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Ordinance 1986-70 ORDINANCE N0. ~~p - ~Q AN ORDINANCE authorizing the issuance of "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1986"; prescribing the terms, features and specifications of said bonds; pledging the net revenues of the City's combined Waterworks and Sanitary Sewer System to the payment of the principal of and interest on said bonds; resolving other matters incident and related to the issuance, sale, security, payment and delivery of said bonds; and providing an effective date. WHEREAS, the City Council hereby finds and determines that revenue bonds approved and authorized to be issued at an election held September 26, 1970 should be issued and sold at this time; a schedule of the revenue bonds approved at said election, as well as at an election held July 7, 1979, which identifies the respective authorized purposes and amounts approved therefor, amounts previously issued and being issued pursuant to the terms of this ordinance and amounts remaining to be issued subsequent to the date hereof, being as follows: Authorized Previously Amounts Election Authorized Principal Issued Being Unissued Date Purpose Amount Amounts Issued Balance 9-26-70 Sewer System $ 400,000 $ 236,000 $ 160,000 $ 4,000 Imp. & Exten. 7-7-79 Water System $ 400,000 $ 248,000 $ -0- $152,000 Imp. & Exten. AND WHEREAS, the City Council hereby further finds and determines that (1) the sewer improvements and extensions for which such revenue bonds were voted have not previously been acquired or constructed and the need for such improvements and extensions to the sewer system continues to exist and (2) all of such revenue bonds can and should be issued on a parity with the City's outstanding revenue bonds (hereinafter defined and identified as "Previously Issued Bonds") payable from and equally secured by a first lien on and pledge of the Net Revenues of the City's Waterworks and Sanitary Sewer System (the "System") in that (a) the City is not now in default as to any covenant, condition or obligation prescribed in the ordinances authorizing the issuance of the outstanding Previously Issued Bonds, (b) the Bonds herein authorized have been voted at an election duly called and held for that purpose as provided by law, (iii) the City can secure from an independent Certified Public Accountant a certificate showing that the net income and revenues of the System, after full provisions have been made for adequate maintenance and operation charges, for the completed fiscal year immediately preceding the issuance and sale of the Bonds herein authorized, are equal to at least one and one-half (1-1/2) times the maximun annual requirements for the payment of principal and interest on all outstanding bonds secured by a first lien and pledge of the Net Revenues of the System, after giving effect to the issuance of the Bonds herein authorized; and WHEREAS, the City Council hereby expressly reserves the right to issue the balance of revenue bonds approved at the aforesaid elections in one or more installments as the Council in its sole discretion shall determine; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: SECTION 1: Authorization-Desi nation-Princi al Amount- Purpose. Revenue bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $160,000, to be designated and bear the title "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1986" (hereinafter referred to as the "Bonds"), for the purpose of improving and extending the City's Sanitary Sewer System, in accordance with authority conferred at the aforesaid election and in conformity with the Constitution and laws of the State of Texas, including Article 1111, et. seq., V.A.T.C.S. SECTION 2: Fully Reqistered Obli ations - Authorized Denominations - Stated Maturities - Date - Interest Rates. The Bonds are issuable in fully registered form only; shall be dated July 1, 1986 (the "Bond Date") and, other than the single Initial Bond described in Section 7 hereof, shall be in denominations of $5,000 or any integral multiple thereof (within a Stated Maturity), and the Bonds shall become due and payable on June 1 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at per annum rates in accordance with the following schedule: Year of Principal Interest Stated Maturity Amount Rate s 1988 $ 5,000 8.40% 1989 5,000 8.40% 1990 5,000 8.40% 1991 5,000 8.40% 1992 5,000 8.40% 1993 5,000 8.40% 1994 5,000 8.40% -2- 1995 5,000 8.40% 1996 5,000 8.40% 1997 10,000 8.40% 1998 10,000 8.40% 1999 10,000 8.40% 2000 10,000 8.40% 2001 10,000 8.40% 2002 10,000 8.40% 2003 10,000 8.40% 2004 15,000 8.40% 2005 15,000 8.40% 2006 15,000 8.40% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the rate(s) per annum shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months). Interest on the Bonds shall be payable on June 1 and December 1 in each year, commencing June 1, 1987. SECTION 3: Terms of Payment-Payinq Aqent/Re istrar The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books (the "Security Register") maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of MBank Dallas, N.A., Dallas, Texas to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds 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 Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or the redemption thereof, only upon presentation and surrender of the Bonds to the Paying -3- Agent/Registrar at its principal office. Interest on the Bonds shall be paid to the Holders whose name appears in the Security Register at the close of business on the Record Date (the 15th 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 Bonds shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. 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 day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. All Bonds 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 any interest payment date at the redemption price of par plus accrued interest to the date of redemption. (b) Exercise of Redem tion O tion. At least forty-five (45) days prior to a redemption date for the Bonds (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 Bonds, 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 Bonds shall be entered in the minutes of the governing body of the City. -4- (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/ Registrar shall treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing the principal amount of such Bonds by $5,000 and shall select the Bonds, or principal amount thereof, 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 Bonds, 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 Bond 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 Bonds, (ii) identify the Bonds 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 Bonds, 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, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the principal office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Bond (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; provided moneys sufficient for the payment of such Bond (or of 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. SECTION 5: Registration - TransferExchanqe of Bonds Predecessor Bonds. A Security Register relating to the registration, payment, and transfer or exchange of the Bonds shall at all times be kept and maintained by the City at the principal office of the Paying Agent/Registrar, as provided herein and in accordance with the provisions of an agreement -5- with the Paying Agent/Registrar and such rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance, or if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations by the Holder, in person or by his duly authorized agent, upon surrender of such Bond 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 Bond for transfer at the principal 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 Bonds of authorized denominations and having the same Stated Maturity . and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the principal office of the Paying Agent/ Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. Al1 Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the principal 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 Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds 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. -6- Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new Bond or Bonds registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued, registered and delivered in lieu thereof pursuant to the provisions of Section 28 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. Neither the City nor the Paying Agent/ Registrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within 45 days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Execution - ReQistration. The Bonds 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 Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 8C, manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 8D, manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. -7- SECTION 7: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the total principal amount of $160,000 with principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as nineteen (19) fully registered bonds, being one bond 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 Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds 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 Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 8: Forms. A. Forms Generally. The Bonds, 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 Bonds, 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 any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds shall be printed, lithographed, or engraved or produced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution, but the Initial Bond(s) submitted to the Attorney General of Texas may be typewritten or photocopied or otherwise reproduced. -8- B. Form of Definitive Bond. REGISTERED REGISTERED NO. ~ United States of America State of Texas City of Wylie, Texas, Waterworks and Sewer System Revenue Bond, Series 1986 Bond Date: Interest Rate: Stated Maturity: CUSIP NO: July 1, 1986 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, hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, solely from the revenues hereinafter identified, on the Stated Maturity date specified above, the Principal Amount stated above (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 Bond Date at the per annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on June 1 and December 1 of each year, commencing June 1, 1987. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the principal office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, 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 15th 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 on the Record Date 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 Bond shall be without exchange or collection charges to the owner or holder 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. -9- This Bond is one of the series specified in its title issued in the aggregate principal amount of $160,000 (herein referred to as the "Bonds") to provide funds for improving and extending the City's Sanitary Sewer System, under and in strict conformity with the Constitution and laws of the State of Texas, including Article 1111 et seq., V.A.T.C.S., and pursuant to an Ordinance adopted by the governing body of the City (herein referred to as the "Ordinance"). The Bonds 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 any interest payment date, at the redemption price of par, together with accrued interest to the date of redemption, and upon 30 days prior written notice being given by United States Mail, first class postage prepaid, to registered owners of the Bonds to be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of the principal sum hereof) shall have been duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor; provided moneys for the payment of the redemption price and the interest 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. In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of this Bond to the Paying Agent/Registrar at its principal office and, there shall be issued, without charge therefor, to the registered owner hereof, a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided in the Ordinance for the then unredeemed balance of the principal sum hereof. If this Bond is called for redemption, in whole or in part, the City or the Paying Agent/Registrar shall not be required to transfer this Bond to an assignee of the Holder within 45 days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance hereof in the event of its redemption in part. -10- The Bonds are special obligations of the City and, together with the outstanding and unpaid Previously Issued Bonds (identified and defined in the Ordinance) are payable solely from and equally and ratably secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the City's combined Waterworks and Sanitary Sewer System (the "System"). The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance upon any property of the City or the System, except with respect to the Net Revenues. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation. Subject to satisfying the terms and conditions prescribed therefor, the City has reserved the right to issue additional revenue obligations payable from and equally and ratably secured by a parity lien on and pledge of the Net Revenues of the System, in the same manner and to the same extent as the Bonds and the Previously Issued Bonds. Reference is hereby made to the Ordinance, a copy of which is on file in the principal office of the Paying Agent/Registrar, and to all of the provisions of which the Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the security for the Bonds; the properties constituting the System; the Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature and extent and manner of enforcement of the lien and pledge securing the payment of the Bonds; the terms and conditions for the issuance of additional revenue obligations; the terms and conditions relating to the transfer or exchange of this Bond; 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 liens, pledges, charges and covenants made therein may be discharged at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no longer Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized terms used herein have the same meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the principal 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 e~ecuted by, the registered owner hereof, or his duly authorized agent. When a transfer on the Security Register -11- occurs, one or more new fully registered Bonds 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, may treat the registered owner hereof 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 Bond 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 non-payment 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 covenanted that the City is a duly organized and legally existing municipal corporation under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds 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 Bonds 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 Bonds do not exceed any constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by a pledge of the Net Revenues of the System as aforestated. In case any provision in this Bond or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. -12- IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. CITY OF WYLIE, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) C. * Form of Re istration Certificate of Com troller of Public Accounts to Appear on Initial Bond 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 Bond 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 Bonds -13- D. Form of Certificate of Payin Aqent/Reqistrar to A pear on Definitive Bonds only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within-mentioned Ordinance; the bond or bonds 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. MBank Dallas, N.A., Dallas, Texas as Paying Agent/Registrar Registered this date: By Authorized Signature E. Form of Assiqnment. 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 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney••to transfer~•the•.within~Bond.•on• the books•~kept for registration thereof, with full power of substitution in the premises. DATED: NOTICE: The signature on this Signature guaranteed: assignment must correspond with the name of the registered owner as it appears on the face of the within Bond in every particular. -14- F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section, except that the form of a single fully registered Initial Bond shall be modified as follows: (i) immediately under the name of the bond the headinqs "Interest Rate " and "Stated Maturity " shall both be completed "as shown below"; (ii) Paragraph one shall read as follows: 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, hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, solely from the revenues hereinafter identified, the Principal Amount hereinabove stated on June 1 in each of the years and in principal installments in accordance with the following schedule: PRINCIPAL INTEREST YEAR INSTALLMENTS 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 Bond Date at the per annum rates of interest specified above computed on the basis of a 360-day year of twelve 30-day months; such interest being payable on June 1 and December 1 of each year, commencing June l, 1987. Principal installments of this Bond are payable in the year of maturity or on a prepayment date to the registered owner hereof, upon presentation and surrender, at the principal office of MBank Dallas, N.A., Dallas, Texas (the "Paying Agent/Registrar"). Interest is payable to the registered owner of this Bond 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 15th 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 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 Bond shall be without exchange or collection charges to the owner or holder hereof -15- and in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 9: Definitions. For all purposes of this Ordinance and in particular for clarity with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of revenues therefor, the following definitions are provided: (a) The term "System" shall mean the City's combined Waterworks and Sanitary Sewer System, including all properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the City of Wylie through purchase, construction or otherwise, and used in connectino with the System and in anywise appertaining thereto, whether situated within or without the limits of the City.. (b) The term "Net Revenues" shall mean the gross revenues of the System less the expense of operation and maintenance, including salaries, labor, materials, interest, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair any obligations payable from and secured by a lien on the Net Revenues of the System shall be deducted in determining "Net Revenues". (c) The term "Bonds" shall mean the revenue bonds, aggregating in principal amount $160,000, authorized by this Ordinance. (d) The term "Previously Issued Bonds" shall mean the outstanding bonds designated "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS," further identified as follows: (1) Series 1971, dated March 1, 1971, and issued in the original principal amount of $300,000; and (2) Series 1980, dated March l, 1980, and issued in the original principal amount of $400,000; -16- (e) The term "Additional Bonds" shall mean the additional parity revenue bonds which the City reserves the right to issue in accordance with the terms and conditions prescribed in Section 19 hereof. (f) The term "Bonds Similarly Secured" shall mean the Bonds, Previously Issued Bonds, and Additional Bonds which are payable from a first lien on and pledge of the Net Revenues of the System. (g) The term "Fiscal Year" shall mean the twelve months' period ending December 31 of each year. (h) The term "Outstanding" shall mean with respect to Bonds, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: (1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/Registrar for cancellation; (2) those Bonds deemed to be paid by the City in accordance with the provisions of Section 30 hereof by the irrevocable deposit with the Paying Agent/Registrar, or an authorized escrow agent, of money or Government Securities, or both, in the amount necessary to fully pay the principal of, premium, if any, and interest thereon to maturity or redemption, as the case may be, provided that, if such Bonds are to be redeemed, notice of redemption thereof shall have been duly given pursuant to this Ordinance or irrevocably provided to be given to the satisfaction of the Paying Agent/Registrar, or waived; and (3) those Bonds that have been mutilated, destroyed, lost, or stolen and replacement Bonds have been registered and delivered in lieu thereof as provided in Section 28 hereof. SECTION 10: Pledge. That the City hereby covenants and agrees that all of the Net Revenues of the System, with the exception of those in excess of the amounts required to establish and maintain the special Fund created and established for the payment and security of the Bonds Similarly Secured, -17- are hereby irrevocably pledged, equally and ratably, to the payment of the Previously Issued Bonds, the Bonds, and Additional Bonds, if issued, and the interest thereon, as hereinafter provided. It is hereby ordained that the Bonds Similarly Secured, and the interest thereon, shall constitute a first lien on the Net Revenues of the System and be valid and binding without any physical delivery thereof or further act by the City. SECTION 11: Rates and Charqes. That the City hereby covenants and agrees that rates and charges for water and sewer services afforded by the System will be established and maintained, on the basis of all available information and experience and with due allowance for contingencies, that are reasonably expected to provide revenues sufficient at all times to pay: (a) all operating, maintenance, depreciation, replacement, betterment and interest charges and other costs incurred in the maintenance and operation of the System; (b) the interest on and principal of the Bonds Similarly Secured and the amounts required to be deposited into the special Fund created and established for the payment and security of the Bonds Similarly Secured; and (c) any other legally incurred indebtedness payable from the revenues of the System and/or secured by a lien on the System or the revenues thereof. ~ SECTION 12: Fund Designations. All revenues derived from the operation of the System shall be kept separate from other funds of the City. To that end, the following special Funds heretofore created are hereby reaffirmed: (a) Waterworks and Sewer System Fund, hereinafter called "System Fund". This Fund shall be kept in the City's depository bank. (b) Special Waterworks and Sewer System Revenue Bond Retirement and Reserve Fund, hereinafter called "Bond Fund". This Fund shall be deposited with MBank Dallas, N.A., Dallas, Texas (formerly Mercantile National Bank at Dallas), and shall be used to pay principal of and interest on the Bonds Similarly Secured when and as the same shall become due and payable. -18- SECTION 13: System Fund. The City hereby covenants and agrees that all revenues and income of every nature derived from the operation of the System shall be deposited from day to day as collected into the System Fund. All revenues deposited in the System Fund shall be pledged and appropriated to the extent required for the following uses and in the order of priority shown: FIRST: To the payment of all necessary and reasonable maintenance and operating expenses of the System as defined herein or required by statute to be a first charge on and claim aqainst the revenues thereof, SECOND: To the payment of the amounts required to be deposited in the Bond Fund for the payment of the principal of and interest on the Bonds Similarly Secured as the same becomes due and payable, and THIRD: To the payment of the amounts required to be deposited in the Bond Fund for the accumulation and maintenance of the "Required Reserve" (hereinafter referenced in Section 14). Any Net Revenues remaininq 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 14: Bond Fund. That, in addition to the monthly deposits required to be made to the Bond Fund for the payment of principal of and interest on the Previously Issued Bonds, the City hereby agrees and covenants to deposit in said Fund from the Net Revenues of the System in the System Fund an amount equal to One Hundred Per Centum (100%) of the amount required to fully pay the interest on and principal of the Bonds falling due on or before each maturity and interest payment date, such payment to be made in substantially equal monthly installments on or before the 15th day of each month beginning on or before the 15th day of the month next following the month the Bonds are delivered to the initial purchaser(s). The monthly deposits to the Bond Fund for the payment of principal and interest on the Bonds shall continue to be made as hereinabove provided until such time as (i) the total amount on deposit in the Bond Fund is equal to the amount required to pay all outstanding Bonds Similarly Secured (principal and interest) or (ii) the Bonds are no longer Outstanding. -19- Accrued interest and premium, if any, received from the purchaser of the Bonds, as well as any proceeds of the Bonds not required to improve and extend the System for which the Bonds are being issued, shall be deposited to the Bond Fund, and may be taken into consideration and reduce the amount of the monthly deposits hereinabove required to be deposited in the Bond Fund from the Net Revenues of the System. In accordance with the provisions of the ordinances authorizing the issuance of the Previously Issued Bonds, the City further covenants and agrees that there shall be accumulated and maintained in the Bond Fund a reserve for the payment of principal of and interest on Bonds Similarly Secured when other moneys on deposit therein are insufficient on a principal or interest payment date for such purpose. The total amount required to be accumulated and maintained as a reserve for the Bonds Similarly Secured under the provisions of the ordinances authorizing the Previously Issued Bonds is $69,000 and there is currentl on deposit in the Bond Fund as a reserve the sum of $~~~0 (the "Current Reserve"). That, by reason of the issuance of the Bonds, the total amount to be accumulated and maintained as a reserve is hereby increased to an amount equal to not less than O (the "Required Reserve and beginning on or before the 15th day of August, 1986, and on or before the 15th day of each following month, monthly deposits in an amount equal to not less than 1/60th of the difference between the Required Reserve and the Current Reserve shall be made to the Reserve Fund until the amount of cash and investments in said Fund totals not less than Required Reserve. When the total amount now required to be deposited as the Required Reserve has been fully accumulated, said monthly payments to said Fund may be terminated; provided, however, should the amount on deposit in said Fund be reduced below the Required Reserve, after the same has been accumulated monthly deposits in an amount equal to not less than (i) $~Qpp,pp or (ii) 1/60 of the Required Reserve then required to be maintained therein, whichever amount is the greater, shall be resumed and continued to be made on or before the 15th day of each month until the Required Reserve has been fully restored. It is hereby declared to be the City's purpose and intent and the City so covenants and agrees that the Required Reserve in the Bond Fund shall be in addition to the other amounts required to be deposited in said Fund to pay the current principal and interest on the Bonds Similarly Secured, and shall be used only to pay the principal and interest on Bonds Similarly Secured when other moneys on deposit in said Fund are insufficient for such purpose. -20- SECTION 15: Investment of Reserve Portion of Bond Fund. The custodian bank of the Bond Fund is authorized to invest all or any portion of the Required Reserve in short term direct obligations of the United States of America, having maturities not in excess of five years from the date of the making of such investments, as the City Council may direct. Said obligations shall be held by the custodian bank and if at any time uninvested funds shall be insufficient to permit payment of principal and interest maturities of the Bonds Similarly Secured as heretofore directed, said bank shall sell on the open market such amount of the securities as is required to pay said principal and interest when due, and shall give notice thereof to the City. All money resulting from the maturity of principal of and interest on the securities in which the reserve portion is invested may be reinvested or accumulated in the reserve portion of the Bond Fund and considered a part thereof and used for and only for the purposes hereinabove provided with respect to said reserve. SECTION 16: Payment of Bonds. While any of the Bonds are Outstanding, the proper officers of the City are hereby authorized to transfer or cause to be transferred to the Paying Agent/Registrar therefor, from funds on deposit in the Bond Fund, and, if necessary, the reserve portion thereof, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrue or mature or come due by reason of redemption prior to maturity; such transfer of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/ Registrar for the Bonds at the close of the business day next preceding ~he date of payment for the Bonds. SECTION 17: Deficiencies in Funds. If in any month the City shall, for any reason, fail to pay into the Bond Fund the full amounts above stipulated, amounts equivalent to such deficiencies shall be set apart and paid into said Fund from the first available and unallocated Net Revenues in the following month or months and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into said Fund during such month or months. SECTION 18: Excess Revenues. Any revenues in excess of those required to establish and maintain the special Fund created for the payment and security of the Bonds Similarly Secured may be used for any other proper City purpose, now or hereafter permitted by law, including the use thereof either for retiring in advance of maturity Bonds Similarly Secured according to the provisions made for their prior redemption, or may be used to purchase Bonds on the open market at not exceedinq the market value thereof. All Bonds so paid, -21- redeemed or purchased shall be cancelled and shall not be reissued. Nothing herein shall be construed, however, as impairing the right of the City to pay, in accordance with the provisions thereof, any junior lien obligations hereafter legally issued by it. SECTION 19: Security of Funds. That all moneys on deposit in the special Fund referred to in this Ordinance (except any portions 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 the State 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 20: Issuance of Additional ParitY Bonds. That in addition to the right to issue bonds of inferior lien as authorized by the laws of this State, the City reserves the right hereafter to issue Additional Bonds. The Additional Bonds when issued shall be payable from and secured by a first lien on and pledge of the Net Revenues of the System in the same manner and to the same extent as are the Previously Issued Bonds and the Bonds, and the Previously Issued Bonds, the Bonds and the Additional Bonds shall in all respects be of equal dignity. The Additional Bonds may be issued in one or more installments, provided, however, that none shall be issued unless and until the following conditions have been met: (a) The City is not then in default as to any covenant, condition or obligation prescribed by any ordinance authorizing the issuance of the outstanding Bonds Similarly Secured. (b) That the proposed Additional Bonds shall have been voted at an election duly called and held for that purpose as provided by law. (c) The City has secured from an independent Certified Public Accountant a certificate showing that the net income and revenues of the System, after full provisions have been made for adequate maintenance and operation charges for the next completed fiscal year immediately preceding the issuance and sale of such Additional Bonds, is equal to at least one and one-half (1-1/2) times the maximum annual requirements for the payment of principal and interest on all bonds secured by a first lien on and pledge of the Net Revenues of the System, after giving effect to the issuance of the proposed Additional Bonds. -22- The Bonds Similarly Secured may be refunded (pursuant to any law then available) upon such terms and conditions as the governing body of the City may deem to the best interest of the City and its inhabitants, and if less than all such outstanding revenue bonds are refunded, the proposed refunding bonds shall be considered as "Additional Bonds" under the provisions of this Section and the report required in subparagraph (c) above shall give effect to the issuance of the proposed refunding bonds (and shall not give effect to the bonds being refunded following their cancellation or provision being made for their payment). SECTION 21: Maintenance and O eration - Insurance. The City shall maintain the System in good condition and operate the same in an efficient manner and at reasonable cost. So long as any of the Bonds are Outstanding, the City agrees to maintain insurance for the benefit of the Holders of such bonds on the System of the kinds and in amounts which usually would be carried by private companies operating similar properties, and that such during time all policies of insurance shall be maintained in force and kept current as to premium payments. All moneys received from losses under such insurance policies other that public liability policies, are hereby pledged as security for the Bonds Similarly Secured until and unless the proceeds are paid out 'in making good the loss or damage in respect of which such proceeds are received, either by replacing the property destroyed or repairing the property damaged, and adequate provision for making good such loss or damage is made within ninety days from the date of the loss. The payment of premiums for all insurance policies required under the provisions hereof shall be considered as maintenance and operation expenses. SECTION 22: Records - Accounts - AccountinQ Reports. The City hereby covenants and agrees that so long as any of the Bonds or any interest thereon, remain Outstanding, it will keep and maintain a proper and complete system of records and accounts pertaining to the operation of the System (separate and apart from all other records and accounts) in which complete and correct entries shall be made of all transactions relating to said System, as provided by Article 1113, V.A.T.C.S, and that the Holders of any Bonds, or any duly authorized agent or agents of such Holders, shall have the right at all reasonable times to inspect the System and all properties comprising same, and to inspect all records, accounts and data relating thereto. The City further covenants and agrees that as soon as possible following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an independent firm of Certified Public Accountants, showing the receipts and disbursements for account of the System for the Fiscal Year. Each such audit, in addition to whatever other matters may be thought proper by the Accountant, shall particularly include the following: -23- (a) A detailed statement of the income and expenditures of the System for such Fiscal Year. (b) A balance sheet as of the end of such Fiscal Year. (c) The Accountant's comments regarding the manner in which the City has carried out the requirements of this Ordinance and his recommendations for any changes or improvements in the operation, records and accounts of the System. (d) A list of the insurance policies in force at the end of the Fiscal Year on the System properties, settinq out as to ea~h policy the amount thereof, the risk covered, the name of the insurer, and the policy's expiration date. (e) A list of the securities which have been on deposit as security for the money in the Bond Fund throughout the Fiscal Year, a list of the securities, if any, in which the reserve portion has been invested, and a statement of the manner in which money in the System Fund has been secured in such Fiscal Year. (f) The number of inetered and unmetered customers connected with the System at the end of the Fiscal Year, showing the number of water connections and sewer connections separately. Expenses incurred in making the audits above referred to are to be regarded as maintenance and operating expenses of the System and paid as such. Copies of the aforesaid annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory Council of Texas at his office in Austin, Texas, and, to the original purchasers of the Bonds and any subsequent Holder at his request. SECTION 23: Remedies in Event of Default. In addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants agrees particularly that in the event the City (a) defaults in the payment of principal or interest on any of the Bonds when due, (b) fails to make the payments required in Section 14 of this Ordinance to be made into the Bond Fund, or (c) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the City -24- Council and other officers of the City to observe and perform any covenant, condition or obligation prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specification of such remedies shall not be deemed to be exclusive. SECTION 24: Further Covenants. That the City hereby further covenants and agrees as follows: (a) That it has the lawful power to pledge the Net Revenues securing the payment of Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 et seq. V.A.T.C.S., and by authority of an election held in the City for that purpose; that the Bonds Similarly Secured shall be ratably secured under said pledge of income in such manner that one bon~ shall have no preference over any other bond of said issues. (b) That other than for the payment of the Previously Issued Bonds and the Bonds, 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, and that the physical properties of the System are free and clear of all encumbrances whatsoever. (c) That no free services of the System shall be allowed, and should the City or any of its agents or instrumentalities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System; (d) To the extent that it legally may, the City further covenants and agrees that, so long as any of the Bonds or any interest thereon are Outstanding, no franchise shall be granted for the installation or operation of any waterworks or sewer system other than those owned by the City, and the operation of any such system by anyone other than this City is hereby prohibited. -25- (e) That neither the System, nor any substantial portion thereof, will be sold, leased or otherwise disposed of while the Bonds are Outstanding (provided that this covenant shall not be construed to prevent the disposal of property which obsolete or otherwise inexpedient for use in connection with the System). SECTION 25: Bonds are Special Obliqations. That the Bonds are special obligations of the City payable from the pledged Net Revenues of the System and the holders thereof shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. 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 Bonds. 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 Bonds 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 Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying Agent/ Registrar. All cancelled Bonds held by the Paying Agent/ Registrar shall be returned to the City. -26- SECTION 28: Mutilated-Destroyed-Lost and Stolen Bonds. In case any Bond shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar, subject to City approval and in its discretion, may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon (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 Bond, 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 Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every replacement Bond 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 Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. 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 Bonds. SECTION 29: Covenants Reqardinq Tax-Exem tion of Interest on the Bonds. That the City hereby certifies and covenants that the proceeds of the Bonds are needed at this time to finance the costs of making improvements and extensions to the System; based on current facts, estimates and circumstances, it is reasonably expected final disbursement of the proceeds of sale of the Bonds will occur within three years from the date of the receipt thereof by the City; it is not reasonably expected the proceeds of the Bonds or moneys deposited in the Bond Fund for the payment of the Bonds will be used or invested in a manner that would cause the Bonds to be or become "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended to the date hereof (the "Code"), or any regulations or published rulings pertaining thereto; and save and except for the Bond Fund, no other Funds or Accounts have been established for, or pledged to, the payment of the Bonds. In addition, the City shall take no action or fail to take any action, which action or failure to act may render the interest on any of such Bonds subject to federal income taxation, particularly pursuant to Section -27- 103(b) of the Code, nor shall the City take any action or fail to take any action, which action or failure to act, would have the effect of causing the income derived by the City from the System to become subject to federal income taxation in the hands of the City, whether or not provision shall have been made for the payment of such Bonds. SECTION 30: Satisfaction of Obliqation of Citv. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the Net Revenues of the System under this Ordinance and all other obligations of the City to the Holders shall thereupon cease, terminate, and become void and be discharged and satisfied. Bonds 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 Bonds or the principal amount(s) thereof at maturity or to 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 Bonds, 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 Bonds to be treated as "arbitrage bonds" within the meaning of Section 103(c) of the Code. 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 Bonds, 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 -28- principal of and interest on the Bonds and remaining unclaimed for a period of four (4) years after the Stated Maturity, or applicable redemption date, of the Bonds 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. The term "Government Securities", as used herein, means direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, which are non-callable prior to the respective Stated Maturities of the Bonds and may be United States Treasury Obligations such as the State and Local Government Series and may be in book-entry form. SECTION 31: Ordinance a Contract - Amendments. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section. The City, may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the written consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, 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 Bonds, reduce the principal amount thereof, the redemption price therefor, 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 Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. SECTION 32: Sale of the Bonds. The sale of the Bonds to the First State Bank, Wylie, Texas (herein referred to as the "Purchaser(s)" at the price of par and accrued interest to the date of delivery is hereby confirmed. Delivery of the Bonds shall be made to the Purchasers as soon as possible upon payment therefor being made in accordance with the terms of sale. -29- SECTION 33: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending the delivery of the Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchaser(s). Furthermore, the Mayor, City Secretary, City Manager and Director of Finance, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents relating to the City and its financial affairs as may be necessary for the issuance of the Bonds, the approval of the Attorney General and registration by the Comptroller of Public Accounts and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for printing of definitive Bonds and the delivery of the Initial Bond(s) to the initial purchasers and the initial exchange thereof for definitive Bonds. SECTION 34: Printed Opinion. The Purchaser's obligation to accept delivery of the Bonds is subject to receipt of a final opinion of Fulbright & Jaworski, Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and .delivered as of the date of delivery and payment for the Bonds. Printing of a true and correct reproduction of said opinion on the reverse side of each of the definitive Bonds is hereby approved and authorized. SECTION 35: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 36: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. -30- SECTION 37: Inconsistent Provisions. orders or resolutions, or All ordinances, or inconsistent with an Parts thereof, which are in conflict repealed to the extentYofr such ~conflictlsa Od dthence are hereby this Ordinance shall be and remain Provisions of matters contained herein, controlling as to the SECTION 38: Governinq Law, construed and enforced in accordance withstheraawsn of the Sta of Texas and the United States of America, shall be te SECTION 39: Effect of herein are for convenience onladin s. The Section headings construction hereof. Y and shall not affect the SECTION 40: Severabilitv, Ordinance or the application thereofftoaan provision be held to be invalid, the remainder of this Ordinan Of this application thereof to other circumstan y circumstance shall be valid ces shall nevertheless Ordinance~ Woud d the City Council hereby declares that this provision. have been enacted without such invalid SECTION 41: Public Meetin . determined, and declared It is officiall Ordinance is adopted was o that the meetin y found, pen to the g at Which this of the time, place, and subject matterPuoflic and public notice to be considered at such meetin the given; all as required b g~ lncluding thisP Ordinancelnwas Statutes, as amended, y Article 6252-17, Vernon's Texas Civil SECTION 42: Effective take effect and be in Date. That this Ordinance shall passage, and it is so ordained,l~ediately from and after its PASSED AND ADOPTED, this June 10, 1986. i~ - / 'i ~ . r--' ~ . ATTEST: Mayor, Cit ~ Y of lie, Texas j / U~~mui~ue~,sy G , i_ 4 ~ F W sP,,,,~ ~ t ' . ~~i Y ~ et C1 ~ ~ Wylie ' Y of ~ ` x a~s _ / (City seal * ~E~ _ ~ 5 ~'y~~E~ ~~P~``p~~ ~ -31- ,a~.~..~.~.~..,~~__