O408CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF TARRANT §
CITY OF KENNEDALE §
I, the undersigned City Secretary of the City of Kennedale, Texas (the "City"),hereby certify
as follows:
I . The City Council of the City convened in REGULAR MEF,TING ON THE 28'x' DAY OF
AUGUST, 2008 at the City Hall, and the roll was called of the duly constituted officers and
members of said City Council, to wit:
Bryan Lankhorst, Mayor
John Clark, Councilmember, Place I
David Green, Councilmember, Place 2
Brian Johnson, Councilmember, Place 3
Kelly Tumer, Councilmember, Place 4
Jerry Miller, Councilmember, Place 5
and all of said officers and members of said City Council were present, except the following
absentees: Bryan Lankhorst Whereupon, among other
business, the following was transacted at said Meeting: a written
ORDINANCE AUTHORIZING THE ISSt1ANCE, SALE AND DELIVERY OF
"CITY OF KENNEDALE, TEXAS COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2008"; SECURING THE
PAYMENT 'THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL
AD VALORF,M TAX AND A PLF.DGF, OF SURPLUS REVENUES OF THE
CITY'S WATERWORKS AND SANITARY SEWER SYSTEM; APPROVING
AND AUTHORIZING THF, F.XF,CUTiON OF At,L INSTRUMENTS AND
PROCEDURES RELATED THERETO INCLUDING A PURCHASF.
CONTRACT, AN OFFICIAL STATEMENT, AND A PAYING
AGENT/REGISTRAR AGREEMENT; AND PROVIDING FOR AN
IMMEDI_ATE EFFECTIVE DATE
was duly introduced for the consideration of said City Council It was then duly moved and
seconded that said Ordinance be passed and, after due discussion, said motion carrying with it the
adoption of said Ordinance, prevailed and carried b}' the following vole:
AYES: 5 NOES: 0 ABSTENTIONS: 0
2. A true, full and correct copy of the aforesaid Ordinance adopted at the Meeting described
in the above and foregoing paragraph is attached to and follows this Certificate; the Ordinance has
been duly recorded in said City Council's minutes of said Meeting; the above and foregoing
paragraph is a true, full and correct excerpt from said City Council's minutes of said Meeting
pertain ing to the passage of said Ordinance; the persons named in the above and foregoing paragraph
arc the duly chosen, qualified and acting officers and members of said City Council as indicated
therein; each of the officers and members of said City Council was duly and sufficiently notified
officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and
that said Ordinance would be introduced and considered for passage at said Meeting, and each of
said offiicers and members consented, in advance, to the holding of said Meeting for such purpose,
and that said Meeting was open to the public and public notice of the time, place and purpose of said
meeting was given, all as required by Chapter 551, Texas Government Code.
SIGNED AND SEALED THE 28'~ DAY OF AUGUST, 2008.
(SEAL;, :,"
Q-° .:1 -~ ~ i~
e, ,,3
~ .
d/tea ~~~-
City Secretary
[SIGNATURE PAGE TO CERTIFICATE FOR ORDINANCE]
ORDINANCE NO. 408
ORDINANCE AUTHORIZING THE ISSUANCE, SALE AND DF. LI VERY OF
"CITY OF KENNEDALE, TEXAS COMBINATION TAX AND REijENUE
CERTIFICATES OF OBLIGATION, SERIES 2008' ; SECURING THE
PAYMENT THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL
AD VALOREM TAX AND A PLEDGE OF SURPLUS REVENUES OF THE
CITY'S WATERWORKS AND SANITARY SEWER SYSTEM; APPROVING
AND AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND
PROCEDURES RELATEll THERETO INCLUDING A PURCHASE
CONTRACT, AN OFFICIAL STATEMENT, AND A PAYING
AGF,NT/RF.GiSTRAR AGREEMENT; AND PROVIDING FOR AN
IMMEDIATE EFFECTIVE DATF,
SALE DATE: AUGUST 28, 2008
TABLE OF CONTENTS
R ECI'I~A LS .............................................................
Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES ............... .
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS. AND
MA"PURITIES OF THE CERTIFICATES .......................... .
Section 3. INTF,RF.ST ....................................................
Section 4. CHARACTERISTICS OF THE CERTIFICATES .................... .
(a) Registration, Transfer, and Exchange; Authentication .............. .
(b) Payment of Certificates of Obligation and Interest ................. .
(c) In General .................................................
(d) Substitute Paying Agent/Registrar ............................. .
(e) Book-Entry Only System for Certificates of Obligation ............ .
(f) Successor Securities Depository; Transfers Outside
Book-Entry Only Systems ................................... .
(g) Payments to Cede & Co ..................................... .
(h) DTC Letter of Representation ................................. .
(i) Delivery of Initial Certificate of Obligation ...................... .
Section 5. FORM OF CERTIFICATE OF OBLIGATION ...................... .
Section 6. INTEREST ANU SINKING FUND; TAX LEVY .................... .
Section 7. SURPLUS REVENUES ........................................ .
Section 8. CONSTRUCTION FUND ....................................... .
Section 9. INVESTMENTS ...............................................
Section 10. DEFEASANCE OF CERTIFICATES .............................. .
(a) Defeased Certificates ol'Obligation ............................. .
(b) Defeasance Securities .........................................
(c) Investment in Defeasance Securities ............................ .
(d) Paying Agent/Registrar Services ............................... .
(e) Selection of Certificates of Obligation for Defeasance .............. .
Section I I . DAMAGED, MUTILATED, LOST, STOLEN, OR
DESTROYED CERTIFICATES .................................. .
(a) Replacement Certificates of Obligation ......................... .
(b) Application for Replacement Certificates of Obligation ............ .
(c) No Default Occurred ........................................ .
(d) Charge for Issuing Replacement Certificates of Obligation .......... .
(e) Authority for Issuing Replacement Certificates of Obligation ........ .
2
3
3
3
4
4
5
5
5
6
6
7
7
IS
15
16
16
16
16
17
17
18
18
18
18
18
18
19
19
Section 12. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES;
BOND COUNSEL'S OPINION; CUSIP NUMBERS; AND
OTHER MATTERS ............................................. 19
Section 13. COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ON "I'HE CERTIFICATES ....................................... 19
(a) Covenants .................................................. 19
(b) Rebate Fund ................................................ 21
(c)Proceeds ................................................... 21
(d) Allocation Of, and Limitation On, Expenditures for the Project ........ 21
(e) Disposition of Project ......................................... 22
(f) Qualified Tax-Exempt Obligations ............................... 22
Section 14. SALE AND DELIVERY OF CERTIFICATES ....................... 22
Section 15. APPROVAI. OH' OFFICIAL STATEMENT .......................... 23
Section 16. AUTHORITY FOR OFFICERS TO EXECUTE DOCUMENTS ......... 23
Section 17. ORDINANCE A CONTRACT; AMENDMENTS ..................... 23
Section 18. REMEDIES IN EVENT OF DEFAULT ............................. 24
Section 19. SECURITY INTEREST ......................................... 24
Section 20. INTERESTED PARTIES ........................................ 25
Section 21. CONTINUING DISCLOSURE UNDERTAKING ..................... 25
Section 22. INSURANCE .................................................. 28
Section 23. INCORPORATION OF RECITALS ................................ 28
Section 24. SEVERABILITY ............................................... 28
Section 25. CHOICE, OF LAW ............................................. 28
Section 26. EFFECTIVE DATE ............................................. 28
SIGNATURES
PAYING AGENT/REGISTRAR AGREEMENT ..............................Exhibit A
FORM OF PURCHASE CONTRACT ......................................Exhibit B
DF.SC'RIPTION OF ANNUAI, FINANCIAL INFORMATION ..................Exhibit C
INStRANCE COMMITMENT ...........................................Exhibit D
ORDINANCF. AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF
"CITY OF KENNEDALE, TEXAS COMBINATION TAX AND REVF_NUE
CERTIFICATES OF OBLIGATION, SERIES 2008"; SECURING THE
PAYMENT THEREOF BY AUTHORIZING THE LEVY OF AN ANNUAL
AD VALOREM TAX AND A PLEDGE OF SURPLUS REVENUES OF THE
CITY'S WATERWORKS AND SANITARY SEWER SYSTEM; APPROVING
AND AUTHORIZING THE EXECUTION OF ALL INSTRUMENTS AND
PROCEllURES RELATED THERETO INCLUDING A PURCHASE
CONTRACT, AN OFFICIAL STATEMENT, AND A PAYING
AGENT/REGiSTRAR A(UREEMENT; AND PROVIDING FOR AN
IMMEDIATE EFFECTIVF, DATE
STATE OF TEXAS §
COUNTY OF TARRANT §
CITY OF KENNEDALE §
WHEREAS, the City Council of CCTV of KENNEDALE, TExns (the "City") hereby
determines that it is necessary and desirable to acquire right-of--ways and construct street, curb, and
sidewalk improvements, together with utility relocation and drainage improvcments incidental
thereto and pay for professional services rendered in connection therewith; and
WHEREAS, on July 10, 2008, the City Council adopted a resolution authorizing and
directing the City Secretary to give notice of intention to issue certificates of obligation pursuant to
the provisions of Subchapter C of Chapter 271, Texas Local Government Code, as amended, to
finance the Project (the "Notice"); and
WHEREAS, the Notice stated that the City Council proposed to authorize the issuance of
the certiticates of obligation at a regular meeting on Thursday, August 28, 2008: and
WHEREAS, the Notice was duly published in the Star Telegram, which is a newspaper of
general circulation in the City, in its issues of July 17, 2008 and July 24, 2007; and
WHEREAS, the City received no petition signed by at least five percent of the qualified
electors of the City protesting the issuance of such certificates of obligation; and
WHEREAS, it is considered to be in the best interest of the City that said interest bearing
certificates of obligation be issued; and
WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice of the time, place, and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code.
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF CITY OF
KENN'F.DALE, TEXAS:
SECTION 1. AMOUNT AND PURPOSE OF THE CERTIFICATES. The certificate or
certificates of the City further described in Section 2 ofthis Ordinance and referred to herein as the
"certiticates of Obligation" are hereby authorized to be issued and delivered in the aggregate princi-
pal amount of $4,500,000 FOR PAYING, IN WHOLE OR IN PART, THE CITY'S
CONTRACTUAL OBLIGATIONS INCURRED TO ACQUIRE RIGHT-OF-WAYS AND
CONSTRUCT STREET, CURB, AND SIDEWALK IMPROVEMENTS, TOGETHER WITH
UTILITYREL OCA TIONAND DRAINAGE IMPRO VEMEIVTS INCIDENTAL THERETO, PAY
FOR PROFESSIONAL SERVICES RENDERED IN CONNF_CTION THEREWITH AND
PA YhNG FOR COSTS OF ISSUANCE.
SECTION 2. DESIGNATION, DATE, DENOMINATIONS, NUMRF,RS AND
MATURITIES OF CERTIFICATES. >/ach certificate issued pursuant to and for the purpose
described in Section I of this Ordinance shall be designated: "CITYOFKENNEDALE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF OBLIGATION, SERIES 2008",
and initially there shall be issued, sold and delivered hereunder one fully registered certificate,
without interest coupons, dated August 1 ~, 2008, in the aggregate principal amount of $4,500,000,
numbered T-I (the "Initial Certificate of Obligation"), with Certificates of Obligation issued in
replacement thereof being in the denomination of $5,000 or any integral multiple thereof and
numbered consecutively from R-1 upward, all payable to the initial registered owner thereof (with
the Initial Certificate of Obligation being payable to the initial purchaser designated in Section 14
hereof). or to the registered assignee or assignees of said certificates or any portion or portions
thereof (in each case, the "Registered Owner"), and the Certificates of Obligation shall mature and
be payable serially on February 15 in each of the years and in the principal amounts, respectively,
as set forth in the following schedule:
YEAR OF
MATURITY PRINCIPAL
AMOUNT YEAR OF
MATURITY PRINCIPAL
AMOUNT
2009 $200,000 2019 $245,000
2010 95,000 2020 260,000
2011 60,000 *** ***
2012 105,000 2022 545,000
2013 105,000 *** ***
2014 135,000 2024 605.000
2015 (60,000 *** ***
2016 190,000 2026 645,000
2017 225,000 *** ***
2018 235,000 2028 690,000
The term "Certificates of Obligation" as used in this Ordinance shall mean and include the
Certitcates of Obligation initially issued and delivered pursuant to this Ordinance and all substitute
certiticates of obligation exchanged therefor, as well as all other substitute certificates of obligation
and replacement certificates of obligation issued pursuant hereto, and the term "Certificate of
Obligation" shall mean any of the Certificates of Obligation.
2
SECTION 3. INTEREST. The Certificates of Obligation shall bear interest calculated on
the basis of a 360-day year composed of twelve 30-day months from the dates specified in the
FOR!~l OF CER"I'IFICA'fE OF OBLIGATION set forth in this Ordinance to their respective dates
of maturity or prior redemption at the following rates per annum:
YEAR OF
MATURITY INTEREST
RATE (%) YEAR OF
MATURITY INTEREST
RATE (%)
2009 4.500 2019 4.000
2010 4.500 2020 4.000
2011 4.500 *** ***
2012 4.500 2022 4.250
2013 4.500 *** ***
20 14 4.500 2024 4.400
2015 4.500 *** ***
2016 4.500 2026 4.500
2017 4.500 *** ***
2018 4.500 2028 4.650
Said interest shall be payable in the manner provided and on the dates stated in the FORM OF
CLRTIFICATE OF OBLIGATION set forth in this Ordinance.
SECTION 4. CHARACTERISTICS OF THE CERTIFICATES. (a) Registration,
Transfer, and Exchcrn~e,~ Authentication. The City shall keep or cause to be kept at the designated
corporate trust office of Wells Fargo Bunk, N.A.. Austin, Texas (the "Paying Agent/Registrar"')
books or records for the registration of the transfer and exchange of the Certificates of Obligation
(the "Registration Books"), and the City hereby appoints the Paying AgenURegistrar as its registrar
and transfer agent to keep such books or records and make such registrations of transfers and
exchanges under such reasonable regulations as the City and Paying Agent/Registrar may prescribe;
and the Paying Agent/Registrar shall make such registrations, transfers and exchanges as herein
provided. Attached hereto as Exhibit A is a copy of the Paying AgentJRegistrar Agreement between
the City and the Paying Agent/Registrar which is hereby approved in substantially final form, and
the Mayor and City Secretary of the City are hereby authorized to execute the Paying
Agent~Registrar Agreement and approve any changes in the final form thereof.
The Paying Agent/Registrar shall obtain and record in the Registration Books the address
of the registered owner of each Certificate of Obligation to which payments with respect to the
Certificates of Obligation shall be mailed, as herein provided; but it shall be the duty of each
registered owner to notify the Paying Agent/Registrar in writing of the address to which payments
shall be mailed, and such interest payments shall not be mailed unless such notice has been given.
3
To the extent possible and under reasonable circumstances, all transfers of Certificates of Obligation
shall be made within three business days after request and presentation thereof. The City shall have
the right to inspect the Registration Books during regular business hours ofthe Paying Agent/Regis-
trar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and,
unless otherwise required by law, shall not permit their inspection by any other entity. The Paying
AgenURegistrar's standard or customary fees and charges for making such registration, transfer,
exchange and delivery of a substitute Certificate of Obligation or Certificates of Obligation shall be
paid as provided in the FORM OF CERTIFICATE OF OBLIGATION set forth in this Ordinance.
Registration of assignments, transfers and exchanges of Certificates of Obligation shall be made in
the manner provided and with the effect stated in the FORM OF CERTIFICATE OF OBLIGATION
set forth in this Ordinance. Each substitute Certificate of Obligation shall bear a letter and/or
number to distinguish it from each other Certificate of Obligation.
Except as provided in (c) below, an authorized representative ofthe Paying Agent/Registrar
shall. before the delivery of any such Certificate of Obligation, date and manually sign the Paying
Agent/Registrar's Authentication Certificate, and no such Certificate of Obligation shall be deemed
to be issued or outstanding unless such Certificate is so executed. The Paying AgenbRegistrar
promptly shall cancel al I paid Certificates of Obligation and Certificates of Obligation surrendered
for transfer and exchange. No additional ordinances, orders, or resolutions need be passed or
adopted by the governing body of the City or any other body or person so as to accomplish the
foregoing transfer and exchange of any Certificate of Obligation or portion thereol; and the Paying
Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Certificates
of Obligation in the manner prescribed herein, and said Certificates of Obligation shall be of type
composition printed on paper with lithographed or steel engraved borders of customary weight and
strength. Pursuant to Subchapter D of Chapter 1201, Texas Government Code, the duty of transfer
and exchange of Certificates of Obligation as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of said Certificate, the transferred and exchanged
Certificate of Obligation shall be valid, incontestable, and enforceable in the same manner and with
the same effect as the Certificates of Obligation which initially were issued and delivered pursuant
to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public
Accounts.
(b) Pavment ofCertrficates ofObligation and Interest. The City hereby further appoints the
Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the
Certitcates of Obligation, all as provided in this Ordinance. "I'he Paying Agent/Registrar shall keep
proper records of all payments made by the City and the Paying Agent/Registrar with respect to the
Certificates of Obligation.
(c) In General. The Certificates of Obligation (i) shall be issued in fully registered form,
without interest coupons, with the principal of and interest on such Certificates of Obligation to be
payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled
maturities (notice of which shall be given to the Paying Agent/Registrar by the City at least 50 days
prior to any such redemption date), (iii) may be transferred and assigned, (iv) may be exchanged for
other Certificates of Obligation, (v) shall have the characteristics, (vi) shall be signed, sealed,
executed and authenticated, (vii) the principal of and interest on the Certificates of Obligation shall
be payable, and (viii) shall be administered and the Paying Agent/Registrar and the City shall have
certain duties and responsibilities with respect to the Certificates of Obligation, all as provided.. and
in the manner and to the effect as required or indicated, in the FORM OF CERTIFICATE OF
OBLIGATION set forth in this Ordinance. The Initial Certificate of Obligation is not required to
4
be, and shat I not be, authenticated by the Paying Agent/ Registrar, but on each substitute Certificate
of Ob I igation issued in exchange for the Initial Certificate of Obl igation issued under th is Ordinance
the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S
AUT'HENTlCA7'ION CERTIFICATE, in the form set forth in the FORM OF CERTIFICATF, OF
OBLIGATION. to lieu of the executed Paying Agent/Registrar's Authentication Certificate
described above, the Initial Certificate of Obligation delivered on the closing date (as further
described in subparagraph (i) below) shall have attached thereto the Comptroller's Registration
Certificate substantially in the form set forth in the FOKM OF CERTIFICATE OF OBLIGATION
below. manually executed by the Comptroller of Public Accounts of the State of Texas or by his
duly authorized agent, which certificate shall be evidence that the Initial Certificate of Obligation
has been duly approved by the Attorney General of the State of Texas and that it is a valid and
binding obligation of the City, and has been registered by the Comptroller.
(d) Substitute PayingAQent/Registrar. The City covenants with the registered owners of
the Certificates of Obligation that at all times while the Certificates of Obligation are outstanding
the City will provide a competent and legally qualified bank, trust company, financial institution,
or other entity to act as and perform the services of Paying Agent/Registrar I'or the Certificates of
Obligation under this Ordinance, and that the Paying Agent/Kegistrarwdl be one entity and shall
be an entity registered with the Securities and Exchange Commission. The City reserves the right
to, and may, at its option, change the Paying Agent~Registrar upon not less than 120 days written
notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal
or interest payment date after such notice. In the event that the entity at any time acting as Paying
Agent%Registrar (or its successor by merger, acyuisition, or other method) should resign or otherwise
cease to act as such, the City covenants that promptly it will appoint a competent and legally
qualited bank, trust company, financial institution, or other agency to act as Paying Agent/Registrar
under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying
Agent/Registrar promptly shall transferand deliverthe Registration Books (or a copy thereof), along
with all other pertinent books and records relating to the Ceriitcates of Obligation, to the new
Paying Agent/Registrar designated and appointed by the City. Upon any change in the Paying
Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the new Paying
Agent/Registrar to each registered owner of the Certificates of Obligation, by United States mail,
lust-class postage prepaid, which notice also shall give the address of the new Paying
Agent; Registrar. By accepting the position and performing as such, each Paying Agent/Registrar
shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
(e) Book-Rntry Only System for Certificates ofObli ag tion. The Certificates of Obligation
issued in exchange for the Certificates of Obligation initially issued to the purchaser specified in
Section ] 4 herein shall be initially issued in the form of a separate single fully registered Certificate
of Obligation for each of the maturities thereof. Upon initial issuance, the ownership of each such
Ceriitcate of Obligation shall be registered in the name of Cede & Co., as nominee of The
Depository Trust Company of New York ("DTC"),and except as provided in subsection (i) hereof,
all of the outstanding Certificates of Obligation shall be registered in the name of Cede & Co., as
nominee of DTC.
With respect to Certificates of Obligation registered in the name of Cede & Co., as nominee
of DTC.. the City and the Paying Agent/Registrar shall have no responsibility or obligation to any
securities brokers and dealers, banks, trust companies, clearing corporations and certain other
5
organizations on whose behalf DTC was created ("DTCParticipant") to hold securities to facilitate
the clearance and settlement of securities transaction among DTC Participants or to any person on
behalfof whom such a DTC Participant holds an interest in the Certificates of Obligation. Without
limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no
responsibility or obligation with respect to (i) the accuracy of the records of DTC, Ccde & Co. or
any DTC Participant with respect to any ownership interest in the Certificates of Obligation, (ii) the
delivery to any DTC, Participant or any other person, other than a registered owner of the Certificates
of Obligation, as shown on the Registration Books, of any notice with respect to the Certificates of
Obligation, or (iii) the payment to any DTC Participant or any other person.. other than a registered
owner of Certificates of Obl igation, as shown in the Registration Books of any amount with respect
to principal of or interest on the Certificates of Obligation. Notwithstanding any other provision of
th is Ordinance to the contrary, the City and the Paying Agent/Registrarshatl be entitled to treat and
consider the person in whose name each Certificate of Obligation is registered in the Registration
Books as the absolute owner of such Certificate of Obligation for the purpose of payment of
principal and interest with respect to such Certificate of Obligation, for the purpose of registering
tansters with respect to such Certificate of Obligation, and for all other purposes whatsoever. The
Paying Agent/Registrar shall pay all principal of and interest on the Certificates of Obligation only
to or upon the Ordinance of the registered owners, as shown in the Registration Books as provided
in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments
shall he valid and effective to fully satisfy and discharge the City's obligations with respect to
payment of principal of and interest on the Certificates of Obligation to the extent of the sum or
sums so paid. No person other than a registered owner, as shown in the Registration Books, shall
receive a Certificate of Obligation certificate evidencing the obligation ofthe City to make payments
of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying
Agent/Registrar of written notice to the effectthat DTC has determined to substitute a new nominee
in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest
checks being mailed to the registered owner at the close of business on the Record Date, the words
"Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(f) Successor Securities Depository, Transfers Outside Book-Entry On1y.Systems. In the
event that the City determines that DTC is incapable of discharging its responsibilities described
herein and in the representation letter of the City to DTC or that it is in the best interest of the
bone I is ial owners ofthe Certificates of Obl igation that they he able to obtain certificated Certificates
of Obligation, the City shall (i) appoint a successor securities depository, qualified to act as such
under Section 17(a) of the Securities and Exchange Act of 1931, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Certif icatcs of Obligation to such successor securities depository or (ii) notify D"TC and
DTC Participants of the availability through DTC of Certificates of Obligation and transfer one or
more separate Certificates of Obligation to DTC Participants having Certificates of Obligation
credited to their DTC accounts. In such event. the Certificates of Obligation shall no longer be
restricted to being registered in the Registration Books in the name of Cede & Co., as nominee of
DTC. but may be registered in the name of the successor securities depository, or its nominee, or
in whatever name or names registered owners transferring or exchanging Certificates of Obligation
shat I designate, in accordance with the provisions of this Ordinance.
(g) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Certificate of Obligation is registered in the name of Cede & Co., as
nominee for DTC, all payments with respect to principal of and interest on such Certificate of
6
Obligation and all notices with respect to such Certificate of Obligation shall be made and given,
respectively, in the manner provided in the rcprescntation letter of the City to DTC.
(h) DTC Letter ofRepresentntion. The officers of the City are herein authorized for and on
behalf ofthe City and as officers ofthe City to enter into one or more Letters o1~Representation with
DTC establishing the book-entry only system with respect to the Ccrtificatcs of Obligation.
(i) Deliver~~ oflnitial Certi rcate o Obligation. On the closing date, one Initial Certificate
of Obligation representing the entire principal amount of the respective series of Certificates of
Obligation, payable in stated installments to the initial registered owner named in Section 14 ofthis
Ordinance or its designee, executed by manual or facsimile signature of the Mayor or Mayor Pro-
Temand City Secretary ofthe City, approved by the Attorney Genera] ofTexas, and registered and
manually signed by the Comptroller of Public Accounts of the State of Texas. will be delivered to
the initial purchaser or its designee. Upon payment for the Initial Certificate of Obligation, the
Paying Agent/Registrar shall cancel the initial Certificate of Obligation and deliver to the initial
registered owner or its designee one registered definitive Certificate of Obligation for each year of
maturity ofthe Certificates of Obligation, in the aggregate principal amount ofall ofthe Certificates
of Obligation for such maturity.
SECTION 5. FORM OF CERTIFICATE OF OBLIGATION. The form of the Certificates
of Obligation, including the form of Paying Agent/Registrar's Authentication Certificate, the form
of Assignment and the form of Registration Certificate of the Comptroller of Public Accounts of the
State ofTexas (to be attached only to the Certificates of Obligation initially issued and delivered
pursuant to this Ordinance), shall be~, respectively, substantially as follows, with such appropriate
variations, omissions, or insertions as are permitted or required by this Ordinance:
[The remainder of this page intentionally left blank)
FORM OF CERTIFICATE OF OBLIGATION
R-
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF KENNEDALE, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2008
PRINCIPAL
AMOUNT
DATE OF
INTEREST RATE MATiJRI"I'Y UATE SERIES CUSIP NO.
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
ON THE MATURITY DATE specified above, CITY OF KENNEDALE, TEXAS (the
"C'ity"), being a political subdivision of the State of Texas, hereby promises to pay to the Registered
Owner set forth above, or registered assigns (hereinafter called the "Registered Owner") the
Principal Amount set forth above, and to pay interest thereon from August 15, 2008, at the Interest
Rate per annum specified above, on February 15, 2009, and semiannually on each August 15 and
f ebruary 15 thereafter to the Maturity Date specified above or date of redemption prior to maturity;
except that if this Certificate of Obligation is required to be authenticated and the date of its
authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall
bear interest from the interest payment date next preceding the date of authentication, unless such
date of authentication is after any Record Date but on or before the next following interest payment
date, in which case such Principal Amount shall bear interest from such next following interest
payment date; provided, however, that if on the date of authentication hereof the interest on the
Ccrtif icate of Obligation or Certificates of Obligation, ifany, for which this Certificate ofObligation
is being exchanged or converted from is due but has not been paid, then this Certificate of
Obligation shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OFAND INTEREST ON THIS CERTIFICATE are payable in lawful
money of the United States of America, without exchange or collection charges. The principal of
this Certificate of Obligation shall he paid to the Registered Owner hereof upon presentation and
surrender of this Certificate of Obligation at maturity or redemption prior to maturity, at the
designated corporate trust office of We(Is Fargo Bank, N.A., Austin, Texas which is the "Paying
Agent%Registrar" for this Certificate of Obligation. The payment of interest on this Certificate of
Obligation shall be made by the Paying Agent/Registrar to the Registered Owner hereof on each
interest payment date by check or draft, dated as of such interest payment date, drawn by the Paying
Agent!Registrar on, and payable solely from, funds of the City required by the order authorizing the
issuance of the Certificates of Obligation (the "Certificate of Obligation Ordinance") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check
August 15, 2008
or draft shall be sent by the Paving Agent/Registrar by United States mail, first-class postage pre-
paid, on each such interest payment date, to the Registered Owner hereof, at its address as it
appeared on the last business day of the month next preceding each such date (the "Record Date")
on the Registration Books kept by the PayingAgent/Registrar, as hereinafter described. In addition,
interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by,
and at the risk and expense of, the Registered Owner. In the event of anon-payment of interest on
a scheduled payment date, and for 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 business days prior to the Special Record Date by United
States mail, first-class postage prepaid, to the address of each owner of a Certificate of Obligation
appearing on the Registration Books at the close of business on the last business day next preceding
the date of mailing of such notice. Any accrued interest due upon the redemption ofthis Certificate
of Obligation prior to maturity as provided herein shall be paid to the Registered Owner upon
presentation and surrender of this Certificate of Obligation for redemption and payment to the
Paying Agent/Registrar at the Designated Trust Office (unless the redemption date is a regularly
scheduled interest payment date, in which case accrued interest on such redeemed Certificates of
Obligation shall be payable in the regular manner described above). The City covenants with the
Registered Owner ofthis Certificate of Obligation that on or before each principal payment date and
interest payment date for this Certificate of Obligation it will make available to the Paying
AgentiRegistrar, Isom the "Interest and Sinking Fund" created by the Certitcate of Obligation
Ordinance, the amounts required to provide For the payment, in immediately available funds.. of all
principal of and interest on the Certificates of Obligation, when due.
IF THE DATE FOR ANYPAYMENTDUE on this Certificate of Obligation shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
Designated Trust 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 on which banking institutions are authorized to close, and
payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS CERTIFICATE OF OBLIGATIONIS ONE OFA SERIES OF CERTIFICATES
OF OBLIGATION, dated as of August 15, 2008, authorized in accordance with the Constitution
and laws of the State of Texas in the principal amount of $4,500,000 FOR PAYING, I]V WHOLE
OR LN PART, THE CITY'S CONTRACTUAL OBLIGATIONS INCURRED TO ACQUIRE
RIGHT-OF-W ~4 YSAND CONSTR UCT STREET, CURB, AND SIDEWALK IMPROVEMENTS,
TOGETHER WITH UTILITY RELOCATION AND DRAINAGE IMPROVEMENTS
INCIDENTAL THF.RF.TO, PAY FOR PROFESSIONAL SERVICES RENDERED I/V
CON,ti'ECTION THEREN~ITH AND PAYING FOR COSTS OF ISSUANCE.
ONFEBRUARYIS, 2018, or on any date thereafter, the Certificates of Obligation ofthis
Series maturing on and alter February 15, 2019, may be redeemed prior to their scheduled
maturities, at the option of the City, with limds derived from any available and lawful source, as a
whole. or in part (provided that a portion of a Certificate ofObligation may be redeemed only in an
integral multiple of $5,000). at the redemption price of the principal amount of Certificates of
Obligation called for redemption, plus accrued interestthereon to the date 1 fixed for redemption. The
9
City shall determine the maturity or maturities, and the principal amount of Certificates of
Obligation within each maturity, to be redeemed. If less than all Certificates of Obligation of a
maturity are to be redeemed, the particular Certificates of Obligation to be redeemed shall be
selected by the Paying Agent/Rcgistrar at random and by lot.
ADDITIONALLY, THE CERTIFICATESMATURING on February 15 in the years 2022,
2024, 2026 and 2028 (the "Term Certificates") are subject to mandatory redemption prior to
maturity in part by lot, at a price equal to the principal amount thereof plus accrued interest to the
date of redemption, on the dates and in the respective principal amounts shown below:
TERM CI?R'I'll'ICA'I'ES MATURING
FEBRUARY 15, 2022
TERM CERTIFICATES MATURING
FEBRUARY 15, 2024
MANDATORY REDEMPTION
REDEMPTION DATE AMOUNT
February 15, 2021 $265,000
February 15, 2022 (maturityl 280,000
TERM CERTIFICATES 1b1ATURING
FEBRI,ARV 15, 2026
YI:1NDATORY REDEMPTION
REDEMPTION DATE AIIIOUNT
February 15,2025 $315,000
February 15, 2026 (mamriq~) 330,000
IVL4NDATORY' REDEMPTION
REDEMPTION DATE AMOUNT
February 15, 2023 $295,000
February 15, 2024 p„arudry) 310,000
TERn1 CERTIFICATES MATURING
FEBRUARY 15, 2028
MANDATORY" REDEMPTION
REDEIIIPTION DATE AMOUNT
February 15, 2027 $335,000
February 15, 2028 lmaturiry> 355,000
The principal amount ofthe Term Certificates required to be redeemed pursuant to the operation of
such mandatory redemption requirements may be reduced, at the option of the City, by the principal
amount of any such Term Certificates which, prior to the date of the mailing of notice of such
mandatory redemption, (i) shall have been acquired by the City and delivered to the Paying
Agent/Registrar for cancellation, (ii) shall have been purchased and canceled by the Paying
Agent/Registrar at the request of the City, or (iii) shall have been redeemed pursuant to the optional
redemption provisions described in the preceding paragraph and not theretofore credited against a
mandatory redemption requirement.
AT LEAST30 days prior to the date fired for any optional redemption of the Certificate of
Obligation or portions thereof prior to maturity a written notice of such redemption shall be sent by
the City by United States mail, first-class postage prepaid, to the registered owner at its address as
it appeared on the Registration Books on the day such notice of redemption is mailed; provided,
however, that the failure of the registered owner to receive such notice, or any defect therein or in
the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for
the redemption of this Certificate of Obligation. By the date fixed for any such redemption, due
provision shall he made for the payment of the required redemption price for the Certificate of
Obligation or portions thereof which are to be so redeemed. If such written notice of redemption
is sent and if due provision for such payment is made, all as provided above, the Certificate of
10
Obligation or portions thereof which are to be so redeemed thereby automatically shall be treated
as redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for
redemption, and shall not be regarded as being outstanding except for the right of the registered
owner to receive the redemption price from the City out of the funds provided for such payment.
ALL CERTIFICATESOFTHISSERIESare issuablesolely asfully registeredCertificates
of Obligation, without interest coupons. in the denomination of any integral multiple of $5,000. As
provided in the Certificate ofObligation Ordinance, this Certificate ofObligation may, atthe request
of the Registered Owner or the assignee or assignees hereof, be assigned, transferred, converted into
and exchanged for a like aggregate amount of fully registered Certificates of Obligation, without
interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case
may be, having any authorized denomination or denominations as requested in writing by the appro-
priate Registered Owner, assignee or assignees, as the case may be, upon surrender of this
Certificate of Obligation to the Paying Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Certificate of Obligation Ordinance. Among other requirements
for such assignment and transfer, this Certificate of Obligation must be presented and surrendered
to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with
guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this
Certificate of Obligation or any portion or portions hereof in any authorized denomination to the
assignee or assignees in whose name or names this Certificate of Obligation or any such portion or
portions hereof is or are to be registered. The form of Assignment printed or endorsed on this
Certificate of Obligation may be executed by the Registered Owner to evidence the assignment
hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the
Paying Agent/Registrar may be used to evidence the assignment of this Certificate of Obligation or
any portion or portions hereof from time to time by the Registered Owner. The Paying Agent/Regis-
trar's reasonable standard or customary fees and charges for assigning, transferring, converting and
exchanging any Certificate of Obligation or portion thereof will be paid by the City. In any cir-
cumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid
by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent
to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such
transfer or exchange of a Certificate of Obligation (i) during the period commencing with the close
of business on any Record Date immediately preceding a principal or interest payment date for such
Certil irate of Obligation and ending with the opening of business on the next following principal
or interest payment date, or (ii) with respect to any Certificate of Obligation or any portion thereof
called for redemption prior to maturity, within 45 days prior to its redemption date; provided,
however, such limitation of transfer shall not be applicable to an exchange by the Registered Owner
of an unredeemed balance of a Certificate of Obligation called for redemption in part.
IN THE EVENTANYPAYINGAGENT/REGISTRAR for the Certificates of Obligation
is changed by the City, resigns, or otherwise ceases to act as such, the City has covenanted in the
Certiticate of Obligation Ordinance that it promptly will appoint a competent and legally qualified
substitute therefor, and cause written notice thereof to be mailed to the registered owners of the
Certificates of Obligation.
IT LS HEREBY CERTIFIED, RECITED, AND COVENANTED that this Certificate of
Obligation has been duly and validly authorized, issued, and delivered; that all acts, conditions, and
things required or proper to be performed, exist, and be done precedent to or in the authorization,
issuance and delivery of this Certificate of Obligation have been performed, existed, and been done
in accordance with law; that this Certificate of Obligation is a general obligation of the City, issued
on the full faith and credit thereof; and that ad valorem taxes sufficient to provide for the payment
of the interest on and principal of this Certificate of Obligation, as such interest comes due, and as
such principal matures, have been levied and ordered to be levied against all taxable property in the
City, and have been pledged for such payment. within the limits provided by law, and that this
Certificate of Obligation is additionally secured by a lien on and pledge of Surplus Revenues
received by the City from the ownership and operation of the City's waterworks and sanitary sewer
system.
THE CITY HAS RESERVED THE RIGHT TO AMEND the Certificate of Obligation
Ordinance as provided therein, and under some (but not all) circumstances amendments thereto must
be approved by the registered owners of a majority in aggregate principal amount of the outstanding
Certiticates of Obligation.
BYBECOMING THEREGISTERED OWNER ofthis Certificate ofObligation, the Regis-
tered Owner thereby acknowledges all of the terms and provisions of the Certificate of Obligation
Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Certificate of
Obligation Ordinance is duly recorded and available for inspection in the official minutes and
records of the governing body of the City, and agrees that the terms and provisions ofthis Certificate
of Obligation and the Ccrtitcate of Obligation Ordinance constitute a contract between each
Registered Owner hereof and the City.
IN WITNESS WHEREOF, the City has caused this Certificate of Obligation to be signed
with the manual or facsimile signature of the Mayor of the City, countersigned with the manual or
facsimile signature of the City Secretary of the City, and has caused the official seal of the City to
be duly impressed, or placed in facsimile, on this Certificate of Obligation.
Countersigned:
(facsimile signahtrel Uacsimilc signature)
City Secretary Mayor
City of Kennedale, Texas City of Kennedale, Texas
(SEAL.)
[The remainder of this page intentionally left blank)
12
FORM OF REGISTRATION CERTIFICATE OF
TI IE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate ofObligation has been examined, certified as to validity,
and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation
has been registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
(COMPTROLLER'S SEAL) of the State of'I'exas
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/RF,GISTRAR'S AUTHF.NTiCATiON CF.RTIFICATF.
(To be executed if this Certificate of Obligation is not accompanied by an executed
Registration Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Certificate of Obligation has been issued under the provisions
of the Certificate of Obligation Ordinance described in the text of this Certificate of Obligation; and
that this Certificate of Obligation has been issued in conversion or replacement of, or in exchange
for, a certificate, certificates, or a portion of a certificate or certificates of a Series which originally
was approved by the Attorney General of the State of "fexas and registered by the Comptroller of
Public Accounts of the State of Texas.
Dated Wells Fargo Bank, N.A.
Austin, Texas
Paying Agent/Registrar
By
Authorized Representative
13
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned Registered Owner of this Certificate of Obligation, or
duly authorized representative or attorney thereof, hereby assigns this Certificate of Obligation to
/ /
(Assignee's Social Security or (Print or typewrite Assignee's name and address,
Taxpayer Identification) including zip code)
and hereby irrevocably constitutes and appoints
attorney to register the transfer of the Certificate of Obligation on the books kept for registration
thereot; with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) mustbe guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owmer as it appears upon the front of this
Certificate of Obligation in every particular,
without alteration or enlargement or any
change whatsoever.
INITIAL CERTIFICATIJ OF OBLIGATION INSERTIONS
The Initial Certificate of Obligation shall be in the respective form set forth above except
that:
(A) Immediately tinder the name of the Certificate of Obligation, the headings
"[NTEREST RATE" and "MATURITY DATE" shall be completed with the words
"As shown below", and the heading "CUSIP NO." should be deleted.
(B) The first paragraph shall be deleted and the following shall be inserted:
"ON THE RESPECTIVE MA TURITYDATES spec i fi ed be I ow. CITYOFKENNEDALE,
TEXAS (the "City"), being a political subdivision of the State of Texas, hereby promises to pay to
the Registered Owner specified above, or registered assigns (hereinafter called the "Registered
Owner"). the respective Principal Installments specified below, and to pay interest thereon
(calculated on the basis of a 360-day year composed of tweh~e 30-day months) from August 15,
2008. at the Interest Rate per annum specified above, payable on February 15, 2009, and
semiannually on each August 15 and February l5 thereafter to the respective Maturity Dates
specited below, or the date of redemption prior to maturity. The respective Maturity Dates and
Principal Installments for this Certificate of Obligation are set forth in the following schedule:
14
MATURITY DATE I PRINCIPAL INti'1'ALLMLN'I
(FEBRUARY 15)
[Insert information frorn Sections 2 and 3 crboveJ
(C) The Initial Certificate of Obligation shall be numbered "T-l ."
SECTIOn 6. INTEREST AND SINKING FUND; TAX LEVY. A special "Interest and
Sinking Fund" is hereby created and shall be established and maintained by the City at an oflicial
depository bank ofthe City. Said Interest and Sinking Fund shall be kept separate and apart from
all other funds and accounts of the City, and shall be used only for paying the interest on and the
principal of said Certificates of Obligation. All ad valorem taxes levied and collected for and on
account of said Certificates of Obligation shall be deposited, as collected, to the credit of said
Interest and Sinking Fund. For each fiscal year while any ofthe Certificates of Obligation or interest
thereon are outstanding and unpaid, the governing body of the City shall compute and ascertain a
rate and amount of ad valorem tax which wi I I be sufficient to raise and produce the money required
to pay the interest on the Certificates of Obligation as such interest comes due, and to provide and
maintain a sinking fund adequate to pay the principal of the Certilicates of Obligation as such
principal matures (but never less than 2% of the original principal amount of each series of the
Certificates of Obligation as a sinking Fund each year); and said tax shall be based on the latest
approved tax rolls of the City, with full allowance being made for tax delinquencies and the cost of
tax collection. Said rate and amount of ad valorem tax is hereby levied, and is hereby ordered to be
levied. against all taxable property in the City for each year while any of the Certificates of
Obligation or interest thereon are outstanding and unpaid; and said tax shall be assessed and
collected each such year and deposited to the credit of the Interest and Sinking Fund created by this
Ordinance. Said ad valorem taxes sufficient to provide for the payment of the interest on and
principal of the Certificates of Obligation, as such interest comes due and such principal matures,
are hereby pledged for such payment, within the limit prescribed by law.
SecT[oN 7. SURPLUS REVF,NUF.S. Pursuant to Section 271.02, Texas Local
Government Code, as amended, and Section 1502.052, Texas Government Code.. as amended, the
Certificates of Obligation additionally shall be payable from and secured by surplus revenues
derived by the City from the ownership and operation of the City's waterworks and sanitary sewer
system (the "Utilities System") remaining after (a) payment of all amounts constituting operation
and maintenance expenses of said Utilities System, and (b) payment of all debt service, reserve, and
other requirements and amounts required to be paid under all ordinances heretofore or hereafter
authori~cing (i) all bonds and (ii) all other obligations not on a parity with the Certificates of
Obligation, which are payable from and secured by any Utilities System revenues, and (c) payment
of all amounts payable from any Utilities System revenues pursuant to contracts heretofore or
hereatter entered into by the City in accordance with law (the "Surplus Revenues"). If for any
15
reason the City fails to deposit ad valorem taxes levied pursuant to Section 6 hereof to the credit of
the Interest and Sinking Fund relating to the Certificates of Obligation in an amount sufficient to
pay, when due, the principal of and interest on the Certificates of Obligations, then Surplus
Revenues may be deposited to the credit of such Interest and Sinking Fund and used to pay such
principal and/or interest. The City reserves, and shall have, the right to issue bonds and other
obligations not on a parity with the Certificates of Obligation, and to enter into contracts, in
accordance with applicable laws, to be payable from and secured by any Utilities System revenues.
SecTtoN 8. CONSTRUCTION FUND. There is hereby created and established on the
financial records of the City or in the depository of the City, a fund to be called the "City of
Kennedale, Texas Certificates of Obligation (Series ?008) Construction Fund" (herein called the
"Construction Fund"). All proceeds from the sale and delivery of the Certificates of Obligation
(other than accrued interest and any premium on the Certificates of Obligation, if any, that is not
used by the City to pay costs of issuance in accordance with the provisions of Section 1201.042(d),
Texas Government Code, as amended, which amounts shall be deposited into the Interest and
Sinking Fund) shall be deposited into the Construction Fund. Money in the Construction Fund shall
be subject to disbursements by the City for payment of costs of issuance and all costs incurred in
carrying out the purpose for which the Certificates of Obligation are issued, including, but not
limited to, costs for construction, engineering, architecture, financing, financial consultants and legal
services related to the project being financed with proceeds of the Certificates ofObligation and the
issuance of the Certificates of Obligation. All funds remaining on deposit in the Construction Fund
upon completion of construction of the project being financed with the proceeds from the
Certitcates of Obligation, if any, shall be transferred to the Interest and Sinking Fund.
St:c'rtoN 9. INVESTMENTS. Funds on deposit in the Interest and Sinking Fund and the
Construction Fund shall be secured by the depository bank of the City in the manner and to the
extent required by lave to secure other public funds of the City and may be invested from time to
time in any investment authorized by applicable law, including but not limited to the Public Funds
Investment Act (Chapter 2256, Texas Government Code), and the City's investment policy adopted
in accordance with the provisions of the Public Funds Investment Act; provided, however, that
investments purchased for and held in each Interest and Sinking Fund shall have a final maturity no
later than the next principal or interest payment date on which such funds will be needed, and
investments purchased for and held in the Construction Fund shall have a final maturity of not later
than the date the City reasonably expects the funds from such investments will be required to pay
costs of the projects for vvfiich the Certificates of Obligation were issued.. Income and profits from
such investments shall be deposited in the respective Fund which holds such investments: however,
any such income and profits from investments in the Construction Fund may be withdrawn by the
City and deposited in the Interest and Sinking Fund to pay all or a portion of the interest next
coming due on the Certificates of Obligation. It is further provided, however, that any interest
earnings on certificate proceeds which are required to be rebated to the United States of America
pursuant to Section 13 hereof in order to prevent the Certificates of Obligation from being arbitrage
certificates shall be so rebated and not considered as interest earnings for the purposes of this
Section.
Section 10. DEFEASANCE OF CERTIFICATES. (a) Defeased Certificates o,~
Oblige[ion. Any Certificate of Obligation and the interest thereon shall be deemed to be paid,
16
retired and no longer Outstanding (a "Defeased Certificate of Obligation"), except to the extent
provided in subsection (d) of this Section, when payment of the principal of such Certificate of
Obligation, plus interestthereon to the due date (whether such due date be by reason of maturity or
otherwise) either (i) shall have been made or caused to be made in accordance with the terms
thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing
with or making available to the Paying Agent/Registrar (or another entity permitted by Section
1207.061, Texas Government Code, as amended, or other applicable law, which entity, together with
the Paying Agent/Registrar, arc referred to collectively in this Section as the "Defeasance Agent"),
in accordance with the requirements of Chapter 1207, Texas Government Code, as amended, or
other applicable law (which may include the use ofan escrow agreement or other similar instrument
- the "Future Escrow Agreement"): (1) lawful money of the United States of America sufficient to
make such payment or (2) "Defeasance Securities" (as defined below) that mature as to principal and
interest in such amounts and at such times as will insure the availability, without reinvestment, 01'
sufficient money to provide for such payment, and when proper arrangements have been made by
the City with the Defeasance Agent for the payment of its services until all Defeased Certificates
of Obligation shall have become due and payable. At such time as a Certilcate of Obligation shall
be deemed to be a Defeased Certificate of Obligation hereunder, as aforesaid, such Certificate of
Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the
benefits of. the ad valorem taxes or revenues herein levied and pledged as provided in this
Ordinance, and such principal and interest shall be payable solely from such money or Defeasance
Securities. Notwithstanding any other provision of this Ordinance to the contrary, it is hereby
provided that any determination not to redeem Defeased Certificates of Obligation that is made in
conjunction with the payment arrangements specified in subsection (a)(i) or (ii) of this Section shall
not be irrevocable, provided that: (1) in the proceedings providing for such payment arrangements,
the City expressly reserves the right to call the Defeased Certificates of Obligation for redemption;
(2) gives notice of the reservation of that right to the owners of the Defeased Certificates of
Obligation immediately following the making of the payment arrangements; and (3) directs that
notice of the reservation be included in any redemption notices that it authorizes.
(b) Deleusunce Securities. The term "Defeasance Securities" means (i) direct,
noncallable obligations of the United States of America, including obligations that are
unconditionally guaranteed by the United States of America., (ii) noncallable ohligations of an
agenc} or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the
purchase thereof are rated as to investment quality by a nationally recognized investment rating firm
not Icss 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 that, on
the date on the date the governing body of the City adopts or approves the proceedings authorizing
the financial arrangements are rated as to investment quality by a nationally recognized investment
rating f irm not less than AAA or its equivalent.
(c) Investment in Defeasance Securities. Any moneys so deposited with the Defeasance
Agent may at the written direction of the City be invested in Defeasance Securities, maturing in the
amounts and times as hereinbefore set forth, and all income from such Defeasance Securities
received by the Defeasance Agent that is not required for the payment of the Certificates of
Obligation and interest thereon, with respect to which such money has been so deposited, shall be
17
turned over to the City, or deposited as directed in writing by the City. Any account or Future
Escrow Agreement pursuant to which the money and/or Defcasancc Securities arc held for the
payment of Defeased Certificates of Obligation may contain provisions permitting the investment
or reinvestment of such moneys in Defcasancc Securities or the substitution of other Defcasancc
Securities upon the satisfaction of the requirements specified in subsections (a)(i) or (ii) of this
Section. All income from such Defeasance Securities received by the Defeasance Agent which is
not required for the payment of the Defeased Certificates of Obligation, with respect to which such
money has been so deposited, shall be remitted to the City or deposited as directed in writing by the
Citv.
(d) Pavin~AQent/Registrar Services. Until all Defeased Certificates ofObligation shall
have hecome due and payable, the Paying Agent/Registrar shall perform the services of Paying
Agent/Registrar for such Defeased Certificates of Obligation the same as if they had not been
defeased, and the City shall make proper arrangements to provide and pay For such services as
required by this Ordinance.
(e) Selection of Certificates of Obli ag tion,for Defeasance. In the event that the City
elects to defease Icss than all ofthe principal amount of Certificates of Obligation of a maturity, the
Paying Agent/Registrar shall select, or cause to be selected, such amount of Certificates of
Obligation by such random method as it deems fair and appropriate.
SECTION 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement CertiTcates of Obligation. In the event any outstanding
Certiticate of Obligation is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Regis-
trar shall cause to be printed, executed, and delivered, a new certificate of the same principal
amount. maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate
of Obligation, in replacement for such Certificate of Obligation in the manner hereinafter provided.
(b) Application or Replacement Certificates of Obli ag tion. Application for replacement
of damaged, mutilated, lost, stolen, or destroyed Certificates of Obligation shall he made by the
registered owner thereof to the Paying Agent/Registrar. In every case of loss, then, or destruction
of a Certificate of Obligation, the registered owner applying for a replacement certificate shall
furnish to the City and to the Paying .Agent/Registrar such security or indemnity as may be required
by them to save each of them harmless from any loss or damage with respect thereto. Also, in every
case of loss, theft, or destruction of a Certificate of Obligation, the registered owner shall furnish
to the City and to the Paying AgenbRegistrar evidence to their satisfaction of the loss, theft, or
destruction of such Certificate of Obligation. In every case of damage or mutilation of a Certificate
of Obligation, the registered owner shall surrender to the Paying Agent/Registrar I'or cancellation
the Certificate of Obligation so damaged or mutilated.
(c) ~Vo Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Certificate of Obligation shall have matured, and no default has occurred which is
then continuing in the payment of the principal of or interest on the Certificate of Obligation, the
City may authorize the payment of the same (without surrender thereof except in the case of a
damaged or mutilated Certificate of Obligation) instead of issuing a replacement Certificate of
Obligation, provided security or indemnity is furnished as above provided in this Section.
18
(d) Charge for Issuinu Replacement Certificates of Obligation. Prior to the issuance of any
replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such
Certificate of Obligation with all legal, printing, and other expenses in connection therewith. Every
replacement certificate issued pursuant to the provisions of this Section by virtue of the fact that any
Certi licate of Obligation is lost, stolen, or destroyed shall constitute a contractual obligation of the
City whether or not the lost, stolen, or destroyed Certificate of Obligation shall be found at any time,
or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Certificates of Obligation duly issued under this Ordinance.
(e) Authorit~or Issuing Replacement Certi rcates of Obli aQ tion. In accordance with
Chapter 1201, Texas Government Code, as amended, this Section ofthis Ordinance shall constitute
authority for the issuance of any such replacement certificate without necessity of further action by
the governing body of the City or any other body or person.. and the duty of the replacement of such
certificates is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying
Agent/Registrar shall authenticate and deliver such Certificates of Obligation in the form and
manner and with the effect, as provided in Section 4(a) of this Ordinance for Certificates of
Obligation issued in conversion and exchange for other Certificates of Obligation.
SECTION 12. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES;
BOND COUNSEL'S OPINION; CUSIP NUMBERS; AND OTHER MATTERS. The Mayor
of the City is hereby authorized to have control ofthe Certificates oI'Obligation initially issued and
delivered hereunder and all necessary records and proceedings pertaining to the Certificates of
Obligation pending their del ivery and their investigation, examination, and approval by the Attorney
General of the State of Texas, and their registration by the Comptroller of Public Accounts of the
State of Texas. Upon registration of the Certificates of Obligation said Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Certificates of Obligation, and the seal of said
Comptroller shall be impressed. or placed in facsimile, on such Certificate. The approving legal
opinion of the City's Bond Counsel (with an appropriate certificate pertaining thereto executed by
facsimile signature ofthe City Secretary of the City) and the assigned CUSP numbers (if obtained)
may, at the option of the City, be printed on the Certificates of Obligation issued and delivered under
this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and
information of the registered owners of the Certificates of Obligation.
SECTION 13. COVF,NANTS REGARDING TAX EXEMPTION OF INTEREST ON
THE CERTIFICATES. (a) Covenants. The City covenants to take any action necessary to assure,
or refrain from any action which would adversely affect, the treatment of the Certificates of
Obligation as obligations described in section 103 of the Internal Revenue Code of 1986, as
amended (the "Code"), the interest on which is not includable in the "gross income" of the holder
for purposes of federal income taxation. In furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Certificates of Obligation or the projects financed or refinanced therewith (less amounts
deposited to a reserve fund, if any) are used for any "private business use," as defined in
section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects
financed or refinanced therewith are so used, such amounts, whether or not received by the
19
City, with respect to such private business use, do not, under the terms of this Ordinance or
any underlying arrangement, directly or indirectly, secure or provide for the payment of
more than 10 percent of the debt service on the Certificates of Obligation, in contravention
of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (I) hereof exceeds 5 percent of the proceeds of the Certificates of
Obligation or the projects financed or refinanced therewith (less amounts deposited into a
reserve fund, if any) then the amount in excess of 5 percent is used fora "private business
use" which is "related" and not "disproportionate," within the meaning of section 141. (b)(3)
of the Code, to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certificates of Obligation (less amounts
deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons,
other than state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Certificates
of Obligation being treated as "private activity bonds" within the meaning of section 141(b)
of the Code;
(5) to refrain from taking any action that would result in the Certificates of
Obligation being "federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using am portion o1' the proceeds ol• the Certilcates of
Obligation, directly or indirectly, to acquire or to replace funds which were used, directly
or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code)
which produces a materially higher yield over the term of the Certificates of Obligation,
other than investment property acquired with --
(A) proceeds of the Certificates of Obligation im~ested for a reasonable
temporary period of 3 years or less or, in the case of a refunding certificate, for a
period of 30 days or less until such proceeds arc needed for the purpose for which
the certificates are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Certitcatcs of Obligation;
(7) to otherwise restrict the use of the proceeds of the Certificates of Obligation or
amounts treated as proceeds of the Certi[cates of Obligation. as may be necessary, so that
the Certificates of Obligation do not otherwise contravene the requirements of section 148
20
of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code
(relating to advance refundings); and
(8) to pay to the lJnited States of America at least once during each five-year period
(beginning on the date of delivery of the Certificates of Obligation) an amount that is at (east
equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the
Code and to pay to the United States of America, not later than 60 days after the Certificates
of Obligation have been paid in full, 100 percent of the amount then required to be paid as
a result of Excess Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation the
certificateholders. The Rebate Fund is established for the additional purpose of compliance with
section 148 of the Code.
(c) Proceeds. The City understands that the term "proceeds" includes "disposition proceeds"
as defined in the Treasury Regulations and, in the case ofrefunding certificates, transferred proceeds
(if any) and proceeds of the refunded certificates expended prior to the date of issuance of the
Certiticates of Obligation. It is the understanding of the City that the covenants contained herein
are intended to assure compliance with the Code and any regulations or rulings promulgated by the
U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated which modify or expand provisions of the Code, as applicable to the
Certificates of Obligation, the City will not be required to comply with any covenant contained
herein to the extent that such failure to comply, in the opinion of nationally recognized bond
counsel, will not adversely affect the exemption from federal income taxation of interest on the
Certificates of Obligation under section 103 of the Code. In the eventthat regulations or rulings are
hereafter promulgated which impose additional requirements which are applicable to the Certificates
of Obligation, the City agrees to comply with the additional requirements to the extent necessary,
in the opinion ofnationally recognized bond counsel. to preservethe exemption from federal income
taxation of interest on the Certificates of Obligation under section 103 of the Code. In furtherance
of such intention, the City hereby authorizes and directs the Finance Director to execute any
documents, certificates or reports required by the Code and to make such elections, on behalf of the
City. which may be permitted by the Code as are consistent with the purpose for the issuance of the
Certificates of Obligation.
(d) Allocation Of and Limitation On Expe~rditLrre.c fir the Project. The City covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 1 of this Ordinance (the "Project") on its books and records in accordance with
the requirements of the Internal Revenue Code. The City recognizes that in order for the proceeds
to be considered used forthe reimbursement ofcosts, the proceeds must be allocated to expenditures
within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is
completed; but in no event later than three years after the date on which the original expenditure is
paid. I he foregoing notwithstanding, the City recognizes that in order for proceeds to be expended
under the Internal Kevenue Code, the sale proceeds or investment earnings must be expended no
more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Certificates of
21
Obligation, or (2) the date the Certificates of Obligation are retired. The City agrees to obtain the
advice ofnationally-recognized bond counsel if such expenditure fails to comply with the foregoing
to assure that such expenditure will not adversely affect the tax-exempt status of the Certificates of
Obligation. For purposes hereof, the City shall not be obligated to comply with this covenant if it
obtains an opinion that such failure to comply will not adversely affect the excludability for federal
income tax purposes from gross income of the interest.
(c) Disposition ofProject. The City covenants that the property constituting the Project will
not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other
compensation, unless the City obtains an opinion ofnationally-recognized bond counsel that such
sale or other disposition will not adversely affect the tax-exempt status of the Certificates of
Obligation. For purposes ofthe foregoing, the portion ofthe property comprising personal property
and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of
cash or other compensation. For purposes hereof, the City shall not be obligated to comply with this
covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the interest.
(f) Qualified Tax-Exempt Oblieations. 'fhe City hereby designates the Certificates of
Obligation as "qualified tax-exempt obligations" as defined in section 265(b)(3) of the Code. In
furtherance of such designation, the City represents, covenants and warrants the following: (a) that
during the calendar year in which the Certificates of Obligation are issued, the City (including any
subordinate entities) has not designated nor will designate bonds or other obligations, which when
aggregated with the Certificates of Obligation, will result in more than $10,000,000 of "qualified
tax-exempt obligations" being issued: (b) thattheCity reasonably anticipates thatthc amount oftax-
exemptobligations issued during the calendaryear in which the Certificates ofObligation are issued
by the City (or any subordinate entities) will not exceed $10,000,000; and, (c) that the City wi I I take
such action or refrain from such action as necessary, and as more particularly set forth in this
Section, in order that the Certificates of Obligation will not be considered "private activity bonds"
within the meaning of section 141 of the Code.
Section 14. SALE AND DELIVERY OF THE CERTIFICATES OF OBLiGATiON.
The Certificates of Obligation are hereby initially sold and shall be delivered to FtasT SOUTHWEST
COMPANY, as representative of the initial purchasers of the Certiticates of Obligation (the
"Underwriters"), at a price of $4,531,160.70 (which amount is equal to par, plus a net original issue
premium of $62,571.20, and less Underwriters' discount of $31,410.50), plus accrued intereston the
Certiticates of Obligation from August 15, 2008, to the date of initial delivery thereof, all pursuant
to the terms and provisions of a Purchase Contract in substantially the form attached hereto as
Exhihil B which the Mayor or Mayor Pro-Tem of the City is hereby authorized to execute and
deliver, and which the City Secretary is hereby authorized to attest. The City will deliver to the
Underwriters an Initial Certificate of Obligation in the aggregate principal amount of ~~,500,000
payable in principal installments on the dates and in the principal amounts shown in Section 2
hereot: and bearing interest at the rates for each respective maturity as shown in Section 3 hereof.
The Initial Certiticate of Obligation shall be registered in the name of Fle5'r SouTHweST
COMPANY.
22
SECTION 15. APPROVAL OF OFFICIAL STATEMENT. "I'he City hereby approves the
form and content of the Official Statement relating to the Certificates of Obligation and any
addenda, supplement, or amendment thereto, and approves the distribution of the Official Statement
in the reoffering of the Certificates of Obligation by the Underwriters in final form, with such
changes therein or additions thereto as the officer executing the same may deem advisable, such
determination to be conclusively evidenced by his execution thereof. The distribution and use of
the Preliminary Official Statement for the Certificates of Obligation, dated August 22, 2008, prior
to the date hereof is hereby ratified and confirmed. The City Council finds and determines that the
Preliminary Official Statement and the Official Statement were and are "deemed final" as of each
of their respective dates within the meaning, and for the purpose, of Rule ISc2-12 promulgated
under authority granted by the Federal Securities and Exchange Act of 1934.
Section 16. AUTHORITY FOR OFFICERS TO F.XF,CUTE DOCUMENTS. The
Mayor. City Manager, City Secretary, and all other officers of the City, and each of them, shall be
and they are hereby expressly authorized, empowered, and directed from time to time and at any
time to do and perform all such acts and things and to execute, acknowledge, and deliver in the name
and under the corporate seal and on behalf of the City all such instruments, whether or not herein
mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this
Ordinance, the Certificates of Obligation, the sale of the Certificates of Obligation, and the Paying
Agent/Registrar Agreement. In case any officer whose signature shall appear on any Certificate of
Obligation shall cease to be such officer before the delivery of such Certificate of Obligation, such
signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had
remained in office until such delivery.
SECTION 17. ORll1NANCF. A CONTRACT; AMENDMENTS. This Ordinance shall
constitute a contract with the Registered Owners of the Certificates of Obligation, binding on the
City and its successors and assigns, and shall not be amended or repealed by the City as long as any
Certiticate of Obligation remains outstanding except as permitted in this Section. The City may,
without the consent of or notice to any Registered Owners, amend, change, or modify this Ordinance
as may be required (i) by the provisions hereof, (ii) for the purpose of curing any ambiguity,
inconsistency, or formal defect or omission herein, or (iii) in connection with any other change
which is not to the prejudice of the Registered Owners. The City may, with the written consent of
the Registered Owners of a majority in aggregate principal amount of the Certificates of Obligation
then outstanding affected thereby, amend, change, modify, or rescind any other provisions of this
Ordinance; provided that without the consent of all of the Registered Owners affected, no such
amendment, change, modification, or rescission shall (i) extend the time or times of payment of the
principal ol'and interest on the Certificates of Obligation, or reduce the principal amount thereof or
the rate of interest thereon, (ii) give any preference to any Certificate of Obligation over any other
Certit icate of Obligation, (iii) extend any waiver of default to subsequent defaults, or (iv) reduce the
aggregate principal amount of Certificates of Obligation required for consent to any such
amendment, change, moditcation, or rescission. Whenever the City shall desire to make any
amendment or addition to or rescission of this Ordinance requiring consent of the Kegistered
Owners, the City shal I cause notice of the amendment, addition, or rescission to be sent by first class
mail, postage prepaid, to the Registered Owners at the respective addresses shown on the
Registration Books. Whenever at any time within one year after the date of the giving of such
notice. the City shall receive an instrument or instruments in writing executed by the Registered
23
Owmers of a majority in aggregate principal amount of the Certificates of Obligation then
outstanding affected by any such amendment, addition, or rescission requiring the consent of the
Registered Owners, which instrument or instruments shall refer to the proposed amendment,
addition, or rescission described in such notice and shall specifically consent to and approve the
adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon,
but not otherwise, the City may adopt such amendment, addition, or rescission in substantially such
form, except as herein provided. No Registered Owner may thereafter object to the adoption of such
amendment, addition, or rescission, or to any of the provisions thereof, and such amendment,
addition, or rescission shall be fully effective for all purposes.
SEC'170N 18. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights and
remedies provided by the laws of the State of Texas, it is specifically covenanted and agreed
particularly that in the event the City (i) defaults in the payment of the principal, premium, if any,
or interest on the Certificates of Obligation, (ii) defaults in the deposits and credits required to be
made to the Interest and Sinking Fund, or (iii) defaults in the observance or performance of any
other of the covenants, conditions or obligations set forth in this Ordinance, the failure to perform
which materially, adversely affects the rights of the Holders of the Certificates of Obligation,
including but not limited to their prospect or ability to be repaid in accordance with this Ordinance
and the continuation thereof for a period of 60 days after notice of such default is given by any
Holder to the City, the Holders of any ofthe Certificates of Obligation shall he entitled to seek a writ
of mandamus issued by a court of proper jurisdiction compelling and requiring the governing body
of the City and other officers of the City to observe and perform any covenant, condition or
obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any such default or 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 remedy herein provided shall be cumulative of all other existing
remedies, and the specification of such remedy shall not be deemed to be exclusive.
SECTION 19. SECURITY INTEREST. Chapter 1208, Texas Government Code, applies
to the issuance of the Certificates of Obligation and the pledge of the ad valorem taxes granted by
the City under Section 6 and 7 of this Ordinance, and is therefore valid, effective, and perfected.
If Texas -aw is amended at any time while the Certificates of Obligation are outstanding and unpaid
such that the pledge of the ad valorem taxes granted by the City under Section 6 of this Ordinance
is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in
order to preserve to the registered owners of the Certificates of Obligation the perfection of the
security interest in said pledge, the City agrees to take such measures as it determines arc reasonable
and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas
Business & Commerce Code, and enable a filing to perfect the security interest in said pledge to
occur.
24
SECTtoV 20. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied
is intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City and the registered owners ol'the Certificates of Obligation, any right, remedy or claim under
or by reason of this Ordinance or any covenant, condition or stipulation hereof, and all covenants,
stipulations.. promises and agreements in this Ordinance contained by and on behalfofthe City shall
be for the sole and exclusive benefit of the City and the registered owners of the Certificates of
Ohligation.
Section 21. CONTiNUINC DISCLOSURE UNDERTAKING.
(a) De anitions. As used in this Section, the following terms have the meanings ascribed to
such berms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SF,C 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.
"S!D" 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 ending in or after 2007, financial information and
operating data with respect to the City of the general type included in the final Official Statement
authorized by this Ordinance being the information described in Exhibit C hereto. Any tinancial
statements so to be provided shall be (1) prepared in accordance with the accounting principles
described in Exhibit B hereto, or such other accounting principles as the City may be required to
employ from time to time pursuant to state law or regulation, 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 the audit of such financial statements is not complete within such period,
then the City shall provide (1) unaudited financial statements for such fiscal year within such six
month period, and (2) audited financial statements for the applicable fiscal year to each NRMSIR
and any SID, when and if the audit report on such statements become available.
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 f financial information and operating data pursuant to this paragraph (b).
fhe financial information and operating data to be provided pursuant to this paragraph (b)
may be set forth in full in one or more documents or may be included by specific reference to any
25
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 of
Obligation, if such event is material within the mcaning of the I'edera] securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related defaults:
C. Unscheduled draws on debt service reserves reflecting financial difficulties;
D. Unscheduled draws on credit enhancements reflecting financial difficulties;
E. Substitution of credit or liquidity providers, or their failure to perform;
F'. Adverse tax opinions or events affecting the tax-exempt status of the
Certificates of Obligation;
G. Modifications to rights of holders of the Certificates of Obligation;
H. Certificate of Obligation calls;
Defeasances;
J. Release, substitution, or sale of property securing repayment of the
Certificates of Obligation; and
K. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of and failure by the City to provide financial information or operating data in accordance with
paragraph (b) of this Section by the time required by such paragraph.
(d) Limitations, Disclaimers, at~d4mendments. The City shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Certificates of Obligation within the meaning of
the Rule, except that the City in any event will give notice of any deposit made in accordance with
Section 1 1 of this Ordinance that causes Certificates of Obligation no longer to be outstanding.
The provisions of this Section are for the sole benefit of the Holders and beneticial owners
of the Certificates of Obligation, and nothing in this Section, express or implied, shall give any
benett or any legal or equitable right, remedy, or claim hereunder to any other person. "fhe 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
26
undertake to provide any other information that may be relevant or material to a complete
presentation ofthe C ity'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 of Obligation at any future date.
UNUER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLUER OK
BENEFICIAL OWNER OF ANY CERTIFICATE OF OBLIGATION ORANY OTI IER PERSON,
IN CON"I'RAC'I' OK TORT. FOR DAMAGES RESULTING [N WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PAR"I. OF ANY COVF,NANT 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
comprise a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (I) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Certificates of
Obligation in the primary offering of the Certificates of Obligation in compliance with the Rule,
taking into account any amendments or interpretations of the Rule since such offering as well as
such changed circumstances and (2) either (a) the Holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that authorizes
such an amendment) of the Outstanding Certificates of Obligation consent to such amendment or
(b) a person that is unaffiliated with the City (such as nationally recognized bond counsel)
detenn fined that such amendment will not materially impairthe interest ofthe Holders and beneficial
owners of the Certificates of Obligation. The City may also amend or repeal the provisions of this
continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule
or a court of final jurisdiction entersjudgment that such provisions of the Rule are invalid, but only
if and to the extent that the provisions of this sentence would not prevent an underwriter from
lawfully purchasing or selling Certificates of Obligation in the primary offering of the Certificates
of Obligation. 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 paragraph (b) of
this Section an explanation, in narrative form, of the reason for the amendment and of the impact
of an} change in the type of financial information or operating data so provided.
~~
SECTION 22. iNSURANCF,. The City approves the insurance of the Certificates of
Obligation by Assured Guaranty Corp. and the payment of such premium and covenants to comply
with al I terms of the insurance commitment attached hereto as Exhibit D, which terms arc hereby
adopted.
Section 23. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
incorporates such recitals as a part of this Ordinance.
St:c'rioN 24. SF.VF.RABILITY. 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 this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 25. CHOICE OF LAW. This Ordinance shall be governed by and construed in
accordance with the laws of the State of Texas.
SECTION 26. EFFECTIVE DATE. This Ordinance shall become effective immediately
after its adoption.
[The r•emain~cler of this page intentionally left hlank.J
?g
PASSEDANDAPPROVEDBYTHECITYCOUNCIL OFTHECITYOFKENNEDALE,
TEXASATA REGULAR MEETING CONVENED ONTHE 28'N DAY OFAUGUST, 2008, AT
WHICH MEETING A QUORUM WAS PRESENT.
ATTEST:
~~:5~v~
City Secret ,City of Kennedale, Texas
., ; ,..
. ~..
. ,~
;'
~-:: ~,,
t .., ~ , :~
d~
'~ ~,.'. ~ ~ ~ ,,y
<~
~ ~ ~~~~~~
Mayor, City of Kennedale, Texas
[EXECUTION PAGE TO THE CERTIFICATE OF OBLIGATION ORDINANCE]
EXH1131"f A
FOKM OF PAYING AGENT/REGISTRAR AGREEMENT
THE PAYING AGENTIREGISTRAR AGREEMENT [S OMITTED AT THIS POINT AS IT' APPIiARS IN
EXEC'I ~ I~ED FORM ELSL' WHERE 1N 7'HlS "I'RANSCRIP"I' OP PROCEEDINGS.
A-1
EXHIBIT B
PURCHASE CONTRACT
THE PURCHASE CONTRACT IS OMITTED AT THIS POINT
AS I'T' APPF..ARti 1N F.XF.CFITF,D FORM F.I.SF,WHF,RF. IN THIS TR.ANSC'RIPT.
B- ~
EXHIBIT C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 21 of this Ordinance.
Annual Financial Statements and Operating Data
1'he 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:
I . The annual audited financial statements of the City or the unaudited financial
statements of the City in the event audited financial statements are not completed within six
months after the end of any fiscal year.
2. All quantitative financial information and operating data with respect to the City
of the general type included in the Official Statement under "Table 1 and in Appendix A to the
Oftcial Statement under Tables 1 through 10.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above.
Gl
EXHIBIT D
INSURANCE COMMITMENT
D-1
ASSURED
GU~R~•
tN01~IMG WIMfa1LL 57aerGnl"
MA SA!• Ar A(oolfi . A.tA Ftld
issuer: Clty d Kennedele, Texas
Canxrtihtleltt D~1K August 29.2006
F~irallort Darr October 29, 2D06
ObAQafiortc Not ro exceed 54,500.000
City of Kemterleb, Texas
Combirtatlon Tax and Revenue Certificates of Obligatbn, Series 2008
Ineurenoe PresrtYatr The Issuer wit pay ro Assunsd Guaranty on the data of issuance of the
Obrgatbns a non~refitrtdebis prernktm In an amotmt equal tb .2596 of the tom
principal end interest on the ObifpaUorls.
Corrtrrtitrltertt On the terms and subject ro the condlUons set forth herekt and made a part hereof, and upon
cornprertce witlt the procedures set forth in the letter dervered herewith (tllis commitment, and such letter
hereinafter. corecttvehr, the , Assured Guaranty Corp., a Maryland insurertce carpaatlort
('Aserrned Guarenl~l, hereby comntfls to issue a tinancisl guentnty insurance pofity relatlng to the
~ ;~~ t guarerny Insurance pony shat be substantlary In the form
unless aaepted by ti>a Issuer, the Cammltrnent shall expire. and be of no further f«c;e and effect,
at 5:00 p.m., F_astem Standard Time, an the F~iraticn Date. unless extended try Assured Guaranty in its
sole discretion by written notice in the Issuer. Any request by the Issuer for arty such extension must be
made to Assured Guaranty prior ro 5:D0 p.m., Easfem StarMerd Time, on the Expiretion Date set forth
above. Business Dav', for all purposes hereof. abet mean any day utirer than (i) a Saturday or Sunday. (i)
any day on whirh the o/fioas of the Tnrstee (es defined In the Policy) a Assured GuartuNy are dosed. or (tin
any day on whidt banklnp InsUwtioris ~e autltorl:sd or requlrad by few. exetxttlve order or governmental
decxee to be closed in New YoAt City Dr in the Stelae Of Maryland or New Yak.
agreement betNreen~C era ~Ptance by the Issuer. Ctrs Commitment shall canstlWte a bindinp
against each sudr rnY and the Issuer, with reaped to the subJed matter hereof, enforceable
party h eccordartce whh its terms: prnvidad, hotwver, that the Commitrttent start expire,
and be d rto further force and effect, to the extent that Assured Guaranty shall not have issued the Po~ry as
cornempPated hereby on tx prior to the Expiratlon Date. Upon the execution of thin Corrurrtment by Assured
Guaranty end the Issuer, and h consideration of the issrrartce of this Commttrnent by Assured Guaranty, the
Issuer, Hereby e®reeg ilk it wit rbt enter into arty d'sarsslons or negotlations with, a seek arty comdtrnarn
from. any fstarxial guarernor other than Assured Guaranty, far the isauertce ~ a Rnartciel euararN.y insurance
policy with respect to the a6tigations, pmvjolad.~ef>he Issuer may tietamrrre prior ro the 5tpiration Date
-wt to issue ObRgetions that ate guarenteed by arty flnardel guarenror, in which Casa Ifte Issuer agrees ro
nodry Assured Guaranty mmedlately after malting su[tr determitation.
Capitalized terms not defined herein shat treve meaning estxbed to such farms ae Set forth in the
Assured Guarany Cbsing Package.
The issuance Cf the PogCy by Assured Guaranty fe subject ro tits satisfactbrt or waiver by Assured
Guarerrty of the fa6owirg conttitior~, and the Issuer hereby fiuther agrees as forow~
irnerest an theobrigador>sef The ~ wnr g°~+h ~ d"~Y pey-nenc of st~,edufed pnnapal arw
olrerfrt0 Docutterrs and t]Cnr isgel Doa.rtartmuon: Asstsed Guaranty shat be provided with:
a. Executed txrp-es of ar flrtartdrg docvmerns (indudirrg doctrnenistlon evitlendng the
Issuer's abTity and intent to comply with the Irttemal Revenue Code of 1986, as emended,
and certltled txtpies ~ the resdutlons reletirtg ro the approval and Issuance of
Obfigations). arty official statements (or any other diadoaure documerns) with reaped ro
the ObNgatiorrs (any and eN such dradoaure, osfiectively, the 'Oftlciei Slatemerrt't and aN
sepal opinions delivered in cxxurection wdfr the issirartce and sale d the Ohlipatiorrs. 3urlt
legal opinions shat include aN opinions as are customary for tinananga d the type
~ ~. I~nch~ InD witlrout gn~taUon the unqualMed approving opinion d bond
Courr~ shall oPk,e substarifta io the efTarx trret o ('Bond CarrnsePl. Bond
federal incartte taxation. iF a icable, (ii) n,e ~ ~0^s era exempt from
pp obNgatiorts have been validly issued. P~/ the
ObNgations end the finarrcirrg docrrrrrergs are enfonoeable, and (iv) the inderttureheaolutfort
create6 a vatld lien in the tn~t estate. 5udt opinions shah be addressed to Assured
Guararty or, fi not so addressed, a letter shaA be provided m Assured Guaranty expressly
providing tlmt Areured Guaranty is entltled to rely on such opiNorrs as K such optnbn were
addressed to Assured Guaranty.
b. A copy of any irtsuraras polcy, surely bond, puararNy, ice, or>mY other policy,
contrad or agreement, which provides for the payment d ~ or any portion d the
ObNgatbns, or h any way secures, insures w enharaes the r~alr Ilow avaiable ro pay ute
Obligations.
o. c:ontrnretion that an amoum equal To the insurance prerrdum ~ be paid to Assured
Guaranty upon issuance of the Policy Ires been deposited to the account d Assured
Guaranty.
~~ OuartsrtY Diedoarre Mptet he Approved: A Statement d Insurance. in the farm contained
in the Assured Guaranty Cbsing Padrepe attached hereto. shat be printed on, or attadred to, the
Oblipetlorte. The ObNgations and the Olficiel Statemera shat contain no reference m Assured Guaranty, to
the Poli[.y. or m the ftnanaal puarardy irrarrarrce evidenced iherelry, except as expressly approved by
Assured Guaranty.
No Melerid Adverse tlterrpx On the dabs hared and on the cloairrg dace pertaining to the
issuance d the Obiipafiorts, there ahMl have been no material adverse change in or a}Fadinp the Issuer or
the Obfigatione pnduding, without limitation, the sassily for the ObNpetlone or the proposed debt service
sdteduie d the ObNpaftons), ttre ONiaal Statement, the fnartartp dogmatise to be exactried recd delivered
with -aspect m the obrigations, the least apinlons to ba exeaEed ana delivered In connectlort wltl- nw
issuarae and sale of the Obligations, o- arry IMormatlon submitted to Assured Guaranty with respect W the
issuer, or Ute Oblgatiorrs, from that previously delivered or otherwise cammurecated to Assured Guaranty.
No EvsrN Affsdirrg Purdteas d 06fipatlons; No event shell have ocaared width would permit any
otherwise conrrttilted purchaser d the ObNgatlons to ales not to purchase the Oblipatlorts on the date
scheduled for the lesuerree and defrvery frereot.
No Pradress by issuer: 1Nithout the prior wnaent d Assured Guaranty, no Obligations insured by
Assured Guaranty shall be purtheced by the Issuer, or any of its afftNatas, in Neu of redemption; unless such
Oblgatons ere redeemed. defeesad or certceNed.
NO lure Stebertterrt Or Ontfseiort: The Offidal Statement the fnenarp doatrttente ip be executed
and delivered h Connection with the Issrrertce and sak d the Oblgatons and aN irttorrrretion submitted to
Assured Guaranty with respect to the Obfigntions and the beast, sheN not oordain any untrue or misleading
stalemate d nraterfal farx, nor omit m state a material fact necessary in order to make the inforrrratfan
corealrred therein rat misleading.
Flrtei Dogrrrrerrfa; Assured Guaranty sheN have received the substantially final forms d afi
financing doCUtrtertta (indtrdinp, wthout fimltation, lepd opinions. schedules and euddblte), incorporatlng
Assured Guaranty's oorturrertts In a marerer eoceplable b Asstred Guerenry, on or prior to the fifth (5th)
Basins: Day prior t0 the Proposed rioaing d the iseuartoa d the ObFgetions and such fvrerrtdrtg doctarteres
shah contain for the Deneftt d Assured Guaranty as bond frtsurer, such right as era aratarrrery for finarrckrg
of the type conlenplated. Arty provisions or regWrerttertb d e^Y other documentation which refer to
Assured Guaranty or m the PoYcy must be delivered to Assured Guarerey ro Iabx than ftve (5) business
gays prior to the oonfemplated sale of the ObNgetiota.
OKer6y Dontrrrarr~ ~p Trstterxlpt: Assured Guaranty shall be Provided with at least six (6j
copies of each d the prefimirtary Offidal Stetenrent and the final O~ial Slatenrerrt as soon es They are
primed and avaaawe (and in any ev«,t Prior to ins aoaing d ins ObNpetiorts). On the day d issuance end
delivery of the Obligations. as a condition d delivery d the PoNcy, dupAcate origirral6 d the fnandrrp
documents and legal opinions shah be immediately delvered by hand, sent via overnight marl or by e-rrrail
for delivery ra later than the day d doshg. Illfilftln 1hfAy {30) days after the Cloekp Date. Aaetred Gtreranty
wtll bs provided vdMr tour {4j complete sale d euoectrled doaartsrttt, preferably on CDfiom or, K Ca-Ron~b
are not avatlable, loose borrtd pr4rted tats.
ktepartlort ftlyhb; F4rarrdd StaMnlsrretK The Issuer must albw Assured Guaranty or its agent
acoass to aN rwn-oorrfldential records. the Issuer must provide to Aestred Guaranty such records and
rrotioes ae reasonably may be requested by Assured Guaranty. indudirrg witlrout IMNtaNort the foNowirg:
finandal reports. operational stedstiev and strategic Plans. if arty. end arty dher records or notices to be
Provided to the Tnrstee pursuard to the terms d the finencirq doatntantation relatkp to the Obligatlarrs.
CenoeWtlon a the Prlor Firrerdsl Guerartgr Inattrsrros Potlty. Assured Guarerrly shall be provided
witlr fj a oettifiCete, acceptable to At~ured Guarenty, ewatxrted by the bondholders of the Obligations, the
trustee tar the Odigetiorrs, and the prior financial guaranty insurer for the Otrb"getlons oorr3enGng to the
cancellation a the prior f&rarrcial guererrty irreurence poNcy for the Obfigetiorts and (if! a ~Py of the
cancelled tinerrcial guerenty insurance poficy-
RdUp AQarwy Feet: Each rating agency rating tire ONligatlons assesses fees with respell to such
ratlng, wt~ fees are payable try or on behaU a the Issuer directly ~ each such rating agency. Questions
with reaper! W such fees should be addressed by tx on behalf of the Issuer directly to the apptlcable rati
agency. n9
l.egel Fess: Assured Guaranty wtll be responsible for ~ own altomeys' fees and expenses
incurred by Assured Guaranty in comectlon with the issuance of the Pdicy.
Very truly yours.
ASSU UARANTS ORP.
By.
'chards
Vice President
The undersigned hereby accepts the carttrribrrent a Asaurod Guerartty Corp. to iss<,e ias Policy
with respect to lire captioned Obiigatlone an the farms and subject to the conditlons set fortlt In the
Comrrrtrnent with resperd thereto issued by Assured Guaranty Corp. on Nre Commitrnent Dnte set forth
above.
Acknowrledged, acxspted and agreed to
es of August _ .2006
CITY OF KENNEDALE
Name:
Title.