08-ordinance authorizing the issuance and sale of the City's Combination Tax & Revenue Certificates of ObligationCITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date:
Originating Department:
Presented By:
Agenda Item No.:
03/03/l 0
Council Date:
Finance
Gene Anderson
8.
03/0/8/10
RECOMMENDED MOTION:
[IF THE SUPERMAJORITY RULE IS INVOKED] Move to approve an ordinance authorizing the issuance of
combination tax and revenue certificates of obligation for the purpose of expanding and improving South
Colle iate Drive -
POLICY ISSUE(S):
Financial management
Proceeds from the sale of the certificates will be used to (1) pay the City's contractual obligations
incurred in connection with the improving and expanding of South Collegiate Drive and making
improvements to the frontage access of South Collegiate Drive, and (2) paying legal, fiscal, engineering,
and architectural fees in connection with this project.
BOARD/COMMISSION RECOMMENDATION:
N/A
EXHIBITS:
Ordinance
ACTION:
BUDGET INFO:
❑ Financial Report ❑ Minute Order
Expense
$NA
❑ Department Report ❑ Resolution
Budgeted Amt.
$NA
❑ Presentation ~ Ordinance
y'I'D Actual
$NA
❑ Public Hearing ❑ Other
Acct. Name
NA
Acct. Number
NA
FISCAL NOTES:
None
REVIEWED AND APPROVED BY:
~ Administration N City Clerk ❑ Community Development ❑ EMS/IT Z Finance ❑ Fire
❑ Municipal Court Z Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities
City of Paris
iceviseu Livwiuo
~ u0(,'1013
Draft 3-2-10
ORDINANCE
OF THE CITY OF PARIS, TEXAS
AUTHORIZING THE ISSUANCE OF
CITY OF PARIS, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2010
%±`Y
~e 6 0 c I
TABLE OF CONTENTS
Section 1. Recitals, Amount and Purpose of the Certificates . . . . . . . . . . . . . . . . . . . . . . . . .
Section 2. Designation, Date, Denominations, Numbers, Maturities of Certificates and
Interest Rates .....................................................1
Section 3. Characteristics of the Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 2
Section 4. Form of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 6
Section 5. Interest and Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Section 6. Surplus Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Section 7. Defeasance of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
Section 8. Damaged, Mutilated, Lost, Stolen, or Destroyed Certificates . . . . . . . . . . . . . . . . . .
14
Section 9. Custody, Approval, and Registration of Certificates; Bond Counsel's Opinion
and Engagement; Attorney General Filing Fee; CUSIP Numbers and
Contingent Insurance Provision, if Obtained . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Section 10. Covenants Regarding Tax Exemption of Interest on the Certificates
16
Section 11. Sale of Certificates; Approval of Official Statement . . . . . . . . . . . . . . . . . . . . . . . .
18
Section 12. Allocation of Certificate Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Section 13. Disposition of Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Section 14. Interest Earnings on Certificate Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Section 15. Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Section 16 Compliance with Rule 1 Sc2-12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Section 17. Method of Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
Section 18. Continued Perfection of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Section 19. lnconsistent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Section 20. Governing Law
24
Section 21. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
~ tr;t~L'~
; .J
Section
22.
Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . 24
Section
22.
Remedies for Default . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . 24
Section
23.
Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . 25
Section
24.
Designation as Qualified Tax-Exempt Obligations .
. . . . . . . . . . . . . . . . . . . . . . . . 25
Section
25.
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . 25
Exhibit
A
Continuing Disclosure Information . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . A-l
ii
n
1~ ~ 4 I .
i~
J. ~
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF CITY OF PAR1S, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2010;
LEVYING AN ANNUAL AD VALOREM TAX FOR TAE PAYMENT OF SAID
CERTIFICATES; APPROVING AN OFFICIAL STATEMENT; AND ENACTING OTHER
PROVISIONS RELATING TO THE SUBJECT
STATE OF TEXAS
§
COUNTY OF LAMAR
§
CITY OF PARIS
§
WHEREAS, the City Council of the City of Paris, Texas (the "Issuer") deems it advisable
to issue Certificates of Obligation in the amount of $3,005,000 for the purpose of paying all or a
portion of the Issuer's contractual obligations incurred in connection with improving and expanding
South Collegiate Drive and making improvements ta the frontage access for South Collegiate Drive
and paying legal, fiscal, engineering and architectural fees in connection with such project; and
WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be
issued and delivered for cash pursuant to Subchapter C of Chapter 271, Local Government Code and
Chapter 1502, Government Code, as amended; and
WHEREAS, the City Council has heretofore passed a resolution authorizing and directing
the City Secretary to give notice of intention to issue Certificates of Obligation; and
WHEREAS, said notice has been duly published in a newspaper of general circulation in said
City, said newspaper being a"newspaper" as defined in §2051.044, Texas Government Code; and
WHEREAS, the City received no petition from the qualified electors of the City protesting
the issuance of such Certificates of Obligation; and
WHEREAS, it is considered to be to the best interest of the City that said interest bearing
Certificates of Obligation be issued.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS:
Section 1. RECITALS, AMOIJNT AND PURPOSE OF THE CERTIFICATES. The
recitals set forth in the preamble hereof are incorparated herein and shall have the same force and
effect as if set forth in this Section. The certi£icates of the City of Paris, Texas (the "Issuer") are
hereby authorized to be issued and delivered in the aggregate principal amount of $3,005,000 for
the purpose of paying all or a portion of the Issuer's contractual obligations incurred in connection
with improving and expanding South Collegiate Drive and making improvements to the frontage
access for South Collegiate Drive and paying legal, fiscal, engineering and architectural fees in
connection with such project (collectively, the "Project").
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, MATURITIES OF
CERTIFICATES AND INTEREST RATES. Each certificate issued pursuant to this Ordinance shall
be designated: "CITY OF PARIS, TEXAS, COIvIBINATION TAX AND REVENUE
CERTIFICATE OF OBLIGATION, SERIES 2010", and initially there shall be issued, sold, and
delivered hereunder one fully registered certificate, withaut interest coupons, dated April l, 2010,
in the principal amount stated above and in the denominations hereinafter stated, numbered T-1,
with certificates issued in replacement thereof being in the denominations and principal amounts
hereinafter stated and numbered consecutively from R-1 upward, payable to the respective
Registered Owners thereof (with the initial certificate being made payable to the initial purchaser
as described in Section 11 hereof), or to the registered assignee or assignees of said certificates or
any portion or portions thereof (in each case, the "Registered Owner"). The Certificates shall mature
on December 15 in the years and in the principal amounts and interest rates set forth below, interest
on each Cei-tificate accruing on the basis of a 360-day year of twelve 30-day months from April 1,
2010 or the most recent interest payment date to which interest has been paid or provided for at the
per annum rates of interest, payable semiannually on June 15 and December 15 of each year until
the principal amount shall have been paid or provision for such payment shall have been made,
commencing December 15, 2010, as follows:
Principal Interest
Year
Amount Rate
2011
$105,000
2012
105,000
2013
110,000
2014
115,000
2015
125,000
2016
130,000
2017
135,000
2018
140,000
2019
145,000
Principal Interest
Year
Amount Rate
2020
$155,000
2021
160,000
2022
170,000
2023
175,000
2024
185,000
2025
190,000
2026
200,000
2027
210,000
2028
220,000
2029
230,000
Section 3. CHARACTERISTICS OF THE CERTIFICATES. (a) Registration, Transfei,
Conversion and Exchanae; Authentication. The Issuer shall keep or cause to be kept at the corporate
trust office of The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, the "Paying
AgendRegistrar"), books or records for the registration of the transfer, conversion and exchange of
the Certificates (the "Registration Books"), and the Issuer hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations af transfers, conversions and exchanges under such reasonable regulations as the Issuer
and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such
registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar
shall obtain and record in the Registration Books the address of the registered owner of each
Certificate to which payments with respect to the Certificates 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 payinents shall be inailed, and such interest payments shall not be mailed unless
such notice has been given. The Issuer shall have the right to inspect the Registration Books during
regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall
keep the Registration Books confidential and, unless otherwise required by law, shall not permit
« t~oc
~
their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for making such registration, transfer, conversion, exchange and
delivery of a substitute Certificate or Certificates. Registration of assignments, transfers,
conversions and exchanges of Certificates shall be made in the manner provided and with the effect
stated in the FORM OF CERTIFICATE set forth in this Ordinance. Each substitute Certificate shall
bear a letter and/or number to distinguish it from each other Certificate.
Except as provided in Section 3(c) of this Ordinance, an authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign
said Certificate, and no such Certificate shall be deemed to be issued or outstanding unless such
Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all paid Certificates
and Certificates surrendered for conversion and exchange. No additional ardinances, orders, or
resolutions need be passed or adopted by the governing body of the Issuer or any other body or
person so as to accomplish the foregoing conversion and exchange of any Certificate or portion
thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the
substitute Certificates in the manner prescribed herein, and said Certificates shall be printed or typed
on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code, and
particularly Subchapter D thereof; the duty of conversion and exchange of Certificates as aforesaid
is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the
converted and exchanged Certificate shall be valid, incontestable, and enforceable in the same
manner and with the same effect as the Certificates that initially were issued and delivered pursuant
to this Ordinance, approved by the Attorney General and registered by the Comptroller of Public
Accounts.
(b) Payment of Certificates and Interest. The Issuer hereby further appoints tYie Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates,
all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payments made by the Issuer and the Paying Agent/Registrar with respect to the Certificates, and
of all conversions and exchanges of Certificates, and all replacements of Certificates, as provided
in this Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date,
and for thirty (30) days thereafter, a new record date for such interest payment (a Special Record
Date") will be established by the Paying AgentlRegistrar, if and when funds for the payment of such
interest have been received from the Issuer. Notice of the past due interest shall be sent at Ieast five
(5) business days priar to the Special Record Date by United States mail, first-class postage prepaid,
to the address of each registered owner appearing on the Registration Books at the close of business
on the last business day next preceding the date of mailing of such notice.
(c) In General. The Certificates (i) shall be issued in fu11y registered form, without
interest coupons, with the principal of and interest on such Certificates 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 Issuer at least 35 days prior to any such
t•edemption date), (iii) may be converted and exchanged for other Certificates, (iv) may be
transferred and assigned, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and
authenticated, (vii) the principal of and interest on the Certificates shall be payable, and (viii) shall
~or'~ --,v
be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and
responsibilities with respect to the Certificates, all as provided, and in the manner and to the effect
as required or indicated, in the FORM OF CERTIFICATE set forth in this Ordinance. The
Certiticate initially issued and delivered pursuant to this Ordinance is not required to be, and shall
not be, authenticated by the Paying Agent/Registrar, but on each substitute Certificate issued in
conversion of and exchange for any Certificate or Certificates issued under this Ordinance the
Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION
CERTIFICATE, in the form set forth in the FORM OF CERTIFICATE.
(d) Book-Entry OnIy SXstem. The Certificates issued in exchange for the Certificate
initially issued to the initial purchaser specified herein shall be initially issued in the form of a
separate single fully registered Certificate for each of the maturities thereof. Upon initial issuance,
the ownership of each such Certificate shall be registered in the name of Cede & Co., as nominee
of The Depository Tiust Company, New York, New York ("DTC"), and except as provided in
subsection (f) hereof, all of the outstanding Certificates shall be registered in the naine of Cede &
Co., as nominee of DTC.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the
lssuer 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 organizations
on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities transactions among DTC Participants or to any person on behalf of
whom such a DTC Participant holds an interest in the Certificates. Without limiting the immediately
preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the recards of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC
Participant or any other person, other than a Registered Owner of Certificates, as shown on the
Registration Books, of any notice with respect to the Certificates, or (iii) the payment to any DTC
Participant ar any other person, other than a Registered Owner of Certificates, as shown in the
Registration Books of any amount with respect to principal of or interest on the Certificates.
Notwithstanding any other provisian of this Ordinance to the contrary, the Issuer and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate is
registered in the Registration Books as the absolute owner of such Certificate for the purpose of
payment of principal and interest with respect to such Certificate, for the purpose of registering
transfers with respect to such Certificate, and for all other purposes whatsoever. The Paying
AgendRegistrar shall pay all principal of and interest on the Certificates only to or upon the order
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 be valid and effective
to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of and
interest on the Certificates 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 evidencing the
obligation of the Issuer 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 effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this
4
- f'~, Q 0 -'l . ~ J
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.
(e) Successor Securities Depositorx; Transfers Outside Book-Entrv Onlv Svstem. ln the
event that the Issuer determines that DTC is incapable of discharging its responsibilities described
herein and in the representations letter of the Issuer ta DTC or that it is in the best interest of the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, the Issuer
shall (i) appoint a successor securities depository, qualified to act as such under Section 17A of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Certificates
to such successor securities depository or (ii) notify DTC and DTC Participants of the availability
through DTC of Certificates and transfer one or more separate certificated Certificates to DTC
Participants having Certificates credited to their DTC accounts. ln such event, the Certificates 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 af the successor securities depository, or its
nominee, or in whatever name or names Registered Owners transferring or exchanging Certificates
shall designate, in accordance with the provisions of this Ordinance.
(f) Pavments to Cede & Co. Notwithstanding any other pravision of this Ordinance to
the contrary, so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC,
all payments with respect to principal of and interest on such Certificate and all notices with respect
to such Certificate shall be made and given, respectively, in the manner provided in the
representations letter of the Issuer to DTC.
(g) Cancellation of initial Certificate. On the closing date, one initial Certificate
representing the entire principal amount of the Certificates, payable in stated installments to tbe
purchaser designated in Section 11 or its designee, executed by manual or facsimile signature af the
Mayor and City Secretary of the Issuer, approved by the Attorney General of Texas, and registered
and manually signed by the Comptroller of Public Accaunts of the State of Texas, will be delivered
to such purchaser or its designee. Upon payment for the initial Certificate, the Paying
Agent/Registrar shall cancel the initial Certificate and deliver to the Depository Trust Company on
behalf of such purchaser one registered definitive Certificate for each year of maturity of the
Certificates, in the aggregate principal amount of al1 of the Certificates for such maturity.
(h) Conditional Notice of Redemption. With respect to any optional redeinption of the
Certificates, unless certain prerequisites to such redemption required by this Ordinance have been
met and moneys sufficient to pay the principal of and premium, if any, and interest on the
Certificates to be redeemed shall have been received by the Paying Agent/Registrar prior to the
giving of such notice of redemption, such notice shall state that said redemption may, at the option
of the Issuer, be conditional upon the satisfaction of such prerequisites and receipt of such moneys
by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon any
prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given
and such prerequisites to the redemption and sufficient moneys are not received, such notice shall
n
be of no force and effect, the Issuer shall not redeem such Certificates and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, ta the
effect that the Certificates have not been redeemed.
Section 4. FORM OF CERTIFICATES. The fortn of the Certificates, including the fornl
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 of Texas to be attached
to the Certificates 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.
(a) [Form of Certificate]
NO. R- UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PARIS, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATE OF
OBLIGATION, SERIES 2010
Interest Rate
Dated Date
Maturity Date
April 1, 2010 December 15,
REGISTERED OWNER:
PRINCIAAL AMOUNT: DOLLARS
PRINCIPAL
AMOUNT
$
CUSIP No.
ON THE MATURITY DATE specified above, the City of Paris, in Lamar County, Texas
(the "I ssuer"), being a political subdivision and municipal corporation of the State of Texas, hereby
promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called
the "Registered Owner"), on the Maturity Date specified above, the Principal Amount specified
above. The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the
basis of a 360-day year af twelve 30-day months) from April l, 2010 at the Interest Rate per annum
specified above. Interest is payable an December 15, 2010 and semiannually on each June 15 and
December 15 thereafter to the Maturity Date specified above, or the date of redemption prior to
maturity; except, if this Certificate 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 af authentication hereof the interest on the Certificate
or Certificates, if any, for which this Certificate is being exchanged is due but has not been paid,
then this Certificate shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND 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 shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, or upon the date fixed for its redemption prior to maturity, at the corparate
trust office of The Bank of New York Mellon Trust Company, N.A. in Dallas, Texas, which is the
"Paying Agent/Registrar" for this Certificate. The payment of interest on this Certificate shall be
made by the Paying Agent/Registrar to the registered awner hereof on each interest payment date
by check or draft, dated as of such interest payment date, drawn by the Paying AgentlRegistrar on,
and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of
this Certificate (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for
such purpose as hereinafter provided; and such check or draft shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment
date, to the registered owner hereof, at its address as it appeared on the last day af the month
preceding each such date (the "Record Date") on the Registration Books kept by the Paying
Agent/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 a non-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 Issuer. 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 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 TNTEREST due at maturity or upon the redemption of this Certificate
prior to maturity as provided herein shall be paid to the registered owner upon presentation and
surrender of this Certificate for redemption and payment at the corporate trust office of the Paying
Agent/Regisirar. The Issuer covenants with the registered owner af this Certificate that on or before
each principal payment date, interest payment date, and accrued interest payment date for this
Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking
Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in
immediately available funds, of all principal of and interest on the Certificates, when due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the
corporate tiust 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 that 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 is one of a series of Certificates dated April 1, 2010, authorized in
accardance with the Constitution and laws of the State of Texas in the principal amount of
O~ . .S
$3,005,000 for the purpose of paying all or a portion of the Issuer's contractual obligations incurred
in connection with improving and expanding South Collegiate Drive and making improvements to
the frontage access for South Collegiate Drive and paying legal, fiscal, engineering and architectural
fees in connection with such project.
THE CERTIFICATES OF THIS SERIES having stated maturities on and after December
15, 2011 may be redeemed prior to their scheduled maturities, at the option of the Issuer, on
December 15, 2020 or on any date thereafter, with funds derived from any available and lawful
source, as a whole, or in part, and, if in part, the particular Certificates, or portions thereof, to be
redeemed shall be selected and designated by the Issuer (provided that a partion of a Certificate may
be redeemed only in an integral multiple of $5,000), at a redemption price equal to the principal
amount to be redeemed plus accrued interest to the date fixed for redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Certificates or portions
thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid, at least 30 days prior to the date
fixed for any such redemption, to the registered owner of each Certificate to be redeemed at its
address as it appear•ed on the 45th day prior to such redemption date; 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 af the proceedings for the redemption
of any Certificate. By the date fixed for any such redemption due provision shall be made with the
Paying Agent/Registrar for the payment of the required redemption price for the Certificates or
portions thereof that 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 Certificates or portians thereof that
are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the registered owner to receive the redemptian
price from the Paying Agent/Registrar out of the funds provided for such payment. If a portion af
any Certificate shall be redeemed, a substitute Certificate or Certificates having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in any integral multiple
of $5,000, at the written reyuest of the registered owner, and in aggregate principal amount equal
to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof
for cancellation, at the expense af the Issuer, all as provided in the Certificate Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates,
without interest caupons, in the denomination of any integral multiple of $5,000. As provided in
the Certificate Ordinance, this Certificate may, at the request of the registered owner or the assignee
or assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate
principal amount of fully registered certificates, without interest coupons, payable to the appropriate
registered owner, assignee or assignees, as the case may be, having the same denomination or
denominations in any integral multiple of $5,000 as requested in writing by the appropriate
registered awner, assignee ar assignees, as the case may be, upon surrender of this Certificate to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth
in the Certificate Ordinance. Among other requirements for such assignment and transfer, this
R`I uo 0 1.. 1
Certificate must be presented and surrendered to the Aaying 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 or any portion or portions hereof in any
integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate or
any such portion or portions hereof is or are to be registered. The form of Assignment printed or
endorsed on this Certificate 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 or any portion
or portions hereof from time to time by the registered owner. The Paying Agent/Registrar's
reasonable standard or customaiy fees and charges for assigning, transferring, converting and
exchanging any Certificate or portion thereof will be paid by the Issuer. In any circumstance, 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, conversion, or exchange (i) during the period cammencing with the close of business on
any Record Date and ending with the opening ofbusiness on the next following principal or interest
payment date, or (ii) with respect to any Gertificate or any portion thereof called for redemption
prior to maturity, within 45 days prior to its redemption date.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute iherefor, and cause written
notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate 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 have been performed, existed and been done in accordance with 1aw; that this Certificate
is ageneral obligation of said Issuer, issued on the full faith and credit thereof; and that annual ad
valorem taxes sufficient to pravide for the payment of the interest on and principal of this
Certificate, as such interest comes due and such principal matures, have been levied and ordered to
be levied against all taxable property in said Issuer, and have been pledged for such payment, within
the limit prescribed by law, and that this Certificate is additionally secured by and payable from a
limited pledge (not to exceed $1,000) of the revenues of the Issuer's combined Waterworks and
Sewer Systems remaining after payment of all operation and maintenance expenses thereof, and all
debt service, reserve and other requirements in connection with all of the Issuer's revenue
obligations (now or hereafter outstanding) that are payable from all or part of said revenues, all as
provided in the Certiticate Ordinance.
BY BECOMING the registered owner of this Certit3cate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the governing body of the lssuer, and
agrees that the terms and provisions of this Certificate and the Certificate Ordinance constitute a
contract between each registered owner hereof and the Issuer.
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IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the
manual or facsimile signature of the Mayor of the Issuer and countersigned with the manual or
facsimile signature of the City Secretary of said lssuer, and has caused the official seal of the Issuer
to be duly impressed, or placed in facsimile, on this Certificate. (signature)
City Secretary
(SEAL)
(sip-nature)
Mayor
(b) [Form af Paying Agent/Registrar's Authentication Certificate]
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate 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 has been issued under the provisions of the
Certificate Ordinance described in the text of this Certificate; and that this Certificate has been
issued in conversion or replacement of, or in exchange for, a certiticate, certificates, or a portion of
a certificate or certificates of a series that originally was approved by the Attoiney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated:
The Bank ofNew York Mellon Trust Company, N.A.
Dallas, Texas
Paying Agent/Registrar
Bv:
Authorized Representative
(c) [Form of Assignment]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer ldentification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee.)
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the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a securities transfer
association recognized signature guarantee
program.
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Certificate in every par-ticular, without
alteration or enlargement or any change
whatsoever.
(d) [Form of Registration Certificate of the Comptroller of Public Accounts]
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
(e) [Initial Certificate Insertions]
(i) The initial Certificate shall be in the form set forth is paragraph (a) of this Section,
except that:
A. immediately under the name of the Gertificate, the headings "Interest Rate"
and "Maturity Date" shall both be completed with the words "As shown below" and
"CUSIP No. " shall be deleted.
B. the first paragraph shall be deleted and the following will be insei-ted:
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"THE CITY OF PARIS, TEXAS (the "Issuer"), being a political subdivision and municipal
corporation of the State of Texas, hereby promises to pay to the Registered Owner specified above,
or registered assigns (hereinafter called the "Registered Owner"), on December 15 in each of the
years, in the principal installments and bearing interest at the per annum rates set forth in the
following schedule:
Years Principal Installments Interest Rates
(Infoimation from Section 2 to be inserted)
The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360-day year of twelve 30-day months) from April 1, 2010 at the respective Interest Rate per
annum specified above. Interest is payable on December 15, 2010 and semiannually on each June
15 and December 15 and thereafter to the date of payment of the principal instaliment specified
above, or the date of redemption prior to maturity; except, that if this Gertificate 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 hereaf the interest on the Certificate or Certificates, if any, for which this Certificate
is being exchanged is due but has not been paid, then this Certificate shall bear interest from the date
to which such interest has been paid in full."
C. The Initial Certificate shall be numbered "T-l."
Section 5. INTEREST AND SINKING FUND. A special "Interest and Sinking Fund" is
hereby created and shall be established and maintained by the Issuer at an ofticial depository bank
of the Issuer. Said Interest and Sinking Fund shall be kept separate and apart from all other funds
and accounts of the Issuer, and shall be used only for paying the interest on and principal of the
Certificates. All amaunts received from the sale of the Certificates as accrued interest and ad
valorem taxes levied and collected for and on account of the Certificates shall be deposited, as
collected, to the credit of said Interest and Sinking Fund. During each year while any of the
Certificates are outstanding and unpaid, the governing body of the Issuer shall compute and ascertain
a rate and amount of ad valorem tax that will be sufficient to raise and produce the money required
to pay the interest on the Certificates as such interest comes due, and to provide and maintain a
sinking fund adequate to pay the principal of the Certificates as such principal matures (but never
less than 2% of the original amount of the Certificates as a sinking fund each year); and said tax
shall be based on the latest approved tax rolls of the Issuer, with full allowances being made far tax
delinquencies and the cost of tax collectian. Said rate and amount of ad valorem tax is hereby
levied, and is hereby ordered to be levied, against all taxable property in the Issuer, for each year
while any of the Certificates are outstanding and unpaid, and said tax shall be assessed and collected
each such year and deposited to the credit of the aforesaid lnterest and Sinking Fund. Said ad
valorem taxes sufficient to provide for the payment of the interest on and principal of the
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Certificates, as such interest comes due and such principal matures, are hereby pledged for such
payment, within the limit prescribed by law.
Section 6. SURPLUS REVENUES. The Certificates are additionally secured by and
payable from a limited pledge (not to exceed $1,000) of the revenues of the Issuer's combined
Waterworks and Sewer Systems remaining after payment of all operation and maintenance expenses
thereof, and all debt service, reserve and other requirements in connectian with all of the Issuer's
revenue obligations (now or hereafter outstanding) that are payable from all or part of the Net
Revenues of the Issuer's Waterworks and Sewer Systems, constituting "Surplus Revenues." The
Issuer shall deposit such Surplus Revenues to the credit of the Interest and Sinking Fund created
pursuant to Section 5, to the extent necessary to pay the principal and interest on the Certificates.
Notwithstanding the requirements of Section 5, if Surplus Revenues are actually on deposit in the
Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied
for any year, then the amount of taxes that otherwise would have been required to be levied pursuant
to Section 5 may be reduced to the extent and by the amount of the Surplus Revenues then on
deposit in the Interest and Sinking Fund.
Section 7. DEFEASANCE OF CERTIFICATES. (a) Any Certificate and the interest
thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Certificate")
within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section
7, when payment of the principal of such Certificate, plus interest thereon 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 in accordance
with an escrow agreement or other instrument (the "Future Escrow Agreement") far such payment
(1) lawful money of the United States of America sufficient to make suchpayment or (2) Defeasance
Securities that mature as to principal and interest in such amounts and at such times as will insure
the availability, without reinvestment, of sufficient money to provide for such payment, and when
pt•oper arrangements have been made by the Issuer with the Paying Agent/Registrar for the payment
of its services until all Defeased Certificates shall have become due and payable. At such time as
a Certificate shall be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate
and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of,
the ad valarem 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 ta redeem Defeased Certificates that is made in conjunction with the payment
arrangements specified in subsection 7(a)(i) or (ii) sha11 not be irrevocable, provided that: (1) in the
proceedings providing for such payment arrangements, the Issuer expressly reserves the right to call
the Defeased Certificates for redemption; (2) gives notice of the reservation of that right to the
owners of the Defeased Certificates 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.
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(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer be invested in .Defeasance Securities, maturing in the amounts and times as
hereinbefare set forth, and all income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Certificates and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited
as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money
and/or Defeasance Securities are held for the payment of Defeased Certificates may contain
provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or
the substitution of other Defeasance Securities upon the satisfaction of the requirements specified
in subsection 7(a)(i) or (ii). All income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Defeased Certificates, with respect to
which such money has been sa deposited, shall be remitted to the Issuer or deposited as directed in
writing by the Issuer.
(c) 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 obligations of an agency 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 less than AAA or its equivalent, and
(iii) noncallable obligations of a state or an agency or a county, inunicipality, or other political
subdivision of a state that have been refunded and that, on the date the governing body of the Issuer
adopts or approves the proceedings authorizing the financial arrangements are rated as to investment
quality by a nationally recognized investment rating firm not less than AAA or its equivalent.
(d) Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paymg Agent/Registrar for such Defeased Certificates
the same as if they had not been defeased, and the Issuer shall make proper arrangements to provide
and pay for such services as required by this Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of
Certificates of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such
amount of Certificates by such random method as it deems fair and appropriate.
Section 8. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement Certificates. In the event any outstanding Certificate is
damaged, mutilated, lost, stolen or destroyed, the Paying AgentlRegistrar 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, in replacement for such Certificate
in the maruier hereinatter provided.
(b) M12lication for Replacement Certificates. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Certificates shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Certificate, the registered
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owner applying for a replacement certificate shall furnish to the Issuer and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also, in every case of loss, theft or
destruction of a Certificate, the registered owner shall furnish to the Issuer and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Certificate, as
the case may be. In every case of damage or mutilation of a Certificate, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Certificate shall have matured, and no default has occurred that is then continuing
in the payment of the principal of, redemption premium, if any, or interest on the Certificate, the
Issuer may authorize the payment of the same (without surrender thereaf except in the case of a
damaged or mutilated Certificate) instead of issuing a replacement Certificate, provided security or
indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. Prior to the issuance of any
replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such
Certificate 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 Certificate
is lost, stolen or destroyed shall constitute a contractual obligation of the Issuer whether or not the
lost, stolen or destmyed Certiticate 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 a11
other Certificates duly issued under this Ordinance.
(e) Authoritv for Issuiny Replacement Certificates. In accordance with Subchapter D
of Chapter 1201, Government Code, this Section 8 of this Ordinance shall constitute authority for
the issuance of any such replacement certificate without necessity of further action by the governing
body of the Issuer or any other body or persan, 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 in the form and manner and with the effect, as
provided in Section 3(a) of this Ordinance for Certificates issued in conversion and exchange for
other Certificates.
Section 9. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; BOND
COUNSEL'S OPINION AND ENGAGEMENT; ATTORNEY GENERAL FILING FEE; CUSIP
NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED. (a) The Mayor
of the lssuer is hereby authorized to have control of the Certificates initially issued and delivered
hereunder and all necessary records and proceedings pertaining to the Certificates pending their
delivery and their investigation, examination, and appraval 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 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, and the seal of said Comptroller shall be impressed, or placed in
facsimile, on such Certificate. The approving legal opinion of the Issuer's Bond Counsel and the
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assigned CUSIP numbers may, at the option of the Issuer, be printed on the Certificates 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. In addition, if bond
insurance is obtained, the Certificates may bear an appropriate legend as provided by the insurer.
(b) The obligation of the initial purchaser to accept delivery of the Certificates is subject
to the initial purchaser being furnished with the final, approving opinion of McCall, Parkhurst &
Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the
date of initial delivery of the Certificates to the initial purchaser. The engagement of such firm as
bond counsel to the Issuer in connection with issuance, sale and delivery of the Certificates is hereby
approved and confirmed. The execution and delivery of an engagement letter between the lssuer
and such firm, with respect to such services as bond counsel, is hereby authorized in such form as
may be approved by the Mayor of the lssuer and the Nlayor is hereby authorized to execute such
engagement letter.
(c) ln accordance with the provisions of Section 1202.004, Tex. Gov't Code Ann., in
connection with the submission of the Certificates by the Attomey General of Texas for review and
approval, a statutory fee (an amount equal to 0.1% principal amount of the Certificates, subject to
a minimum of $750 and a maximum of $9,500) is required to be paid to the Attomey General upon
the submission of the transcript of proceedings for the Certiticates. The Issuer hereby authorizes
and directs that a check in the amount of the Attomey General filing fee for the Certificates, made
payable to the "Texas Attomey General," be promptly fiu-nished to the Issuer's Bond Counsel, for
payment to the Attomey General in connection with his review of the Certificates.
Section 10. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES. The lssuer covenants to take any action necessary to assure, or refrain from any
action that would adversely affect, the treatment of the Certificates as Obligatian described in
section 103 of the Code, the interest on which is not includable in the "gross income" of the holder
for purposes of federal income taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates (less amounts depasited ta 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 therewith are so used, such amounts, whether or not
received by the tssuer, 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, in contravention
of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Certificates or
the projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a"private business use" that is "related" and not
16
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"disproportionate," within the meaning of section 141(b)(3) ofthe Code, to the governmental
use;
(c) to take any action to assure that no amount that is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Certifcates (less amaunts deposited into a
reserve fund, if any) is directly or indirectly used to fmance loans to persons, other than state
or local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action that would otherwise result in the
Certificates being treated as "private activity bonds" within the meaning of section 141(b)
of the Code;
(e) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Certificates, directly
or indirectly, to acquire or to replace f'unds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Gode) that produces a materially
higher yield over the term of the Certificates, othei• than investment property acquired with
(1) proceeds of the Certificates invested for a reasonable temparary
period of 3 years or less or, in the case of a refunding bond, for a period of 30 days
or less until such proceeds are needed for the purpose for which the bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Certificates;
(g) to otherwise restrict the use of the proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not
otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and,
to the extent applicable, section 149(d) of the Code (relating to advance refiindings);
(h) to pay to the United States af America at least once during each five-year
period (beginning on the date of delivery of the Certificates) an amount that is at least equal
ta 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Cade and
to pay to the United States of America, not later than 60 days after the Certificates have been
paid in ful1,100 percent of the amount then required to be paid as a result of Excess Earnings
under section l 4$(o of the Code; and
17
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(i) to assure that the praceeds of the Certificates wi11 be used solely for new money
projects.
In order to facilitate compliance with the above covenant (h), a"Rebate Fund" is hereby
established by the Issuer for the sole benefit of the United States of America, and such Fund shall
not be subject to the claim of any other person, including without limitation the certificateholders.
The Rebate Fund is established for the additional purpose of compliance with section 148 of the
Code.
Far purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds"
includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding
bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date
of issuance of the Certificates. lt is the understanding of the Issuer that the covenants contained
herein are intended to assure compliance with the Code and any regulations or rulings promulgated
by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated that modify or expand provisions of the Code, as applicable to the
Certificates, the Issuer will not be required to comply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Certificates under
section 103 af the Code. In the event that regulations or rulings are hereafter promulgated that
impose additional requirements applicable to the Certificates, the Issuer agrees to comply with the
additional requirements to the extent necessary, in the opinion of nationally recognized bond
counsel, to preserve the exemption from federal income taxation of interest on the Certificates under
section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs
the Mayor to execute any documents, certificates or reports required by the Code and to make such
elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the
purpose for the issuance of the Certificates.
Section 11. SALE OF CERTIFICATES; APPROVAL OF OFFICIAL STATEMENT (a)
The Certificates are hereby sold and shall be delivered to (the "Purchaser"), at a
price of par, plus a premium of $ , plus accrued interest on the Certificates. The
Certificates shall initially be registered in the name of the Purchaser.
(b) It is bereby officially found, determined and declared that the Certificates have been
sold at public sale to the bidder offering the lowest interest cost, after receiving sealed bids pursuant
to an Ofticial Notice of such and Bidding Instructions. It is further officially found, determined and
declared that the Certificates have been offered pursuant to a Preliminary Official Statement dated
March 1, 2010, prepared and distributed in connection with the sale of the Certificates. Said
Preliminary Official Statement, the Official Statement dated March 8, 2010, and any addenda,
supplement or amendment thereto, have been and are hereby approved by the City Council of the
Issuer and its use in the offer and sale of the Certificates is hereby approved. It is further officially
found, determined and declared that the statements and representations contained in said Official
Statement are true and correct in all material respects, to the best knowledge and belief of the City
Council. The accrued interest received from the sale of the Certificates and the net original issue
premium shall be deposited into the Interest and Sinking Fund.
ts
Section 12. ALLOCATION OF CERTIFICATE PROCEEDS. The Issuer covenants to
account for the expenditure of sale proceeds and investment earnings to be used far the construction
and acquisition of the Proj ect on its books and records by allocating proceeds to expenditures within
18 months of the later of the date that (1) the expenditure is made, or (2) the Project is completed.
The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Certificates
or investment earnings thereon more than 60 days after the earlier of (1) the fifth aruliversary of the
delivery of the Certificates, or (2) the date the Certificates are retired, unless the Issuer obtains an
opinion of nationally-recogrrized bond counsel that such expenditure will not adversely affect the
status, far federal income tax purposes, of the Certificates or the interest thereon. For purposes
hereof, the lssuer shall not be obligated to comply with this covenant if it obtains an opinion that
such failure to comply will not adversely affect the excludability for federal income tax purposes
from gross income of the interest.
Section 13. DISPOSITION OF PROJECT. The Issuer covenants that the Project will not
be sold ar otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other
compensation, unless the lssuer obtains an apinion of nationally-recognized bond counsel that such
sale or other disposition will not adversely affect the tax-exempt status of the Certificates. For
purposes of the foregoing, the portion of the property comprising personal property and disposed
in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant
if it obtains a legal opinion that such failure to comply will not adversely affect tbe excludability for
federal income tax proposes from gross income of the interest.
Section 14. INTEREST EARNINGS ON GERTIFICATE PROCEEDS. Interest earnings
derived from the investment of proceeds from the sale of the Certificates shall be used along with
other certificate proceeds for the Aroject; provided that after completion of such purpose, if any of
such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is furtherprovided, however, that any interest earnings on certificate proceeds that
are required to be rebated to the United States of America pursuant to Section 10 hereof in order to
prevent the Certificates from being arbitrage bonds shall be so rebated and not considered as interest
earnings for the purposes of this Section.
Section 15. CONSTRUGTION FL1ND. The Issuer hereby creates and establishes and shall
maintain on the baoks of the Issuer a separate fund to be entitled the "Series 2010 Combination Tax
and Limited Surplus Revenue Certificate of Obligation Construction Fund" for use by the Issuer for
payment of all lawful costs associated with the acquisition and construction of the Project as
hereinbefore provided. Upon payment of all such costs, any moneys remaining on deposit in said
Fund shall be transfeired to the Interest and Sinking Fund. Amounts so deposited to the Interest and
Sinking Fund shall be used in the manner described in Section 5 of this Ordinance.
Section 16 COMPLIANCE WITH RULE 15c2-12. (a) Annual Reports. (i) The Issuer
shall provide annually to the MSRB, within six months after the end of each fiscal year ending in
or after 2009, financial information and operating data with respect to the Issuer of the general type
19
77
ri 10 o0"~.~~J
included in the final Official Statement authorized by Section l l af this Ordinance, being the
information described in Exhibit A hereto. Any financial statements so to be provided shall be (1)
prepared in accordance with the accounting principles described in Exhibit A hereto, or such other
accounting principles as the Issuer may be required to employ from time to time pursuant to state
law or regulation, and (2) audited, if the Issuer commissions an audit of such statements and the
audit is completed within the period during which they must be provided. If the audit of such
financial statements is not complete within such period, then the Issuer shall provide unaudited
financial statements by the required time and will provide audited financial statements for the
applicable fiscal year to the MSRB, when and if the audit report on such statements become
available. Such information shall be transmitted electronically to the MSRB, in such format and
accompanied by such identifying information as prescribed by the MSRB.
(ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the
date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be
required to provide financial information and operating data pursuant to this Section. The financial
information and operating data to be provided pursuant to this Section may be set forth in full in one
or more documents or may be included by specific reference to any document (including an official
statement or other affering document, if it is available from the MSRB) that theretofore has been
provided to the MSRB or filed with the SEC.
(b) Material Event Notices. The Issuer shall notify the MSRB, in a timely manner, of any
of the following events with respect to the Certificates, if such event is material within the meaning
of the federal securities laws:
1. Pi°incipal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status af the Certificates;
7. Modifications to rights of holders of the Certificates;
8. Bond calls;
9. Defeasances;
10. Release, substitution, 01- sale of property securing repayment of the Certificates;
and
11. Rating changes.
The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide
financial infonnatian or operating data in accordance with subsection (a) of this Sectian by the time
reyuired by such subsection.
(c) Limitations Disclaimers and Amendments. (i) The Tssuer shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the Issuer
remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except
20
rv o~-,;4 r)
~
that the Issuer in any event will give the natice required by Subsection (b) hereof of any Bond calls
and defeasance that cause the Issuer to no longer be such an "obligated person".
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any
benetit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer
undertakes to provide only the financial infozrnation, operating data, fmancial statements, and
notices which it has expressly agreed to provide pursuant to this Section and daes not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the Issuer's financial results, condition, or prospects or hereby undertake to update
any informatian provided in accordance with this Section or otherwise, except as expressly provided
herein. The Issuer does not make any representation ar warranty concerning such information or
its usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART
FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SAECIFIED 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 AERFORMANCE.
(iv) No default by the Issuer in observing or perfornung its obligations under this Section
shall comprise a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
(v) The provisions of this Section may be amended by the Issuer from time to time to adapt
to changed 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 Issuer, but only if (1) the provisions
of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates
in the primary offering of the Certificates in compliance with the Rule, taking into account any
amendments or interpretations of the Rule since such offering as well as such changed circumstances
and (2) eitner (a) the registered owners of a majority in aggregate principal amount (or any greater
amaunt required by any other provision of this Ordinance that authorizes such an amendment) of
the outstanding Certificates consent to such amendment or (b) a person that is unaffiliated with the
Issuer (such as nationally recognized bond counsel) determined that such amendment will not
materially impair the interest of the registered owners and beneficial owners of the Certiticates. If
the Issuer so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with subsection (a) of this Section an
explanation, in narrative form, of the reason for the amendment and of the impact of any change in
the type of financial information or operating data so provided. The Issuer may alsa amend or repeal
the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
21
provision of the Rule or a court of final jurisdiction enters judgment that such provisions ofthe 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 in the primary affering of the
Certificates.
(d) Definitians. As used in this Section, the following terms have the meanings ascribed to
such terms below:
"MSRB" means the Municipal Securities Rulemaking Board or any successor to its
functions under the Rule.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
Section 17. METHOD OF AMENDMENT. The Issuer hereby reserves the right ta amend
this Ordinance subject to the following terms and conditions, to-wit:
(a) The Issuer may from time to time, without the consent of any holder, except as
otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure
any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the
interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add
events af default as shall not be inconsistent with the provisions of this Ordinance and which shall
not materially adversely affect the interests of the holders, (v) qualify thi s Ordinance under the Trust
Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time
in effect, or (iv) make such other provisions in regard to matters or questions arising under this
Ordinance as shall not be inconsistent with the provisions of this Ordinance and which shall not in
the opinion of the Issuer's Bond Caunsel materially adversely affect the interests of the holders.
(b) Except as provided in paragraph (a) above, the holders of Certificates aggregating in
principal amount 51 % of the aggregate principal amount of then outstanding Certificates which are
the subject of a proposed amendment shall have the right from time to time to approve any
amendment hereto which may be deemed necessary or desirable by the Issuer; provided, however,
that without the consent of 100% of the holders in aggregate principal amount of the then
outstanding Certificates, nothing herein contained shall permit or be construed ta permit amendment
of the terms and conditions of this Ordinance or in any of the Certificates so as to:
(1) Make any change in the maturity of any of the outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
(3) Reduce the amount of the principal of, or redemption premium, if any, payable on
any outstanding Certificates;
22
y
(4) Modify the terms of payment of principal or of interest or redemption premium on
outstanding Certificates or any of them or impose any condition with respect to such
payment; or
(5) Change the minimum percentage of the principal amount of any series of
Certificates necessary for consent to such amendment.
(c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the
Issuer shall send by U.S. mail to each registered owner of the affected Certificates a copy of the
proposed amendment and cause notice of the proposed amendment to be published at least once in
a financial publication published in The City ofNew York, New York or in the State of Texas. Such
published notice shall briefly set forth the nature of the proposed amendment and shall state that a
copy thereof is on file at the office of the Issuer far inspection by all holders of such Certificates.
(d) Whenever at any time within one year from the date of publication of such notice the
Issuer shall receive an instrument or instruments executed by the holders of at least 51% in
aggregate principal amount of all of the Certificates then autstanding which are required far the
amendment, which instrument or instruments shall refer to the proposed amendment and which shall
specifically consent to and apprave such amendment, the Issuer may adopt the amendment in
substantially the same form.
(e) Upon the adoption of any aniendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders
of such affected Certificates shall thereafter be determined, exercised, and enforced, subject in all
respects to such amendment.
(f) Any consent given by tbe holder of a Gertificate pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the publication of the notice
provided for in this Section, and shall be conclusive and binding upon all future holders of the same
Certificate during such periad. Such consent may be revoked at any time after six months from the
date of the publication of said notice by the holder who gave such consent, or by a successor in title,
by filing notice with the lssuer, but such revacation shall not be effective if the holders of 51 % in
aggregate principal amount of the affected Certificates then outstanding, have, prior to the attempted
revocation, consented ta and approved the amendment.
For the purposes of establishing ownership of the Certificates, the Issuer shall rely salely
upon the registration of the ownership of such Certificates on the registration books kept by the
Paying Agent/Registrar.
Section 18. CONTINUED PERFECTION OF SECURITY INTEREST. Chapter 1208,
Government Code, applies to the issuance of the Certificates and the pledge of the ad valorem taxes
granted by the Issuer under Section 5 of this Ordinance and the pledge of the Surplus Revenues
under Section 6 of this Ordinance, and such pledge is therefore valid, effective, and perfected. If
23
! ~ „
Texas law is amended at any time while the Certificates are outstanding and unpaid such that the
pledge of the taxes granted by the Issuer under Section 5 of this Ordinance or the pledge of the
Surplus Revenues under Sectian 6 af this Ordinance is to be subject to the filing reyuirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Certificates the perfection of the security interest in said pledges, the Issuer agrees to take such
measures as it determines are reasonable and necessary under Texas law to comply with the
applicable provisions of Chapter 9, Business & Gommerce Code and enable a filing ta perfect the
security interest in said pledges to occur.
Section 19. INCONSISTENT PROVISIONS. All indentwes, ordinances or resolutions, or
parts thereof, that are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
Section 20. GOVERNING LAW. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
Section 21. SEVERABILITY. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application
thereof'to other circumstances shall nevertheless be valid, and this governing body hereby declares
that this Ordinance would have been enacted without such invalid provision.
Section 22. EVENTS OF DEFAULT. Each of the following occurrences or events for the
purpase of this Ordinance is hereby declared to be an event of default (an "Event of Default"):
(i) the failure to make payment of the principal of or interest on any of the Certificates when
the same becoines due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or obligation
of the Issuer, the failure to perform which materially, adversely affects the rights of the
Registered Owners, 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 Registered Owner to the Issuer.
Section 22. REMEDIES FOR DEFAlJLT. (a) Upon the happening of any Event of Default,
then and in every case, any Registered Owner or an authorized representative thereof, including, but
not limited to, a trustee or trustees therefor, may proceed against the may proceed against the Issuer
or the Board of Trustees of the Issuer, as appropriate for the purpose of protecting and enforcing the
rights of the Registered Owners under this Ordinance, by mandainus or other suit, action or special
proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by
law, including the specific performance of any covenant or agreement contained herein, or thereby
to enjoin any act or thing that may be unlawful or in violation of any right of the Registered Owners
hereunder or any combination of such remedies.
24
(b) It is provided that al l such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Certificates then outstanding.
Section 23. REMEDIES NOT EXCLUSIVE. (a) No remedy herein conferred or reserved
is intended to be exclusive of any ather available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under
the Certificates or naw or hereafter existing at law or in eyuity; provided, however, that
notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by
the Certificates shall not be available as a remedy under this Ordinance.
(b) The exercise of any remedy herein confeired or reserved shall not be deemed a waiver
of any other available remedy.
(c) By accepting the delivery of a Certificate authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to a
personal or pecuniary liability or charge against the officers, employees or trustees of the Issuer or
the Board of Trustees of the Issuer.
Section 24. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The Issuer
hereby designates the Certificates as "qualified tax-exempt obligations" as defined in section
265(b)(3) of the Code. In furtherance of such designation, the Issuer represents, covenants and
warrants the following: (a) that during the calendar year in which the Certificates are issued, the
Issuer (including any subordinate entities) has not designated nor will designate obligations, which
when aggregated with the Certificates, will result in more than $10,000,000 ($30,000,000 for taxable
years beginning after December 31, 2008 and ending prior to January l, 2011) of "qualified tax-
exempt obligations" being issued; (b) that the Issuer reasonably anticipates that the amount of tax-
exempt obligations issued, during the calendar year in which the Certificates are issued, by the
Issuer (or any subordinate entities) will not exceed $10,000,000 ($30,000,000 far taxable years
beginning after December 31, 2008 and ending prior to January 1, 2011); and, (c) that the Issuer will
take such action or refrain from such action as necessary, and as more particularly set forth in this
Section, in order that the Certificates will not be considered "private activity bonds" within the
meaning of section 141 of the Code.
Section 25. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A.,
Government Code, Section 1201.028, this Ordinance shall be effective immediately upon its
adoption by the City Council.
25
Exhibit A
Continuing Disclosure Information
The following information is referred to in Section 16(a) of this Ordinance:
Annual Financial Statements and (?perating Data
The financial information and operating data with respect to the Issuer to be provided annually in
accordance with such Section are as specified (and included in the Appendices of the Official
Statement referred to) below:
The quantitative financial information and operating data pertaining to the Issuer of the general type
included in Tables numbered l, 2, 11, 12, 13, 15, 22, 23, 24, 25 and 26 of Appendix A and in
Appendix D to the Official Statement.
The financial statements of the Issuer that will be provided will be unaudited, unless an audit is
performed, in which event the audited financial statements will be made available.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described in the
notes to the financial statements that are attached to the Official Statement as Appendix C, or such
other accounting principles as the Issuer may be required to employ from time to time pursuant to
state law or regulation.
A-1
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PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of April 1, 2010 (this "Agreement"), by and between
the City of Paris, Texas (the "Issuer"), and The Bank of New York Mellon Trust Company, N.A.,
in Dallas, Texas, a national banking association duly organized and existing under the laws of the
United States of America (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its Combination
Tax and Revenue Certificates of Obligation, Series 2010 (the "Securities") in the aggregate principal
amount of $3,005,000, such Securities to be issued in fully-registered form only as to the payment
of principal and interest thereon; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers thereof on
or about Apri1 8, 2010; and
WHEREAS, the lssuer has selected the Bank to serve as Paying Agent/Registrar in connection
with the payment of the principal of, premium, if any, and interest on said Securities and with
respect to the registration, transfer and exchange thereof by the registered owners thereof; and
WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and
has full power and authority to perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as fallows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Auuointment.
The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities.
As Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer
the principal, premium (if any), and interest on the Securities as the same become due and payable
to the registered owners thereof, all in accordance with this Agreernent and the "Order" (hereinafter
defined).
The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar
for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Order."
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation.
As compensation for the Bank's services as Paying Agent/Registrar, the lssuer hereby agrees
to pay the Bank the fees and amounts set forth in Schedule A attached hereto for the first year of this
Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in
effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the l ssuer
on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon
the first day of the following Fiscal Year.
In addition, the Issuer agrees to reimburse the Bank upan its request for all reasonable
expenses, disbursements and advances incurred or made by the Bank in accordance with any of the
provisions hereof (including the reasonable compensation and the expenses and disbursements of
its agents and counsel).
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the principal or any
or all installments of interest, or both, are due and payable on any Security which has become
accelerated pursuant to the terms of the Security.
"Bank Office" means the principal corporate trust office of the Bank as indicated on the
signature page hereof. The Bank will notify the Issuer in writing of any change in location of the
Bank Office.
"Fiscal Year" means the fiscal year of the Issuer, ending September 30.
"Holder" and "Security Holder" each means the Aerson in whose name a Security is registered
in the Security Register.
"lssuer Request" and "Issuer Order" means a written request or order signed in the name of the
Issuer by the Mayor or Mayor Pro-tem of the Issuer, any one ar more of said officials, delivered to
the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
"Order" means the order, ordinance or resolution of the governing body of the Issuer pursuant
to which the Securities are issued, certified by the Secretary of the Board of Trustees or any other
officer of the lssuer and delivered to the Bank.
2
,
"Person" means any individual, corporation, partnership, joint venture, association, joint stock
company, trust, unincorporated organizatian or government or any agency or political subdivision
of a government.
"Predecessor Securities" of any particular Security means every previous Security evidencing
all or a portion of the same obligation as that evidenced by such particular Security (and, for the
purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement
Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the
Order).
"Record Date" means the last business day of the month next preceding payment.
"Redemption Date" when used with respect to any Bond to be redeemed means the date fixed
for such redemption pursuant to the terms of the Order.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice-
Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive Committee
of the Board of Directors, the Aresident, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, or any ather officer of the Bank customarily performing functions similar
to those performed by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is refened because of his
knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the Issuer providing
for the registration and transfer of the Securities.
"Stated Maturity" means the date specified in the Order the principal of a Security is scheduled
to be due and payable.
Section 2.02. Other Definitions.
The terms "Bank," "Issuer" and "Securities (Security)° have the meanings assigned ta them
in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and
functions af this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent.
As Paying Agent, the Bank shall, provided adequate collected funds have been provided ta it
for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each
Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender
of the Security to the Bank at the Bank Office.
I ~ ? Y
As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it
for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid each Holder and preparing and
sending checks by United States Mail, first class postage prepaid, on each payment date, to the
Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the
address appearing on the Security Register or by such other method, acceptable to the Bank,
reyuested in writing by the Holder at the Holder's risk and expense.
The Bank is also authorized to transfer funds relating to the closing and initial delivery of the
securities in the manner disclosed in the closing memorandum approved by the Issuer as prepared
by the Issuer's financial advisor or other agent. The Bank may act on a facsimile transmission of
the closing memorandum to be followed by an original of the closing memorandum signed by the
financial advisor or the Issuer
SecNon 3.02. Payment Dates.
The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on
the dates specified in the Order.
ARTICLE FOUR
REGISTRAR
Section 4.01. SecuritX Reg,ister - Transfers and Exchanges.
The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books
and records (herein sometimes referred to as the "Security Register") and, if the Bank Office is
located outside the State of Texas, a copy of such books and records shall be kept in the State of
Texas, far recording the names and addresses of the Holders of the Securities, the transfer, exchange
and replacement of the Securities and the payment of the principal of and interest on the Securities
to the Holders and containing such other information as may be reasonably required by the Issuer
and subject to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers,
exchanges and replacement of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied
by a written instrument of transfer, the signattu•e on which has been guaranteed by an officer of a
federal ar state bank or a member of the National Association of Securities Dealers, in form
satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a re-
registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in relation
to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be
completed and new Securities delivered to the Holder or the assignee of the Holder in not more than
three (3) business days after the receipt af the Securities to be canceled in an exchange or transfer
and the written instrument of transfer or request for exchange duly executed by the Holder, or his
duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar.
4
:
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Section 4.02. Certificates.
At any time that the Securities are not subject to a book-entry-only system of registration and
transfer, the lssuer shall provide an adequate inventory of printed Securities ta facilitate transfers
or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in
safekeeping pending their use, and reasonable care will be exercised by the Bank in maintaining
such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt
securities of other political subdivisions or corporations for which it serves as registrar, or that is
maintained for its own securities.
Section 4.03. Form of Security Register.
The Bank, as Registrar, will maintain the Security Register relating to the registration,
payment, transfer and exchange of the Securities in accordance with the Bank's general practices and
procedures in effect from time to time. The Bank shall not be obligated ta maintain such Security
Register in any form other than those that the Bank has currently available and currently utilizes at
the time.
The Security Register may be inaintained in written form or in any ather form capable of being
converted into written form within a reasonable time.
Section 4.04. List of Securitv Holders.
The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the
required fee, a copy of the information contained in the Security Register. The Issuer may also
inspect the information contained in the Security Register at any time the Bank is customarily open
for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or
ta convert the information into written form.
The Bank will not release or disclose the contents of the Security Register to any person other
than to, or at tbe written request of, an authorized officer or employee of the Issuer, except upon
receipt of a caurt order or as otherwise required by law. Upon receipt of a court order and prior to
the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so
that the Issuei• may contest the court order or such release or disclosure of the contents of the
Security Register.
Section 4.05. Caacellation of Certificates.
All certificates surrendered to the Bank, at the designated Payment/Transfer Office, for
payment, redemption, transfer or replacement, shall be promptly canceled by the Bank. The Bank
will provide to the Issuer, at reasonable intervals determined by it, a certificate evidencing the
destruction of canceled certificates.
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Section 4.06. Mutilated~Destroyed, Lost or Stolen Securities.
The Issuer hereby instructs the Bank, subject to the applicable provisions of the Order, to
deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost or stolen
Securities as long as the same does not result in an over-issuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its discretion,
may execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only after (i) the filing by the Holder thereof with the Bank of evidence satisfactory
to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership
thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the
Issuer and the Bank hatmless. All expenses and charges associated with such indemnity and with
the preparation, execution and delivery of a replacement Security shall be borne by the Holder of
the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer.
The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish
the lssuer inforrnation as to the Securities it has paid pursuant to Section 3.01, Securities it has
delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities
it has delivered in exehange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant
to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank.
The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care
in the performance thereof.
Section 5.02. Reliance on Documents, Etc.
(a) The Bank may conclusively re1y, as to the truth of the statements and correctness of the
opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisians of this Agreement shall require the Bank to expend or risk its own funds or
otherwise incur any financial liability for performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adeguate indemnity satisfactory to it against such risks or liability is not
assured to it.
6
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(d) The Bank may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note, security, or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties. Withaut limiting the generality of the foregoing
statement, the Bank need not examine the ownership of any Securities, but is protected in acting
upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer
executed in accordance with Section 4.01 hereof, which appears on its face to be signed by the
Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the
facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written advice of such counsel or any opinion
af counsel shall be full and complete authorization and protection with respect to any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
( fl The Bank may exercise any of the powers hereunder and perform any duties hereunder
either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
The recitals contained herein with respect to the Issuer and in the Securities shall be taken as
the statements of the lssuer, and the Bank assumes no responsibility for their carrecmess.
The Bank shall in no event be liable ta the Issuer, any Holder or Holders of any Security, or
any other Person for any amount due on any Security from its own funds.
Section 5.04. Mav Hold Securities.
The Bank, in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Issuer with the same rights it would have if it were not
the Paying Agent/Registrar, or any other agent.
Section 5.05. MoneYS Held by Bank.
The Bank shall deposit any moneys received from the Issuer inta a trust account to be held in
a fiduciary capacity for the payment of the Securities, with such moneys in the account that exceed
the deposit insurance available to the Issuer by the Federal Deposit Insurance Corporation, to be
fully collateralized with securities or obligations that are eligible under the laws of the State of Texas
to secure and be pledged as collateral for trust accounts until the principal and interest on such
securities have been presented for payment and paid to the owner thereof. Payments made from
such trust account shall be made by check drawn on such trust account unless the owner of such
Securities shall, at its own expense and risk, request such other medium of payment.
Subject to the Unclaimed Property Law of the State of Texas, any money deposited with the
Bank for the payment of the principal, premium (if any), or interest on any Security and remaining
unclaimed far three years after the final maturity of the Security has become due and payable will
be paid by the Bank ta the Issuer if the Issuer so elects, and the Holder of such Security shall
7
,
hereafter look only to the Issuer for payment thereof, and all liabiliry of the Bank with respect to
such monies shall thereupon cease. If the Issuer does not elect, the Bank is directed to report and
dispose of the funds in compliance with Title Six of the Texas Properly Code, as amended.
Section 5.06. [ndemnification.
TO THE EXTENT PERMITTED BY LAW, THE 1SSUER AGREES TO TNDEMNIFY THE BANK, ITS
DIRECTORS, OFFICERS AND EMPLOYEES, AND HOLD IT HARMLESS AGAINST, ANY LOSS, LIABILITY
OR EXPENSE 1NCURRED VVITHOUT NEGLIGENCE OR BAD FAITH ON ITS PART, ARISING OUT OF OR
IN CONNECTION WITH 1TS ACCEPTANCE OR ADMINISTRATION OF ITS DUTIES HEREUNDER,
INCLUDING THE COST AND EXPENSE AGAINST ANY CLAIM OR LIABILITY IN CONNECTION WITH
THE EXERCISE OR PERFORMANCE OF ANY OF ITS POWERS OR DUTIES UNDER THTS AGREEMENT.
Section 5.07. Interpleader.
The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim,
demand, or controversy over its person as well as funds on deposit, in either a Federal or State
District Court located in the State and County where the administrative offices of the Issuer are
located, and agree that service of process by cetlified or registered mail, return receipt requested,
to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The
Issuer and the Bank further agree that the Bank has the right ta file a Bill of Interpleader in any court
of competent jurisdiction in the State of Texas to determine the rights of any Person claiming any
interest herein.
Section 5.08. Depository Trust Company Services.
It is hereby represented and warranted that, in the event the Securities are otherwise qualified
and accepted for "Depository Trust Company" services or equivalent depository ttust services by
other organizatians, the Bank has the capability and, ta the extent within its control, will comply
with the "Operational Arrangements," effective August 1, 1987, which establishes requirements for
securities to be eligible for such type depository trust sezvices, including, but not limited to,
requirements for the timeliness of payments and funds availability, transfer turnaround time, and
notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment.
This Agreement may be amended only by an agreement in writing signed by both of the parties
hereto.
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SecNon 6.02. Assignment.
This Agreement may not be assigned by either party without the prior written consent of the
other.
Section 6.03. Notices.
Any request, demand, authorization, direction, notice, consent, waiver or other doeument
provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or
delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page of this
Agreement.
Section 6.04. Effect of Headings.
The Article and Section headings herein are for convenience only and shall not affect the
canstruction hereof.
Section 6.05. Successors and Assigns.
All cavenants and agreements herein by the Issuer shall bind its successors and assigns,
whether so expressed or not.
Any corporation or association into which the Bank may be converted or merged, or with
which it may be cansolidated, or to which it may sell, lease, or transfer its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or association resulting from
any such conversion, sale, merger, consolidation, or transfer to which it is a party, ipso facto, shall
be and become successor Paying Agent/Registrar hereunder and vested with all of the powers,
rights, obligations, duties, remedies, discretions, immunities, privileges, and all other matters as was
its predecessor, without the execution or filing of any instruments or any further act, deed, or
conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
Section 6.06. Severabilitv.
In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 6.07. Benefits of Agreement.
Nothing herein, express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, any benefit or any legal or eyuitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement.
This Agreement and the Order constitute the entire agreement between the parties hereto
relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this
Agreement and the Order, the Order sha11 govern.
9
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Section 6.09. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same Agreement.
Section 6.10. Termination.
This Agreement will terminate (i) on the date of final payment of the principal of and interest
on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty
(60) days written notice; provided, however, an early termination of this Agreement by either party
shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer
and such appointment accepted and (b) notice has been given to the Holders of the Securities of the
appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually
agree that the effective date of an early termination of this Agreement shall not occur at any time
which would disiupt, delay or otherwise adversely affect the payment of the Securities.
The resigning Paying Agent/Registrar may petition any court of competent jurisdiction for the
appaintment of a successor Paying Agent/Registrar if an instnunent of acceptance by a successor
Paying Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty
(60) days after the giving of such notice of resignation.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver
the Security Registei• (or a copy thereof), together with other pertinent books and records relating
to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer.
The provisions of Section 1.02 and af Article Five shall survive and remain in full force and
effect following the termination of this Agreement.
Section 6.11. Governinp, Law.
This Agreement shall be construed in accordance with and governed by the laws of the State
of Texas.
l0
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
By
Title
2001 Bryan - 1 lth Floor
Dallas, Texas 75021
CITY OF PARIS, TEXAS
By
Mayor
135 1 st Street SE
Paris, Texas 75460-5803
12
SCHEDULE A
Paying Agent/Registrar Fee Schedule
[To be supplied by the Bank]
a 0 0 p I
LAW OFPICES
MECALL, PARKHURST & HORTON L.L.P.
600 CONGRESS AVENUE
717 NORTH HARWOOD
1800 ONE AMERICAN CENTER
NINTH FLOOR
AUSTIN.TEXAS 78701-3248
DALLAS,TEXAS 75201-6587
TELEPHONE: 512 478-3805
TELEPHONE 214 754-8200
FACSIMILE:512 472-0877
FACSIMILE 214754-8250
March 8, 2010
Mayor and Members af the City Council
City of Paris
135 1 st Street SE
Paris, Texas 75460-5803
700 N. ST. MARY'S STREET
1525 ONE RIVERWALK PIACE
SAN ANTONIO, TEXAS 78205-3503
TELEPHONE: 210 225-2800
FACSIMIIE'210 225-2884
Re: Proposed City of Paris, Texas Combination Tax and Revenue Certificates of Obligation,
Series 2010
Ladies and Gentlemen:
The purpose of this engagement letter i s to set forth certain matters concerning the services we
will perform as bond counsel to the City of Paris (the "Issuer") in connectian with the issuance of
the above-referenced Certificates of Obligation (the "Certificates"). We understand that the
Certificates are being issued for the purpose of paying all or a portion of the Issuer's contractual
obligations incuired in connection with improving and expanding South Collegiate Drive and
making improvements to the frontage access for South Collegiate Drive and paying legal, fiscal,
engineering and architectural fees in connection with such project. We further understand that the
Certificates will be secured by a pledge of the receipts of an ad valorem tax levied by the Issuer
within the limitation prescribed by law and additionally from a limited pledge of the surplus net
revenues of the Issuer's waterwarks and sewer system. We understand that the Certificates will be
issued in the amount of $3,005,000. We further understand that the Certificates will be sold by the
City Council of the Issuer (the "City Council") by competitive sale on the date hereof (the "Sale
Date") to an investment banking firm or syndicate of banking firms (collectively, the "Purchasers").
A. THE FINANCING
As Bond Counsel to the Issuer, we would like for the City Council to understand how the
issuance of the Certificates will be effected. I will briefly describe the procedures and certain
applicable law that pertains to the issuance of the Certificates, below. However, you sbould feel free
to call me at any time to discuss any questions that you or your staff may have.
(1) The first step in the issuance of the Certificates will be the adoption of a resolution
expressing the Issuer's intention to issue the Certificates, providing for the intended use of the
Certificate proceeds and describing the sources of payment. The resolution will include a
notice that must be published in the local paper on two occasions, with the first publicatian to
be at least 30 days prior to the adoption of the Certificate Ordinance, described below. The
publication of the notice gives right to voters of the Issuer to present a petition calling for a
referendum on the adoption of the Certificate Ordinance. If no such petition is received from
Page 1 of 6
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X
at least five percent of the registered voters of the Issuer prior to the adoption of the Certificate
Ordinance, then the Issuer may proceed with the issuance without holding an election.
(2) The Certificates will be "ordered to be issued" when and if the City Council approves an
ordinance (the "Ordinance") on the Sa1e Date. The Ordinance provides for (i) the terms of the
Certificates, including the principal amortization schedule and interest rates, (ii) the
redemption right of the Issuer with respect to the Certificates, (iii) the Issuer's commitment to
levy its debt service tax each year in an amount sufficient to pay the debt service on the
Certificates to the extent that the other revenues are not on deposit in the Issuer's Interest and
Sinking Fund for the Certificates in amounts sufficient to pay the debt service on the
Certificates when the annual tax levy is set, (iv) the sale of the Certificates to the Purchasers,
(v) the approval of a paying agent agreement to whom you will make semiannual payments
sufficient to pay the debt service on the Certificates, (vi) certain other covenants of the Issuer
that are designed to allow the Issuer to issue the Certificates as tax-exempt obligations and
(vii) the Issuer's commitment ta annually provide information to certain persons that describe
the Issuer's financial condition, the status of the Certificates and certain other matters. As you
can see, the Ordinance is an omnibus undertaking ofthe Issuer that is intended to provide for
all actions and undertakings that are required for the issuance, sale and delivery of the
Certificates. There will be other certificates and letters that will be required to be executed by
officers of the Issuer on the Sale Date, but they all spring from, and are authorized by, the
Ordinance.
(3) As noted above, the Certificates will be sold to the Purchasers in accordance with the
provisions of the Ordinance and the terms of the Issuer's Notice of Sale. The Notice of Sale
obligates the lssuer make certain representations to the Pu.rchasers to the effect that the Issuer
is authorized to issue the Certificates and that it has made full disclosure to the Certificate
holders of all material information. Therefore, if there are any unusual financial, legal or other
circumstances affecting the Issuer which would make such representations or statements made
by the Issuer untrue, you should let your Financial Advisor know about them as soon as
possible. As a condition to the Purchasers paying for the Certificates, they will require this
tirm to deliver our Bond Counsel opinion to them, through which we will apine that the
Certificates are valid abligations of the Issuer and that, assuming ongoing compliance by the
Issuer with the provisions of the Ordinance, the interest on the Certificates will be exempt
from Federal incame taxation. State law will also require the delivery of an opinion of the
Texas Attorney General approving the Certificates.
(4) The Issuer will offer the Certificates into the public debt markets prior to the time that the
City Council meets to accept the Purchasers' offer for the Certificates. Through this process,
the Certificates will be "priced," i.e., interest rates and premiums or discounts, if any, for the
Certificates will be established. Again, your financial advisor wi11 assist you in the marketing
of the Certificates to the Piu•chasers. On the Sale Date, the City Council will consider the
terms offered to the Issuer by the winning bidder based upon the market conditions and other
factors that determine interest rates and pricing information. The Issuer, working with its
financial advisor and Bond Counsel, will prepare an offering document called an "Official
Stateinent" that contains financial and operating data concerning the Issuer, and infonnation
Page 2 of 6
that describes the Certificates. The Issuer is responsible for the information that is contained
in the Official Statement ta the extent that it describes the Certificates and the Issuer.
B. SCOPE OF ENGAGEMENT
In this engagement, we expect to perform the following duties:
(1) Subject to the completion ofproceedings to our satisfaction, render our legal opinion (the
"Bond Opinion") regarding the validity and binding effect of the Certificates, the source
of payment and security for the Certificates, and the excludability of interest on the
Certificates from gross income for Federal income tax purposes.
Our Bond Opinion will be delivered by us an the date the Certificates are exchanged for
their purchase price (the "Closing"). The Issuer will be entitled to rely on our Bond
Opinion.
The Bond Opinion will be based on facts and law existing as of its date. In rendering our
Bond Opinion, we will rely upon the cei-tified proceedings and other certifications of
public officials and other persons furnished to us withaut undertaking to verify the same
by independent investigation, and we will assume continuing compliance by the Issuer
with applicable laws relating to the Certificates. During the course of this engagement,
we will rely on you to provide us with complete and timely information on all
developments pertaining to any aspect of the Certificates and their security. We
understand that you will direct members of your staff and other employees of the Issuer
to cooperate with us in this regard.
(2) Prepare and review documents necessary or appropriate to the authorization, issuance
and delivery of the Certificates, coordinate the authorization and execution of such
documents, and review enabling legislation.
(3) Assist the Issuer in seeking from other governmental authorities sucb approvals,
permissions and exemptions as we determine are necessary or appropriate in connection
with the authorization, issuance and delivery of the Certificates, except that we will not
be responsible for any required federal or state securities law filings. In this connection,
we particularly undertake to assist the Issuer in having the Certificates approved by the
Public Finance Division of the Office of the Texas Attorney General, and, following
such approval> registered by the Texas Comptroller of Public Accounts.
(4) Review legal issues relating to the structure of the Certificate issue.
(5) Review those sections of the official statement to be disseminated in connection with the
sale of the Certificates that describe the Certificates, the Ordinance pursuant to which
they will be issued and the tax-exempt treatment of the interest an the Certificates for
purposes of federal income taxation.
Page 3 of 6
(6) If requested, assist the Issuer in presenting information to bond rating organizations and
providers of credit enhancement relating to legal issues affecting the issuance of the
Certificates.
(7) Draft the continuing disclosure undertaking of the Issuer.
Our duties in this engagement are limited to those expressly set forth above. Unless we are
separately engaged in writing to perform other services, our duties do not include any other services,
including the following:
(1) Preparing requests for tax rulings from the lnternal Revenue Service, or no action letters
from the Certificates and Exchange Commission.
(2) Preparing state securities law memoranda or investment surveys with respect to the
Certificates.
(3) Drafting state constitutianal or legislative amendments.
(4) Pursuing test cases or other litigation.
(5) Expressing any view as to the creditworthiness of the Issuer or the Certificates.
(6) Representing the Issuer in Internal Revenue Setvice examinations or inquiries, or
Certificates and Exchange Commission investigations.
(7) Except as described in paragraph (7) above, assisting in the preparation of, or opining
on, a continuing disclosure undertaking pertaining to the Certificates or, after Closing,
providing advice concerning any actions necessary to assure compliance with any
continuing disclosure undertaking.
(8) After Closing, providing continuing advice to the Issuer or any other party concerning
any actions necessary to assure that interest paid on the Certificates will continue to be
excludable from gross income for federal income tax purposes (e.g., our engagement
does not include rebate calculations for the Certificates).
(9) Negotiating the terms of, or opining as to, any investment contract.
(10) Addressing any other matter not specifically set forth above that is not required to render
our Bond Opinion or our disclosure opinion.
C. ATTORNEY-CLIENT RELATIONSHIP
Upon execution of this engagement letter, the Issuer will be our client and an attorney-client
relationship will exist between us. We further assume that all other parties in this transaction
understand that we represent only the lssuer in this transaction, we are not counsel to any other
party, and we are not acting as an intermediary among the parties. Our services as bond counsel are
Page 4 of 6
limited to those contracted for in this letter; the Issuer's execution of this engagement letter will
constitute an acknowledgment of those limitations. Our representation of the Tssuer will not affect,
however, our responsibility to render an objective Bond Opinion.
Our representation of the Issuer and the attorney-client relationship created by this engagement
letter will be concluded upon issuance of the Certificates. Nevertheless, subsequent to Closing, we
will mail the appropriate Internal Revenue Service Form 8038, prepare and distribute to the
participants in the transaction a transcript of the proceedings pertaining to the Certificates.
D. CONFLICTS
As you are aware, our tirm represents many political subdivisions and investment banking
firms, among others, who do business with political subdivisions. It is possible that during the time
that we are representing the Issuer, one or more of our present or future clients will have transactions
with the Issuer. It is also possible that we may be asked to represent, in an unrelated matter, one or
more of the entities involved in the issuance of the Certificates. We do not believe such
representation, if it occurs, will adversely affect our ability to represent you as provided in this letter,
either because such matters will be sufficiently different from the issuance of the Certificates so as
to make such representations not adverse to our representation of you, or because the potential for
such adversity is i•emote or minor and outweighed by the consideration that it is urilikely that advice
given to the other client will be relevant to any aspect of the issuance of the Certificates. Execution
of this letter will signify the Issuer's consent to our representation of others consistent with the
circumstances described in this paragraph.
E. FEES
Based upon: (i) ouu current understanding of the terms, structure, size and schedule of the
financing represented by the Certificates; (ii) the duties we will undertake pursuant to this
engagement letter; (iii) the time we anticipate devoting to the financing; and (iv) the responsibilities
we will assume in connection therewith, ow• fee for Bond Counsel services will be $5,000 plus .OOI
times the principal amount of the Bonds that is in excess of $1,000,000. ln addition, we will be
reimbursed for all travel costs, photocopying, deliveries, long distance telephone charges, telecopier
charges and a11 other expenses. Our fee will be billed after the Closing. If the financing is not
consummated, we understand and agree that we will not be paid. In accordance with the terms af
the Certificate Ordinance, the Issuer will provide the filing fee of the Texas Attorney General to
Bond Counsel on a timely basis to permit the filing of the transcript of proceedings for the
Certificates so that the Certificates may be approved by the Attorney General in time to meet the
closing date of Apri18, 2010.
F. RECORDS
At your request, papers and property furnished by you will be returned promptly upon receipt
of payment for outstanding fees and client charges. Our own files, including lawyer work product,
pertaining to the transaction will be retained by us. For various reasons, including the minimization
of unnecessary storage expenses, we reserve the right to dispose of any documents or other materials
retained by us after• the termination of this engagement.
Page 5 of 6
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If the faregoing terms are acceptable to you, please so indicate by retw-ning the enclosed copy
of this engagement letter dated and signed by an authorized officer, retaining the original for your
files. We look forward to working with you.
Respectfully yours,
McCall, Parkhurst & Horton L.L.P.
BY
D Cuiver
Accepted and Approved
City of Paris, Texas
By:
Mayor
Date: March 8, 2010
Page 6 of 6
nr)
i
SIGNATURE IDENTIFICATION AND GENERAL CERTIFICATE
THE STATE OF TEXAS §
LAMAR COUNTY §
CITY OF PARIS §
We, the undersigned officers of the City of Paris, Texas (the "Issuer"), hereby certify that we are
executing and delivering this certificate with reference to City af Paris, Texas, Combination Tax and
Revenue Certificates of Obligation, Series 2010, dated April l, 2010, in the principal amount of
$3,005,000 (the "Certificates"). The certifications herein are made this, the _ day of April, 2010.
Certifications as to Execution of Certificates and Issuer Seal
l. We officially executed and signed the Certificates with our manual signatures or by causing
facsimiles of our manual signatures to be imprinted or lithographed on each of the Certificates, and, if
appropriate, we hereby adopt said facsimile signatures as our own, respectively, and declare that said
facsimile signatures constitute our signatures the same as if we had manually signed each of the
Certificates.
2. The Certificates are substantially in the form, and have been duly executed and signed in the manner,
prescribed in the ordinance authorizing the issuance of the Certificates (the "Ordinance").
3. At the time we so executed and signed the Certificates we were, and at the time of executing this
Certificate we are, the duly chosen, qualified and acting officers indicated therein, and authorized to
execute the same.
4. We have caused the official seal of the lssuer to be impressed, or printed, or lithographed on the
Certificates; and said seal on the Certificates has been duly adopted as, and is hereby declared ta be, the
official seal of the lssuer.
Certifications as to Liti g tion
5. No litigarion of any nature has been filed or is now pending to restrain or enjoin the issuance or
delivery of the Certificates, or that would affect the provision made for their payment or security, or in any
manner questioning the proceedings or authority concerning the issuance of the Certificates, and so far as
we know and believe no such litigation is threatened.
6. Neither the corporate existence nor boiundaries of the Issuer is being contested; no litigation has been
filed or is now pending that would affect the authority of the officers of the Issuer to issue, execute, sign,
and deliver the Certificates; and no authority or proceedings for the issuance of the Certificates have been
repealed, revoked or rescinded.
7. No litigation of any nature has ever been filed pertaining to, affecting or contesting. (a) the
Chdinance that authorized the Certificates; (b) the issuance, delivery, payment, security or validity of the
Certificates; (c) the authority of the governing body and the officers of the Issuer to issue, execute and
deliver the Certificates; (d) the validity of the corporate existence of the Issuer; or (e) the current tax rolls
of the Issuer; and no litigation is pending pertaining to, affecting, questioning or contesting the current
boundaries of the Issuer.
t?~~'.1~~
Certifications as to_Oryanization Existence and Qualifications of the lssuer
8. The Issuer is a duly incorporated Home Rule City, having more than 5,000 inhabitants, operating and
existing under the Constitution and laws of the State of Texas and the duly adopted Hame Rule Charter
of the City, which Charter has not been amended since the issuance of the most recent obligations
approved by the Attorney General of Texas.
Certification as to the Issuer's Tax-Supported Debt
9. Attached to this certificate and marked Exlvbit A is a true, full and correct debt service schedule for
the proposed Certificates and all of the Issuer's other outstanding indebtedness that is payable from a
pledge of its tax revenues. In addition to the proposed Certificates, the Issuer currently has $24,775,000
of outstanding tax-supported debt (the "Outstanding Tax Obligations"), consisting of the following: (i) its
Combination Tax and Revenue Certificates of Obligation, Series 2002, outstanding in the principal amount
of $4,280,000, (ii) its General Obligation Refunding Bonds, Series 2003, outstanding in the principal
amount of $3,420,000 and (iii) its General Obligation Refunding Bonds, Series 2010, outstanding in the
principal amount of $17,075,000.
Certification as to the Issuer's Current Tax Roll
10. The currently effective ad valorem Tax Rolls of the Issuer are those for the year 2009, being the most
recently approved Tax Rolls of the Issuer; that the taxable property in the Issuer has been assessed as
required by law; that the Board of Equalization of the Issuer has eyualized and approved the valuation of
taxable property in the Issuer for said year; that the Tax Assessor of the Issuer has duly verified the
aforesaid Tax Rolls, and said Board of Equalization has finally approved the same; and that the assessed
value of taxable property in the Issuer upon which the annual ad valorem tax of the Issuer has been levied
(after deducting the amount of all exemptions, if any, taken or required to be given under the Constitution
and laws of the State of Texas), according to the aforesaid Tax Rolls for said year, as delivered to the City
Clerk ofthe Issuer, and finally approved and recorded by the City Council ofthe Issuer, is $1,504,756,374.
Certification as to Absence of Petition for Referendum
11. No petition protesting the issuance of the Certificates and requesting a referendum election has been
received.
Certifications as to Waterworks and Sewer S s~
12. None of the revenues or income of the Issuer's combined Waterworks and Sewer System (the
"System") have been pledged or encumbered to the payment of any debt or obligation of the Issuer or the
System, except in connection with (i) the aforesaid propased Certificates, (ii) the Issuer's Combination Tax
and Revenue Certificates of Obligation, Series 2002, which are currently outstanding in the principal
amount of $4,280,000 and (iii) the Issuer's Waterworks and Sewer System Revenue Bonds, Series 2000,
which are cw-rently outstanding in the principal amount of $480,000.
13. Attached hereto as Exhibit B is a true, full and correct schedule of the income (consisting of
operating income and interest income) and expenses (consisting of operating expenses, but excluding
depreciation and debt service) of the System for the most recent five years for which financial information
is available.
14. The lssuer's current water and sewer rates are set forth in Exhibit C attached hereto.
Certification as to No Default
15. The Issuer is not in default with respect to the Certificates or the Ordinance ar with any af the other
Outstanding Tax Obligations or the ordinances authorizing such obligations.
Submission of documents to the Attomey General
16. The initial securities certificate af the Certifcates shall be sent to the Office of the Attomey General
of the State of Texas, Public Finance Division (the "Attorney General"), by the lssuer's Bond Counsel,
McCall, Parkhurst & Horton L.L.A. It is requested that the Attomey General examine and approve the
initial Certificate in accordance with law. After such approval, the Attomey General is reyuested to
deliver the Certificate to the Comptroller of Public Accounts for registration.
Authorization of the Attomey General to Execute this Certificate
17. The Attomey General is hereby authorized and directed to date this Certificate concurrently with the
date of approval of the Certificates. If any litigation or contest should develop pertaining to the
Certificates or any other matters covered by this Certificate, the undersigned will notify the Attomey
General thereof immediately by telephone. With this assurance the Attomey General can rely on the
absence of any such litigation or contest, and on the veracity and currency of this Certificate, at the time
the Certificates are approved, unless the Attomey General is notified otherwise as aforesaid.
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The persons named below are on the date hereof, the duly elected and qualified incumbents of the
offices of the Issuer set apposite their respective names, and the signatures herein below are the genuine
signatures of said officers. By signing below, such officers hereby evidence their lawful signatures, adopt
same as facsimiles for the purpose of executing the Certificates and attest to the truthfulness of the
foregoing certifications.
MANUAL SIGNATURES OFFICIAL TITLES
Mayor
City Secretary
Before me on this day personally appeared the foregoing individuals, known ta me to be the officers
whose true and genuine signatw-es were subscribed to the foregoing instrument in my presence.
Given under my hand and seal of office this _ day of March, 2010.
Notary Public
(Notary Seal)
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F~0 ol 17)