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HomeMy WebLinkAboutMin - Community Development Corporation - 2007 - 09/17 - RegularALLEN COMMUNITY DEVELOPMENT CORPORATION MIXI:71361sl slI NE125A I Q111 N SEPTEMBER 17, 2007 Lee Howard, President Sue Johnson, Vice -President Richard Kessler, Secretary Debbie Stout George Chrisman Lonnie Simmons Lori Stitt (absent) City Staff: Peter H. Vargas, City Manager Tim Dentler, Director of Parks and Recreation Department Kevin Hammeke, Director of Finance Department Brian Bristow, Landscape Architect Tina Burnside, Senior Administrative Assistant 1. Call to Order and Announce a Quorum is Present With a quorum of the Community Development Corporation Board present, President Howard called the Meeting to order at 7:00 p.m. on Monday, September 17, 2007, in the Council Conference Room. 2. Approve Minutes of the August 20, 2007, Meeting Motion: Upon a motion by Board Member Chrisman and a second by Board Member Simmons, the Board voted six (6) for and none (0) opposed to approve the minutes from the August 20, 2007, meeting. The motion carried. 3. Citizens' Comments 4. Adopt a Resolution Authorizing the Issuance of Allen Community Development Corporation Sales Tax Revenue Refundine Bonds, Series 2007A and Resolving Other Matters Incident and Related to the Issuance and Sale of the Bonds Motion: Upon a motion by Board Member Chrisman and a second by Board Member Johnson, the Board voted six (6) for and none (0) opposed to adopt Resolution 106 -CDC -07 authorizing the issuance of Allen Community Development Corporation Sales Tax Revenue Refunding Bonds, Series 2007A and resolving other matters incident and related to the issuance and sale of the bonds. The motion carried. Community Development Corporation Minutes September 17, 2007 Page 2 5. Authorize Execution of a Project Management and Fundine Agreement between the City of Allen and the Allen Community Development Corporation Reeardine the Event Center Project Motion: Upon a motion by Board Member Stout and a second by Board Member Johnson, the Board voted six (6) for and none (0) opposed to authorize execution of a Project Management and Funding Agreement between the City of Allen and the Allen Community Development Corporation regarding the Event Center Project. The motion carried. 6. Consider Introduction of Items on First Reading: a) A Proposal to Authorize up to $400,000 of Sales Tax Revenue for Trail Development b) A Proposal to Authorize up to $100,000 of Sales Tax Revenue for a Shade Structure at Celebration Park c) A Proposal to Authorize up to $50,000 of Sales Tax Revenue for an Irrinet Irrigation System Implementation d) A Proposal to Authorize up to $59,000 of Sales Tax Revenue for Ford Park Softball Field Enhancements e) A Proposal to Authorize up to $1,000,000 of Sales Tax Revenue for Phase II Renovations at Joe Farmer Recreation Center f) A Proposal to Authorize up to $60,000 of Sales Tax Revenue for a UV Water Treatment System at Don Rodenbaugh Natatorium g) A Proposal to Authorize up to $150,000 of Sales Tax Revenue for an Entrance Drive and Signage at Molsen Farm h) A Proposal to Authorize up to $200,000 of Sales Tax Revenue for Heritage Village and Information Center i) A Proposal to Authorize up to $70,000 of Sales Tax Revenue for the 2008 Celebration USA j) A Proposal to Authorize up to $475,000 of Sales Tax Revenue for Chase Oaks Erosion and Bunker Renovation Ik) A Proposal to Authorize up to $85,000 of Sales Tax Revenue for Bethany Pier Community Development Corporation Minutes September 17, 2007 Page 3 1) A Proposal to Authorize up to $30,000 of Sales Tax Revenue for a Rail/Dam Archaeological Survey and Interpretive m) A Proposal to Authorize a minimum of $32,000,000 of Sales Tax Revenue for Construction of the Allen Event Center Motion: Upon a motion by Board Member Chrisman and a second by Board Member Simmons, the Board voted six (6) for and none (0) opposed to approve the first reading. The motion carried. 7. Consider Amendments of Items on Second Reading: a) A Proposal to Authorize up to $400,000 of Sales Tax Revenue for Trail Development b) A Proposal to Authorize up to $100,000 of Sales Tax Revenue for a Shade Structure at Celebration Park c) A Proposal to Authorize up to $50,000 of Sales Tax Revenue for an Irrinet Irrigation System Implementation d) A Proposal to Authorize up to $59,000 of Sales Tax Revenue for Ford Park Softball Field Enhancements e) A Proposal to Authorize up to $1,000,000 of Sales Tax Revenue for Phase II Renovations at Joe Farmer Recreation Center f) A Proposal to Authorize up to $60,000 of Sales Tax Revenue for a UV Water Treatment System at Don Rodenbaugh Natatorium g) A Proposal to Authorize up to $150,000 of Sales Tax Revenue for an Entrance Drive and Signage at Molsen Farm h) A Proposal to Authorize up to $200,000 of Sales Tax Revenue for Heritage Village and Information Center i) A Proposal to Authorize up to $70,000 of Sales Tax Revenue for the 2008 Celebration USA j) A Proposal to Authorize up to $475,000 of Sales Tax Revenue for Chase Oaks Erosion and Bunker Renovation 1 it) A Proposal to Authorize up to $85,000 of Sales Tax Revenue for Bethany Pier I I Community Development Corporation Minutes September 17, 2007 Page 4 1) A Proposal to Authorize up to $30,000 of Sales Tax Revenue for a Rail/Dam Archaeological Survey and Interpretive m) A Proposal to Authorize a minimum of $32,000,000 of Sales Tax Revenue for Construction of the Allen Event Center Motion: Upon a motion by Board Member Stout and a second by Board Member Johnson, the Board voted six (6) for and none (0) opposed to approve the second reading. The motion carried. S. Other Business a) Sales Tax Analysis b) Balance Sheet c) Project Status Reports and Map i, Presentation by Brian Bristow Regarding Trail Developments d) Items of Interest to the Board "r Community Calendar 'v Next Meeting — October 15, 2007, at 7 p.m. 9. Adiourn Motion: Upon a motion by Board Member Chrisman and a second by Board Member Stout, the Board voted six (6) for and none (0) opposed to adjourn the meeting at 8:07 p.m. The motion carried. These minutes approved on the 15th day of October, 2007. ee Howard, PRESIDENT Richard Kessler, SECRETARY RESOLUTION NO. 106 -CDC -07 A RESOLUTION authorizing the issuance of "ALLEN COMMUNITY DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES 2007A"; pledging certain "Pledged Revenues" of the Corporation, including "Gross Sales Tax Revenues", to the payment of the principal of and interest on said Bonds and enacting other provisions incident and related to the issuance, payment, security and delivery of said bonds, including the approval of a Paying Agent/Registrar Agreement, a Purchase Agreement and a Special Escrow Agreement; providing for the redemption of the bonds being refunded; and resolving other matters incident and related to the issuance and sale of the Bonds; and providing an effective date. WHEREAS, the Allen Community Development Corporation (the "Corporation"), a non- profit corporation duly organized and existing under the laws of the State of Texas, including Section 4B of the Development Corporation Act of 1979, Article 5190.6, Vernon's Texas Civil Statutes, as amended (the "Act"), has heretofore issued, sold, and delivered, and there is currently outstanding, obligations totaling in principal amount $1,555,000 (collectively, the "Refunded Bonds") more particularly described as follows: (1) "Allen Community Development Corporation Sales Tax Revenue Bonds, Series 1997", dated August 1, 1997, scheduled to mature on September 1, 2008, and aggregating in principal amount $260,000 (the "Series 1997 Refunded Bonds"); and (2) "Allen Community Development Corporation Sales Tax Revenue Bonds, Series 1999", dated April 1, 1999, scheduled to mature on September 1, 2008 through 2012, and aggregating in principal amount $1,295,000 (the "Series 1999 Refunded Bonds"); AND WHEREAS, the Board of Directors of the Corporation further finds and determines it is in the best interest of the Corporation to refund the Refunded Bonds to allow for the reserve fund maintained for the payment and security of Parity Obligations (hereinafter defined) to be funded with a surety bond, and such refunding should be undertaken notwithstanding the aggregate amount of payments to be made on the refunding bonds herein authorized exceeds the aggregate amount of payments that would have been made on the Refunded Bonds had the refunding not occurred by a maximum amount of $32,459.88 and results in a present value cost of $29,240.45; and WHEREAS, the Board of Directors hereby further finds and determines that such revenue bonds shall be payable from certain "Pledged Revenues" (hereinafter defined) of the Corporation, including sales tax receipts of the Corporation in the manner and to the extent hereinafter provided; and WHEREAS, the Board of Directors hereby finds and determines such bonds can and should be issued on a parity with the outstanding and unpaid "Previously Issued Bonds" (hereinafter identified and defined) in that the terms and conditions prescribed for the issuance of "Additional Obligations" can be met and satisfied, to wit: (i) the officer of the Corporation 45952700.2/10713177 having the primary responsibility for the financial affairs of the Corporation will execute a certificate stating that, to the best of their knowledge and belief, the Corporation is not now in default as to any covenant, obligation or agreement contained in the resolution authorizing the issuance of the Previously Issued Bonds, (ii) the Corporation can secure from a certified public accountant a certificate or opinion to the effect that, according to the books and records of the Corporation, the "Gross Sales Tax Revenues" received by the Corporation for either (a) the last completed Fiscal Year next preceding the adoption of this resolution authorizing the issuance of the bonds herein authorized or (b) any twelve (12) consecutive months out of the previous fifteen (15) months next preceding the adoption of this resolution authorizing the bonds herein authorized were equal to not less than 1.50 times the Average Annual Debt Service for all Parity Obligations currently Outstanding after giving effect to the issuance of the bonds herein authorized to be issued, and (iii) the Required Reserve to be accumulated and maintained in the Reserve Fund shall be increased to the extent necessary as provided herein; now, therefore, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE ALLEN COMMUNITY DEVELOPMENT CORPORATION: SECTION 1: Authorization Designation Principal Amount - Purpose. Bonds of the Corporation shall be and are hereby authorized to be issued in the aggregate principal amount of $1,615,000 to be designated and bear the title "ALLEN COMMUNITY DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BONDS, SERIES 2007A", hereinafter referred to as the "Bonds", for the purpose of refunding certain outstanding obligations of the Corporation (identified in the preamble hereof and referred to as the "Refunded Bonds") and to pay costs of issuance associated with the issuance of the Bonds, in conformity with the Constitution and laws of the State of Texas, including Vernon's Ann. Civ. Stat., Section 4B of Article 5190.6, as amended. SECTION 2: Fully Registered Obligations Authorized Denominations Stated Maturities — Bond Date. The Bonds shall be issued as fully registered obligations, without coupons, shall be dated October 1, 2007 (the "Bond Date") and shall be in denominations of $5,000 or any integral multiple thereof, shall be numbered consecutively from One (1) upward and shall become due and payable on September 1, 2012 (the "Stated Maturity"). The Bonds shall bear interest on the unpaid principal amounts from the date of delivery to the initial purchasers (anticipated, October 16, 2007) at the rate of 3.98% per annum (calculated on the basis of a 360 day year of twelve 30 day months). Interest on the Bonds shall be payable on March 1 and September 1 in each year, commencing March 1, 2008. SECTION 3: Terms of Payment - Paying Agent/Registrar. The principal of, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying Agent/Registrar and the payment thereof shall be in any coin or currency of the United States of America, which at the time of payment is legal tender for the payment of public and private debts, and shall be without exchange or collection charges to the Holders. The selection and appointment of The Bank of New York Trust Company, N.A., Dallas, Texas, to serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and records relating to the registration, payment, exchange and transfer of the Bonds (the "Security Register') shall at all times be kept and maintained on behalf of the Corporation by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and 45952700.2/10713177 2 provisions of a "Paying Agent/Registrar Agreement", substantially in the form attached hereto as Exhibit A and such reasonable rules and regulations as the Paying Agent/Registrar and the Corporation may prescribe. The Chairperson and Secretary of the Board of Directors of the Corporation are hereby authorized to execute and deliver such Agreement in connection with the delivery of the Bonds. The Corporation covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are paid in full and discharged. 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 Corporation agrees to promptly cause a written notice to be sent to the Holder affected by United States Mail, first class postage prepaid, which notice shall identify and give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or upon their earlier redemption, only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"); provided, however, while this Bond is registered as a single fully registered bond, the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of this Bond. Interest on the Bonds shall be paid to the Holders whose name appear in the Security Register at the close of business on the Record Date (the 15th day of the month next preceding each interest payment date) and shall be paid by the Paying Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located is authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a non-payment of interest on one or more maturities on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment for such maturity or maturities (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Corporation. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder of such maturity or maturities appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. SECTION 4: Redemption. (a) Optional Redemption. The Bonds shall not be subject to redemption prior to maturity at the option of the Corporation. (b) Mandatory Redemption. The Bonds shall be subject to mandatory redemption prior to maturity at the redemption price of par and accrued interest to the date of redemption on the respective dates and in principal amounts as follows: 45952700.2/10713177 3 Principal Redemption Date Amount September 1, 2008 $515,000 September 1, 2009 260,000 September 1, 2010 270,000 September 1, 2011 280,000 September 1, 2012 (maturity) 290,000 Approximately forty-five (45) days prior to each mandatory redemption date for the Bonds, the Paying Agent/Registrar shall select by lot the numbers of the Bonds to be redeemed on the next following September 1 from moneys set aside for that purpose in the Bond Fund (as hereinafter defined). Any Bonds not selected for prior redemption shall be paid on the date of their Stated Maturity. The principal amount of the Bonds required to be redeemed pursuant to the operation of such mandatory redemption provisions may be reduced, at the option of the Corporation, by the principal amount of Bonds which, at least 50 days prior to the mandatory redemption date, shall have been acquired by the Corporation at a price not exceeding the principal amount of such Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation. (c) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States mail, first class postage prepaid, in the name of the Corporation and at the Corporation's expense, to each Holder of a Bond to be redeemed in whole or in part at the address of the Holder appearing on the Security Register at the close of business on the business day next preceding the date of mailing such notice, and any notice of redemption so mailed shall be conclusively presumed to have been duly given irrespective of whether received by the Holder. All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due and payable on the redemption date specified, and the interest thereon, or on the portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given or waived as herein provided, such Bond (or the principal amount thereof to be redeemed) shall become due and payable, and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys sufficient for the payment of such Bonds (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. 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 45952700.2/10713177 4 this Resolution. Any Bond may, in accordance with its terms and the terms hereof, be transferred or exchanged for Bonds of other authorized denominations upon the Security Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or request for exchange duly executed by the Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. Upon surrender for transfer of a Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar, one or more new certificates evidencing the Bonds, in authorized denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrender for transfer shall be registered and issued to the assignee or transferee of the previous Holders. At the option of the Holder, Bonds may be exchanged for other Bonds of authorized denominations and having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the 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 printed certificates evidencing the Bonds, executed on behalf of, and furnished by, the Corporation, to the Holder requesting the exchange. All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be valid obligations of the Corporation, evidencing the same obligation to pay, and entitled to the same benefits under this Resolution, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds canceled 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 25 hereof and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond. SECTION 6: Execution - Registration. The Bonds shall be executed on behalf of the Corporation by its Chairperson of the Board of Directors of the Corporation under its seal reproduced or impressed thereon and attested by the Secretary of the Board of Directors of the Corporation. 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 Corporation on the date of adoption of this Resolution shall be deemed to be duly executed on behalf of the Corporation, notwithstanding that such individuals or either of them shall cease 45952700.2/10713177 5 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. No Bond shall be entitled to any right or benefit under this Resolution, 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 8(c), manually executed by the Comptroller of Public Accounts of the State of Texas or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 8(d), manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate upon any Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. SECTION 7: Initial Bond. The Bonds herein authorized shall be initially issued as a single fully registered bond in the total principal amount and to become due and payable as provided in Section 2 hereof and to be numbered T-1 (hereinafter called the "Initial Bond") and the Initial Bond shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond, the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturity, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 8: Forms. (a) Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas (to be printed on the Initial Bond only), 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 Resolution 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 Board of Directors of the Corporation or determined by the officers executing such Bonds as evidenced by the execution thereof. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The Bonds, including the Initial Bond, shall be typewritten, printed, lithographed, or engraved or produced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. (b) Form of Bond. REGISTERED NO. 45952700.2/10713177 6 REGISTERED UNITED STATES OF AMERICA STATE OF TEXAS ALLEN COMMUNITY DEVELOPMENT CORPORATION SALES TAX REVENUE REFUNDING BOND, SERIES 2007A Bond Date: Interest Rate: Stated Maturity: CUSIP NO: October 1, 2007 % September 1, 2012 Registered Owner: Principal Amount: The Allen Community Development Corporation (hereinafter referred to as the "Corporation"), a non-profit industrial development corporation organized and existing under the laws of the State of Texas, including Section 4B of Article 5190.6, Tex. Rev. Civ. St. Ann., as amended, (the "Act"), with its principal office located in Collin County, Texas, for value received, hereby promises to pay to the Registered Owner named above, or the registered assigns thereof, solely from the revenues and sources pledged under the Resolution identified below, the Principal Amount stated above (without right of prior redemption) on the Stated Maturity date specified above and to pay interest (computed on the basis of a 360 -day year of twelve 30 -day months) on the unpaid Principal Amount hereof from the date of delivery to the initial purchaser (October 16, 2007) at the per annum rate of interest specified above; such interest being payable on March 1 and September 1 of each year, commencing March 1, 2008. Principal of this Bond is payable at its Stated Maturity or redemption to the registered owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor; provided, however, while this Bond is registered as a single fully registered bond, the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of this Bond. Interest is payable to the registered owner of this Bond (or one or more Predecessor Bonds, as defined in the resolution 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. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located is 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. 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 $1,615,000 (herein referred to as the "Bonds") to provide funds for the discharge and final payment of certain outstanding obligations of the Corporation (identified in the preamble 45952700.2/10713177 7 hereof and referred to as the "Refunded Bonds") and to pay costs of issuance, in conformity with the Constitution and laws of the State of Texas, including the Act, and pursuant to a Resolution adopted by the governing body of the Corporation (herein referred to as the "Resolution"). The Bonds are subject to mandatory redemption in part prior to maturity at the redemption price of par and accrued interest to the date of redemption on the respective dates and in principal amounts as follows: Principal Redemption Date Amount September 1, 2008 $515,000 September 1, 2009 260,000 September 1, 2010 270,000 September 1, 2011 280,000 September 1, 2012 (maturity) 290,000 The particular Bonds to be redeemed on each redemption date shall be chosen by lot by the Paying Agent/Registrar; provided, however, that the principal amount of Bonds required to be redeemed pursuant to the operation of such mandatory redemption provisions may be reduced, at the option of the Corporation, by the principal amount of Bonds which, at least 50 days prior to a mandatory redemption date, shall have been acquired by the Corporation at a price not exceeding the principal amount of such Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation. The Bonds, together with certain Previously Issued Bonds, are payable solely from and equally and ratably secured by a pledge of the "Pledged Revenues" (as defined in the Resolution) received by the Corporation, including the receipts from a Sales Tax levied for the benefit of the Corporation pursuant to the Act and an election held in the City. The Bonds do not constitute a legal or equitable, pledge, charge, lien or encumbrance upon any property of the Corporation or the City of Allen, Texas (the "City") except with respect to the "Pledged Revenues". This Bond may not be paid in whole or in part from any property taxes raised or to be raised by the City and is not a debt of and does not give rise to a claim for payment against the City, except as to the sales and use tax revenues held by the City and required under the Act to be paid over to the Corporation. Neither the State of Texas, the City or any political corporation, subdivision or agency of the State of Texas shall be obligated to pay this Bond or the interest hereon and neither the faith and credit nor the taxing power of the State, the City or any other political corporation, subdivision or agency thereof is pledged to the payment of the principal of and interest on this Bond except as noted above. Subject to satisfying the terms and conditions prescribed therefor, the Corporation has reserved the right to issue additional revenue obligations payable, in whole or in part, from the "Pledged Revenues" and equally and ratably secured in like manner and effect as the Bonds. Reference is hereby made to the Resolution, a copy of which is on file in the Designated Payment/Transfer Office of the Paying Agent/Registrar, and to all of the provisions of which the Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the security for the payment of the Bonds; the rights of Holders of the Bonds the terms and conditions for the issuance of additional obligations; the terms and 45952700.2/10713177 8 conditions relating to the payment, transfer or exchange of this Bond; the conditions upon which the Resolution may be amended or supplemented with or without the consent of the Holders; the rights, duties, and obligations of the Corporation and the Paying Agent/Registrar; the terms and provisions upon which the encumbrances, pledges, charges and covenants made therein may be discharged; and for the other terms and provisions contained therein. Capitalized terms used herein have the same meanings assigned in the Resolution. This Bond, subject to certain limitations contained in the Resolution, 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, 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 Corporation and the Paying Agent/Registrar, and any agent of either, may treat the registered owner hereof whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the Corporation nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of non-payment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Corporation. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and covenanted that the Corporation is a non-profit industrial development corporation duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas, including the Act; 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 special obligations of the Corporation have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that due provision has been made for the payment of the principal of and interest on the Bonds from the sources and in the manner provided in the Resolution. In case any provision in this Bond or any application thereof shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions and applications shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Resolution shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the Board of Directors of the Corporation has caused this Bond to be duly executed under the official seal of the Corporation. 45952700.2/10713177 9 ALLEN COMMUNITY DEVELOPMENT CORPORATION Chairperson, Board of Directors ATTEST: Secretary, Board of Directors (SEAL) 45952700.2/10713177 10 (c) Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Bond only. REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS ) REGISTER NO. THE STATE OF TEXAS I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. (SEAL) WITNESS my signature and seal of office this Comptroller of Public Accounts of the State of Texas (d) Form of Certificate of Paving Agent/Registrar to Appear on definitive Bonds. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered in the name of the Registered Owner shown above under the provisions of the within -mentioned Resolution and duly approved, or a Predecessor Bond hereof duly approved, by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar located in Dallas, Texas, is the "Designated Payment/Transfer Office" for this Bond. Registration date: THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas, as Paying Agent/Registrar By Authorized Signature 45952700.2/10713177 11 (e) Form of Assignment. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print or typewrite name, address, and zip code of transferee:) (Social Security or other identifying number ) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: Signature guaranteed: 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. SECTION 9: Definitions. For all purposes of this Resolution and in particular for clarity with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of revenues to the payment of the Bonds, the following definitions are provided: "Act" - The Development Corporation Act of 1979, Article 5190.6, Vernon's Texas Civil Statutes, as amended, Art. 5190.6, as amended at any time. "Additional Obligations" - Bonds, notes or other evidences of indebtedness which the Corporation reserves the right to issue or enter into, as the case may be, in the future in accordance with the terms and conditions provided in Section 17 hereof and which, together with the Bonds, are equally and ratably secured by a parity pledge of and claim on the Pledged Revenues under the terms of this Resolution and a Supplemental Resolution. "Average Annual Debt Service" - That amount which, at the time of computation, is derived by dividing the total amount of Debt Service to be paid over a period of years as the same is scheduled to become due and payable by the number of years taken into account in determining the total Debt Service. Capitalized interest payments provided from proceeds of borrowings of the Corporation shall be excluded in making the aforementioned computation. "Board" - The Board of Directors of the Corporation. "Bonds" - The "Allen Community Development Corporation Sales Tax Revenue Refunding Bonds, Series 2007A" authorized by this Resolution. "City" - The City of Allen, Texas. "Corporation" - The Allen Community Development Corporation, a non-profit industrial development corporation organized and existing under and 45952700.2/10713177 12 pursuant to the laws of the State of Texas, including Section 4B of the Act and on behalf of the City of Allen, Texas. "Debt Service" - As of any particular date of computation, with respect to any obligations and with respect to any period, the aggregate of the amounts to be paid or set aside by the Corporation as of such date or in such period for the payment of the principal of, premium, if any, and interest (to the extent not capitalized) on such obligations; assuming, in the case of obligations without a fixed numerical rate, that such obligations bear, or would have borne, interest at the maximum legal per annum rate applicable to such obligations, and further assuming in the case of obligations required to be redeemed or prepaid as to principal prior to maturity, the principal amounts thereof will be redeemed prior to maturity in accordance with the mandatory redemption provisions applicable thereto. "Depository" - A commercial bank or other qualified financial institution eligible and qualified to serve as the custodian of the Corporation's monetary accounts and funds. "Fiscal Year" - The twelve month financial accounting period used by the Corporation ending September 30 in each year, or such other twelve consecutive month period established by the Corporation. "Government Obligations" - (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and on the date of their acquisition or purchase by the Corporation are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and on the date of their acquisition or purchase by the Corporation, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. "Gross Sales Tax Revenues" - All of the revenues or receipts due or owing to, or collected or received by or on behalf of the Corporation by the City or otherwise pursuant to Section 4B of the Act and the election held May 4, 1996, less any amounts due and owed to the Comptroller of Public Accounts of the State of Texas as charges for the collection of the Sales Tax or retention by said Comptroller for refunds and to redeem dishonored checks and drafts, to the extent such charges and retention are authorized or required by law. "Outstanding" - When used in this Resolution with respect to Bonds or Parity Obligations, as the case may be, means, as of the date of determination, all Bonds and Parity Obligations theretofore sold, issued and delivered by the Corporation, except: 45952700.2/10713177 13 (1) those Bonds or Parity Obligations canceled or delivered to the transfer agent or registrar for cancellation in connection with the exchange or transfer of such obligations; (2) those Bonds or Parity Obligations paid or deemed to be paid in accordance with the provisions of Section 23 hereof or similar provisions of any Supplemental Resolution authorizing the issuance of Additional Obligations. (3) those Bonds or Parity Obligations that have been mutilated, destroyed, lost, or stolen and replacement obligations have been registered and delivered in lieu thereof. "Parity Obligations" - Collectively, the Bonds, the Previously Issued Bonds and Additional Obligations. "Pledged Revenues" - Collectively (i) Gross Sales Tax Revenues from time to time deposited or owing to the Pledged Revenue Fund and (ii) such other money, income, revenue, receipts or other property as may be specifically dedicated, pledged or otherwise encumbered in a Supplemental Resolution for the payment and security of Parity Obligations. "Previously Issued Bonds" - The outstanding "Allen Community Development Corporation Sales Tax Revenue Refunding Bonds, Series 2006", dated March 15, 2006. "Required Reserve" - The amount required to be accumulated and maintained in the Reserve Fund under the provisions of Section 13 hereof. "Sales Tax" - The local sales and use tax authorized under Section 4B of the Act, approved at an election held on May 4, 1996, and the effective date for the imposition and application of such Sales Tax within the corporate limits of the City by the Comptroller of Public Accounts of the State of Texas being October 1, 1996, together with any increases in the rate of such Sales Tax authorized and provided by law. "Supplemental Resolution" - Any resolution of the Board supplementing this Resolution for the purpose of authorizing and providing the terms and provisions of the Bonds or Additional Obligations, or supplementing or amending this Resolution for any other authorized purpose permitted in Section 17 or 24 hereof, including resolutions authorizing the issuance of Additional Obligations or pledging and encumbering income, revenues, receipts or property other than the Gross Sales Tax Revenues to the payment and security of the Parity Obligations. SECTION 10: Pledge. The Corporation hereby covenants and agrees that the Pledged Revenues, with the exception of those in excess of the amounts required for the payment and security of the Parity Obligations, are hereby irrevocably pledged to the payment and security of the Bonds, the Previously Issued Bonds and Additional Obligations, if issued, including the establishment and maintenance of the special funds created and established in this Resolution and any Supplemental Resolution, all as hereinafter provided. The Corporation hereby resolves the Parity Obligations shall constitute a lien on the Pledged Revenues in accordance with the terms of this Resolution and any Supplemental Resolution, which lien shall be valid and binding 45952700.2/10713177 14 and fully perfected from and after the date of adoption of this Resolution without physical delivery or transfer or transfer of control of the Pledged Revenues, the filing of this Resolution or any other act; all as provided in Chapter 1208 of the Texas Government Code. Section 1208, Government Code, applies to the issuance of the Bonds and the pledge of the Pledged Revenues granted by the Corporation under this Section 10, and such pledge is therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds are Outstanding such that the pledge of the Pledged Revenues granted by the Corporation under this Section 10 is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the security interest in said pledge, the Corporation agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. SECTION 11: Pledged Revenue Fund. The Corporation hereby reaffirms its agreement and covenant to establish and maintain a fund or account at a Depository for the deposit of the Pledged Revenues as received by the Corporation, which fund or account shall continue to be known on the books and records of the Corporation as the "Pledged Revenue Fund". All Pledged Revenues deposited to the credit of such Fund shall continue to be accounted for separate and apart from all other revenues, receipts and income of the Corporation and, with respect to the Gross Sales Tax Revenues, the Corporation shall further account for such funds separate and apart from the other Pledged Revenues deposited to the credit of the Pledged Revenue Fund. All Pledged Revenues deposited to the credit of the Pledged Revenue Fund shall be appropriated and expended to the extent required by the resolutions authorizing the outstanding Previously Issued Bonds, this Resolution and any Supplemental Resolution for the following uses and in the order of priority shown: First: To the payment of the amounts required to be deposited in the Bond Fund for the payment of Debt Service on the Parity Obligations as the same becomes due and payable; Second: To the payment of the amounts required to be deposited in the Reserve Fund to establish and maintain the Required Reserve in accordance with the provisions of the resolutions authorizing the outstanding Previously Issued Bonds, this Resolution and any Supplemental Resolution; Third: To the payment of amounts required to be deposited in any other fund or account required by any Supplemental Resolution authorizing the issuance of Parity Obligations; and Fourth: To any fund or account held at any place or places, or to any payee, required by any other resolution of the Board which authorized the issuance of obligations or the creation of debt of the Corporation having a lien on the Pledged Revenues subordinate to the lien created herein on behalf of the Parity Obligations. Any Pledged Revenues remaining in the Pledged Revenue Fund after satisfying the foregoing payments, or making adequate and sufficient provision for the payment thereof, may be appropriated and used for any other lawful purpose now or hereafter permitted by law. 45952700.2/10713177 15 SECTION 12: Bond Fund. For the purpose of providing funds to pay the principal of and interest on Parity Obligations, the Corporation reaffirms its agreement and covenant to maintain a separate and special account or fund on the books and records of the Corporation known as the "Allen Community Development Corporation Debt Service Account" (the "Bond Fund"), and all monies deposited to the credit of such Fund shall continue to be held in a special banking fund or account maintained at a Depository of the Corporation. In addition to the deposits for the payment of the Previously Issued Bonds, the Corporation covenants that there shall be deposited into the Bond Fund prior to each principal and interest payment date from the Pledged Revenues an amount equal to one hundred per centum (100%) of the interest on and the principal of the Bonds then falling due and payable, and such deposits to pay principal and accrued interest on the Bonds shall be made in substantially equal monthly installments on or before the 10th day of each month, beginning on or before the 10th day of the month next following the delivery of the Bonds to the initial purchasers. The required deposits to the Bond Fund for the payment of principal of and interest on the Bonds shall continue to be made as hereinabove provided until (i) the total amount on deposit in the Bond Fund and Reserve Fund is equal to the amount required to fully pay and discharge all Parity Obligations (principal and interest) then Outstanding or (ii) the Bonds are no longer Outstanding. SECTION 13: Reserve Fund. The Corporation reaffirms its agreement and covenant to maintain on the books and records of the Corporation a separate and special fund or account known as the "Reserve Account" (the "Reserve Fund"), which fund or account is and shall continue to be a special banking fund maintained at a Depository. All Pledged Revenues deposited to the credit of such fund or account shall be used solely for the payment of the principal of and interest on the Parity Obligations when (whether at maturity, upon a redemption date or any interest payment date) other funds available for such purposes are insufficient, and, in addition, may be used to the extent not required to maintain the "Required Reserve", to pay, or provide for the payment of, the final principal amount of a series of Parity Obligations so that such series of Parity Obligations is no longer deemed to be "Outstanding" as such term is defined herein. In accordance with the resolutions authorizing the issuance of the Previously Issued Bonds, the amount currently on deposit to the credit of the Reserve Fund is $868,587.50 (the "Current Reserve"). The total amount required to be deposited to the credit of the Reserve Fund by reason of the issuance of the Bonds is hereby determined to be $854,525.00 (the "Required Reserve"), which amount is equal to the maximum annual Debt Service (calculated on a Fiscal Year basis) for all Parity Obligations currently Outstanding (after giving effect to the issuance of the Bonds), as determined on the date the Bonds are to be delivered to the initial purchasers. The Required Reserve being less than the Current Reserve, no additional deposits will be required to be made to the Reserve Fund by reason of the issuance of the Bonds. As and when Additional Obligations are delivered or incurred, the Required Reserve shall be increased, if required, to an amount equal to the lesser of either (i) the maximum annual Debt Service (calculated on a Fiscal Year basis) for all Parity Obligations then Outstanding (after giving effect to the issuance of the Additional Obligations), as determined on the date each series of Additional Obligations are delivered or incurred, as the case may be, or (ii) the maximum amount that can be invested without restriction as to yield in a reasonably required reserve fund pursuant to Subsection (d) of Section 148 of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder. Any additional amount required to be accumulated and maintained in the Reserve Fund by reason of the issuance of Additional 45952700.2/10713177 16 Obligations shall be accumulated by the deposit to the credit of the Reserve Fund of cash immediately after the delivery of such Additional Obligations. While the cash and investments in the Reserve Fund total not less than the Required Reserve, no deposits need be made to the credit of the Reserve Fund. Should the Reserve Fund at any time contain less than the Required Reserve, the Corporation covenants and agrees to cause monthly deposits to be made to the Reserve Fund on or before the 10th day of each month (beginning the month next following the month the deficiency in the Required Reserve occurred by reason of a draw on the Reserve Fund or as a result of a reduction in the market value of investments held for the account of the Reserve Fund) from Pledged Revenues in an amount equal to 1/36th of the Required Reserve until the total Required Reserve then required to be maintained in said Fund has been fully restored. The Corporation further covenants and agrees that the Pledged Revenues shall be applied and appropriated and used to establish and maintain the Required Reserve and to cure any deficiency in such amounts as required by the terms of this Resolution and any Supplemental Resolution. During such time as the Reserve Fund contains the total Required Reserve, the Corporation may, at its option, withdraw any amount in the Reserve Fund in excess of the Required Reserve and deposit such surplus in the Pledged Revenue Fund. The Corporation retains the right to fund the Required Reserve in whole or in part with a surety bond or insurance policy issued by an insurance company or other entity that is rated either for the long term unsecured debt of the issuer of such surety bond or for obligations insured, secured or guaranteed by such issuer have a rating in the highest letter category by two nationally recognized municipal securities rating or evaluation services, and money deposited to the credit of the Reserve Fund may be used to make any payments required to satisfy the Corporation's repayment obligation to the issuer of such surety bond or insurance policy in the same manner and with like effect as if such payments were being used to accumulate, maintain or restore the Required Reserve in cash or with authorized investments. SECTION 14: Deficiencies. If on any occasion there shall not be sufficient Pledged Revenues to make the required deposits into the Bond Fund or Reserve Fund, such deficiency shall be cured as soon as possible from the next available Pledged Revenues, or from any other sources available for such purpose. SECTION 15: Payment of Bonds. While any of the Bonds are Outstanding, the designated financial officer of the Corporation shall cause to be transferred to the Paying Agent/Registrar, from funds on deposit in the Bond Fund, and, if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly as each installment of interest and principal of the Bonds accrues or matures; such transfer of funds to be made in such manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar for the Bonds at the close of the business day next preceding the date of payment for the Bonds. SECTION 16: Investments - Security of Funds. Money in any Fund required to be maintained pursuant to this Resolution may, at the option of the Corporation, be invested in obligations and in the manner prescribed by the Public Funds Investment Act (V.T.C.A., Government Code, Chapter 2256), including investments held in book -entry form; provided that all such deposits and investments shall be made in such a manner that the money required to be expended from any Fund will be available at the proper time or times and provided further the maximum stated maturity for any investment acquired with money deposited to the credit of the Reserve Fund shall be limited to five (5) years from the date of the investment of such 45952700.2/10713177 17 money. Such investments shall be valued in terms of current market value within 45 days of the close of each Fiscal Year and, with respect to investments held for the account of the Reserve Fund, within 45 days of the date of passage of each authorizing document of the Board pertaining to the issuance of Additional Obligations. All interest and income derived from deposits and investments in the Bond Fund immediately shall be credited to, and any losses debited to, the appropriate account of the Bond Fund. All interest and income derived from deposits in and investments of the Reserve Fund shall, subject to the limitations provided in Section 14 hereof, be credited to and deposited in the Pledged Revenue Fund. All such investments shall be sold promptly when necessary to prevent any default in connection with the Parity Obligations. Money deposited to the credit of the Pledged Revenue Fund, Bond Fund and Reserve Fund, to the extent not invested and not otherwise insured by the Federal Deposit Insurance Corporation or similar agency, shall be secured by a pledge of direct obligations of the United States of America, or obligations unconditionally guaranteed by the United States of America. SECTION 17: Issuance of Additional Parity Obligations. Subject to the provisions hereinafter appearing as to conditions precedent which must be satisfied, the Corporation reserves the right to issue, from time to time as needed, Additional Obligations for any lawful purpose. Such Additional Obligations may be issued in such form and manner as the Corporation shall determine, provided, however, prior to issuing or incurring such Additional Obligations, the following conditions precedent for the authorization and issuance of the same are satisfied, to wit: (1) The Treasurer of the Corporation (or other officer of the Corporation then having the primary responsibility for the financial affairs of the Corporation) shall have executed a certificate stating that, to the best of his or her knowledge and belief, the Corporation is not then in default as to any covenant, obligation or agreement contained in the Resolution or a Supplemental Resolution. (2) The Corporation has secured from a certified public accountant a certificate or opinion to the effect that, according to the books and records of the Corporation, the Gross Sales Tax Revenues received by the Corporation for either (i) the last completed Fiscal Year next preceding the adoption of the Supplemental Resolution authorizing the issuance of the proposed Additional Obligations or (ii) any twelve (12) consecutive months out of the previous fifteen (15) months next preceding the adoption of the Supplemental Resolution authorizing the Additional Obligations were equal to not less than 1.50 times the Average Annual Debt Service for all Parity Obligations then Outstanding after giving effect to the issuance of the Additional Obligations then being issued. Additionally, for the purpose of providing this certificate or opinion, if the Corporation shall not have received Gross Sales Tax Revenues for a full 12 month period, one-half of the amount of sales tax revenues actually received by the City under Chapter 321, Texas Tax Code, may be used for the months during which the Corporation did not receive Gross Sales Tax Revenues. (3) The Required Reserve to be accumulated and maintained in the Reserve Fund is increased to the extent required by Section 13. 45952700.2/10713177 18 SECTION 18: Refunding Bonds. The Corporation reserves the right to issue refunding bonds to refund all or any part of the Parity Obligations (pursuant to any law then available) upon such terms and conditions as the Board may deem to be in the best interest of the Corporation, and if less than all such Parity Obligations then Outstanding are refunded, the conditions precedent prescribed (for the issuance of Additional Obligations) set forth in Section 17 hereof shall be satisfied, and shall give effect to the refunding. SECTION 19: Right to Create Subordinate Debt. Except as may be limited by a Supplemental Resolution, the Corporation shall have the right to issue or create any debt payable from or secured by a lien on all or any part of the Pledged Revenues for any lawful purpose without complying with the provisions of Section 17 or 18 hereof, provided the pledge and the lien securing such debt is subordinate to the pledge and lien established, made and created in Section 10 of this Resolution with respect to the Pledged Revenues to the payment and security of the Parity Obligations. SECTION 20: Confirmation and Levy of Sales Tax. (a) The Board hereby represents the City has duly complied with the provisions of the Act for the levy of the Sales Tax at the rate voted at the election held by and within the City on May 4, 1996, and such Sales Tax is to be imposed within the corporate limits of the City and the receipts of such Sales Tax are to be remitted to the City by the Comptroller of Public Accounts on a monthly basis. (b) While any Bonds are Outstanding, the Corporation covenants, agrees and warrants to take and pursue all action permissible to cause the Sales Tax, at said rate or at a higher rate if legally permitted, to be levied and collected continuously, in the manner and to the maximum extent permitted by law, and to cause no reduction, abatement or exemption in the Sales Tax or rate of tax below the rate stated, confirmed and ordered in subsection (a) of this Section to be ordered or permitted while any Bonds shall remain Outstanding. (c) If hereafter authorized by law to apply, impose and levy the Sales Tax on any taxable items or transactions that are not subject to the Sales Tax on the date of the adoption hereof, to the extent it legally may do so, the Corporation agrees to use its best efforts to cause the City to take such action as may be required to subject such taxable items or transactions to the Sales Tax. (d) The Corporation agrees to take and pursue all action legally permissible to cause the Sales Tax to be collected and remitted and deposited as herein required and as required by Section 4B of the Act, at the earliest and most frequent times permitted by law. (e) The Corporation agrees to use its best efforts to cause the City to comply with Section 4B of the Act and shall cause the Gross Sales Tax Revenues to be deposited to the credit of the Pledged Revenue Fund in their entirety immediately upon receipt by the City. In the alternative and if legally authorized, the Corporation shall, by appropriate notice, direction, request or other legal method, use its good -faith efforts to cause the Comptroller of Public Accounts of the State of Texas (the "Comptroller") to pay all Gross Sales Tax Revenues directly to the Corporation for deposit to the Pledged Revenue Fund. SECTION 21: Records and Accounts. The Corporation hereby covenants and agrees that while any of the Bonds are Outstanding, it will keep and maintain complete records and accounts in accordance with generally accepted accounting principles, and following the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an 45952700.2/10713177 19 independent firm of certified public accountants. Each such audit, in addition to whatever other matters may be thought proper by the accountant, shall particularly include the following: (1) A statement in reasonable detail regarding the receipt and disbursement of the Pledged Revenues for such Fiscal Year; and (2) A balance sheet for the Corporation as of the end of such Fiscal Year. Such annual audit of the records and accounts of the Corporation shall be in the form of a report (and may be reflected in the audit of the City) and be accompanied by an opinion of the accountant to the effect that such examination was made in accordance with generally accepted auditing standards and contain a statement to the effect that in the course of making the examination necessary for the report and opinion, the accountant obtained no knowledge of any default of the Corporation on the Bonds or in the fulfillment of any of the terms, covenants or provisions of this Resolution, or under any other evidence of indebtedness, or of any event which, with notice or lapse of time, or both, would constitute a failure of the Corporation to comply with the provisions of this Resolution or if, in the opinion of the accountants, any such failure to comply with a covenant or agreement hereof, a statement as to the nature and status thereof shall be included. Copies of each annual audit report shall be furnished upon written request, to any Holders of any of said Bonds. The audits herein required shall be made within 180 days following the close of each Fiscal Year insofar as is possible. The Holders of any Bonds or any duly authorized agent or agents of such Holders shall have the right to inspect such records, accounts and data of the Corporation during regular business hours. SECTION 22: Representations as to Security for the Bonds. (a) The Corporation represents and warrants that, except for the Parity Obligations, the Pledged Revenues are and will be and remain free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and lien created in or authorized by this Resolution except as expressly provided herein. (b) The Bonds and the provisions of this Resolution are and will be the valid and legally enforceable obligations of the Corporation in accordance with their terms and the terms of this Resolution, subject only to any applicable bankruptcy or insolvency laws or to any laws affecting creditors rights generally. (c) The Corporation shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Pledged Revenues and all the rights of the Holders against all claims and demands of all persons whomsoever. (d) The Corporation will take, and use its best efforts to cause the City to take, all steps reasonably necessary and appropriate to collect all delinquencies in the collection of the Sales Tax to the fullest extent permitted by the Act. (e) The provisions, covenants, pledge and lien on and against the Pledged Revenues, as herein set forth, are established and shall be for the equal benefit, protection and 45952700.2/10713177 20 security of the owners and holders of Parity Obligations without distinction as to priority and rights under this Resolution. (f) The Parity Obligations shall constitute special obligations of the Corporation, payable solely from, and equally and ratably secured by a parity pledge of and lien on, the Pledged Revenues, and not from any other revenues, properties or income of the Corporation. The Bonds may not be paid in whole or in part from any property taxes raised or to be raised by the City and shall not constitute debts or obligations of the State or of the City, and the Holders, shall never have the right to demand payment out of any funds raised or to be raised by any system of ad valorem taxation. SECTION 23: Satisfaction of Obligation of Corporation. If the Corporation 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 Resolution, then the pledge of the Pledged Revenues under this Resolution and all other obligations of the Corporation to the Holders shall thereupon cease, terminate, and be discharged and satisfied. Bonds or any principal amount(s) 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 Obligations shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Obligations have been certified by an independent accounting firm to mature 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 accepted to the Paying Agent/Registrar have been made) the redemption date thereof. The Corporation covenants that no deposit of moneys or Government Obligations will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow agent, and all income from Government Obligations held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section in excess of the amount required for the payment of the Bonds shall be remitted to the Corporation or deposited as directed by the Corporation. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of 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 Corporation, be remitted to the Corporation against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the Corporation shall be subject to any applicable unclaimed property laws of the State of Texas. SECTION 24: Resolution a Contract - Amendments. This Resolution shall constitute a contract with the Holders from time to time, be binding on the Corporation, and shall not be amended or repealed by the Corporation while any Bond remains Outstanding except as permitted in this Section. The Corporation, may, without the consent of or notice to any Holders, from time to time and at any time, amend this Resolution in any manner not detrimental 45952700.2/10713177 21 to the interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In addition, the Corporation may, with the written consent from the owners holding a majority in aggregate principal amount of the Parity Obligations then Outstanding affected thereby, amend, add to, or rescind any of the provisions of this Resolution; provided that, without the written consent of all Holders of Outstanding Bonds effected, no such amendment, addition, or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate principal amount of Bonds or Parity Obligations, as the case may be, required to be held for consent to any such amendment, addition, or rescission. SECTION 25: 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 Corporation 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 Corporation and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be borne by the Holder of the Bond mutilated, or destroyed, lost or stolen. Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or stolen Bond shall constitute a replacement of the prior obligation of the Corporation, whether or not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Resolution equally and ratably with all other Outstanding Bonds. SECTION 26: Covenants Regarding Tax -Exempt Status. (a) Definitions. When used in this Section 26, the following terms have the following meanings: "Closing Date" means the date on which the Bonds are first authenticated and delivered to the initial purchasers against payment therefor. "Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any, effective on or before the Closing Date. "Computation Date" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Gross Proceeds" means any proceeds as defined in Section 1.148-1(b) of the Regulations, and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the Bonds. "Investment" has the meaning set forth in Section 1.148-1(b) of the Regulations. 45952700.2/10713177 22 "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to carry out the governmental purposes of the Bonds. "Rebate Amount" has the meaning set forth in Section 1.148-1(b) of the Regulations. "Regulations" means any proposed, temporary, or final Income Tax Regulations issued pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to supplement, amend or replace the specific Regulation referenced. "Yield" of (1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations and (2) the Bonds has the meaning set forth in Section 1.148- 4 of the Regulations. (b) Not to Cause Interest to Become Taxable. The Corporation 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 Corporation receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the Corporation shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. The Bonds are being issued to finance the costs of the Projects for and on behalf of the City, a political subdivision of the State of Texas and, in connection therewith, the City and the Corporation will execute an agreement relating to the ownership, operation and maintenance of the Projects while the Bonds are outstanding and unpaid, which agreement provides that, except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the Projects shall at all times prior to the last Stated Maturity of Bonds: (1) be exclusively owned, operated and maintained by the City, and prohibits the City from using or permitting the use of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Bonds) 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; and (2) prohibits the City from directly or indirectly imposing or accepting any charge or other payment for use of Gross Proceeds of the Bonds or for any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the Refunded Bonds), other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. 45952700.2/10713177 23 (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the Corporation shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the Corporation shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the Corporation 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 Corporation shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder: (1) The Corporation and the City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the Corporation may commingle Gross Proceeds of the Bonds with other money of the Corporation, provided that the Corporation separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the Corporation shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The Corporation shall maintain such calculations with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the 45952700.2/10713177 24 interest thereon from the gross income of the owners thereof for federal income tax purposes, the Corporation shall pay to the United States out of the Bond Fund or its general fund, as permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148- 3(e)(2) of the Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The Corporation shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty (180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under Section 1.148-3(h) of the Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the Corporation shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. 0) Elections. The Corporation hereby directs and authorizes the Chairperson, Vice Chairperson or Secretary of the Board of Directors, or any Ex -Officio Member of the Board, of the Corporation, individually or jointly, to make elections permitted or required pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. (k) Bonds Not Hedge Bonds. (1) At the time the original bonds refunded by the Bonds were issued, the Corporation reasonably expected to spend at least 85% of the spendable proceeds of such bonds within three years after such bonds were issued and (2) not more than 50% of the proceeds of the original bonds refunded by the Bonds were invested in Nonpurpose Investments having a substantially guaranteed Yield for a period of 4 years or more. (1) Current Refunding of Series 1997 Refunded Bonds. The Bonds are issued in part to refund the Series 1997 Refunded Bonds, and the Bonds are a current refunding of such Series 1997 Refunded Bonds in that such bonds will be paid and redeemed within ninety (90) days of the date of the delivery of the Bonds. 45952700.2/10713177 25 (m) Qualified Advance Refunding. The Bonds are issued in part to refund the Series 1999 Refunded Bonds, and the Bonds will be issued more than 90 days before the redemption of the Series 1999 Refunded Bonds. The Corporation represents as follows: (1) The Bonds are the first advance refunding of the Series 1999 Refunded Bonds, within the meaning of section 149(d)(3) of the Code. (2) The Series 1999 Refunded Bonds are being called for redemption, and will be redeemed not later than the earliest date on which such bonds may be redeemed. (3) 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 Series 1999 Refunded Bonds on the Closing Date if not ended prior thereto. (4) On and after the date of issue of the Bonds, no proceeds of the Series 1999 Refunded Bonds will be invested in Nonpurpose Investments having a Yield in excess of the Yield on such Series 1999 Refunded Bonds. (5) The Bonds are being issued for the purposes stated in the preamble of this Resolution. There is not a present value savings associated with the refunding. In the issuance of the Bonds the Corporation has neither: (i) overburdened the tax exempt bond market by issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than reasonably necessary to accomplish the governmental purposes for which the Bonds were issued; (ii) employed on "abusive arbitrage device" within the meaning of Section 1.148-10(a) of the Regulations; nor (iii) employed a "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, if any, and reduced debt service payments in early years. SECTION 27: Notices to Holders - Waiver. Wherever this Resolution provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder as it appears in the Security Register. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Resolution 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 28: Cancellation. All Bonds surrendered for payment, redemption, transfer or exchange, if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if surrendered to the Corporation, shall be delivered to the Paying Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The Corporation may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously 45952700.2/10713177 26 certified or registered and delivered which the Corporation may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be destroyed as directed by the Corporation. SECTION 29: Sale of Bonds. The offer of All Points Public Funding, LLC (herein referred to as the "Purchasers") to purchase the Bonds in accordance with a letter agreement, dated as of September 17, 2007, attached hereto as Exhibit B and incorporated herein by reference as a part of this Resolution for all purposes is hereby accepted and the sale of the Bonds to said Purchasers is hereby approved and authorized. The Chairperson and Secretary of the Board of Directors of the Corporation are hereby authorized and directed to sign the acceptance clause of said letter for and on behalf of the Corporation and as the act and deed of this Board of Directors. Delivery of the Bonds to the Purchasers shall occur as soon as possible upon payment being made therefor in accordance with the terms of sale. SECTION 30: Approval and Execution of Special Escrow Agreement. The "Special Escrow Agreement" (the "Agreement") by and between the Corporation and The Bank of New York Trust Company, N.A., Dallas, Texas (the "Escrow Agent"), attached hereto as Exhibit C and incorporated herein by reference as a part of this Resolution 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 Corporation, is hereby authorized to be executed by the Chairperson and Secretary of the Board of Directors of the Corporation for and on behalf of the Corporation and as the act and deed of this Board of Directors; and such Agreement as executed by said officials shall be deemed approved by the Board of Directors and constitute the Agreement herein approved. Appropriate officials of the Corporation in cooperation with the Escrow Agent are hereby authorized and directed to make the necessary arrangements for the purchase of the Escrowed Securities referenced in the Agreement and 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 2007A ALLEN COMMUNITY DEVELOPMENT CORPORATION REFUNDING BOND ESCROW FUND" (the "Escrow Fund"); all as contemplated and provided in Act, this Resolution and the Agreement. SECTION 31: Redemption of Refunded Bonds. (a) The bonds of that series known as "Allen Community Development Corporation Sales Tax Revenue Bonds, Series 1997", dated August 1, 1997, aggregating in principal amount $260,000 and more particularly described in the preamble hereof shall be redeemed and the same are hereby called for redemption on November 16, 2007, at the price of par and accrued interest to the date of redemption. The Secretary of the Board of Directors of the Corporation is hereby authorized and directed to file a copy of this Resolution, together with a suggested form of notice of redemption to be sent to bondholders, with The Bank of New York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Texas Commerce Bank, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit D and incorporated herein by reference as a part of this resolution for all purposes. (b) The bonds of that series known as "Allen Community Development Corporation Sales Tax Revenue Bonds, Series 1999", dated April 1, 1999, aggregating in original principal amount of $815,000 and scheduled to mature in the years 2010 through 2012 shall be 45952700.2/10713177 27 redeemed and the same are hereby called for redemption on September 1, 2009, at the price of par and accrued interest to the date of redemption. The Secretary of the Board of Directors of the Corporation is hereby authorized and directed to file a copy of this Resolution, together with a suggested form of notice of redemption to be sent to bondholders, with The Bank of Trust York Trust Company, N.A., Dallas, Texas (successor paying agent/registrar to Chase Bank of Texas, National Association), in accordance with the redemption provisions applicable to such bonds; such suggested form of notice of redemption being attached hereto as Exhibit E and incorporated herein by reference as a part of this resolution for all purposes. The redemption of the bonds described above being associated with the advance refunding of such bonds, the approval, authorization and arrangements herein given and provided for the redemption of such obligations on the redemption dates designated therefor and in the manner provided shall be irrevocable upon the issuance and delivery of the Bonds; and the Secretary of the Corporation is hereby authorized and directed to make all arrangements necessary to notify the holders of such bonds of the Corporation's decision to redeem such bonds on the dates and in the manner herein provided and in accordance with the resolutions authorizing the issuance of the bonds and this Resolution. SECTION 32: Proceeds of Sale. Immediately following the delivery of the Bonds, proceeds of sale in the sum of $1,576,428.40 shall be deposited to the credit of the Escrow Fund. The balance of the proceeds of sale of the Bonds shall be expended to pay costs of issuance and any excess amount budgeted for such purpose shall be deposited to the credit of the Bond Fund. Additionally, on or immediately prior to the date of the delivery of the Bonds to the Purchasers, the Chairperson of the Board of Directors shall cause to be transferred in immediately available funds to the Escrow Agent from moneys on deposit in the interest and sinking fund maintained for the payment of the Refunded Bonds the sum of $9,747.50 to accomplish the refunding. SECTION 33: Legal Opinion. The obligation of the Purchasers to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys, Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such Bonds. SECTION 34: 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 Corporation nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 35: Control and Custody of Bonds. The Chairperson of the Board 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, and shall take and have charge and control of the Initial Bond 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 Chairperson, Vice Chairperson and Secretary of the Board of Directors of the Corporation, or any Ex -Officio Member of the Board, individually, jointly or collectively, are hereby authorized and directed to furnish and execute such documents and certifications relating to the Corporation and the issuance of the Bonds, as may be necessary for the approval 45952700.2/10713177 28 of the Attorney General, registration by the Comptroller of Public Accounts and delivery of the Bonds to the initial purchasers and, together with the Corporation's financial advisor, general counsel, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond to the Purchasers and the initial exchange thereof for definitive Bonds. SECTION 36: Benefits of Resolution. Nothing in this Resolution, expressed or implied, is intended or shall be construed to confer upon any person other than the Corporation, the Paying Agent/Registrar and the Holders, any right, remedy, or claim, legal or equitable, under or by reason of this Resolution or any provision hereof, this Resolution and all its provisions being intended to be and being for the sole and exclusive benefit of the Corporation, the Paying Agent/Registrar and the Holders. SECTION 37: Inconsistent Provisions. All orders or resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict and the provisions of this Resolution shall be and remain controlling as to the matters contained herein. SECTION 38: Governing Law. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 39: Severability. If any provision of this Resolution or the application thereof to any circumstance shall be held to be invalid, the remainder of this Resolution and the application thereof to other circumstances shall nevertheless be valid, and the Board hereby declares that this Resolution would have been enacted without such invalid provision. SECTION 40: Construction of Terms. If appropriate in the context of this Resolution, 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 41: Incorporation of Findings and Determinations. The findings and determinations of the Board of Directors contained in the preamble hereof are hereby incorporated by reference and made a part of this Order for all purposes as if the same were restated in full in this Section. SECTION 42: Public Meeting. It is officially found, determined, and declared that the meeting at which this Resolution 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 Resolution, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. SECTION 43: Effective Date. This Resolution shall be in force and effect from and after its passage on the date shown below. [remainder of page left blank intentionally] 45952700.2/10713177 29 PASSED AND ADOPTED, this September 17, 2007. ALLEN COMMUNITY DEVELOPMENT CORPORATION Chairperson, Board of Directors ATTEST: Secretary, Board of Directors (Seal) 45952700.2/10713177 30 EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT 45952700.2/10713177 A-1 EXHIBIT B PURCHASE LETTER 45952700.2/10713177 B-1 EXHIBIT C SPECIAL ESCROW AGREEMENT 45952700.2/10713177 C-1 EXHIBIT D NOTICE OF REDEMPTION ALLEN COMMUNITY DEVELOPMENT CORPORATION SALES TAX REVENUE BONDS SERIES 1997 DATED AUGUST 1, 1997 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on September 1, 2008 and aggregating in principal amount $260,000 have been called for redemption on November 16, 2007 at the redemption price of par and accrued interest to the date of redemption. The CUSIP Number is ALL SUCH BONDS shall become due and payable on November 16, 2007, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to The Bank of New York Trust Company, N.A. (successor paying agent/registrar to Texas Commerce Bank National Association) at its designated offices at the following addresses: First Class/ Registered/Certified The Bank of New York Trust Company, N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier The Bank of New York Trust Company, N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only The Bank of New York Trust Company, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to a resolution by the Board of Directors of the Allen Community Development Corporation. THE BANK OF NEW YORK TRUST COMPANY, N.A., as Paying Agent/Registrar 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45952700.2/10713177 D-1 EXHIBIT E NOTICE OF REDEMPTION ALLEN COMMUNITY DEVELOPMENT CORPORATION SALES TAX REVENUE BONDS SERIES 1999 DATED APRIL 1, 1999 NOTICE IS HEREBY GIVEN that the bonds of the above series maturing on September 1, 2010 through September 1, 2012 and aggregating in principal amount $815,000 have been called for redemption on September 1, 2009 at the redemption price of par and accrued interest to the date of redemption, such bonds being identified as follows: Year of CUSIP Maturity Principal Amount Number 2010 $260,000 2011 $270,000 2012 $285,000 ALL SUCH BONDS shall become due and payable on September 1, 2009, and interest thereon shall cease to accrue from and after said redemption date and payment of the redemption price of said bonds shall be paid to the registered owners of the bonds only upon presentation and surrender of such bonds to The Bank of New York Trust Company, N.A. (successor paying agent/registrar to Chase Bank of Texas, National Association) at its designated offices at the following addresses: First Class/ Registered/Certified The Bank of New York Trust Company, N.A. Institutional Trust Services P. O. Box 2320 Dallas, Texas 75221-2320 Express Delivery/Courier The Bank of New York Trust Company, N.A. Institutional Trust Services 2001 Bryan Street, 9th Floor Dallas, Texas 75201 By Hand Only The Bank of New York Trust Company, N.A. Room 234 -North Building Institutional Trust Securities Window 55 Water Street New York, New York 10041 THIS NOTICE is issued and given pursuant to the terms and conditions prescribed for the redemption of said bonds and pursuant to a resolution by the Board of Directors of the Allen Community Development Corporation. THE BANK OF NEW YORK TRUST COMPANY, N.A., as Paying Agent/Registrar 2001 Bryan Street, 8th Floor Dallas, Texas 75201 45952700.2/10713177 E-1