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HomeMy WebLinkAboutO-1135-10-92CERTIFICATE OF CITY SECRETARY THE STATE OF TEXAS § COUNTY OF COLLIN § CITY OF ALLEN I, the undersigned, City Secretary of the City of Allen, Texas, DO HEREBY CERTIFY as follows: 1. That on the 1st day of October, 1992, a of the City Council of the City of Allen, Texas meeting place within the City; the duly constitute Council being as follows: JOE FARMER MAYOR KEVIN LILLY ) MAYOR PRO TEM MICKEY CHRISTAKOS ) DAVID BISHOP ) MIKE NICHOLS ) COUNCILMEMBERS STEVE TERRELL ) SHARON HAMNER ) and all o following: business entitled: regular meeting was held at a d members of the f said persons were present at said meeting, except the . Among other considered at said meeting, the attached ordinance "AN ORDINANCE authorizing the issuance of 'CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 19921; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval and execution of a Purchase Contract and Special Escrow Agreement and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date." was introduced and submitted to the Council for passage and adoption. After presentation and due consideration of the ordinance and, upon a motion made by Mike Nichols and seconded by David Bishop , the ordinance was duly passed and adopted by the Council to be effective immediately by the following vote: 7 voted "For" 0 voted "Against" 0 abstained 0043624 all as shown in the official Minutes of the Council for the meeting held on the aforesaid date. 2. That the attached ordinance is a true and correct copy of the original on file in the official records of the City; the duly qualified and acting members of the City Council of said City on the date of the aforesaid meeting are those persons shown above and, according to the records of my office, advance notice of the time, place and purpose of the meeting was given to each member of the Council; and that said meeting, and the deliberation of the aforesaid public business, was open to the public and written notice of said meeting, including the subject of the above entitled ordinance, was posted and given in advance thereof in compliance with the provisions of Article 6252-17, Section 3A, V.A.T.C.S. IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal of said City, this the 1st day of October, 1992. ty S retary, City of Allen, Texas (City Seal) 0043624 -2- F ORDINANCE NO. 1135-10-92 AN ORDINANCE authorizing the issuance of "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 1992"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval and execution of a Purchase Contract and Special Escrow Agreement and the approval and distribution of an Official Statement pertaining thereto; 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 totalling in principal amount $9,880,000 of the following issues or series (hereinafter called collectively called the "Refunded Bonds"), to wit: (1) City of Allen, Texas, General Obligation Bonds, Series 1979, dated August 1, 1979, maturing on August 1, 2000 through August 1, 2009, and now outstanding in the principal amount of $1,390,000 (2) City of Allen, Texas, General Obligation Bonds, Series 1985, dated September 1, 1985, maturing on September 1, 1996 through September 1, 2000, and now outstanding in the principal amount of $2,650,000 (3) City of Allen, Texas, General Obligation Bonds, Series 1986, dated August 1, 1986, maturing on September 1, 1999 through September 1, 2006, and now outstanding in the principal amount of $4,650,000 (4) City of Allen, Texas, General Obligation Bonds, Series 1988, dated April 1, 1988, maturing on September 1, 1999 through September 1, 2001, and now outstanding in the principal amount of $1,190,000 AND WHEREAS, pursuant to the provisions of Article 717k, V.A.T.C.S., as amended, the City Council is authorized to issue refunding bonds and deposit the proceeds of sale thereof directly with the place of payment for the Refunded Bonds, and such deposit, 0042639 when made in accordance with said statute, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Bonds; and WHEREAS, the City Council hereby finds and determines that the Refunded Bonds should be refunded at this time to restructure the debt service repayment schedule for such indebtedness to incorporate the new money bonds identified below and provide for a level debt service repayment schedule on the City's outstanding general obligation indebtedness, and the City Council further recognizes that such refunding will result in a present value savings on such Refunded Bonds of appoximately $188,417.28 while adding approximately $1,247,505.44 in future debt service payments on such indebtedness; and WHEREAS, in addition to the bonds to be issued for refunding purposes, the City Council hereby finds and determines that $4,530,000 in principal amount of general obligation bonds approved and authorized at an election held June 22, 1985 should be issued and sold at this time; a summary of the general obligation bonds authorized at said election, the principal amount authorized, amounts heretofore issued and being issued pursuant to this Ordinance and amounts remaining to be issued subsequent hereto being as follows: Purpose Street Improvements and Drainage Parks Fire Fighting Facilities and Equipment Library Facilities Principal Amounts Amounts Amount Heretofore Being Unissued Authorized Issued Issued Amount $9,970,000 $6,677,000 $2,753,000 $540,000 $5,065,000 $2,415,000 $1,450,000 $1,200,000 $785,000 $458,000 $327,000 $2,525,000 $2,400,000 $-0- $-0- $125,000 AND WHEREAS, the City Council hereby reserves and retains the right to issue the balance of unissued bonds approved at said election in one or more installments when, in the judgment of the City Council, funds are needed to accomplish the purposes for which such bonds were voted; and WHEREAS, the City Council hereby finds and determines that the general obligation bonds for refunding purposes and the gen- eral obligation bonds voted at the aforesaid election should be issued and sold at this time as one series or issue; now, therefore, 0042639 -2- BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS: SECTION 1: Authorization -Designation -Principal Amount - Purpose - Date. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $16,053,921.35 to be designated and bear the title "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 1992" (hereinafter referred to as the "Bonds"), for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City (identified in the preamble hereof and referred to as the "Refunded Bonds") and the payment of costs of issuance and to provide funds in the amount of $4,530,000 for making permanent public improvements and public purposes, to wit: $2,753,000 for street improvements, including drainage incidental thereto, the purchase of equipment and machinery for making such improvements and the acquisition of land and right-of-way therefor, $1,450,000 for acquiring or improving, or both, land for parks, $327,000 for constructing and equipping fire station facilities, including the purchase of land and firefighting equipment therefor; all in accordance with authority conferred by and in conformity with the Constitution and laws of the State of Texas, including Articles 1175 and 717k, V.A.T.C.S., as amended. The Bonds shall be dated October 1, 1992 (the "Issue Date") and issued as fully registered obligations, without coupons. SECTION 2: Fully Registered Interest Paying/Non-Interest Paying Obligations - Terms. The Bonds shall be issued in part as "Current Interest Bonds" (obligations paying accrued interest to the holders or owners on and at stated intervals prior to maturity or redemption) totalling $14,075,000 in principal amount and in part as "Capital Appreciation Bonds" (obligations paying no accrued interest to the holders or owners prior to maturity) totalling $1,978,921.35 in original principal amount. (a) Current Interest Bonds. The Current Interest Bonds (other than the Initial Bonds referenced in Section 7 hereof) shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, shall be lettered "R " and the definitive printed obligations shall be numbered consecutively from One (1) upward and principal shall become due and payable on September 1 in each of the years and in amounts (the "Stated Maturities") and bear interest at the rate(s) per annum in accordance with the following schedule: 0042639 -3- The Current Interest Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the rate(s) per annum shown in the above schedule (calculated on the basis of a 360 -day year of twelve 30 -days months. Interest on the Current Interest Bonds shall be payable on March 1 and September 1 in each year, commencing March 1, 1993. (b) Capital Appreciation Bonds. The Capital Appreciation Bonds shall each be issued in Maturity Amounts (the "Accreted Value" [as hereinafter defined) at maturity) of $5,000, or any integral multiple thereof within a Stated Maturity (except for the Initial Bond referenced in Section 7 hereof), shall be lettered "CAB " and shall be numbered consecutively from One (1) upward, and the Capital Appreciation Bonds shall be issued in the original principal amounts, which shall accrue interest at the interest rate(s) stated in the table below, and shall become due and payable on September 1 in each of the years (the "Stated Maturities") in the Maturity Amounts set forth in the following table: Year of Principal Interest Stated Maturity Amount Rate(s) 1993 $ 90,000 3.00% 1994 30,000 3.50% 1995 30,000 4.00% 1996 360,000 4.40% 1997 395,000 4.75% 1998 435,000 5.00% 1999 1,000,000 5.00% 2000 1,725,000 5.20% 2001 1,815,000 5.40% 2002 1,915,000 5.60% 2003 2,020,000 5.70% 2004 2,135,000 5.75% 2007 2,125,000 6.00% The Current Interest Bonds shall bear interest on the unpaid principal amounts from the Issue Date at the rate(s) per annum shown in the above schedule (calculated on the basis of a 360 -day year of twelve 30 -days months. Interest on the Current Interest Bonds shall be payable on March 1 and September 1 in each year, commencing March 1, 1993. (b) Capital Appreciation Bonds. The Capital Appreciation Bonds shall each be issued in Maturity Amounts (the "Accreted Value" [as hereinafter defined) at maturity) of $5,000, or any integral multiple thereof within a Stated Maturity (except for the Initial Bond referenced in Section 7 hereof), shall be lettered "CAB " and shall be numbered consecutively from One (1) upward, and the Capital Appreciation Bonds shall be issued in the original principal amounts, which shall accrue interest at the interest rate(s) stated in the table below, and shall become due and payable on September 1 in each of the years (the "Stated Maturities") in the Maturity Amounts set forth in the following table: Year of Original Principal Maturity Stated Maturity Amount Amount Yield(s) 2005 $1,023,251.35 $2,255,000 6.25% 2006 955,670.00 2,270,000 6.35% Interest on the Capital Appreciation Bonds shall accrue from the date of delivery of the Bonds to the initial purchasers (October 29, 1992), and be compounded semiannually on March 1 and September 1 in each year, commencing March 1, 1993, until the Stated Maturity 0042639 -4- therefor. The accrued interest on Capital Appreciation Bonds shall be payable at maturity as a portion of the Maturity Amount. The term "Accreted Value", as herein used with respect to Capital Appreciation Bonds, shall mean the original principal amount of a Capital Appreciation Bond plus interest thereon compounded semiannually to March 1 or September 1, as the case may be, next preceding the date of such calculation (or the date of calculation, if such calculation is made on March 1 or September 1), at the respective stated yield(s) designated in the schedule above and, with respect to each $5,000 Accreted Value at maturity, as set forth in the Accreted Value table appearing in the Official Statement referred to in Section 14 hereof. For any day other than a March 1 or September 1, the Accreted Value of a Capital Appreciation Bond shall be determined by a straight line interpolation between the values for the applicable semiannual compounding dates (based on 30 -day months). SECTION 3: Terms of Payment - Paying 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 (the "Security Register") for the Bonds maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of Ameritrust Texas National Association to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. The Bonds shall be payable at their Stated Maturities or upon their earlier redemption only upon the presentation and surrender of the Bonds to the Paying Agent/Registrar at its principal offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest on a Capital Appreciation Bond shall be payable at its Stated Maturity as a portion of the Accreted Value or Maturity Amount. Interest on a Current Interest Bond shall be paid to the Holders whose names appear in the Security Register at the close of business 0042639 -5- 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 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 on the Current Interest Bonds, 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 the Current Interest Bonds appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. (1) The Current Interest Bonds having Stated Maturities on and after September 1, 2003, 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 September 1, 2002 or on any date thereafter at the redemption price of par, together with accrued interest to the redemption date. (2) The Capital Appreciation Bonds shall not be subject to redemption at the option of the City prior to their Stated Maturities. (b) Exercise of Redemption Option. At least forty-five (45) days prior to a redemption date (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 Current Interest Bonds, the principal amount of each 0042639 -6- Stated Maturity to be redeemed, and the date set for the redemption thereof. The decision of the City to exercise the right to redeem Current Interest 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 Current Interest Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such as representing the number of Bonds Outstanding which is obtained by dividing the principal amount by $5,000 and shall select the Current Interest Bonds 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 Current Interest 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 Current Interest Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the last 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 by number 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 to be redeemed, shall become due and payable on the redemption date specified, and the accruing of interest shall cease from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount to be redeemed, shall be made at the Designated Payment/ Transfer Office of the Paying Agent/Registrar only upon presentation and surrender of the Bonds to be redeemed, in whole or in part, by the Holder. If a Current Interest Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption has been duly given or waived as herein provided, such Current Interest Bond (or the principal amount 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 Current Interest Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying Agent/Registrar. SECTION 5: Registration -Transfer - Exchange of Bonds - Predecessor Bonds. A Security Register relating to the registration, payment, and transfer or exchange of the Bonds shall at all times be 0042639 -7- kept and maintained on behalf of the City by the Paying Agent/ Registrar, as provided herein and in accordance with the provisions of an agreement with the Paying Agent/Registrar and such rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address of each 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 like kind (Current Interest Bonds or Capital Appreciation 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 Bonds authorized in Section 7 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 of like Stated Maturity and of a like aggregate principal amount (with respect to Current Interest Bonds) or Maturity Amount (with respect to Capital Appreciation Bonds) as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds (other than the Initial Bonds authorized in Section 7 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 (with respect to Current Interest Bonds) or Maturity Amount (with respect to Capital Appreciation Bonds) 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 furnished by, the City, to the Holder requesting the exchange. All Bonds issued upon any such transfer or exchange 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. 0042639 -8- 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. 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 10 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 Current Interest Bond called for redemption, in whole or in part, within 45 days of the date fixed for redemption of such Current Interest Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Current Interest Bond called for redemption in part. SECTION 6: 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 are or were the proper officers of the City on the Issue Date shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals or either of them shall cease to hold such offices at the time of delivery of the Bonds to the initial purchasers) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in the Bond Procedures Act of 1981, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 8C, manually executed by the Comptroller of Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 8D, manually executed by an authorized officer, employee or representative of the Paying Agent/ Registrar, and either such 0042639 -9- 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 7: Initial Bonds. The Bonds herein authorized shall be initially issued as two (2) fully registered bonds, being (i) a single fully registered Current Interest Bond in the aggregate principal amount shown in Section 2 hereof with principal installments to become due and payable as provided in Section 2(a) hereof and numbered TR -1 and (ii) a single fully registered Capital Appreciation Bond in the aggregate Maturity Amount appearing in Section 2 hereof with installments of such Maturity Amount to become due and payable as provided in Section 2(b) hereof and numbered TCAB-1. The two (2) initial bonds (hereinafter collectively called the "Initial Bonds") shall be registered in the name of the initial purchaser(s), or the designee thereof. The Initial Bonds 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 Bonds, the Paying Agent/ Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bonds delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts (with respect to Current Interest Bonds) or Maturity Amounts (with respect to Capital Appreciation Bonds) and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 8: Forms. A. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Certificate of Registration, and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this Ordinance and may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends on insured Bonds 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 0042639 -10- 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 lithographed, or engraved, typewritten, reproduced in any other similar manner, officers executing such Bonds as evide thereof. B. Form of Definitive Bond. REGISTERED NO. Bonds shall be printed, photocopied or otherwise all as determined by the nced by their execution [Current Interest Bond] REGISTERED UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 1992 Issue Date: Interest Rate: Stated Maturity: CUSIP NO: October 1, 1992 Registered Owner: Principal Amount: DOLLARS The City of Allen (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Issue Date at the per annum rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on March 1 and September 1 in each year, commencing March 1, 1993. 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. 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 0042639 -11- "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. This Bond is one of the series specified in its title issued in the aggregate principal amount of $16,053,921.35 (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City and the payment of costs of issuance and to provide funds in the amount of $4,530,000 for making permanent public improvements and public purposes, to wit: $2,573,000 for street improvements, including drainage incidental thereto, the purchase of equipment and machinery for making such improvements and the acquisition of land and right-of-way therefor, $1,450,000 for acquiring or improving, or both, land for parks, $327,000 for constructing and equipping fire station facilities, including the purchase of land and firefighting equipment therefor; under and in strict conformity with the Constitution and laws of the State of Texas, including Articles 1175 and 717k, V.A.T.C.S., and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds are issued in part as "Current Interest Bonds", which total in principal amount $14,075,000 and pay accrued interest at stated intervals to registered owners and in part as "Capital Appreciation Bonds", which total in original principal amount $1,978,921.35 and pay no accrued interest prior to their Stated Maturities. The Current Interest Bonds maturing on and after September 1, 2003, 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 September 1, 2002, or on any date thereafter, at the redemption price of par, together with accrued interest to the date of redemption and upon 30 days prior written notice being sent by United States Mail, first class postage prepaid, to the registered owners of the Bonds to be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of the principal sum hereof) shall have been 0042639 -12- duly called for redemption and notice of such redemption duly given, then upon such redemption date this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event of a partial redemption of the principal amount of this Bond, payment of the redemption price of such principal amount shall be made to the registered owner only upon presentation and surrender of this Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and there shall be issued to the registered owner hereof, without charge, 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 hereof. If this Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this 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 hereof in the event of its redemption in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. 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 owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/ Registrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the 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 0042639 -13- 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 of the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of the same aggregate principal amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this 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 nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in accordance with and shall be governed by the laws of the State of Texas. 0042639 -14- IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Issue Date. CITY OF ALLEN, TEXAS COUNTERSIGNED: Mayor City Secretary (SEAL) (Capital Appreciation Bond] REGISTERED REGISTERED MATURITY AMOUNT NO. CAB_ $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 1992 Issue Date: Stated Yield: October 1, 1992 % Registered Owner: Stated Maturity: CUSIP NO: Maturity Amount: DOLLARS The City of Allen (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner named above, or the registered assigns thereof, on the Stated Maturity date specified above, without right of prior redemption or prepayment, the Maturity Amount stated above. The Maturity Amount of this Bond represents the accretion of the original principal amount of this Bond from the date of delivery to the initial purchasers (October 29, 1992) to the Stated Maturity and such accretion in value occurring at the above Stated Yield and compounding on March 1, 1993, and semiannually 0042639 -15- thereafter on March 1 and September 1. A table of the "Accreted Values" per $5,000 "Accreted Value" at maturity is printed on the reverse side of this Bond. The term "Accreted Value", as used herein, means the original principal amount of this Bond plus the interest thereon compounded semiannually to March 1 and September 1, as the case may be, next preceding the date of such calculation (or the date of calculation, if such calculation is made on March 1 or September 1) at the Stated Yield for the Stated Maturity shown above and in the Table of Accreted Values printed hereon. For any date other than March 1 or September 1, the Accreted Value of this Bond shall be determined by a straight line interpolation between the values for the applicable semiannual compounding dates (based on 30 -day months). This Bond is payable 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. Payments of 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. This Bond is one of the series specified in its title issued in the aggregate principal amount of $16,053,921.35 (herein referred to as the "Bonds") for the purpose of providing funds for the discharge and final payment of certain outstanding obligations of the City, to provide funds in the amount of $4,530,000 for making permanent public improvements and public purposes, to wit: $2,753,000 for street improvements, including drainage incidental thereto, the purchase of equipment and machinery for making such improvements and the acquisition of land and right-of-way therefor, $1,450,000 for acquiring or improving, or both, land for parks, $327,000 for constructing and equipping fire station facilities, including the purchase of land and firefighting equipment therefor, and paying costs of issuance, under and in strict conformity with the Constitution and laws of the State of Texas, including Articles 1175 and 717k, V.A.T.C.S., and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds are issued in part as "Current Interest Bonds", which total in principal amount $14,075,000 and pay accrued interest at stated intervals to registered owners and in part as "Capital Appreciation Bonds", which total in original principal amount $1,978,921.35 and pay no accrued interest prior to their Stated Maturities. The Bonds are payable from the proceeds of an ad valorem tax levied, within the limitations prescribed by law, upon all taxable property in the City. Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Payment/Transfer 0042639 -16- Office of the Paying Agent/Registrar, and to all of the provisions of which the owner or holder of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be discharged at or prior to its maturity, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein have the 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 of the same Stated Maturity, of authorized denominations, accruing interest at the same rate, and of the same aggregate Maturity Amount will be issued by the Paying Agent/Registrar to the designated transferee or transferees. The City and the Paying Agent/ Registrar, and any agent of either, shall treat the registered owner whose name appears on the Security Register (i) on the date of surrender of this Bond as the owner entitled to payment of the Maturity Amount at its Stated Maturity, and (ii) 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. 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 provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal, or unenforceable, the validity, legality, and 0042639 -17- enforceability of the remaining provisions 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. IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Issue Date. COUNTERSIGNED: City Secretary (SEAL) CITY OF ALLEN, TEXAS Mayor C. *Form of Registration Certificate of Comptroller of Public Accounts to appear on Initial Bonds only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS ( REGISTER NO. THE STATE OF TEXAS I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (SEAL) *NOTE TO PRINTER: Do Not Print on Definitive Bonds 0042639 -18- D. Form of Certificate of Paying Agent/Registrar to appear on Definitive Bonds only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the within -mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The principal offices of the Paying Agent/Registrar in Dallas, Texas, is the Designated Payment/ Transfer Office for this Bond. AMERITRUST TEXAS NATIONAL ASSOCIATION, Dallas, Texas, as Paying Agent/Registrar Registration Date: By Authorized Signature E. Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned and transfers unto (Print or and zip code of transferee:) assigns, address, (Social Security or other identifying number: thereunder, and hereby hereby sells, typewrite name, ) the within Bond and all rights 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: 0042639 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. -19- F. The Initial Bonds for the Current Interest Paving Bonds and the Capital Appreciation Bonds shall be in the respective forms set forth therefor in paragraph B of this Section except as follows: (1) (Form of Current Interest Initial Bond) Heading and paragraph one shall be amended to read as follows: NO. TR -1 UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 1992 Issue Date: October 1, 1992 Registered Owner: Principal Amount: CUSIP NO: 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 order of the Registered Owner named above, or the registered assigns thereof, the Principal Amount hereinabove stated on September 1 in the years and in principal installments in accordance with the following schedule: YEAR OF PRINCIPAL INTEREST MATURITY INSTALLMENTS RATE (Information to be inserted from schedule in Section 2 hereof) (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the Issue Date at the per annum rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on March 1 and September 1 in each year, commencing March 1, 1993. Principal installments of this Bond are payable at the year of maturity or on a prepayment date to the registered owner hereof by Ameritrust Texas National Association (the "Paying Agent/ Registrar"), upon 0042639 -20- presentation and surrender, at its principal offices in Dallas, Texas (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 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. (2) (Form of Capital Appreciation Initial Bond] Heading and first two paragraphs shall be amended to read as follows: REGISTERED NO. TCAB-1 MATURITY AMOUNT UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 1992 Issue Date: CUSIP NO: October 1, 1992 Registered Owner: Maturity Amount: 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 order of the Registered Owner named above, or the registered assigns thereof, the aggregate Maturity Amount stated above on September 1 in each of the years and in installments in accordance with the following schedule: 0042639 -21- Year of Maturity Stated Maturity Amount Yield(s) (Information to be inserted from schedule in Section 2 hereof). (without right of prior redemption or prepayment). The respective installments of the Maturity Amount hereof represents the accretion of the original principal amounts of each year of maturity from the date of delivery to the initial purchasers (October 29, 1992) to the respective years of maturity and such accretion in values occurring at the respective Stated Yields and compounding on March 1, 1993, and semiannually thereafter on each March 1 and September 1. A table of the "Accreted Values" per $5,000 "Accreted Value" at maturity is attached to this Bond. The term "Accreted Value", as used herein, means the original principal amount of this Bond plus the interest thereon compounded semiannually to March 1 or September 1, as the case may be, next preceding the date of such calculation (or the date of calculation, if such calculation is made on March 1 or September 1) at the respective Stated Yields shown above and in the Table of Accreted Values attached hereto. For any date other than March 1 or September 1, the Accreted Value of this Bond shall be determined by a straight line interpolation between the values for the applicable semiannual compounding dates (based on 30 -day months). The installments of Maturity Amounts of this Bond are payable at maturity to the registered owner hereof, without exchange or collection charges, by Ameritrust Texas National Association (the "Paying Agent/Registrar"), upon presentation and surrender, at its principal offices in Dallas, Texas (the "Designated Payment/Transfer Office"), and shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 9: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form, and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be ample and sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full 0042639 -22- allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 1992 Refunding Bond Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a special fund maintained at an official depository of the City's funds; and such tax hereby levied, and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. Proper officers of the City are hereby authorized and directed to cause to be transferred to the Paying Agent/ Registrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of interest and principal of the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. Provided, however, in regard to the payments to become due on the Bonds on March 1, 1993 and September 1, 1993, sufficient current funds will be available and are hereby appropriated to pay such payments; and proper officials of the City are hereby authorized and directed to transfer and deposit in the Interest and Sinking Fund such current funds which, together with the accrued interest received from the purchaser of the Bonds, will be sufficient to pay the amount of the payment due on the Bonds on March 1, 1993 and September 1, 1993. SECTION 10: 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 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 0042639 -23- and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost, or stolen Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 11: 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 taxes levied under this Ordinance and all covenants, agreements, and other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) (with respect to Current Interest Bonds) and Maturity Amounts (with respect to Capital Appreciation Bonds) 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 at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying Agent/ Registrar, or an authorized escrow agent, or (ii) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the Bonds on the Stated Maturities thereof or ( if notice of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been made) the redemption date thereof. The City covenants that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 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 0042639 -24- Securities held in trust by the Paying Agent/ Registrar, or an authorized escrow agent, pursuant to this Section in excess of the amount required for the payment of the Bonds 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 Bonds and remaining unclaimed for a period of four (4) years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pay shall upon the request of the City be remitted to the City against a written receipt therefor. 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. The term "Government Securities", as used herein, means direct obligations of the United States of America, which are non -callable prior to the respective Stated Maturities of the Bonds and may be United States Treasury Obligations such as the State and Local Government Series and may be in book -entry form. SECTION 12: Ordinance a Contract - Amendments - Outstanding Bonds. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the City may, with the consent of Holders who own in aggregate 51% of the principal amount (with respect to Current Interest Bonds) and Maturity Amount (with respect to Capital Appreciation Bonds) of the Bonds then Outstanding, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount or Maturity Amount, as the case may be, 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 or Maturity Amount, as the case may be, of Bonds required to be held by Holders for consent to any such amendment, addition, or rescission. The term "Outstanding" when used in this Ordinance with respect to Bonds means, as of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: 0042639 -25- (1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying Agent/ Registrar for cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section it hereof; and (3) those mutilated, destroyed, lost, or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 10 hereof. SECTION 13: Covenants to Maintain Tax -Exempt Status. (a) Definitions. When used in this Section, the following terms shall have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, enacted on or before the Issue Date. "Computation Date" has the meaning stated in Treas. Reg. § 1.148-8(b)(1). "Gross Proceeds" has the meaning stated in Treas. Reg. § 1.148-8(d). "Investment" has the meaning stated in Treas. Reg. § 1.148-8(e). "Nonpurpose Investment" means any Investment in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purpose of the Bonds. Obligations acquired with proceeds of the Bonds that are to be used to discharge the Refunded Bonds are Nonpurpose Investments. "Rebatable Arbitrage" has the meaning stated in Treas. Reg. § 1.148-2. "Yield of" (1) any Investment shall be computed in accordance with Treas. Reg. §1.148-2, and (2) the Bonds has the meaning stated in Treas. Reg. § 1.148-3. 0042639 -26- (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 shall have received 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 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 or any property acquired, constructed, or improved with such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) in any activity carried on by any person or entity other than a state or local government, unless such use is solely as a member of the general public, or (2) not directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds of the Bonds or any property the acquisition, construction, or improvement of which is to be financed 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 0042639 -27- 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 of the Bonds in any Investment (or use such Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Investments allocated to such Gross Proceeds 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 with the Secretary of the Treasury the information required by section 149(e) of the Code with respect to the Bonds on such form and in such place as such Secretary may prescribe. (h) Payment of Rebatable Arbitrage. Except to the extent otherwise provided in section 148(f) of the Code and the regulations and rulings thereunder, (1) The City shall account for all Gross Proceeds of the Bonds (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 maintain all records of such accounting with the official transcript of the proceedings relating to the issuance of the Bonds until six years after the final Computation Date. The City may, however, to the extent permitted by section 148(f) of the Code and the regulations thereunder, commingle Gross Proceeds of the Bonds with other money of the City, provided that the 0042639 -28- City separately accounts for each receipt and expenditure of such Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall either (i) cause to be calculated by a nationally recognized accounting or financial advisory firm or (ii) calculate and cause its calculations to be verified by a nationally recognized accounting or financial advisory firm, in either case in accordance with rules set forth in section 148 (f ) of the Code and Treas. Reg. § 1.148-2 and rulings thereunder, the Rebatable Arbitrage with respect to the Bonds. The City shall maintain such calculations relating to the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the initial purchasers thereof and the loan of the money represented thereby, and in order to induce such purchase by measures designed to result in 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 the amount described in paragraph (2) above and the amount described in paragraph (4) below, at the times, in the installments, to the place, in the manner, and accompanied by such forms or other information as is or may be required by section 148(f) of the Code and Treas. Reg. §§ 1.148-1 through 1.148-9 and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations required by paragraph (2) and, if such error is made, to discover and promptly to correct such error within a reasonable amount of time thereafter, including payment to the United States of any Correction Amount as described in Treas. Reg. § 1.148-1(c) (2) and any penalty under Treas. Reg. § 1.148-1(c)(3)(ii)(B). (i) Oualified Advance Refunding. The Bonds are being issued exclusively to refund the Refunded Bonds, and the Bonds will be issued more than 90 days before the redemption of the Refunded Bonds. The City represents that: (1) None of the Refunded Bonds are "private activity bonds," within the meaning of section 141 of the Code. Specifically, the covenants set forth in subsection (c) and (d) of this Section are true, 0042639 -29- correct, and complete with respect to the Refunded Bonds, their proceeds, and the facilities financed therewith. (2) The Bonds are the first advance refunding (within the meaning of section 149(d)(5) of the Code) of the Refunded Bonds. (3) The Refunded Bonds are being called for redemption, and will be redeemed, not later than the earliest date on which each such issue may be redeemed at par or at a premium of 3 percent or less. (4) The initial temporary period under section 148(c) of the Code will end (i) with respect to the proceeds of the Bonds not later than 30 days after the date of issue of such Bonds and (ii) with respect to proceeds of the Refunded Bonds on the date of issuance of the Bonds if not ended prior thereto. (5) Section 148(e) of the Code did not apply to the Refunded Bonds. On and after the date of issue of the Bonds no proceeds of the Refunded Bonds will be invested in Nonpurpose Investments having a Yield in excess of the Yield on the Refunded Bonds to which any of such proceeds relate. (6) The debt service savings achieved by the City are a result solely of the interest rates on the Bonds being lower than the interest rates of the Refunded Bonds. In the issuance of the Bonds the City has employed no "device" to obtain a material financial advantage (based on arbitrage), within the meaning of section 149(d)(4) of the Code, apart from savings attributable to lower interest rates. SECTION 14: Sale of Bonds - Official Statement Approval. The Bonds authorized by this Ordinance have been and are hereby sold by the City to Southwest Securities Incorporated and others (herein referred to collectively as the "Purchasers") in accordance with the Purchase Contract, dated October 1, 1992, attached hereto as Exhibit A and incorporated herein by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and directed to execute said Purchase Contract for and on behalf of the City and as the act and deed of this Council, and the City Secretary is authorized to attest said Purchase Contract, in regard to the approval and execution of the Purchase Contract, the Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained 0042639 -30- therein are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Preliminary Official Statement in connection with the public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects. The final Official Statement reflecting the terms of sale, attached as Exhibit A to the Purchase Contract (together with such changes approved by the Mayor, City Manager, City Secretary or 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 October 1, 1992, in the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Purchasers, and such Official Statement in the final form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Purchasers. SECTION 15: Special Escrow Agreement Approval and Execution. The "Special Escrow Agreement" (the "Agreement") by and between the City and Ameritrust Texas National Association (the "Escrow Agent"), attached hereto as Exhibit B 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 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 Federal Securities referenced in the Agreement and the delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "SPECIAL CITY OF ALLEN, TEXAS, 1992 GO REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in Article 717k, V.A.T.C.S., as amended, this Ordinance and the Agreement. SECTION 16: 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 0042639 -31- supply of definitive Bonds, and shall take and have charge and control of the Initial Bonds pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public Accounts and the delivery thereof to the Purchasers. Furthermore, the Mayor, City Secretary, City Manager, and Finance Director, any one or more of said officials, are hereby authorized and directed to furnish and execute such documents and certifications relating to the City and the issuance of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure and investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Purchasers, and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bonds to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 17: Proceeds of Sale. Immediately following the delivery of the Bonds, the proceeds of sale thereof (less certain costs of issuance, the accrued interest received from the Purchasers of the Bonds and the amounts to be deposited to the credit of the construction fund) shall be deposited with the Escrow Agent for application and disbursement in accordance with the provisions of the Agreement. The proceeds of sale of the Bonds not so deposited with the Escrow Agent for the refunding of the Refunded Bonds shall be disbursed and deposited for payment of costs of issuance, deposited in the Interest and Sinking Fund and deposited in the construction fund, all in accordance with written instructions from the City. Pending expenditure for authorized projects and purposes, the proceeds of sale of the Bonds deposited to the construction fund may be invested in authorized investments and any investment earnings realized may be expended for such authorized projects or purposes or deposited in the Interest and Sinking Fund as shall be determined by the City Council. All surplus proceeds of sale of the Bonds deposited in the construction fund, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. SECTION 18: Notices to Holders - Waiver. Wherever this Ordinance provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the close of business on the business day next preceding the mailing of such notice. 0042639 -32- 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 19: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/ Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying Agent/ Registrar. All cancelled Bonds held by the Paying Agent/Registrar shall be returned to the City. SECTION 20: Printed Opinion. The Purchasers' obligation to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski, Dallas, Texas, approving the Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Bonds. Printing of a true and correct reproduction of said opinion on the reverse side of each of the definitive Bonds is hereby approved and authorized. SECTION 21: 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 the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 22: 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 0042639 -33- and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 23: 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 24: 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 25: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 26: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. SECTION 27: 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 City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 28: 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. SECTION 29: Insurance. The Bonds have been offered and sold with the principal of and interest thereon being insured by AMBAC Indemnity Corporation (hereinafter called "AMBAC") pursuant to a Municipal Bond Guaranty Insurance Policy. In accordance with the terms and conditions applicable to insurance provided by AMBAC, the City covenants and agrees that, in the event the principal and interest due on the Bonds shall be paid by AMBAC pursuant to the policy referred to this Section, the assignment and pledge of all funds and all covenants, agreements and other obligations of the City to the Holders shall continue to exist and AMBAC shall be subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that: 0042639 -34- (a) Consent of AMBAC where Holder Consent Reauired. AMBAC shall be deemed to be the holder of the Bonds insured by AMBAC at all times for the purpose of the execution and delivery of any amendment, change or modification of this Ordinance or the initiation by Holders of any action to be taken under this Ordinance at the Holder's request, which under this Ordinance (or under such underlying documents requires the written approval or consent of or can be initiated by the Holders of a majority (50% percent) in aggregate principal amount of the Bonds at the time Outstanding. (b) Defeasance. In the event that the principal and redemption price, if applicable, and interest due on the Bonds shall be paid by AMBAC pursuant to the policy referred to in this Section, all covenants, agreements and other obligations of the City to the Holders shall continue to exist and AMBAC shall be subrogated to the rights of such Holders. (c) Notices to be Given to AMBAC. While the Municipal Bond Guaranty Insurance Policy is in effect, the City shall furnish to AMBAC: (1) as soon as practicable after the filing thereof, a copy of any financial statement of the City and a copy of any audit and annual report of the City; (2) a copy of any notice to be given to the registered owners of the Bonds, including, without limitation, notice of any redemption or defeasance of Bonds, and any certificate rendered pursuant to this Ordinance relating to the security for the Bonds; and (3) such additional information as it may reasonably request. The City will permit AMBAC to discuss the affairs, finances and accounts of the City, or any information AMBAC may reasonably request regarding the security for the Bonds with appropriate officers of the City. The City will permit AMBAC to have access to and make copies of all books and records relating to the Bonds at any reasonable time. 0042639 -35- (d) Consent of AMBAC. Any provision of this Ordinance expressly recognizing or granting rights in or to AMBAC may not be amended in any manner which affects the rights of AMBAC hereunder without the prior written consent of AMBAC. Furthermore, anything in this Ordinance to the contrary notwithstanding, upon the occurrence and continuance of an event of default, AMBAC shall be entitled to control and direct the enforcement of all rights and remedies granted to the Holders of the Bonds for the benefit of such Holders. (e) Concerning the Bond Insurance Policv. As long as insurance for the Bonds shall be in full force and effect, the City agrees to comply with the following provisions: (1) if five (5) days prior to an interest payment date for the Bonds the City determines that there will be insufficient funds in the Interest and Sinking Fund to pay the principal of or interest on the Bonds on such interest payment date, the City shall so notify AMBAC. Such notice shall specify the amount of the anticipated deficiency, the Bonds to which such deficiency is applicable and whether such Bonds will be deficient as to principal or interest, or both. (2) the City shall, after giving notice to AMBAC as provided in (1) above, make available to AMBAC and the United States Trust Company of New York, as insurance trustee for AMBAC, the registration books of the City maintained by the Paying Agent/Registrar, and all records relating to the funds and accounts maintained under this Ordinance. (3) the City shall cause the Paying Agent/Registrar to provide AMBAC and the United States Trust Company of New York with a list of registered owners of Bonds entitled to receive principal or interest payments from AMBAC under the terms of the Municipal Bond Insurance Policy, and shall cause the Paying Agent/Registrar to make arrangements with United States Trust Company of New York (i) to mail checks or drafts to the registered owners of Bonds entitled to receive full or partial interest payments 0042639 -36- from AMBAC, and (ii) to pay principal upon Bonds surrendered to United States Trust Company of New York by the registered owners of Bonds entitled to receive full or partial principal payments from AMBAC. (4) the City shall cause the Paying Agent/Registrar to notify, at the time it provides notice to AMBAC pursuant to (1) above, the registered owners of Bonds entitled to receive the payment of principal or interest thereon from AMBAC (i) as to the fact of such entitlement, (ii) that AMBAC will remit to them all or a part of the interest payments next coming due, (iii) that should they be entitled to receive full payment of principal from AMBAC they must tender their Bonds (along with a form of transfer of title thereto) for payment to United States Trust Company of New York, as insurance trustee for AMBAC, and not the Paying Agent/Registrar, and (iv) that should they be entitled to receive partial payment of principal from AMBAC they must tender their Bonds for payment thereon first to the Paying Agent/Registrar, who shall note on such Bonds the portion of the principal paid by the Paying Agent/Registrar, and then, along with a form of transfer of title thereto, to AMBAC, which will then pay the unpaid portion of principal. (5) AMBAC shall, to the extent it makes a payment of principal of or interest on Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Municipal Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the City shall cause the Paying Agent/Registrar to note AMBAC's rights as subrogee on the registration books of the City maintained by the Paying Agent/Registrar upon receipt from AMBAC of proof of the payment of interest thereon to the registered owners of the Bonds, and (ii) in the case of subrogation as to claims for past due principal, the City shall cause the Paying Agent/Registrar to note AMBAC's rights as subrogee on the 0042639 -37- registration books of the City maintained by the Paying Agent/ Registrar upon surrender of the Bonds by the registered owners thereof together with proof of the payment of principal thereof. SECTION 30: 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 Article 6252-17, Vernon's Texas Civil Statutes, as amended. SECTION 31: Effective Date. This Ordinance shall take effective immediately upon its passage and adoption on the date shown below. PASSED AND ADOPTED, this October 1, 1992. CITY OF ALLEN, TEXAS Mfiyor ATTEST: (City Seal) 0042639 -38- EXHIBIT A $16,053992135 CITY OF ALLEN, TEXAS General Obligation Refunding and Improvement Bonds, Series 1992 PURCHASE CONTRACT October 1, 1992 THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS City of Allen One Butler Circle Allen, Texas 75002 Dear Mayor and City Council Members: Southwest Securities Incorporated and Dean Witter Reynolds Inc. (the "Underwriters"), offer to enter into this Purchase Contract with the City of Allen, Texas (the "City"). This offer is made subject to the City's acceptance of this Purchase Contract on or before 9:00 p.m., Central Daylight Savings Time on October 1, 1992. 1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriters hereby agree to purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters an aggregate of $16,053,921.35' principal amount of City of Allen, Texas General Obligation Refunding and Improvement Bonds, Series 1992 (the "Bonds"). The Bonds shall be dated October 1, 1992 and shall have the maturities and bear interest from their date at the rate or rates per annum as shown on the cover page of the Official Statement (hereinafter defined), such interest being payable on March 1, 1993, and semi-annually thereafter on September 1 and March 1 in each year. The purchase price of the Bonds shall be $15,748,257.82 (representing the principal amount of the Bonds maturing in the years 1993 through 2004 and in 2007 [the "Current Interest Bonds"] of $14,075,000, plus the principal amount of the Bonds maturing in the years 2005 and 2006 [the "Capital Appreciation Bonds"] of $1,978,921.35, less an Original Issue Discount of $97,762.25 and less an Underwriters' discount on the Bonds of $207,898.28) plus accrued interest on the Current Interest Bonds from their date to the date of the payment for and delivery of the Bonds (the "Closing"). 2. Ordinance. The Bonds shall be as described in and shall be issued and secured under the provisions of an ordinance with respect to the Bonds adopted by the City on October 1, 1992 (the "Ordinance"). The Bonds shall be subject to redemption and shall be payable as provided in the Ordinance. 3. Public Offering. It shall be a condition of the obligation of the City to sell and deliver the Bonds to the Underwriters, and of the obligation of the Underwriters to purchase and accept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the Ordinance shall be sold and delivered by the City and accepted and paid for by the Underwriters at the Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, at not in excess of the initial public offering prices, as set forth on the cover page of the Official Statement, plus interest accrued thereon from the date of the Bonds and confirm in writing to the City the principal amount (or percentage of principal amount) of each maturity and the corresponding price for each maturity (or the yield from each maturity resulting from such price) at which the Bonds sold pursuant to such bona fide public offering. Unless otherwise notified in writing by the Underwriters by the Closing, the City can assume that the "end of the underwriting period" for purposes of Rule 15c2-12 of the federal Securities Exchange Act of 1934 (the "Rule") shall be the Closing. In the event such notice is so given in writing by the Underwriters, the Underwriters agree to notify the City in writing following the occurrence of the "end of the underwriting period" as defined in the Rule. 4. Security Deposit. Delivered to the City herewith is a corporate check of Southwest Securities Incorporated payable to the order of the City in the amount of 580,325.00. The City agrees to hold such check uncashed until the Closing to ensure the performance by the Underwriters of its obligation to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with the payment by the Underwriters of the purchase price of the Bonds, the City shall return such check to Southwest Securities Incorporated as provided in Paragraph 7 hereof. Should the City fail to deliver the Bonds at the Closing, or should the City be unable to satisfy the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Purchase Contract (unless waived by the Underwriters), or should such obligation of the Underwriters be terminated for any reason permitted by this Purchase Contract, such check shall immediately be returned to the Southwest Securities Incorporated. In the event the Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and pay for the Bonds at the Closing as herein provided, such check shall be retained by the City as and for full liquidated damages for such failure of the Underwriters and for any defaults hereunder on the part of the Underwriters. The Underwriters hereby agree not to stop or cause payment on said check to be stopped unless the City has breached any of the terms of this Purchase Contract. 5. Official Statement. The City hereby authorizes the Escrow Agreement, hereinafter defined, the Ordinance and the Official Statement and the information therein contained to be used by the Underwriters in connection with the public offering and sale of the Bonds. The City hereby ratifies and confirms the use by the Underwriters in the offering of the Bonds prior to the date hereof of the Preliminary Official Statement for the Bonds dated September 22, 1992 and that the Preliminary Official Statement was "deemed final" by the City, as of the date of its initial mailing within the meaning, and for the purposes, of the Rule. The City agrees to cooperate with the Underwriters to provide a supply of final Official Statements within seven business days of the date hereof in sufficient quantities to comply with the Underwriters' obligations under applicable MSRB Rules and the Rule. The Underwriters will use their best efforts to assist the City in the preparation of the final Official Statement in order to ensure compliance with the aforementioned rules. 6. Representations, Warranties and Agreements of City. On the date hereof, the City represents, warrants and agrees as follows: (a) The City is a municipal corporation, a political subdivision of the State of Texas and a body politic and corporate, and has full legal right, power and authority to enter into this Purchase Contract, and the Escrow Agreement, between the City and the Escrow Agent named in the Official Statement (the "Escrow Agreement"), to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to the Underwriters as provided herein and to carry out and consummate all other transactions contemplated by the Ordinance, the Escrow Agreement and this Purchase Contract; (b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly adopted the Ordinance, has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations contained in the Bonds, the Escrow Agreement and this Purchase Contract and has duly authorized and approved the performance by the City of its obligations contained in the Ordinance, the Escrow Agreement and in this Purchase Contract; EXHIBIT A 2 (c) The City is not in breach of or default under any applicable law or administrative regulation of the State of Texas or the United States or any applicable judgment or decree or any loan agreement, note, resolution, agreement or other instrument, except as may be disclosed in the Official Statement, to which the City is a party or is otherwise subject, which would have a material and adverse effect upon the business or financial condition of the City; and the execution and delivery of the Escrow Agreement and this Purchase Contract by the City and the execution and delivery of the Bonds and the adoption of the Ordinance by the City and compliance with the provisions of each thereof will not violate or constitute a breach of or default under any existing law, administrative regulation, judgment, decree or any agreement or other instrument to which the City is a party or is otherwise subject; (d) All approvals, consents and orders of any governmental authority or agency having jurisdiction of any matter which would constitute a condition precedent to the performance by the -City of its obligations to sell and deliver the Bonds hereunder will have been obtained prior to the Closing; (e) At the time of the City's acceptance hereof and at the time of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (f) Between the date of this Purchase Contract and Closing, the City will not, without the prior written consent of the Underwriters, issue any additional bonds, certificates of obligation, notes or other obligations for borrowed money payable in whole or in part from ad valorem taxes, and the City will not incur any material liabilities, direct or contingent, relating to, nor will there be any adverse change of a material nature in the financial position of, the City; (g) Except as described in the Official Statement, no litigation is pending or, to the knowledge of the City, threatened in any court affecting the corporate existence of the City, the title of its officers to their respective offices, or seeking to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the issuance, execution, delivery, payment, security or validity of the Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance, the Escrow Agreement or this Purchase Contract, or contesting the powers of the City, or any authority for the Bonds, the Ordinance, the Escrow Agreement, or this Purchase Contract or contesting in any way the completeness, accuracy or fairness of the Preliminary Official Statement or the Official Statement or materially and adversely affecting the financial condition of the City; (h) The City will cooperate with the Underwriters in arranging for the qualification of the Bonds for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriters designate, and will use their best efforts to continue such qualifications in effect so long as required for distribution of the Bonds; provided, however, that the City will not be required to execute a general consent to service of process or to qualify to do business in connection with any such qualification in any jurisdiction; (i) The descriptions contained in the Official Statement of the Bonds, the Escrow Agreement and the Ordinance accurately reflect the provisions of such instruments, and the Bonds, when validly executed, authenticated and delivered in accordance with the Ordinance and sold to the Underwriters as provided herein, will be validly issued and outstanding obligations of the City entitled to the benefits of, and subject to the limitations contained in, the Ordinance; EXHIBIT A 0) If prior to the Closing an event occurs affecting the City which is materially adverse for the purpose for which the Official Statement is to be used and is not disclosed in the Official Statement, the City shall notify the Underwriters, and if in the opinion of the Underwriters such event requires a supplement or amendment to the Official Statement, the City will supplement or amend the Official Statement in a form and in a manner approved by the Underwriters' Counsel; and (k) If, after the Closing and until twenty-five (25) days after the end of the underwriting period, any event shall occur as a result of which it is necessary to amend or supplement the Official Statement in order to make the statements therein, in the light of the circumstances when the Official Statement is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Official Statement to comply with law, the City agrees to notify Southwest Securities Incorporated (and for the purposes of this clause (k) to provide the Underwriters with such information as they may from time to time request), and to forthwith prepare and furnish, at its own expense (in a form and manner approved by Southwest Securities Incorporated), 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, in light of the circumstances when the Official Statement is delivered to a purchaser, be misleading or so that the Official Statement will comply with law. 7. Closing. At 10:00 A.M., Central Standard Time, on October 29, 1992, the City will deliver the initial certificates to the Underwriters and, provided the Underwriters shall have given written instructions to the Paying Agent/Registrar (as defined in the Ordinance) for the Bonds as hereinafter provided, will have available for immediate exchange the Bonds in definitive form, duly executed and authenticated, together with the other documents hereinafter mentioned, and the Underwriters will accept such delivery and pay the respective purchase prices of the Bonds as set forth in Paragraph 1 hereof in immediately available funds. Concurrently with such payment by the Underwriters, the City shall return to Southwest Securities Incorporated, the check referred to in Paragraph 4 hereof. Delivery and payment as aforesaid shall be made at the offices of Fulbright & Jaworski, 2800 Texas Commerce Bank Tower, 2200 Ross Avenue, Dallas, Texas 75201, or such other place, as shall have been mutually agreed upon by the City and the Underwriters. The Bonds (except for the initial bonds which may be typed) shall be printed or lithographed; shall be prepared and delivered as fully registered bonds in the denominations of $5,000 or any multiple thereof, shall be registered in the names as shall be requested by written instructions of the Underwriters to the Paying Agent/Registrar for the Bonds at least five business days prior to the Closing; and, if the Underwriters shall so request, shall be made available to the Underwriters at least one business day before the Closing for purpose of inspection in New York, New York or such other place as shall be mutually satisfactory to the City and the Underwriters. 8. Conditions. The Underwriters have entered into this Purchase Contract in reliance upon the representations and warranties of the City contained herein and to be contained in the documents and instruments to be delivered at the Closing, and upon the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriters' obligations under this Purchase Contract to purchase and pay for the Bonds shall be subject to the performance by the City 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 conditions: (a) The representations and warranties of the City contained herein shall be true, complete and correct in all material respects on the date hereof and on and as of the date of Closing, as if made on the date of Closing; (b) At the time of the Closing, the Ordinance and the Escrow Agreement shall be in full force and effect, and the Ordinance and the Escrow Agreement shall not have been amended, or 4 EXHIBIT A supplemented and the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to by the Underwriters; (c) At the time of the Closing, all official action of the City related to the Ordinance and the Escrow Agreement shall be in full force and effect and shall not have been amended, modified or supplemented; (d) The City shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (e) The City will purchase the government securities necessary to provide the funds needed to refund the City's outstanding obligations as contemplated by the Escrow Agreement; (f) At or prior to the Closing, the Underwriters shall have received two copies of each of the following documents: (1) The Official Statement of the City executed on behalf of the City by the Mayor and City Secretary of the City; (2) The Ordinance certified by the City Secretary of the City under its seal as having been duly adopted by the City and as being in effect, with such changes or amendments as may have been agreed to by the Underwriters; (3) An unqualified opinion, dated the date of Closing, of Fulbright & Jaworski, Bond Counsel to the City, in substantially the forms and substance of Appendix C to the Official Statement; (4) An unqualified opinion or certificate, dated on or prior to the date of Closing, of the Attorney General of Texas, approving the Bonds as required by law and a certificate of the Comptroller of Public Accounts of the State of Texas regarding the registration of the Bonds as required by law; (5) The supplemental opinion, dated the date of Closing, of Fulbright & Jaworski, Bond Counsel to the City, addressed to the City and the Underwriters, to the effect that (A) in its capacity as Bond Counsel, such firm has reviewed the information in the Official Statement under the captions, "Plan of Financing," "The Series 1992 Bonds" and the following subceptions under the heading "Legal Matters" thereunder "Tax Exemption," "Tax Accounting Treatment of Original Issue Discount Bonds; and "The 1992 Bonds as Legal Investments in Texas" and such firm is of the opinion that the information relating to the Bonds and the Ordinance contained under such captions in all respects accurately and fairly reflects the provisions thereof and (B) the Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Ordinance is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended; (6) The opinion of McCall, Parkhurst & Horton L.L.P., as Underwriters' Counsel, dated the date of the Closing addressed to the Underwriters to the effect that the Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Ordinance is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended. The opinion of such Counsel shall also state that, based upon their participation in the preparation of the Official Statement, such Counsel has no reason to 5 EXHIBIT A believe that the Official Statement (except for the financial statements and other financial and statistical data contained therein, as to which no view need be expressed), as of the date of the Official Statement, 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; (7) A certificate, dated the date of Closing, signed by the City Manager and the Director of Finance of the City, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the Official Statement, no litigation is pending or, to the knowledge of such persons, threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the ad valorem taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity of the Bonds, the Ordinance, the Escrow Agreement or this Purchase Contract, or contesting the powers of the City or contesting the authorization of the Bonds or the Ordinance, or contesting in any way the accuracy, completeness or fairness of the Preliminary Official Statement or the Official Statement (but in lieu of or in conjunction with such certificate the Underwriters may, in their discretion, accept certificates or opinions of the City Attorney that, in his or her opinion, the issues raised in any such pending or threatened litigation are without substance or that the contentions of all plaintiffs therein are without merit); and (iii) to the best of their knowledge, no event affecting the City has occurred since the date of the 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 order to make the statements and information therein not misleading in any respect; (8) A certificate, dated the date of Closing, of the Director of Finance of the City to the effect that there has not been any material and adverse change in the affairs or financial condition of the City since September 30, 1991, the latest date as to which audited financial information is available; (9) A certificate, dated the date of the Closing, of an appropriate official of the City to the effect that, on the basis of the facts, estimates and circumstances in effect on the date of delivery of the Bonds, it is not reasonably 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(a) of the Internal Revenue Code of 1986, as amended; (10) A copy of a special report prepared by the independent Certified Public Accountants named in the Official Statement, addressed to the City, Bond Counsel, the Underwriters and Underwriters' Counsel verifying the arithmetical computations of the adequacy of the maturing principal and interest on the escrowed securities and uninvested cash on hand under the Escrow Agreement to pay, when due, the principal of and interest on the bonds being refunded by the Bonds and the computation of the yield with respect to such securities and the Bonds; (11) Evidence of the ratings on the Bonds of "Aaa" by Moody's Investors Service, Inc. and "AAA" by Standard & Poor's Corporation shall be delivered in a form acceptable to the Underwriters together with evidence of the delivery of the AMBAC Insurance Policy; (12) Such additional legal opinions, certificates, instruments and other documents as Bond Counsel or the Underwriters may reasonably request to evidence the truth, accuracy and completeness, as of the date hereof and as of the date of Closing, of the City's 6 EXHIBIT A representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance and satisfaction by the City at or prior to the date of Closing of all agreements then to be performed and all conditions then to be satisfied by the City. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are satisfactory to the Underwriters. If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the City shall be under further obligation hereunder, except that: (i) the check referred to in Paragraph 4 hereof shall be immediately returned to Southwest Securities Incorporated by the City, and (ii) the respective obligations of the City and the Underwriters set forth in Paragraphs 10 and 12 hereof shall continue in full force and effect. 9. Terminadon. The Underwriters may terminate their obligation to purchase at any time before the Closing if any of the following should occur: (a) (i) Legislation (including any amendment thereto) shall have been introduced in or adopted by either House of the Congress of the United States, or recommended to the Congress for passage by the President of the United States or favorably reported for passage to either House of the Congress by any Committee of such House, or (ii) a decision shall have been rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, or (iii) an order, ruling or regulation shall have been issued or proposed by or on behalf of the Treasury Department of the United States or the Internal Revenue Service or any other agency of the United States, or (iv) a release or official statement shall have been issued by the President of the United States or by the Treasury Department of the United States or by the Internal Revenue Service, the effect of which, in any such case described in clause (i), (ii), (iii), or (iv), would be to impose, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds or upon income of the general character to be derived by the City, other than as imposed on the Bonds and income therefrom under the federal tax laws in effect on the date hereof, in such a manner as in the judgment of the Underwriters would materially impair the marketability or materially reduce the market price of obligations of the general character of the Bonds. (b) Any action shall have been taken by the Securities and Exchange Commission or by a court which would require registration of any security under the Securities Act of 1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as amended, in connection with the public offering of the Bonds, or any action shall have been taken by any court or by any governmental authority suspending the use of the Official Statement or any amendment or supplement thereto, or any proceeding for that purpose shall have been initiated or threatened in any such court or by any such authority. (c) (i) The Constitution of the State of Texas shall be amended or an amendment shall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have been rendered as to matters of Texas law, or (iv) any order, ruling or regulation shall have been issued or proposed by or on behalf of the State of Texas by an official, agency or department thereof, affecting the tax status 7 EXHIBIT of the City, its property or income, its bonds (including the Bonds) or the interest thereon, which in the judgment of the Underwriters would materially affect the market price of the Bonds. (d) (i) A general suspension of trading in securities shall have occurred on the New York Stock Exchange, or (ii) the United States becomes engaged in any outbreak of armed hostilities (whether or not foreseeable at the time of execution hereof) or hostilities previously commenced shall escalate, the effect of which, in either case described in clause (i) and (ii), is, in the judgment of the Underwriters, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in this Purchase Contract and the Official Statement, including without limitation any material adverse effect on the market price of the Bonds. (e) An event described in Paragraph 60) hereof occurs which, in the opinion of the Underwriters, requires a supplement or amendment to the Official Statement. (f) A general banking moratorium shall have been declared by authorities of the United States, the State of New York or the State of Texas. (g) A lowering of the ratings initially assigned to the Bonds below "Aaa" and "AAA" by either Moody's Investors Service, Inc. and Standard & Poor's Corporation, respectively, shall occur prior to Closing or failure to provide evidence of the confirmation of each rating. (h) Any event occurs which prevents the United States Treasury Department from delivering on the Closing Date the State and Local Government Securities, if any, subscribed for by the City in connection with the issuance of the Bonds. 10. Expenses. (a) The Underwriters shall be under no obligation to pay, and the City shall pay, any expenses incident to the performance of the City's obligations hereunder, including but not limited to: (i) the cost of the preparation, printing and distribution of the Official Statement; (ii) the cost of the preparation and printing of the Bonds; (iii) the fees and expenses of Bond Counsel to the City; (iv) the fees and disbursements of the City's accountants, advisors, and of any other experts or consultants retained by the City; and (v) fees and premiums for bond ratings, bond insurance and any travel or other expenses incurred incident thereto. (b) The Underwriters shall pay: (i) all advertising expenses of the Underwriters in connection with the offering of the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents, including this Purchase Contract and (iii) all other expenses incurred by them in connection with their offering and distribution of the Bonds, including the fees of Counsel to the Underwriters. 11. Notices. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing at the address for the City set forth above, and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to Southwest Securities Incorporated, 1201 Elm Street, Suite 4300, Dallas, Texas 75201, Attention: Mr. Dan Almon. 8 EXHIBIT A LX 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriters (including the successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof. The City's representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters and (ii) delivery of any payment for the Bonds hereunder; and the City's representations and warranties contained in Paragraph 6 of this Purchase Contract shall remain operative and in full force and effect, regardless of any termination of this Purchase Contract. 13. Effective Date. This Purchase Contract shall become effective upon the execution of the acceptance hereof by the Mayor of the City and shall be valid and enforceable as of the time of such acceptance. Accepted: ,This 1st day of October, 1992 Mayor, City of Allen, Texas (SEAL) Attest: City Secretary, City of Allen, Texas Very truly yours, SOUTHWEST SECURITIES INCORPORATED DEAN WITI`ER REYNOLDS INC. By: Southwest Securities Incorporated By: 9 EXHIBIT A K% Exhibit A Official Statement 10 SPECIAL ESCROW AGREEMENT THE STATE OF TEXAS § COUNTY OF DALLAS § THIS SPECIAL ESCROW AGREEMENT (the "Agreement"), made and entered into as of October 1, 1992, by and between the City of Allen, Texas, a duly incorporated municipal corporation in Collin County, Texas (the "City") acting by and through the Mayor and City Secretary, and Ameritrust Texas National Association, a banking association organized and existing under the laws of the United States of America, or its successors or assigns hereunder (the "Bank"), W I T N E S S E T H: WHEREAS, the City has duly issued certain obligations now outstanding in the aggregate amount $9,880,000 (hereinafter collectively referred to as the "Refunded Bonds") and more particularly described as follows: (1) City of Allen, Texas, General Obligation Bonds, Series 1979, dated August 1, 1979, maturing on August 1, 2000 through August 1, 2009, and now outstanding in the principal amount of $1,390,000 (2) City of Allen, Texas, General Obligation Bonds, Series 1985, dated September 1, 1985, maturing on September 1, 1996 through September 1, 2000, and now outstanding in the principal amount of $2,650,000 (3) City of Allen, Texas, General Obligation Bonds, Series 1986, dated August 1, 1986, maturing on September 1, 1999 through September 1, 2006, and now outstanding in the principal amount of $4,650,000 (4) City of Allen, Texas, General Obligation Bonds, Series 1988, dated April 1, 1988, maturing on September 1, 1999 through September 1, 2001, and now outstanding in the principal amount of $1,190,000 OO4V34 AND WHEREAS, in accordance with the provisions of Article 717k, V.A.T.C.S., 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 any place of payment for the obligations being refunded and enter into an escrow or similar agreement with such place of payment 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 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") 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 such obligations; 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 WHEREAS, the City on the 1st day of October, 1992, pursuant to an ordinance (the "Bond Ordinance") passed and adopted by the City Council, authorized the issuance of bonds known as "City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 1992" (the "Bonds"), and such Bonds are being issued in part 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, are to be deposited with the Bank and used in part to purchase the Federal Securities listed and identified in Exhibit B attached hereto and incorporated by reference as a part of this Agreement for all purposes; and WHEREAS, the Federal 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 Federal 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 ordinances authorizing the issuance of the Refunded Bonds and as set forth in Exhibit A attached hereto; and oo4V34 -2- WHEREAS, the City has completed all arrangements for the purchase of the Federal for deposit and credit 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 WHEREAS, in Section 15 of the Bond Ordinance, the City Council duly approved and authorized the execution of this Agreement; and WHEREAS, the City and the Bank, 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 ordinances authorizing 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 as the same shall become due, the City and the Bank hereby mutually undertake, promise and agree as follows: SECTION 1: Receipt of Refunded Bond Ordinances. Receipt of true and correct copies of the ordinances 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 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/ Funding. There is hereby created by the City with the Bank a special segregated and irrevocable trust fund designated "SPECIAL CITY OF ALLEN, TEXAS, 1992 GO 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 amounts: $11,058,460.13 for the purchase of the Federal Securities identified in Exhibit B to be held for the account of the Escrow Fund; $ 875.00 for a beginning cash balance in the Escrow Fund 00W1+ -3- 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 Federal 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 the cash and Federal 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 (i) a notice of redemption with respect to the Series 1979 Refunded Bonds and (ii) a copy of the resolution providing for the redemption of (a) the Series 1979 Refunded Bonds on August 1, 1999 at the redemption price of par plus accrued interest, (b) the Series 1985 Refunded Bonds on September 1, 1995 at the redemption price of par plus accrued interest, (c) the Series 1986 Refunded Bonds on September 1, 1998 at the redemption price of par plus accrued interest and (d) the Series 1988 Refunded Bonds on September 1, 1998 at the redemption price of par plus accrued interest; all in accordance with the provisions of the notice requirements applicable to said Refunded Bonds and the notice requirements contained in the respective ordinances authorizing the Refunded Bonds. The Bank agrees that on the redemption date for the Series 1979 Refunded Bonds, or as such obligations are presented for payment, a notice of redemption will be given by United States Mail, first class, postage prepaid, to the then known owners or holders at the City's expense. The Bank agrees to cause a notice of redemption pertaining to the Series 1985, Series 1986 and Series 1988 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: Pledge of Escrow. The Bank agrees that all cash and Federal 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 Federal W42734 -4- 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. If, for any reason, the funds on hand in the Escrow Fund shall be insufficient to make the payments set forth in 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 Federal 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 Federal 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 are represented by the Federal Securities, shall always be maintained on deposit in the Escrow Fund by the Bank, as trustee; 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 Federal 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 oo4V34 -5- 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 four (4) years after the stated maturity date or redemption date of such Refunded Bonds shall be returned to the City. Notwithstanding the above and 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 disposed of 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 Federal 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 Federal 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 funds and Federal Securities enjoyed by a trust beneficiary. The funds and Federal 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 Federal Securities shall not be subject to checks or drafts drawn by the City. 004V3, -6- SECTION 10: Absence of Bank Claim/Lien on Escrow Fund. The Bank shall have no lien whatsoever upon any of the moneys or Federal 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 of Investments/Reinvestments. The Bank shall be authorized to accept initially and temporarily cash and/or substituted securities pending the delivery of the Federal Securities identified in Exhibit B attached hereto, or shall be authorized to redeem the Federal Securities and reinvest the proceeds thereof, together with other moneys held in the Escrow Fund in noncallable direct obligations of the United States of America 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 Federal 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 Federal Securities and the reinvestment of such funds in one or more substituted securities (which shall be noncallable direct obligations of the United States of America), together with the interest thereon and other available moneys then held in the Escrow Fund, will, in either case, 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) with respect to an early redemption of Federal Securities and the reinvestment of the proceeds thereof, an unqualified opinion of nationally 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. oo4V34 -7- SECTION 12: Restriction on Escrow Fund Investments - Reinvestment. Except as provided in Section 11 hereof, moneys in the Escrow Fund will be invested only in the Federal Securities listed in Exhibit B 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 Federal 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 Federal 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 for Investments. The Bank shall not be liable or responsible for any loss resulting from any investment made in the Federal Securities or substitute securities as provided in Section 11 hereof. oo4V34 -8- SECTION 16: Bank's Compensation - Escrow Administration/ Settlement of Paying Agent's 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 $13,500.00 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 $5,500.00, which deposit is the total charges due all paying agents for the Refunded Bonds, and the Bank acknowledges and agrees that the above 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. The City acknowledges and agrees that the above amount deposited with the Escrow Agent to cover paying agents' charges and expenses does not include amounts which shall become due and payable for services rendered as registrar and transfer agent for fully registered Refunded Bonds, and the City agrees to pay directly to each "registrar" for the Refunded Bonds all reasonable costs, expenses and charges incurred in connection with the maintenance of the registration books and records and the transfer of such fully registered obligations as and when such costs, expenses and charges are incurred and against written invoices, statements or bills submitted therefor. SECTION 17: Escrow Agent's Duties/Responsibilities/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 City Manager or Mayor and/or City Secretary of the City 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 instrument in the form therein set forth has been adopted by the City Council of the City, 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 are specifically set forth in this Agreement, and no 0047)34 -9- 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 furnished 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 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: Interpleader. 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: (a) 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 (b) 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. 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 004273+ -11- 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. Promptly after September 30th of each year, commencing with the year 1993, while the Escrow Fund is maintained under this Agreement, the Bank shall forward by letter to the City, to the attention of the City Manager, or other designated official of the City, a statement in detail of the Federal Securities and monies held, and the current income and maturities thereof, and the withdrawals of money from the Escrow Fund for the preceding 12 month period ending September 30th of each year. 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, TEXAS One Butler Circle Allen, texas 75002 Attention: City Manager AMERITRUST TEXAS N.A. P. 0. Box 2320 Dallas, Texas 75221-2320 Attention: Debt Administration 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 oo4V34 -12- 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 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 be severable from the other provisions of this Agreement, written notice of such event shall immediately be given to Moody's Investors Service, 99 Church Street, New York, New York 10007, Attention: Public Finance Rating Desk - Refunded Bonds. 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 Federal 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. OD4V3, -13- SECTION 27: Successors/Assigns. (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 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 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 004V3, -14- 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 term "Bank" as used herein shall be the Bank and its legal assigns and successor hereunder. SECTION 28: Escrow Agreement - Amendment/Modification. 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 shall (1) alter the firm financial arrangements made for the payment of the Refunded Bonds or (2) 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 parties 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 Moody's Investors Service, 99 Church Street, New York, New York 10007, Attention: Public Finance Rating Desk - Refunded Bonds, prior to such amendment or modification being executed. SECTION 29: Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof. SECTION 30: Executed Counterparts. 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. 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. 004x,34 -15- 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. CITY OF ALLEN, TEXAS Mayor ATTEST: City Secretary (City Seal) AMERITRUST TEXAS NATIONAL ASSOCIATION, as Escrow Agent Vice President ATTEST: Authorized Signer (Bank Seal) 004V34 -16- GENERAL CERTIFICATE THE STATE OF TEXAS COUNTY OF COLLIN CITY OF ALLEN We, the undersigned, Finance Director and City Secretary, respectively, of the City of Allen, Texas (the "City"), DO HEREBY CERTIFY as follows: 1. That the total principal amount of indebtedness of the City, including 'the proposed "City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 199211, dated October 1, 1992 (the "Series 1992 Bonds"), payable from ad valorem taxes levied and collected by the City is as follows: OUTSTANDING INDEBTEDNESS-----------------$ 6,920,000.00* SERIES 1992 BONDS------------------------ 16,053,921.35 TOTAL INDEBTEDNESS ---------------$22,973,921.35 *excludes obligations being refunded 2. That a debt service requirement schedule for the City's above described outstanding indebtedness as well as the Series 1992 Bonds is attached hereto as Exhibit A and made a part of this certificate for all purposes. 3. That certain duly qualified and acting officials of the City are as follows: JOE FARMER JON McCARTY JUDY MORRISON CHARLOTTE SMITH MAYOR CITY MANAGER CITY SECRETARY FINANCE DIRECTOR 4. That the assessed value of all taxable property (net of exemptions) in the City, as shown by the tax rolls for the year 1992, and which have been duly approved and are the latest official assessment of taxable property in the City is as follows: TOTAL ASSESSED TAXABLE VALUES OF REAL AND PERSONAL PROPERTY ------$729,240,387 0043636 5. The City is incorporated under the general laws of the State of Texas, and is operating under the Home Rule Amendment to the Texas Constitution, Section 5, Section XI, as amended in 1912. The City Charter was adopted at an election held in said City on January 20, 1979, and said Charter has not been amended in any respect since its adoption. 6. That none of the obligations being refunded by the Series 1992 Bonds, have ever been held in or purchased for the account of the special Funds created and maintained for the payment and security of such obligations being refunded and, none of the obligations being refunded by the Series 1992 Bonds are currently owned nor have any of the same ever been purchased or held for any account or fund of the City. 7. The City will have sufficient current funds available to pay the amounts to become due on the Series 1992 Bonds on March 1, 1993 and September 1, 1993 and there will be deposited in the "Special 1992 Refunding Bond Account" (created for the payment of the Series 1992 Bonds) such amount of current funds which will be sufficient to pay the amounts to become due on the Series 1992 Bonds on March 1, 1993 and September 1, 1993. WITNESS OUR HANDS AND THE SEAL OF THE CITY OF ALLEN, TEXAS, this the 1st day of October, 1992. (City Seal) 0043636 Finance Director, City of Allen, Texas Ci Sec tary, City of Allen, Texas -2- October 1, 1992 Attorney General of Texas P.O. Box 12548 Capitol Station Austin, Texas 78711 Attention: Public Finance Division RE: "City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 199211, dated October 1, 1992 Ladies and Gentlemen: Enclosed herewith are the Initial Bonds of the above series and a Signature and No -Litigation Certificate relating thereto, executed and completed except as to date. When the record of proceedings relating to the issuance of the above referenced series and the Initial Bonds have been approved by your office, this will be your authority to date the Signature and No -Litigation Certificate and deliver such Initial Bonds to the Comptroller of Public Accounts for registration. Should there be a change in circumstances which would alter or modify the certifications or recitals contained in such Certificate, particularly the absence of litigation or a change in the office of Mayor or City Secretary, the undersigned or other official of the City will notify you at once by telephone or other means. You may thus be assured that the certifications and statements appearing in the Signature and No -Litigation Certificate are accurate and complete at the time the Bonds are finally approved unless notice to the contrary has been given in the manner aforementioned. Very truly yours, M yor, City of Allen, Texas 0043630 October 1, 1992 Ms. Arlene Chisholm Economic Analysis Center Comptroller's Department P. O. Box 13528, Capitol Station Austin, Texas 78711 Re: "City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 199211, dated October 1, 1992 Dear Ms. Chisholm: The Initial Bonds of the above described series are to be delivered to your office for registration when the same have been approved by the Office of the Attorney General. After the same have been registered by your office, please forward the same by overnight delivery, together with seven (7) copies of the Attorney General opinion with the Comptroller's accompanying registration certificate, to the City's Bond Counsel, Fulbright & Jaworski, 2200 Ross Avenue, Suite 2800, Dallas, Texas, 75201, Attention: Mr. Ed H. Esquivel. Please note delivery of the Bonds is scheduled to occur in Dallas, Texas on October 29, 1992. Should circumstances develop that would prevent your office from forwarding the Initial Bonds in accordance with the above instructions and ensure that the Initial Bonds will be in Dallas by October 28, 1992, please contact Bond Counsel for a change in the above instructions regarding the shipment of such Bonds following their registration by your office. Very truly yours, �L M or, City of Allen, Texas 0043630 October 1, 1992 Fulbright & Jaworski Attorneys at Law 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201 RE: "City of Allen, Texas, General Obligation Refunding and Improvement Bonds, Series 199211, dated October 1, 1992 Gentlemen: In regard to the issuance and delivery of the captioned series of bonds, you are authorized to date and deliver each of the following documents to the purchasers thereof, to wit: (1) Signature and No -Litigation Certificate; (2) Certificate as to Tax Exemption; and (3) Certificate of City Manager and Director of Finance; all in conformity with the terms of the Purchase Contract, dated October 1, 1992. Should any events or circumstances develop or occur prior to the delivery of such documents to the purchasers which would cause any of the representations, warranties and statements appearing in any of such instruments to be incorrect, misleading or inaccurate, the City will notify you immediately of the same. You may thus be assured that, unless advised to the contrary, the representations, warranties and agreements appearing in such documents are true, accurate and complete in all respects at the time of the delivery of the above referenced series of bonds. Very truly yours, M yor, City of Allen, Texas 0043630 AFFIDAVIT AND PROOF OF PUBLICATION THE STATE OF TEXAS COUNTY OF COLLIN BEFORE ME, the undersigned authority, on this day personally appeared DEBBIE TACKETT, who having been by me duly sworn, on oath deposes and says: That she is the General Manager of THE ALLEN AMERICAN, a newspaper published in COLLIN COUNTY, TEXAS, not less frequently than once a week, having a general circulation in said county, and having been published regularly and continously for more than twelve (12) months prior to publishing Ordinance #1135-10-92 of which the attached is a true and written copy, and which was published in THE ALLEN AMERICAN on Wednesday Octo. 7, 1992 & Sunday Oct. 11, 1992 and which was issued on October 7, 1992 , by City of Allen of COLLIN COUNTY, TEXAS. A printed copy of said publication is attached hereto. SUBSCRIBED AND s`"�^.y. ^-.-1_ efore me this day of,A.D. 19_2-A V.A. TODD ' MY COMMISSION EXPIRES pry= D90mber 5, 1952 NOTARY PUBLIC in and for COLLIN COUNTY, TEXAS Publisher's fee $ 31 .50 CITY OF ALLEN PUBLIC NOTICE Notice is hereby given that the Allen City Council adopted the following ordinance at their regular meeting held on Thursday, October 1, 1992 (Title only): Ordinance No. 1135-10-92: An Ordinance of the City of Allen, Collin County, Texas, Authorizing the Issuance of "CITY OF AL- LEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 1992"; Specifying the Terms and Features of Said Bonds; Levy- ing a Continuing Direct Annual Ad Valorem Tax for the Payment of Said Bonds; and _ Resolving Other Matters Incident and Re- lated to the Issuance, Sale, Payment and Delivery of Said Bonds, Including the Ap- proval and Execution of a Purchase Con- tract and Special Escrow Agreement'and the Approval and Distribution of an Official Statement Pertaining Thereto; and Provid- ing an Effective Date. A copy of this ordinance may be read or, purchased in the office of the City Secret- ary, City of Allen, One Butler Circle, Allen, Texas 75002. /s/ Judy Morrison City Secretary CITY OF ALLEN PUBLIC NOTICE Notice is hereby given that the Allen City Council adopted the following ordinance at their regular meeting held on Thursday, October 1, 1992 (Title only): Ordinance No. 1135-10-92: An Ordinance of the City of Allen, Collin County, Texas; Authorizing the Issuance of "CITY OF AL-. LEN, TEXAS, GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 1992"; Specifying the Terms and Features of Said Bonds; Levy- ing a Continuing Direct Annual Ad Valorem Tax for the Payment of Said Bonds; and Resolving Other Matters Incident and Re= lated to the Issuance, Sale, Payment and Delivery of Said Bonds, Including the Ap= proval and Execution of a Purchase Con- tract and Special Escrow Agreement and the Approval and Distribution of an Official Statement Pertaining Thereto; and Provid- ing an Effective Date. A copy of this ordinance may be read or purchased in the office of the City Secret-, ary, City of Allen, One Butler Circle, Allen; Texas 75002. ' /s/ Judy Morrison City Secretary f L-