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HomeMy WebLinkAboutO-2648-8-07' ORDINANCE NO. 2648-8-07 AN ORDINANCE authorizing the issuance of "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2007"; specifying the terms and features of said bonds; levying a continuing direct annual ad valorem tax for the payment of said bonds; and resolving other matters incident and related to the issuance, sale, payment and delivery of said bonds, including the approval and execution of a Paying Agent/Registrar Agreement and a Bond Purchase Agreement, and the approval and distribution of an Official Statement pertaining thereto; and providing an effective date. WHEREAS, the City Council of the City of Allen, Texas (the "City'l hereby finds and determines that general obligation bonds in the principal amount of $11,145,D00 approved and authorized to be issued at elections held June 12, 1999, November 5, 2002 and May 12, 2007 should be issued and sold at this time; a summary of the general obligation bonds authorized at said elections, the principal amounts authorized, amounts heretofore issued and being issued pursuant to this ordinance and amounts remaining to be issued subsequent hereto being as follows: Election Amount Previously Being Unissued Date Purpose Authorized Issued Issued Balance 6-12-99 Fire Stations $ 4,900,000 $3,765,000 $1,135,000 $4)- 8-12-99 Streets 20,500,000 20,309,500 190,500 -0- 6-12-99 Parks 22,000,000 21,349,000 401,000 250,000 11-5-02 Performing Arts Center 19,500,000 2,786,500 28,500 16,685,000 5-12-07 Service Center Facilities 14,500,000 -0- -0- 14,500,000 5-12-07 Municipal Public Buildings 1,700,000 -0- -0- 1,700,000 5-12-07 Streets 27,200,000 -0- 2,840,000 24,360,000 5-12-07 Parks 17,250,000 4)- 4,150,000 13,100,000 5-12-07 Public Art Projects 1,390,000 -0- 200,000 1,190,000 5-12-07 Public Safety 15,855,000 -0- 2,200,000 13,655,000 AND WHEREAS, the Council hereby reserves and retains the right to issue the balance of unissued bonds approved at said elections in one or more installments when, in the judgment of the Council, funds are needed to accomplish the purposes for which such bonds were voted; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS: SECTION 1: Authorization - Designation - Principal Amount - Purpose. General obligation bonds of the City shall be and are hereby authorized to be issued in the aggregate principal amount of $11,145,000, to be designated and bear the title "CITY OF ALLEN, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2007" (hereinafter referred to as the "Bonds"), for permanent public improvements and public purposes, to wit: $1,135,000 to construct and equip firefighting facilities, including the purchase of firefighting equipment, $190,500 for street ' improvements, including drainage, curb, gutters, sidewalks, landscaping, traffic signalization and utility line relocation and the acquisition of land and right-of-way therefor, $401,000 for park improvements including the acquisition of land and constructing recreational facilities, $28,500 45942]45.2/10614620 ' to construct and equip a performing arts center, including the purchase of land, $2,840,000 for acquiring, constructing, improving and maintaining streets, thoroughfares, bridges, alleyways and sidewalks within the City, including related storm drainage improvements, traffic signalization and signage, streetscaping and median improvements, and utility relocations and the acquisition of land and rights of way therefor, $4,150,000 for acquiring, constructing, improving and equipping park and recreational facilities, including the acquisition of land therefor, $200,000 for public art projects, and $2,200,000 for constructing, renovating, improving, expanding and equipping public safety facilities, including the acquisition of land therefor, all in accordance with authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1331, as amended. SECTION 2: Fully Registered Oblioations - Bond Date - Authorized Denominations - Stated Maturities - Interest Rates. The Bonds shall be issued as fully registered obligations only, shall be dated August 15, 2007 (the "Bond Date"), shall be in denominations of $5,000 or any integral multiple (within a Stated Maturity) thereof, and shall become due and payable on August 15 in each of the years and in principal amounts (the "Stated Maturities") and bear interest at the rate(s) per annum in accordance with the following schedule: YEAR OF PRINCIPAL INTEREST MATURITY AMOUNT ($) RATE (%) 2008 405,000 4.00% 2009 380,000 4.00% ' 2010 395,000 4.00% 2011 415,000 4.00% 2012 430,000 4.00% 2013 445,000 4.00% 2014 465,000 4.25% 2015 485,000 4.00% 2016 505,000 4.00% 2017 525,000 4.00% 2018 545,000 4.25% 2019 570,000 4.40% 2020 595,000 4.50% 2021 620,000 4.50% 2022 650,000 4.60% 2023 675,000 4.50% 2024 _ 710,000 4.50% 2027 2,330,000 5.00% The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the rate(s) per annum shown above (calculated on the basis of a 360 -day year of twelve 30 -day ' months). Interest on the Bonds shall be payable on February 15 and August 15 in each year, commencing February 15, 2008, until maturity or prior redemption. 45942745.2 IIN14820 2 ' SECTION 3: Terms of Payment - Paving Aoent/Reaistrar. The principal of, premium, if any, and the interest on the Bonds, due and payable by reason of maturity, redemption or otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter called the "Holders") appearing on the registration and transfer books maintained by the Paying AgenURegistrar, 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 City by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions of a "Paying AgenURegistrar Agreement", substantially in the form attached hereto as Exhibit A, and such reasonable rules and regulations as the Paying Agent/Registrar and the City may prescribe. The Mayor and City Secretary of the City are hereby authorized to execute and deliver such Paying Agent/Registrar Agreement in connection with the delivery of the Bonds. The City covenants to maintain and provide a Paying AgenURegistrar at all times until the Bonds are paid and discharged, and any successor Paying Agent/Registrar shall be a commercial bank, trust company, financial institution or other entity qualified and authorized to serve in such capacity and perform the duties and services of Paying Agent/Registrar. Upon any change in the Paying AgentlRegistrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each Holder by United States Mail, first class postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities or upon prior redemption thereof only upon presentation and surrender of the Bonds to the Paying Agent/Registrar at its designated offices in Dallas, Texas (the "Designated Paymentlrransfer Office"). Interest on the Bonds shall be paid to the Holders whose names appear in the Security Register at the close of business on the Record Date (the last business 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, legal holiday or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying AgentlRegistrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be fifteen (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. 45W7452 /10614820 SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated Maturities on and after August 15, 2018, shall be subject to redemption prior to maturity, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on August 15, 2017, or on any date thereafter, at the redemption price of par plus accrued interest to the date of redemption. At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter notification period shall be satisfactory to the Paying AgenURegistrar), the City shall notify the Paying AgenURegistrar of the decision to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the City to exercise its right to redeem Bonds shall be entered in the minutes of the governing body of the city. (b) Mandatory Redemption. The Bonds maturing on August 15, 2027 (the 'Term Bonds") shall be subject to mandatory redemption prior to maturity at the price of par plus accrued interest to the mandatory redemption date on the respective dates and in principal amounts as follows: Term Bonds Due August 15, 2027 Redemption Date Principal Amount August 15, 2025 $740,000 August 15, 2028 $775,000 ' August 15, 2027 (maturity) $815,000 (c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall treat such Bonds as representing the number of Bonds Outstanding, which is obtained by dividing the principal amount of such Bonds by $5,000, and shall select the Bonds to be redeemed within such Stated Maturity by lot. (d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be 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 Halder. All notices of redemption shall (t) 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, IN) 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 PaymentlTransfer Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption and notice of redemption thereof has been duly given as hereinabove provided, such Bond (or 45942745.2/70614620 the principal amount thereof to be redeemed) shall become due and payable and interest thereon shall cease to accrue from and after the redemption date therefor, provided moneys sufficient for the payment of such Bond (or of the principal amount thereof to be redeemed) at the then applicable redemption price are held for the purpose of such payment by the Paying AgentfRegistrar. 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 and every owner of the Bonds issued under and pursuant to the provisions of this Ordinance or, if appropriate, the nominee thereof. Any Bond may be transferred or exchanged for Bonds of other authorized denominations 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 AgentlRegistrar 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 forth satisfactory to the Paying AgentlRegistrar. Upon surrender of any Bond (other than the Initial Bond(s) referenced in Section 8 hereof) for transfer at the Designated Payment/Transfer Office of the Paying AgentlRegistrar, one or more new Bonds shall be registered and issued to the assignee or transferee of the previous Holder; such Bonds to be in authorized denominations, of like Stated Maturity and of a like aggregate principal amount as the Bond or Bonds surrendered for transfer. At the option of the Holder, Bonds (other than the Initial Bond(s) referenced in Section 8 hereof) may be exchanged for other Bonds of authorized denominations and having the same ' Stated Maturity, beadng the same rate of interest and of like aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever any Bonds are surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds to the Holder requesting the exchange. All Bonds issued in any transfer or exchange of Bonds shall be delivered to the Holders at the Designated Payment/Transfer Office of the Paying Agent/Registrar or sent by United States Mail, first class postage prepaid, to the Holders, and, upon the registration and delivery thereof, the same shall be valid obligations of the City, evidencing the same obligation to pay, and entitled to the same benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange. All transfers or exchanges of Bonds pursuant to this Section shall be made without expense or service charge to the Holder, except as otherwise herein provided, and except that the Paying AgentlRegistrar shall require payment by the Holder requesting such transfer or exchange of any tax or other governmental charges required to be paid with respect to such transfer or exchange. Bonds cancelled by reason of an exchange or transfer pursuant to the provisions hereof are hereby defined to be "Predecessor Bonds", evidencing all or a portion, as the case may be, of the same obligation to pay evidenced by the new 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 the provisions of Section 11 hereof, and such new replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Bond. 45942715.2 /10610620 Neither the City nor the Paying AgentlRegistrar shall be required to issue or transfer to an assignee of a Holder any Bond called for redemption, in whole or in part, within forty-five (45) days of the date fixed for the redemption of such Bond; provided, however, such limitation on transferability shall not be applicable to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in part. SECTION 6: Book -Entry -Only Transfers and Transactions. Notwithstanding the provisions contained herein relating to the payment of and transfer/exchange of the Bonds, the City hereby approves and authorizes the use of "Book -Entry -Only" securities clearance, settlement and transfer system provided by The Depository Trust Company ("DTC'), a limited purpose trust company organized under the laws of the State of New York, in accordance with the requirements and procedures identified in the Blanket Letter of Representations, by and between the City and DTC (the "Depository Agreement'. Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be deposited with DTC, who shall hold said Bonds for its participants (the "DTC Participants"). While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on the Security Register for all purposes, including payment and notices, shall be Cede & Co., as nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each Bond (the "Beneficial Owners") being recorded in the records of DTC and DTC Participants. In the event DTC determines to discontinue serving as securities depository for the Bonds or otherwise ceases to provide book -entry clearance and settlement of securities transactions in general or the City determines that DTC is incapable of properly discharging its ' duties as securities depository for the Bonds, the City covenants and agrees with the Holders of the Bonds to cause Bonds to be printed in definitive form and provide for the Bond certificates to be issued and delivered to DTC Participants and Beneficial Owners, as the case may be. Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall be made in accordance with the provisions of Sections 3, 4 and 5 hereof. SECTION 7: Execution - Registration. The Bonds shall be executed on behalf of the City by the Mayor under its seal reproduced or impressed thereon and countersigned by the City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals who are or were the proper officers of the City on the Bond Date shall be deemed to be duly executed on behalf of the City, notwithstanding that one or more of the individuals executing the same shall cease to hold such offices at the time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in subsequent exchanges and transfers, all as authorized and provided in V.T.C.A., Government Code, Chapter 1201, as amended. No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Bond either a certificate of registration substantially in the form provided in Section 9(c), manually executed by the Comptroller of Public Accounts of the State of Texas, or his duly authorized agent, or a certificate of registration substantially in the form provided in Section 9(d), manually executed by an authorized officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly signed upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been duly certified, registered and delivered. 45942745.2110614520 SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued either (i) as a single fully registered bond in the aggregate principal amount stated in Section 1 hereof in principal installments to become due and payable as provided in Section 2 hereof and numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity in the applicable principal amount and denomination and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial Bond(s)'j and, in either case, the Initial Bond(s) shall be registered in the name of the initial purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Bonds submitted to the Office of the Attorney General of the State of Texas for approval, certified and registered by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any time after the delivery of the Initial Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to and in accordance with such written instructions from the initial purchaser(s), or the designee thereof, and such other information and documentation as the Paying Agent/Registrar may reasonably require. SECTION 9: Forms. (a) Forms Generally. The Bonds, the Registration Certificate of the Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar and the form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set forth in this Section with such appropriate insertions, omissions, substitutions and ' other variations as are permitted or required by this Ordinance, and may have such letters, numbers or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including insurance legends on insured Bonds and any reproduction of an opinion of counsel) thereon as may, consistently herewith, be established by the City or determined by the officers executing such Bonds as evidenced by their execution. Any portion of the text of any Bonds may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Bond. The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, engraved, typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined by the officers executing such Bonds as evidenced by their execution thereof. 45912745211W14820 I 1 0 (b) Form of Definitive Bond. REGISTERED REGISTERED NO. $ UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS GENERAL OBLIGATION BOND SERIES 2007 Bond Date: Interest Rate: Stated Maturity: CUSP NO August 15, 2007 August 15, 20_ Registered Owner. Principal Amount: DOLLARS The City of Allen (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above (the "Registered Owner"), or the registered assigns thereof, on the Stated Maturity date specified above, the Principal Amount hereinabove stated (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid principal amount hereof from the interest payment date next preceding the 'Registration Date" of this Bond appearing below (unless this Bond bears a "Registration Date" as of an interest payment date, in which case it shall bear interest from such date, or unless the "Registration Date" of this Bond is prior to the initial interest from such date in which case it shall bear interest from the Bond Date) at the per annum rate of interest specified above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on February 15 and August 15 in each year, commencing February 15, 2008. Principal of this Bond is payable at its Stated Maturity or upon its prior redemption to the Registered Owner hereof, upon presentation and surrender, at the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration certificate appearing hereon, or its successor, provided, however, while this Bond is registered to Cede & Co., the payment of principal upon a partial redemption of the principal amount hereof may be accomplished without presentation and surrender of this Bond. Interest is payable to the Registered Owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the 'Security Register' maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business 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 AgenURegistrar, 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, legal holiday or a day when banking institutions in the city where the Designated Payment/Transfer Office of the Paying AgenURegistrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. All payments of principal of, premium, if any, and interest on this Bond shall be without exchange or collection charges to the owner 45942]45.211 W14820 ' 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 $11,145,000 (herein referred to as the "Bonds") for permanent public improvements and public purposes, to wit: $1,135,000 to construct and equip firefighting facilities, including the purchase of firefighting equipment, $190,500 for street improvements, including drainage, curb, gutters, sidewalks, landscaping, traffic signalization and utility line relocation and the acquisition of land and right-of-way therefor, $401,000 for park improvements including the acquisition of land and constructing recreational facilities, $28,500 to construct and equip a performing arts center, including the purchase of land, $2,840,000 for acquiring, constructing, improving and maintaining streets, thoroughfares, bridges, alleyways and sidewalks within the City, including related storm drainage improvements, traffic signalization and signage, streetscaping and median improvements, and utility relocations and the acquisition of land and rights of way therefor, $4,150,000 for acquiring, constructing, improving and equipping park and recreational facilities, including the acquisition of land therefor, $200,000 for public art projects, and $2,200,000 for constructing, renovating, improving, expanding and equipping public safety facilities, including the acquisition of land therefor, all in accordance with authority conferred by and in conformity with the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1331, as amended, and pursuant to an Ordinance adopted by the City Council of the City (herein referred to as the "Ordinance"). The Bonds maturing on the dates hereinafter identified (the "Term Bonds') are subject to mandatory redemption prior to maturity with funds on deposit in the Interest and Sinking Fund ' established and maintained for the payment thereof in the Ordinance, and shall be redeemed in part prior to maturity at the price of par and accrued interest thereon to the date of redemption, and without premium, on the dates and in the principal amounts as follows: Term Bonds Due August 15, 2027 Redemption Date Principal Amount August 15, 2025 $740,000 August 15, 2026 $775,000 August 15, 2027 (maturity) $815,000 The particular Term 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 Term Bonds for a Stated Maturity required to be redeemed on a mandatory redemption date may be reduced, at the option of the City, by the principal amount of Term Bonds of like maturity which, at least 50 days prior to the mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the optional redemption provisions appearing below and not theretofore credited against a mandatory redemption requirement. The Bonds maturing on and after August 15, 2018, may be redeemed prior to their Stated Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on August 15, 2017, or on any date thereafter, at the redemption price of par, ' together with accrued interest to the date of redemption. 45942745.2110614820 ' At least thirty (30) days prior to a redemption date, the City shall cause a written notice of such redemption to be sent by United States Mail, first class postage prepaid, to the Registered Owners of each Bond to be redeemed at the address shown on the Security Register and subject to the terns and provisions relating thereto contained in the Ordinance. If this Bond (or any portion of its principal sum) shall have been duly called for redemption and notice of such redemption duly given, then upon the redemption date this Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and interest hereon shall cease to accrue from and after the redemption date herefor, provided moneys for the payment of the redemption price and the interest on the principal amount to be redeemed to the date of redemption are held for the purpose of such payment by the Paying Agent/Registrar. In the event a portion of the principal amount of this Bond is to be redeemed and the Registered Owner is someone other than Cade & Co., payment of the redemption price of such principal amount shall be made to the Registered Owner only upon presentation and surrender of this Bond to the Designated Paymentrrransfer Office of the Paying Agent/Registrar, and a new Bond or Bonds of like maturity and interest rate in any authorized denominations provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to the Registered Owner, without charge. If this Bond is selected for redemption, in whole or in part, the City and the Paying Agent/Registrar shall not be required to transfer this Bond to an assignee of the Registered Owner within forty-five (45) days of the redemption date therefor; provided, however, such limitation on transferability shall not be applicable to an exchange by the Registered Owner of the unredeemed balance hereof in the event of its redemption in part. The Bonds are payable from the proceeds of an ad valorem tax levied, within the ' limitations prescribed by law, upon all taxable property in the City. - Reference is hereby made to the Ordinance, a copy of which is on file in the Designated Paymentrrransfer Office of the Paying Agent/Registrar, and to all of the provisions of which the Registered Owner of this Bond by the acceptance hereof hereby assents, for definitions of terms; the description of and the nature and extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or supplemented with or without the consent of the Registered Owners; the rights, duties and obligations of the City and the Paying Agent/Registrar,, the terms and provisions upon which this Bond may be discharged at or prior to its maturity or redemption, and deemed to be no longer Outstanding thereunder; and for other terms and provisions contained therein. Capitalized terms used herein and not otherwise defined have the meanings assigned in the Ordinance. This Bond, subject to certain limitations contained in the Ordinance, may be transferred on the Security Register only upon its presentation and surrender at the Designated Paymentrrransfer 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 City and the Paying Agent/Registrar, and any agent of either, shall treat the ' Registered Owner whose name appears on the Security Register (i) on the Record Date as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as the owner entitled to payment of principal hereof at its Stated Maturity or upon its prior redemption, 45942]45.2/10514820 10 ' in whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of nonpayment of interest on a scheduled payment date and for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date') will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest (which shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States Mail, first class postage prepaid, to the address of each Holder appearing on the Security Register at the close of business on the last business day next preceding the date of mailing of such notice. It is hereby certified, recited, represented and declared that the City is a body corporate and political subdivision duly organized and legally existing under and by virtue of the Constitution and laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all acts, conditions and things required to exist and be done precedent to and in the issuance of the Bonds to render the same lawful and valid obligations of the City have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not exceed any Constitutional or statutory limitation; and that due provision has been made for the payment of the principal of and interest on the Bonds by the levy of a tax as aforestated. In case any provision in this Bond shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed ' in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly executed under the official seal of the City as of the Bond Date. 1 CITY OF ALLEN, TEXAS Mayo COUNTERSIGNED: (SEAL) (c) Form of Registration Certificate ofForm of Registration of Comptroller of Public Accounts to appear an Public Accounts to appear on Initial Bond(slonly. 45942]45.2110614820 11 ' REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS THE STATE OF TEXAS § OFFICE OF THE COMPTROLLER § REGISTER NO. OF PUBLIC ACCOUNTS § I HEREBY CERTIFY that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of Public Accounts of the State of Texas. WITNESS my signature and seal of Comptroller of Public Accounts of the State of Texas (SEAL) ' (d) Form of Certificate of Paving Agent/Registrar to appear on Definitive Bonds only. REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR This Bond has been duly issued and registered under the provisions of the Within -mentioned Ordinance; the bond or bonds of the above entitled and designated series originally delivered having been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts, as shown by the records of the Paying Agent/Registrar. The designated offices of the Paying Agent/Registrar in Dallas, Texas is the "Designated Payment/Transfer Office" for this Bond. THE BANK OF NEW YORK TRUST COMPANY, N.A., Dallas, Texas, as Paying Agent/Registrar By: Authorized Signature Registration Date: 45942745 2/10614620 12 ' (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: NOTICE: The signature on this assignment must correspond with the name of the Signature guaranteed: registered owner as it appears on the face of the within Bond in every particular. (f) The Initial Bond(s) shall be in the form set forth in Paragraph (b) of this Section. except that the form of the single fully registered Initial Bond shall be modified as follows: ' Heading and paragraph one shall be amended to read as follows: NO. T-1 $11,145,000 UNITED STATES OF AMERICA STATE OF TEXAS CITY OF ALLEN, TEXAS GENERAL OBLIGATION BOND SERIES 2007 Bond Date: August 15, 2007 Registered Owner. First Southwest Company Principal Amount: ELEVEN MILLION ONE HUNDRED FORTY-FIVE THOUSAND DOLLARS The City of Allen, Texas (hereinafter referred to as the "City"), a body corporate and municipal corporation in the County of Collin, State of Texas, for value received, acknowledges itself indebted to and hereby promises to pay to the Registered Owner named above (the "Registered Owner"), or the registered assigns thereof, the Principal Amount hereinabove stated on August 15 in the years and in principal installments in accordance with the following schedule: 45M745.2 IlMl"zo 13 ' YEAR OF PRINCIPAL INTEREST MATURITY INSTALLMENTS RATE (Information to be inserted from schedule in Section 2 hereof) (or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum rates of interest specked above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being payable on February 15 and August 15 in each year until maturity or prior redemption, commencing February 15, 2008. Principal installments of this Bond are payable at the year of maturity or on a redemption date to the Registered Owner hereof by The Bank of New York Trust Company, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon presentation and surrender, at its designated offices in Dallas, Texas (the "Designated Payment/Transfer Office"). Interest is payable to the Registered Owner of this Bond (or one or more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name appears on the "Security Register' maintained by the Paying Agent/Registrar at the close of business on the "Record Date", which is the last business day of the month next preceding each interest payment date, and interest shall be paid by the Paying Agent/Registrar by check sem 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, legal holiday or a day ' when banking institutions in the city where the Designated Paymentrrransfer Office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday or day when banking institutions are authorized to Gose; and payment on such date shag have the same force and effect as ff made on the original date payment was due. All payments of principal of, premium, 0 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. SECTION 10: Levy of Taxes. To provide for the payment of the "Debt Service Requirements" of the Bonds, being (i) the interest on the Bonds and (ii) a sinking fund for their redemption at maturity or a sinking fund of 2% (whichever amount is the greater), there is hereby levied, and there shall be annually assessed and collected in due time, form and manner, a tax on all taxable property in the City, within the limitations prescribed by law, and such tax hereby levied on each one hundred dollars' valuation of taxable property in the City for the Debt Service Requirements of the Bonds shall be at a rate from year to year as will be sufficient to provide funds each year to pay the principal of and interest on said Bonds while Outstanding; full allowance being made for delinquencies and costs of collection; separate books and records relating to the receipt and disbursement of taxes levied, assessed and collected for and on account of the Bonds shall be kept and maintained by the City at all times while the Bonds are Outstanding, and the taxes collected for the payment of the Debt Service Requirements on the Bonds shall be deposited to the credit of a "Special 2007 Bond Account" (the "Interest and Sinking Fund") maintained on the records of the City and deposited in a ' special fund maintained at an official depository of the City's funds; and such tax hereby levied and to be assessed and collected annually, is hereby pledged to the payment of the Bonds. 45942745.2/10614820 14 ' The Mayor, Mayor Pro Tem, City Manager, City Secretary, Finance Director and Assistant Finance Director of the City, individually or collectively, are hereby authorized and directed to cause to be transferred to the Paying AgenVRegistrar for the Bonds, from funds on deposit in the Interest and Sinking Fund, amounts sufficient to fully pay and discharge promptly each installment of principal of and interest on the Bonds as the same accrues or matures or comes due by reason of redemption prior to maturity; such transfers of funds to be made in such manner as will cause collected funds to be deposited with the Paying Agent/Registrar on or before each principal and interest payment date for the Bonds. SECTION 11: Mutilated, Destroyed. Lost and Stolen Bonds. In rase any Bond shall be mutilated, destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a replacement Bond of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the City and after (i) the filing by the Holder thereof with the Paying Agent/Registrar of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such Bond, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Bond shall be bome by the Holder of the Bond mutilated, destroyed, lost or stolen. Every replacement Bond issued pursuant to this Section shall be a valid and binding obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds; notwithstanding the enforceability of payment by anyone of the destroyed, lost or stolen Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost or stolen Bonds. SECTION 12: Satisfaction of Obligations of City. If the City shall pay or cause to be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of taxes levied under this Ordinance and all covenants, agreements and other obligations of the City to the Holders shall thereupon cease, terminate and be discharged and satisfied. Bonds or any principal amount(s) thereof shall be deemed to have been paid within the meaning and with the effect expressed above in this Section when (i) money sufficient to pay in full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor, together with all interest due thereon, shall have been irrevocably deposited with and held in trust by the Paying AgenVRegistrar, or an authorized escrow agent, or (i) Government Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an authorized escrow agent, which Government Securities have been certified by an independent accounting firm to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay when due the principal of and interest on such Bonds, or the principal amount's) thereof, on and prior to the Stated Maturity thereof or 'if notice of ' redemption has been duly given or waived or if irrevocable arrangements therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof. The City covenants 4594275.2/IW1020 15 t that no deposit of moneys or Government Securities will be made under this Section and no use made of any such deposit which would cause the Bonds to be treated as "arbitrage bonds" within the meaning of section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted pursuant thereto. Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow agent, and all income from Government Securities held in trust by the Paying Agent/Registrar, or an authorized escrow agent, pursuant to this Section which is not required for the payment of the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such moneys have been so deposited, shall be remitted to the City or deposited as directed by the City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were deposited and are held in trust to pay shall, upon the request of the City, be remitted to the City against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws of the State of Texas. The term "Government Securities", as used herein, means (i) direct noncallable obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States, including obligations unconditionally guaranteed or insured by the agency or instrumentality and, on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a slate or an agency or a county, municipality or other political subdivision of a state that have been refunded and that, on the date of their acquisition or purchase by the City, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. SECTION 13: Ordinance a Contract - Amendments - Outstanding Bonds. This Ordinance shall constitute a contract with the Holders from time to time, be binding on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted in this Section and Section 21 hereof. The City may, without the consent of or notice to any Holders, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders, including the curing of any ambiguity, inconsistency or formal defect or omission herein. In addition, the City may, with the consent of Holders holding a majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend, add to or rescind any of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding Bonds, no such amendment, addition or rescission shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce the principal amount 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 required to be held by Holders for consent to any such amendment, addition or rescission. The term "Outstanding', when used in this Ordinance with respect to Bonds, means, as ' of the date of determination, all Bonds theretofore issued and delivered under this Ordinance, except: 45942945.2 H0514820 16 (1) those Bonds cancelled by the Paying Agent/Registrar or delivered to the Paying AgentlRegistrarfor cancellation; (2) those Bonds deemed to be duly paid by the City in accordance with the provisions of Section 12 hereof; and (3) those mutilated, destroyed, lost or stolen Bonds which have been replaced with Bonds registered and delivered in lieu thereof as provided in Section 11 hereof. SECTION 14: Covenants to Maintain Tax -Exempt Status. (a) Definitions. When used in this Section, the following terms shall 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 1966, as amended by all legislation, 'd 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. "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 1.148A of the Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross 45942]452/10514820 17 ' 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 limtting the generality of the foregoing, unless and until the City receives a written opinion of counsel nationally recognized in the field of municipal bond law to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the City shall comply with each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall at all times prior to the last Stated Maturity of Bonds: (1) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carded on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the ' Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except to the extent permitted by section 141 of the Code and the Regulations and rulings thereunder, the City shall not use Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be 'loaned' to a person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment (or use Gross Proceeds to replace money so invested) if, as a result of such investment, the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds. ' (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any 45942]45.2/10514820 18 ' action which would cause the Bonds to be federally guaranteed within the meaning of section 149(b) of the Code and the Regulations and rulings thereunder. (g) Information Report. The City shall timely file the information required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place 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 City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is discharged. However, to the extent permitted by law, the City may commingle Gross Proceeds of the Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and rulings thereunder. The City shall maintain such calculations with its official transcript of proceedings relating to the issuance ' of the Bonds until six years after the final Computation Date. (3) As additional consideration for the purchase of the Bonds by the Purchasers and the loan of the money represented thereby and in order to induce such purchase by measures designed to insure the excludability of the interest thereon from the gross income of the owners thereof for federal income tax purposes, the City shall pay to the United States from the construction fund, the general fund, or other appropriate fund or, if permitted by applicable Texas statute, regulation or opinion of the Attorney General of the State of Texas, the Interest and Sinking Fund, 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'/6) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the rebate payments shall be made at the times, in the installments, to the place and in the manner as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by Section 148(f) of the Code and the Regulations and rulings thereunder. (4) The City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs (2) and (3), and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter (and in all events within one hundred eighty ' (180) days after discovery of the error), including payment to the United States of 45942745.21IM14820 19 ' 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 City shall not, at any time prior to the earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection H of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yield of the Bonds not been relevant to either party. (j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro Tem, City Manager, Finance Director, Assistant Finance Director, or City Secretary, 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. SECTION 15: Sale of Bonds Official Statement Approval. The Bonds authorized by this Ordinance are hereby sold by the City to First Southwest Company and A. G. Edwards & Sons, Inc. (herein collectively referred to as the 'Underwriters') in accordance with the Bond Purchase Agreement, dated August 14, 2007 attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The City Manager is hereby authorized and directed to execute said Bond Purchase Agreement for and on behalf of the City and as the act and deed of this City Council, and in regard to the approval and execution of the Bond Purchase Agreement, the City Council hereby finds, determines and declares that the representations, warranties and agreements of the City contained in the Bond Purchase Agreement are true and correct in all material respects and shall be honored and performed by the City. Furthermore, the use of the Preliminary Official Statement, dated August 6, 2007, by the Underwriters in connection with the public offering and sale of the Bonds is hereby retied, confirmed and approved in all respects. The final Official Statement, which reflects the terms of sale (together with such changes approved by the Mayor, Mayor Pro Tem, City Secretary, City Manager, Finance Director and Assistant Finance Director, one or more of said officials), shall be and is hereby in all respects approved and the Underwriters are hereby authorized to use and distribute said final Official Statement, dated August 14, 2007, in the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are further authorized and directed to manually execute and deliver for and on behalf of the City copies of said Official Statement in final form as may be required by the Underwriters, and such final Official Statement in the form and content manually executed by said officials shall be deemed to be approved by the City Council and constitute the Official Statement authorized for distribution and use by the Underwriters. SECTION 16: Control and Custody of Bonds. The Mayor of the City shall be and is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, including the printing and supply of definitive Bonds, and shall take and have charge and control of the Initial Bond(s) pending the approval thereof by the Attorney General, the registration thereof by the Comptroller of Public ' Accounts and the delivery thereof to the Underwriters. 45942745.2/10614820 20 Furthermore, the Mayor, Mayor Pro Tem, City Manager, Finance Director, Assistant Finance Director and City Secretary, any one or more of said officials, are hereby authorized and directed to furnish and execute such agreements, documents and certifications relating to the City and the issuance, sale and delivery of the Bonds, including certifications as to facts, estimates, circumstances and reasonable expectations pertaining to the use, expenditure and investment of the proceeds of the Bonds, as may be necessary for the approval of the Attorney General, the registration by the Comptroller of Public Accounts and the delivery of the Bonds to the Underwriters, and, together with the City's financial advisor, bond counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond(s) to the Underwriters and the initial exchange thereof for definitive Bonds. SECTION 17: Proceeds of Sale. The proceeds of sale of the Bonds, excluding the accrued interest received from the Underwriters, amounts to pay municipal bond insurance premium and amounts to pay costs of issuance, shall be deposited in a construction fund maintained at the City's depository bank. Pending expenditure for authorized projects and purposes, such proceeds of sale may be invested in authorized investments in accordance with the provisions of V.T.C.A., Government Code, Chapter 2256, as amended, and the City's investment policies and guidelines, and any investment earnings realized shall be expended for such authorized projects and purposes or deposited in the Interest and Sinking Fund as shall be determined by the City Council. Accrued interest received from the Underwriters as well as any surplus proceeds of sale of the Bonds, including investment earnings, remaining after completion of all authorized projects or purposes shall be deposited to the credit of the Interest and Sinking Fund. Any premium received from the Underwriters shall be deposited and applied in accordance with the applicable provisions of Section 1201.042, Texas Government Code, as ' amended. SECTION 16: Notices to Holders - Waiver. Wherever this Ordinance provides for notice to Hoklers of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to the address of each Holder appearing in the Security Register at the Gose of business on the business day next preceding the mailing of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event with respect to which such notice is given, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 19: Cancellation. All Bonds surrendered for payment, redemption, transfer, exchange or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not already cancelled, shall be promptly cancelled by the Paying Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or registered and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Paying ' Agent/Registrar. All cancelled Bonds held by the Paying AgenURegistrar shall be returned to the City. 45942]45.2/10614820 21 ' SECTION 20: Legal Opinion. The Underwriters' obligation to accept delivery of the Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Dallas, Texas, approving the Bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for the Bonds. A true and correct reproduction of said opinion or an executed counterpart thereof shall accompany the global Bonds deposited with DTC or a reproduction thereof shall be printed on the definitive Bonds in the event the book -entry -only system shall be discontinued. SECTION 21: Continuing Disclosure Undertaking. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below. "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, ' officer or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. (b) Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year (beginning with the fiscal year ending September 30, 2007) financial information and operating data with respect to the City of the general type included in the final Official Statement approved by Section 15 of this Ordinance, being the information described in Exhibit C hereto. Financial statements to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and any SID with the financial information and operating data and will file the annual audit report when and if the same becomes available. 1 If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change (and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. 45042745.2/10614820 22 (c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, If such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial d'dficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 8. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 8. Bond calls; 9. Defeasances; 10. Release, substitution or sale of property securing repayment of the Bonds; and 11. Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such Section. (d) Limitations Disclaimers and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the City in any event will give the notice required by subsection (c) of this Section of any Bond calls and defeasance that cause the City to be no longer such an "obligated person". The provisions of this Section are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive or otherwise limit the duties of the City under federal and state securities laws. 45 2145.2 /10514820 23 ' Notwithstanding anything herein to the contrary, the provisions of this Section may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law or a change in the identity, nature, status or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (b) a Person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Holders and beneficial owners of the Bonds. The provisions of this Section may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City's right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) of this Section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. SECTION 22: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive Bonds. It is expressly provided, however, that the presence or absence of CUSIP ' numbers on the definitive Bonds shall be of no significance or effect as regards the legality thereof, and neither the City nor attorneys approving the Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed or typed on the definitive Bonds. SECTION 23: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is intended or shall be construed to confer upon any person other than the City, the Paying AgenURegistrar and the Holders, any right, remedy or claim, legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being intended to be and being for the sole and exclusive benefit of the City, the Paying Agent/Registrar and the Holders. SECTION 24: Inconsistent Provisions. All ordinances, orders or resolutions, or pads thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters contained herein. SECTION 25: Governing Law. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 26: Effect of Headings. The Section headings herein are for convenience of referenced only and shall not affect the construction hereof. SECTION 27: Construction of Terms. If appropriate in the context of this Ordinance, words of the singular number shall be considered to include the plural, words of the plural number shall be considered to include the singular, and words of the masculine, feminine or neuter gender shall be considered to include the other genders. 45 2M.21IM14e20 24 ' SECTION 28: Severability. If any provision of this Ordinance or the application thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the application thereof to other circumstances shall nevertheless be valid, and the City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 29: Incorporation of Findings and Determinations. The findings and determinations of the City Council contained In the preamble hereof are hereby incorporated by reference and made a part of this Ordinance for all purposes as if the same were restated in full in this Section. SECTION 30: Insurance. The Bonds have been sold with the principal of and interest thereon being insured by MBIA Insurance Corporation (hereinafter called "MBIA") pursuant to a Financial Guaranty Insurance Policy. In accordance with the terms and conditions applicable to insurance provided by MBIA, the City covenants and agrees that, in the event the principal and interest due on the Bonds shall be paid by MBIA pursuant to the policy referred to this Section, and the policy remains in full force and effect and there is no continuing event of default by MBIA thereunder, the assignment and pledge of all funds and all covenants, agreements and other obligations of the City to the Holders shall continue to exist and MBIA shall be subrogated to the rights of such Holders; and furthermore, the City covenants and agrees that: (a) In the event that, on the second business day, and again on the business day, prior to the payment date on the Bonds, the Paying Agent/Registrar has not received sufficient moneys to pay all principal of and interest on the Bonds due on the second following or following, as the case may be, business day, the Paying Agent/Registrar shall immediately ' notify MBIA or its designee on the same business day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. (b) If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent/Registrar shall so notify MBIA or its designee, (c) In addition, if the Paying Agent/Registrar has notice that any Holder has been required to disgorge payments of principal of or interest on the Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Holder within the meaning of any applicable bankruptcy laws, then the Paying Agent/Regisbar shall notify the MBIA or its designee of such fact by telephone or telegraphic notice, confirming in writing by registered or certified mail. (d) The Paying Agent/Registrar is hereby irrevocably designated, appointed, directed and authorized to act as attorney in fact for Holders of the Bonds as follows: (1) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Paying Agent/Registrar shall (a) execute and deliver to U.S. Bank Trust National Association, or its successors under the Policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the MBIA as agent for such Holders in such legal proceeding related to the payment of such interest and an assignment to the MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (b) receive as designee to the respective Holders (and not as Paying Agent/Registrar) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and 459427452110614820 25 ' (2) If and to the extent of a deficiency in amounts required to pay principal of the Bonds, the Paying Agent/Registrar shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing MBIA as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any of the Bonds surrendered to the Insurance Paying Agent or so much of the principal thereof as has not previously been paid or for which moneys are not held by the Paying Agent/Registrar and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective Holders (and not as Paying Agent/Registrar) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. (e) Payments with respect to claims for interest on and principal of Bonds disbursed by the Paying Agent/Registrar from proceeds of the Policy shall not be considered to discharge the obligation of the City with respect to such Bonds, and MBIA shall become of the owner of such unpaid Bond and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. (f) Irrespective of whether any such assignment is executed and delivered, MBIA and the Paying Agent/Registrar hereby agree for the benefit of the MBIA that: (1) They recognize that to the extent MBIA makes payments, directly or indirectly (as by paying through the Paying Agent/Registrar), on account of principal of and interest on the Bonds, MBIA will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the City as provided and solely from the sources stated in this Ordinance and the Bonds; and (2) They will accordingly pay to MBIA the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Policy, which principal and interest shall be deemed past due and not to have been paid) as provided in this Ordinance and the Bonds, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Bonds to Holders, and will otherwise treat the MBIA as the owner of such rights to the amount of such principal and interest. (g) In connection with the issuance of additional obligations, the City shall deliver to the MBIA a copy of the disclosure document, if any, circulated with respect to such additional obligations. (h) Copies of any amendments made to the documents executed in connection with the issuance of the Bonds which are consented to by the MBIA shall be sent to Standard & Poor's Corporation. (i) MBIA shall receive notice of the resignation or removal of the Paying Agent/Registrar and the appointment of a successor thereto. () MBIA shall receive copies of all notices required to be delivered to Holders and, on an annual basis, copies of the City's audited financial statements and annual budget. 45942745.2110614620 26 ' (k) Any notice that is required to be given to a Holder of the Bonds or to the Paying Agent/Registrar pursuant to the Ordinance shall also be provided to MBIA. All notices required to be given to MBIA under the Ordinance shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Surveillance. E (1) The City agrees to reimburse the Insurer immediately and unconditionally upon demand received in writing, or as soon as possible and practicable thereafter and to the extent permitted by law, for all reasonable expenses, including attorneys' fees and expenses, incurred by the Insurer in connection with (i) the enforcement by the Insurer of the City's obligations, or the preservation or defense of any rights of the Insurer, under this Ordinance and any other document executed in connection with the issuance of the Bonds, and (ii) any consent, amendment, waiver or other action with respect to the Ordinance or any related document, whether or not granted or approved, together with interest on all such expenses from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or the maximum interest rate permitted by law, whichever is less. In addition, the Insurer reserves the right to charge a fee in connection with its review of any such consent, amendment or waiver, whether or not granted or approved. Any obligation of the City created under this subsection shall not be a debt obligation of the City under the laws of the State of Texas, but shall be subject to annual appropriation by the City from current funds of the City. (m) The City agrees not to use MBIA's name in any public document including, without limitation, a press release or presentation, announcement or forum without MBIA's prior consent. In the event that the City advised by counsel that it has a legal obligation to disclose MBIA's name in any press release, public announcement or other public document, the City shall provide MBIA with at least three (3) business days' prior written notice of its intent to use MBIA's name together with a copy of the proposed use of MBIA's name and any description of a transaction with MBIA and shall obtain MBIA's prior consent as to the form and substance of the proposed use of MBIA's name and any such description; provided, however, such prohibition on the use of MBIA's name shall not relate to the use of the Insurers standard approved form of disclosure in public documents issued in connection with the Bonds; and further provided, such prohibition shall not apply to the use of MBIA's name in order to comply with public notice, public meeting or public reporting requirements. (n) The City shall not enter into any agreement nor shall it consent to or participate in any arrangement pursuant to which Bonds are tendered or purchased for any purpose other than the redemption and cancellation or legal defeasance of such Bonds with the prior written consent of MBIA. SECTION 31: Public Meeting. It is officially found, determined and declared that the meeting at which this Ordinance is adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered at such meeting, including this Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as amended. 45942745.2 /1 W 14820 27 SECTION 32: Effective Date. In accordance with the provisions of V.T.C.A., Government Code, Section 1201.028, as amended, this Ordinance shall be in force and effect from and after its passage on the date shown below and it is so ordained. [remainder of page left blank intentionally] 45942745.2 /10514829 28 1 1 PASSED AND ADOPTED, this August 14, 2007. CITY OF ALLEN, TEXAS ATTEST: (City Seal) 45"2745,2/10614820 S-1 ' EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT 1 45942745.2/10614820 A-1 ' PAYING AGENTIREGISTRAR AGREEMENT THIS AGREEMENT entered into as of August 14, 2007 (this "Agreement"), by and between the City of Allen, Texas (the "Issuer"), and The Bank of New York Trust Company, N.A., Dallas, Texas, a banking association duly organized and existing under the laws of the United States of America (the "Bank'). RECITALS WHEREAS, the Issuer has duly authorized and provided for the execution and delivery of its "City of Allen, Texas, General Obligation Bonds, Series 2007" (the "Securities"), August 15, 2007, such Securities scheduled to be delivered to the initial purchasers thereof on or about September 12, 2007; and WHEREAS, the Issuer has selected the Bank to serve as Paying AgentlRegistrer in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ' ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal of, premium, if any, and interest on the Securities as the same become due and payable to the registered owners thereof; all in accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the Securities, the Bank shall keep and maintain, for and on behalf of the Issuer, books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Bond Resolution". The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying AgenttRegistrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Annex A attached hereto. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). 45942754.1/10614820 ' ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the offices of the Bank located in Dallas, Texas, at the address appearing in Section 3.01 hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Bond Resolution" means the resolution, order or ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the Secretary or any other officer of the Issuer and delivered to the Bank. "Fiscal Year' means the fiscal year of the Issuer, ending September 30. "Holder' and "Security Holder' each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Order' means a written request or order signed in the name of the Issuer by the Mayor, Mayor Pro Tem, City Manager, Finance Director, Assistant Finance Director or City Secretary, any one or more of said officials, and delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government, or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Bond Resolution). "Record Date" means the last business day of the month next preceding each interest payment date. "Redemption Date", when used with respect to any Security to be redeemed, means the date foxed for such redemption pursuant to the terns of the Bond Resolution. "Responsible Officer", when used with respect to the Bank, means the Chairman or Vice -Chairman of the Board of Directors, the Chairman or Vice -Chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, 4e9427s4.vras14820 any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Securities" means the securities defined in the recital paragraphs herein. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfers of Securities. "Stated Maturity" means the date specked in the Bond Resolution the principal of a Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "Bank", "Issuer", and "Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar' refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of the Paving Agent. As Paying Agent, the Bank shall, provided ' adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the following address: P. O. Box 2320, Dallas, Texas 75221-2320 or 2001 Bryan Street, 9th Floor, Dallas, Texas 75201, Attention: Operations. 1 As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and making payment thereof to the Holders of the Securities (or their Predecessor Securities) on the Record Date. All payments of principal and/or interest on the Securities to the registered owners shall be accomplished (1) by the issuance of checks, payable to the registered owners, drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first class postage prepaid, to the address appearing on the Security Register or (2) by such other method, acceptable to the Bank, requested in writing by the Holder at the Holders risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on the dates specified in the Bond Resolution. 45842754.1n0814820 ARTICLE FOUR REGISTRAR Section 4.01. Security Register - Transfers and Exchanges. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register) for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subject to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers, exchanges and replacements of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Secu(I ies Dealers, such written instrument to be in a form satisfactory to the Bank and duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re -registration, transfer or exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Securities. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other governments or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03. Form of the Security Register. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. 45W754.11105MM ' Section 4.04. List of Security Holders, The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of Cancelled Securities. The Bank will, at such reasonable intervals as it determines, cancel and destroy, pursuant to the Securities and Exchange Act of 1934, all Securities in lieu of which or in exchange for which other Securities have been issued, or which have been paid, and will provide a certificate of destruction of such Securities to the Issuer upon the Issuer's request. Section 4.06. Mutilated Destroyed Lost or Stolen Securities. The Issuer hereby instrucls the Bank, subject to the applicable provisions of the Bond Resolution, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, destroyed, lost or stolen, the Bank, in its discretion, may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed, lost or stolen Security, only upon (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be bome by the Holder of the Security mutilated, destroyed, lost or stolen. Section 4.07. Transaction Information to the Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to'Section 3.01 hereof, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01 hereof, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost or stolen Securities pursuant to Section 4.06 hereof. 45942]54.1/10514820 L ARTICLE FIVE THE BANK Section 5.01. Duties of the Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on the Documents Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent fads. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document believed by it to be genuine and ' to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document supplied by the Issuer. (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either direly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of the Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. 1 45942954.1/10814820 ' Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have If it were not the Paying Agent/Registrar, or any other agent. 11 Section 5.05. Moneys Held by the Bank - Fiduciary Account. A fiduciary account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and disbursement of moneys received from the Issuer hereunder for the payment of the Securities, and money deposited to the credit of such account until paid to the Holders of the Securities shall be continuously collateralized by securities or obligations which qualify and are eligible under both the laws of the State of Texas and the laws of the United States of America to secure and be pledged as collateral for fiduciary accounts to the extent such money is not insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary account shall be made by check drawn on such fiduciary account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. The Bank shall be under no liability for interest on any money received by it hereunder. Subject to the applicable unclaimed property laws of the State of Texas, any money deposited with the Bank for the payment of the principal, premium, if any, or interest on any Security and remaining unclaimed for three (3) years after final maturity of the Security has become due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such moneys shall thereupon cease. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank, and its directors, officers and employees (collectively, the "Indemnified Parties'), and hold the Indemnified Parties harmless against any loss, liability or expense incurred without negligence or bad faith on the part of the Indemnified Parties, arising out of or in connection with the Bank's acceptance or administration of the Bank's duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of the Bank's powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 0.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State of Texas to determine the rights of any Person claiming any interest herein. Section 5.00. DTC Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements", which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time and notification of redemptions and calls. 45saVW/1061 s ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on the execution page of this Agreement. Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Severability. In case any provision herein shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. ' Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal equitable right, remedy or claim hereunder. or Section 6.08. Entire Agreement This Agreement and the Bond Resolution Wnstitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar and if any conflict exists between this Agreement and the Bond Resolution, the, Bond Resolution shall govern. Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying AgenURegistrar has been appointed by the Issuer and such appointment accepted and (b) notice is given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and the Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. The resigning Paying AgenURegistrar may petition any court of competent jurisdiction for the appointment of a successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying Agent/Registrar has not been delivered to the resigning Paying AgenURegistrar within sixty (60) days after the giving of such notice of resignation. 45942754.1110614820 8 Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereof), together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. (remainder of page left blank intentionally) 45942754.110614820 ' IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. C I Attest: Title: Attest: City Secretary THE BANK OF NEW YORK TRUST COMPANY, N.A. BY Title: Address: 2001 Bryan Street, 8' Floor Dallas, Texas 75201 CITY OF ALLEN, TEXAS BY Mayor Address: One Allen Civic Plaza Allen, Texas 75013 45942754.1119814820 S-1 I t ANNEX A 45942754,11IM14820 A-1 ' EXHIBIT B BOND PURCHASE AGREEMENT I 45942745.2110614820 B-1 ' Bond Purchase Agreement City of Allen, Texas $11,145,000 Genual Obligation Bonds, Series 2007 City of Allen, Texas August 14, 2007 305 Century Parkway Allen, Texas 75013-8042 Ladies and Gentleman: The undersigned, First Southwest Company and A.G. Edwards & Sons, Inc. (collectively, the "Underwriters'), acting through First Southwest Company (in such capacity DO behalf of the Underwriters, the "Represm am-"), acting solely on behalf of the Underwriters, and not acting ae fiduciary or agent for you, offer to enter foto the following agreement (this "49r0cs1m ') with the City of Allen, Texas (the "Issuer') which, upon the Issuer's written acceptance of this offer, will be binding upon the Issuer and upon the Underwrites. This offer is made subject to the Issuer's written acceptance bereof en or before 11:00 p.m., Dallas, Texas time, on August 14, 2007, and, if not m accepted, will be subject to withdrawal by the Underwriters upon written notice delivered to the Issue at any time prior to the acceptance bereof by the Issuer. Tums not otherwise defined in this Agreement shall have the same meanings set forth in the Ordinance (as defined herein) or in the Official Statement (as defined herein). I. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby agree to purchase, jointly and severally, from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriters, all, but not less than all, of the Issuer's $11,145,000 General Obligation Bonds, Series 2007 (the "Bonds'). Inasmuch as this purchase and sale represents a negotiated transaction, the Issuer understands, and hereby confirms, that the Representative is not acting as a fiduciary of the Issuer, but rather is acting solely in its capacity as the representative of the Underwriters. The principal amount of the Bonds to be issued, the dated date therefor, the maturities, sinking fund and optional redemption provisions, prigs or yields and interest rates per annum are set forth is attached as Schedule I hereto. The Bonds shall be as described in, and shall be issued and secured under and pursuant to the provisions of the Ordinance adopted by the City Council of the Issuer on August 14,20D7 (the "Ordinance'). The purchase price for the Bonds shall be $11,095,93724, which reflects the principal amount of the Bonds, interest accrued on the Bonds from the dated date of the Bonds to the Closing Date (as hereinafter defined), less an underwriting diacomt of $71,936.39, less a net original issue discount of $13,936.75. Delivered to the Issuer herewith as a good faith deposit is a check payable to the order of the Issuer in clearing house funds in the amount of $111,450.00. In the event you accept this offer, such check shall be held uncashed by you until the time of Closing, at which time such check shall be returned uncashed to the Representative. In the event that the Issuer does not accept this Agreement, such check will be immediately returned to the Representative. Should the Issuer fail to deliver the Bonds at the Closing, or should the Issuer be unable to satisfy the conditions of the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth in this Agreement (unless waived by the Representative), or should such obligations of the Underwriters be terminated for any reason permitted by this Agreement, such check shall immediately be returned to the Representative. In the event that the Underwriters fail (other than for a reason permitted hereunder) m purchase, accept delivery, of and pay for the Bonds at the Closing as herein provided, such check shall be cashed and the amount thereof retained by the Issuer as and for fully liquidated darnages for such failure of the Underwriters, and, except as set forth in Sections 8 and 10 hereof, no party shall have any further rights against the other hereunder. The Underwriters and the Issuer understand that in such event the DALLAS: 551369.00005: 1612071,2 ' Issuer's actual damages may be greater m may be less than such smount Accordingly, the Underwriters hereby waive any right to claim that the Issuer's actual damages are less than such amount, and the Issuer's acceptance of this offer shag constitute a waiver of my right the Issuer may have to additional damages from the Underwriters. The Representative hereby agrees not to stop or cause payment on such check to be stopped unless the Issuer has breached any of the terms of this Agreement 2. Public Offering. The Underwriters agree to make a bona fide public offering of all of the Bonds at a price not to exceed the public offering price set forth on the inside cover of the Official Statement and may subsequently change such offering price without any requirement of prior notice. the Underwriters may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment busts) and others at prices lower than the public offering price stated an the inside cover of the Official Statement, provided that an or before the Closing, the Representative shag execute and deliver to Bond Counsel an issue price certificate prepared by Bond Counsel. 3. The Official Statement (a) Attached hereto as Exhibit A is either a draft of the final Official Statement or a copy of the Preliminary Official Statement dated August 6, 2007 (the "Preliminary Official Statement'), including the cover page and Appendices thereto, of the Issuer relating to the Bonds. Such draft of the feral Official Statement or copy of the Preliminary Official Statement, as amended to reflect the changes marked or otherwise indicated an Exhibit A hereto, is hereinafter caged the "Official Statement " (b) The Preliminary Official Statement bas been prepared fm use by the Underwriters in connection with the public offering, sale and distribution of the Bonds. The Issuer hereby represents and warrents that the Preliminary Official Statement was deemed feral by the Issuer as of its date, except for the omission of such information which is dependent upon the food pricing of the Bonds for completion, all as ' permitted to be excluded by Section (b)(1) of Rule 15c2-12 under the Securities Exchange Act of 1934 (the Rule'). (c) The Issuer hereby authorizes the Official Statement and the information therein contained to be used by the Underwriters in connection with the public offering and the sale of the Bonds. The Issuer consents to the we by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. The Issuer shag provide, or cause to be provided, to the Representative as soon as practicable ager the date of the Issuer's acceptance of this Agreement (but, in my event, act later that within seven business days after the Issuer's acceptance of this Agreement and in sufficient time to accompany any confirmatim that requests payment from any customer) copies of the Official Statement which is complete m of the date of its delivery to the Representative in such quantity as the Representative shall reasonably request in order far the Underwriters tu comply with Section (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board. (d) It; atter the date of this Agreement to and including the date the Underwriters are no longer required to protide an Official Statement to potential customers who request the tome pursuant to the Rule (the earlier of (i) 90 days from the "end of the underwriting period" (as defined in the Rule) and (u) the time when the Official Statement is available to my person from a nationally recognized municipal securities information repository, but in no case less tban 25 days atter the "end of the underwriting period" for the Bonds), the Issuer becomes aware of my fact or event which might or would cease the Official Statement, as than supplemented or amended, to contain any untrue statement of a material fact or to omit m state a material fact requited to be stated therein or necessary in make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary to remand or supplement the Official Statement to comply with law, the Issuer will notify the Representative (and for the purposes of this clause provide the Representative with such information as it may from time to time reasonably request), and if, in the reasonable opinion of the Representative, such fact or event requires preparation and publication of a supplement or amendment to the ' Official Statement, the Issuer Will forthwith prepare and famish, at the Issuer's own expense (in a form and manner approved by the Representative, such approval not to be unreasonably withheld), a reasonable number of copies of either amendments or supplements m the Official Statement so that the statements in the Official DALLAS: 551369.00005: 1612011v2 Statement ss so amended and supplemented will not contain any m me statement of a material fact or omit m state a material fact required to be stated therein or necessary in make the statements therein, in light of the circumstances order which they were made, not misleading or so that the Official Statement will comply with law provided, however, that for all purposes of this Agreement and any certificate delivered by the fanner in accordance herewith, the Issuer makes no representations with respect to the descriptions in the Preliminary Official Statement or the Official Statement of The Depository Trust Company, New York New York ('DTC) or its book -entry -only system, or the information provided by MBIA Insurance Corporation (the Bond Insurer') under the caption therein entitled "Bond Insurance". If such notification shall be subsequent an the Closing, the Issuer shall famish such legal opinions, certificates, instruments and other documents as the Representative may deem reasonably necessary to evidence the With and accuracy of such supplement or amendment in the Official Statement (e) The Representative hereby agrees to file the Official Statement with a a mm ally recognized municipal securities information repository. Unless otherwise notified in writing by the Representative, the Ismer can assume that the "end of the underwriting period" for purposes of the Rule is the date of the Closing. 4. Representarions, Warranties and Covenants of the Issuer. The Iasuw hereby represents and warrants to and covenants with the Underwriters that: (a) The Issuer is a political subdivision of the State of Texas (the "State') duly crested, organized and existing order the laws of the State, and has full legal right, power and authority under the Texts Government Code, Chapter 1331 (the "Act), and the Issuer's Nome Rule Charter and at the date of the Closing will have fall legal right, power and authority trader the Act and the Ordinance (s) to enter into, execute and deliver this Agreement, the Ordinance and all documents required hereunder and thereorder to be executed and delivered by the Issuer (this Agreement, the Ordinance and the other dommmts referred to in ' this clause (i) are hereinafter referred to as the 'Issuer Documents'), (ii) to sell, issue and deliver the Bonds to the Representative w provided herein, and (ori) to carry out and consummate the transactions described in the Issuer Dominants and the Official Statement and (iv) to utilize the proceeds from the sale of the Bonds for the project (the "Project") as described in the Official Statement, and the Issuer has complied, and will at the Closing be in compliance in all respects, with the terms of the Act and the Issuer Documents as they pertain to such transactions; (b) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized all necessary action to be taken by it for (i) the adoption of the Ordinance and the issuance and sale of the Binds, (ii) the approval, execution and delivery of, and the performanoe by the Issuer of the obligations on its part, contained in the Bonds and the Issuer Domments and (iii) the consummation by it of all other transactions described in the Official Statement, the Issuer Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the Issuer in order to carry tat, give effect to, and consummate the transactions described herein and in the Official Statement; (c) The Issuer Documents constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; the Bonds, when issued, delivered and paid for, in accordance with the Ordinance and this Agreement, will constitute legal, valid and binding obligations of the Issuer entitled to the benefits of the Ordinance and enforceable in accordance with thew terms, subject to bankruptcy, 'insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; upon the issuance, authentication and delivery of the Bonds as aforesaid, the Ordinance will provide, for the benefit of the holders, from time to time, of the Bonds, the legally valid and binding pledge of and lien it purports m create as set forth in the Ordinance; ' (d) The Issuer is not in breach of or default in any material respect under any applicable constitutional provision, law or administrative regulation of the State or the United States or any applicable DALLAS: 551369.WM: 16 MIW ' judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer, is a party or to which the Issuer is otherwise subject, and no event has oavrred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a default or event of default by the Issuer under any of the foregoing; and the execution and delivery of the Bonds, the Issuer Documents and the adoption of the Ordinance and compliance with the provisions on the Issuer's part contained therein, will not conflict with or constitute a breach of or default =der my constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is otherwise subject or =der the terms of any such law, regulation or instrument, except as provided by the Bonds and the Ordinance; (e) All authorizations, approvals, licenses, permits, cousems and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Issuer of its obligations under the Issuer Documents, and the Bonds have been duly obtein4 except for (i) the approval of the Bonds by the Attorney General of the State of Texas (and registration of the Bonds by the Comptroller of Public Accosts of the State of Texas); and (ii) such approvals, consents and orders as may be required under the Blue Sky or securities laws of any jurisdiction in connection with the offering and We of the Bonds; (f) The Bonds and the Ordinance conform to the descriptions thereof contained in the Official Statement =der the captions "The Bonds" and "Official Statement Summary"; and the proceeds of the sale of the Bonds will be applied generally as described in the Official Statement order the captions "Plan of Financing' and "Official Statement Summary—Use of Proceeds." ' (g) There is no litigation, action, suit. proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of the Issuer, threatened against the Issuer, affecting the existence of the Ism=r or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds, the collection of the ad valorem taxes or the construction or operation of the Project pursuant to the Ordinance or in any way contesting or affecting the validity or enforceability of the Bonds or the Issuer De=ments, or contesting the exclusion from gross income of interest on the Bonds for federal income tax purposes, or contesting in my way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or my supplement or amendment thereto, or contesting the powers of the Ismer or my authority for the issuance of the Bonds, the adoption of the Ordinance or the execution and delivery of the Issuer Documents, nor, to the best knowledge of the Issuer, is there my basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Issuer Documents; (h) As of the date thereof, the Preliminary Official Statement did not contain my tame statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (i) At the time of the Issuer's acceptance hereof and (unless the Official Statement is amended or supplemented pursuant to paragraph (d) of Section 3 of this Agreement) at all times subsequent thereto during the period up to and including the date of Closing, the Official Statement does Out and will not contain tory untrue statement of a material fact or omit to state my material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 0) If the Official Statement is supplemented or amended pursuant to paragraph (d) of Section 3 this Agreement, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto during the period up to d including the date of Closing the Official Statement as so supplemented or amended will not contain my DALLAS: 551369.00005:161 ]07 M ' untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in tight of the circumstances under which made, not misleading; (k) The Issuer will apply, or cause to be applied, the proceeds from the sale of the Bonds w provided in and subject to all of the terms; and provisions of the Ordinance and will not take or omit to take any action which action or omission will adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds; (1) The Issuer will furnish such information and execute such instruments and take such action in cooperation with the Representative as the Representative may reasonably request, at no expense to the Issuer, (A) to (y) qualify the Bonds for offer end sale muter the Blue Sky or other securities laws and regulations of such states and other jurisdictions in the United States as the Representative may designate and (z) determine the eligibility of the Bonds for investment under the laws of such stares and other jurisdictions and (B) to continue such qualifications in effect so long as required for the distribution of the Bonds (provided, however, that the Issuer will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any jurisdiction) and will advise the Representative immediately of receipt by the Issuer of say notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; (o) Any certificate, signed by any official of the Issuer authorized to do an in connection with the transactions described in this Agreement, shall be deemed a representation and warranty by the Issuer to the Representative as to the statements made therein. 5. Closing (a) At 10:00 a.m., Dallas, Texas time, on September 12, 2007, or at such other time and date as shall have been mutually agreed upon by the Issuer and the Representative (the "Closing Date), the Issuer will, subject to the terms and conditions hereof, deliver to the Representative the initial Bonds registered in the name of the Representative, in temporary form, together with the other documents hereinafter mentioned, and will have available for immediate exchange definitive Bonds deposited with DTC, or deposited with the Paying Agent'Registrar, if the Bonds are to be held in safekeeping for DTC by the Paying Agent/Registrar pursuant to DTC's FAST system and the Ordinance, duly executed and authenticated in the form and manner described below, and the Underwriters will, subject m the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds w set forth in Section I hereof in immediately available funds (such events being referred to herein as the "Closure). Concurrently with such payment by the Underwriters, the Issuer shall return to the Representative, the check referred to in Section I hereof Payment for the Bonds as aforesaid shall be made at the offices of the paying age st/registrar or such other place m shall have been mutually agreed upon by the Issuer and the Representative. t (b) Delivery of the definitive Bonds in exchange for the initial Bonds shall be made through DTC, utilizing the book -entry only form of issuance, and the Issuer agrees to enter into such agreement, DALLAS: 551369.00005: 161201 J (m) The financial statements of, and other financial information regarding the Issuer, in the Official Statement fairly present the financial position and results of the Issuer as of the dates and for the periods therein or forth. Prior to the Closing, the Issuer will not take any action within or under its control that will cause any adverse change of a material mature in such financial position, results of operations or condition, financial or otherwise, of the Issuer. The Issuer is not a party to any litigation or other proceeding pending or, to its knowledge, threatened which, if decided adversely to the Issuer, would have a materially adverse effect ' on the financial condition of the Issuer; (a) Prior to the Closing the Issuer will not offer or issue any bonds, ones or other obligations for borrowed money or incur any material liabilities (except in the ordinary course of business), direct or contingent, payable from in secured by any of the revenues or assets which will secure the Bonds without the prior approval of the Representative, and (o) Any certificate, signed by any official of the Issuer authorized to do an in connection with the transactions described in this Agreement, shall be deemed a representation and warranty by the Issuer to the Representative as to the statements made therein. 5. Closing (a) At 10:00 a.m., Dallas, Texas time, on September 12, 2007, or at such other time and date as shall have been mutually agreed upon by the Issuer and the Representative (the "Closing Date), the Issuer will, subject to the terms and conditions hereof, deliver to the Representative the initial Bonds registered in the name of the Representative, in temporary form, together with the other documents hereinafter mentioned, and will have available for immediate exchange definitive Bonds deposited with DTC, or deposited with the Paying Agent'Registrar, if the Bonds are to be held in safekeeping for DTC by the Paying Agent/Registrar pursuant to DTC's FAST system and the Ordinance, duly executed and authenticated in the form and manner described below, and the Underwriters will, subject m the terms and conditions hereof, accept such delivery and pay the purchase price of the Bonds w set forth in Section I hereof in immediately available funds (such events being referred to herein as the "Closure). Concurrently with such payment by the Underwriters, the Issuer shall return to the Representative, the check referred to in Section I hereof Payment for the Bonds as aforesaid shall be made at the offices of the paying age st/registrar or such other place m shall have been mutually agreed upon by the Issuer and the Representative. t (b) Delivery of the definitive Bonds in exchange for the initial Bonds shall be made through DTC, utilizing the book -entry only form of issuance, and the Issuer agrees to enter into such agreement, DALLAS: 551369.00005: 161201 J including a "Letter of Representations," as may be required to allow for the use of such bookcntry only system. The definitive Bonds shall be delivered in fully registered form hearing CUSIP numbers without coupons with one Bond for each maturity registered in the name of CEDE & CO. and shall be made available to the Representative at least one business day before the Closing Date for purposes of inspection, except that the failure to include CUSIP numbers or the printing of an incorrect CUSIP number on any Bond shall not be a default under this Agreement, 6. Closing Condlfions. The Underwriters have entered into this Agreement in reliance upon the representations, warranties and agreements of the Issuer contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hweof and as of the date of the Closing. Accordingly, the Underwriters' obligations under this Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions, including the delivery by the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Representative: (a) The representations and warranties of the Issuer contained herein shall be true, complete and correct on the data hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) The Issuer shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing; (c) At the time of the Closing, (i) the Issuer Documents and the Bonds shall be in full force and effect in the form heretofore approved by the Representative and shall not have been amended, modified or supplemented, and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Representative; and (ii) all actions of the Issuer required to be taken by the Issuer shall be performed in order for Bond Counsel to deliver its opinions referred to hereafter, (d) At the time of the Closing, all official action of the Issuer relating to the Bonds and the Issuer Documents shall be in full force and effect and shall not have been amended, modified or supplemented except in any such case as may have been agreed to by the Representative; (e) At or prior to the Closing, the Ordinance shall have been duly executed and delivered by the Issuer and the Issuer shall have duly executed and delivered and the Registrar shall have duly authenticated the Bonds; (f) At the time of the Closing, there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or in the revenues or operations of the Issuer, from that set forth in the Official Statement that in the reasonable judgment of the Representative, is material and adverse and that makes it, in the reasonable judgment of the Representative, impracticable n market the Bonds on the tams and in the manner described in the Official Statement; (g) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (h) All steps to be taken and all instruments and other documents to be executed, and all other legal matters in connection with the transactions described in by this Agreement shall be reasonably satisfactory in legal form and effect in the Representative; (k) At or prior to the Closing, the Representative shell have received one copy of each of the following documents: DALLAS: 551369.00005: 1612071,2 ' (1) the Official Statement, and each supplement or amendment thereto, if any, executed on behalf of the Issuer by its Mayor or City Manager, or such other official as may have been agreed to by the Representative; (2) the Ordinance with such supplements or amendments as may have been agreed to by the Representative; (3) the approving opinion of Bond Counsel with respect to the Bonds, in substantially the form attached to the Official Statement; (4) a supplemental opinion of Bond Counsel addressed to the Underwriters, substantially to the effect that (i) the Bonds are exempted securities under the Securities Act of 1933, as amended (the "1933 Act'), and the Trust Indenture Act of 1939, as amended (the "bust IndemureAet') and it is not necessary, in connection with the offering and sale of the Bonds, to register the Bonds under the 1933 Act or to qualify the Ordinance under the Trust Indenture Am; and (ii) except to the extent noted therein, said fuer has not verified and is not passing upon, and does not assume my responsibility for the accuracy, completeness or fairness of the statements and information contained in the Official Statement but that said firm has reviewed the statements and information contained in the Official Statement under the captions 'Tien of Financing" (except the subcaption "Use of Proceeds"), "The Bonds" ' (except under the subcaptions 'Book -Entry -Only System" and "Bondholders' Remedies'), Tax Matters," "Continuing Disclosure of hrfooratioe (except for the information under the caption "Compliance with Prior Undedakings) "Other Information —Legal Investments and Eligibility to Secure Public Funds in Texas," "Other Information — Registration and Qualification of Bonds for Sale" and "Other Information — Legal Matters" (except fm the last two sentences of the fast paragraph thereof) fairly and accurately summarized the matters purported to be summarized therein (5) An opinion, dated the date of the Closing and addressed to the Underwriters, of counsel for the Underwriters, to the effent that (i) the Bonds are exempted securities order the 1933 Act and the Trust Indenture Act and it is not necessary, in connection with the offering and sale of the Bonds, to register the Bonds under the 1933 Act and the Ordinance need not be qualified under the Trust Indenture Act; and (ii) based upon thew participation in the preparation of the Official Statement SS counsel for the Underwriters and their participation at wnfertnces at which the Official Statement was discussed, but without having undertaken to determine independently the accuracy, completeness or faimess of the statements contained in the Official Statement, such counsel has no reason to believe that the Official Statement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the cirourostanas under which they were made, not misleading (except for any financial, forecast, technical and statistical statements and data included in the Official Statement and the information regarding the Depository and its book -entry system or the ' bond insurer, as to which no view need be expressed); DALLAS: 551369.0W05:16120r� W2 ' (6) A certificate, dated the date of Closing, of the Issuer to the effect that (i) the representations and warranties of the Issuer contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing; (ii) no litigation or proceeding or material tax challenge against it is pending or, to its knowledge, threatened in my court or administrative body nor is there a basis for litigation which would (a) contest the right of the members or officials of the Issuer to hold and exercise their respective positions, (b) contest the due organization and valid existence of the issuer, (c) contest the validity, due authorization and execution of the Bonds or the Issuer Documents or (d) attempt to limit, enjoin or otherwise restrict or prevent the Issuer from functioning and collecting revenues, including payments on the Bonds, purmam to the Ordinance, and other income or the anticipated receipt of ad valorem taxes, or the pledge thereof; (iii) the Ordinance has been duty adopted by the Issuer, is in full tome and effect and has not been modified, amended or repealed, and (iv) to the best of its knowledge, no event affecting the Issuer has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein, in light of the circumstances under which made, not misleading in any respect n of the time of Closing, and the information contained in the Official Statement is correct in all material respects and as of the date of the Official Statement did not, and as of the date of the Closing does not, contain any un rue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (7) A certificate of the Issuer in form and substance satisfactory to Bond Counsel and counsel in the Underwriters setting forth the facts, estimates and circumstances in existence on the date of the Closing, which establish that it is not expected that the proceeds of the Bonds will be used in a rummer that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code'), and soy applicable regulations ' (whether fatal, temporary or proposed), issued pursuant to the Code; (8) Any other certificates and opinions required by the Onlinaice for the issuance thereunder of the Bonds; (9) Evidence satisfactory to the Representative that the Bonds have been rated Am and AAA by Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, respectively, and that both such ratings are in effect as of the date of Closing, together with a municipal bond insurance policy on which such ratings aro based; and (10) Such additional legal opinions, certificates, instruments and other documents as the Representative or counsel to the Underwriters may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the data of lire Closing, of the Issuer's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer on or prior to the date of the Closing of all the respective agreements than to be performed and conditions then m be satisfied by the Issuer. All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel and the Representative. If the Issuer shag be unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Agreement, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for my reason permitted by this Agreement, this Agreement shall terminate and neither the Underwriters nor the Issuer shall be under any further obligation hereunder, ' except that the respective obligations of the Issuer and the Underwriters set forth in Sections 4 and 8 hereof shall continue in full force and effect. 8 DALLAa: 551369 0000.5:161 M IQ ' 7. Termirhmion. The Underwriters shall have the right t morel their obligation in purchase the Bonds if, between the date of this Agreement and the Closing, the market price or marketability of the Bonds shag be materially adversely affected, in the solejudgment of the Representative, reasonably exercised, by the occurrence of my of the following: (a) legislation shall be "acted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or my member of the Congress or the State legislature or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United Stales or of the Sante or the United Stales Tax Court shall be tendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revemx Service or other governmental agency shall be made or proposed, the effect of my or all of which would be in impose, directly or indirectly, federal income taxation upon revenues or other income of the general character to be derived by the Issuer Pursuant in the Ordinance, or upon interest received on obligations of the general character of the Bonds of the interest on the Bonds as described in the Official Statement, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences of my of the transactions described herein; (b) legislation introduced in or enacted (or resottion passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or my other governmental agency having jurisdiction of the subject miner, to the effect that obligations of the general character of the Bonds, including my or all underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or that the Ordinance is not exempt ' from qualification under or other requirements of the Trust Indenture Act, or that the issuance, offering, or sale of obligations of the general character of the Bonds, including my or all underlying arrangements, as described herein m in the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; (c) my state blue sky or securities commission or other govemmetltal agency or body in my jurisdiction in which at least 10% of the principal amount of the Bonds have been offered and sold shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar ruling relating therein; (d) a general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange, the establishment of minimum prices on either such exchange, the establishment of material resections (not in force as of the date hereof) upon trading securities generally by my governmental authority or my national securities exchange, a general banking moratorium declared by federal, Stat of New York, or State officials authorized to do so; (e) the New York Stock Exchange or other national securities exchange or any governmental authority, shall impose, as to the Bonds or as m obligations of the general character of the Bonds, my material restrictions not now in force, or increase materially those now in force, with respect in the extension of credit by, or the charge to the net capital requirements of, the Underwriters; (f) my amendment to the federal or slate Constitution or action by my federal or state court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Issuer, its pmperly, income securities (or interest thereon), or the validity or enforceability of the assessments or the levy of taxes to pay principal of and interest an the Bonds; (g) my event occurring, or information becoming known which, in the reasonable judgment of the Represmmtivav makes untrue in any material respect my statement or information contained in the Official DALLAS: 551369.00005: 1612071v2 ' Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the fight of the circumstances under which they were made, not misleading; (h) there shall have occurred since the date of this Agreement any materially adverse change in the affairs or financial condition of the Issuer, (i) since the date of this Agreement the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities or a national or international calamity or crisis, financial or otherwise; 0) any material fact or event shall exist or have existed that, in the Representative's reasonable judgment, requires or has required an amendment of or supplement to the Official Statement; (k) them shall have occurred any downgrading, or my notice shall have been given of (A) any intended or potential downgrading or (B) any review or possible change that does not indicate a possible upgrade, in the rating accorded any of the Issuer's obligations (including the rating to be accorded the Bonds); and (I) the purchase of and payment for the Bonds by the Underwriters, or the resale of the Bonds by the Underwriters, on the terms and conditions herem provided shall be prohibited by any applicable law, governmental authority, board, agency or commission and such prohibition is not the result of the Underwriters' sets or failure to act. ' With respect to the condition described in subparagraph (1) above, the Underwriters are not aware of any current, pending or proposed law or government inquiry or investigation as of the date of execution of this Agreement which would permit the Underwriters to invoke their termination rights hereunder. 8. Expenses. (a) The Underwriters shall be under no obligation to pay, and the Issuer shall pay, any expenses incident to the performance of the Issuer's obligations heremader, including, but not limited to (i) the cost of preparation and printing of the Bonds; (ii) the fees and disbursements of Bond Counsel; (iii) the fees and disbursements of the Financial Advisor to the Issuer•, (iv) the fees and disbusements of any other engineers, accountants, and other experts, consultants or advisers retained by the Issuer, and (v) the fees for bond ratings. (b) The Underwriters shall pay (i) the cost of preparation and printing of this Agreement, the Blue Sky Survey and Legal Investment Memorandum (if my); (u) all advertising expenses in connection with the public offering of the Bonds; and (tri) all other expenses incurred by them in connection with the public offering of the Bonds, including the fees and disbursements of counsel retained by the Underwriters. 9. Notices. Any notice or other communication to be given to the Issuer under this Agreement may be given by delivering the same in writing at City of Allen, Texas, 305 Century Parkway, Allem, Texas 75013-8042, Attention: City Manager, and any notice or other communication to be given to the Representative under this Agreement may be given by delivering the same in writing to First Southwest Company, 325 N. St. Paul, Suite 800, Dallas, Texas 75201, Attention: Boyd London. 10. Parties in Interest. This Agreement m heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the Issuer and the Underwriters (including successors or assigns of the Underwriters) and no other person shall acquire or have any right hereunder or by virtue hereof This Agreement may not be assigned by the Issuer. All of the Issuer's representations, warmatim and agreements contained in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf 10 DALLAS: 551369.00005:161207W v2 ' of my of the Underwriters; (ii) delivery of and payment for the Bonds pursuant to this Agreement; and (iii) any termmatim of this Agreement 11. Effectiveness. This Agreement shall become effective upon the acceptance bereof by the Issuer and shall be valid and enforceable at the time of such acceptance. 12. Choice of Law. This Agreement shall be governed by and construed in accordance with the law of the State 13. Severability. If my provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in my particular one in my jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of my Constitution, statute, role of public policy, or my other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering my other provision or provisions of this Agreement invalid, inoperative or unenforceable to my extent whatever. 14. Business Day. For purposes of this Agreement, "business day" mems my day on which the New York Stock Exchange is open for trading. 15. Section Headings. Section headings have been inserted in this Agreement w a matter of convenience of referm" only, and it is agreed that such section headings are not a part of this Agreement and will not be used in the interpretation of my provisions of this Agreement ' 16. Counterparts. This Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute me and the same document. 17. No Personal Liability. None of the members of the City Council, nor my officer, agent or employee of the Lssuir, shall be charged personally by the Underwriters: with my liability, or be held liable to the Underwriters under my term or provision of this Agreement, or because of execution or attempted execution, or because of my breach or attempted or alleged breach of this Agreement. 1 DALLAS 551]69.00005:1612071]2 /The remainder ofibiv Page is intentionally blank/ If you agree with the foregoing, please sign the enclosed counterpart of this Agreement and return it to the Representative. This Agreement shall become a binding agreement behveen you and the Underwriters when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Very truly Yours, FIRST SOUTHMT COMPANY, A.G. EDwmtos & SONS, INC_ By: F1 SovrewesF CoNPANY, m Representative By. Authorized Officer Accepted and agreed to this 14th day of August, 2007 at _:_—m. CDT CUtY OF Au ,TH ' Name: Peter H. Verges Title. City Manager 12 DALLAS: 551569.00005: MMIJ The dated date of the Bonds is August 15, 2007. SCBeD=I TIRBoams P Mandator, Redemption. The Bonds maturing August 15, 2027 are subject to mandatory sinking fund redemption prior to thew scheduled maturity and shall be redeemed by the Issuer, in part, prim to their scheduled maturity, with the particular Bonds or portions thereof to be redeemed to be selected and designated by the Issuer (provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at a redemption price equal to the par or principal annual thereof plus accrued interest to the date of redemption, on the dates, and in the principal amounts set forth below: Redemption Date (8/15) Maturity 2025 $740,000 Amomt(S) (August 15) Rate(%) Yield(°h) 405,000 2008 4.000 3.690 380,000 2009 4.000 3.730 395,000 2010 4.000 3.780 415,000 2011 4.000 3.820 430,000 2012 4.000 3.880 445,000 2013 4.000 3.950 465,000 2014 4.250 4.030 485,000 2015 4.000 4.080 505,000 2016 4.000 4.150 525,000 2017 4.000 4.240 545,000 2018 4.250 4.380 570,000 2019 4.400 4.500 595,000 2020 4.500 4.580 620,000 2021 4.500 4.640 650,000 2022 4.600 4.700 675,000 2023 4.500 4.720 ' 710,000 2024 4.500 4.740 2,330,000 2027 5.000 4.815* (Accrued Interest from August 15, 2007 to be, added) * Yield to maturity P Mandator, Redemption. The Bonds maturing August 15, 2027 are subject to mandatory sinking fund redemption prior to thew scheduled maturity and shall be redeemed by the Issuer, in part, prim to their scheduled maturity, with the particular Bonds or portions thereof to be redeemed to be selected and designated by the Issuer (provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at a redemption price equal to the par or principal annual thereof plus accrued interest to the date of redemption, on the dates, and in the principal amounts set forth below: Redemption Date (8/15) Principal Amount 2025 $740,000 2026 775,000 2027* 815,000 * Final Maturity Optional Redemption of Bonds. The Issuer reserves the right, at its option, to redeem Bonds having stated maturities on and after August 15, 2018, in whole or in part in principal amounts of $5,000 or my integral multiple thereof, on August 15, 2017, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. DALLAS: 551369.000OS: 1612071x2 I DALLAS: 551369.00005:16120] 1 v2 [Attach Official Statement] ' EXHIBIT C DESCRIPTION OF ANNUAL FINANCIAL INFORMATION 1 The following information is referred to in Section 21 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included in the Appendix or under the headings of the Official Statement referred to) below: 1. The financial statements of the City, portions of which are appended to the Official Statement as Appendix B, but for the most recently concluded fiscal year. 2. The information included under Tables 1 through 6 and 8 through 14 in the Official Statement. Accounting Principles The accounting principles referred to in such Section are generally those described in Appendix B to the Official Statement, as such principles may be changed from time to time to comply with state law or regulation. 95942745.211 W 14820 C-1