in connection with the public offering and sale of the
Certificates. The City confmns its consent to the use by the Underwriters prior to the date hereof
of the Preliminary Official Statement, relative to the Certificates, dated January 3, 2005 (the
"Preliminary Official Statement") in connection with the preliminary public offering and sale of the
Certificates, and it is "deemed fmal" as of its date, within the meaning, and for the purposes, of Rule
15c2-12 (the "Rule") of the Securities Exchange Act of 1934, as amended. The <;:ity agrees to
cooperate with the Underwriters to provide a supply of fmal Official Statements within seven
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business days ofthe date hereofin sufficient quantities to comply with the Underwriters' obligations
under the Rule and the applicable rules of the Municipal Securities Rulemaking Board. The.
Underwriters will use their best efforts to assist the City in the preparation of the final Official
Statement, and any supplements thereto, in order to ensure compliance with the aforementioned
rules,
If, after the date of this Purchase Contract up to and including the date the Underwriters are
no longer required pursuant to the Rule to provide an Official Statement to potential customers who
request an Official Statement (the earlier of (i) 90 days from the "end of the underwriting period"
(as defined in the Rule) and (ii) the time when the Official Statement is available to any person from
a nationally recognized municipal securities repository, but in no case less than 25 days after the
"end of the underwriting period" for the Certificates), the City becomes aware of any fact or event
that might or would cause the Official Statement to contain any untrue statement of a material fact
or to omit to state a material fact required to be stated therein-or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, the City shall
notify the Underwriters, and if, in the judgement of the Authorized Representative, such event
requires the preparation and publication of a supplement or amendment to the Official Statement,
the City will at its expense supplement or amend the Official Statement in the form and in a manner
approved by the Underwriters and furnish to the Underwriters a reasonable number of copies
requested by the Underwriters in order to enable the Underwriters to comply with the Rule.
To the best knowledge and belief of the City, the Official Statement contains information,
including financial information or operating data, as required by the Rule, and, except as disclosed
in the Official Statement, the City has not failed to comply with any undertaking made by the City
in accordance with paragraph (b )(5)(i) of the Rule within the last five years.
6. Representations, Warranties and Agreements ofthe City. On the date hereof, the
City represents, warrants and agrees as follows:
(a) The City is a home-rule municipal corporation and a political subdivision of
the State of Texas and a body politic and corporate, and has full legal right, power and
authority to: (i) enter into this Purchase Contract and the Ordinance; (ii) adopt the
Ordinance; (ii) sell the Certificates; (iv) issue and deliver the Certificates to the Underwriters
as provided herein; and (v) to carry out and consummate all other transactions contemplated
by the Ordinance and this Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance
hereof, the City has duly adopted the Ordinance, has duly authorized and approved the
execution and delivery of, and the performance by the City of the obligations contained in
the Certificates and this Purchase Contract and has duly authorized and approved the
performance by the City of its obligations contained in the Ordinance and this Purchase
Contract;
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(c) The City is not in breach of or default under any applicable law or
administrative regulation of the State of Texas or the United States (including regulations
of its agencies) or any applicable judgment or decree or any loan agreement, note, order,
agreement or other instrument, except as may be disclosed in the Official Statement, to
which the City is a party or to the knowledge of the City it is otherwise subject, that would
have a material and adverse effect upon the business or financial condition of the City; and
the execution and delivery of this Purchase Contract by the City and the execution and
delivery of the Certificates and the adoption of the Ordinance by the City and compliance
with the provisions of each thereof will not violate or constitute a breach of or default under
any existing law, administrative regulation, judgment, decree or any agreement or other
instrument to which the City is a party or, to the knowledge ofthe City, is otherwise subject;
(d) All approvals, consents and orders of anygovernrnental authority or agency
having jurisdiction of any matter that would constitute a condition precedent to the
perfonnance by the City of its obligations to sell and deliver the Certificates hereunder will
have been obtained prior to the Closing; provided, no representation is made regarding
consents or approvals that may be required under the Blue Sky or securities laws of any state
in connection with the offering and sale of the Certificates.
(e) At the time of the City's acceptance hereof and at the time ofthe Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
(f) Between the date of this Purchase Contract and the Closing, the City will not,
without the prior written consent of the Underwriter, issue any additional bonds, notes or
other obligations for borrowed money payable in whole or in part from ad valorem taxes
(except the City's General Obligation Refunding and Improvement Bonds, Series 2005, also
being sold by the City to the Underwriters on the date hereof) and the City will not incur any
material liabilities, direct or contingent payable from ad valorem taxes. Prior to the Closing,
the City will not take any actions within or under its control that will cause any adverse
change of a material nature in the financial position of the City;
(g) Except as described in the Official Statement, no litigation is pending or, to
the knowledge of the City, threatened in any court affecting the corporate existence of the
City, the title of its officers to their respective offices, or seeking to restrain or enjoin the
issuance or delivery of the Certificates, the levy, collection or application of the ad valorem
taxes pledged or to be pledged to pay the principal of and interest on the Certificates, or in
any way contesting or affecting the issuance, execution, delivery, payment, security or
validity of the Certificates, or in any way contesting or affecting the validity or
enforceability of the Ordinance or this Purchase Contract, or contesting the powers of the
City, or any authority for the Certificates, the Ordinance or this Purchase Contract or
contesting in any way the completeness, accuracy or fairness of the Preliminary Official
Statement or the Official Statement;
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(h) The City will cooperate with the Underwriters in arranging for the
qualification of the Certificates for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Underwriters designate, and will
cooperate with the Underwriters to continue such qualifications in effect so long as required
for distribution of the Certificates; provided, however, that the City will not bear any
expense in connection with any such qualification or determination and will not be required
to execute a consent to service of process or to qualify to do business in connection with any
such qualification in any jurisdiction;
(i) The descriptions of the Certificates and the Ordinance contained in the
Official Statement accurately summarize certain provisions of such instruments, and the
Certificates, when validly executed, authenticated and delivered in accordance with the
Ordinance and sold to the Underwriters as provided herein, will be validly issued and
outstanding obligations ofthe City entitled to the benefits of, and subject to the limitations
contained in, the Ordinance;
U) If prior to the Closing an event occurs affecting the City that is materially
adverse for the purpose for which the Official Statement is to be used and is not disclosed
in the Official Statement, the City shall notify the Underwriters, and if in the judgment of
the City and the Underwriters such event requires a supplement or amendment to the Official
Statement, the City will supplement or amend the Official Statement in a form and in a
manner approved by the Underwriters;
(k) The financial statements contained in the Official Statement present fairly the
financial position of the City as of the date and for the period covered thereby and are stated
on a basis substantially consistent with that of the prior year's audited financial statements;
(1) Any certificate signed by an official of the City and delivered to the
Underwriters shall be deemed a representation and warranty by the City to the Underwriters
as to the truth of the statements therein contained;
(m) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications
may not be relied upon;
(n) The City will not knowingly take or omit to take any action, which action or
omission will in any way cause the proceeds from the sale of the Certificates to be applied
in a manner other than as provided in the Ordinance or that would cause the interest of the
Certificates to be includable in gross income of the holders thereof for federal income tax
purposes; and
(0) The City is not relying on the Underwriters in connection with the issuance
of the Certificates for financial or other advice that the City could and should expect to
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obtain from an entity hired in the role of financial advisor to the City; also, the City has not
ever relied on the Underwriters in such capacity.
7, Closing. At lO:OO A.M., Central Daylight Time, on January 27, 2005 (the
"Closing"), the City will deliver the Initial Certificate (as defined in the Ordinance) to the
Underwriters and the City shall take appropriate steps to provide The Depository Trust Company
("DTC") (or the paying agent/registrar, if the Certificates are to be held in safekeeping for DTC by
the paying agent/registrar pursuant to DTC's FAST system) with one definitive securities certificate
for each year of maturity of the Certificates, and to provide the Underwriters with the other
documents hereinafter mentioned. On or prior to the date of Closing, the U ndenvriters shall make
arrangements with DTC for the Certificates to be immobilized and thereafter traded as book-entry
only securities and on the date of Closing the Underwriters will accept such delivery and pay the
purchase price of the Certificates as set forth in Paragraph 1 hereof in immediately available funds,
Concurrently with such payment by the Underwriters, the City shall return to the Authorized
Representative the check referred to in paragraph 4 hereof. Delivery and payment as aforesaid shall
be made at the office of the paying agent/registrar, as noted in the Official Statement, or such other
place as shall have been mutually agreed upon by the City and the Underwriters.
8. Conditions, The Underwriters have entered into this Purchase Contract in reliance
upon the representations and warranties of the City contained herein and to be contained in the
documents and instruments to be delivered at the Closing, and upon the performance by the City of
its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the
Underwriters' obligations under this Purchase Contract to purchase and pay for the Certificates shall
be subject to the performance by the City of its obligations to be perfonned hereunder and under
such documents and instruments at or prior to the Closing, and shall also be subject to the following
conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of
Closing, as if made on the date of Closing;
(b) At the time of the Closing, (i) the Ordinance shall be in full force and effect;
the Ordinance shall not have been amended, modified or supplemented; and the Official
Statement shall not have been amended, modified or supplemented, except as may have been
agreed to by 'the Underwriters, and (ii) the net proceeds ofthe sale of the Certificates shall
be deposited and applied as described in the Official Statement and in the Ordinance;
(c) At the time of the Closing, all official action of the City related to the
Ordinance shall be in full force and effect and shall not have been amended, modified or
supplemented;
(d) The City shall not have failed to pay principal or interest when due on any
of its outstanding obligations for borrowed money;
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(e) At or prior to the Closing, the Underwriters shall have received each of the
following documents:
(I) The Official Statement of the City, executed on behalf of the City by
the Mayor and City Secretary;
(2) The Ordinance, certified by the City Secretary under the seal of the
City as having been duly adopted by the City and as being in effect, with such
changes or amendments as may have been agreed to by the Authorized
Representative. The Ordinance shall contain the agreement of the City, in form
satisfactory to the Underwriters, that is described under the caption "Continuing
Disclosure of Information" in the Preliminary Official Statement;
(3) The opinion, dated the date of Closing, of Fulbright & Jaworski
L.L.P. ("Bond Counsel") in substantially the form and substance of the opinion
related to the Certificates contained in Appendix C tothe Official Statement;
(4) An opinion or certificate, dated on or prior to the date of Closing, of
the Attorney General of Texas, approving the Certificates as required by law and the
registration certificate of the Comptroller of Public Accounts of the State of Texas;
(5) The supplemental opinion or opinions, dated the date of Closing, of
Bond Counsel, addressed to the City and the Underwriters, providing that the
Underwriters may rely upon the opinion of Bond Counsel delivered in accordance
with the provisions of paragraph 8(f)(3) hereof, and opining to the effect that (a) in
its capacity as Bond Counsel, such firm has reviewed the information in the Official
Statement under the captions or sub captions "Plan of Financing" (exclusive of the
information under the subcaption "Sources and Uses of Proceeds"), "The
Obligations" (exclusive ofthe information under the subcaptions "Book-Entry-Only
System" and "Bondholders'/Certificateholders' Remedies"), "Tax Matters,"
"Continuing Disclosure of Information" (exclusive of the information under the
subcaption "Compliance with Prior Undertakings"), and under the subcaptions
"Legal Matters" (exclusive of the last two sentences thereof) and "Legal Investments
and Eligibility to Secure Public Funds in Texas". under the caption "Other
Inforination," and such firm is of the opinion that the information relating to the
Certificates and the Ordinance contained therein fairly and accurately describes the
provisions thereof; and (b) the Certificates are exempted securities that do not require
registration under the Securities Act of 1933, as amended (the "1933 Act"), and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and it is not
necessary in connection with the offering and sale ofthe Certificates to register any
securities under the 1933 Act or to qualify the Ordinance under the Trust Indenture
Act;
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(6) An opinion of McCall, Parkhurst & Horton L.L.P., legal counsel to
the Underwriters, addressed to the Underwriters and dated the date of Closing, in the
form attached hereto as Exhibit B;
(7) A certificate, dated the date of Closing, signed by the Mayor and the
City Manager, to the effect that (i) the representations and warranties of the City
contained herein are true and correct in all material respects on and as of the date of
Closing as if made on the date of Closing; (ii) except to the extent disclosed in the
Official Statement, no litigation is pending or, to the knowledge of such persons,
threatened in any court to restrain or enjoin the issuance or delivery of the
Certificates, or the levy, collection or application of the ad valorem taxes pledged or
to be pledged to pay the principal of and interest on the Certificates, or the pledge
thereof, or in any way contesting or affecting the validity of the Certificates, the
Ordinance or this Purchase Contract, or contesting the powers of the City or the
authorization of the Certificates or the Ordinance, or contesting in any way the
accuracy, completeness or fairness of the Official Statement (but in lieu of or in
conjunction with such certificate, the Underwriters may, in their sole discretion,
accept certificates or opinions of counsel to the City that, in the opinion thereof, the
issues raised in any such pending or threatened litigation are without substance or
that the contentions of all plaintiffs therein are without merit); (iii) to the best oftheir
knowledge, no event affecting the City has occurred since the date of the Official
Statement that should be disclosed in the Official Statement for the purpose for
which it is to be used or that it is necessary to disclose therein in order to make the
statements and information therein not misleading in any respect; and (iv) that there
has not been any material and adverse change in the affairs or financial condition of
the City since September 30, 2003, the latest date as to which audited financial
information is available;
(8) A certificate, dated the date of the Closing, of an appropriate officer
of the City to the effect that, on the basis of the facts, estimates and circumstances
in effect on the date of delivery of the Certificates, it is not expected that the
proceeds of the Certificates will be used in a manner that would cause the
Certificates to be arbitrage bonds within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended;
(9) Evidence that a rating for the Certificates of"AAA" has been assigned
by Standard & Poor's Credit Market Services, A Division of the McGraw-Hill
Companies, Inc. ("S&P") and "Aaa" by Moody's Investors Service ("Moody's"),
based on the Bond Insurance Policy (hereinafter defmed) in a form acceptable to the
Authorized Representative, and that the rating is in effect as of the date of Closing;
(10) Evidence satisfactory to the Authorized Representative that the
policy of bond insurance (the "Bond Insurance Policy") shall have been duly
executed, issued and delivered by MBlA Insurance Corporation (the "Insurer") and
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receipt of a certificate of the Insurer with respect to the accuracy of statements
contained in the Official Statement regarding the Bond Insurance Policy and the
Insurer and the due authorization, execution, issuance and delivery ofthe Bond
Insurance Policy, together with an opinion of counsel to the Insurer in fonn and
substance satisfactory to the Authorized Representative;
(11) Such additional legal opinions, certificates, instruments and other
documents as Bond Counsel or the Underwriters may reasonably request to evidence
the truth, accuracy and completeness, as of the date hereof and as of the date of
Closing, of the City's representations and warranties contained herein and of the
statements and information contained in the Official Statement and the due
performance and satisfaction by the City at or prior to the date of Closing of all
agreements then to be perfonned and all conditions then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above
or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions
hereof if, but only if, they are satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, accept delivery of and pay for the Certificates as set forth in this Purchase Contract, or if
the obligations of the Underwriters to purchase, accept delivery of and pay for the Certificates shall
be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall
terminate, the security deposit referred to in Paragraph 4 of this Purchase Contract shall be returned
to the Authorized Representative and neither the Underwriters nor the City shall be under any
further obligation hereunder, except that the respective obligations of the City and the Underwriters
set forth in Paragraphs 10 and 12 hereof shall continue in full force and effect.
9. Termination. The Underwriters may tenninate their obligation to purchase at any
time before the Closing if any of the following should occur:
, (a) (i) Legislation shall have been enacted by the Congress of the United States,
or recommended to the Congress for passage by the President of the United States or
favorably reported for passage to either House of the Congress by any Committee of such
House; or (ii) a decision shall have been rendered by a court established under Article III of
the Constitution of the United States or by the United States-Tax Court; or (iii) an order,
ruling or regulation shall have been issued or proposed by or on behalf of the Treasury
Department of the United States or the Internal Revenue Service or any other agency of the
United States; or (iv) a release or official statement shall have been issued by the President
of the United States or by the Treasury Department of the United States or by the Internal
Revenue Service, the effect of which, in any such case described in clause (i), (ii), (iii), or
(iv), would be to impose, directly or indirectly, federal income taxation upon interest
received on obligations of the general character of the Certificates or upon income of the
general character to be derived by the City, other than any imposition of federal income
taxes upon interest received on obligations ofthe general character as the Certificates on the
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date hereof and other than as disclosed in the Official Statement, in such a manner as in the
judgment of the Authorized Representative would materially impair the marketability or
materially reduce the market price of obligations of the general character of the Certificates,
(b) Any action shall have been taken by the Securities and Exchange Commission
or by a court that would require registration of any security under the 1933 Act, or
qualification of any indenture under the Trust Indenture Act, in connection with the public
offering of the Certificates, or any action shall have been taken by any court or by any
governmental authority suspending the use of the Preliminary Official Statement or the
Official Statement or any amendment or supplement thereto, or any proceeding for that
purpose shall have been initiated or threatened in any such court or by any such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment
shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been
rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall have been
issued or proposed by or on behalf of the State ofT exas by an official, agency or department
thereof, affecting the tax status of the City, its property or income, its obligations (including
the Certificates) or the interest thereon, that in the reasonable judgment of the Authorized
Representative would materially affect the market price of the Certificates.
(d) There shall have occurred a (i) material outbreak of hostilities (including,
without limitation, an act of terrorism) or (ii) new material other national or international
calamity or crisis, or any material adverse change in the fmancial, political or economic
conditions affecting the United States, including, but not limited to, an escalation of
hostilities that existed prior to the date hereof or (iii) a material adverse change in the
financial markets of the United States, and the effect of any such event on the financial
markets ofthe United States shall be such as would make it impracticable, in the reasonable
judgment of the Authorized Representative, for the Underwriters to sell the Certificates on
the terms and in the manner contemplated by the Official Statement.
(e) An event described in Paragraph 6U) hereof occurs that, in the reasonable
judgment of the Authorized Representative, requires a supplement or amendment to the
Official Statement that is deemed by them, in their discretion, to adversely affect the market
for the Certificates.
(f) A general banking moratorium shall have been declared by authorities of the
United States, the State of New York or the State of Texas.
(g) A lowering of the ratings of "Aaa" and "AAAl! initially assigned to the
Certificates by Moody's and S&P, respectively, shall occur prior to the Closing.
10. Expenses. (a) The City shall payout of the proceeds of the Certificates all expenses
incident to the issuance of the Certificates, including but not limited to: (i) the cost of the
preparation, printing and distribution of the Preliminary Official Statement and the Official
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Statement; (ii) the cost of the preparation and printing of the Certificates; (iii) the fees and expenses
of Bond Counsel to the City; (iv) the fees and disbursements of the City's accountants, advisors, and
of any other experts or consultants retained by the City; and (v) the fees for the bond ratings and any
travel or other expenses incurred incident thereto.
(b) The Underwriters shall pay (i) all advertising expenses in connection with the
offering of the Certificates; (ii) the cost of the preparation and printing of all the underwriting
documents; and (iii) the fee of McCall, Parkhurst & Horton L.L.P. for such firm's opinion requrred
by Paragraph 8(f)( 6) hereof.
11. Notices. Any notice or other communication to be given to the City under this
Purchase Contract may be given by delivering the same in writing at the address for the City set
forth on page 1, and any notice or other communication to be given to the Underwriters under this
Purchase Contract may be given by delivering the same in writing to Southwest Securities, Inc.,
1201 Elm Street, Suite 3500, Dallas, Texas 75270, Attention~ Mr. Jim Brooks.
12. Parties in Interest. This Purchase Contract is made solely for the benefit ofthe City
and the Underwriters (including the successors or assigns of the Underwriters) and no other person
shall acquire or have any right under this contract. The City's representations, warranties and
agreements contained in this Purchase Contract that exist as of the Closing, and without regard to
any change in fact or circumstance occurring subsequent to the Closing, shall remain operative and
in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters,
and (ii) delivery of any payment for the Certificates hereunder; and the City's representations and
warranties contained in Paragraph 6 of this Purchase Contract shall remain operative and in full
force and effect, regardless of any termination of this Purchase Contract.
13. Severability. lfany provision of this Purchase Contract shall be held or deemed to
be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule of public policy, or any other reason, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or unenforceable in any other
case or circumstances, or of rendering any other provision inoperative or unenforceable to any extent
whatever.
14. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
15. Execution in Counterparts. This Purchase Contract may be executed in any number
of counterparts, all of which taken together shall constitute one and the same instrument, and any
of the parties hereto may execute this Purchase Contract by signing any such counterpart.
16. Section Headings. Section headings have been inserted in this Contract as a matter
of convenience of reference only, and it is agreed that such section headings are not a part of this
Contract and will not be used in the interpretation of any provisions of this Contract.
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17. Status of the Underwriters. It is understood and agreed that for all purposes of this
Contract and the transactions contemplated hereby the Underwriters have, in their role as
underwriters, acted so lely as independent contractors and have not acted as a financial or investment
advisors, fiduciaries or agents to or for the City, whether directly or indirectly through any person.
The City recognizes that the Underwriters expect to profit from the acquisition and potential
distribution of the Certificates.
[Signature page follows.]
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18. Effective Date. This Purchase Contract shall become effective upon the execution
of the acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time
of such acceptance,
Very truly yours,
Southwest Securities, Inc.
By:
Title: Authorized Officer
Accepted:
This 11th day of January, 2005
By:
Mayor
Attest:
City Secretary
Schedule I
Undernrriters
Southwest Securities, Inc.
RBC Dain Rauscher Inc.
5-1
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
City of Wylie, Texas
Combination Tax and Revenue Certificates of Obligation, Series 2005
Maturity
(2/15)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Principal
Amount
$215,000
220,000
230,000
235,000
240,000
250,000
260,000
270,000
285,000
295,000
305,000
320,000
330,000
345,000
360,000
375,000
395,000
Interest
Rate (%)
3.000
3.000
3.000
3.000
3.000
4.000
4.000
4.000
4.000
4.000
4.000
4.000
4.1 00
4.150
4.200
4.250
4.375
* * *
2025 1,295,000
c = yield to call date of February 15, 2015.
5.000
Yield(% )
2.100
2.250
2.400
2.600
2.900
3.120
3.330
3.500
3.640
3.770
3.910 c
4.020
4.130
4.210
4.290
4.350
4.410
4.510 c
The City reserves the right, at its option, to redeem Certificates having stated maturities on and after
February 15, 2016, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof, on February 15,2015, or any date thereafter, at the par value thereof plus accrued interest
to the date of redemption.
In addition to being subject to optional redemption as provided above~ the Certificates maturing on
February 15,2025 (the "Term Certificates") are subject to mandatory redemption prior to maturity.
The Term Certificate shall be redeemed by the Paying Agent/Registrar in part prior to maturity for
the principal amount thereof and accrued interest to the date of redemption, and without premium,
on the dates and in the principal amounts as set forth in the following schedule:
Certificates Maturing Februarv 15.2025
Redemption Date Principal Amount
February 15,2023 $410,000
February 15,2024 430,000
February 15, 2025* 455,000
(*) Final maturity.
A-I
EXHIBIT B
Proposed Form of Opinion of
McCall, Parkhurst & Horton L.L.P "
Legal Counsel to the Underwriters
January _,2005
Southwest Securities, Inc.
RBC Dain Rauscher Inc.
c/o Southwest Securities, Inc.
1201 Elm Street, Suite 3500
Dallas, Texas 75270
Re: $6,225,000 City of Wylie, Texas Combination Tax and Revenue Certificates of
Obligation, Series 2005
Ladies and Gentlemen:
We have acted as counsel for you as the underwriters ofthe Certificates described above (the
"Certificates"), issued under and pursuant to an ordinance (the "Ordinance") of the City of Wylie,
Texas (the "City"), authorizing the issuance of the Certificates, which Certificates you are
purchasing pursuant to a Purchase Contract, dated January 11, 2005. All capitalized undefmed terms
used herein shall have the meaning set forth in the Purchase Contract.
In connection with this opinion letter, we have considered such matters of law and of fact,
and have relied upon such certifications and other information furnished to us, as we have deemed
appropriate as a basis for our opinion set forth below. Weare not expressing any opinion or views
herein on the authorization, issuance, delivery, validity of the Certificates and we have assumed, but
not independently verified, that the signatures on all documents and Certificates that we have
examined are genuine.
Based on and subjectto the foregoing, we are of the opinion that, under existing laws, the
Certificates are nof subject to the registration requirements of the- Securities Act of 1933, as
amended, and the Order is not required to be qualified under the Trust Indenture Act of 1939, as
amended. .
Because the primary purpose of our professional engagement as your counsel was not to
establish factual matters, and because of the wholly or partially nonlegal character of many of the
determinations involved in the preparation of the Official Statement dated January 11, 2005 (the
"Official Statement") and because the information in the Official Statement under the headings or
subheadings "The Obligations - Book-Entry-Only System," "Bond Insurance," "Tax Matters,"
"Continuing Disclosure ofInformation - Compliance with Prior Undertakings" and the Appendices
thereto were prepared by others who have been engaged to review or provide such information, we
are not passing on and do not assume any responsibility for the information contained under such
headings and in the appendices, and, except as set forth in the last sentence ofthis paragraph, we are
B-1
not passing on and do not assume any responsibility for the accuracy, completeness or fairness of
other statements contained in the Official Statement (including any appendices, schedules and
exhibits thereto) and we make no representation that we have independently verified the accuracy,
completeness or fairness of such statements. In the course of our participation in the preparation of
the Official Statement as your counsel, we had discussions with representatives of the City,
including its Financial Advisor and Bond Counsel, regarding the contents of the Official Statement.
In the course of such activities, no facts came to our attention which would lead us to believe that
the Official Statement (except for the [mancial statements and other financial and statistical data
contained therein, the information set forth under the headings or subheadings "Book-Entry-Only
System," "Bond Insurance," "Tax Matters," "Continuing Disclosure of Information - Compliance
with Prior Undertakings" and the Appendices thereto, as to which we express no opinion), as of its
date contained any untrue statement of a material fact or omitted to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading.
This opinion letter may be relied upon by only you and only in connection with the
transaction to which reference is made above and may not be used or relied upon by any other
person for any purposes whatsoever without our prior written consent.
Respectfully,
B-2
Exhibit C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION AND OPERATING DATA
The following information is referred to in Section 36 of this Ordinance.
Annual Financial Statements and Operatinq Data
The financial information and operating data with respect to the City 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 referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B for the most recently concluded fiscal year.
2. The information in the Official Statement contained in Tables 1 through 6 and 8
through 15.
Accountinq Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above
45552595.2
THE WYLIE NEWS
Lovermg wyrre;-sachse~ITpIiYalJd the slliToundmg area
110 N. Ballard
P.O. Box 369
Wylie, Texas 75098
(972) 442-5515
Fax (972) 442-4318
STATE OF TEXAS
COUNTY OF COLLIN
Before me, the undersigned authority, on this day personally appeared Chad Engbrock, publisher of
The Wylie News, a newspaper regularly published in Collin County, Texas and having general
circulation in Collin County, Texas, who being by me duly sworn, deposed and says that the
foregoing attached
City of Wylie
Ord. No. 2005-01, Ord. No. 2005-02,
Ord. No. 2005-03, Ord. No. 2005-04
was published in said newspaper on the following date(s), to-wit: Jan.~, 2005
{JJj;IL
Chad Engbrock, Publisher
Subscribed and sworn before me on this, the
! /V'f- _day of ~l---
, 2005
to certify which witness my hand and seal of office.
....-.. ,-,-~~.-
~~~~..ftY ..~,."~ '-~~
f ~~[o. .*....~. . .(~i\ ADA ~. MOONEY -....""~
~ P /* NOla/}'. PUblic f
..;.~ .........{;> State of Texas
~O,~ My COlTlm E
. xp. 01-02-07
.............
(/L ~ ~7
Notary Public in and for
The State of Texas
M v commission expires 01/02/07
r--------------
Public Notices
(
INVITATION FOR BIDS
NORTH TEXAS
MUNICIPAL WATER
DISTRICT
TEMPORARY LABOR
Sealed bids addressed to
the attention of Judd
Sanderson, pirector of
Finance, North Texas
Municipal Water District,
P.O. Box 2408, Wylie,
Texas 75098. Bids will be
received at the NTMWD
Administrative Offices,
until 2:00 P.M., local time,
on Thursday, January 20,
2005, opened and then read
for Temporary Labor.. Bid
documents ' may be
obtained from the
NTMWD offices at 505 E.
Brown Street, Wylie.
NORTH TEXAS MUNIC-
IPAL WATER DISTRICT
By Joe Farmer President,
Board of Directors
33-3t-235
PUBLIC NOTICE
CITY OF WYLIE
REQUEST FOR
PROPOSALS
CONCESSIONAIRE
SERVICES
The City of Wylie is solic-
iting competitive proposals
for concessionaire serv!ces
at Community Park and
Founders Park. The con-
tract will provide conces-
sion rightS' for food and
beverage vending during
all athletic events at these
locations. Proposals will be
accepted at the Wy lie
Municipal Complex
Office of the Purchasing
Agent - 2000 Highway 78
North - Wylie, Texas until
. 5:00 PM January 28, 2005.
The City reserves ~ right
to reject any or al rorts-
als and to accept d ~\o-
posal that provides l~ best
value for the City.
~__~l!.-]39
INVITATION FOR BIDS
NORTH TEXAS
MUNICIPAL WATER
DISTRICT
BELT PRESS
REHABILITATION
PROJECT INSTALLED AT
THE SOUTH MESQUITE
WASTEWATER TREAT-
MENT PLANT IN
MESQUITE, TEXAS
Sealed bids addressed to
the attention of Mr.' Judd
Sanderson, Director of
Finance of the North Texas
Municipal Water District in
Wylie, Texas will be
received at the
Administrative Offices 505
E. Brown Street, Wylie,
Texas 75098 until 2:00
P.M., local time, Tuesday,
February 8, 2005, op~ned
and then read. Bid docu-
ments may be obtained
from the North Texas
Municipal water District
offices at the address
above.
NORTH TEXAS MUNIC-
IPAL WATER DISTRICT
By )oe Farmer
President, Board of
Directors 35-3t-235
ORDINANCE NO.
2005-01
AN ORDINANCE OF
THE CITY OF WYLIE,
TEXAS AMENDING
ORDINANCE NOS. 92-6,
92-14, AND 96-22 IN
REGARD TO REGULA-
TIONS FOR DISPOSAL
OF SEWAGE AND
WASTES INTO THE
SANITARY SEWER OF
THE CITY OF WYLIE,
TEXAS; PROVIDING
FOR A PERMIT SYSTEM
WITH DENIAL, SUS-
PENSION, REVOCA-
TION AND APPEAL
PROCESS; PROVIDING
FOR REPEALING, SAV-
INGS AND SEVERABIL-
ITY CLAUSES; AND
PROVIDING FOR AN
EFFECTIVE DATE OF
THIS ORDINANCE.
ORDINANCE NO.
2005-02
AN ORDINANCE
AUTHORIZING THE
ISSUANCE OF "CITY OF
WYLIE, TEXAS, COM-
BINATION TAX AND
REVENUE CERTIFI-
CATES OF OBLIGA-
TION, SERIES 2005";
SPECIFYING THE
TERMS AND FEATURES
OF SAID CERTIFI-
CATES; PROVIDING
FOR THE PAYMENT OF
SAID CERTIFICATES OF
OBLIGATION BY THE
LEVY OF AN AD VAL-
OREM TAX UPON ALL
TAXABLE PROPERTY
WITHIN THE CITY AND
A LIMITED PLEDGE OF
THE NET REVENUES
FROM THE OPERATION
OF THE CITY'S WATER-
WORKS AND SEWER
SYSTEM; AND RESOLV-
1NG OTHER MATTERS
INCIDENT AND RELAT-
ING TO THE ISSUANCE,
PAYMENT, SECURITY,
SALE AND DELIVERY
OF SAID CERTIFI-
CATES, INCLUDING
THE APPROVAL AND
EXECUTION OF A PAY-
ING AGENT/REGIS-
TRAR AGREEMENT
AND A PURCHASE
CONTRACT ANb THE
APPROVAL AND DIS-
. TRIBUTION OF AN
OFFICIAL STATEMENT;
AND PROVIDING AN
EFFECTIVE DATE.
ORDINANCE NO.
2005-03
AN ORDINANCE
AUTHORIZING THE
ISSUANCE OF "CITY OF
WYLIE, TEXAS, GEN-
ERAL OBLIGATION
REFUNDING AND
IMPROVEMENT
BONDS, SERIES 2005";
SPECIFYING THE
TERMS AND FEATURES
OF SAID BONDS; LEVY-
ING A CONTINUING
DIRECT ANNUAL AD
VALOREM TAX FOR
THE PAYMENT OF SAID
BONDS; PROVIDING
FOR THE REDEMPTION
OF CERTAIN OUT-'
STANDING OBLIGA-
TexSCAN Nationwide Advl
PREPAYMENT REQUIRED - TexSCAN
Want to advertise nationwide?'
Y..IuA~.ci.hnw..t We ar.cp.ntMast.ercar.d..and V LS1Lm make .\[1'11'
Principal Amount
Redemption Date
$410,000
$430,000
February 15, 2023
February 15, 2024
Approximately forty-five (45) days prior to each mandatory redemption date for the Term
Certificates, the Paying Agent/Registrar shall select by lot the numbers of the Term Certificates
to be redeemed on the next following February 15 from moneys set aside for that purpose in the
Certificate Fund (as hereinafter defined). Any Term Certificate not selected for prior redemption
shall be paid on the date of their Stated Maturity.
The principal amount of the Term Certificates required to be redeemed on a mandatory
redemption date may be reduced, at the option of the City, by the principal amount of Term
Certificates which, at least 50 days prior to the mandatory redemption date, (1) shall have been
acquired by the City at a price not exceeding the principal amount of such Term Certificates plus
accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for
cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions set
forth in paragraph(a) of this Section and not theretofore credited against a mandatory
redemption requirement.
(c) Selection of Certificates for Redemption. If less than all Outstanding Certificates
of the same Stated Maturity are to be redeemed on a redemption date, the Paying
Agent/Registrar shall treat such Certificates as representing the number of Certificates
Outstanding which is obtained by dividing the principal amount of such Certificates by $5,000
and shall select the Certificates to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Certificates, a notice of redemption shall be sent by United States Mail, first class
postage prepaid, in the name of the City and at the City's expense, to each Holder of a
Certificate to be redeemed in whole or in part at the address of the Holder appearing on the
Security Register at the close of business on the business day next preceding the date of
mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to
have been duly given irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Certificates, (ii)
identify the Certificates to be redeemed and, in the case of a portion of the principal amount to
be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed,
shall become due and payable on the redemption date specified and the interest thereon, or on
the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after
the redemption date, provided moneys sufficient for the payment of such Certificate (or the
principal amount thereof to be redeemed) at the then applicable redemption price are held for
the purpose of such payment by the Paying Agent/Registrar and (v) specify that payment of the
redemption price for the Certificates, or the principal amount thereof to be redeemed, shall be
made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon
presentation and surrender of the Certificates. If a Certificate is subject by its terms to prior
redemption and has been called for redemption and notice of redemption has been duly given
as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed) shall
become due and payable and interest thereon shall cease to accrue from and after the
redemption date therefor.
45552595,2
4
SECTION 5: Reqistration - Transfer Exchanqe of Certificates-Predecessor
Certificates. 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 (other than the Initial Certificate(s) authorized in
Section 8 hereof) 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 (other than the Initial Certificate(s) authorized in
Section 8 hereof) 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
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 19 hereof and such new replacement Certificate shall be
deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Certificate.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to
an assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days
of the date fixed for the redemption of such Certificate; provided, however, such limitation on
45552595,2
5
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Certificate called for redemption in part.
SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
transfer/exchange of the Certificates, the City hereby approves and authorizes the use of
"Book-Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter of Representation, by and between the City and DTC (the "Depository
Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be
deposited with DTC who shall hold said Certificates for its participants (the "DTC Participants").
While the Certificates are held by DTC under the Depository Agreement, the Holder of the
Certificates on the Security Register for all purposes, including payment and notices, shall be
Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or
owner of each Certificate (the "Beneficial Owners") being recorded in the records of DTC and
DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that DTC is incapable of properly discharging its
duties as securities depository for the Certificates, the City covenants and agrees with the
Holders of the Certificates to cause Certificates to be printed in definitive form and provide for
the Certificate certificates to be issued and delivered to DTC Participants and Beneficial
Owners, as the case may be. Thereafter, the Certificates in definitive form shall be assigned,
transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar
and payment of such Certificates shall be made in accordance with the provisions of Sections 3,
4 and 5 hereof.
SECTION 7: Execution - Reqistration. 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 V.T.C.A., Government Code, Chapter 1201.
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 9C, 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 90, manually executed by
an authorized 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.
45552595,2
6
SECTION 8: Initial Certificate(s). The Certificates herein authorized shall be initially
issued either (i) as a single fully registered certificate in the total principal amount stated in
Section 1 hereof with principal installments to become due and payable as provided in Section 2
hereof and numbered T-1, or (ii) as multiple 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(s) 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 9: 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 insurance legends in the event the Certificates, or any maturities thereof, are
purchased with 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 and the Initial Certificate(s) shall be printed, lithographed, or
engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as
determined by the officers executing such Certificates as evidenced by their execution.
B.
Form of Certificates.
REGISTERED
NO.
REGISTERED
$
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF WYLIE, TEXAS,
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2005
Interest Rate:
%
Stated Maturity:
February 15,
CUSIP NO:
Certificate Date:
January 1, 2005
45552595,2
7
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 Registered Owner named above, or
the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount
hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) 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 36D-day year of twelve 3D-day
months; such interest being payable on February 15 and August 15 in each year, commencing
August 15, 2005. Principal of this Certificate is payable at its Stated Maturity or redemption 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; provided, however, while this Certificate is registered to
Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof
may be accomplished without presentation and surrender of this Certificate. 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 $6,225,000 (herein referred to as the "Certificates") for the purpose of paying
contractual obligations to be incurred for (1) the purchase of land for authorized needs and
purposes, to wit: (i) a City municipal government complex and (ii) City recreational facilities and
(2) professional services rendered in relation to such projects and the financing thereof; 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 maturing on February 15, 2025 (the "Term Certificates") are subject to
mandatory redemption prior to maturity with funds on deposit in the Certificate Fund established
and maintained for the payment thereof in the Ordinance, and shall be redeemed in part prior to
maturity at the price of par and accrued interest thereon to the mandatory redemption date on
the respective dates and in principal amounts as follows:
Redemption Date
Principal Amount
February 15, 2023
February 15, 2024
$410,000
$430,000
45552595.2
8
The particular Term Certificates to be redeemed on each redemption date shall be
chosen by lot by the Paying Agent/Registrar; provided, however, that the principal amount of
Term Certificates required to be redeemed on a mandatory redemption date may be reduced, at
the option of the City, by the principal amount of Term Certificates which, at least 50 days prior
to the mandatory redemption date, (1) shall have been acquired by the City at a price not
exceeding the principal amount of such Term Certificates plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have
been redeemed pursuant to the optional redemption provisions appearing below and not
theretofore credited against a mandatory redemption requirement.
The Certificates maturing on and after February 15, 2016, may be redeemed prior to
their Stated Maturities, at the option of the City, in whole or in part in principal amounts of
$5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying
Agent/Registrar), on February 15, 2015, or on any date thereafter, at the redemption price of
par, together with accrued interest to the date of redemption. .
At least thirty days prior to a redemption date, the City shall cause a written notice of
such redemption to be sent by United States Mail, first class postage prepaid, to the registered
owners of each Certificate to be redeemed at the address shown on the Security Register and
subject to the terms and provisions relating thereto contained in the Ordinance. If a Certificate
(or any portion of its principal sum) shall have been duly called for redemption and notice of
such redemption duly given, then upon the redemption date such Certificate (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the payment
of the redemption price and the interest accrued on the principal amount to be redeemed to the
date of redemption are held for the purpose of such payment by the Paying Agent/Registrar,
interest shall cease to accrue and be payable from and after the redemption date on the
principal amount redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a
new Certificate or Certificates of like maturity and interest rate in any authorized denominations
provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in
whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer such
Certificate to an assignee of the registered owner within 45 days of the redemption date
therefor; provided, however, such limitation on transferability shall not be applicable to an
exchange by the registered owner of the unredeemed balance of a Certificate redeemed in part.
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 from a limited pledge of
the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sewer
System (the "System"), such pledge being limited to an amount not in excess of $1,000 and
being junior and subordinate to the lien on and pledge of such Net Revenues securing the
payment of "Prior Lien Obligations" (identified and 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 without limitation as to principal amount but subject to any
applicable terms, conditions or restrictions under law or otherwise, as well as the right to issue
additional obligations payable from the same sources as the Certificates and, together with the
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Certificates, equally and ratably secured by a parity lien on and pledge of the Net Revenues of
the System.
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 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 or its redemption, in
whole or in part, 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 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
45552595.2
10
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 validity, 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
Mayor
COUNTERSIGNED:
City Secretary
(Seal)
C. *Form of Registration Certificate of Comptroller of Public Accounts to appear
on Initial Certificate(s) 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)
*NOTE TO PRINTER: Do not print on definitive Certificates
45552595.2
11
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 designated office of the Paying Agent/Registrar located in Dallas, Texas, is the
"Designated Payment/Transfer Office" for this Certificate.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION,
Dallas, Texas,
as Paying Agent/Registrar
Registration Date:
By
Authorized Signature
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:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within
Certificate in every particular.
45552595,2
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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:
REGISTERED
NO. T-1
REGISTERED
$
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF WYLIE, TEXAS,
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2005
Certificate Date: January 1, 2005
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 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:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid 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 August 15,
2005. Principal installments of this Certificate are payable at its Stated Maturity or on a
prepayment date to the registered owner hereof by JPMorgan Chase Bank, National
Association, Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at
its designated offices 'in Dallas, Texas (the "Designated Payment/Transfer Office"). 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 10: Definitions. 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
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Revenues therefor, the following words or terms, whenever the same appears herein without
qualifying language, are defined to mean as follows:
(a) The term "Certificates" shall mean the "CITY OF WYLIE, TEXAS,
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2005" authorized by this Ordinance.
(b) The term "Certificate Fund" shall mean the special Fund created
and established under the provisions of Section 11 of this Ordinance.
(c) The term "Collection Date" shall mean, when reference is being
made to the levy and collection of annual ad valorem taxes, the date annual ad
valorem taxes levied each year by the City become delinquent.
(d) The term "Fiscal Year" shall mean the twelve month accounting
period used by the City in connection with the operation of the System which may
be any twelve consecutive month period established- by the City.
(e) The term "Government Securities" shall mean (i) direct
noncallable 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, (ii) noncallable obligations of an agency or instrumentality of
the United States, including obligations unconditionally guaranteed or insured by
the agency or instrumentality and on the date of their acquisition or purchase by
the City are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a
state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(f) The term "Gross Revenues" shall mean all income, receipts and
revenues of every nature derived or received from the operation and ownership
(excluding refundable meter deposits, restricted gifts and grants in aid of
construction) of the System, including earnings and income derived from the
investment or deposit of moneys in any special funds or accounts created and
established for the payment and security of the Prior Lien Obligations and other
obligations payable solely from and secured only by a lien on and pledge of the
Net Revenues.
(g) The term "Maintenance and Operating Expenses" shall mean all
current expenses of operating and maintaining the System, including all salaries,
labor, materials, 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 maintain the
operations 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 obligations payable from Net Revenues shall be
deducted in determining "Net Revenues". Depreciation charges shall not be
considered Maintenance and Operating Expenses. Maintenance and Operating
Expenses shall include payments under contracts for the purchase of water
45552595,2
14
supply, treatment of sewage or other materials, goods or services for the System
to the extent authorized by law and the provisions of such contract.
(h) The term "Net Revenues" shall mean Gross Revenues of the
System, with respect to any period, after deducting the System's Maintenance
and Operating Expenses during such period.
(i) 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 deemed to be duly paid by the
City in accordance with the provisions of Section 20 hereof; and
(3) those mutilated, destroyed, lost, or stolen
Certificates which have been replaced with Certificates registered
and delivered in lieu thereof as provided in Section 19 hereof.
U) The term "Prior Lien Obligations" shall mean (i) the outstanding
and unpaid (1) "City of Wylie, Texas Waterworks and Sewer System Revenue
Bonds, Series 1999", dated September 1, 1999, and originally issued in the
aggregate principal amount of $1,380,000, (2) "City of Wylie, Texas, Waterworks
and Sewer System Revenue Bonds, Series 2000", dated August 15, 2000, and
originally issued in the aggregate principal amount of $1,720,000, and (3) "City of
Wylie, Texas, Waterworks and Sewer System Revenue Bonds, Series 2002",
dated September 15, 2002, and originally issued in the aggregate principal
amount of $1,150,000 and (4) "City of Wylie, Texas, Tax and Waterworks and
Sewer System Surplus Revenue Refunding Bonds, Series 1993", dated
August 1, 1993, and originally issued in the aggregate principal amount of
$5,890,000 and (ii) obligations hereafter issued which by the terms of the
authorizing ordinance are made payable from and secured by a lien on and
pledge of the Net Revenues of the System ranking prior and superior to the lien
and pledge securing the payment of the Certificates.
(k) The term "System" shall mean all properties, facilities and plants
currently owned, operated and maintained by the City for the supply, treatment,
transmission and distribution of treated potable water and the collection,
treatment and disposal of water carried wastes, together with all future
extensions, improvements, replacements and additions thereto; provided,
however, that notwithstanding the foregoing, and to the extent now or hereafter
authorized or permitted by law, the term "System" shall not mean to include
facilities of any kind which are declared not to be a part of the System and which
are acquired or constructed by or on behalf of the City with the proceeds from the
issuance of "Special Facilities Bonds", which are hereby defined as being special
revenue obligations of the City which are not bonds but which are payable from
and secured by other liens on and pledges of any revenues, sources or
payments, not pledged to the payment of the bonds including, but not limited to,
45552595,2
15
special contract revenues or payments received from any other legal entity in
connection with such facilities.
SECTION 11: Certificate Fund. 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 account or fund on the books and records of the City known as the
"SPECIAL SERIES 2005 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND", and all
moneys deposited to the credit of such Fund shall be shall be kept and maintained in a special
banking account at the City's depository bank. 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" (V.T.C.A., Government Code, Chapter
2256) 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 12: Tax Levv. 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, within the limitations
prescribed by law, 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 collected shall be paid into the
Certificate Fund. The City Council 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
45552595.2
16
Collection Date for the ad valorem taxes to be levied and (b)
adding thereto the amount of the 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 of the System, and
any other lawfully available revenues which are 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.
Accrued interest received from the purchasers of the Certificates shall be deposited to
the Certificate Fund. In addition, any surplus proceeds from the sale of the Certificates not
expended for authorized purposes shall be deposited in the Certificate Fund, and such amounts
so deposited shall reduce the sums otherwise required to be deposited in said Fund from ad
valorem taxes.
SECTION 13: Limited Pledqe of Revenues. The City hereby covenants and agrees
that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment
and security of Prior Lien Obligations, the Net Revenues of the System in an aggregate amount
not to exceed $1,000 are hereby irrevocably pledged to the payment of the principal of and
interest on the Certificates, and the limited pledge of $1 ,000 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 until such time as the City shall
pay all of such $1,000 after which time the pledge shall cease. Furthermore, such lien on and
pledge of the Net Revenues securing the payment of the Certificates shall be valid and binding
and fully perfected from and after the date of adoption of this Ordinance without physical
delivery or transfer or transfer of control of the Net Revenues, the filing of this Ordinance or any
other act; all as provided in Chapter 1208 of the Texas Government Code.
Section 1208, Government Code, applies to the issuance of the Certificates and the
pledge of the Net Revenues of the System granted by the City under this Section 13, and such
pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the
Certificates are Outstanding such that the pledge of the Net Revenues of the System granted by
the City under this Section 13 is to be subject to the filing requirements of Chapter 9, Business
& Commerce Code, then in order to preserve to the registered owners of the Certificates the
perfection of the security interest in said pledge, the City agrees to take such measures as it
determines are reasonable and necessary under Texas law to comply with the applicable
45552595,2
17
provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur.
SECTION 14: System Fund. The City hereby covenants and agrees that all Gross
Revenues (excluding earnings from the investment of money held in any special funds or
accounts created for the payment and security of Prior Lien Obligations) 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 "Water 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 as defined herein or required by statute to be a first charge
on and claim against the Gross Revenues thereof.
SECOND: To the payment of the amounts required to be deposited in the Bond
Fund created and established for the payment of Debt Service on the Bonds
Similarly Secured as the same becomes due and payable.
THIRD: To the payment of the amounts required to be deposited in the Reserve
Fund to establish and maintain the Required Reserve in accordance with the
provisions of this Ordinance or any other ordinance relating to issuance of Bonds
Similarly Secured.
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.
SECTION 15: Security of Funds. 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: Special Covenants. The City hereby further covenants as follows:
(a) 1t 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 V.T.C.A, Government Code, Sections
1502.56 and 1502.58 and V.T.C.A., Local Government Code, Sections 271.041,
et seq. '
(b) Other than for the payment of the outstanding Prior Lien
Obligations and the Certificates, 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.
SECTION 17: Issuance of Prior Lien Obliqations and Additional Parity Obliqations. The
City hereby expressly reserves the right to hereafter issue Prior Lien Obligations, without
45552595,2
18
limitation as to principal amount but subject to any terms, conditions or restrictions applicable
thereto under law or otherwise, and such Prior Lien Obligations hereafter issued may be
payable, in whole or in part, from the Net Revenues (without impairment of the obligation of
contract with the Holders of the Certificates) upon such terms and secured in such manner as
the City Council may determine. Additionally, the City reserves the right without any limitations
or restrictions to issue additional obligations payable (in whole or in part) from and secured by
lien on and pledge of the Net Revenues of the System of equal rank and dignity with the lien on
and pledge of such Net Revenues securing the payment of the Certificates.
SECTION 18: Application of Prior Lien Obliqations Covenants and Aqreements. 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. Notwithstanding
the above, any change or modification affecting the application of revenues derived from the
operation of the System shall not impair the obligation of contract with respect to the pledge of
revenues herein made for the payment and security of the Certificates.
SECTION 19: Mutilated - Destroved - Lost and Stolen Certificates. In case any
Certificate shall 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. '
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 20: Satisfaction of Obliqation of City, If the City shall payor 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
45552595,2
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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 independent
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 or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date 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.
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 three (3)
years after the Stated Maturity, or applicable redemption date, 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 21: 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 while any Certificates remain Outstanding. except as permitted in this
Section and in Section 36 hereof. 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, 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.
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SECTION 22: Covenants to Maintain Tax-Exempt Status. (a) Definitions. When used in
this Section, the following terms have the following meanings:
"Closing Date" means the date on which the Certificates are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1,148-1 (b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the
Regulations, of the Certificates.
"Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired
to carry out the governmental purposes of the Certificates.
"Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Certificates. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Certificates has the meaning set forth in Section 1.148-4 of the
Regulations.
(b) Not to Cause Interest to Become Taxable. 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 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 receives 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, the
City shall comply with each of the specific covenants in this Section.
(c) 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 all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates, and not use or permit the use
45552595,2
21
of such Gross Proceeds (including all contractual arrangements with terms
different than those applicable to the general public) or any property acquired,
constructed or improved with such Gross Proceeds in any activity carried on by
any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use
is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of which
is to be financed or refinanced 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.
(d) 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.
(e) Not to Invest at Hiqher 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 in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
(f) Not Federallv 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.
(g) Information Report. The City shall timely file the information required by
Section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary may prescribe.
(h) Rebate of Arbitraoe Profits. Except to the extent otherwise provided in
Section 148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all
receipts, expenditures and investments thereof) on its books of account
separately and apart from all other funds (and receipts, expenditures and
investments thereof) and shall retain all records of accounting for at least six
45552595,2
22
years after the day on which the last Outstanding Certificate is discharged.
However, to the extent permitted by law, the City may commingle Gross
Proceeds of the Certificates with other money of the City, provided that the City
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in Section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Certificates until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Certificates by
the Underwriters and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States from the construction fund,
other appropriate fund, or if permitted by applicable Texas statute, regulation or
opinion of the Attorney General of the State of Texas, the Certificate Fund, the
amount that when added to the future value of previous rebate payments made
for the Certificates equals (i) in the case of a Final Computation Date as defined
in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the
Rebate Amount on such date; and (ii) in the case of any other Computation Date,
ninety percent (90%) of the Rebate Amount on such date. In all cases, the
rebate payments shall be made at the times, in the installments, to the place and
in the manner as is or may be required by Section 148(f) of the Code and the
Regulations and rulings thereunder, and shall be accompanied by Form 8038- T
or such other forms and information as is or may be required by Section 148(f) of
the Code and the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no
errors are made in the calculations and payments required by paragraphs (2) and
(3), and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitraqe Profits. 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
earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Certificates not
been relevant to either party.
U) Elections. The City hereby directs and authorizes the Mayor, City Secretary, City
Manager, Assistant City Manager and Finance Director, individually or jointly, to make elections
permitted or required pursuant to the provisions of the Code or the Regulations, as they deem
necessary or appropriate in connection with the Certificates, in the Certificate as to Tax
Exemption or similar or other appropriate certificate, form or document.
45552595.2
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SECTION 23: Sale of Certificates - Official Statement Approval. The sale of the
Certificates authorized by this Ordinance to Southwest Securities Inc. and RBC Oain Rauscher
Inc. (herein referred to as the "Underwriters") in accordance with the Purchase Contract,
dated January 11, 2005, attached hereto as Exhibit B and incorporated herein by reference as a
part of this Ordinance for all purposes. The Mayor or Mayor Pro Tem is hereby authorized and
directed to execute said Purchase Contract for and on behalf of the City and as the act and
deed of this Council, and in regard to the approval and execution of the Purchase Contract, the
Council hereby finds, determines and declares that the representations, warranties and
agreements of the City contained in the Purchase Contract are true and correct in all material
respects and shall be honored and performed by the City.
Furthermore, the use of the Official Statement by the Underwriters in connection with the
public offering and sale of the Certificates is hereby ratified, confirmed and approved in all
respects. The final Official Statement, which reflects the terms of sale (together with such
changes approved by the Mayor, City Manager, Assistant City Manager, Finance Director, or
City Secretary, individually or collectively), shall be and is hereby in all respects approved, and
the Underwriters are hereby authorized to use and distribute said final Official Statement, dated
January 11, 2005, in the reoffering, sale and delivery of the Certificates to the public. The
Mayor and City Secretary are further authorized and directed to manually execute and deliver
for and on behalf of the City copies of said Official Statement in final form as may be required by
the Underwriters, and such final Official Statement in the form and content manually executed
by said officials shall be deemed to be approved by the City Council and constitute the Official
Statement authorized for distribution and use by the Underwriters.
SECTION 24: Proceeds of Sale. The proceeds of sale of the Certificates in the amount
of $6,200,000.00 shall be deposited in a construction fund maintained at the City's depository
bank and $18,383.17, representing the accrued interest received from the Underwriters, shall be
deposited to the Certificate Fund. The balance of the proceeds of the Certificates shall be used
to pay costs of issuance and municipal bond insurance premium. Pending expenditure for
authorized projects and purposes, such proceeds of sale may be invested in authorized
investments in accordance with the provisions of V.T.C.A., Government Code, Chapter 2256,
including specifically guaranteed investment contracts permitted in V.T.C.A., Section 2256.015,
et seq, 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 25: 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 the sale
of the Certificates, the 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(s) pending the approval thereof by the Attorney General, the registration
thereof by the Comptroller of Public Accounts and the delivery thereof to the Underwriters.
Furthermore, the Mayor, Mayor Pro Tern, City Secretary, Finance Director and City
Manager, anyone 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 and their registration
45552595,2
24
by the Comptroller of Public Accounts. In addition, such officials, together with the City's
financial advisor, bond counsel and the Paying Agent/Registrar, are authorized and directed to
make the necessary arrangements for the delivery of the Initial Certificate(s) to the Underwriters
and the initial exchange thereof for definitive Certificates.
SECTION 26: 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 27: Cancellation. All Certificates surrendered for payment, redemption,
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.
SECTION 28: Bond Counsel's Opinion. The Underwriters' obligation to accept delivery
of the Certificates is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P.,
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. An executed counterpart of
said opinion shall accompany the global certificates deposited with The Depository Trust
Company or a reproduction thereof shall be printed on the definitive Certificates in the event the
book entry only system shall be discontinued.
SECTION 29: 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 30: 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, and this Ordinance and all its provisions is
intended to be and shall be for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
45552595,2
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SECTION 31: 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 32: Governinq 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 33: Effect of HeadinQs. The Section headings herein are for convenience
only and shall not affect the construction hereof.
SECTION 34: 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.
SECTION 35: Severabilitv. 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 36: Continuinq ~isclosure Undertakinq. (a) 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 municipal 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.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2004) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 23 of this Ordinance,
being the information described in Exhibit C hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report,
when and if the same becomes available,
45552595,2
26
If the City 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 City 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.
(c) Material Event Notices. The City 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, 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;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Certificates;
and
11, Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Certificates within the meaning of the Rule,
except that the City in any event will give the notice .required by subsection (c) hereof of any
Certificate calls and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Certificates, 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 City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City'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 City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
Any filing required by this Section may be made solely by transmitting such filing to the
Texas Municipal Advisory Council (the "MAC") as provided at http://www.disclosureusa.org
unless the SEC has withdrawn the interpretive advice in its letter to the MAC dated September
7,2004.
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27
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS 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.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this 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 City under federal and state securities laws.
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances resulting from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or
type of operations of the City, but only if (1) the provisions of this Section, as so amended,
would have permitted underwriters to purchase or sell Certificates in the primary offering of the
Certificates in compliance with the Rule, taking into account any amendments or interpretations
of the Rule to the date of such amendment, 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 consent to such amendment or (b) a Person that is unaffiliated with the
City (such as nationally recognized bond counsel) determines that such amendment will not
materially impair the interests of the Holders and beneficial owners of the Certificates. The
provisions of this Section may also be amended from time to time or repealed by the City if the
SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, but only if and to the extent that reservation of the
City's right to do so would not prevent underwriters of the initial public offering of the Certificates
from lawfully purchasing or selling Certificates in such offering. If the City so amends the
provisions of this Section, it shall include with any amended financial information or operating
data next provided in accordance with subsection (b) an explanation, in narrative form, of the
reasons for the amendment and of the impact of any change in the type of financial information
or operating data so provided.
SECTION 37: MBIA Insurance. The Certificates have been sold with the principal of and
interest thereon being insured by MBIA Insurance Corporation (hereinafter called "MBIA")
pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms and conditions
applicable to insurance provided by MBIA, the City covenants and agrees that, in the event the
principal and interest due on the Certificates shall be paid by MBIA pursuant to the policy
referred to this Section, the assignment and pledge of all funds and all covenants, agreements
and other obligations of the City to the Holders shall continue to exist and MBIA shall be
subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that:
(a) In the event that, on the second business day, and again on the business day,
prior to the payment date on the Certificates, the Paying Agent/Registrar has not received
sufficient moneys to pay all principal of and interest on the Certificates due on the second
following or following, as the case may be, business day, the Paying Agent/Registrar shall
45552595.2
28
immediately notify MBIA or its designee on the same business day by telephone or telegraph,
confirmed in writing by registered or certified mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on the payment date,
the Paying Agent/Registrar shall so notify MBIA or its designee.
(c) In addition, if the Paying Agent/Registrar has notice that any Holder has been
required to disgorge payments of principal of or interest on the Certificates to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes a voidable preference to such Holder within the
meaning of any applicable bankruptcy laws, then the Paying Agent/Registrar shall notify the
MBIA or its designee of such fact by telephone or telegraphic notice, confirming in writing by
registered or certified mail.
(d) The Paying Agent/Registrar is hereby irrevocably designated, appointed, directed
and authorized to act as attorney-in-fact for Holders of the Certificates as follows:
(1) If and to the extent there is a deficiency in amounts required to
pay interest on the Certificates, the Paying Agent/Registrar shall (a) execute and
deliver to State Street Bank and Trust Company, N.A., or its successors under
the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance
Paying Agent, an instrument appointing the MBIA as agent for such Holders in
such legal proceeding related to the payment of such interest and an assignment
to the MBIA of the claims for interest to which such deficiency relates and which
are paid by MBIA, (b) receive as designee to the respective Holders (and not as
Paying Agent/Registrar) in accordance with the tenor of the Policy payment from
the Insurance Paying Agent with respect to the claims for interest so assigned,
and (c) disburse the same to such respective Holders; and
(2) If and to the extent of a deficiency in amounts required to pay
principal of the Certificates, the Paying Agent/Registrar shall (a) execute and
deliver to the Insurance Paying Agent in form satisfactory to the Insurance
Paying Agent an instrument appointing MBIA as agent for such Holder in any
legal proceeding relating to the payment of such principal and an assignment to
MBIA of any of the Certificates surrendered to the Insurance Paying Agent or so
much of the principal thereof as has not previously been paid or for which
moneys are not held by the Paying Agent/Registrar and available for such
payment (but such assignment shall be delivered only if payment from the
Insurance Paying Agent is received), (b) receive as designee of the respective
Holders (and not as Paying Agent/Registrar) in accordance with the tenor of the
Policy payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Holders.
(e) Payments with respect to claims for interest on and principal of Certificates
disbursed by the Paying Agent/Registrar from proceeds of the Policy shall not be considered to
discharge the obligation of the City with respect to such Certificates, and MBIA shall become of
the owner of such unpaid Certificate and claims for the interest in accordance with the tenor of
the assignment made to it under the provisions of this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed and delivered, the City
and the Paying Agent/Registrar hereby agree for the benefit of the MBIA that:
45552595,2
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(1) They recognize that to the extent the MBIA makes payments,
directly or indirectly (as by paying through the Paying Agent/Registrar), on
account of principal of and interest on the Certificates, MBIA will be subrogated
to the rights of such Holders to receive the amount of such principal and interest
from the City, as provided and solely from the sources stated in this Ordinance
and the Certificates; and
(2) They will accordingly pay to MBIA the amount of such principal
and interest (including principal and interest recovered under subparagraph (ii) of
the first paragraph of the Policy, which principal and interest shall be deemed
past due and not to have been paid), as provided in this Ordinance and the
Certificates, but only from the sources and in the manner provided herein for the
payment of principal of and interest on the Certificates to Holders, and will
otherwise treat the MBIA as the owner of such rights to the amount of such
principal and interest.
(g) In connection with the issuance of additional obligations, the City shall deliver to
the MBIA a copy of the disclosure document, if any, circulated with respect to such additional
obligations.
(h) No amendment or supplement to this Ordinance may become effective without
prior consent of MBIA. Copies of any amendments made to the documents executed in
connection with the issuance of the Certificates which are consented to by the MBIA shall be
sent to Standard & Poor's Corporation.
(i) MBIA shall receive notice of the resignation or removal of the Paying
Agent/Registrar and the appointment of a successor thereto.
U) MBIA shall receive copies of all notices required to be delivered to Holders and,
on an annual basis, copies of the City's audited financial statements and annual budget.
(k) Any notice that is required to be given to a Holder of the Certificates or to the
Paying Agent/Registrar pursuant to this Ordinance shall also be provided to MBIA. All notices
required to be given to MBIA under this Ordinance shall be in writing and shall be sent by
registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk,
New York 10504, Attention: Surveillance.
(I) The City will not enter into a guaranteed investment contract for the investment of
proceeds of the Certificates pursuant to the Public Funds Investment Act without the prior
written consent of MBIA and any investment of money deposited to the credit of the special
funds created or maintained pursuant to this Ordinance shall be in accordance with the Public
Funds Investment Act..
(m) MBIA, acting alone, shall have the right to direct all remedies in the event of a
default. MBIA shall be recognized as the registered owner of each Certificate which it insures
for the purposes of exercising all rights and privileges available to Holders. For Certificates
which it insures, MBIA shall have the right to institute any suit, action, or proceeding at law or in
equity under the same terms as the Holder in accordance with the applicable provisions of this
Ordinance.
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(n) The City agrees, subject to annual appropriation by the City and to the extent
permitted by law, to reimburse MBIA for all reasonable expenses, including attorneys' fees and
expenses, incurred by MBIA in connection with (i) the enforcement by MBIA of the City's
obligations, or the preservation or defense of any rights of MBIA, under this Ordinance and any
other document executed in connection with the issuance of the Certificates, and (ii) any
consent, amendment, waiver or other action with respect this Ordinance or any related
document, whether or not granted or approved, together with interest on all such expenses from
and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the
maximum interest rate permitted by law, whichever is less. In addition, MBIA reserves the right
to charge a fee in connection with its review of such consent, amendment or waiver, whether or
not granted or approved.
(0) The City agrees not to use MBIA's name in any public document including,
without limitation, a press release or presentation, announcement or forum without MBIA's prior
consent. In the event that the City advised by counsel that it has a legal obligation to disclose
MBIA's name in any press release, public announcement or other public document, the City
shall provide MBIA with at least three (3) business days' prior written notice of its intent to use
MBIA's name together with a copy of the proposed use of MBIA's name and of any description
of a transaction with MBIA and shall obtain MBIA's prior consent as to the form and substance
of the proposed use of MBIA's name and any such description.
(p) The City shall not enter into any agreement nor shall it consent to or participate in
any arrangement pursuant to which Certificates are tendered or purchased for any purpose
other than the redemption and cancellation or legal defeasance of such Certificates without the
prior written consent of MBIA.
(q) In regard to any defeasance of the Certificates, MBIA be shall provided with an
opinion of counsel acceptance to MBIA that the Certificates have been legally defeased and that
the escrow agreement establishing such defeasance operates to legally defease the Certificates
within the meaning of this Ordinance. In addition, MBIA shall be entitled to receive (i) 15
business days notice of any advance refunding of the Certificates and (ii) an accountant's report
with respect to the sufficiency of the amounts deposited in escrow to defease the Certificates.
SECTION 38: Public Meetinq, 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 V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 39: Effective Date. This Ordinance shall take effect and be in full force from
and after its adoption on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028.
[remainder of page left blank intentionally]
45552595.2
31
PASSED AND ADOPTED, this January 11, 2005.
ATTEST:
(City Seal)
45552595,2
CITY OF WYLIE, TEXAS
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