O-2805-2-09ORDINANCE NO. 2805-2-09
' AN ORDINANCE authorizing the issuance of "CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING
BONDS, SERIES 2009'; pledging the net revenues of the City's
combined Waterworks and Sewer System to the payment of the principal
of and interest on said bonds; enacting provisions incident and related to
the issuance, payment, security and delivery of said bonds, including the
approval and execution of a Paying Agent/Registrar Agreement, a Bond
Purchase Agreement and an Escrow Agreement; providing for the
redemption of the bonds being refunded; and providing an effective date.
WHEREAS, the City Council of the City of Allen, Texas (the "City") has heretofore
issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal
amount $5,695,000 (the "Refunded Bonds") more particularly described as follows: City of
Allen, Texas, Waterworks and Sewer System Revenue Refunding and Improvement Bonds,
Series 1999, dated February 1, 1999, scheduled to mature on June 1 in each of the years 2010
through 2017 and 2019 (the "Refunded Bonds"); and
AND WHEREAS, pursuant to the provisions of V.T.C.A., Government Code, Chapter
1207, as amended, the City Council is authorized to issue refunding bonds and deposit the
proceeds of sale directly with any place of payment for the Refunded Bonds, or other authorized
depository, and such deposit, when made in accordance with said statute, and the ordinance
authorizing the issuance of the Refunded Bonds, shall constitute the making of firm banking and
financial arrangements for their discharge and final payment; and
WHEREAS, the City Council hereby finds and determines that refunding bonds should
be issued at this time to refund the Refunded Bonds, and such refunding will result in a gross
dollar savings of approximately $471,148.17 and provide a present value savings of
approximately $408,464.40; and
WHEREAS, the City Council hereby further finds and determines that the aforesaid
revenue bonds can and should be issued on a parity with the City's outstanding revenue bonds
(hereinafter de£med and identified as "Previously Issued Bonds") payable from and secured by a
first lien on and pledge of the Net Revenues of the City's combined Waterworks and Sewer
System (the "System") in that (i) the Finance Director of the City will execute a certificate
stating (a) that, to the best of his knowledge and belief, the City is not now in default as to any
covenant, obligation or agreement contained in any ordinance or other proceeding relating to any
obligations of the City payable from and secured by a lien on and pledge of the Net Revenues of
the System that would materially affect the security or payment of such obligations and
(b) payments into all special funds or accounts created and established for the payment and
security of all outstanding obligations payable from and secured by a lien on and pledge of the
Net Revenues of the System have been made and that the amounts on deposit in such special
funds or accounts are the amounts now required to be on deposit therein; (ii) the bonds herein
' authorized shall be scheduled to mature as to principal on June 1 in each year; and (iii) the City
will secure a certificate or opinion of a Certified Public Accountant to the effect that, according
to the books and records of the City, the Net Earnings, for the last completed Fiscal Year or for
85W46NV1WW863
12 consecutive months out of the 15 months immediately preceding the dais hereof, are at least
' equal to 1.20 times the "Average Annual Debt Service" for all "Bonds Similarly Secured" to be
outstanding after giving effect to the issuance of the bonds herein being issued; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS:
SECTION 1. Authorization - Designation - Principal Amount - Purpose. Revenue
bonds of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $5,795,000 to be designated and bear the title "CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 2009"
(hereinafter referred to as the "Bonds"), for the purpose of refunding certain obligations of the
City (identified in the preamble hereof and referred to as the "Refunded Bonds") and to pay the
costs of issuance, in conformity with the Constitution and laws of the State of Texas, including
V.T.C.A., Government Code, Chapters 1207 and 1502, as amended.
SECTION 2. Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Date. The Bonds shall be issued as fully registered obligations, without coupons,
shall be dated February 15, 2009 (the "Bond Date") and, other than the single fully registered
Initial Bond referenced in Section 8 hereof, shall be in denominations of $5,000 or any integral
multiple thereof (within a Stated Maturity), shall be numbered consecutively from one (1)
upward and shall become due and payable on June I in each of the years and in principal
amounts (the "Stated Maturities") and bear interest at per annum rates in accordance with the
' following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
2010 $ 575,000 2.50%
2011 590,000 2.50
2012 610,000 2.50
2013 530,000 2.50
2014 540,000 2.75
2015 555,000 3.00
2016 570,000 3.00
2017 585,000 3.25
2018 610,000 3.50
2019 630,000 3.50
The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the
rate(s) per annum shown in the above schedule (calculated on the basis of a 360 -day year of
twelve 30 -day months). Interest on the Bonds shall be payable on June 1 and December 1 in
each year, commencing June 1, 2009, until maturity or prior redemption.
SECTION 3. Terms of Payment - Paving Agent/Registrar. The principal of, premium,
if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
' otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of
85W46092IW0863
America which at the time of payment is legal tender for the payment of public and private debts,
' and shall be without exchange or collection charges to the Holders.
The selection and appointment of The Bank of New York Mellon Trust Company, N.A.,
Dallas, Texas (the "Paying Agent/Registrar") to serve as paying agent/registrar for the Bonds is
hereby approved and confirmed. Books and records relating to the registration, payment,
transfer and exchange of the Bonds (the "Security Register") shall at all times be kept and
maintained on behalf of the City by the Paying Agent/Registrar, as provided herein and in
accordance with the terns and provisions of a "Paying Agent/Registrar Agreement",
substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations
as the Paying Agent/Registrar and the City may prescribe. The Mayor or Mayor Pro Tem and
City Secretary of the City are hereby authorized to execute and deliver such Paying
Agent/Registrar Agreement in connection with the delivery of the Bonds. The City covenants to
maintain and provide a Paying Agent/Registrar at all times until the Bonds we paid and
discharged, and any successor Paying Agent/Registrar shall be a commercial bank, trust
company, financial institution or other entity qualified and authorized to serve in such capacity
and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying
Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be
sent to each Holder by United States Mail, fust class postage prepaid, which notice shall also
give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities
or upon the earlier redemption thereof, only upon presentation and surrender of the Bonds to the
Paying Agent/Registrar at its designated offices, initially in Dallas, Texas, or, with respect to a
successor Paying Agent/Registrar, at the designated offices of such successor (the "Designated
Payment/Transfer Office'). Interest on the Bonds shall be paid to the Holders whose names
appear in the Security Register at the close of business on the Record Date (the 15th day of the
month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of
the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the city where the Designated Payment/Transfer
Office of the Paying Agent/Registrar is located are authorized by law or executive order to close,
then the date for such payment shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on
such date shall have the same force and effect as if made on the original date payment was due.
In the event of a non-payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment for
such maturity or maturities (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from the
City. Notice of the Special Record Date and of the scheduled payment date of the past due
interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
' business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder of such maturity or maturities appearing on the Security Register at
the close of business on the last business day next preceding the date of mailing of such notice.
85W 9W10900963
SECTION 4. Redemption. (a) Optional Redemption. The Bonds maturing on June 1,
2019 shall be subject to redemption prior to maturity, at the option of the City, in whole or in
part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated
Maturity by lot by the Paying Agent/Registrar), on June 1, 2018 or on any date thereafter at the
redemption price of par plus accrued interest to the date of redemption.
(b) Exercise of Redemption Option. At least forty-five (45) days prior to a date set
for the redemption of Bonds (unless a shorter notification period shall be satisfactory to the
Paying Agent/Registrar), the City shall notify the Paying Agent/Registrar of its decision to
exercise the right to redeem Bonds, the principal amount of each Stated Maturity to be redeemed,
and the date set for the redemption thereof The decision of the City to exercise the right to
redeem Bonds shall be entered in the minutes of the governing body of the City.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall
treat such Bonds as representing the number of Bonds Outstanding which is obtained by dividing
the principal amount of such Bond by $5,000 and shall select the Bonds, or principal amount
thereof, to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be
t redeemed in whole or in part at the address of the Holder appearing on the Security Register at
the close of business on the business day next preceding the date of mailing such notice, and any
notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state
that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due
and payable on the redemption date specified, and the interest thereon, or on the portion of the
principal amount thereof to be redeemed, shall cease to accrue from and after the redemption
date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount
thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying
Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject
by its terms to prior redemption and has been called for redemption and notice of redemption
thereof has been duly given as hereinabove provided, such Bond (or the principal amount thereof
to be redeemed) shall become due and payable and interest thereon shall cease to accrue from
and after the redemption date therefor; provided moneys sufficient for the payment of such Bond
(or of the principal amount thereof to be redeemed) at the then applicable redemption price are
held for the purpose of such payment by the Paying Agent/Registrar.
(e) Conditional Notice of Redemption. With respect to any optional redemption of
' the Bonds, 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 Bonds
to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of
1:cro_r.1QPJJ eam:uxI
such notice of redemption, such notice shall state that said redemption may, at the option of the
' City, 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 be of no force and effect, the City shall not redeem such Bonds and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to
the effect that the Bonds have not been redeemed.
SECTIONS. Registration - Transfer- Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of this
Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be transferred or
exchanged for Bonds of other authorized denominations upon the Security Register by the
Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Designated
Payment/Transfer Office of the Paying Agent/Registrar for cancellation, accompanied by a
written instrument of transfer or request for exchange duly executed by the Holder or by his duly
authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond (other than the Initial Bond(s) authorized in
Section 8 hereof) at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
' transferees, one or more new Bonds, executed on behalf of, and furnished by, the City of
authorized denominations and having the same Stated Maturity and of a like aggregate principal
amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial Bond(s) authorized in Section 8
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the
Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated
Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered
for exchange, the Paying Agent/Registrar shall register and deliver new Bonds, executed on
behalf of, and famished by, the City, to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be
valid obligations of the City, evidencing the same obligation to pay, and entitled to the same
benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that the
Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange
of any tax or other governmental charges required to be paid with respect to such transfer or
' exchange.
85009689 Wffl8W
Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be, of
the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 30 hereof and such new replacement
Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen
Bond.
Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange
any Bond called for redemption, in whole or in part, within 45 days of the date fixed for
redemption of such Bond; provided, however, such limitation of transfer shall not be applicable
to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part.
SECTION 6. Book -Entry -Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and transfer/exchange
of the Bonds, the City hereby approves and authorizes the use of "Book -Entry -Only" securities
clearance, settlement and transfer system provided by The Depository Trust Company ("DTC"),
a limited purpose trust company organized under the laws of the State of New York, in
accordance with the operational arrangements referenced in the Blanket Issuer Letter of
Representations, by and between the City and DTC (the "Depository Agreement").
' Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond
(the `Beneficial Owners") being recorded in the records of DTC and DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the Bonds
or otherwise ceases to provide book -entry clearance and settlement of securities transactions in
general or the City determines that DTC is incapable of properly discharging its duties as
securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds
to cause Bonds to be printed in definitive form and provide for the Bond certificates to he issued
and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the
Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register
maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in
accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7. Execution - Registration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who we or were the proper officers of
the City on the date of the adoption of this Ordinance shall be deemed to be duly executed on
' behalf of the City, notwithstanding that such individuals or either of them shall cease to hold
such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to
85009609 VI0 NS63
Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in
' V.T.C.A., Government Code, Chapter 1201.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 9(c), manually executed by the Comptroller of
Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 9(d), manually executed by an authorized officer,
employee or representative of the Paying Agent/Registrar, and either such certificate upon any
Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been
duly certified, registered and delivered.
SECTION 8. Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount referenced in Section 1
hereof with principal installments to become due and payable as provided in Section 2 hereof
and numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of
maturity in the applicable principal amount and denomination and to be numbered consecutively
from T-1 and upward (hereinafter called the "Initial Bond(s)") and, in either case, the Initial
Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The
Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of
Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts
of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the
' Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written instructions
from the initial purchaser(s), or the designee thereof, and such other information and
documentation as the Paying Agent/Registrar may reasonably require.
SECTION 9. Forms. (a) Forms Generally. The Bonds, the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
Agent/Registrar, and the forth of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in this Section with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance and may have
such letters, numbers, or other marks of identification (including identifying numbers and letters
of the Committee on Uniform Securities Identification Procedures of the American Bankers
Association) and such legends and endorsements (including insurance legends in the event the
Bonds, or any maturities thereof, are purchased with insurance and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be established by the City or
determined by the officers executing such Bonds as evidenced by their execution thereof. Any
portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Bond.
' The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution thereof.
IWID: MWYIJ[1110Mt]
I
1
(b) Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BOND
SERIES 2009
Bond Date: Interest Rate: Stated Maturity: CUSIP NO:
February 15, 2009 % June 1, 20
Registered Owner:
Principal Amount: DOLLARS
The City of Allen (hereinafter referred to m the "City"), a body corporate and municipal
corporation in the County of Collin, State of Texas, for value received, acknowledges itself
indebted to and hereby promises to pay to the Registered Owner named above, or the registered
assigns thereof, solely from the revenues hereinafter identified, on the Stated Maturity date
specified above the Principal Amount stated above (or so much thereof as shall not have been
paid upon prior redemption) and to pay interest (computed on the basis of a 360 -day year of
twelve 30 -day months) on the unpaid Principal Amount hereof from the interest payment date
next preceding the "Registration Date" of this Bond appearing below (unless this Bond bears a
"Registration Date" as of an interest payment date, in which case it shall bear interest from such
date, or unless the "Registration Date" of this Bond is prior to the initial interest payment date in
which case it shall bear interest from the Bond Date) at the per annum rate of interest specified
above; such interest being payable on Jane 1 and December 1 of each year, commencing Jane 1,
2009, until maturity or prior redemption. Principal of this Bond is payable at its Stated Maturity
or redemption to the registered owner hereof, upon presentation and surrender at the Designated
Payment Transfer/Office of the Paying Agent/Registrar executing the registration certificate
appearing hereon, or its successor; provided, however, while this Bond is registered to Cede &
Co., the payment of principal upon a partial redemption of the principal amount hereof may be
accomplished without presentation and surrender of this Bond. Interest is payable to the
registered owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance
hereinafter referenced) whose name appears on the "Security Register" maintained by the Paying
Agent/Registrar at the close of business on the "Record Date", which is the 15th day of the
month next preceding each interest payment date and interest shall be paid by the Paying
Agent/Registrar by check sent United States Mail, first class postage prepaid, to the address of
the registered owner recorded in the Security Register or by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the registered owner. All
payments of principal of, premium, if any, and interest on this Bond shall be without exchange or
collection charges to the owner hereof and in any coin or currency of the United States of
America which at the time of payment is legal tender for the payment of public and private debts.
850a4fia9.]/10 80
' If the date for the payment of the principal of or interest on the Bonds shall be a Saturday,
Sunday, a legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original
date payment was due.
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $5,795,000 (herein referred to as the "Bonds") for the purpose of refunding certain
obligations of the City (identified in the preamble hereof and referred to as the "Refunded
Bonds") and to pay the costs of issuance, under and in strict conformity with the Constitution
and laws of the State of Texas, including V.T.C.A., Government Code, Chapters 1207 and 1502,
and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the
"Ordinance").
The Bonds maturing on June 1, 2019 may be redeemed prior to their Stated Maturities, at
the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on June 1, 2018 or
on any date thereafter at the redemption price of par plus accrued interest thereon to the
redemption date.
' At least thirty days prior to the date fixed for any redemption of Bonds, the City shall
cause a written notice of such redemption to be sent by United States Mail, first class postage
prepaid, to the registered owners of each Bond to be redeemed at the address shown on the
Security Register and subject to the terms and provisions relating thereto contained in the
Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption drily given, then upon such redemption date such
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor, provided
moneys for the payment of the redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar.
In the event a portion of the principal amount of a Bond is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided by
the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the
registered owner, without charge. If a Bond is selected for redemption, in whole or in part, the
City and the Paying Agent/Registrar shall not be required to transfer such Bond to an assignee of
the registered owner within 45 days of the redemption date therefor; provided, however, such
limitation on transferability shall not be applicable to an exchange by the registered owner of the
' unredeemed balance of a Bond redeemed in part.
850oa6 'VINW86;
With respect to any optional redemption of the Bonds, unless certain prerequisites to such
' redemption required by the Ordinance have been met and moneys sufficient to pay the principal
of and premium, if any, and interest on the Bonds 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 City, 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 be of no force and effect, the City shall not redeem
such Bonds and the Paying Agent/Registrar shall give notice, in the manner in which the notice
of redemption was given, to the effect that the Bonds have not been redeemed.
The Bonds are special obligations of the City, and, together with the outstanding
Previously Issued Bonds (identified and defined in the Ordinance), are payable solely from and
equally and ratably secured by a first lien on and pledge of the Net Revenues (as defined in the
Ordinance) of the City's combined Waterworks and Sewer System (hereinafter referred to as the
"System"). The Bonds do not constitute a legal or equitable pledge, charge, lien or encumbrance
upon any property of the City or the System, except with respect to the Net Revenues. The
holder hereof shall never have the right to demand payment of this obligation out of any funds
raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has reserved
' the right to issue additional revenue obligations payable from and equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System, in the same manner and to the
same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the Bonds; the properties constituting the System; the
Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature
and extent and manner of enforcement of the lien and pledge securing the payment of the Bonds;
the terms and conditions for the issuance of additional revenue obligations; the terms and
conditions relating to the transfer or exchange of this Bond; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/Registrar; the terns and
provisions upon which the liens, pledges, charges and covenants made therein may be discharged
at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no longer
Outstanding thereunder; and for the other terms and provisions contained therein. Capitalized
terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
' endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered Bonds
85MI v.Ma 863 10
of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and
of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the
designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, may treat the registered
owner whose name appears on the Security Register (i) on the Record Date as the owner entitled
to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to
payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii)
on any other date as the owner for all other purposes, and neither the City nor the Paying
Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event
of non-payment of interest on a scheduled payment date and for thirty (30) days thereafter, a new
record date for such interest payment (a "Special Record Date") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States Mail, first class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, recited, represented and declared that the City is a body corporate
and political subdivision duly organized and legally existing under and by virtue of the
Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by
' law; that all acts, conditions and things required to exist and be done precedent to and in the
issuance of the Bonds to render the same lawful and valid obligations of the City have been
properly done, have happened and have been performed in regular and due time, form and
manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that
the Bonds do not exceed any Constitutional or statutory limitation; and that due prevision has
been made for the payment of the principal of and interest on the Bonds by a pledge of the Net
Revenues of the System as aforestated. In case any provision in this Bond or any application
thereof shall he invalid, illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions and applications shall not in any way be affected or impaired thereby. The
terms and provisions of this Bond and the Ordinance shall be construed in accordance with and
shall be governed by the laws of the State of Texas.
1
[Remainder ofpage left blank inlentionalW
8500 fki?. IW00863 11
IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
' executed under the official seal of the City.
CITY OF ALLEN, TEXAS
Stephen Terrell, MAYOR
COUNTERSIGNED:
Shelley B. George, CITY SECRETARY
(City Seal)
(c) Form of Registration Certificate of Comptroller of Public Accounts to Appeaz
on Initial Bond(s) only.
REGISTRATION CERTIFICATE OF
' COMPTROLLER OF PUBLIC ACCOUNTS
THE STATE OF TEXAS )
OFFICE OF THE COMPTROLLER ) REGISTER NO.
OF PUBLIC ACCOUNTS )
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
85004609 v109M80 12
(d) Form of Certificate of Paying Agent/Reeistrar to appear on Definitive Bonds
off.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered under the provisions of the
within -mentioned Ordinance; the bond or bonds of the above entitled and designated series
originally delivered having been approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts, as shown by the records of the Paying
Agent/Registrar.
The designated offices of the Paying Agent/Registrar in Dallas, Texas is the "Designated
PaymenVTransfer Office" for this Bond.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
Dallas, Texas,
as Paying Agent/Registrar
Registration date:
Authorized Signature
' (e) Form of Assignment.
1
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee:)
(Social Security or other identifying number:
) the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
85ooaeo9.Mw 863 13
NOTICE: The signature on this assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular.
' M The Initial Bond(s) shall be in the form set forth in paragraph (b) of this
Section, except that the form of a single fully -registered Initial Bond shall be
modified as follows:
Heading and paragraph one shall read as follows:
REGISTERED
NO. T-1
REGISTERED
$5,795,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF ALLEN, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BOND,
SERIES 2009
Bond Date:
February 15, 2009
Registered Owner: Stifel Nicolaus & Company, Incorporated
Principal Amount: FIVE MILLION SEVEN HUNDRED NINETY-FIVE THOUSAND DOLLARS
The City of Allen, Texas (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the County of Collin, State of Texas, for value received, acknowledges
itself indebted to and hereby promises to pay to the Registered Owner named above, or the
registered assigns thereof, solely from the revenues hereinafter identified, the Principal Amount
hereinabove stated on June 1 in each of the yews and in principal installments in accordance with
the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been redeemed prior to maturity) and to pay interest,
computed on the basis of a 360 -day year of twelve 30 -day months, on the unpaid principal
amounts hereof from the Bond Date at the per annum rates of interest specified above; such
interest being payable on June 1 and December 1 in each year, commencing June 1, 2009, until
maturity or prior redemption. Principal installments of this Bond are payable in the year of
maturity or on a redemption date to the registered owner hereof by The Bank of New York
Mellon Trust Company, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon its
presentation and surrender, at its designated offices, initially in Dallas, Texas, or, with respect to
a successor paying agent/registrar, at the designated office of such successor (the "Designated
Payment/Transfer Office"). Interest is payable to the registered owner of this Bond (or one or
more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name
' appears on the "Security Register" maintained by the Paying Agent/Registrar at the close of
business on the "Record Date", which is the 15th day of the month next preceding each interest
payment date and interest shall be paid by the Paying Agent/Registrar by check sent United
850046MV10900863 14
' States Mail, fust class postage prepaid, to the address of registered owner recorded in the
Security Register or by such other method, acceptable to the Paying Agent/Registrar, requested
by, and at the risk and expense of, the registered owner. All payments of principal of, premium,
if any, and interest on this Bond shall be without exchange or collection charges to the owner
hereof and in any coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts. If the date for the payment of the
principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when
banking institutions in the city where the Designated Payment/Transfer Office of the Paying
Agent/Registrar is located are authorized by law or executive order to close, then the date for
such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day when banking institutions are authorized to close; and payment on such date shall
have the same force and effect as if made on the original date payment was due.
SECTION 10. Definitions. For all purposes of this Ordinance and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues to the payment of the Bonds, the following definitions are provided:
"Additional Parity Bonds" - Revenue bonds or other evidences of indebtedness which the
City reserves the right to issue or enter into, as the case may be, in the future in accordance with
the terms and conditions provided in Section 18 hereof and which are equally and ratably
secured by a first lien on and pledge of the Net Revenues of the System.
' "Average Annual Debt Service" - That amount which, at the time of computation, is
derived by dividing the total amount of Debt Service to be paid over a period of years as the
same is scheduled to become due and payable by the number of years taken into account in
determining the total Debt Service. Capitalized interest payments provided from bond proceeds
shall be excluded in making the aforementioned computation.
"Bonds" - The "City of Allen, Texas, Waterworks and Sewer System Revenue Refunding
Bonds, Series 2009", dated February 15, 2009, authorized by this Ordinance.
"Bonds Similarly Secured" - Collectively, the Previously Issued Bonds, the Bonds and
Additional Parity Bonds.
"City" - The City of Allen located in the County of Collin, Texas
"Debt Service" - As of any particular date of computation, with respect to any obligations
and with respect to any period, the aggregate of the amounts to be paid or set aside by the City as
of such date or in such period for the payment of the principal of, premium, if any, and
interest (to the extent not capitalized) on such obligations; assuming, in the case of obligations
without a fixed numerical rate, that such obligations bear, or would have home, interest at the
highest rate reached, or that would have been applied to such obligations (using the index or
measure for computing interest applicable to such obligations) during the twenty-four (24) month
period next preceding the date of computation, and further assuming in the case of obligations
required to be redeemed or prepaid as to principal prior to maturity, the principal amounts
' thereof will be redeemed prior to maturity in accordance with the mandatory redemption
provisions applicable thereto.
85004609]110900863 15
"Fiscal Year'- The twelve month accounting period used by the City in connection with
the operation of the System which may be any twelve consecutive month period established by
the City.
"Government Obligations" - (i) direct noncallable obligations of the United States of
America, including obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America, (ii) noncallable obligations of an agency or
instrumentality of the United States, including obligations unconditionally guaranteed or insured
by the agency or instrumentality and, on the date of their acquisition or purchase by the City, are
rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county,
municipality, or other political subdivision of a state that have been refunded and that, on the
date of their acquisition or purchase by the City, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent.
"Gross Revenues'- All income, receipts and revenues of every nature derived or
received from the operation and ownership (excluding refundable meter deposits, restricted gifts
and grants in aid of construction) of the System, including earnings and income derived from the
investment or deposit of moneys in any special funds or accounts created and established for the
payment and security of the Bonds Similarly Secured and other obligations payable solely from
and secured only by a lien on and pledge of the Net Revenues.
"Net Earnings" - The meaning assigned to such tern in Section 1 S hereof.
"Net Revenues" - Gross Revenues of the System, with respect to any period, after
deducting the System's Operating and Maintenance Expenses during such period.
"Operating and Maintenance Expenses" - All current expenses of operating and
maintaining the System, including all salaries, labor, materials, repairs and extensions necessary
to render efficient service; provided, however, that only such repairs and extensions, as in the
judgment of the City Council, reasonably and fairly exercised, are necessary to maintain the
operations and render adequate service to the City and the inhabitants thereof, or such as might
be necessary to meet some physical accident or condition which would otherwise impair
obligations payable from Net Revenues shall be deducted in determining "Net Revenues".
Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating
and Maintenance Expenses shall include payments under contracts for the purchase of water
supply or the treatment of sewage or other materials, goods, services or facilities for the System
to the extent authorized by law and the provisions of such contract.
"Outstanding" - When used in this Ordinance with respect to Bonds or Bonds Similarly
Secured, as the case may be, means, as of the date of determination, all Bonds and Bonds
Similarly Secured theretofore sold, issued and delivered by the City, except:
(1) those Bonds or Bonds Similarly Secured cancelled or delivered to the
' transfer agent or registrar for cancellation in connection with the exchange or
transfer of such obligations;
8500J6a9,VIN00863 16
' (2) those Bonds or Bonds Similarly Secured paid or deemed to be paid in
accordance with the provisions of Section 28 hereof; and
(3) those Bonds or Bonds Similarly Secured that have been mutilated,
destroyed, lost, or stolen and replacement bonds have been registered and
delivered in lieu thereof in accordance with the provisions of Section 30 hereof.
"Previously Issued Bonds" - The presently outstanding and unpaid revenue bonds
payable from and secured by a fust lien on and pledge of the Net Revenues of the System, more
particularly described as follows: (1) "City of Allen, Texas, Waterworks and Sewer System
Revenue Refunding and Improvement Bonds, Series 1999", dated February 1, 1999, originally
issued in the principal amount of $12,545,000 (the "Series 1999 Bonds"), (2) "City of Allen,
Texas, Waterworks and Sewer System Revenue Refunding and Improvement Bonds, Series
2004", dated June 1, 2004, originally issued in the principal amount of $6,710,000 (the "Series
2004 Bonds"), and (3) "City of Allen, Texas, Waterworks and Sewer System Revenue Bonds,
Series 2005", dated August 1, 2005, originally issued in the principal amount of $4,300,000.
"Required Reserve" - The amount required to be accumulated and maintained in the
Reserve Fund under the provisions of Section 14 hereof.
"System" - All properties, facilities and plants owned, operated and maintained by the
City for the supply, treatment and transmission of potable water and for the collection, treatment
and disposal of water -carried wastes, together with all future extensions, improvements,
' replacements and additions thereto; provided, however, that notwithstanding the foregoing, and
to the extent now or hereafter authorized or permitted by law, the term "System" shall not mean
to include facilities of any kind which are declared not to be a part of the System and which are
hereafter acquired or constructed by or on behalf of the City with the proceeds from the issuance
of "Special Facilities Bonds", which are hereby defined as being special revenue obligations of
the City which are not Bonds Similarly Secured but which are payable from and secured by other
liens on and pledges of any revenues, sources or payments, not pledged to the payment of the
Bonds Similarly Secured including, but not limited to, special contract revenues or payments
received from any other legal entity in connection with such facilities.
SECTION 11. Pledee. The City hereby covenants and agrees that the Net Revenues of
the System, with the exception of those in excess of the amounts required for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged, to the payment and
security of the Previously Issued Bonds, the Bonds and Additional Parity Bonds, if issued,
including the establishment and maintenance of the special funds created and established by this
Ordinance, all as hereinafter provided, and it is hereby ordained that the lien on and pledge of the
Net Revenues securing the payment of the Bonds Similarly Secured and interest thereon shall
constitute a first lien on the Net Revenues of the System and be valid and binding and fully
perfected from and after the date of adoption of this Ordinance without physical delivery or
transfer of control of the Net Revenues, the filing of this Ordinance or any other act; all as
provided in Chapter 1208 of the Texas Government Code ("Chapter 1208").
' Chapter 1208 applies to the issuance of the Bonds and the pledge of the Net Revenues
granted by the City under this Section 11, and such pledge is therefore valid, effective and
8500 N9VIWM63 17
perfected. If Texas law is amended at any time while the Bonds are Outstanding such that the
pledge of the Net Revenues granted by the City under this Section 11 is to be subject to the filing
requirements of Chapter 9, Business & Commerce Code, as amended, then in order to preserve
to the registered owners of the Bonds the perfection of the security interest in said pledge, the
City agrees to take such measures as it determines are reasonable and necessary under Texas law
to comply with the applicable provisions of Chapter 9, Business & Commerce Code, as
amended, and enable a filing to perfect the security interest in said pledge to occur.
SECTION 12. System Fund. The City hereby covenants and agrees that Gross Revenues
of the System (excluding earnings and income derived from investments held in the Bond Fund
and Reserve Fund) shall be deposited as collected to the credit of a fund maintained at an official
depository of City funds and known on the books and records of the City as the "Waterworks
and Sewer System Fund" (herein called the "System Fund"), and such revenues of the System
shall be kept separate and apart from all other funds of the City. All revenues deposited in the
System Fund shall be pledged and appropriated to the extent required for the following uses and
in the order of priority shown:
(1) To the payment of all necessary and reasonable Operating and
Maintenance Expenses of the System as defined herein or required by statute to
be a first charge on and claim against the Gross Revenues thereof.
(2) To the payment of the amounts required to be deposited in the Bond
' Fund for the payment of Debt Service on the Bonds Similarly Secured as the same
becomes due and payable.
(3) To the payment of the amounts required to be deposited in the Reserve
Fund to establish and maintain the Required Reserve in accordance with the
provisions of this Ordinance or any other ordinance relating to issuance of Bonds
Similarly Secured.
Any Net Revenues remaining in the System Fund after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment thereof, may be
appropriated and used for any other City purpose now or hereafter permitted by law.
SECTION 13. Bond Fund. For purposes of providing funds to pay the principal of and
interest on the Bonds as the same becomes due and payable, the City agrees to maintain a
separate and special account or fund on the books and records of the City known as the "City of
Allen Interest and Sinking Revenue Bond Fund" (the "Bond Fund'), and all monies deposited to
the credit of such Fund shall be held in a special banking fund or account maintained at an
official depository of the City. In addition to the deposits to the Bond Fund for the payment of
the Previously Issued Bonds, the City covenants that there shall be deposited into the Bond Fund
prior to each principal and interest payment date from the Net Revenues an amount equal to one
hundred per centum (100%) of the interest on and the principal of the Bonds then falling due and
payable by reason of maturity or redemption, and such deposits to pay principal and accrued
' interest on the Bonds shall be made in substantially equal monthly installments on or before the
25th day of each month, beginning on or before the 25th day of the month next following the
delivery of the Bonds to the initial purchaser.
850 W9Mo9 63 18
The required monthly deposits to the Bond Fund for the payment of principal of and
' interest on the Bonds shall continue to be made as hereinabove provided until (i) the total amount
on deposit in the Bond Fund and Reserve Fund is equal to the amount required to fully pay and
discharge all Outstanding Bonds Similarly Secured (principal and interest) or (ii) the Bonds are
no longer Outstanding.
Accrued interest and premium, if any, received from the purchaser(s) of the Bonds, as
well as earnings derived from the investment of moneys in the Bond Fond, shall be deposited to
the credit of the Bond Food and taken into consideration and reduce the amount of the monthly
deposits hereinabove required to be deposited in the Bond Fund from the Net Revenues of the
System.
SECTION 14. Reserve Fund. For purposes of accumulating and maintaining funds as a
reserve for the payment of the Bonds Similarly Secured, the City reaffirms its covenant with the
owners of the Previously Issued Bonds and agrees with the Holders of the Bonds to maintain a
separate and special fund or account at a depository of city fonds to be known as the "City of
Allen Revenue Bond Reserve Fond" (the "Reserve Fund"), and all funds deposited therein
(excluding earnings and income derived or received from deposits or investments which may be
transferred to the System Fund established in Section 12 hereof during such periods as there is on
deposit in the Reserve Fund the Required Reserve) shall be used solely for the payment of the
principal of and interest on the Bonds Similarly Secured when (whether at maturity, upon a
mandatory redemption date or any interest payment date) other funds available for such purposes
' are insufficient, and, in addition, may be used to the extent not required to maintain the
"Required Reserve", to pay, or provide for the payment of, the final principal amount of a series
of Bonds Similarly Secured so that such series of Bonds Similarly Secured is no longer deemed
to be "Outstanding" as such term is defined herein.
In accordance with the provisions of the ordinances authorizing the issuance of the
Previously Issued Bonds, the amount currently on deposit to the credit of the Reserve Fund is an
amount equal to $1,404,564 (the "Current Reserve"). By reason of the issuance of the Bonds,
the total amount required to be accumulated and maintained in said Fund is hereby determined to
be $1,165,725 (the "Required Reserve") which amount equals the Average Annual Debt Service
for the Bonds and the Previously Issued Bonds (calculated on a Fiscal Year basis as of the date
the Bonds are to be delivered). No additional deposits shall be required to be made to the
Reserve Fund by reason of the issuance of the Bonds since the Required Reserve is less than the
Current Reserve.
When and so long as the cash and investments in the Reserve Fond total not less than the
Required Reserve, no deposits need be made to the credit of the Reserve Fund; but, if and when
the Reserve Fund at any time contains less than the Required Reserve (other than as the result of
the issuance of Additional Parity Bonds as provided in the paragraph below), the City covenants
and agrees to cure the deficiency in the Required Reserve by making monthly deposits to said
Fond from the Net Revenues of the System; such monthly deposits to be in amounts equal to not
less than 1/60th of the then total Required Reserve to be maintained in said Fond and to be made
t on or before the 25th day of each month until the total Required Reserve then to be maintained in
said Fund has been fully restored. The City further covenants and agrees that, subject only to the
payments to be made to the Bond Fond, the Net Revenues shall be applied and appropriated and
85009609 V IWW96r 19
' used to establish and maintain the Required Reserve and to cure any deficiency in such amounts
as required by the terms of this Ordinance and any other ordinance pertaining to the issuance of
Additional Parity Bonds.
As and when Additional Parity Bonds are delivered or incurred, the Required Reserve
shall be increased, if required, to an amount equal to the lesser of (i) the Average Annual Debt
Service (calculated on a Fiscal Year basis) for all Bonds Similarly Secured then Outstanding, as
determined on the date each series of Additional Parity Bonds are delivered or incurred, as the
case may be, or (ii) the maximum amount in a reasonably required reserve fund that can be
invested without restriction as to yield pursuant to subsection (d) of section 148 of the Internal
Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any additional
amount required to be maintained in the Reserve Fund shall be so accumulated by the deposit in
the Reserve Fond of all or any part thereof in cash immediately after the delivery of the then
proposed Additional Parity Bonds, or, at the option of the City, by the deposit of monthly
installments, made on or before the 25th day of each month following the month of delivery of
the then proposed Additional Parity Bonds, of not less than 1/60th of the additional amount to be
maintained in said Fund by reason of the issuance of the Additional Parity Bonds then being
issued (or 1/60th of the balance of the additional amount not deposited immediately in cash).
During such time as the Reserve Fund contains the total Required Reserve, the City may,
at its option, withdraw all surplus in the Reserve Fond in excess of the Required Reserve and
deposit such surplus in the System Fund.
' Notwithstanding anything herein to the contrary, if the Series 1999 Bonds and the Series
2004 Bonds are either paid or deemed to have been paid in accordance with the provisions of the
ordinances authorizing their issuance, the City retains the right to fund the Required Reserve in
whole or in part with a surety bond or insurance policy issued by an insurance company or other
entity that is rated either for the long term unsecured debt of the issuer of such surety bond or for
obligations insured, secured or guaranteed by such issuer have a rating in the highest letter
category by two nationally recognized municipal securities rating or evaluation services, and
money deposited to the credit of the Reserve Fond may be used to make any payments required
to satisfy the City's repayment obligation to the issuer of such surety bond or insurance policy in
the same manner and with like effect as if such payments were being used to accumulate,
maintain or restore the Required Reserve in cash or with authorized investments.
SECTION 15. Deficiencies. If on any occasion there shall not be sufficient Net
Revenues of the System to make the required deposits into the Bond Fond and the Reserve Fund,
then such deficiency shall be cured as soon as possible from the next available Net Revenues of
the System, or from any other sources available for such purpose.
SECTION 16. Payment of Bonds. While any of the Bonds are Outstanding, the Finance
Director (or other designated financial officer of the City) shall cause to be transferred to the
Paying Agent/Registrar, from funds on deposit in the Bond Fund, and, if necessary, in the
Reserve Fund, amounts sufficient to fully pay and discharge promptly as each installment of
' interest and principal of the Bonds accrues or matures or comes due by reason of redemption
prior to maturity; such transfer of funds to be made in such manner as will cause immediately
85oaWo VICM)863 20
available funds to be deposited with the Paying Agent/Registrar for the Bonds at the close of the
' business day next preceding the date of payment for the Bonds.
SECTION 17. Investments - Security of Funds. (a) Money in any Fund established
pursuant to this Ordinance may, at the option of the City, be placed in time deposits or
certificates of deposit secured (to the extent not insured by the Federal Deposit Insurance
Corporation) by obligations of the type hereinafter described, or be invested, including
investments held in book -entry form, in direct obligations of the United States of America and
obligations guaranteed or insured by the United States of America, which, in the opinion of the
Attorney General of the United States, are backed by its full faith and credit or represent its
general obligations; provided that all such deposits and investments shall be made in such a
manner that the money required to be expended from any Fund will be available at the proper
time or times and provided further the maximum stated maturity for any investment acquired
with money in the Reserve Fond shall be limited to five (5) years from the date of the investment
of such money. Notwithstanding anything herein to the contrary, if all of the Series 1999 Bonds
and the Series 2004 Bonds are either paid or deemed to have been paid in accordance with the
provisions of the ordinances authorizing their issuance, money in any Fund established pursuant
to this Ordinance may, at the option of the City, be invested in eligible investments described in
the Texas Public Funds Investment Act, Chapter 2256, Texas Government Code, consistent with
the investment policy approved by the City Council. Such investments as described in this
Section (except State and Local Government Series investments held in book -entry form, which
shall at all times be valued at cost) shall be valued in terms of current market value within 45
' days of the close of each Fiscal Year and, with respect to investments held for the account of the
Reserve Fund, within 30 days of the date of passage of each ordinance authorizing the issuance
of Additional Parity Bonds. All interest and income derived from deposits and investments in
the Bond Fund immediately shall be credited to, and any losses debited to, the Bond Fund. All
interest and interest income derived from deposits in and investments of the Reserve Fund shall,
subject to the limitations provided in Section 14 hereof, be credited to and deposited in the
System Fund. All such investments shall be sold promptly when necessary to prevent any
default in connection with the Bonds.
(b) Money in all Funds created by this Ordinance, to the extent not invested, shall be
secured in the manner and to the fullest extent required by the laws of the State of Texas for the
security of public funds.
SECTION 18. Issuance of Additional Parity Oblieations. Subject to the provisions
hereinafter appearing as to conditions precedent which must be satisfied, the City reserves the
right to issue, from time to time as needed, Additional Parity Bonds for any lawful purpose.
Such Additional Parity Bonds may be issued in such form and manner as now or hereafter
authorized by the laws of the State of Texas for the issuance of evidences of indebtedness or
other instruments, and should new methods or financing techniques be developed that differ from
those now available and in normal use, the City reserves the right to employ the same in its
financing arrangements provided only that the following conditions precedent for the
authorization and issuance of the same are satisfied, to wit:
' (1) The Finance Director of the City (or other officer of the City then having the
primary responsibility for the financial affairs of the City) shall have executed a certificate
85009609 2//0900863 21
stating (a) that, to the best of his knowledge and belief, the City is not then in default as to any
' covenant, obligation or agreement contained in any ordinance or other proceeding relating to any
obligations of the City payable from and secured by a lien on and pledge of the Net Revenues of
the System that would materially affect the security or payment of such obligations and (b) either
(i) payments into all special funds or accounts created and established for the payment and
security of all outstanding obligations payable from and secured by a lien on and pledge of the
Net Revenues of the System have been made and that the amounts on deposit in such special
fonds or accounts are the amounts then required to be on deposit therein or (ii) the application of
the proceeds of sale of such obligations then being issued will cure any such deficiency.
(2) The Additional Parity Bonds shall be scheduled to mature or be payable as to
principal on June 1 or December 1 (or both) in each year the same are to be outstanding or
during the tern thereof.
(3) The City has secured a certificate or opinion of a Certified Public Accountant (the
"Accountant") to the effect that, according to the books and records of the City, the Net Earnings
for the last completed Fiscal Year, or for 12 consecutive months out of the 15 months,
immediately preceding the month the ordinance authorizing the issuance of the Additional Parity
Bonds is adopted are at least equal to 1.20 times the Average Annual Debt Service for all
Outstanding Bonds Similarly Secured after giving effect to the issuance of the Additional Parity
Bonds then being issued. In making a determination of the Net Earnings, the Accountant may
take into consideration a change in the rates and charges for services and facilities afforded by
the System that became effective at least sixty (60) days prior to the last day of the period for
which Net Earnings are determined and, for purposes of satisfying the above Net Earnings test,
make a pro forma determination of the Net Earnings of the System for the period of time covered
by his certification or opinion based on such change in rates and charges being in effect for the
entire period covered by the Accountant's certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean the Gross Revenues of the
System after deducting the Operating and Maintenance Expenses of the System, but not
depreciation charges or other expenditures which, under generally accepted accounting
principles, should be treated as capital expenditures.
SECTION 19. Refunding Bonds. The City reserves the right to issue refunding bonds to
refund all or any part of the Bonds Similarly Secured (pursuant to any law then available) upon
such terms and conditions as the City Council of the City may deem to be in the best interest of
the City and its inhabitants, and if less than all such Bonds Similarly Secured then outstanding
are refunded, the conditions precedent prescribed (for the issuance of Additional Parity Bonds)
set forth in subparagraph (3) of Section 18 hereof shall be satisfied and the Accountant's
certificate or opinion required in subparagraph (3) shall give effect to the Debt Service of the
proposed refunding bonds (and shall not give effect to the Debt Service of the Bonds Similarly
Secured being refunded following their cancellation or provision being made for their payment).
SECTION 20. Obligations of Inferior Lien and Pledge. The City hereby reserves the
' right to issue obligations payable from and secured by a lien on and pledge of the Net Revenues
of the System, junior and subordinate in rank and dignity to the lien and pledge securing the
payment of the Bonds Similarly Secured, as may be authorized by the laws of the State of Texas.
850a46a9 WIMOM3 22
SECTION 21. Rates and Charaes. For the benefit of the Holders of the Bonds and in
' addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance,
the City hereby expressly stipulates and agrees, while any of the Bonds are Outstanding, to
establish and maintain rates and charges for facilities and services afforded by the System that
are reasonably expected, on the basis of available information and experience and with due
allowance for contingencies, to produce Gross Revenues in each Fiscal Year sufficient:
(1) To pay Operating and Maintenance Expenses;
(2) To produce Net Revenues sufficient to pay the principal of and
interest on the Bonds Similarly Secured and the amounts required to be deposited
in any reserve or contingency fund created for the payment and security of the
Bonds Similarly Secured, and other obligations or evidences of indebtedness
issued or incurred that are payable only from and secured solely by a lien on and
pledge of the Net Revenues of the System;
(3) To produce Net Revenues equal to at least 1.20 times the annual Debt
Service for the Fiscal Year on the Outstanding Bonds Similarly Secured; and
(4) To pay all other indebtedness payable from the Net Revenues and/or
secured by a lien on the properties or the revenues of the System.
SECTION 22. Maintenance and Operation - Insurance. (a) The City shall maintain the
' System in good condition and operate the System in an efficient manner and at reasonable cost.
While any Bonds are Outstanding, the City agrees to maintain casualty and other insurance on
the System of a kind and in an amount customarily carried by municipal corporations owning
and operating similar properties. Nothing in this Ordinance shall be construed as requiring the
City to expend any funds derived from sources other than the operation of the System, but
nothing herein shall be construed as preventing the City from doing so.
(b) The foregoing notwithstanding, but subject to any similar covenant made in an
ordinance authorizing Previously Issued Bonds, the City may self -insure against risks, accidents
or casualties.
SECTION 23. Sale or Lease of Properties. The City, to the extent and in the manner
authorized by law, may sell or exchange for consideration representing the fair value thereof, as
determined by the City Council of the City, any property not necessary or required in the
efficient operations of the System, or any equipment not necessary or useful in the operations
thereof or which is obsolete, damaged or wom out or otherwise unsuitable for use in the
operation of the System. The proceeds of any sale of properties of the System shall be deposited
in the System Fund.
SECTION 24. Records and Accounts. The City hereby covenants and agrees that so long
as any of the Bonds are Outstanding, it will keep and maintain separate and complete records and
accounts pertaining to the operations of the System in which complete and correct entries shall
' be made of all transactions relating thereto, as provided by V.T.C.A., Government Code,
Chapter 1502, as amended, or other applicable law. The Holders of any Bonds or any duly
authorized agent or agents of such Holders shall have the right at all reasonable times to inspect
850046092/10900863 23
such records, accounts and data relating thereto, and to inspect the System and all properties
comprising same. The City further agrees that following the close of each Fiscal Year, it will
cause an audit of such books and accounts to be made by an independent firm of certified public
accountants. Each such audit, in addition to whatever other matters may be thought proper by
the Accountant, shall particularly include the following:
(1) A statement of the income and expenses of the System for such Fiscal
Year.
(2) A balance sheet for the System as of the end of such Fiscal Year.
(3) A statement describing the sources and application of funds of the
System for such Fiscal Year.
(4) The Accountant's comments regarding the manner in which the City
has carried out the requirements of this Ordinance and any other ordinance
authorizing the issuance of Additional Parity Bonds and his recommendations for
any changes or improvements in the operations, records and accounts of the
System.
(5) A list of insurance policies in force at the end of the Fiscal Year
covering the properties of the System, setting out as to each policy the amount
thereof, the risk covered, the name of the insurer and the policy's expiration date.
' Expenses incurred in making an annual audit of the operations of the System are to be
regarded as Operating and Maintenance Expenses. Copies of each annual audit shall be
famished to the Executive Director of the Municipal Advisory Council of Texas at his office in
Austin, Texas, and, upon request, to the initial purchasers of the Bonds and subsequent Holders
of any of said Bonds. The audits herein required shall be made within 180 days following the
close of each Fiscal Year insofar as is possible.
SECTION 25. Special Covenants. The City further covenants and agrees by and through
this Ordinance as follows:
(1) It has the lawful power to pledge the Net Revenues of the System to the payment
of the Bonds to the extent provided herein and has lawfully exercised said power under the
Constitution and laws of the State of Texas, and that the Previously Issued Bonds, the Bonds
issued hereunder, together with the Additional Parity Bonds, shall be equally and ratably secured
in such manner that no one bond shall have preference over any other bond of said issues.
(2) The Net Revenues of the System have not been in any manner pledged or
encumbered to the payment of any debt or obligation of the City or the System, save and except
for the Previously Issued Bonds and the Bonds.
(3) No free services of the System shall be allowed, and should the City or any of its
' agents or instrumentalities make use of the services and facilities of the System, payment of the
reasonable value thereof shall be made by the City out of funds from sources other than the
revenues and income of the System.
850046N VICONsss 24
(4) To he extent that it legally may and while any of the Bonds are Outstanding, no
franchise shall be granted for the installation or operation of any competing waterworks or sewer
system facilities.
(5) The City will comply with all of the terms and conditions of any and all
franchises, permits and authorizations applicable to or necessary with respect to the ownership
and operation of municipal facilities for the supply and distribution of potable water and the
collection, treatment and disposal of water -carried wastes, and which have been obtained from
any governmental agency; and the City has or will obtain and keep in full force and effect all
franchises, permits, authorizations and other requirements applicable to or necessary with respect
to the acquisition, construction, equipment, operation and maintenance of such properties and
facilities.
SECTION 26. Remedy in Event of Default. In addition to all rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City (a) defaults in payments to be made to the Bond Fund or the Reserve Fund m
required by this Ordinance or (b) defaults in the observance or performance of any other of the
covenants, conditions or obligations set forth in this Ordinance, the Holders of any of the Bonds
shall be entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and
requiring the City and its officers to observe and perform any covenant, condition or obligation
prescribed in this Ordinance. No delay or omission to exercise any right or power accruing upon
any default shall impair any such right or power, or shall be construed to be a waiver of any
' such default or acquiescence therein, and every such right and power may be exercised from time
to time and as often as may be deemed expedient.
The specific remedy herein provided shall be cumulative of all other existing remedies
and the specification of such remedy shall not be deemed to be exclusive.
SECTION 27. Special Obligations. The Bonds are special obligations of the City
payable from the pledged Net Revenues of the System and the Holders thereof shall never have
the right to demand payment thereof out of funds raised or to be raised by taxation.
SECTION 28. Satisfaction of Obligation of City. If the City shall pay or cause to be
paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge
of the Net Revenues of the System under this Ordinance and all other obligations of the City to
the Holders shall thereupon cease, terminate, and become void and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in trust
by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) non -callable Government
Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
' authorized escrow agent, which Government Obligations have been certified by an independent
accounting firm to mature m to principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money, together with any moneys
85ao W.Mo 80 25
deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the
principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice of
redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to
the Paying Agent/Registrar have been made) the redemption date thereof The City covenants
that no deposit of moneys or Government Obligations will be made under this Section and no use
made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within
the meaning of section 148 of the Internal Revenue Code of 1986, as amended, or regulations
adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow
agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the City.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the Bonds and remaining unclaimed for a period of three (3) years after the Stated
Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held
in trust to pay shall, upon the request of the City, be remitted to the City against a written receipt
therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying
Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the
State of Texas.
' SECTION 29. Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City so long as any Bond remains Outstanding except as permitted in this Section
and in Section 47 hereof. The City, may, without the consent of or notice to any Holders, from
time to time and at any time, amend this Ordinance in any manner not detrimental to the interests
of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the written consent from the owners holding a
majority in aggregate principal amount of the Bonds Similarly Secured then Outstanding, amend,
add to, or rescind any of the provisions of this Ordinance; provided that, without the written
consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall
(1) extend the time or times of payment of the principal of, premium, if any, and interest on
the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of
interest thereon, or in any other way modify the terms of payment of the principal of, premium, if
any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or
(3) reduce the aggregate principal amount of Bonds or Bonds Similarly Secured, as the case may
be, required to be held for consent to any such amendment, addition, or rescission.
SECTION 30. Mutilated - Destroyed - Lost and Stolen Bonds. In case any Bond shall be
mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence
satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of
850046092 INN863 26
indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be bome by the Holder of the Bond
mutilated, or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not
the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 31. Notices to Holders - Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
' notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 32. Cancellation. All Bonds surrendered for payment, redemption, transfer or
exchange, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if
surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time
deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly cancelled by the Paying Agent/Registrar. All cancelled
Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the City.
SECTION 33. Covenants to Maintain Tax -Exempt Status. (a) Definitions. When used
in this Section, the following terms have the following meanings:
"Closing Date" means the date on which the Bonds are first authenticated and delivered
to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations.
85oo W90 VIo 863 27
' "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations,
of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b) of
the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry
out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code
of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also
mean, m appropriate, any proposed, temporary or final Income Tax Regulation designed to
supplement, amend or replace the specific Regulation referenced.
"Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations and (2) the Bonds has the meaning set forth in Section 1.148-4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
' construction or improvement of which is to be financed directly or indirectly with Gross
Proceeds) in a manner which if made or omitted, respectively, would cause the interest on any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds (including property financed with
Gross Proceeds of the Refunded Bonds), and not use or permit the use of such
Gross Proceeds (including all contractual arrangements with terms different than
those applicable to the general public) or any property acquired, constructed or
improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government, unless such use is solely as a
' member of the general public; and
850006N,NIN0080 28
' (2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is to
be financed or refinanced directly or indirectly with such Gross Proceeds
(including property financed with Gross Proceeds of the Refunded Bonds), other
than taxes of general application within the City or interest earned on investments
acquired with such Gross Proceeds pending application for their intended
purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if. (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income tax
purposes; (2) capacity in or service from such property is committed to such person or entity
under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed
or improved with such Gross Proceeds are otherwise transferred in a transaction which is the
economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
' the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
(or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced
thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the
Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report. The City shall timely file the information required by section
149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in
such place w the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(1) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof)
and shall retain all records of accounting for at least six years after the day on
' which the last Outstanding Bond is discharged. However, to the extent permitted
by law, the City may commingle Gross Proceeds of the Bonds with other money
85ma .VIWWSO 29
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers (defined herein) and the loan of the money represented thereby and in
order to induce such purchase by measures designed to insure the excludability of
the interest thereon from the gross income of the owners thereof for federal
income tax purposes, the City shall pay to the United States out of the general
fund, other appropriate fund or, if permitted by applicable Texas statute,
regulation or opinion of the Attorney General of the State of Texas, the Bond
Fond, the amount that when added to the future value of previous rebate payments
made for the Bonds equals (i) in the case of a Final Computation Date as defined
in Section 1.148-3(e)(2) of the Regulations, one hundred percent (100%) of the
Rebate Amount on such date; and (ii) in the case of any other Computation Date,
ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate
payments shall be made at the times, in the installments, to the place and in the
manner as is or may be required by section 148(f) of the Code and the
Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or
such other forms and information as is or may be required by Section 148(f) of
the Code and the Regulations and rulings thereunder.
(4) The City shall exercise reasonable diligence to assure that no errors
are made in the calculations and payments required by paragraphs (2) and (3), and
if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitraee Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection (h) of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
0) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem,
' City Manager, Finance Director, Assistant Finance Director, or City Secretary, either
individually or jointly, to make elections permitted or required pursuant to the provisions of the
850046092/ WW863 30
' Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in
the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document.
(k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the
Bonds were issued, the City reasonably expected to spend at least 85% of the spendable proceeds
of such bonds within three years after such bonds were issued and (2) not more than 50% of the
proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments
having a substantially guaranteed Yield for a period of 4 years or more.
(1) Current Refunding. The Bonds are a current refunding of the Refunded Bonds in
that the Refunded Bonds will be paid and redeemed within ninety (90) days of the date of the
delivery of the Bonds.
(m) Qualified Tax Exempt Obligations. In accordance with the provisions of
paragraph (3) of subsection (b) of Section 265 of the Code, the City hereby designates the Bonds
to be "qualified tax exempt obligations" in that the Bonds are not "private activity bonds" as
defined in the Code and the reasonably anticipated amount of "qualified tax exempt obligations"
to be issued by the City (including all subordinate entities of the City) for the calendar year 2009
will not exceed $30,000,000.
SECTION 34. Sale of Bonds. The Bonds authorized by this Ordinance me hereby sold
by the City to Stifel Nicolaus & Company, Incorporated (herein referred to as the "Purchasers")
in accordance with the Bond Purchase Agreement, dated February 24, 2009, attached hereto as
' Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The
Mayor or Mayor Pro Tem are hereby authorized and directed to execute said Bond Purchase
Agreement for and on behalf of the City and as the act and deed of this City Council, and in
regard to the approval and execution of the Bond Purchase Agreement, the City Council hereby
finds, determines and declares that the representations, warranties and agreements of the City
contained in the Bond Purchase Agreement are true and correct in all material respects and shall
be honored and performed by the City.
SECTION 35. Official Statement. The use of the Preliminary Official Statement, dated
February 19, 2009, in the offering and sale of the Bonds is hereby ratified, confirmed and
approved in all respects, and the City Council hereby finds that the information and data
contained in said Preliminary Official Statement pertaining to the City and its financial affairs is
true and correct in all material respects and no material facts have been omitted therefrom which
are necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading. The final Official Statement, which reflects the terms of sale (together
with such changes approved by the Mayor, Mayor Pro Tem, City Secretary, City Manager,
Finance Director and Assistant Finance Director, any one or more of said officials), shall be and
is hereby in all respects approved and the Purchasers are hereby authorized to use and distribute
said final Official Statement, dated February 24, 2009, in the reoffering, sale and delivery of the
Bonds to the public.
' SECTION 36. Control and Custody of Bonds. The Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
95a 09VIWM63 31
' definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the
approval thereof by the Attorney General, the registration thereof by the Comptroller of Public
Accounts and the delivery thereof to the Purchasers.
SECTION 37. Escrow Agreement ADuroval and Execution. The "Escrow Agreement"
(the "Agreement') by and between the City and The Bank of New York Mellon Trust Company,
N.A., Dallas, Texas (the "Escrow Agent'), attached hereto as Exhibit C and incorporated herein
by reference as a part of this Ordinance for all purposes, is hereby approved as to form and
content, and such Agreement in substantially the form and substance attached hereto, together
with such changes or revisions as may be necessary to accomplish the refunding or benefit the
City, is hereby authorized to be executed by the Mayor or Mayor Pro Tem and City Secretary for
and on behalf of the City and as the act and deed of the City Council; and such Agreement as
executed by said officials shall be deemed approved by the City Council and constitute the
Agreement herein approved.
Furthermore, appropriate officials of the City in cooperation with the Escrow Agent are
hereby authorized and directed to make the necessary arrangements for the purchase of the
Escrowed Securities referenced in the Agreement and their delivery to the Escrow Agent on the
day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL 2009
CITY OF ALLEN, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (the "Escrow
Fund"); all as contemplated and provided in V.T.C.A., Government Code, Chapter 1207, as
amended, this Ordinance and the Agreement.
' The transfer of funds from moneys on deposit in the debt service fund maintained for the
payment of the Refunded Bonds to the Escrow Fund established by the Escrow Agreement in the
amount of $84,456.51 is hereby authorized.
SECTION 38. Redemption of Refunded Bonds. The bonds of that series known as "City
of Allen, Texas, Waterworks and Sewer System Revenue Refunding and Improvement Bonds,
Series 1999", dated February 1, 1999, aggregating in the principal amount of $5,695,000 and
more particularly described in the preamble hereof, shall be redeemed and the same are hereby
called for redemption on June 1, 2009, at the price of par and accrued interest to the date of
redemption. The City Secretary is hereby authorized and directed to file a copy of this
Ordinance, together with a suggested form of notice of redemption to be sent to bondholders,
with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (successor paying
agent/registrar to Chase Bank of Texas, National Association), in accordance with the
redemption provisions applicable to such bonds; such suggested form of notice of redemption
being attached hereto as Exhibit D and incorporated herein by reference as a part of this
Ordinance for all purposes.
The redemption of the Refunded Bonds described above being associated with the
refunding of such Refunded Bonds, the approval, authorization and arrangements herein given
and provided for the redemption of such Refunded Bonds on the redemption date designated
therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the
' Bonds; and the City Secretary is hereby authorized and directed to make all arrangements
necessary to notify the holders of such Refunded Bonds of the City's decision to redeem such
85004609 L10900863 32
Refunded Bonds on the date and in the manner herein provided and in accordance with the
' ordinance authorizing the issuance of the Refunded Bonds and this Ordinance.
SECTION 39. Proceeds of Sale. Immediately following the delivery of the Bonds, the
proceeds of sale of the Bonds in the amount of $5,742,433.34 shall be deposited with the Escrow
Agent for application in accordance with the Agreement and $18,269.06 shall be deposited to the
credit of the Bond Fund for the Bonds. The balance of the proceeds of sale shall be disbursed for
payment of costs of issuance in accordance with instructions from the City, and any proceeds of
sale remaining after payment of the costs of issuance for the Bonds shall be deposited in the
Bond Fund for the Bonds.
SECTION 40. Legal Opinion. The obligation of the Purchasers to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion or an executed counterpart thereof shall accompany the global Bonds deposited with
DTC or a reproduction thereof shall be printed on the definitive Bonds in the event the book -
entry -only system shall be discontinued.
SECTION 41. CUSIP Numbers. CUSIP numbers may be printed or typed on the
definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP
numbers on the definitive Bonds shall be of no significance or effect as regards the legality
' thereof and neither the City nor attorneys approving said Bonds as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds.
SECTION 42. Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar and the Holders.
SECTION 43. Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 44. 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 45. Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and the Council hereby
declares that this Ordinance would have been enacted without such invalid provisions.
' SECTION 46. Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
85004609]110900863 33
number shall be considered to include the singular, and words of the masculine, feminine or
' neuter gender shall be considered to include the other genders.
SECTION 47. Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2008) financial information and operating data with respect to the City of the
' general type included in the final Official Statement approved by Section 35 of this Ordinance,
being the information described in Exhibit E hereto. Financial statements to be provided shall be
(1) prepared in accordance with the accounting principles described in Exhibit E hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements me not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report
when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal yea end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR
or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if
such event is material within the meaning of the federal securities laws:
' 1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
85g146WVIWW863 34
3.
Unscheduled draws on debt service reserves reflecting financial difficulties;
' 4.
Unscheduled draws on credit enhancements reflecting financial difficulties;
5.
Substitution of credit or liquidity providers, or their failure to perform;
6.
Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7.
Modifications to rights of holders of the Bonds;
8.
Bond calls;
9.
Defeasances;
10.
Release, substitution, or sale of property securing repayment of the Bonds; and
11.
Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely
manner, of any failure by the City to provide financial information or operating data in
accordance with subsection (b) of this Section by the time required by such Section.
(d) Limitations. Disclaimers. and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except
that the City in any event will give the notice required by subsection (c) hereof of any Bond calls
and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
' any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
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 CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
' Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
85o 9,Wrosm863 35
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City from time to time to adapt to changed circumstances resulting from a
change in legal requirements, a change in law, or a change in the identity, nature, status, or type
of operations of the City, but only if (1) the provisions of this Section, as so amended, would
have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in
compliance with the Rule, taking into account any amendments or interpretations of the Rule to
the date of such amendment, as well as such changed circumstances, and (2) either (a) the
Holders of a majority in aggregate principal amount (or any greater amount required by any
other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the
interests of the Holders and beneficial owners of the Bonds. The provisions of this Section may
also be amended from time to time or repealed by the City if the SEC amends or repeals the
applicable provisions of the Rule or a court of final jurisdiction determines that such provisions
are invalid, but only if and to the extent that reservation of the City's right to do so would not
prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or
selling Bonds in such offering. If the City so amends the provisions of this Section, it shall
include with any amended financial information or operating data next provided in accordance
with subsection (b) of this Section an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of financial information or operating
data so provided.
' SECTION 48. Further Procedures. Any one or more of the Mayor, Mayor Pro Tem, City
Secretary, City Manager, Finance Director and Assistant Finance Director are hereby expressly
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and on behalf of the City all
agreements, instruments, certificates or other documents, whether mentioned herein or not, as
may be necessary or desirable in order to carry out the terms and provisions of this Ordinance
and the issuance, sale and delivery of the Bonds. In addition, prior to the initial delivery of the
Bonds, the Mayor, Mayor Pro Tem, City Secretary, City Manager, Finance Director, Assistant
Finance Director or Bond Counsel to the City are each hereby authorized and directed to approve
any changes or corrections to this Ordinance or to any of the documents authorized and approved
by this Ordinance: (i) in order to cure any ambiguity, formal defect, or omission in the Ordinance
or such other document; or (ii) as requested by the Attorney General of the State of Texas or his
representative to obtain the approval of the Bonds by the Attorney General. In the event that any
officer of the City whose signature shall appear on any document shall cease to be such officer
before the delivery of such document, such signature nevertheless shall be valid and sufficient
for all purposes the same as if such officer had remained in office until such delivery.
SECTION 49. Effect of Headings. The Section headings herein are for convenience of
reference only and shall not affect the construction hereof.
SECTION 50. Incorporation of Findings and Determinations. The findings and
determinations of the City Council contained in the preamble hereof are hereby incorporated by
. reference and made a part of this Ordinance for all purposes as if the same were restated in full in
this Section.
850x46 WIWN63 36
n
SECTION 51. Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended.
SECTION 52. Effective Date. This Ordinance shall take effect and be in full force from
and after its adoption on the date shown below in accordance with V.T.C.A., Government Code,
Section 1201.028, as amended.
[remainder ofpage left blank intentionally]
85OWN VINWe0 37
PASSED AND ADOPTED, this February 24, 2009.
' CITY OF ALLEN, TEXAS
1
STEPHEN TERRELL
Mayor
ATTEST:
SHELLEY B. GE •
City Secretary
(City Sea])
85004609.7110900863 SIGNATURE PAGE OF BOND ORDINANCE
1
1
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
85004609] INN863 A-1
' PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT is entered into as of February 24, 2009 (this "Agreement"), by and
between the City of Allen, Texas (the `Issuer"), and The Bank of New York Mellon Trust
Company, N.A. (the "Bank"), a banking association drily organized and existing under the laws
of the United States of America.
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Allen, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 2009" (the
"Securities"), dated February 15, 2009, and such Securities are to be issued in fully registered
form; and
WHEREAS, the Securities are scheduled to be delivered to the initial purchasers on or
about March 24, 2009; and
WHEREAS, the Issuer has selected and the Bank has agreed 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; and
' WHEREAS, the Bank represents it has full power and authority to perform and serve as
Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01 Auoointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as
to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution".
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
' Section 1.02 Comnensatioa The Issuer hereby agrees to pay the Bank the fees and
amounts set forth in Annex A attached hereto as compensation for the Bank's services as Paying
Agent/Registrar.
850061351/109ON63
' In addition, the Issuer agrees to reimburse the Bank upon 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 designated office of the Bank in Dallas, Texas at the address
shown in Section 3.01 hereof The Bank will notify the Issuer in writing of any change in
location of the Bank Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing body of the
Issuer pursuant to which the Securities we issued, certified by the Secretary or any other officer
of the Issuer and delivered to the Bank.
' "Fiscal Year" means the fiscal year of the Issuer, ending September 30t°.
"Holder" and "Security Holder" each means the Person in whose name a Security is
registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in the name
of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Finance Director, Assistant Finance
Director, or City Secretary, any one or more of said officials, and delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be closed.
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision of a government.
"Predecessor Securities" of any particular Security means every previous Security
evidencing all or a portion of the same obligation as that evidenced by such particular Security
(and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for
which a replacement Security has been registered and delivered in lieu thereof pursuant to
Section 4.06 hereof and the Bond Resolution).
' "Redemption Date" when used with respect to any Security to be redeemed means the
date fixed for such redemption pursuant to the terms of the Bond Resolution.
85W W 5.1/10900863
"Responsible Officer" when used with respect to the Bank means the Chaimlan or
Vice -Chairman of the Board of Directors, the Chairman or Vice -Chairman of the Executive
Committee of the Board of Directors, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier,
any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular subject.
"Security Register" means a register maintained by the Bank on behalf of the Issuer
providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principal of a
Security is scheduled to be due and payable.
Section 2.02 Other Definitions. The terms `Bank," "Issuer," "Securities (Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The tern "Paying Agent/Registrar" refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
' PAYING AGENT
Section 3.01 Duties of Paving Agent As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer,
pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption
Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the
following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 2001 Bryan Street, 9th Floor,
Dallas, Texas 75201, Attention: Operations.
I
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and making
payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record
Date (as defined in the Bond Resolution). All payments of principal and/or interest on the
Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable
to the registered owners, drawn on the fiduciary account provided in Section 5.05 hereof, sent by
United States mail, first class, postage prepaid, to the address appearing on the Security Register
or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the
Holder's risk and expense.
Section 3.02 Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
85006435.1/10MSO
' ARTICLE FOUR
REGISTRAR
Section 4.01 Security Register - 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 w the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information m 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 signature on which has been guaranteed by
an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the 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 of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly executed
by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying
Agent/Registrar.
Section 4.02 Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The 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 governments 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 to maintain such Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
' Section 4.04 List of Security Holders. The 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
85006/35.1110900863
' 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 to 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 the written request of, an authorized officer or employee of the Issuer, except
upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the contents
of the Security Register.
Section 4.05 Return of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06 Mutilated, Destroyed. Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of the Bond Resolution, to deliver and issue
Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as
the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may execute
and deliver a replacement Security of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange and substitution for such
' mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security,
only upon the approval of the Issuer and after (i) the filing by the Holder thereof with the Bank
of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an
amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges
associated with such indemnity and with the preparation, execution and delivery of a
replacement Security shall be home 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, famish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or
exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange
for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01 Duties of Bank. The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof. 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 or email transmission of the
closing memorandum acknowledged by the financial advisor or the Issuer as the final closing
memorandum.
85006935.1/10900863
' Section 5.02 Reliance on Documents. Etc.
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The 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. Without 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 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 the Issues.
(e) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereander in good faith and in reliance thereon.
(f) 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 Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04 May Hold Securities. The 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 - Fiduciary Account/Collateralization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities shall
85006435.1/109W863 6
' be continuously collateralized by securities or obligations which qualify and are eligible under
both the laws of the State of Texas and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such money is not insured by the
Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be
made by check drawn on such fiduciary account unless the owner of such Securities shall, at its
own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws 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 for three years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
Section 5.06 Indemnification. To the extent permitted by law, the Issuer agrees to harmless indemnify the Bank for, and hold it against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of its powers or duties under this
' Agreement.
Section 5.07 Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where the
administrative offices of the Issuer is located, and agree that service of process by certifted or
registered mail, return receipt requested, to the address referred to in Section 6.03 of this
Agreement shall constitute adequate service. The Issuer and the Bank further agree that the
Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State
of Texas to determine the rights of any Person claiming any interest herein.
In the event the Bank becomes involved in litigation in connection with this Section, the
City to the extent permitted by law agrees to indemnify and save the Bank harmless from all loss,
cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result thereof.
The obligations of the Bank under this Agreement shall be performable at the principal corporate
office of the Bank in the City of Dallas, Texas.
Section 5.08 DTC 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 tout services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements", which
establishes requirements for securities to be eligible for such type depository trust services,
' including, but not limited to, requirements for the timeliness of payments and funds availability,
transfer turnaround time, and notification of redemptions and calls.
85006435.1/1a 63
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02 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 document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on the execution page of this Agreement.
Section 6.04 Effect of Headimes. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 6.05 Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06 Severability. In case any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
' any way be affected or impaired thereby.
Section 6.07 Merger, Conversion. Consolidation, or Succession. Any corporation or
association into which the Bank may be merged or converted or with which it may be
consolidated, or any corporation or association resulting from any merger, conversion, or
consolidation to which the Bank shall be a party, or any corporation or association succeeding to
all or substantially all of the corporate trust business of the Bank shall be the successor of the
Bank as Paying Agent hereunder without the execution or filing of any paper or any further act
on the part of either of the parties hereto.
Section 6.08 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 equitable right, remedy, or claim hereunder.
Section 6.09 Entire Agreement. This Agreement and the Bond Resolution constitute
the entire agreement between the parties hereto relative to the Bank acting as Paying
Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the
Bond Resolution shall govern.
Section 6.10 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 6.11 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
95 0 35.1/1D 863
' early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b)
notice given to the Holders of the Securities of the appointment of a successor Paying
AgentfRegistrar. However, if the Issuer fails to appoint a successor Paying Agent/Registrar
within a reasonable time, the Bank may petition a court of competent jurisdiction within the State
of Texas to appoint a successor Paying Agent/Registrar. Furthermore, the Bank and the Issuer
mutually agree that the effective date of an early termination of this Agreement shall not occur at
any time which would disrupt, delay, or otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
The provisions of Section 1.02 and of Article Five shall survive and remain in full force
and effect following the termination of this Agreement.
Section 6.12 Goveming,Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
(Remainder ofpage left blank in(enliona[W
85006135.1/10900863
iIN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
1
1
Attest:
Title:
ATTEST:
SHELLEY B. GEORGE, City Secretary
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
Title:
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
CITY OF ALLEN, TEXAS
STEPHEN TERRELL,
Address: One Allen Civic Plaza
Allen, Texas 75013
95OD6435.1/1 W 863 SIGNATURE PAGE TO
PAYING AGENT/REGISTRAR AGREEMENT
:.vR` »W
E BANK OF N
THE YORK MELLON
L The Bank of New York Mellon Trust Company N A.
Fee Schedule
City ojAllen, Texas WW&SS Revenue Refunding Bonds, Series 2009
Acceptance Fee: None
A one-time charge covering the Bank Officer's review of governing documents, communication with members
of the closing party, including representatives of the issuer, investment banker(s) and attorney(s), establishment
of procedures and controls, set-up of trust accounts and tickler suspense items and the receipt and
disbursement/investment of bond proceeds. This fee is payable on the closing date.
Annual Paying Agent Administration Fee $500
An annual charge covering the normal paying agent duties related to account administration and bondholder
services. This fee is payable annually, in advance.
Escrow Agent Fee: $750
The Escrow Agent Fee covers the consideration of documents and the normal administrative duties of the
escrow agent according to the governing documents. This fee is payable on the closing date and assumes
maturity June 1, 2009.
Pricing for Call or Redemptions of Bonds $300
Call Pricing includes distribution of the all notice in holders of record, redemption processing, and notification
to NRMS1Rs. Any publication expenses (i.e. Bond Buyer, regional periodical, financial periodicals, etc.) for
the call notice will be billed to the Issuer at cost
Extraordinary Services / Miscellaneous Fees: At Appraisal
The charges for performing extraordinary or other services not contemplated at the time of the execution of the
transaction or not specifically covered elsewhere in this schedule will be commensurate with the service to be
provided and may be charged in BNYMTC's sole discretion. If it is contemplated that the Trustee hold and/or
value collateral or enter into any investment contract, forward purchase or similar or other agreement,
additional acceptance, administration and counsel review fees will be applicable in the agreement goveming
such services. If the bonds are converted to certificated form, additional annual fees will be charged for any
applicable tender agent and/or registrar/paying agent services. Additional information will be provided at such
time. Should this transaction terminate prior to closing, all out-of-pocket expenses incurred, including legal
foes, will be billed at cost. If all outstanding bonds of a series are defamed or called in full prior to their
maturity, a termination fee may be assessed at that time.
These extraordinary services may include, but are not limited to, supplemental agreements, consent operations,
=usual releases, tender processing, sinking fund redemptions, failed remarketing processing, the preparation
of special or interim reports, custody of collateral, a one-time fee to be charged upon termination of an
engagement. Counsel, accountants, special agents and others will be charged at the actual amount of fes and
expenses billed, C filing fees, money market sweep fees, auditor confirmation fees, wine transfer fees,
transaction fees to settle third -party trades and reconcilement fees to balance trust account balances to third -
party investment provider statements
Annual fees include one standard audit confirmation per year without charge. Standard audit confirmations
include the final maturity date, principal paid, principal outstanding, interest cycle, interest paid, cash and asset
2001 Bryn- 9' Floor Cl TX 75201
' EXHIBIT B
BOND PURCHASE AGREEMENT
1
1
85004609.2/10900863 B-1
BOND PURCHASE AGREEMENT
$5,795,000 CITY OF ALLEN, TEXAS
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 2009
February 24, 2009
Mayor and Members of the City Council
City of Allen
One Allen Civic Plaza
305 Century Pkwy
Allen, Texas 75013
Ladies and Gentlemen:
The undersigned, Stifel Nicolaus & Company, Incorporated (the "Underwriter"), offers to
enter into the following agreement (the or this "Agreemene') with the City of Allen, Texas (the
"Issuer") which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer
and upon the Underwriter. This offer is made subject to the Issuer's written acceptance hereof on
' or before 9:00 p.m., Central Time, on February 24, 2009, and, if not so accepted, will be subject to
withdrawal by the Underwriter upon written notice delivered to the Issuer at any time prior to the
acceptance hereofby the Issuer. Terms not otherwise defined in this Agreement shall have the same
meanings set forth in the Bond Ordinance (as defined herein) or, if not defined in the Bond
Ordinance, in the Official Statement (as defined herein).
1. Purchase and Sale ofrhe Bonds. Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees
to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriter, all,
but not less than all, of the Issuer's $5,795,000 Waterworks and Sewer System Revenue Refunding
Bonds, Series 2009 (the "Bonds"). Inasmuch as this purchase and sale represents a negotiated
transaction, the Issuer understands, and hereby confirms, that the Underwriter is not acting as a
fiduciary of the Issuer, but rather is acting solely in its capacity as Underwriter for its own account.
The Underwriter has been duly authorized to execute this Agreement and to act hereunder.
The principal amount of the Bonds to be issued, the dated date therefor, the maturities,
sinking fund and optional redemption provisions and interest rates per annum are set forth in
Schedule I hereto. The Bonds shall be as described in, and shall be issued and secured under and
pursuant to the provisions of the ordinance adopted by the Issuer on February 24, 2009 (the `Bond
Ordinance").
The purchase price for the Bonds shall be $5,823,561.80 (representing the principal amount
of the Bonds of $5,795,000.00, plus an aggregate original issue premium of $65,644.35, less an
' underwriter's discount of $37,082.55) plus interest accrued on the Bonds from the dated date of the
Bonds to the date of the Closing (as hereinafter defined).
' Delivered to the Issuer herewith as a good faith deposit is a check payable to the order of the
Issuer in clearing house funds in the amount of $57,750 (the "ChecK�. If the Issuer accepts this
Agreement, the Check shall be held uncashed by the Issuer until the time of Closing, at which time
the Check shall be returned uncashed to the Underwriter. In the event that the Issuer does not accept
this Agreement, the Check will be immediately returned to the Underwriter. Should the Issuer fail
to deliver the Bonds at the Closing, or should the Issuer be unable to satisfy the conditions of the
obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds, as set forth in
this Agreement (unless waived by the Underwriter), or should such obligations of the Underwriter
be terminated for any reason permitted by this Agreement, the Check shall immediately be returned
to the Underwriter. In the event that the Underwriter fails (other than for a reason permitted
hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing as herein provided,
the Check shall be cashed and the amount thereof retained by the Issuer as and for fully liquidated
damages for such failure of the Underwriter, and, except as set forth in Sections 8 and 10 hereof, no
party shall have any further rights against the other hereunder. The Underwriter and the Issuer
understand that in such event the Issuer's actual damages may be greater or may be less than such
amount. Accordingly, the Underwriter hereby waives any right to claim that the Issuer's actual
damages are less than such amount, and the Issuer's acceptance ofthis offer shall constitute awaiver
of any right the Issuer may have to additional damages from the Underwriter. The Underwriter
hereby agrees not to stop or cause payment on the Check to be stopped unless the Issuer has
breached any material terms of this Agreement or unless an event oftermination has occurred as set
forth in Section 7 hereof.
' 2. Public Offering. The Underwriter agrees to make a bona fide public offering of all
of the Bonds at a price not to exceed the public offering price set forth on the inside front cover of
the Official Statement and may subsequently change such offering price without any requirement
of prior notice. The Underwriter may offer and sell Bonds to certain dealers (including dealers
depositing Bonds into investment trusts) and others at prices lower than the public offering price set
forth on the inside front cover ofthe Official Statement, provided that on or before the Closing, the
Underwriter shall execute and deliver to Bond Counsel an Issue Price Certificate for the Bonds
prepared by Bond Counsel.
3. The Official Statement.
(a) The Bonds have been offered pursuant to the Preliminary Official Statement
dated February 19, 2009, including the cover page and Appendices thereto, of the Issuer
relating to the Bonds (the "Preliminary Official Statement'). The Preliminary Official
Statement, as amended to reflect the information indicated on Schedule I hereto, and as it
may otherwise be amended or supplemented in accordance with this Agreement is
hereinafter called the "Official Statement."
(b) The Preliminary Official Statement has been prepared for use by the
Underwriter in connection with the public offering, sale and distribution of the Bonds. The
Issuer hereby represents and warrants that the Preliminary Official Statement was deemed
final by the Issuer as of its date, except for the omission of such information which is
2
dependent upon the final pricing ofthe Bonds for completion, all as permitted to be excluded
by Section (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule").
(c) The Issuer hereby authorizes the Official Statement and the information
therein contained to be used by the Underwriter in connection with the public offering and
the sale of the Bonds. The Issuer consents to the use by the Underwriter prior to the date
hereof of the Preliminary Official Statement in connection with the public offering of the
Bonds. The Issuer shall provide, or cause to be provided to the Underwriter as soon as
practicable after the date of the Issuer's acceptance of this Agreement (but, in any event, not
later than within seven business days after the Issuer's acceptance of this Agreement and in
sufficient time to accompany my confirmation that requests payment from any customer)
copies of the Official Statement which is complete as of the date of its delivery to the
Underwriter in such quantity as the Underwriter shall reasonably request in order for the
Underwriter to comply with Section (b)(4) of the Rule and the rules of the Municipal
Securities Rulemaking Board.
(d) If, after the date of this Agreement to and including the date the Underwriter
is no longer required to provide an Official Statementto potential customers who request the
same pursuant to the Rule (the earlier of (i) 90 days from the "end of the underwriting
period" (as defined in the Rule) and (ii) the time when the Official Statement is available to
any person from a nationally recognized municipal securities information repository, but in
no case less than 25 days after the"end ofthe underwriting period" for the Bonds), the Issuer
becomes aware of any fact or event which might or would cause the Official Statement, as
then supplemented or amended, to contain any untrue statement of a material fact or to omit
to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, or if it is necessary to amend or supplement the Official Statement
to comply with law, the Issuer will notify the Underwriter (and for the purposes of this
clause provide the Underwriter with such information as it may from time to time reasonably
request), and if, in the reasonable opinion of the Underwriter, such fact or event requires
preparation and publication of a supplement or amendment to the Official Statement, the
Issuer will prepare and furnish, at the Issuer's own expense (in a form and manner approved
by the Underwriter), a reasonable number of copies of either amendments or supplements
to the Official Statement so that the statements in the Official Statement as so amended and
supplemented will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading or so that the Official Statement will comply with law. If such notification shall
be subsequent to the Closing, the Issuer shall furnish such legal opinions, certificates,
instruments and other documents m the Underwriter may deem reasonably necessary to
evidence the truth and accuracy of such supplement or amendment to the Official Statement.
(e) The Underwriter hereby agrees to promptly file the Official Statement with
a nationally recognized municipal securities information repository. Unless otherwise
notified in writing by the Underwriter, the Issuer can assume that the "end of the
' underwriting period" for purposes of the Rule is the date of the Closing.
3
' 4. Representations, Warranties, and Covenants of the Issuer. The Issuer hereby
represents and warrants to and covenants with the Underwriter that:
(a) The Issuer is a duly organized municipality and body corporate and politic
of the State of Texas (the "State") duly created, organized and existing under the laws ofthe
State and its home rule charter, and has full legal right, power and authority under Texas
Government Code, Chapters 1207 and 1502, w amended and supplemented (collectively,
the "Act'), and at the date of the Closingwill have full legal right, power and authority under
the Act and the Bond Ordinance (i) to enter into, execute and deliver this Agreement, the
Bond Ordinance, which shall contain the Continuing Disclosure Undertaking (the
"Undertaking") as defined in Section 6(h)(3) hereof, the escrow agreement pertaining to the
Bonds (the "Escrow Agreement") between the Issuer and the escrow agent identified in the
Official Statement and all documents required hereunder and thereunder to be executed and
delivered by the Issuer (this Agreement, the Escrow Agreement and the Bond Ordinance are
hereinafter referred to w the "Issuer Documents"), (ii) to sell, issue and deliver the Bonds
to the Underwriter as provided herein, and (iii) to carry out and consummate the transactions
described in the Issuer Documents and the Official Statement;
(b) By all necessary official action of the Issuer prior to or concurrently with the
acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it for
(i) the adoption of the Bond Ordinance and the issuance and sale of the Bonds, (ii) the
approval, execution and delivery of, and the performance by the Issuer of the obligations on
its part, contained in the Bonds and the Issuer Documents and (iii) the consummation by it
of all other transactions described in the Official Statement and the Issuer Documents and
any and all such other agreements and documents as may be required to be executed,
delivered and/or received by the Issuer in order to carry out, give effect to, and consumrnate
the transactions described herein and in the Official Statement;
(c) The Bonds, when issued, delivered and paid for, in accordance with the Bond
Ordinance and this Agreement, will constitute legal, valid and binding obligations of the
Issuer entitled to the benefits of the Bond Ordinance and will be enforceable in accordance
with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws and principles of sovereign immunity and equity relating to or affecting the
enforcement ofcreditors' rights; upon the issuance, authentication and delivery ofthe Bonds
as aforesaid, the Bonds will be payable from, and secured by, a first lien on and pledge of
the Net Revenues of the Issuels combined Waterworks and Sewer System (the "System'l
after the payment of Operating and Maintenance Expenses, as set forth in the Bond
Ordinance;
(d) To the best of its knowledge, the Issuer is not in breach of or default in any
material respect under any applicable constitutional provision, law or administrative
regulation of the State or the United States, or any applicable judgment or decree, relating
to the issuance of such Bonds or any loan agreement, indenture, bond, note, resolution,
' agreement or other instrument to which the Issuer is a party or to which the Issuer is or any
4
I
C
' of its property or assets are otherwise subject, and no event has occurred and is continuing
which constitutes or with the passage of time or the giving of notice, or both, would
constitute a default or event of default by the Issuer under any of the foregoing; and the
execution and delivery of the Bonds and the Issuer Documents and the adoption of the Bond
Ordinance and compliance with the provisions on the Issuer's part contained therein will not
conflict with or constitute a breach of or default under any constitutional provision, any
administrative regulation relating to the issuance ofthe Bonds, or anyjudgment, decree, loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which the
Issuer is a party or to which the Issuer is or to which any of its property or assets are
otherwise subject;
(e) All authorizations, approvals, licenses, permits, consents and orders of any
governmental authority, legislative body, board, agency or commission having jurisdiction
of the matter which are required for the due authorization of, which would constitute a
condition precedent to, or the absence of which would materially adversely affect the due
performance by the Issuer of its obligations under the Issuer Documents and the Bonds have
been duly obtained, except for (i) approval of the Bonds by the Office of the Attorney
General of the State and registration of the Bonds by the Office of the Comptroller of the
State and (ii) such approvals, consents and orders as may be required under the Blue Sky or
securities laws of any jurisdiction in connection with the offering and sale of the Bonds;
' (f) The Bonds and the Bond Ordinance conform to the descriptions thereof
contained in the Official Statement under the captions "TETE BONDS"; the proceeds of the
sale of the Bonds will be applied generally as described in the Official Statement under the
caption "PLAN OF FINANCING"; and the Undertaking conforms to the description thereof
contained in the Official Statement under the caption "CONTINUING DISCLOSURE OF
INFORMATION";
(g) Except as may be set forth in the Official Statement, there is no litigation,
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by my court,
government agency, public board or body, pending or, to the best knowledge of the Issuer,
threatened against the Issuer, affecting the existence of the Issuer or the titles of its officers
to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale,
issuance or delivery of the Bonds or the collection of System revenues for the payment of
principal of and interest on the Bonds pursuant to the Bond Ordinance or in any way
contesting or affecting the validity or enforceability ofthe Bonds, the Issuer Documents, or
contesting the exclusion from gross income of interest on the Bonds for federal income tax
purposes, or contesting in any way the completeness or accuracy ofthe Preliminary Official
Statement or the Official Statement or any supplement or amendment thereto, or contesting
the powers ofthe Issuer or any authority for the issuance ofthe Bonds, the adoption ofthe
Bond Ordinance or the execution and delivery of the Issuer Documents, nor, to the best
knowledge ofthe Issuer is there any basis therefor, wherein an unfavorable decision, ruling
or finding would materially adversely affect the validity or enforceability ofthe Bonds or
' the Issuer Documents;
5
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1
' (h) As ofthe date thereof, the Preliminary Official Statement did not contain my
untrue statement ofa material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that for the purpose of this Agreement and any
certificate delivered by the Issuer in accordance herewith, the Issuer makes no
representations with respect to the descriptions in the Preliminary Official Statement or the
Official Statement of The Depository Trust Company, New York, New York, or its book -
entry -only system;
(i) At the time of the Issuer's acceptance hereof and (unless the Official
Statement is amended or supplemented pursuant to paragraph (d) of Section 3 of this
Agreement) at all times subsequent thereto during the period up to and including the date of
Closing, the Official Statement does not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading;
Q) If the Official Statement is supplemented or amended pursuant to paragraph
(d) of Section 3 ofthis Agreement, at the time of each supplement or amendment thereto and
(unless subsequently again supplemented or amended pursuant to such paragraph) at all
times subsequent thereto during the period up to and including the date of Closing the
' Official Statement as so supplemented or amended will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light ofthe circumstances underwhich made, not misleading;
(k) The Issuer will apply, or cause to be applied, the proceeds from the sale of
the Bonds as provided in and subject to all of the terms and provisions of the Bond
Ordinance and will not take or omit to take any action which action or omission will
adversely affect the exclusion from gross income for federal income tax purposes of the
interest on the Bonds;
(1) The Issuer will furnish such information and execute such instruments and
take such action in cooperation with the Underwriter as the Underwriter may reasonably
request (A) to (y) qualify the Bonds for offer and sale under the Blue Sky or other securities
laws and regulations of such states and other jurisdictions in the United States as the
Underwriter may designate and (z) determine the eligibility of the Bonds for investment
under the laws of such states and other jurisdictions and (B) to continue such qualifications
in effect so long m required for the distribution ofthe Bonds (provided, however, that such
actions shall be at no expense to the Issuer and the Issuer will not be required to qualify as
a foreign corporation or to file any general or special consents to service of process under
the laws of anyjurisdiction) and will advise the Underwriter immediately of receipt by the
Issuer of any notification with respect to the suspension of the qualification ofthe Bonds for
sale in any jurisdiction or the initiation or threat of any proceeding for that purpose;
1
' (m) The financial statements of, and other financial information regarding, the
Issuer in the Official Statement fairly present the financial position and results of the Issuer
as of the dates and for the periods therein set forth, (i) the audited financial statements have
been prepared in accordance with generally accepted accounting principles consistently
applied, (ii) the unaudited financial statements (if any) have been prepared on a basis
substantially consistent with the audited financial statements included in the Official
Statement and reflect all adjustments necessary to that effect, and (iii) the other financial
information has been determined on a basis substantially consistent with that of the Issuer's
audited financial statements included in the Official Statement. Prior to the Closing, there
will be no adverse change of a material nature in such financial position, results of
operations or condition, financial or otherwise, of the Issuer from that described in the
Official Statement. Except as may be described in the Official Statement, the Issuer is not
a party to any litigation or other proceeding pending or, to its knowledge, threatened which,
if decided adversely to the Issuer, would have a materially adverse effect on the financial
condition of the Issuer;
(n) Prior to the Closing the Issuer will not offer or issue any bonds, notes or other
obligations for borrowed money (except in the ordinary course of business) without the
prior approval of the Underwriter, such approval not to be unreasonably withheld;
(o) Any certificate, signed by any official of the Issuer authorized to do so in
' connection with the transactions described in this Agreement, shall be deemed a
representation and warranty by the Issuer to the Underwriter as to the statements made
therein; and
(p) To the best knowledge and belief of the Issuer, the Official Statement
contains information, including financial information or operating data, as required by the
Rule. The Issuer has complied in all material respects with any undertaking specified in
paragraph (b)(5)(i) of the Rule within the last five years.
5. Closing
(a) At 10:00 a.m. Central Time, on March 24, 2009, or at such other time and
date as shall have been mutually agreed upon by the Issuer and the Underwriter (the
"Closing'j, the Issuer will, subject to the terms and conditions hereof, deliver the Bonds to
the Underwriter, duly executed and authenticated, together with the other documents
hereinafter mentioned, and the Underwriter will, subject to the terms and conditions hereof,
accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 of this
Agreement in immediately available funds to the order of the Issuer. Payment for the Bonds
as aforesaid shall be made at the offices of the Paying Agent/Registrar for the Bonds, or such
other place as shall have been mutually agreed upon by the Issuer and the Underwriter. The
initial Bond(s) shall be registered in the name of the Underwriter. In addition, the Issuer and
the Underwriter agree that there shall be a preliminary closing held at such place as the
' Issuer and the Underwriter shall mutually agree, commencing at least 24 hours prior to the
7
Closing; provided, however, that such preliminary closing shall not be required if Bond
Counsel provides a complete Transcript of Proceedings acceptable to the Underwriter
relating to the Bonds to the counsel for the Underwriter at least 24 hours priorto the Closing.
Drafts of all documents to be delivered at the Closing shall be prepared and distributed to
the parties and their counsel for review at least two business days prior to the Closing.
(b) Delivery of the Bonds shall be made through The DepositoryTrustCompany
("DTC'), New York, New York, utilizing the book -entry -only form of issuance. The
definitive Bonds shall be delivered in definitive fully registered form, bearing CUSIP
numbers without coupons, with one Bond for each maturity of the Bonds, registered in the
name of Cede & Co, all as provided in the Bond Ordinance, and shall be made available to
the Underwriter at least one business day before the Closing for purposes of inspection at
the offices of DTC or, if the Bonds are to be held in safekeeping for DTC by the Paying
Agent/Registrar pursuant to DTC's FAST system, at the designated payment office of the
Paying Agent/Registrar.
6. Closing Conditions. The Underwriter has entered into this Agreement in reliance
upon the representations, warranties and agreements of the Issuer contained herein, and in reliance
upon the representations, warranties and agreements to be contained in the documents and
instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations
hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the
' Underwriter's obligations under this Agreement to purchase, to accept delivery of and to pay forthe
Bonds shall be conditioned upon the performance by the Issuer of its obligations to be performed
hereunder and under such documents and instruments at or prior to the Closing, and shall also be
subject to the following additional conditions, including the delivery by the Issuer of such
documents as are enumerated herein, in form and substance reasonably satisfactory to the
Underwriter:
(a) The representations and warranties of the Issuer contained herein shall be
true, complete and correct on the date hereof and on and as of the date of the Closing, as if
made on the date of the Closing;
(b) The Issuer shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by it prior to or at
the Closing;
(c) At the time of the Closing, (i) the Issuer Documents and the Bonds shall be
in full force and effect, and shall not have been amended, modified or supplemented, and the
Official Statement shall not have been supplemented or amended, except in any such case
as may have been agreed to by the Underwriter; and (ii) all actions of the Issuer required to
be taken by the Issuer shall be performed in order for Bond Counsel and Underwriter's
counsel to deliver their respective opinions referred to hereafter;
t(d) At or prior to the Closing, the Bond Ordinance shall have been duly approved
by the governing body of the Issuer in accordance with law and the Issuer shall have duly
executed and delivered and the Paying Agent/Registrar shall have duly authenticated the
Bonds;
(e) At the time of the Closing, there shall not have occurred any change in the
condition, financial or otherwise, or in the revenues or operations of the Issuer, from that set
forth in the Official Statement that in the reasonablejudgment of the Underwriter, is material
and adverse and that makes it, in the reasonablejudgment of the Underwriter, impracticable
to market the Bonds on the terms and in the manner described in the Official Statement;
(f) The Issuer shall not have failed to pay principal or interest when due on any
of its outstanding obligations for borrowed money;
(g) All steps to be taken and all instruments and other documents to be executed,
and all other legal matters in connection with the transactions described in this Agreement
shall be reasonably satisfactory in legal form and effect to the Underwriter and Bond
Counsel;
(h) At or prior to the Closing, the Underwriter shall have received one copy of
each of the following documents:
' (1) The Official Statement, and each supplement or amendment thereto,
if any, executed on behalf of the Issuer by the Mayor and City Secretary, or such
other officials as may have been agreed to by the Underwriter, or a conformed copy
thereof, and the reports and audits referred to or appearing in the Official Statement;
(2) The Bond Ordinance;
(3) The Bond Ordinance shall include an Undertaking ofthe Issuer which
satisfies the requirements of section (b)(5)(i) of the Rule, with such supplements or
amendments as may have been agreed to by the Underwriter;
(4) The approving opinion of Bond Counsel with respect to the Bonds,
in substantially the form and substance attached to the Official Statement as
Appendix C;
(5) a supplemental opinion of Bond Counsel, addressed to the Issuer and
the Underwriter, which provides that the Underwriter may rely upon the opinion of
Bond Counsel delivered in accordance with the provisions of paragraph 6(h)(4)
hereof, and opining to the effect that:
(i) the Bonds are exempted securities within the meaning of
' Section 3(a)(2) of the Securities Act of 1933, as amended (the "1933 Act'),
9
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and it is not necessary, in connection with the offering and sale of the Bonds,
to register the Bonds under the 1933 Act or to qualify the Bond Ordinance
under the Trust Indenture Act; and
('n A certificate, dated the date of Closing, ofthe Issuer to the effect that
(i) the representations and warranties of the Issuer contained herein are true and
correct in all material respects on and as of the date of Closing as if made on the date
of Closing; (ii) except as may be disclosed in the Official Statement, no litigation or
proceeding or tax challenge against it is pending or, to its knowledge, threatened in
any court or administrative body nor, to its knowledge, is there a basis for litigation
which would (a) contest the right of the members or officials of the Issuer to hold
and exercise their respective positions, (b) contest the due organization and valid
existence of the Issuer, (c) contest the validity, due authorization and execution of
the Bonds or the Issuer Documents or (d) attemptto limit, enjoin or otherwise restrict
or prevent the Issuer from functioning and collecting System revenues, including
payments on the Bonds, pursuant to the Bond Ordinance; (iii) the Bond Ordinance,
which authorized the execution, delivery and/or performance of the Official
Statement, the Bonds and the other Issuer Documents, has been duly adopted by the
Issuer, is in full force and effect and has not been modified, amended or repealed,
(iv) to the best of its knowledge, no event affecting the Issuer has occurred since the
date ofthe Official Statement which should be disclosed in the Official Statement for
' the purpose for which it is to be used or which it is necessary to disclose therein in
10
(iii) such firm has reviewed the statements and information
contained in the Official Statement under the captions "PLAN OF
FINANCING — Refunded Obligations", "THE BONDS" (except under the
subcaptions "Book -Entry -Only System" and "Bondholders' Remedies", as to
which no opinion need be expressed), "TAX MATTERS", "CONTINUING
DISCLOSURE OF INFORMATION" (except under the subcaption
"Compliance with Prior Undertakings," as to which no opinion need be
expressed), "OTHER INFORMATION — Registration and Qialification of
Bonds for Sale", "OTHER INFORMATION — Legal Investments and
Eligibility to Secure Public Funds inTexas", and "OTHER INFORMATION
— Legal Matters" (except for the last two sentences of the first paragraph
thereof as to which no opinion need be expressed), and such firm is of the
opinion that the information relating to the Bonds and the legal issues
contained under such captions is an accurate and fair description of the laws
and legal issues addressed therein and, with respect to the Bonds, such
information conforms to the provisions of the Bond Ordinance;
'
(6) An opinion of McCall, Parkhurst & Horton L.L.P., as counsel for the
Underwriter, dated the date of the Closing, addressed to the Underwriter,
substantially in the form attached hereto as Exhibit A;
('n A certificate, dated the date of Closing, ofthe Issuer to the effect that
(i) the representations and warranties of the Issuer contained herein are true and
correct in all material respects on and as of the date of Closing as if made on the date
of Closing; (ii) except as may be disclosed in the Official Statement, no litigation or
proceeding or tax challenge against it is pending or, to its knowledge, threatened in
any court or administrative body nor, to its knowledge, is there a basis for litigation
which would (a) contest the right of the members or officials of the Issuer to hold
and exercise their respective positions, (b) contest the due organization and valid
existence of the Issuer, (c) contest the validity, due authorization and execution of
the Bonds or the Issuer Documents or (d) attemptto limit, enjoin or otherwise restrict
or prevent the Issuer from functioning and collecting System revenues, including
payments on the Bonds, pursuant to the Bond Ordinance; (iii) the Bond Ordinance,
which authorized the execution, delivery and/or performance of the Official
Statement, the Bonds and the other Issuer Documents, has been duly adopted by the
Issuer, is in full force and effect and has not been modified, amended or repealed,
(iv) to the best of its knowledge, no event affecting the Issuer has occurred since the
date ofthe Official Statement which should be disclosed in the Official Statement for
' the purpose for which it is to be used or which it is necessary to disclose therein in
10
' order to make the statements and information therein, in light of the circumstances
under which made, not misleading in any respect as of the time of Closing, and the
information contained in the Official Statement is correct in all material respects and,
as of the date of the Official Statement did not, and as of the date of the Closing does
not, contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein, in the
light ofthe circumstances under which they were made, not misleading, and (v) there
has not been any material adverse change in the financial condition of the Issuer
since September 30, 2007, the latest date as of which audited financial information
is available;
(8) A certificate of the Issuer in form and substance satisfactory to Bond
Counsel and counsel to the Underwriter setting forth the facts, estimates and
circumstances in existence on the date of the Closing, which establish that it is not
expected that the proceeds of the Bonds will be used in a manner that would cause
the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended (the "Code'l, and any applicable regulations
(whether final, temporary or proposed), issued pursuant to the Code;
(9) The approving opinion of the Attorney General of the State and the
registration certificate of the Comptroller of Public Accounts of the State in respect
' of the Bonds;
(10) A copy of a special report prepared by Grant Thornton LLP with
respect to the Bonds addressed to the Issuer, Bond Counsel and the Underwriter
verifying the arithmetical computations of the adequacy of the maturing principal
and interest on the Federal Securities (as defined in the Official Statement) and
uninvested cash on hand, if any, under the Escrow Agreement to pay, when due, the
principal of and interest on the bonds being refunded and the computation of the
yield with respect to such Federal Securities and the Bonds;
(11) Evidence satisfactory to the Underwriter that the Bonds have been
rated "Aa3" by Moody's and "AA+" by S&P, without regard to credit enhancement,
and that all such ratings are in effect as of the date of Closing; and
(12) Such additional legal opinions, certificates, instruments and other
documents as the Underwriter or counsel to the Underwriter may reasonably request
to evidence the truth and accuracy, w of the date hereof and as of the date of the
Closing, of the Issuer's representations and warranties contained herein and of the
statements and information contained in the Official Statement and the due
performance or satisfaction by the Issuer on or prior to the date of the Closing of all
the respective agreements then to be performed and conditions then to be satisfied
by the Issuer.
11
' All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof if, but only if, they are in form and substance reasonably satisfactory to
the Underwriter.
If the Issuer shall be unable to satisfy the conditions to the obligations of the
Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this
Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and
to pay for the Bonds shall be terminated for any reason permitted by this Agreement, this
Agreement shall terminate and neither the Underwriter nor the Issuer shall be under any
further obligation hereunder, except that the representations, warranties and obligations of
the Issuer and the Underwriter set forth in Sections 4 and 8 hereof shall continue in full force
and effect and the Check shall be returned to the Underwriter.
7. Temimtion. The Underwriter shall have the right to cancel their obligation to
purchase the Bonds if, between the date of this Agreement and the Closing, the market price or
marketability of the Bonds shall be materially adversely affected, in the reasonable judgment ofthe
Underwriter, by the occurrence of any of the following:
(a) legislation shall be enacted by or introduced in the Congress of the United
States or recommended to the Congress for passage by the President of the United States,
' or the Treasury Department of the United States or the Internal Revenue Service or any
member of the Congress or favorably reported for passage to either House of the Congress
by any committee of such House to which such legislation has been referred for
consideration, a decision by a court of the United States or of the State or the United States
Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed),
press release, statement or other form of notice by or on behalf of the Treasury Department
of the United States, the Internal Revenue Service or other governmental agency shall be
made or proposed, the effect of any or all of which would be to impose, directly or
indirectly, federal income taxation upon interest received on obligations of the general
character of the Bonds as described in the Official Statement, or other action or events shall
have transpired which may have the purpose or effect, directly or indirectly, of changing the
federal income tax consequences of any of the transactions described herein;
(b) legislation introduced in or enacted (or resolution passed) by the Congress
or an order, decree, or injunction issued by any court of competent jurisdiction, or an order,
ruling, regulation (final, temporary, orproposed), press release or other form ofnotice issued
or made by or on behalf of the Securities and Exchange Commission, or any other
governmental agency havingjurisdiction of the subject matter, to the effect that obligations
of the general character of the Bonds, including any or all underlying arrangements, are not
exempt from registration under or other requirements of the 1933 Act, or that the Bond
Ordinance is not exempt from qualification under or other requirements of the Trust
Indenture Act, or that the issuance, offering, or sale of obligations of the general character
' of the Bonds, including any or all underlying arrangements, m described herein or in the
12
'
Official Statement or otherwise, is or would be in violation of the federal securities law as
amended and then in effect;
(c) any state blue sky or securities commission or other governmental agency or
body in any jurisdiction in which more than ten percent (10514) the Bonds have been offered
and sold shall have withheld registration, exemption or clearance of the offering of the
Bonds as described herein, or issued a stop order or similar ruling relating thereto;
(d) a general suspension of trading in securities on the New York Stock
Exchange or the American Stock Exchange, the establishment of material restrictions (not
in force as of the date hereof) upon trading securities generally by any governmental
authority or any national securities exchange, or a general banking moratorium declared by
federal, State of New York, or State officials authorized to do so;
(e) a national securities exchange or any governmental authority shall impose,
as to the Bonds or as to obligations of the general character of the Bonds, any material
restrictions not now in force, or increase materially those now in force, with respect to the
extension of credit by, or the charge to the net capital requirements of, the Underwriter;
(f) any amendment to the federal or Texas Constitution or action by any federal
or Texas court, legislative body, regulatory body, or other authority materially adversely
affecting the tax status of the Issuer, its property, income, securities (or interest thereon), or
'
the validity or enforceability ofthe imposition or collection ofwaterworks and sewer system
revenues to pay principal of and interest on the Bonds;
(g) any event occurring, or information becoming known which, in the reasonable
judgment of the Underwriter, makes untrue in any material respect any statement or
information contained in the Official Statement, or has the effect that the Official Statement
contains any untrue statement ofmaterial fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(h) there shall have occurred since the date of this Agreement any materially
adverse change in the affairs or financial condition of the Issuer;
(i) since the date ofthis Agreement the United States shall have become engaged
in hostilities which have resulted in a declaration of war or a national emergency or there
shall have occurred any other outbreak or escalation of hostilities or a national or
international calamity or crisis, financial or otherwise;
0) any fact or event shall exist or have existed that, in the reasonable judgment
of the Underwriter, requires or has required an amendment of or supplement to the Official
Statement;
1
13
' (k) there shall have occurred any downgrading orpublished negative credit watch
or similar published information from a rating agency that at the date of this Agreement has
published a rating (or has been asked to furnish a rating on the Bonds) on any ofthe Issuer's
debt obligations that are secured in a like manner as the Bonds, which action reflects a
change or possible change, in the ratings accorded any such obligations of the Issuer
(including any rating to be accorded the Bonds);
(1) the purchase of and payment for the Bonds by the Underwriter, or the resale
of the Bonds by the Underwriter, on the terms and conditions provided herein shall be
prohibited by any applicable law, governmental authority, board, agency or commission,
which prohibition shall occur subsequent to the date hereof and shall not be due to the
malfeasance, misfeasance or nonfeasance of the Underwriter; or
(m) the debt ceiling of the United States is such that the Federal Securities
required to fund the Escrow Agreement are not available for delivery on the date of delivery
of the Bonds.
With respect to the condition described in subparagraph (1) above, the Underwriter
is not aware of any current, pending or proposed law or government inquiry or investigation
as of the date of execution of this Agreement which would permit the Underwriter to invoke
its termination rights hereunder.
' 8. Expenses.
1
(a) The Underwriter shall be under no obligation to pay, and the Issuer shall pay,
any expenses incident to the performance of the Issuer's obligations hereunder, including,
but not limited to (i) the cost of preparation and printing of the Bonds, (ii) the fees and
disbursements of Bond Counsel and counsel to the Issuer; (iii) the fees and disbursements
of the Financial Advisor to the Issuer; (iv) the fees and disbursements of any engineers,
accountants, and other experts, consultants or advisers retained by the Issuer; (v) the fees for
bond ratings; and (vi) the fees of the Texas Attorney General.
(b) The Underwriter shall pay (i) the cost of preparation and printing of this
Agreement, the Blue Sky Survey, if any, and Legal Investment Memorandum, if any; (ii) all
advertising expenses in connection with the public offering of the Bonds; and (iii) all other
expenses incurred by them in connection with the public offering ofthe Bonds, including the
fees and disbursements of counsel retained by the Underwriter.
9. Notices. Any notice or other communication to be given to the Issuer under this
Agreement may be given by delivering the same in writing at the address for the Issuer set forth
above, and any notice or other communication to be given to the Underwriter under this Agreement
may be given by delivering the same in writing to Stifel Nicolaus, Texas Public Finance, 9901 IH -10
West Suite 800, San Antonio, Texas 78230, Attention: Nom Chavez.
14
10. Parties in Interest. This Agreement shall constitute the entire agreement between
the Issuer and the Underwriter and is made solely for the benefit of the Issuer and the Underwriter
(including successors or assigns of the Underwriter) and no other person shall acquire or have any
right hereunder or by virtue hereof. This Agreement may not be assigned by the Issuer. All of the
Issuer's representations and warranties contained in this Agreement shall remain operative and in
full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriter;
(ii) delivery of and payment for the Bonds pursuant to this Agreement; and (iii) any termination of
this Agreement.
11. Effectiveness. This Agreement shall become effective upon the acceptance hereof
by the Issuer and shall be valid and enforceable at the time of such acceptance.
12. Choice of Law. This Agreement shall be governed by and construed in accordance
with the law of the State.
13. Severability. If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions of this Agreement invalid,
' inoperative or unenforceable to any extent whatever.
14. Business Day. For purposes of this Agreement, "business day" means any day on
which the New York Stock Exchange is open for trading.
15. Section Headings. Section headings have been inserted in this Agreement as a matter
of convenience of reference only, and it is agreed that such section headings are not a part of this
Agreement and will not be used in the interpretation of any provisions of this Agreement.
16. Counterparts. This Agreement may be executed in several counterparts each of
which shall be regarded as an original (with the same effect as if the signatures thereto and hereto
were upon the same document) and all of which shall constitute one and the same document.
17. No Personal Liability. None of the members of the City Council, nor any officer,
agent, or employee of the Issuer, shall be charged personally by the Underwriter with any liability,
or be held liable to the Underwriter under any term or provision of this Agreement, or because of
execution or attempted execution, or because any breach or attempted or alleged breach, of this
Agreement.
18. Statm of the Underwriter. It is understood and agreed that for all purposes of this
Agreement and the transactions described herein the Underwriter has, in its role as underwriter,
acted solely as an independent contractor and has not acted as a financial or investment advisor,
' fiduciary or agent to or for the Issuer, whether directly or indirectly through any person. The Issuer
recognizes that the Underwriter expects to profit from the acquisition and potential distribution of
the Bonds.
15
If the Issuer agrees with the foregoing, please sign the enclosed counterpart of this
Agreement and return it to the Underwriter. This Agreement shall become a binding agreement
between the Issuer and the Underwriter when at least the counterpart of this Agreement shall have
been signed by or on behalf of each of the parties hereto.
Respectfully submitted,
Stifel, Nicolaus & Company, Incorporated
as Underwriter
By:
Authorized Officer
Date: . 2009
ACCEPTANCE
ACCEPTED pursuant to a motion adopted by the City Council of the City of Allen, Texas
at a.m. / p.m. Central Time on February 24, 2009.
1 By:
Stephen Terrell, Mayor
' City of Allen, Texas
Waterworks and Sewer System Revenue Refunding Bonds, Series 2009
I
1
1
SCHEDULEI
SCHEDULE OF MATURITIES, INTEREST RATES AND REDEMPTION PROVISIONS
$5,795,000.00
City of Allen, Texas
Waterworks and Sewer System Revenue Refunding Bonds, Series 2009
The Bonds are dated February 15, 2009 and the Bonds shall accrue interest from such date.
Maturity
Principal
Approximate
Interest
Maturity
Principal
Approximate
Interest
(6/1)
Amount ($)
Yield (%)
Rate (%)
(6/1)
Amount ($)
Yield (%)
Rate (%)
2010
575,000
1.200
2.500
2015
555,000
2.720
3.000
2011
590,000
1.650
2.500
2016
570,000
2.910
3.000
2012
610,000
1.900
2.500
2017
585,000
3.150
3.250
2013
530,000
2.160
2.500
2018
610,000
3.350
3.500
2014
540,000
2.500
2.750
2019
630,000
3.540
3.500
The Bonds maturing on June I, 2019 are subject to redemption at the option of the Issuer on June 1, 2018 or
any date thereafter at a redemption price equal to the principal amount thereofplus accrued interest to the date
of redemption.
S -I
' EXHIBIT A
Form of Opinion of McCall, Parkhurst & Horton L.L.P., as Counsel to the Underwriters
March _, 2009
Stifel Nicolaus
Texas Public Finance
9901 IH -10 West Suite 800
San Antonio, Texas 78230
Re: $5,795,000 CityofAllen, Waterworks and Sewer System Revenue Refunding Bonds, Series
2009
Ladies and Gentlemen:
We have acted as counsel for you as the underwriters of the above -referenced Bonds (the
"Bonds'), issued under and pursuant to an ordinance (the "Ordinance') of the City of Allen, Texas
(the "Issuer"), authorizing the issuance of the Bonds, which Bonds you are purchasing pursuant to
a Bond Purchase Agreement dated February 24, 2009. All capitalized undefined terms used herein
shall have the meaning set forth in the Bond Purchase Agreement.
' In connection with this opinion letter, we have considered such matters of law and of fact,
and have relied upon such certifications and other information furnished to us, as we have deemed
appropriate as a basis for our opinion set forth below. We are not expressing any opinion or views
herein on the authorization, issuance, delivery, validity of the Bonds and we have assumed, but not
independently verified, that the signatures on all documents and Bonds that we have examined are
genuine.
Based on and subject to the foregoing, we are of the opinion that, under existing laws, the
Bonds are not subjectto the registration requirements ofthe Securities Act of 1933, as amended, and
the Ordinance is not required to be qualified under the Trust Indenture Act of 1939, as amended.
Because the primary purpose of our professional engagement as your counsel was not to
establish factual matters, and because of the wholly or partially nonlegal character of many of the
determinations involved in the preparation of the Official Statement dated February . 2009 (the
"Official Statement') and because the information in the Official Statement included under the
headings "THE BONDS - Book -Entry -Only System," "TAX MATTERS," and "CONTINUING
DISCLOSURE INFORMATION — Compliance with Prior Undertakings," and the Appendices
thereto were prepared by others who have been engaged to review or provide such information, we
are not passing on and do not assume any responsibility for the information contained under such
headings and in the appendices, and except as set forth in the last sentence of this paragraph, we are
not passing on and do not assume any responsibility for the accuracy, completeness or fairness of
' other statements contained in the Official Statement (including any appendices, schedules and
A-1
' exhibits thereto) and we make no representation that we have independently verified the accuracy,
completeness or fairness of such statements. In the course of our participation in the preparation of
the Official Statement as your counsel, we had discussions with representatives of the Issuer,
including its Financial Advisor and Bond Counsel, regarding the contents ofthe Official Statement.
In the course of such activities, no facts came to our attention which would lead us to believe that
the Official Statement (except for the financial statements and other financial and statistical data
contained therein, the information set forth under the headings "THE BONDS - Book -Entry -Only
System,' "TAX MATTERS," and "CONTINUING DISCLOSURE INFORMATION—Compliance
with Prior Undertakings " and the Appendices thereto, as to which we express no opinion), as of its
date contained any untrue statement of a material fact or omitted to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading.
1
1
This opinion letter may be relied upon by only you and only in connection with the
transaction to which reference is made above and may not be used or relied upon by any other
person for any purposes whatsoever without our prior written consent.
A-2
Respectfully,
I
EXHIBIT C
ESCROW AGREEMENT
850066093/10900863 C-1
' ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement'), is made and entered into as of
February 24, 2009, by and between the City of Allen, a governmental agency, body politic and
corporate and political subdivision of the State of Texas in Collin County (the "City') acting by
and through the Mayor and City Secretary of the City, and The Bank of New York Mellon Trust
Company, N.A., Dallas, Texas, a banking association organized and existing under the laws of
the United States of America, or its successors or assigns (the "Bank").
WITNESSETH:
WHEREAS, the City Council of the City has heretofore issued, sold, and delivered, and
there is currently outstanding obligations of the following issue or series (hereinafter called the
"Refunded Bonds'j, to wit: City of Allen, Texas, Waterworks and Sewer System Revenue
Refunding and Improvement Bonds, Series 1999, dated February ry 1, 1999, scheduled to mature
on June 1 in each of the years 2010 through 2017 and 2019, and aggregating in the principal
amount of $5,695,000; and
WHEREAS, in accordance with the provisions of V.T.C.A., Government Code, Chapter
1207, as amended (the "Act"), the City is authorized to sell refunding bonds in an amount
sufficient to provide for the payment of obligations to be refunded, deposit the proceeds of such
refunding bonds with the place of payment for the obligations being refunded, or other
authorized depository, and enter into an escrow or similar agreement with such depository for the
safekeeping, investment, reinvestment, administration and disposition of such deposit, upon such
terms and conditions as the parties may agree, provided such deposits may be invested only
(i) direct noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United States of
America, (ii) noncallable obligations of an agency or instrumentality of the United States,
including obligations unconditionally guaranteed or insuued by the agency or instrumentality and
on the date of their acquisition or purchase by the City are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent and
(iii) noncallable obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent that mature and/or bear interest payable at such times and in such
amounts as will be sufficient to provide for the scheduled payment of the Refunded Bonds; and
WHEREAS, in accordance with the provisions of the ordinance authorizing the issuance
of the Refunded Bonds, the deposits to refund and defense such Refunded Bonds shall be
invested only in direct obligations of the United States of America, including obligations the
principal of and interest on are unconditionally guaranteed by the United States of America (the
"Federal Securities"); and
WHEREAS, the Refunded Bonds are scheduled to mature, or be redeemed, and interest
thereon is payable on the dates and in the manner set forth in Exhibit A attached hereto and
incorporated herein by reference as a part of this Agreement for all purposes; and
85010535.1/10900863
' WHEREAS, the City on the 20 day of February, 2009, pursuant to an ordinance (the
"Bond Ordinance') duly passed and adopted by the City Council, authorized the issuance of
bonds known as "City of Allen, Texas, Waterworks and Sewer System Revenue Refunding
Bonds, Series 2009" (the "Bonds"), and such Bonds are being issued to refund, discharge and
make final payment of the principal of and interest on the Refunded Bonds; and
WHEREAS, upon the delivery of the Bonds, the proceeds of sale, together with other
available funds of the City to be deposited with the Bank, are to be used in part to purchase the
Federal Securities listed and identified in Exhibit B attached hereto and incorporated herein by
reference as a part of this Agreement for all purposes (together with substituted securities
therefor in accordance with the provisions of Section it hereof hereinafter referred to as the
"Escrowed Securities"); and
WHEREAS, the Escrowed Securities shall be held and deposited to the credit of the
"Escrow Fund" to be established and maintained by the Bank in accordance with this
Agreement; and
WHEREAS, the Escrowed Securities, together with the beginning cash balance in the
Escrow Fund, shall mature and the interest thereon shall be payable at such times to insure the
existence of monies sufficient to pay the principal amount of the Refunded Bonds and the
accrued interest thereon, as the same shall become due in accordance with the terms of the
ordinance authorizing the issuance of the Refunded Bonds and as set forth in Exhibit A attached
' hereto; and
WHEREAS, the City has completed all arrangements for the purchase of the Escrowed
Securities listed in Exhibit B and the deposit and credit of the same to the Escrow Fund as
provided herein; and
WHEREAS, the Bank is a banking association organized and existing under the laws of
the United States of America, possessing trust powers and is fully qualified and empowered to
enter into this Agreement and authorized to do business in the State of Texas; and
WHEREAS, in Section 37 of the Bond Ordinance, the City Council duly approved and
authorized the execution of this Agreement; and
WHEREAS, the City and the Escrow Agent, as the case may be, shall take all action
necessary to call, pay, redeem and retire said Refunded Bonds in accordance with the provisions
thereof, including, without limitation, all actions required by the ordinance authorizing the
issuance of the Refunded Bonds, the Act, the Bond Ordinance and this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and to
secure the payment of the principal of and the interest on the Refunded Bonds m the same shall
become due, the City and the Bank hereby mutually undertake, promise and agree as follows:
' SECTION 1: Receipt of Refunded Bond Ordinance. Receipt of a true and correct copy
of the ordinance authorizing the issuance of the Refunded Bonds and the Bond Ordinance are
hereby acknowledged by the Bank. Reference herein to or citation herein of any provision of
85010535.1/10900863
said documents shall be deemed an incorporation of such provision as a part hereof in the same
manner and with the same effect as if it were fully set forth herein.
SECTION 2: Escrow Fund Creation/Fundin¢. There is hereby created by the City with
the Bank a special segregated and irrevocable trust fund designated "SPECIAL 2009 CITY OF
ALLEN, TEXAS, REVENUE REFUNDING BOND ESCROW FUND" (hereinafter called the
"Escrow Fund") for the benefit of the holders of the Refunded Bonds, and, immediately
following the delivery of the Bonds, the City agrees and covenants to cause to be deposited with
the Bank the following:
$ 5,826,888.00 for the purchase of the Escrowed Securities listed in Exhibit B to
be held for the account of the Escrow Fund; and
1.85 for deposit in the Escrow Fund as a beginning cash balance
The Bank hereby accepts the Escrow Fund and further agrees to receive said moneys,
apply the same as set forth herein, and to hold the cash and Escrowed Securities deposited and
credited to the Escrow Fund for application and disbursement for the purposes and in the manner
provided in this Agreement.
SECTION 3: Escrow Fund Sufficiency Warranty. The City hereby represents that the
' cash and Escrowed Securities, together with the interest to be earned thereon, deposited to the
credit of the Escrow Fund will be sufficient to pay the principal of and premium and interest on
the Refunded Bonds as the same shall become due and payable, and such Refunded Bonds, and
the interest thereon, are to mature or be redeemed and shall be paid at the times and in the
amounts set forth and identified in Exhibit A attached hereto.
FURTHERMORE, the Bank acknowledges receipt of a copy of the Bond Ordinance
which provides for the redemption of the Refunded Bonds on June 1, 2009 at the redemption
price of par plus accrued interest thereon; all in accordance with the provisions of the notice
requirements applicable to said Refunded Bonds and the notice requirements contained in the
ordinance authorizing the issuance of the Refunded Bonds.
The Bank agrees to cause a notice of redemption pertaining to the Refunded Bonds to be
sent to the registered owners thereof appearing on the registration books at least thirty (30) days
prior to the redemption date therefor.
SECTION 4: Pledee of Escrow. The Bank agrees that all cash and Escrowed Securities,
together with any income or interest earned thereon, held in the Escrow Fund shall be and is
hereby irrevocably pledged to the payment of the principal of and interest on the Refunded
Bonds which will mature and become due on and after the date of this Agreement, and such
funds initially deposited and to be received from maturing principal and interest on the Escrowed
Securities in the Escrow Fund shall be applied solely in accordance with the provisions of this
' Agreement.
SECTION 5: Escrow Insufficiency - City Warranty to Cure. It for any reason, the
funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in
85010535.1/10900863
' Exhibit A attached hereto, as the same becomes due and payable, the City shall make timely
deposits to the Escrow Fund, from lawfully available funds, of additional funds in the amounts
required to make such payments. Notice of any such insufficiency shall be immediately given by
the Bank to the City by the fastest means possible, but the Bank shall in no manner be
responsible for the City's failure to make such deposits.
SECTION 6: Escrow Fund Securities/Segregation. The Bank shall hold said Escrowed
Securities and moneys in the Escrow Fund at all times as a special and separate trust fund for the
benefit of the holders of the Refunded Bonds, wholly segregated from other moneys and
securities on deposit with the Bank; shall never commingle said Escrowed Securities and moneys
with other moneys or securities of the Bank; and shall hold and dispose of the assets therein only
as set forth herein. Nothing herein contained shall be construed as requiring the Bank to keep the
identical moneys, or any part thereof, in said Escrow Fund, if it is impractical, but moneys of an
equal amount, except to the extent such me represented by the Escrowed Securities, shall always
be maintained on deposit in the Escrow Fund by the Bank, as escrow agent; and a special
account evidencing such facts shall at all times be maintained on the books of the Bank.
SECTION 7: Escrow Fund Collections/Payments. The Bank shall from time to time
collect and receive the principal of and interest on the Escrowed Securities as they respectively
mature and become due and credit the same to the Escrow Fund. On or before each principal
and/or interest payment date or redemption date, as the case may be, for the Refunded Bonds
' shown in Exhibit A attached hereto, the Bank, without further direction from anyone, including
the City, shall cause to be withdrawn from the Escrow Fund the amount required to pay the
accrued interest on the Refunded Bonds due and payable on said payment date and the principal
of the Refunded Bonds due and payable on said payment date or redemption date, as the case
may be, and the amount withdrawn from the Escrow Fund shall be immediately transmitted and
deposited with the paying agent for the Refunded Bonds to be paid with such amount. The
paying agent for the Refunded Bonds is the Bank.
If any Refunded Bond or interest coupon thereon shall not be presented for payment
when the principal thereof or interest thereon shall have become due, and if cash shall at such
times be held by the Bank in trust for that purpose sufficient and available to pay the principal of
such Refunded Bond and interest thereon it shall be the duty of the Bank to hold said cash
without liability to the holder of such Refunded Bond for interest thereon after such maturity or
redemption date, in trust for the benefit of the holder of such Refunded Bond, who shall
thereafter be restricted exclusively to said cash for any claim of whatever nature on his part on or
with respect to said Refunded Bond, including for any claim for the payment thereof and interest
thereon. All cash required by the provisions hereof to be set aside or held in trust for the
payment of the Refunded Bonds, including interest thereon, shall be applied to and used solely
for the payment of the Refunded Bonds and interest thereon with respect to which such cash has
been so set aside in trust.
Subject to the provisions of the last sentence of Section 25 hereof; cash held by the Bank
' in trust for the payment and discharge of any of the Refunded Bonds and interest thereon which
remains unclaimed for a period of three (3) years after the stated maturity date or redemption
date of such Refunded Bonds shall be returned to the City. Notwithstanding the above and
85010535.1/10900863
' foregoing, any remittance of funds from the Bank to the City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 8: Disposal of Refunded Bonds. All Refunded Bonds cancelled on account
of payment by the Bank shall be cremated or otherwise destroyed by the Bank, and an
appropriate certificate of destruction furnished the City.
SECTION 9: Escrow Fund Encumbrance. The escrow created hereby shall be
irrevocable and the holders of the Refunded Bonds shall have an express lien on all moneys and
Escrowed Securities in the Escrow Fund until paid out, used and applied in accordance with this
Agreement.
Unless disbursed in payment of the Refunded Bonds, all funds and the Escrowed
Securities received by the Bank for the account of the City hereunder shall be and remain the
property of the Escrow Fund and the City and the owners of the Refunded Bonds shall be
entitled to a preferred claim and shall have a first lien upon such fiords and Escrowed Securities
enjoyed by a tout beneficiary. The funds and Escrowed Securities received by the Bank under
this Agreement shall not be considered as a banking deposit by the City and the Bank and the
City shall have no right or title with respect thereto, except as otherwise provided herein. Such
funds and Escrowed Securities shall not be subject to checks or drafts drawn by the City.
SECTION 10: Absence of Bank Claim/Lim on Escrow Fund. The Bank shall have no
' lien whatsoever upon any of the moneys or Escrowed Securities in the Escrow Fund for payment
of services rendered hereunder, services rendered as paying agent/registrar for the Refunded
Bonds, or for any costs or expenses incurred hereunder and reimbursable from the City.
SECTION 11: Substitution/Reinvestments. The Bank shall be authorized to accept
initially and temporarily cash and/or substituted Federal Securities pending the delivery of the
Escrowed Securities attached hereto, or shall be authorized to redeem the Escrowed Securities
and reinvest the proceeds thereof, together with other moneys held in the Escrow Fund in Federal
Securities provided such early redemption and reinvestment of proceeds does not change the
repayment schedule of the Refunded Bonds appearing in Exhibit A and the Bank receives the
following:
(1) an opinion by an independent certified public accountant to the
effect that (i) the initial and/or temporary substitution of cash and/or securities for
one or more of the Escrowed Securities identified in Exhibit B pending the receipt
and delivery thereof to the Escrow Agent or (ii) the redemption of one or more of
the Escrowed Securities and the reinvestment of such funds in one or more
substituted Federal Securities, together with the interest thereon and other
available moneys then held in the Escrow Fund, will, in either case, be sufficient
without reinvestment to pay, as the same become due in accordance with Exhibit
A, the principal of, and interest on, the Refunded Bonds which have not
t previously been paid, and
(2) with respect to an early redemption of Escrowed Securities and the
reinvestment of the proceeds thereof, an unqualified opinion of nationally
M10535.1/10900F63
' recognized municipal bond counsel to the effect that (a) such investment will not
cause interest on the Bonds or Refunded Bonds to be included in the gross income
for federal income tax purposes, under the Code and related regulations as in
effect on the date of such investment, or otherwise make the interest on the Bonds
or the Refunded Bonds subject to Federal income taxation and (b) such
reinvestment complies with the Constitution and laws of the State of Texas and
with all relevant documents relating to the issuance of the Refunded Bonds and
the Bonds.
SECTION 12: Restriction Re: Escrow Fund Investments/Re-Investment. Except as
provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Escrowed
Securities and neither the City nor the Bank shall reinvest any moneys deposited in the Escrow
Fund except as specifically provided by this Agreement.
SECTION 13: Excess Funds. If at any time through redemption or cancellation of the
Refunded Bonds there exists or will exist excesses of interest on or maturing principal of the
Escrowed Securities in excess of the amounts necessary hereunder for the Refunded Bonds, the
Bank may transfer such excess amounts to or on the order of the City, provided that the City
delivers to the Bank the following:
(1) an opinion by an independent certified public accountant that after
' the transfer of such excess, the principal amount of securities in the Escrow Fund,
together with the interest thereon and other available monies then held in the
Escrow Fund, will be sufficient to pay, as the same become due, in accordance
with Exhibit A, the principal of, and interest on, the Refunded Bonds which have
not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond
counsel to the effect that (a) such transfer will not cause interest on the Bonds or
the Refunded Bonds to be included in gross income for federal income tax
purposes, under the Code and related regulations as in effect on the date of such
transfer, or otherwise make the interest on the Bonds or the Refunded Bonds
subject to Federal income taxation, and (b) such transfer complies with the
Constitution and laws of the State of Texas and with all relevant documents
relating to the issuance of the Refunded Bonds or the Bonds.
SECTION 14: Collateralization. The Bank shall continuously secure the monies in the
Escrow Fund not invested in Escrowed Securities by a pledge of direct obligations of the United
States of America, in the par or face amount at least equal to the principal amount of said
uninvested monies to the extent such money is not insured by the Federal Deposit Insurance
Corporation.
SECTION 15: Absence of Bank's Liability Re: Investments. The Bank shall not be
' liable or responsible for any loss resulting from any investment made in the Escrowed Securities
or substitute securities as provided in Section 11 hereof.
85010535.1/10900863
' SECTION 16: Bank's Compensation - Escrow Administration Settlement of Paving
Agents' Charges. The City agrees to pay the Bank for the performance of services hereunder
and as reimbursement for anticipated expenses to be incurred hereunder the amount of $750.00
and, except for reimbursement of costs and expenses incurred by the Bank pursuant to
Sections 3, 11, and 19 hereof, the Bank hereby agrees said amount is full and complete payment
for the administration of this Agreement.
The City also agrees to deposit with the Bank on the effective date of this Agreement, the
sum of $300.00, which represents the total charges due the paying agent for the Refunded Bonds
and the Bank acknowledges and agrees that such amount is and represents the total amount of
compensation due the Bank for services rendered as paying agent for the Refunded Bonds. The
Bank hereby agrees to pay, assume and be fully responsible for any additional charges that it
may incur in the performance of its duties and responsibilities as paying agent for the Refunded
Bonds.
SECTION 17: Escrow Agent's Duties/Resoonsibilities/Liability. The Bank shall not be
responsible for any recital herein, except with respect to its organization and its powers and
authority. As to the existence or nonexistence of any fact relating to the City or as to the
sufficiency or validity of any instrument, paper or proceedings relating to the City, the Bank
shall be entitled to rely upon a certificate signed on behalf of the City by its Mayor, Mayor Pro
Tem, City Manager, Finance Director, Assistant Finance Director or City Secretary as sufficient
' evidence of the facts therein contained. The Bank may accept a certificate of the City Secretary
under the City's seal, to the effect that a resolution or other instrrunent in the form therein set
forth has been adopted by the City Council, as conclusive evidence that such resolution or other
instrument has been duly adopted and is in full force and effect.
The duties and obligations of the Bank shall be determined solely by the express
provisions of this Agreement and the Bank shall not be liable except for the performance of such
duties and obligations as we specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Bank.
In the absence of bad faith on the part of the Bank, the Bank may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon any
certificate or opinion famished to the Bank, conforming to the requirements of this Agreement;
but notwithstanding any provision of this Agreement to the contrary, in the case of any such
certificate or opinion or any evidence which by any provision hereof is specifically required to
be furnished to the Bank, the Bank shall be under a duty to examine the same to determine
whether it conforms to the requirements of this Agreement.
The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Bank unless it shall be proved that the Bank was negligent
in ascertaining or acting upon the pertinent facts.
' The Bank shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the holders of not less than a majority in
aggregate principal amount of all said Refunded Bonds at the time outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Bank not
85010535.1/10900863
' in conflict with the intent and purpose of this Agreement. For the purposes of determining
whether the holders of the required principal amount of said Refunded Bonds have concurred in
any such direction, Refunded Bonds owned by any obligor upon the Refunded Bonds, or by any
person directly or indirectly controlling or controlled by or under direct or indirect common
control with such obligor, shall be disregarded, except that for the purposes of determining
whether the Bank shall be protected in relying on any such direction only Refunded Bonds which
the Bank knows are so owned shall be so disregarded.
The term "Responsible Officers" of the Bank, as used in this Agreement, shall mean and
include the Chairman of the Board of Directors, the President, any Vice President and any
Second Vice President, the Secretary and any Assistant Secretary, the Treasurer and any
Assistant Treasurer, and every other officer and assistant officer of the Bank customarily
performing functions similar to those performed by the persons who at the time shall be officers,
respectively, or to whom any corporate trust matter is referred, because of his knowledge of and
familiarity with a particular subject; and the term "Responsible Officer" of the Bank, as used in
this Agreement, shall mean and include any of said officers or persons.
SECTION 18: Limitation Re- Bank's Duties/Responsibilities/Liabilities to Third Parties.
The Bank shall not be responsible or liable to any person in any manner whatever for the
sufficiency, correctness, genuineness, effectiveness, or validity of this Agreement with respect to
the City, or for the identity or authority of any person making or executing this Agreement for
' and on behalf of the City. The Bank is authorized by the City to rely upon the representations of
the City with respect to this Agreement and the deposits made pursuant hereto and as to the
City's right and power to execute and deliver this Agreement, and the Bank shall not be liable in
any manner as a result of such reliance. The duty of the Bank hereunder shall only be to the City
and the holders of the Refunded Bonds. Neither the City nor the Bank shall assign or attempt to
assign or transfer any interest hereunder or any portion of any such interest. Any such
assignment or attempted assignment shall be in direct conflict with this Agreement and be
without effect.
SECTION 19: Intemleader. In the event conflicting demands or notices are made upon
the Bank growing out of or relating to this Agreement or the Bank in good faith is in doubt as to
what action should be taken hereunder, the Bank shall have the right at its election to:
(1) Withhold and stop all further proceedings in, and performance of,
this Agreement with respect to the issue in question and of all instructions
received hereunder in regard to such issue; and
(2) File a suit in interpleader and obtain an order from a court of
appropriate jurisdiction requiring all persons involved to interplead and litigate in
such court their several claims and rights among themselves.
In the event the Bank becomes involved in litigation in connection with this Section, the
' City to the extent permitted by law agrees to indemnify and save the Bank harmless from all loss,
cost, damages, expenses and attorney fees suffered or incurred by the Bank as a result thereof.
The obligations of the Bank under this Agreement shall be performable at the principal corporate
office of the Bank in the City of Dallas, Texas.
85010535.1/10900863
' The Bank may advise with legal counsel in the event of any dispute or question regarding
the construction of any of the provisions hereof or its duties hereunder, and in the absence of
negligence or bad faith on the part of the Bank, no liability shall be incurred by the Bank for any
action taken pursuant to this Section and the Bank shall be fully protected in acting in accordance
with the opinion and instructions of legal counsel that is knowledgeable and has expertise in the
field of law addressed in any such legal opinion or with respect to the instructions given.
SECTION 20: Accounting - Annual Report. Following the final payment and
redemption of the Refunded Bonds, the Bank shall forward by letter to the City, to the attention
of the Finance Director, or other designated official of the City, a final accounting with respect to
the Escrowed Securities and the payment and discharge of the Refunded Bonds.
SECTION 21: Notices. Any notice, authorization, request or demand required or
permitted to be given hereunder shall be in writing and shall be deemed to have been duly given
when mailed by registered or certified mail, postage prepaid addressed as follows:
CITY OF ALLEN
One Allen Civic Plaza
Allen, Texas 75013
Attention: Finance Director
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
2001 Bryan Street, 8th Floor
Dallas, Texas 75201
Attention: Corporate Trust Department
The United States Post Office registered or certified mail receipt showing delivery of the
aforesaid shall be conclusive evidence of the date and fact of delivery.
Any party hereto may change the address to which notices are to be delivered by giving
to the other parties not less than ten (10) days prior notice thereof.
SECTION 22: Performance Date. Whenever under the terms of this Agreement the
performance date of any provision hereof, including the date of maturity of interest on or
principal of the Refunded Bonds, shall be a Sunday or a legal holiday or a day on which the
Bank is authorized by law to close, then the performance thereof; including the payment of
principal of and interest on the Refunded Bonds, need not be made on such date but may be
performed or paid, as the case may be, on the next succeeding business day of the Bank with the
same force and effect as if made on the date of performance or payment and with respect to a
payment, no interest shall accrue for the period after such date.
' SECTION 23: Warranty of Parties Re: Power to Execute and Deliver Escrow Agreement.
The City covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement, in any and every said
85010535.1/10900863
' Refunded Bond as executed, authenticated and delivered and in all proceedings pertaining
thereto as said Refunded Bonds shall have been modified as provided in this Agreement. The
City covenants that it is duly authorized under the Constitution and laws of the State of Texas to
execute and deliver this Agreement, that all actions on its part for the payment of said Refunded
Bonds as provided herein and the execution and delivery of this Agreement have been duly and
effectively taken and that said Refunded Bonds and coupons in the hands of the holders and
owners thereof are and will be valid and enforceable obligations of the City according to the
import thereof as provided in this Agreement.
SECTION 24: Severability. if any one or more of the covenants or agreements provided
in this Agreement on the part of the parties to be performed should be determined by a court of
competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of this Agreement. In the event
any covenant or agreement contained in this Agreement is declared to he severable from the
other provisions of this Agreement, written notice of such event shall immediately be given to
each national rating service (Moody's Investors Service, Standard & Poor's Corporation or Fitch
Investors Service) which has rated the Refunded Bonds on the basis of this Agreement
SECTION 25: Termination. This Agreement shall terminate when the Refunded Bonds,
including interest due thereon, have been paid and discharged in accordance with the provisions
' of this Agreement. If any Refunded Bonds are not presented for payment when due and payable,
the nonpayment thereof shall not prevent the termination of this Agreement. Funds for the
payment of any nonpresented Refunded Bonds and accrued interest thereon shall upon
termination of this Agreement be held by the Bank for such purpose in accordance with
Section 7 hereof. Any moneys or Escrowed Securities held in the Escrow Fund at termination
and not needed for the payment of the principal of or interest on any of the Refunded Bonds shall
be paid or transferred to the City.
SECTION 26: Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Bank by this Agreement.
SECTION 27: Successors/Assi®s. (a) Should the Bank not be able to legally serve or
perform the duties and obligations under this Agreement, or should the Bank be declared to be
insolvent or closed for any reason by federal or state regulatory authorities or a court of
competent jurisdiction, the City, upon being notified or discovering the Bank's inability or
disqualification to serve hereunder, shall forthwith appoint a successor to replace the Bank, and
upon being notified of such appointment, the Bank shall (i) transfer all funds and securities held
hereunder, together with all books, records and accounts relating to the Escrow Fund and the
Refunded Bonds, to such successor and (ii) assign all rights, duties and obligations under this
Agreement to such successor. If the City should fail to appoint such a successor within ninety
(90) days from the date the City discovers, or is notified of, the event or circumstance causing
the Bank's inability or disqualification to serve hereunder, the Bank, or a bondholder of the
Refunded Bonds, may apply to a court of competent jurisdiction to appoint a successor or assigns
of the Bank and such court, upon determining the Bank is unable to continue to serve, shall
appoint a successor to serve under this Agreement and the amount of compensation, if any, to be
paid to such successor for the remainder of the term of this Agreement for services to be
M10535.11109Wa63 10
I
rendered both for administering the Escrow Fund and for paying agent duties and responsibilities
for the Refunded Bonds.
(b) Furthermore, the Bank may resign and be discharged from performing its duties and
responsibilities under this Agreement upon notifying the City in writing of its intention to resign
and requesting the City to appoint a successor. No such resignation shall take effect until a
successor has been appointed by the City and such successor has accepted such appointment and
agreed to perform all duties and obligations hereunder for a total compensation equal to the
unearned proportional amount paid the Bank under Section 16 hereof for the administration of
this Agreement and the unearned proportional amount of the paying agents fees for the Refunded
Bonds due the Bank.
Any successor to the Bank shall be a bank, trust company or other financial institution
that is duly qualified under applicable law (the Act, or other appropriate statute) to serve as
escrow agent hereunder and authorized and empowered to perform the duties and obligations
contemplated by this Agreement and organized and doing business under the laws of the United
States or the State of Texas, having its principal office and place of business in the State of
Texas, having a combined capital and surplus of at least $5,000,000 and be subject to the
supervision or examination by Federal or State authority.
Any successor or assigns to the Bank shall execute, acknowledge and deliver to the City
and the Bank, or its successor or assigns, an instrument accepting such appointment hereunder,
and the Bank shall execute and deliver an instrument transferring to such successor, subject to
the terms of this Agreement, all the rights, powers and trusts created and established and to be
performed under this Agreement. Upon the request of any such successor Bank, the City shall
execute any and all instruments in writing for more fully and certainly vesting in and confirming
to such successor Bank all such rights, powers and duties. The tern "Bank" as used herein shall
be the Bank and its legal assigns and successor hereunder.
SECTION 28: Escrow Agreement - Amendment/Modificatiom. This Agreement shall be
binding upon the City and the Bank and their respective successors and legal representatives and
shall inure solely to the benefit of the holders of the Refunded Bonds, the City, the Bank and
their respective successors and legal representatives. Furthermore, no alteration, amendment or
modification of any provision of this Agreement (1) shall alter the firm financial arrangements
made for the payment of the Refunded Bonds or (2) shall be effective unless (i) prior written
consent of such alteration, amendment or modification shall have been obtained from the
holders of all Refunded Bonds outstanding at the time of such alteration, amendment or
modification and (ii) such alteration, amendment or modification is in writing and signed by the
patties hereto; provided, however, the City and the Bank may, without the consent of the holders
of the Refunded Bonds, amend or modify the terms and provisions of this Agreement to cure in a
manner not adverse to the holders of the Refunded Bonds any ambiguity, formal defect or
omission in this Agreement. If the parties hereto agree to any amendment or modification to this
Agreement, prior written notice of such amendment or proposed modification, together with the
' legal documents amending or modifying this Agreement, shall be furnished to each national
rating service (Standard & Poor's Corporation, Moody's Investors Service or Fitch Investors
Service) which has rated the Refunded Bonds on the basis of this Agreement, prior to such
amendment or modification being executed.
85010535.1/10900863 11
t SECTION 29: Effect of Headings. The Section headings herein are for convenience of
reference only and shall not affect the construction hereof.
1
L
SECTION 30: Executed Counternatts. This Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as one original and shall
constitute and be but one and the same instrument.
SECTION 31: Governing Law. This Agreement shall be governed by the laws of the
State of Texas and shall be effective as of the date of the delivery of the Bonds.
[Remainder of page left blank in[en ionalW
95010535.1/10900863 12
' IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be hereunto affixed and
attested as of the date first above written.
1
CITY OF ALLEN, TEXAS
STEPHEN TERRELL, Mayor
ATTEST:
SHELLEY B. GEORGE, City Secretary
(City Seal)
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
Dallas, Texas, as Escrow Agent
ATTEST:
Title:
(Bank Seal)
85010535.1/10900863 SIGNATURE PAGE TO
ESCROW AGREEMENT
I
1
1
EXHIBIT D
NOTICE OF REDEMPTION
CITY OF ALLEN, TEXAS
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING AND IMPROVEMENT BONDS
SERIES 1999
DATED FEBRUARY 1, 1999
NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on June 1 in
each of the years 2010 through 2017 and 2019, and aggregating in principal amount of
$5,695,000, have been called for redemption on June 1, 2009, at the redemption price of par and
accrued interest to the date of redemption, such bonds being identified as follows:
Year of
Maturity Principal Amount
2010
$ 520,000
2011
$ 545,000
2012
$ 575,000
2013
$ 505,000
2014
$ 525,000
CUSIP Year of
CUSIP
Number MaW i[v
Principal Amount Number
2015
$ 550,000
2016
$ 575,000
2017
$ 600,000
2019
$ 1,300,000
ALL SUCH BONDS shall become due and payable on June 1, 2009, and interest thereon
shall cease to accrue from and after said redemption date and payment of the redemption price of
said bonds shall be paid to the registered owners of the bonds only upon presentation and
surrender of such bonds to The Bank of New York Mellon Trust Company, N.A., Dallas, Texas
(successor paying agent/registrar to Chase Bank of Texas, National Association) at its designated
offices at the following addresses:
First Class/
Registered/Certified
Express Delivery/Courier
By Hand Onlv
The Bank of New York
The Bank of New York
The Bank of New York Mellon Tout
Mellon Trust Company,
Mellon Trust Company, N.A.
Company, N.A.
N.A.
Institutional Trust Services
Room 234 -North Building
Institutional Trust Services
2001 Bryan Street, 9th Floor
Institutional Trust Securities Window
P. O. Box 2320
Dallas, Texas 75201
55 Water Street
Dallas, Texas 75221-2320
New York, New York 10041
THIS NOTICE is issued and given pursuant to the
terms and conditions prescribed for
the redemption of said bonds and pursuant to an ordinance by the City Council of the City of
Allen, Texas.
8500/ .V]0s 63
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
Address: 2001 Bryan Street, 8th Floor
Dallas, Texas 75201
D-1
' EXHIBIT E
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is refereed to in Section 47 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (an included in the Appendix or under
the headings of the Official Statement referred to) below:
1. The portions of the financial statements of the City appended to the Official
Statement as Appendix E, but for the most recently concluded fiscal year.
2. The information contained in Tables I through 11 of Appendix A to the Official
Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above.
85004609]/I0 963 E-1